EX-10.1






ASSET PURCHASE AGREEMENT




BETWEEN




GE FANUC EMBEDDED SYSTEMS, INC.,




TERAFORCE TECHNOLOGY CORPORATION




AND




DNA COMPUTING SOLUTIONS, INC.




 




Dated as of August 1, 2005




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Article I            DEFINIT
	 	IONS                                                              1
	 	 	 	 	 	 	 	 
	1.1
	 	Certain Definitions
	 	 	1	 	 	 	 	 
	1.2
	 	Terms Defined Elsewhere in this Agreement
	 	 	7	 	 	 	 	 
	1.3
	 	Other Definitional and Interpretive Matters
	 	 	8	 	 	 	 	 
	Article II
	 	PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
	 	 	 	 	 	 	9	 
	2.1
	 	Purchase and Sale of Assets
	 	 	9	 	 	 	 	 
	2.2
	 	Excluded Assets.
	 	 	10	 	 	 	 	 
	2.3
	 	Assumption of Liabilities
	 	 	11	 	 	 	 	 
	2.4
	 	Excluded Liabilities
	 	 	11	 	 	 	 	 
	2.5
	 	Cure Amounts
	 	 	11	 	 	 	 	 
	2.6
	 	Further Conveyances and Assumptions
	 	 	11	 	 	 	 	 
	2.7
	 	Bulk Sales Law
	 	 	12	 	 	 	 	 
	Article III
	 	CONSIDERATION
	 	 	12	 	 	 	 	 
	3.1
	 	Consideration
	 	 	12	 	 	 	 	 
	3.2
	 	Payment of Purchase Price
	 	 	12	 	 	 	 	 
	Article IV
	 	CLOSING AND TERMINATION
	 	 	12	 	 	 	 	 
	4.1
	 	Closing Date
	 	 	12	 	 	 	 	 
	4.2
	 	Deliveries by Seller
	 	 	13	 	 	 	 	 
	4.3
	 	Deliveries by Purchaser
	 	 	13	 	 	 	 	 
	4.4
	 	Termination of Agreement
	 	 	14	 	 	 	 	 
	4.5
	 	Procedure Upon Termination
	 	 	15	 	 	 	 	 
	4.6
	 	Effect of Termination
	 	 	16	 	 	 	 	 
	Article V
	 	REPRESENTATIONS AND WARRANTIES OF SELLER
	 	 	16	 	 	 	 	 
	5.1
	 	Organization and Good Standing
	 	 	16	 	 	 	 	 
	5.2
	 	Authorization of Agreement
	 	 	16	 	 	 	 	 
	5.3
	 	Board Approval and Recommendation
	 	 	17	 	 	 	 	 
	5.4
	 	Conflicts; Consents of Third Parties
	 	 	17	 	 	 	 	 
	5.5
	 	Financial Statements; Projections
	 	 	18	 	 	 	 	 
	5.6
	 	Inventories
	 	 	19	 	 	 	 	 
	5.7
	 	Absence of Certain Developments
	 	 	19	 	 	 	 	 
	5.8
	 	Taxes
	 	 	20	 	 	 	 	 
	5.9
	 	Title to Purchased Assets
	 	 	20	 	 	 	 	 
	5.10
	 	Intellectual Property
	 	 	21	 	 	 	 	 
	5.11
	 	Material Contracts
	 	 	23	 	 	 	 	 
	5.12
	 	Labor
	 	 	23	 	 	 	 	 
	5.13
	 	Litigation
	 	 	23	 	 	 	 	 
	5.14
	 	Compliance with Laws; Permits
	 	 	24	 	 	 	 	 
	5.15
	 	Related Party Transactions
	 	 	24	 	 	 	 	 
	5.16
	 	Customers and Suppliers
	 	 	25	 	 	 	 	 
	5.17
	 	Product Warranty; Product Liability
	 	 	25	 	 	 	 	 
	5.18
	 	Full Disclosure
	 	 	25	 	 	 	 	 
	5.19
	 	Financial Advisors
	 	 	25	 	 	 	 	 
	5.20
	 	No Other Representations and Warranties
	 	 	26	 	 	 	 	 
	Article VI
	 	REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	26	 	 	 	 	 
	6.1
	 	Organization and Good Standing
	 	 	26	 	 	 	 	 
	6.2
	 	Authorization of Agreement
	 	 	26	 	 	 	 	 
	6.3
	 	Conflicts; Consents of Third Parties
	 	 	26	 	 	 	 	 
	6.4
	 	Litigation
	 	 	27	 	 	 	 	 
	6.5
	 	Financial Advisors
	 	 	27	 	 	 	 	 
	6.6
	 	Financing
	 	 	27	 	 	 	 	 
	Article VII
	 	BANKRUPTCY COURT MATTERS
	 	 	27	 	 	 	 	 
	7.1
	 	Approval of Break-Up Fee and Expense Reimbursement
	 	 	27	 	 	 	 	 
	7.2
	 	Bidding Procedures
	 	 	28	 	 	 	 	 
	7.3
	 	Non-Solicitation Period
	 	 	30	 	 	 	 	 
	7.4
	 	The Sale Order
	 	 	31	 	 	 	 	 
	7.5
	 	Bankruptcy Court Approval
	 	 	32	 	 	 	 	 
	7.6
	 	Bankruptcy Court Objections
	 	 	33	 	 	 	 	 
	Article VIII
	 	COVENANTS
	 	 	33	 	 	 	 	 
	8.1
	 	Access to Information
	 	 	33	 	 	 	 	 
	8.2
	 	Conduct of the Business Pending the Closing
	 	 	33	 	 	 	 	 
	8.3
	 	Consents
	 	 	35	 	 	 	 	 
	8.4
	 	Further Assurances
	 	 	35	 	 	 	 	 
	8.5
	 	Non-Competition; Non-Solicitation; Confidentiality
	 	 	35	 	 	 	 	 
	8.6
	 	Preservation of Records
	 	 	37	 	 	 	 	 
	8.7
	 	Publicity
	 	 	37	 	 	 	 	 
	8.8
	 	Use of Name
	 	 	38	 	 	 	 	 
	8.9
	 	Financing Statement Releases
	 	 	38	 	 	 	 	 
	Article IX
	 	EMPLOYEES AND EMPLOYEE BENEFITS
	 	 	38	 	 	 	 	 
	9.1
	 	Employment
	 	 	38	 	 	 	 	 
	9.2
	 	Indemnification
	 	 	38	 	 	 	 	 
	Article X
	 	CONDITIONS TO CLOSING
	 	 	38	 	 	 	 	 
	10.1
	 	Conditions Precedent to Obligations of Purchaser
	 	 	38	 	 	 	 	 
	10.2
	 	Conditions Precedent to Obligations of Seller
	 	 	40	 	 	 	 	 
	10.3
	 	Conditions Precedent to Obligations of Purchaser and Seller
	 	 	40	 	 	 	 	 
	10.4
	 	Frustration of Closing Conditions
	 	 	41	 	 	 	 	 
	Article XI
	 	INDEMNIFICATION
	 	 	41	 	 	 	 	 
	11.1
	 	Survival of Representations and Warranties
	 	 	41	 	 	 	 	 
	11.2
	 	Indemnification
	 	 	41	 	 	 	 	 
	11.3
	 	Indemnification Procedures.
	 	 	42	 	 	 	 	 
	11.4
	 	Breaches of Representations and Warranties
	 	 	44	 	 	 	 	 
	11.5
	 	Limitations on Indemnification
	 	 	44	 	 	 	 	 
	11.6
	 	Indemnity Escrow
	 	 	44	 	 	 	 	 
	11.7
	 	Tax Treatment of Indemnity Payments
	 	 	44	 	 	 	 	 
	Article XII
	 	TAXES
	 	 	45	 	 	 	 	 
	12.1
	 	Transfer Taxes
	 	 	45	 	 	 	 	 
	12.2
	 	Prorations
	 	 	45	 	 	 	 	 
	12.3
	 	Purchase Price Allocation
	 	 	45	 	 	 	 	 
	12.4
	 	Cooperation on Tax Matters
	 	 	46	 	 	 	 	 
	Article XIII
	 	MISCELLANEOUS
	 	 	46	 	 	 	 	 
	13.1
	 	Expenses
	 	 	46	 	 	 	 	 
	13.2
	 	Specific Performance
	 	 	46	 	 	 	 	 
	13.3
	 	Submission to Jurisdiction; Consent to Service of Process
	 	 	47	 	 	 	 	 
	13.4
	 	Waiver of Right to Trial by Jury
	 	 	47	 	 	 	 	 
	13.5
	 	Entire Agreement; Amendments and Waivers
	 	 	47	 	 	 	 	 
	13.6
	 	Governing Law
	 	 	48	 	 	 	 	 
	13.7
	 	Notices
	 	 	48	 	 	 	 	 
	13.8
	 	Severability
	 	 	49	 	 	 	 	 
	13.9
	 	Binding Effect; Assignment
	 	 	49	 	 	 	 	 
	13.10
	 	Non-Recourse
	 	 	49	 	 	 	 	 
	13.11
	 	Counterparts
	 	 	49	 	 	 	 	 
	Schedules
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	1.1(a)
	 	Equipment
	 	 	 	 	 	 	 	 
	1.1(b)
	 	Inventory
	 	 	 	 	 	 	 	 
	1.1(c)
	 	Products
	 	 	 	 	 	 	 	 
	1.1(d)
	 	Purchased Contracts
	 	 	 	 	 	 	 	 
	5.7
	 	Absence of Certain Developments
	 	 	 	 	 	 	 	 
	5.10(a)
	 	Intellectual Property
	 	 	 	 	 	 	 	 
	5.10(b)
	 	Exceptions to Title to Intellectual Property
	 	 	 	 	 	 	 	 
	5.10(g)
	 	Intellectual Property Licenses
	 	 	 	 	 	 	 	 
	5.10(o)
	 	Software
	 	 	 	 	 	 	 	 
	5.11
	 	Material Contracts
	 	 	 	 	 	 	 	 
	5.13
	 	Litigation
	 	 	 	 	 	 	 	 
	5.14(b)
	 	Permits
	 	 	 	 	 	 	 	 
	5.15
	 	Related Party Transactions
	 	 	 	 	 	 	 	 
	5.16(a)
	 	Customers and Suppliers
	 	 	 	 	 	 	 	 
	5.16(b)
	 	Customers and Suppliers Changes
	 	 	 	 	 	 	 	 
	5.17
	 	Product Warranty
	 	 	 	 	 	 	 	 
	5.19
	 	Seller Financial Advisors
	 	 	 	 	 	 	 	 
	10.1(f)
	 	Key Employees
	 	 	 	 	 	 	 	 
	Exhibits
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	A
	 	Bill of Sale
	 	 	 	 	 	 	 	 
	B
	 	Assumption Agreement
	 	 	 	 	 	 	 	 
	C
	 	Indemnity Escrow Agreement
	 	 	 	 	 	 	 	 






1




ASSET PURCHASE AGREEMENT




ASSET PURCHASE AGREEMENT, dated as of August 1, 2005 (this “Agreement”), between GE
Fanuc Embedded Systems, Inc., a Delaware corporation (“Purchaser”), TeraForce Technology
Corporation, a Delaware corporation (“TeraForce”), and DNA Computing Solutions, Inc., a
Delaware corporation, a wholly-owned subsidiary of TeraForce (“DNA” and together with
TeraForce, “Seller”).



W I T N E S S E T H:




WHEREAS, Seller intends to commence a chapter 11 case in the United States Bankruptcy Court
for the Northern District of Texas, Dallas Division (the “Bankruptcy Court”) (such case,
the “Chapter 11 Case”) and shall be a debtor-in-possession under chapter 11 of title 11 of
the United States Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”);



WHEREAS, Seller desires to sell, transfer and assign to Purchaser or its designated Affiliate
or Affiliates, and Purchaser desires to (or to cause its designated Affiliate or Affiliates to)
acquire and assume from Seller, pursuant to Sections 363 and 365 of the Bankruptcy Code, all of the
Purchased Assets, all as more specifically provided herein; and



WHEREAS, certain terms used in this Agreement are defined in Section 1.1; and



NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:



ARTICLE I




DEFINITIONS




1.1 Certain Definitions.



For purposes of this Agreement, the following terms shall have the meanings specified in this
Section 1.1:



“Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person, and the term “control” (including the terms “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, whether through ownership of voting
securities, by contract or otherwise.



“Bidding Procedures Motion” means the motion to be filed with the Bankruptcy Court
seeking approval of the Break-Up Fee and the Expense Reimbursement and the establishment of bidding
procedures as contemplated pursuant to Article VII hereof.



“Bidding Procedures Order” means the order, in form and substance reasonably
acceptable to Purchaser, entered by the Bankruptcy Court with respect to the Bidding Procedures
Motion and more fully described in Section 7.2 hereof.



“Business Day” means any day of the year on which national banking institutions in New
York are open to the public for conducting business and are not required or authorized to close.



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



“Contract” means any contract, agreement, indenture, note, bond, loan, instrument,
lease, commitment or other arrangement or agreement, whether written or oral.



“Documents” means all files, documents, instruments, papers, books, reports, records,
tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies,
customer lists, regulatory filings, operating data and plans, technical documentation (design
specifications, functional requirements, operating instructions, logic manuals, flow charts, etc),
user documentation (installation guides, user manuals, training materials, release notes, working
papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web pages, etc.), and
other similar materials related to the Seller’s business and the Purchased Assets in each case
whether or not in electronic form.



“Employee” means all individuals, as of the date hereof, who are employed by Seller in
connection with its business, together with individuals who are hired in respect of the Seller’s
business after the date hereof.



“Equipment” means the equipment of Seller set forth on Schedule 1.1(b).



“Excluded Contracts” means the Contracts of Seller other than those set forth on
Schedule 1.1(d).



“GAAP” means generally accepted accounting principles in the United States as of the
date hereof.



“Governmental Body” means any government or governmental or regulatory body thereof,
or political subdivision thereof, whether foreign, federal, state, or local, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private) (including the
Bankruptcy Court).



“Hardware” means any and all computer and computer-related hardware, including, but
not limited to, computers, file servers, facsimile servers, scanners, color printers, laser
printers and networks.



“Indemnity Escrow Agent” means Wilmington Trust Company in its capacity as escrow
agent under the Indemnity Escrow Agreement.



“Indemnity Escrow Agreement” means the Indemnity Escrow Agreement to be dated as of
the Closing Date by and among Seller, Purchaser and the Indemnity Escrow Agent substantially in the
form of Exhibit C hereto.



“Indemnity Escrow Amount” means the sum of $300,000.



“Indemnity Escrow Fund” means the Indemnity Escrow Amount together with all interest
or income actually earned thereon pursuant to the Indemnity Escrow Agreement.



“Intellectual Property” means all intellectual and industrial property rights, whether
protected, created or arising under the laws of the United States or any other jurisdiction,
including: (i) all patents and applications therefor, inventions and invention disclosures,
including continuations, divisionals, continuations-in-part, or reissues of patent applications and
patents issuing thereon (collectively, “Patents”), (ii) all trademarks, service marks,
trade names, service names, industrial designs, brand names, trade dress rights, logos, Internet
domain names, identifying symbols, logos, emblems, signs or insignia, and corporate names and
general intangibles of a like nature, together with the goodwill associated with any of the
foregoing, and all applications, registrations and renewals thereof (collectively,
“Marks”), (iii) copyrights (including copyrights in computer software programs) and
registrations and applications therefor, works of authorship and mask work rights (collectively,
“Copyrights”), (iv) discoveries, concepts, ideas, research and development, know-how,
formulae, inventions, compositions, manufacturing and production processes and techniques,
technical data, procedures, designs, drawings, specifications, databases, and other proprietary and
confidential information, including customer lists, supplier lists, pricing and cost information,
and business and marketing plans and proposals (collectively, “Trade Secrets”).



“Intellectual Property Licenses” means (i) any grant to a third Person of any right to
use any of the Purchased Intellectual Property, and (ii) any grant to Seller of a right to use a
third Person’s Intellectual Property.



“Inventory” means the categories of inventory of Seller set forth on Schedule
1.1(b).



“IRS” means the Internal Revenue Service.



“Knowledge of Seller” means the actual knowledge, after due inquiry, of the officers
of Seller.



“Law” means any foreign, federal, state or local law (including common law), statute,
code, ordinance, rule, regulation or other requirement (including the Bankruptcy Code).



“Legal Proceeding” means any judicial, administrative or arbitral actions, suits,
proceedings (public or private) or claims or any proceedings by or before a Governmental Body.



“Liability” means any debt, loss, damage, adverse claim, liability or obligation
(whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, or due or to become due, and whether in contract,
tort, strict liability or otherwise), and including all costs and expenses relating thereto.



“Lien” means any lien, pledge, mortgage, deed of trust, security interest, claim,
lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or
agreement, transfer restriction under any shareholder or similar agreement, encumbrance or any
other restriction or limitation whatsoever.



“Material Adverse Effect” means (i) a material adverse effect on the historical or
near-term business, assets, properties, results of operations, condition (financial or otherwise)
or prospects of Seller or its business, (ii) a material adverse effect on the value of the
Purchased Assets or (iii) a material adverse effect on the ability of Seller to consummate the
transactions contemplated by this Agreement or perform their obligations under this Agreement or
the Seller Documents, excluding any such effect to the extent resulting from or arising in
connection with (a) general economic or market changes or changes that generally affect businesses
of the same type as the Seller’s business, but only if, in each case, the Purchased Assets are not
disproportionately affected; (b) the filing of the Chapter 11 Case; or (c) the public announcement
of the transactions contemplated hereunder.



“Modification” means, with respect to any item, any modification, translation,
conversion, compilation, upgrade or other derivative version of, or change or addition to, such
item. “Modified” and “Modify” shall have corollary meanings.



“Order” means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award.



“Ordinary Course of Business” means the ordinary and usual course of normal day-to-day
operations of the Seller’s business through the date hereof consistent with past practice.



“Permits” means any approvals, authorizations, consents, licenses, permits or
certificates.



“Person” means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization, Governmental Body or other
entity.



“Products” means any and all products developed, manufactured, marketed or sold by
Seller, whether work in progress or in final form, including the products set forth on Schedule
1.1(c).



“Purchased Contracts” means the Contracts set forth on Schedule 1.1(d).
Purchaser shall have the right, by written notice delivered to Seller at any time during the period
from and after the date hereof and until one (1) day prior to the Auction Date to delete any
Contract from Schedule 1.1(d) (it being understood that any such Contract deleted by
Purchaser from such schedule may subsequently be rejected by Seller in the Chapter 11 Case).
Purchaser shall also have the right by written notice delivered to Seller at any time during the
period from and after the date hereof and until one (1) day prior to the Auction Date to add any
Contract to Schedule 1.1(d); provided that such Contract has not been previously
rejected in the Chapter 11 Case. Schedule 1.1(d) also sets forth the estimated amounts (as
of the date hereof) of all amounts which Seller expects will be payable pursuant to Section 365(b)
of the Bankruptcy Code on account of the assumption and assignment of any Purchased Contract.



“Purchased Intellectual Property” means the Intellectual Property used in, held for
use in or intended to be used in DNA’s business as presently conducted and as currently proposed to
be conducted.



“Purchased Technology” means the Technology used in, held for use in or intended to be
used in DNA’s business as presently conducted and as currently proposed to be conducted.



“Restructuring Transaction” means (a) a recapitalization transaction involving, in
whole or in part, Seller and its existing security holders or creditors, (b) any merger,
consolidation, share exchange, business combination or other similar transaction with Seller, (c)
any tender offer or exchange offer for 10% or more of the outstanding shares of Seller’s common
stock or any class of Seller’s debt securities or the filing of a registration statement under the
Securities Act of 1933, as amended, in connection therewith, or (d) the acquisition of beneficial
ownership or a right to acquire beneficial ownership of, or the formation of any “group” (as
defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) which
beneficially owns or has the right to acquire beneficial ownership of 10% or more of the then
outstanding shares of any class of Seller’s common stock or any class of Seller’s debt securities
or (e) a transaction or series of transactions, including by way of a plan of reorganization, in
connection with a liquidation or reorganization or other continuation of Seller’s business relating
to some or all of the Purchased Assets.



“Sale Motion” means the motion to be filed with the Bankruptcy Court by Seller seeking
(a) approval of the terms and provisions of this Agreement, (b) authorization for (i) the sale of
the Purchased Assets pursuant to Section 363 of the Bankruptcy Code and (ii) the assumption and
assignment of the Purchased Assets that are executory contracts pursuant to Section 365 of the
Bankruptcy Code and (c) any other provisions acceptable to Purchaser.



“Sale Order” means the order of the Bankruptcy Court, in form and substance reasonably
acceptable to Purchaser, granting the relief requested in the Sale Motion and authorizing the sale
of the Purchased Assets pursuant to Section 363 of the Bankruptcy Code and the assumption and
assignment of the Purchased Assets that are executory contracts pursuant to Section 365 of the
Bankruptcy Code, free and clear of all Liens and as more fully described in Section 7.4.



“Software” means any and all (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code, object code 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 product 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 related to any of the
foregoing.



“Subsidiary” means any Person of which a majority of the outstanding voting securities
or other voting equity interests are owned, directly or indirectly, by either Seller.



“Tax” or “Taxes” means (i) any and all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees,
assessments and charges of any kind whatsoever, (ii) all interest, penalties, fines, additions to
tax or additional amounts imposed by any Taxing Authority in connection with any item described in
clause (i), and (iii) any liability in respect of any items described in clauses (i) and/or (ii)
payable by reason of contract, assumption, transferee liability, operation of law, Treasury
Regulation section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar
provision under law) or otherwise.



“Taxing Authority” means the U.S. Internal Revenue Service and any other Governmental
Body responsible for the administration of any Tax.



“Tax Return” means any return, report or statement required to be filed with respect
to any Tax (including any attachments thereto, and any amendment thereof) including, but not
limited to, any information return, claim for refund, amended return or declaration of estimated
Tax, and including, where permitted or required, combined, consolidated or unitary returns for any
group of entities that includes the Company, or any of its Subsidiaries.



“Technology” means, collectively, all designs, formulae, algorithms, procedures,
methods, techniques, ideas, know-how, Software (whether in source code, object code or human
readable form) research and development, technical data, programs, subroutines, tools, materials,
specifications, processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice), apparatus, creations, improvements, works of authorship 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 specifically listed herein, and
all related technology.



“Transitional Services Agreement” means an agreement dated as of the Closing Date
between Purchaser and Seller, on terms and conditions reasonably satisfactory to Purchaser and
Seller, pursuant to which Seller shall provide to Purchaser such transitional services as mutually
agreed to by Purchaser and Seller.



“Vista” means Vista Controls, Inc.



“Vista Agreements” means the following Contracts, dated as of November, 2003, between
DNA and Vista: (i) Technology License and Marketing Agreement, (ii) Distribution Agreement and
(iii) Technology Transfer and Support Agreement.



“WARN” means the Worker Adjustment and Retraining Notification Act of 1988, as
amended.



1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the
following terms have meanings set forth in the sections indicated:



	 	 	 	 	 
	Term	 	Section
	Acquisition Financing
	 	 	6.6	 
	Alternative Transaction
	 	 	7.2	 
	Asset Acquisition Statement
	 	 	12.2	 
	Assumed Liabilities
	 	 	2.3	 
	Auction
	 	 	7.2	(c)
	Bankruptcy Code
	 	Recitals

	Bankruptcy Court
	 	Recitals

	Bid Deadline
	 	7.2(a)(ii)
	Break-Up Fee
	 	 	7.1	 
	Chapter 11 Case
	 	Recitals

	Closing
	 	 	4.1	 
	Closing Date
	 	 	4.1	 
	Confidential Information
	 	 	8.5	(c)
	Copyrights
	 	1.1 (in Purchased Intellectual
	 
	 	Property definition)

	Cure Amounts
	 	 	2.5	 
	DNA
	 	Preamble

	Excluded Assets
	 	 	2.2	 
	Excluded Liabilities
	 	 	2.4	 
	Expense Reimbursement
	 	 	7.1	 
	Expenses
	 	 	11.2	(a)(v)
	Financial Statement
	 	 	5.5	(a)
	Financial Statement Date
	 	 	5.5	(a)
	Indemnification Claim
	 	 	11.3	(a)
	Losses
	 	 	11.2	(a)(i)
	Marks
	 	1.1 (in Purchased Intellectual
	 
	 	Property definition)

	Material Contract
	 	 	5.10	(e)
	Non-Solicitation Period
	 	 	7.3	(a)
	Patents
	 	1.1 (in Purchased Intellectual
	 
	 	Property definition)

	Purchased Assets
	 	 	2.1	 
	Purchase Price
	 	 	3.1	 
	Purchaser
	 	Preamble

	Purchaser Documents
	 	 	6.2	 
	Purchaser Indemnified Parties
	 	 	11.2	(a)
	Restricted Business
	 	 	8.5	(a)
	Revised Statements
	 	 	12.2	 
	Seller
	 	Preamble

	Seller Documents
	 	 	5.2	 
	Seller Indemnified Parties
	 	 	11.2	(b)
	Seller Marks
	 	 	8.8	 
	Seller Representatives
	 	 	7.3	(a)
	Starting Auction Bid
	 	 	7.2	(c)
	Survival Period
	 	 	11.1	 
	TeraForce
	 	Preamble

	Trade Secrets
	 	1.1 (in Purchased Intellectual
	 
	 	Property definition)

	Transferred Employees
	 	 	9.1	(a)
	Unresolved Claims
	 	 	11.6	 






1.3 Other Definitional and Interpretive Matters



(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules
of interpretation shall apply:



Calculation of Time Period. When calculating the period of time before which, within
which or following which any act is to be done or step taken pursuant to this Agreement, the date
that is the reference date in calculating such period shall be excluded. If the last day of such
period is a non-Business Day, the period in question shall end on the next succeeding Business Day.



Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.



Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and
Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit
but not otherwise defined therein shall be defined as set forth in this Agreement.



Gender and Number. Any reference in this Agreement to gender shall include all
genders, and words imparting the singular number only shall include the plural and vice versa.



Headings. The provision of a Table of Contents, the division of this Agreement into
Articles, Sections and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or interpreting this Agreement.
All references in this Agreement to any “Section” are to the corresponding Section of this
Agreement unless otherwise specified.



Herein. The words such as “herein,” “hereinafter,” “hereof,”
and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which
such words appear unless the context otherwise requires.



Including. The word “including” or any variation thereof means
“including, without limitation” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters immediately following it.



(b) The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.



ARTICLE II




PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES




2.1 Purchase and Sale of Assets. On the terms and subject to the conditions set forth
in this Agreement, at the Closing Purchaser shall (or shall cause its designated Affiliate or
Affiliates to) purchase, acquire and accept from Seller, and Seller shall sell, transfer, assign,
convey and deliver to Purchaser (or its designated Affiliate or Affiliates) all of Seller’s right,
title and interest in, to and under the Purchased Assets, free and clear of all Liens, claims (as
defined in Section 101(5) of the Bankruptcy Code) and interests. “Purchased Assets” means
each of the following assets:



(a) all Purchased Intellectual Property and Purchased Technology;



(b) all Inventory;



(c) all Equipment;



(d) all rights of Seller under the Purchased Contracts;



(e) all Documents that are used in, held for use in or intended to be used in, or that arise
primarily out of, the Purchased Assets, including Documents relating to Products, services,
marketing, advertising, promotional materials, Purchased Intellectual Property, personnel files for
Transferred Employees and all files, customer files and documents (including credit information),
supplier lists, records, literature and correspondence, but excluding personnel files for Employees
of Seller who are not Transferred Employees;



(f) all Permits used by Seller in connection with the Purchased Assets to the extent
assignable;



(g) all rights of Seller under non-disclosure or confidentiality, non-compete, or
non-solicitation agreements with employees and agents of Seller or with third parties to the extent
relating to the Purchased Assets (or any portion thereof);



(h) all rights of Seller under or pursuant to all warranties, representations and guarantees
made by suppliers, manufacturers and contractors to the extent relating to Products sold, or
services provided, to Seller or to the extent affecting any Purchased Assets; and



(i) all rights, claims or causes of action of against third parties relating to any of the
Purchased Assets.



2.2 Excluded Assets. Nothing herein contained shall be deemed to transfer, assign or
convey the Excluded Assets to Purchaser, and Seller shall retain all right, title and interest to,
in and under the Excluded Assets. “Excluded Assets” shall mean all assets, properties,
interests and rights of Seller other than the Purchased Assets and those assets, properties,
interests and rights primarily related to the Purchased Assets, including each of the following
assets:



(a) all cash and accounts receivable of Seller;



(b) all deposits (including customer deposits and security deposits for rent, electricity,
telephone or otherwise) and prepaid charges and expenses of Seller;



(c) the Excluded Contracts; and



(d) all real estate and leasehold interests of Seller; and



(e) (i) all amounts recoverable or recovered by Seller in connection with any Legal
Proceedings commenced prior to the Closing Date, or after the Closing Date to the extent not
related to the Purchased Assets and (ii) all rights, claims or causes of action of Seller against
third parties relating to Excluded Assets.



2.3 Assumption of Liabilities. On the terms and subject to the conditions set forth
in this Agreement, at the Closing Purchaser shall (or shall cause its designated Affiliate or
Affiliates to) assume, effective as of the Closing, only the following liabilities of Seller
(collectively, the “Assumed Liabilities”):



(a) all Liabilities of Seller under the Purchased Contracts that arise out of or relate to the
period on and after the Closing Date; and



(b) all Liabilities relating to amounts required to be paid by Purchaser hereunder.



2.4 Excluded Liabilities. Notwithstanding anything contained in this Agreement to the
contrary, Purchaser does not assume or agree to pay, satisfy, discharge or perform, and shall not
be deemed by virtue of the execution and delivery of this Agreement or any document delivered at
the Closing pursuant to this Agreement, or as a result of the consummation of the transactions
contemplated by this Agreement, to have assumed, or to have agreed to pay, satisfy, discharge or
perform, any liability, obligation or indebtedness of Seller, arising in connection with or
relating to any period prior to the Closing Date, whether primary or secondary, direct or
indirect, known or unknown, contingent or absolute, determined or indeterminable, other than the
Assumed Liabilities. Seller shall retain and pay, satisfy, discharge and perform in accordance
with the terms thereof, all liabilities and obligations other than the Assumed Liabilities (all
such liabilities and obligations retained by Seller being referred to herein as the “Excluded
Liabilities”).



2.5 Cure Amounts.



(a) At Closing and pursuant to Section 365 of the Bankruptcy Code, Seller shall assume and
assign to Purchaser the Purchased Contracts. The cure amounts, as determined by the Bankruptcy
Court, if any (the “Cure Amounts”), necessary to cure all defaults, if any, and to pay all
actual or pecuniary losses that have resulted from such defaults under the Purchased Contracts,
shall be paid by Seller, on or before Closing, and not by Purchaser and Purchaser shall have no
liability therefor.



(b) Purchaser and Seller agree that they shall each use commercially reasonable efforts to
establish the adequate assurance of future performance by Purchaser, by taking the following
actions: furnishing affidavits or other documents or information for filing with the Bankruptcy
Court or testimony, as reasonably requested by Seller.



2.6 Further Conveyances and Assumptions.



(a) From time to time following the Closing, Seller shall, or shall cause its Subsidiaries to,
make available to Purchaser such non-confidential data in personnel records of Transferred
Employees as is reasonably necessary for Purchaser to transition such employees into Purchaser’s
records.



(b) From time to time following the Closing, Seller and Purchaser shall, and shall cause their
respective Subsidiaries to, execute, acknowledge and deliver all such further conveyances, notices,
assumptions, releases and acquaintances and such other instruments, and shall take such further
actions, as may be necessary or appropriate to assure fully to Purchaser and its respective
successors or assigns, all of the properties, rights, titles, interests, estates, remedies, powers
and privileges intended to be conveyed to Purchaser under this Agreement and the Seller Documents
and to assure fully to Seller and its Subsidiaries and their successors and assigns, the assumption
of the liabilities and obligations intended to be assumed by Purchaser under this Agreement and the
Seller Documents, and to otherwise make effective the transactions contemplated hereby and thereby.



2.7 Bulk Sales Law. Purchaser hereby waives compliance by Seller with the
requirements and provisions of any “bulk-transfer” Laws of any jurisdiction that may otherwise be
applicable with respect to the sale of any or all of the Purchased Assets to Purchaser. Pursuant
to Section 363(f) of the Bankruptcy Code, the transfer of the Purchased Assets shall be free and
clear of any security interests in the Purchased Assets, including any Liens or claims arising out
of the bulk transfer laws, and the parties shall take such steps as may be necessary or appropriate
to so provide in the Sale Order.



ARTICLE III




CONSIDERATION




3.1 Consideration. The aggregate consideration for the Purchased Assets shall be an
amount in cash equal to $2,895,000 (the “Purchase Price”).



3.2 Payment of Purchase Price.



(a) On the Closing Date, Purchaser shall pay the Purchase Price (less the Indemnity Escrow
Deposit) to Seller, which shall be paid by wire transfer of immediately available funds into an
account designated by Seller.



(b) On the Closing Date, Purchaser shall deliver to the Indemnity Escrow Agent under the
Indemnity Escrow Agreement, by wire transfer of immediately available funds, the amount of
$300,000, representing the sum of the amounts of Indemnity Escrow Deposit.



ARTICLE IV




CLOSING AND TERMINATION




4.1 Closing Date. Subject to the satisfaction of the conditions set forth in
Sections 10.1 and 10.2 hereof (or the waiver thereof by the party entitled to waive
that condition), the closing of the purchase and sale of the Purchased Assets and the assumption of
the Assumed Liabilities provided for in Article II hereof (the “Closing”) shall
take place at the offices of Weil, Gotshal & Manges LLP located at 200 Crescent Court, Suite 300,
Dallas, Texas 75201 (or at such other place as the parties may designate in writing) at 10:00 a.m.
(Dallas time) on a date to be specified by the parties, which date shall be no later than the
second Business Day after satisfaction or waiver of the conditions set forth in Article X
(other than conditions that by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions), unless another time or date, or both, are agreed to in
writing by the parties hereto. The date on which the Closing shall be held is referred to in this
Agreement as the “Closing Date.” Unless otherwise agreed by the parties in writing, the
Closing shall be deemed effective and all right, title and interest of Seller to be acquired by
Purchaser hereunder shall be considered to have passed to Purchaser as of 12:01 a.m. (Dallas time)
on the Closing Date.



4.2 Deliveries by Seller. At the Closing, Seller shall deliver to Purchaser:



(a) a duly executed bill of sale in the form of Exhibit A hereto;



(b) duly executed assumption agreement in the form of Exhibit B hereto and duly
executed assignments of the registrations and applications for registration included in the
Purchased Intellectual Property, in a form suitable for recording in the U.S. Patent and Trademark
office and applicable foreign counterpart offices, and general assignments of all other Purchased
Intellectual Property;



(c) copies of all consents, waivers and approvals referred to in Section 10.1(e);



(d) duly executed affidavit of non-foreign status for Seller that complies with Section 1445
of the Code;



(e) a duly executed Transitional Services Agreement;



(f) the officer’s certificate required to be delivered pursuant to Sections 10.1(a)
and 10.1(b);



(g) a duly executed Indemnity Escrow Agreement; and



(h) such other good and sufficient instruments of transfers as Purchaser may reasonably
request.



4.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to Seller:



(a) the Purchase Price (less the Indemnity Escrow Amount), including evidence of the wire
transfer referred to in Section 3.2 hereof;



(b) a duly executed assignment and assumption agreement in the form attached hereto as
Exhibit B hereto;



(c) a duly executed Transitional Services Agreement;



(d) the officer’s certificate required to be delivered pursuant to Sections 10.2(a)
and 10.2(b);



(e) a duly executed Indemnity Escrow Agreement; and



(f) such other documents, instruments and certificates as Seller may reasonably request.



4.4 Termination of Agreement. This Agreement may be terminated prior to the Closing
as follows:



(a) by mutual written consent of Seller and Purchaser;



(b) by Purchaser, if any of the conditions to the obligations of Purchaser set forth in
Sections 10.1 and 10.3 shall have become incapable of fulfillment other than as a
result of a breach by Purchaser of any covenant or agreement contained in this Agreement, and such
condition is not waived by Purchaser;



(c) by Seller, if any condition to the obligations of Seller set forth in Sections
10.2 and 10.3 shall have become incapable of fulfillment other than as a result of a
breach by Seller of any covenant or agreement contained in this Agreement, and such condition is
not waived by Seller;



(d) by Purchaser, if there shall be a breach by Seller of any representation or warranty, or
any covenant or agreement contained in this Agreement which would result in a failure of a
condition set forth in Section 10.1 or 10.3 and which breach cannot be cured or has
not been cured by 10 Business Days after the giving of written notice by Purchaser to Seller of
such breach;



(e) by Seller, if there shall be a breach by Purchaser of any representation or warranty, or
any covenant or agreement contained in this Agreement which would result in a failure of a
condition set forth in Section 10.2 or 10.3 and which breach cannot be cured or has
not been cured by 10 Business Days after the giving of written notice by Seller to Purchaser of
such breach;



(f) by Seller or Purchaser if there shall be in effect a final nonappealable Order of a
Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue such appeal with
reasonable diligence) that the parties reasonably agree is advisable to pursue; or



(g) by Purchaser, if there is a Material Adverse Effect;



(h) by Purchaser, if Seller has not commenced the Chapter 11 Case within two (2) Business Days
after the date hereof;



(i) by Purchaser, if the Seller has not filed with the Bankruptcy Court the Bidding Procedures
Motion within one (1) Business Day after the date of commencement of the Chapter 11 Case;



(j) by Purchaser, if the Bidding Procedures Order has not been entered by the Bankruptcy Court
within thirty (30) days after the date of commencement of the Chapter 11 Case;



(k) by Purchaser, if the Sale Order has not been entered by the Bankruptcy Court within
seventy-five (75) days after the date of commencement of the Chapter 11 Case;



(l) by Seller or Purchaser, if the Bankruptcy Court approves a Restructuring Transaction or an
Alternative Transaction or the sale of all or substantially all of the assets of Seller or any of
the Purchased Assets to a Person (or group of Persons) other than Purchaser or an Affiliate of
Purchaser, provided that no termination under this Section 4.4(l) shall be effective until
the Break-Up Fee and the Expense Reimbursement set forth in Section 7.1 hereof shall have
been paid to Purchaser;



(m) by Purchaser, if (i) the Bankruptcy Court enters an order appointing a trustee, examiner
with expanded powers or responsible officer in the Chapter 11 Case, (ii) the Chapter 11 Case is
converted to a case under chapter 7 of the Bankruptcy Code or (iii) the Chapter 11 Case is
dismissed;



(n) by Purchaser, if the Bidding Procedures Order (including the Break-Up Fee, Expense
Reimbursement or any of the provisions set forth in Section 7.2 hereof) or the Sale Order
is modified in any respect without the consent of Purchaser;



(o) by Purchaser, if any secured creditor of Seller obtains relief from the stay to foreclose
on any of the Purchased Assets, which foreclosure could cause a Material Adverse Effect; or



(p) by Purchaser, if Purchaser shall have sent written notice to Seller at least five (5) days
prior to the date of the Auction that any of the conditions set forth in Section 10.1(f),
10.1(g) or 10.1(h) has not been satisfied.



Notwithstanding the foregoing, if the Closing shall not have occurred by the close of business
on one hundred eighty (180) days after the date hereof, this Agreement shall automatically
terminate.



4.5 Procedure Upon Termination. This Agreement shall in no event terminate with
respect to Seller unless and until any and all amounts payable to Purchaser pursuant to Section
7.1 in connection with such proposed termination shall have been paid in full to Purchaser. In
the event of termination and abandonment by Purchaser or Seller, or both, pursuant to Section
4.4 hereof, written notice thereof shall forthwith be given to the other party or parties, and
this Agreement shall terminate, and the purchase of the Assets hereunder shall be abandoned,
without further action by Purchaser or Seller. If this Agreement is terminated as provided herein
each party shall redeliver all documents, work papers and other material of any other party
relating to the transactions contemplated hereby, whether so obtained before or after the execution
hereof, to the party furnishing the same.



4.6 Effect of Termination. In the event that this Agreement is validly terminated as
provided herein, then each of the parties shall be relieved of its duties and obligations arising
under this Agreement after the date of such termination and such termination shall be without
liability to Purchaser or Seller; provided, however, that the obligations of the
parties set forth in Article XIII and Sections 4.5, 4.6, 7.1,
7.2(j) and 7.2(k) hereof shall survive any such termination and shall be
enforceable hereunder; provided, further, however, that nothing in this
Section 4.6 shall relieve Purchaser or Seller of any liability for a breach of this
Agreement prior to the effective date of such termination.



ARTICLE V




REPRESENTATIONS AND WARRANTIES OF SELLER




Each Seller hereby, jointly and severally, represents and warrants to Purchaser that:



5.1 Organization and Good Standing.



Seller is a corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now conducted. Seller is duly qualified or
authorized to do business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property and each other jurisdiction in which the
conduct of its business or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified, authorized or in good standing would
not have a Material Adverse Effect. Seller has delivered to Purchaser true, complete and correct
copies of its certificate of incorporation and by-laws or comparable organizational documents as in
effect on the date hereof.



5.2 Authorization of Agreement. Subject to obtaining Bankruptcy Court approval
pursuant to the Sale Order, Seller has all requisite power, authority and legal capacity to execute
and deliver this Agreement and Seller has all requisite power, authority and legal capacity to
execute and deliver each other agreement, document, or instrument or certificate contemplated by
this Agreement or to be executed by Seller in connection with the consummation of the transactions
contemplated by this Agreement (the “Seller Documents”), to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.
Subject to obtaining Bankruptcy Court approval pursuant to the Sale Order, the execution and
delivery of this Agreement and the Seller Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite corporate action on the
part of Seller. This Agreement has been, and each of the Seller Documents will be at or prior to
the Closing, duly and validly executed and delivered by Seller and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) following the approval of this
Agreement and the transactions contemplated hereby by the Bankruptcy Court pursuant to the Sale
Order, this Agreement, constitutes, and each of the Seller Documents when so executed and delivered
will constitute, legal, valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).



5.3 Board Approval and Recommendation. The Board of Directors of Seller has (i)
determined that this Agreement and the transactions contemplated hereby, including the purchase of
the Purchased Assets by Purchaser, are advisable, fair to and in the best interests of those
Persons to whom the directors owe fiduciary duties under applicable law, (ii) determined that an
immediate sale of the Purchased Assets pursuant to Section 363 of the Bankruptcy Code is necessary
and urgent as the value of the Purchased Assets, and, therefore, the value ultimately available to
the creditors and equityholders of Seller, is rapidly deteriorating, and (iii) approved this
Agreement and the transactions contemplated hereby.



5.4 Conflicts; Consents of Third Parties.



(a) Except as a result of the Chapter 11 Case, none of the execution and delivery by Seller of
this Agreement or by Seller of the Seller Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by Seller with any of the provisions hereof or
thereof will conflict with, or result in any violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration
of any obligation or to loss of a material benefit under, or give rise to any obligation of Seller
to make any payment under, or to the increased, additional, accelerated or guaranteed rights or
entitlements of any Person under, or result in the creation of any Liens upon any of the properties
or assets of Seller under any provision of (i) the certificate of incorporation and by-laws or
comparable organizational documents of Seller; (ii) subject to entry of the Sale Order, any
Purchased Contract or Permit to which Seller is a party or by which any of the properties or assets
of Seller are bound; (iii) subject to entry of the Sale Order, any Order of any court, Governmental
Body or arbitrator applicable to Seller or any of the properties or assets of Seller as of the date
hereof; or (iv) subject to entry of the Sale Order, any applicable Law.



(b) Other than in connection with the commencement of the Chapter 11 Case, entry of the
Bidding Procedures Order and entry of the Sale Order, no consent, waiver, approval, Order, Permit
or authorization of, or declaration or filing with, or notification to, any Person or Governmental
Body is required on the part of Seller (i) in connection with the execution and delivery of this
Agreement or the Seller Documents, the compliance by Seller with any of the provisions hereof or
thereof, the consummation of the transactions contemplated hereby or the taking by Seller of any
other action contemplated hereby, or (ii) the continuing validity and effectiveness immediately
following the Closing of any Contract or Permit of Seller.



5.5 Financial Statements; Projections.



(a) Seller has delivered to Purchaser copies of the financial statements of Seller as at May
31, 2005 (the “Financial Statement Date”) reflecting the sales of the Products and the
value of the Inventory (such financial statement, including the related notes and schedules
thereto, are referred to herein as the “Financial Statement”). The Financial Statement is
complete and correct in all material respects, has been prepared in accordance with GAAP
consistently applied without modification of the accounting principles used in the preparation
thereof throughout the periods presented and presents fairly in all material respects the sales of
the Products and the value of the Inventory as at the dates and for the periods indicated.



(b) Seller makes and keeps books, records and accounts which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of its assets. Seller maintains systems of
internal accounting controls sufficient to provide reasonable assurances that: (i) transactions
are executed in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary to permit the preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded accountability for
assets is compared with the actual levels at reasonable intervals and appropriate action is taken
with respect to any differences.



(c) The financial projections and business plan provided by Seller to Purchaser prior to the
date hereof were reasonably prepared on a basis reflecting the management’s best estimates,
assumptions and judgments, at the time provided to Purchaser, as to the future financial
performance of Seller’s business, assuming reasonable access to capital and support of its
business.



(d) Seller’s principal executive officer and its principal financial officer have disclosed,
based on their most recent evaluation, to Seller’s auditors and the audit committee of the Board of
Directors of Seller (i) all significant deficiencies in the design or operation of internal
controls which could adversely affect Seller’s ability to record, process, summarize and report
financial data and have identified for Seller’s auditors any material weaknesses in internal
controls and (ii) any fraud, whether or not material, that involves management or other employees
who have a significant role in Seller’s internal controls.



(e) Seller has established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-14 under the Exchange Act); such disclosure controls and procedures are
designed to ensure that material information relating to Seller is made known to Seller’s principal
executive officer and its principal financial officer.



5.6 Inventories. With the exception of the Inventory reflected in the Financial
Statement as being obsolete, excess, damaged or otherwise unusable Inventory, the Inventory of
Seller is in good and marketable condition, and is saleable in the Ordinary Course of Business.
The Inventory of Seller set forth in the Financial Statement was properly stated therein in
accordance with GAAP consistently applied. Adequate reserves have been reflected in the Financial
Statement for obsolete, excess, damaged or otherwise unusable Inventory, which reserves were
calculated in a manner consistent with past practice and in accordance with GAAP consistently
applied. The Inventory of Seller constitutes sufficient quantities for the normal operation of
Seller’s business in accordance with past practice.



5.7 Absence of Certain Developments. Except as expressly contemplated by this
Agreement or as set forth on Schedule 5.7, since the Financial Statement Date (i) Seller
has conducted its business only in the Ordinary Course of Business and (ii) there has not been any
event, change, occurrence or circumstance that has had or could reasonably be expected to have a
Material Adverse Effect. Without limiting the generality of the foregoing, since the Financial
Statement Date:




(i) there has not been any damage, destruction or loss, whether or not covered by
insurance, with respect to the Purchased Assets having a replacement cost of more than
$10,000 for any single loss or $100,000 for all such losses;




(ii) there has not been any change by Seller in accounting or Tax reporting
principles, methods or policies;




(iii) Seller has not mortgaged, pledged or subjected to any Lien any of its assets, or
acquired any assets or sold, assigned, transferred, conveyed, leased or otherwise disposed
of any assets of Seller, except for assets acquired or sold, assigned, transferred,
conveyed, leased or otherwise disposed of in the Ordinary Course of Business;




(iv) Seller has not granted any license or sublicense of any rights under or with
respect to any Purchased Intellectual Property; and




(v) Seller has not agreed, committed, arranged or entered into any understanding to do
anything set forth in this Section 5.7.



5.8 Taxes.



(a) With respect to the Purchased Assets, (i) all material Tax Returns required to be filed by
or on behalf of Seller or any affiliated group of which Seller is or was a member have been duly
and timely filed with the appropriate Taxing Authority in all jurisdictions in which such Tax
Returns are required to be filed (after giving effect to any valid extensions of time in which to
make such filings), and all such Tax Returns are true, complete and correct in all material
respects; and (ii) all material Taxes payable by or on behalf of Seller or any affiliated group of
which Seller is or was a member have been fully and timely paid.



(b) Seller has timely paid or caused to be paid all Taxes due with respect to the Purchased
Assets, the non-payment of which would result in a Lien on any Purchased Asset or would result in
Purchaser becoming liable or responsible therefor.



(c) All deficiencies asserted or assessments made as a result of any examinations by any
Taxing Authority of the Tax Returns related to the Purchased Assets have been fully paid, and, to
the Knowledge of Seller, there are no other audits or investigations by any Taxing Authority in
progress, nor has Seller received any written notice from any Taxing Authority that it intends to
conduct such an audit or investigation related to the Purchased Assets.



(d) There is no Purchased Contract covering any Person that, individually or collectively,
could give rise to the payment of any amount that would not be deductible by Purchaser, Seller or
any of their respective Affiliates by reason of Section 280G of the Code.



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



(f) No power of attorney with respect to any Tax matter is currently in force with respect to
the Purchased Assets that would, in any manner, bind, obligate, or restrict Purchaser.



(g) Seller has not executed or entered into any agreement with, or obtained any consents or
clearances from, any Taxing Authority, or have been subject to any ruling guidance specific to
Seller, that would be binding on Purchaser for any taxable period (or portion thereof) ending on or
after the Closing Date.



5.9 Title to Purchased Assets . Seller owns and has good title to each of the
Purchased Assets, and at the Closing, Seller shall convey each of the Purchased Assets free and
clear of all Liens.



5.10 Intellectual Property



(a) Schedule 5.10(a) sets forth an accurate and complete list of all Patents,
registered Marks, material unregistered Marks, pending applications for registrations of any Marks
and unregistered Marks, registered Copyrights, and pending applications for registration of
Copyrights, owned or filed by Seller and included in the Purchased Intellectual Property.
Schedule 5.10(a) lists the jurisdictions in which each such item of Purchased Intellectual
Property has been issued or registered or in which any such application for such issuance and
registration has been filed.



(b) Except as disclosed in Schedule 5.10(b), Seller is the sole and exclusive owner of
all right, title and interest in and to all of the Intellectual Property required to be set forth
on Schedule 5.10(a), and each of the other Copyrights in any works of authorship prepared
by or for Seller that resulted from or arose out of any work performed by or on behalf of Seller or
by any employee, officer, consultant or contractor of any of them.



(c) To the Knowledge of Seller, Seller is the sole and exclusive owner of, or has valid and
continuing rights to use, sell and license, as the case may be, all other of the Purchased
Intellectual Property and Purchased Technology, free and clear of all Liens or obligations to
others (except for those specified licenses included in Schedule 5.10(g)).



(d) All Intellectual Property required to be set forth on Schedule 5.10(a) is in full
force and effect and has not lapsed, expired or been abandoned, and is not the subject of any
opposition or cancellation proceeding filed with the United States Patent and Trademark Office or
any other intellectual property registry.



(e) The Purchased Intellectual Property, the manufacturing, licensing, marketing, importation,
offer for sale, sale or use of the Products or Purchased Technology, and the present and currently
proposed business practices and methods of Seller do not constitute an infringement, unauthorized
use, misappropriation or other violation of any Intellectual Property of any Person (including
pursuant to any non-disclosure agreements or obligations to which Seller or any of their present or
former employees is a party). The Purchased Intellectual Property includes all of the Intellectual
Property necessary and sufficient to enable Seller to conduct its business in the manner in which
such business is currently being conducted and, as currently proposed to be conducted.



(f) Except with respect to licenses of commercial off-the-shelf Software, and except pursuant
to the Intellectual Property Licenses listed in Schedule 5.10(g), Seller is not required,
obligated, or under any liability whatsoever, to make any payments by way of royalties, fees or
otherwise to any owner, licensor of, or other claimant to any Purchased Intellectual Property, or
other third party, with respect to the use thereof or in connection with the conduct of Seller’s
business as currently conducted or proposed to be conducted.



(g) Schedule 5.10(g) sets forth a complete and accurate list of all Contracts to which
Seller is a party (i) granting any Intellectual Property Licenses, (ii) containing a covenant not
to compete or otherwise limiting its ability to (A) exploit fully any of the Purchased Intellectual
Property or (B) conduct Seller’s business in any market or geographical area or with any Person or
(iii) containing an agreement to indemnify any other Person against any claim of infringement,
unauthorized use, misappropriation or violation of Intellectual Property.



(h) Each of the Intellectual Property Licenses is in full force and effect and is the legal,
valid and binding obligation of Seller, enforceable against them in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). Seller
is not in default under any Intellectual Property License, nor, to the Knowledge of Seller, is any
other party to an Intellectual Property License in default thereunder, and no event has occurred
that with the lapse of time or the giving of notice or both would constitute a default thereunder.
No party to any of the Intellectual Property Licenses has exercised any termination rights with
respect thereto.



(i) No Trade Secret or any other non-public, proprietary information material to Seller’s
business as presently conducted has been authorized to be disclosed or, to the Knowledge of Seller,
has been actually disclosed by Seller to any employee or any third party other than pursuant to a
non-disclosure agreement restricting the disclosure and use of such Trade Secret or information.
Seller has taken adequate security measures to protect the secrecy, confidentiality and value of
all the Trade Secrets of Seller and any other confidential information, including invention
disclosures, not covered by any patents owned or published patent applications filed by Seller,
which measures are reasonable in the industry in which Seller operates. Each employee, consultant
and independent contractor of Seller, has entered into a written non-disclosure and invention
assignment agreement with Seller in a form provided to Purchaser.



(j) Seller is not and has not been the subject of any pending or, to the Knowledge of Seller,
threatened Legal Proceedings which involve a claim of infringement, unauthorized use,
misappropriation or other violation by any Person against Seller or challenging the ownership, use,
validity or enforceability of, any Purchased Intellectual Property. Seller has not received
written (including by electronic mail) notice of any such threatened claim or challenge and, to the
Knowledge of Seller, there are no facts or circumstances that would form the basis for any such
claim or challenge. The Purchased Intellectual Property and all of Seller’s rights in and to
Purchased Intellectual Property are valid and enforceable.



(k) To the Knowledge of Seller, no Person (including Employees and former employees of Seller)
is infringing, violating, misusing or misappropriating any material Purchased Intellectual
Property, and neither Seller nor any of its Subsidiaries has made any such claim against any Person
(including Employees and former employees of Seller).



(l) There are no Orders to which Seller is a party or by which Seller is bound which restrict
the rights to use any of the Purchased Intellectual Property or Purchased Technology.



(m) The consummation of the transactions contemplated hereby will not result in the loss or
impairment of Purchaser’s right to own or use any of the Purchased Intellectual Property or
Purchased Technology.



(n) No present or former employee has any right, title, or interest, directly or indirectly,
in whole or in part, in any Purchased Intellectual Property or Purchased Technology. To the
Knowledge of Seller, no employee, consultant or independent contractor of Seller is, as a result of
or in the course of such employee’s, consultant’s or independent contractor’s engagement by Seller,
in default or breach of any material term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement.



(o) Schedule 5.10(o) sets forth a complete and accurate list of (i) all Software that
is owned exclusively by Seller and is material to the operation of Seller’s business and (ii) all
Software that is used by Seller in its business that is not exclusively owned by Seller, excluding
Software available on reasonable terms through commercial distributors or in consumer retail stores
for a license fee of no more than $10,000.



5.11 Material Contracts. Except as set forth in Schedule 5.11, each
Purchased Contract is in full force and effect, constitutes a valid and binding obligation of
Seller and, to the Knowledge of Seller, the other parties thereto, and is legally enforceable
against Seller and, to the Knowledge of Seller, the other parties thereto, in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization, or similar laws from time to time in effect which affect the
enforcement of creditors’ rights generally. Except as disclosed in Schedule 5.11, Seller
is not in material breach or default under any Purchased Contract and, to the Knowledge of Seller,
no other party to any Purchased Contract is in material breach or default in any material respect
thereunder. To the Knowledge of Seller, no party to any of the Purchased Contracts has exercised
any termination rights with respect thereto. Seller has delivered to Purchaser true, correct and
complete copies of all of the Purchased Contracts, together with all amendments, modifications or
supplements thereto.



5.12 Labor. Seller is not a party to any labor or collective bargaining agreement and
there are no labor or collective bargaining agreements which pertain to employees of Seller.



5.13 Litigation. Except as set forth in Schedule 5.13 and the Chapter 11
Case, there is no suit, action, proceeding, investigation (to the Knowledge of Seller), claim or
order pending or, to the Knowledge of Seller, threatened against Seller (or to the Knowledge of
Seller, pending or threatened, against any of the officers, directors or key employees of Seller
with respect to their business activities on behalf of Seller), or to which Seller is otherwise a
party, which, if adversely determined, would have a Material Adverse Effect, before any
Governmental Body; nor to the Knowledge of Seller is there any reasonable basis for any such
action, proceeding, or investigation. Other than the Chapter 11 Case, Seller is not subject to any
Order of any Governmental Body except to the extent the same could not reasonably be expected to
have a Material Adverse Effect and Seller is not engaged in any legal action to recover monies due
it or for damages sustained by it.



5.14 Compliance with Laws; Permits.



(a) Seller is in compliance in all material respects with all Laws of any Governmental Body
applicable to its operations or assets or its business. Seller has not received any written or
other notice of or been charged with the violation of any Laws. To the Knowledge of Seller, Seller
is not under investigation with respect to the violation of any Laws and there are no facts or
circumstances which could form the basis for any such violation.



(b) Schedule 5.14(b) contains a list of all Permits which are required for the
operation of Seller’s business as presently conducted and as presently intended to be conducted.
Seller currently has all Permits which are required for the operation of its business as presently
conducted. Seller is not in default or violation, and no event has occurred which, with notice or
the lapse of time or both, would constitute a default or violation, in any material respect of any
term, condition or provision of any Permit to which it is a party, to which the Seller’s business
is subject or by which its properties or assets are bound and, to the Knowledge of Seller, there
are no facts or circumstances which could form the basis for any such default or violation.



5.15 Related Party Transactions.



(a) Except as set forth on Schedule 5.15, none of Seller, any Subsidiary of Seller or
any of their respective officers or employees (i) owns any direct or indirect interest of any kind
in, or controls or is a director, officer, employee or partner of, or consultant to, or lender to
or borrower from or has the right to participate in the profits of, any Person which is (A) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of Seller, (B) engaged in a
business related to the business of Seller, or (C) a participant in any transaction to which Seller
is a party or (ii) is a party to any Contract with Seller.



(b) Each Purchased Contract, agreement, or arrangement between Seller on the one hand, and any
Affiliate of Seller or any officer, director or employee of Seller on the other hand, is on
commercially reasonable terms no more favorable to the Affiliate, director, officer or employee of
Seller than what any third party negotiating on an arms-length basis would expect.



5.16 Customers and Suppliers.



(a) Schedule 5.16(a) sets forth a list of the ten (10) largest customers and the ten
(10) largest suppliers of Seller, as measured by the dollar amount of purchases therefrom or
thereby, during each of the fiscal years ended December 31, 2004, showing the approximate total
sales by Seller to each such customer and the approximate total purchases by Seller from each such
supplier, during such period.



(b) Except as set forth on Schedule 5.16(b), since December 31, 2004, no customer or
supplier listed on Schedule 5.16(a) has terminated its relationship with Seller or
materially reduced or changed the pricing or other terms of its business with Seller and, to the
Knowledge of Seller, no customer or supplier listed on Schedule 5.16(a) has notified Seller
that it intends to terminate or materially reduce or change the pricing or other terms of its
business with Seller.



5.17 Product Warranty; Product Liability.



(a) Except as set forth on Schedule 5.17, each product manufactured, sold or delivered
by Seller in conducting the Seller’s business has been in conformity with all product
specifications and all express and implied warranties. Seller does not have any liability for
replacement or repair of any such products or other damages in connection therewith or any other
customer or product obligations. Seller has not sold any products or delivered any services that
included a warranty for a period of longer than one (1) year.



(b) Seller has not committed any act or failed to commit any act, which would result in, and
there has been no occurrence which would give rise to or form the basis of, any product liability
or liability for breach of warranty (whether covered by insurance or not) on the part of Seller
with respect to products designed, manufactured, assembled, repaired, maintained, delivered or
installed or services rendered prior to the Closing.



5.18 Full Disclosure. This Agreement and the Seller Documents and their respective
schedules and exhibits delivered by or on behalf of Seller hereunder and thereunder are true,
correct and complete in all material respects. No representation or warranty of Seller contained
in this Agreement or any of the Seller Documents and no written statement made by or on behalf of
Seller to Purchaser or any of its Affiliates pursuant to this Agreement or any of the Seller
Documents contains an untrue statement of a material fact or, to Seller’s knowledge, omits to state
a material fact necessary to make the statements contained herein or therein not misleading.



5.19 Financial Advisors. Except as set forth on Schedule 5.19, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for Seller in connection
with the transactions contemplated by this Agreement and no Person is entitled to any fee or
commission or like payment in respect thereof.



5.20 No Other Representations and Warranties. Purchaser acknowledges that except as
expressly provided in this Agreement, Seller makes no representation or warranty of any kind
whatsoever or by operation of law, by statute or otherwise.



ARTICLE VI




REPRESENTATIONS AND WARRANTIES OF PURCHASER




Purchaser hereby represents and warrants to Seller that:



6.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.



6.2 Authorization of Agreement. Purchaser has full corporate power and authority to
execute and deliver this Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by Purchaser in connection with the consummation
of the transactions contemplated hereby and thereby (the “Purchaser Documents”), and to
consummate the transactions contemplated hereby and thereby. The execution, delivery and
performance by Purchaser of this Agreement and each Purchaser Document have been duly authorized by
all necessary corporate action on behalf of Purchaser. This Agreement has been, and each Purchaser
Document will be at or prior to the Closing, duly executed and delivered by Purchaser and (assuming
the due authorization, execution and delivery by the other parties hereto and thereto) this
Agreement constitutes, and each Purchaser Document when so executed and delivered will constitute,
legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).



6.3 Conflicts; Consents of Third Parties.



(a) Except as set forth on Schedule 6.3 hereto, neither of the execution and delivery
by Purchaser of this Agreement and of the Purchaser Documents, nor the compliance by Purchaser with
any of the provisions hereof or thereof will (i) conflict with, or result in the breach of, any
provision of the certificate of incorporation or by-laws of Purchaser, (ii) conflict with, violate,
result in the breach of, or constitute a default under any note, bond, mortgage, indenture,
license, agreement or other obligation to which Purchaser is a party or by which Purchaser or its
properties or assets are bound or (iii) violate any statute, rule, regulation or Order by which
Purchaser is bound, except, in the case of clauses (ii) and (iii), for such violations, breaches or
defaults as would not, individually or in the aggregate, have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated by this Agreement.



(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the part of Purchaser in
connection with the execution and delivery of this Agreement or Purchaser Documents or the
compliance by Purchaser with any of the provisions hereof or thereof.



6.4 Litigation. There are no Legal Proceedings pending or, to the knowledge of
Purchaser, threatened that are reasonably likely to prohibit or restrain the ability of Purchaser
to enter into this Agreement or consummate the transactions contemplated hereby.



6.5 Financial Advisors. No Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in respect thereof.



6.6 Financing. Purchaser at the Closing will have, sufficient funds, including its
committed financing (the “Acquisition Financing”), available to pay the Purchase Price and
any expenses incurred by Purchaser in connection with the transactions contemplated by this
Agreement.



ARTICLE VII




BANKRUPTCY COURT MATTERS




7.1 Approval of Break-Up Fee and Expense Reimbursement.



(a) Seller acknowledges and agrees that Purchaser has expended considerable time and expense
in connection with this Agreement and the negotiation thereof and the identification and
quantification of assets of Seller. In consideration therefor, Seller shall file with and seek the
approval of the Bankruptcy Court of the Bidding Procedures Motion, including the Break-Up Fee and
Expense Reimbursement, and the entry by the Bankruptcy Court of the Bidding Procedures Order
approving the payment of the break-up fee in an amount equal to Seventy Five Thousand Dollars
($75,000) (the “Break-Up Fee”) and the expense reimbursement in an amount not to exceed
Seventy Five Thousand Dollars ($75,000) (the “Expense Reimbursement”) for Purchaser’s
reasonable out-of-pocket documented expenses incurred in connection with the transactions
contemplated hereby and the financing thereof  and deeming the Break-Up Fee and the
Expense Reimbursement as administrative priority expenses under Sections 503(b) and 507(a)(1) of
the Bankruptcy Code.



(b) Seller shall pay to Purchaser the Expense Reimbursement on the first (1st)
Business Day after the earlier occurrence of any of the following events:




(i) Seller voluntarily withdraws the Sale Motion other than in connection with
Seller’s termination of this Agreement in accordance with Section 4.4(e) hereof;




(ii) the Bankruptcy Court approves an Alternative Transaction or Restructuring
Transaction, whether or not within the bidding procedures set forth in the Bidding
Procedures Order;




(iii) to the extent that Seller is no longer under the jurisdiction of the Bankruptcy
Court, Seller consummates an Alternative Transaction or Restructuring Transaction prior to
a date eighteen (18) months following the date hereof; or




(iv) Purchaser terminates this Agreement in accordance with the provisions of
Section 4.4(d), 4.4(g), 4.4(h), 4.4(i), 4.4(k),
4.4(m), 4.4(n), or 4.4(o) hereof.



(c) In addition to Seller’s payment of the Expense Reimbursement to Purchaser pursuant to
Section 7.1(b), Seller shall pay to Purchaser the Break-Up Fee on the first
(1st) Business Day after the earlier occurrence of any of the following events:




(i) Seller consummates an Alternative Transaction or Restructuring Transaction in the
Chapter 11 Case, whether or not within the bidding procedures set forth in the Bidding
Procedures Order; or




(ii) to the extent that Seller is no longer under the jurisdiction of the Bankruptcy
Court, Seller consummates an Alternative Transaction or Restructuring Transaction prior to
a date eighteen (18) months following the date hereof.



7.2 Bidding Procedures. This Agreement is subject to approval by the Bankruptcy Court
and the consideration by Seller of higher or better competing bids (each an “Alternative
Transaction”). Prior to seeking approval of the sale of the Purchased Assets, Seller shall
seek the Bankruptcy Court’s approval of the Bidding Procedures Order, which shall include the
following procedures and overbid protections for the submission and consideration of qualified
bids, along with such other bidding procedures as agreed to by Seller and Purchaser:



(a) In order for any Alternative Transaction to be a qualified bid (each a “Qualified
Bid”), it must be:




(i) in writing;




(ii) received by Purchaser and Seller at their respective addresses set forth in
Section 13.7 no later than the deadline for submitting an Alternative Transaction
established by the Bidding Procedures Order (the “Bid Deadline”);




(iii) a firm, unconditional bid to purchase the Purchased Assets, not subject to any
contingencies as to the validity, effectiveness and/or binding nature of the offer,
including, without limitation, further due diligence review or financing;




(iv) a firm bid of at least $200,000 over the Purchase Price;




(v) accompanied by sufficient information to demonstrate that the competing bidder has
the financial wherewithal and ability to timely consummate the acquisition of the Purchased
Assets on terms and conditions substantially the same as this Agreement, including evidence
of adequate financing and a financial guaranty, if appropriate;




(vi) accompanied by a signed contract substantially in the form of this Agreement, and
marked to show any changes made to this Agreement; and




(vii) accompanied by a good faith cash deposit in an amount equal to the $150,000 to
be deposited with Seller on or before the Bid Deadline;



(b) Seller shall promptly inform Purchaser of all Qualified Bids and any information received
related to the terms and conditions of such Qualified Bids;



(c) Purchaser shall have the opportunity to increase its offer to a level at least $50,000 in
excess of any Qualified Bid to be eligible to become the starting bid at the auction (the
“Auction”) contemplated by the Bidding Procedures Order (“Starting Auction Bid”);
and, in connection therewith, Purchaser shall be entitled to credit the Breakup Fee and Expense
Reimbursement against the purchase price reflected in such Qualified Bid, provided that
Purchaser delivers a statement to Seller that the actual amount of its expenses that Purchaser
reasonably expects to incur in connection with the transaction contemplated hereby are equal to or
greater than the amount of Expense Reimbursement that Purchaser seeks to have credited against the
purchase price reflected in such bid of Purchaser;



(d) Seller shall evaluate all Qualified Bids received and shall determine which Qualified Bid
reflects the highest or best offer as the Starting Auction Bid for the Purchased Assets. Seller
shall announce its determination of the Starting Auction Bid at the commencement of the Auction;



(e) the first incremental competitive bid at the Auction shall be at least $100,000 over the
Starting Auction Bid, with any subsequent increases of bids to be made in increments equal to as
least $100,000;



(f) no bids shall be considered by Purchaser unless a party submitted a Qualified Bid and
participates in the Auction;



(g) all of the Purchased Assets shall be sold in a single lot;



(h) if Seller desires to select a bid from an entity other than Purchaser that Purchaser
believes is not the highest or best bid, the Bankruptcy Court shall determine which is the
successful bidder;



(i) when determining the highest or best bid, Seller shall include the Break-Up Fee and the
Expense Reimbursement in Purchaser’s last bid, which Break-Up Fee and Expense Reimbursement would
otherwise be payable to Purchaser;



(j) the payment of the Break-Up Fee and the Expense Reimbursement to Purchaser in accordance
with Section 7.1;



(k) if any overbid from an entity other than Purchaser is accepted but fails to be
consummated, Seller shall be obligated to consummate the transaction with Purchaser, at Purchaser’s
option, on the terms of this Agreement, except for the purchase price, which shall equal the
purchase price of the next highest bid that was submitted to Seller during the Auction;



(l) In the event that Seller determines in good faith that it has not received a Qualified Bid
by the Bid Deadline that is a higher or better bid than the one represented by this Agreement,
Seller shall seek approval of this Agreement at the Approval Hearing without conducting an Auction
and without further motion; and



(m) such other terms as the Bankruptcy Court deems necessary and are reasonably acceptable to
Purchaser.



7.3 Non-Solicitation Period.



(a) From the time of Seller’s and Purchaser’s execution and delivery of this Agreement until
the Bankruptcy Court’s entry of the Bidding Procedures Order (the “Non-Solicitation
Period”), Seller shall not, nor shall it authorize or permit any Subsidiary of Seller to, nor
shall it authorize or permit any officer, director, manager or employee of, or any investment
banker, attorney or other advisor, agent or representative of, Seller or any of its Subsidiaries
(collectively, “Seller Representatives”) to solicit or otherwise proactively encourage any
entity with respect to the submission of an Alternative Transaction or negotiate the terms of an
Alternative Transaction; provided, however, that during the Non-Solicitation Period
so long as Seller is not otherwise in breach of this Agreement, nothing in this Agreement shall
prohibit Seller or Seller Representatives from entering into confidentiality agreements with any
entity or furnishing to any entity any information relating to the Purchased Assets with respect to
any proposal or expression of interest that constitutes, or which may lead to, a Qualified Bid; and
provided, further, however, that Seller shall not execute any Alternative
Transaction prior to the Bankruptcy Court’s entry of the Bidding Procedures Order. In the event
Seller receives an Alternative Transaction during the Non-Solicitation Period, Seller shall as
promptly as practicable (and in any event within twenty-four (24) hours after receipt) advise
Purchaser in writing of the details of such Alternative Transaction and the identity of the entity
submitting the Alternative Transaction and, to the extent known by the Seller, the principals who
are backing such entity.



(b) Following entry of the Bidding Procedures Order until the Bid Deadline, Seller and Seller
Representatives shall not be subject to any restrictions with respect to the solicitation or
encouragement of any entity concerning the potential or actual submission of a Qualified Bid;
provided, however, that within twenty four (24) hours after Seller’s receipt of any
offer for an Alternative Transaction, Seller must deliver to Purchaser by facsimile transmission or
send by courier service for delivery to Purchaser by the morning of the next business day true and
complete copies of any such Alternative Transaction.



7.4 The Sale Order. Seller shall use its commercially reasonable efforts to cause the
Bankruptcy Court to enter a Sale Order which contains, among other provisions requested by
Purchaser, the following provisions (it being understood that certain of such provisions may be
contained in either the findings of fact or conclusions of law to be made by the Bankruptcy Court
as part of the Sale Order):



(a) the sale of the Purchased Assets by a Seller to Purchaser (A) are or will be legal, valid
and effective transfers of the Purchased Assets; (B) vest or will vest Purchaser with all right,
title and interest of such Seller to the Purchased Assets free and clear of all Liens and claims
pursuant to Section 363(f) of the Bankruptcy Code (other than Liens created by Purchaser); and (C)
constitute transfers for reasonably equivalent value and fair consideration under the Bankruptcy
Code and the laws of the states in which Seller is incorporated and any other applicable
non-bankruptcy laws;



(b) all amounts to be paid to Purchaser pursuant to this Agreement constitute administrative
expenses under Sections 503(b) and 507(a)(1) of the Bankruptcy Code and are immediately payable if
and when the obligations of Seller arise under this Agreement, without any further order of the
Bankruptcy Court;



(c) all Persons are enjoined from taking any actions against Purchaser or any Affiliates of
Purchaser (as they existed immediately prior to the Closing) to recover any claim which such Person
has solely against a Seller or its Affiliates;



(d) pursuant to Section 1146(c) of the Bankruptcy Code, the transactions contemplated by this
Agreement shall be exempt from stamp, sales, use, transfer and certain other taxes, the so-called
“bulk sales” laws shall be waived in all necessary jurisdictions, and the transactions contemplated
herein shall be deemed to be under or in contemplation of a plan to be confirmed under Section 1129
of the Code;



(e) obligations of Seller relating to Taxes, whether arising under law, by this Agreement, or
otherwise, shall be fulfilled by Seller;



(f) the provisions of the Sale Order are non-severable and mutually dependent;



(g) provide that Purchaser will not have any successor or transferee liability for liabilities
of Seller (whether under federal or state law or otherwise) as a result of the sale of the
Purchased Assets;



(h) Purchaser has acted in good faith within the meaning of Section 363(m) of the Bankruptcy
Code, the transactions contemplated by this Agreement are undertaken by Purchaser and Seller at
arm’s length, without collusion and in good faith within the meaning of Section 363(m) of the
Bankruptcy Code, and such parties are entitled to the protections of Section 363(m) of the
Bankruptcy Code;



(i) all Purchased Contracts shall be assumed by Seller and assigned to Purchaser pursuant to
Section 365 of the Bankruptcy Code and, as required by this Agreement, Seller shall be obligated to
pay all Cure Amounts in respect thereof;



(j) the Bankruptcy Court retains exclusive jurisdiction to interpret and enforce the
provisions of this Agreement, the Bidding Procedures Order and the Sale Order in all respects;
provided, however, that in the event the Bankruptcy Court abstains from exercising
or declines to exercise jurisdiction with respect to any matter provided for in this clause or is
without jurisdiction, such abstention, refusal or lack of jurisdiction shall have no effect upon
and shall not control, prohibit or limit the exercise of jurisdiction of any other court having
competent jurisdiction with respect to any such matter; and



(k) such other provisions as Purchaser may agree to.



7.5 Bankruptcy Court Approval.



(a) As promptly as practicable after the date of this Agreement, but in no event later than
the date the Bidding Procedures Motion is filed, Seller shall file, in a form reasonably
satisfactory to Purchaser, the Sale Motion. At least 15 days prior to the hearing approving the
Sales Order, Seller shall serve a copy of the Sale Motion (along with a copy at the proposed Sale
Order and the Bidding Procedures Order) on each jurisdiction where the Purchased Assets are subject
to Tax.



(b) Seller shall use its commercially reasonable efforts to obtain entry of the Sale Order no
later than seventy-five (75) days after the date of commencement of the Chapter 11 Case.



(c) Seller shall cooperate with Purchaser and its representatives in connection with the Sale
Order, the Bidding Procedures Order and the bankruptcy proceedings in connection therewith. Such
cooperation shall include, but not be limited to, consulting with Purchaser at Purchaser’s
reasonable request concerning the status of such proceedings and providing Purchaser with copies of
requested pleadings, notices, proposed orders and other documents relating to such proceedings as
soon as reasonably practicable prior to any submission thereof to the Bankruptcy Court. Seller
further covenants and agrees that the terms of any plan it submits to the Bankruptcy Court for
confirmation shall not conflict with, supersede, abrogate, nullify or restrict the terms of this
Agreement, or in any way prevent or interfere with the consummation or performance of the
transactions contemplated by this Agreement, including, without limitation, any transaction
contemplated by or approved pursuant to the Sale Order or the Bidding Procedures Order.



7.6 Bankruptcy Court Objections. In furtherance and not in limitation of the
covenants of the parties contained in this Article VII, each of the parties hereto shall use its
commercially reasonable efforts to resolve objections, if any, as may be asserted or raised by the
Bankruptcy Court, any party in interest to the Chapter 11 Case, a Governmental Body or other Person
with respect to the transactions contemplated by this Agreement.



ARTICLE VIII




COVENANTS




8.1 Access to Information. Seller agrees that, prior to the Closing Date, Purchaser
shall be entitled, through its officers, employees and representatives (including, without
limitation, its legal advisors and accountants), to make such investigation of the properties,
businesses and operations of Seller and such examination of the books, records and financial
condition of Seller as it reasonably requests and to make extracts and copies of such books and
records. Any such investigation and examination shall be conducted during regular business hours
and under reasonable circumstances, and Seller shall cooperate fully therein. No investigation by
Purchaser prior to or after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of Seller contained in this Agreement or the
Seller Documents. In order that Purchaser may have full opportunity to make such physical,
business, accounting and legal review, examination or investigation as it may reasonably request of
the affairs of Seller, Seller shall use commercially reasonable efforts to cause the officers,
employees, consultants, agents, accountants, attorneys and other representatives of Seller to
cooperate fully with such representatives in connection with such review and examination. Seller
shall promptly deliver to Purchaser such copies of all pleadings, motions, notices, statements,
schedules, applications, reports and other papers filed by Seller in the Chapter 11 Case. Seller
shall promptly provide to Purchaser all documents and materials relating to the proposed sale of
the Purchased Assets, Purchased Contracts or any portion thereof, including, without limitation,
with respect to competing bids, and otherwise cooperate with Purchaser, to the extent reasonably
necessary in connection with Purchaser’s preparation for or participation in any part of the
Chapter 11 Case in which Purchaser’s participation is necessary, required or reasonably
appropriate. Seller shall promptly deliver to Purchaser all pleadings, motions, notices,
statements, schedules, applications, reports and other papers filed in any other judicial or
administrative proceeding as Purchaser may reasonably request. In addition, Seller shall consult
with Purchaser with respect to any written or oral communication concerning, in whole or in part,
the transactions contemplated by this Agreement.



8.2 Conduct of the Business Pending the Closing.



(a) Except as otherwise expressly contemplated by this Agreement (including the prosecution of
the Chapter 11 Case) or with the prior written consent of Purchaser, Seller shall:




(i) conduct its business only in the Ordinary Course of Business;




(ii) use its commercially reasonable efforts to (A) preserve its present business
operations, organization (including management and the sales force) and goodwill of Seller
and (B) preserve the present relationships with Persons having business dealings with
Seller (including customers and suppliers);




(iii) maintain (A) all of the assets and properties of Seller in their current
condition, ordinary wear and tear excepted and (B) insurance upon all of the assets and
properties of Seller in such amounts and of such kinds comparable to that in effect on the
date of this Agreement;




(iv) (A) maintain the books, accounts and records of Seller in the Ordinary Course of
Business, (B) continue to collect accounts receivable and pay accounts payable utilizing
normal procedures and without discounting or accelerating payment of such accounts, and (C)
comply with all contractual and other obligations applicable to the operation of Seller;




(v) comply in all material respects with applicable Laws; and




(vi) not take any action which would adversely affect the ability of the parties to
consummate the transactions contemplated by this Agreement.



(b) Except as otherwise expressly contemplated by this Agreement or with the prior written
consent of Purchaser, Seller shall not:




(i) make or rescind any election relating to Taxes, settle or compromise any claim,
action, suit, litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes, or except as may be required by applicable Law or GAAP, make any
material change to any of its methods of accounting or methods of reporting income or
deductions for Tax or accounting practice or policy from those employed in the preparation
of its most recent Tax Returns;




(ii) subject to any Lien or otherwise encumber or permit, allow or suffer to be
encumbered, any of the properties or assets (whether tangible or intangible) of Seller;




(iii) sell, assign, license, transfer, convey, lease or otherwise dispose of any of
the Purchased Assets (except for fair consideration in the Ordinary Course of Business) of
Seller;




(iv) enter into or agree to enter into any merger or consolidation with, any
corporation or other entity, and not engage in any new business or invest in, make a loan,
advance or capital contribution to, or otherwise acquire the securities of any other
Person;




(v) enter into, modify or terminate any labor or collective bargaining agreement or,
through negotiation or otherwise, make any commitment or incur any liability to any labor
organization;




(vi) introduce any material change with respect to the operation of the Seller’s
business, including any material change in the types, nature, composition or quality of
products or services, or, other than in the Ordinary Course of Business, make any change in
product specifications or prices or terms of distributions of such products;




(vii) enter into any transaction or to enter into, modify or renew any Contract which
by reason of its size or otherwise is not in the Ordinary Course of Business;




(viii) enter into any Contract, understanding or commitment that restrains, restricts,
limits or impedes the ability of the Seller’s business, or the ability of Purchaser, to
compete with or conduct any business or line of business in any geographic area;




(ix) terminate, amend, restate, supplement or waive any rights under any (A) Purchased
Contract or (B) Permit; or




(x) agree to do anything prohibited by this Section 8.2 or anything which
would make any of the representations and warranties of Seller in this Agreement untrue or
incorrect in any material respect.



8.3 Consents. Seller shall use its commercially reasonable efforts, and Purchaser
shall cooperate with Seller, to obtain at the earliest practicable date all consents and approvals
required to consummate the transactions contemplated by this Agreement, including, without
limitation, the consents and approvals referred to in Section 5.4(b) hereof.



8.4 Further Assurances. Each of Seller and Purchaser shall use its commercially
reasonable efforts to (i) take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (ii) cause the fulfillment at the earliest practicable date of
all of the conditions to their respective obligations to consummate the transactions contemplated
by this Agreement.



8.5 Non-Competition; Non-Solicitation; Confidentiality.



(a) For a period from the date hereof until the third (3rd) anniversary of the
Closing Date, Seller shall not and shall cause its Subsidiaries not to directly or indirectly, own,
manage, operate, control or participate in the ownership, management, operation or control of any
business, whether in corporate, proprietorship or partnership form or otherwise, engaged in
Seller’s business as of the date hereof and during the preceding twelve (12) months, including the
production and sale of PowerPC and FPGA based single board computer products (a “Restricted
Business”); provided, however, that the restrictions contained in this
Section 8.5(a) shall not restrict the acquisition by Seller, directly or indirectly, of
less than 2% of the outstanding capital stock of any publicly traded company engaged in a
Restricted Business. The parties hereto specifically acknowledge and agree that the remedy at law
for any breach of the foregoing will be inadequate and that Purchaser, in addition to any other
relief available to it, shall be entitled to temporary and permanent injunctive relief without the
necessity of proving actual damage or posting any bond whatsoever.



(b) For a period from the date hereof to the third (3rd) anniversary of the Closing
Date, Seller shall not and shall cause its Subsidiaries not to: (i) cause, solicit, induce or
encourage any employees of Seller who are or become employees of Purchaser or its Affiliates to
leave such employment or hire, employ or otherwise engage any such individual; or (ii) cause,
induce or encourage any material actual or prospective client, customer, supplier, or licensor of
Seller’s business (including any existing or former customer of Seller and any Person that becomes
a client or customer of Seller’s business after the Closing) or any other Person who has a material
business relationship with Seller’s business, to terminate or modify any such actual or prospective
relationship.



(c) From and after the date hereof, Seller shall not and shall cause its Subsidiaries and
their respective officers, and directors not to, directly or indirectly, disclose, reveal, divulge
or communicate to any Person other than authorized officers, directors and employees of Purchaser
or use or otherwise exploit for its own benefit or for the benefit of anyone other than Purchaser,
any Confidential Information (as defined below). Seller and its officers, directors and
Subsidiaries shall not have any obligation to keep confidential any Confidential Information if and
to the extent disclosure thereof is specifically required by law; provided,
however, that in the event disclosure is required by applicable Law, Seller shall, to the
extent reasonably possible, provide Purchaser with prompt notice of such requirement prior to
making any disclosure so that Purchaser may seek an appropriate protective order. For purposes of
this Section 8.5(c), “Confidential Information” shall mean any confidential
information with respect to Seller’s business, including, methods of operation, customers, customer
lists, Products, prices, fees, costs, Technology, inventions, Trade Secrets, know-how, Software,
marketing methods, plans, personnel, suppliers, competitors, markets or other specialized
information or proprietary matters. “Confidential Information” does not include, and there
shall be no obligation hereunder with respect to, information that (i) is generally available to
the public on the date of this Agreement or (ii) becomes generally available to the public other
than as a result of a disclosure not otherwise permissible thereunder. This Section 8.5
shall not in any way limit the disclosure of information (x) by Seller in connection with the and
prosecution of the Chapter 11 Case or (y) regarding Seller to other bidders or potential bidders to
the extent specifically permitted by this Agreement.



(d) The covenants and undertakings contained in this Section 8.5 relate to matters
which are of a special, unique and extraordinary character and a violation of any of the terms of
this Section 8.5 will cause irreparable injury to the parties, the amount of which will be
impossible to estimate or determine and which cannot be adequately compensated. Therefore,
Purchaser will be entitled to an injunction, restraining order or other equitable relief from any
court of competent jurisdiction in the event of any breach of this Section 8.5. The rights
and remedies provided by this Section 8.5 are cumulative and in addition to any other
rights and remedies which Purchaser may have hereunder or at law or in equity. In the event that
Purchaser were to seek damages for any breach of this Section 8.5, the portion of the
Purchase Price which is allocated by the parties to the foregoing covenant shall not be considered
a measure of or limit on such damages.



(e) The parties hereto agree that, if any court of competent jurisdiction in a final
nonappealable judgment determines that a specified time period, a specified geographical area, a
specified business limitation or any other relevant feature of this Section 8.5 is
unreasonable, arbitrary or against public policy, then a lesser time period, geographical area,
business limitation or other relevant feature which is determined to be reasonable, not arbitrary
and not against public policy may be enforced against the applicable party.



8.6 Preservation of Records. Seller and Purchaser agree that each of them shall
preserve and keep the records held by it, Seller’s Subsidiaries or Purchaser’s Affiliates relating
to Seller’s business for a period of seven (7) years from the Closing Date and shall make such
records and personnel available to the other as may be reasonably required by such party in
connection with, among other things, any insurance claims by, legal proceedings against or
governmental investigations of Seller or Purchaser or any of their Affiliates or in order to enable
Seller or Purchaser to comply with their respective obligations under this Agreement and each other
agreement, document or instrument contemplated hereby or thereby. In the event Seller or Purchaser
wishes to destroy such records before or after that time, such party shall first give ninety (90)
days prior written notice to the other and such other party shall have the right at its option and
expense, upon prior written notice given to such party within such ninety (90) day period, to take
possession of the records within one hundred and eighty (180) days after the date of such notice.



8.7 Publicity. Neither Seller nor Purchaser shall issue any press release or public
announcement concerning this Agreement or the transactions contemplated hereby without obtaining
the prior written approval of the other party hereto, which approval will not be unreasonably
withheld or delayed, unless, in the sole judgment of Purchaser or Seller, disclosure is otherwise
required by applicable Law or by the Bankruptcy Court with respect to filings to be made with the
Bankruptcy Court in connection with this Agreement or by the applicable rules of any stock exchange
on which Purchaser or Seller lists securities, provided that the party intending to make
such release shall use its commercially reasonable efforts consistent with such applicable Law or
Bankruptcy Court requirement to consult with the other party with respect to the text thereof.



8.8 Use of Name. Seller hereby agrees that upon the consummation of the transactions
contemplated hereby, Purchaser shall have the sole right to the use of the name “DNA Computing
Solutions” or similar names or any service marks, trademarks, trade names, identifying symbols,
logos, emblems or signs containing or comprising the foregoing, including any name or mark
confusingly similar thereto (collectively, the “Seller Marks”) and Seller shall not, and
shall not permit any Subsidiary to, use such name or any variation or simulation thereof. In
furtherance thereof, as promptly as practicable but in no event later than thirty (30) days
following the Closing Date, Seller shall remove, strike over or otherwise obliterate all Seller
Marks from all materials owned by Seller and used or displayed publicly including, without
limitation, any sales and marketing materials, displays, signs, promotional materials and other
materials.



8.9 Financing Statement Releases. On or prior to the Closing, Seller shall have filed
valid releases of any and all financing statements filed with respect to any Purchased Asset.



ARTICLE IX




EMPLOYEES AND EMPLOYEE BENEFITS




9.1 Employment.



(a) Except as otherwise provided herein, at any time immediately prior to or after the
Closing, Purchaser shall be permitted to offer employment to any employees of Seller. Such
individuals who accept such offer are referred to herein as the “Transferred Employees.”
Subject to applicable Laws, Purchaser shall have the right to dismiss any or all Transferred
Employees at any time, with or without cause, and to change the terms and conditions of their
employment (including compensation and employee benefits provided to them).



(b) To the extent permitted by applicable Law, from time to time following the Closing, Seller
shall make available to Purchaser such non-confidential data in personnel records of Transferred
Employees as is reasonably necessary for Purchaser to transition such employees into Purchaser’s
records.



9.2 Indemnification. Seller shall indemnify and hold Purchaser and its Affiliates
harmless with respect to any Transferred Employee from (i) any employment-related liability with
respect to employment on or prior to the date any such Transferred Employee was hired by Purchaser
and (ii) any liability under WARN.



ARTICLE X




CONDITIONS TO CLOSING




10.1 Conditions Precedent to Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or all of which may be waived
by Purchaser in whole or in part to the extent permitted by applicable Law):



(a) the representations and warranties of Seller set forth in this Agreement qualified as to
materiality shall be true and correct, and those not so qualified shall be true and correct in all
material respects, as of the date of this Agreement and as of the Closing as though made at and as
of the Closing, except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct in all material respects,
on and as of such earlier date) and Purchaser shall have received a certificate signed by an
authorized officer of Seller (in form and substance reasonably satisfactory to Purchaser), dated
the Closing Date, to such effect;



(b) Seller shall have performed and complied in all respects with all obligations and
agreements required in this Agreement to be performed or complied with by it prior to the Closing
Date, and Purchaser shall have received a certificate signed by an authorized officer of Seller (in
form and substance reasonably satisfactory to Purchaser), dated the Closing Date, to such effect
and copies of such corporate resolutions and other documents evidencing the performance thereof as
Purchaser may reasonably request;



(c) there shall not have been or occurred any event, change, occurrence or circumstance that
has had or which could reasonably be expected to have a Material Adverse Effect since the Financial
Statement Date;



(d) no Legal Proceedings (including, without limitation, any proceeding over which the
Bankruptcy Court has jurisdiction under 28 U.S.C. § 157(b) and (c)) shall have been instituted or
threatened or claim or demand made against Seller or Purchaser seeking to restrain or prohibit or
to obtain substantial damages with respect to the consummation of the transactions contemplated
hereby, and there shall not be in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby;



(e) Seller shall have obtained all consents, waivers and approvals referred to in Section
5.4(b) hereof in a form satisfactory to Purchaser;



(f) Purchaser shall have entered into employment contracts or arrangement with the Employees
identified on Schedule 10.1(f) on terms and conditions satisfactory to Purchaser in its
sole discretion, which condition shall be deemed satisfied if Purchaser does not provide written
notice to Seller on or prior to the day immediately prior to the date of the Auction that such
condition has not been satisfied;



(g) Purchaser shall have entered into a real property lease for a facility satisfactory to
Purchaser for Purchaser’s operation of its business with respect to the Purchased Assets on terms
and conditions satisfactory to Purchaser in its sole discretion, which condition shall be deemed
satisfied if Purchaser does not provide written notice to Seller on or prior to the day immediately
prior to the date of the Auction that such condition has not been satisfied;



(h) Purchaser shall be satisfied, in its sole discretion, with its due diligence of
Purchaser’s customers and suppliers, which condition shall be deemed satisfied if Purchaser does
not provide written notice to Seller on or prior to the day immediately prior to the date of the
Auction that such condition has not been satisfied; and



(i) Seller shall have rejected in the Chapter 11 Case the Vista Agreements.



10.2 Conditions Precedent to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to
or on the Closing Date, of each of the following conditions (any or all of which may be waived by
Seller in whole or in part to the extent permitted by applicable law):



(a) The representations and warranties of Purchaser set forth in this Agreement qualified as
to materiality shall be true and correct, and those not so qualified shall be true and correct in
all material respects, as of the date of this Agreement and as of the Closing as though made at and
as of the Closing, except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct in all material respects,
on and as of such earlier date); and



(b) Purchaser shall have performed and complied in all respects with all obligations and
agreements required by this Agreement to be performed or complied with by Purchaser on or prior to
the Closing Date.



10.3 Conditions Precedent to Obligations of Purchaser and Seller. The respective
obligations of Purchaser and Seller to consummate the transactions contemplated by this Agreement
are subject to the fulfillment, on or prior to the Closing Date, of each of the following
conditions (any or all of which may be waived by Purchaser and Seller in whole or in part to the
extent permitted by applicable Law):



(a) no Legal Proceedings shall have been instituted or threatened or claim or demand made
against Seller or Purchaser seeking to restrain or prohibit or to obtain substantial damages with
respect to the consummation of the transactions contemplated hereby, and there shall not be in
effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;



(b) the Bankruptcy Court shall have entered the Bidding Procedures Order; and



(c) the Bankruptcy Court shall have entered the Sale Order and any stay period applicable to
the Sale Order shall have expired or shall have been waived by the Bankruptcy Court.



10.4 Frustration of Closing Conditions. Neither Seller nor Purchaser may rely on the
failure of any condition set forth in Section 10.1, 10.2, 10.3, or, as the
case may be, if such failure was caused by such party’s failure to comply with any provision of
this Agreement.



ARTICLE XI




INDEMNIFICATION




11.1 Survival of Representations and Warranties. The representations and warranties
of the parties contained in Articles V and VI of this Agreement shall survive the
Closing through and including the first (1st) anniversary of the Closing Date (the
“Survival Period”); provided, however, that any obligations to indemnify
and hold harmless shall not terminate with respect to any Losses as to which the Person to be
indemnified shall have given notice (stating in reasonable detail the basis of the claim for
indemnification) to the indemnifying party in accordance with Section 13.3(a) before the
termination of the Survival Period.



11.2 Indemnification.



(a) Subject to Section 11.4 hereof, Seller hereby agrees to indemnify and hold
Purchaser and its directors, officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and assigns (collectively, the “Purchaser Indemnified Parties”)
harmless from and against:




(i) any and all losses, liabilities, obligations, damages, costs and expenses
(collectively, “Losses”) based upon, attributable to or resulting from the failure
of any representation or warranty of Seller set forth in this Agreement or in any Seller
Document, to be true and correct in all respects at the date hereof and at the Closing
Date;




(ii) any and all Losses based upon, attributable to or resulting from the breach of
any covenant or other agreement on the part of Seller under this Agreement or any Seller
Document;




(iii) any and all Losses arising out of, based upon or relating to any Excluded Asset
or any Excluded Liability; and




(iv) any and all Losses imposed under or pursuant to environmental Laws, including any
loss of any tangible personal property of Seller, liabilities, obligations, fines,
penalties, damages, costs and expenses imposed under or pursuant to environmental Laws
arising from or related to any condition, act or omission, by Seller or any predecessor
thereof or related to the operations of Seller or any predecessor thereof at any property
currently or formerly owned, operated or leased by Seller, whether known or unknown, to the
extent existing on or prior to the Closing Date, including, but not limited to any
environmental costs and Liabilities; and




(v) any and all notices, actions, suits, proceedings, claims, demands, assessments,
judgments, costs, penalties and expenses, including attorneys’ and other professionals’
fees and disbursements (collectively, “Expenses”) incident to any and all Losses
with respect to which indemnification is provided hereunder.



(b) Subject to Section 11.4, Purchaser hereby agrees to indemnify and hold Seller and
its Affiliates, stockholders, agents, attorneys, representatives, successors and permitted assigns
(collectively, the “Seller Indemnified Parties”) harmless from and against:




(i) any and all Losses based upon, attributable to or resulting from the failure of
any representation or warranty of Purchaser set forth in this Agreement or any Purchaser
Document, to be true and correct at the date hereof and at the Closing Date;




(ii) any and all Losses based upon, attributable to or resulting from the breach of
any covenant or other agreement on the part of Purchaser under this Agreement or any
Purchaser Document;




(iii) any and all Losses arising out of, based upon or relating to any Assumed
Liability;




(iv) any and all Losses arising in connection with the conduct and operation of
Purchaser’s business on and after the Closing Date; and




(v) any and all Expenses incident to any and all Losses with respect to which
indemnification is provided hereunder.



11.3 Indemnification Procedures.



(a) In the event that any Legal Proceedings shall be instituted or that any claim or demand
shall be asserted by any Person in respect of which payment may be sought under Section
11.2 hereof (regardless of the limitations set forth in Section 11.4)
“Indemnification Claim”), the indemnified party shall reasonably and promptly cause written
notice of the assertion of any Indemnification Claim of which it has knowledge which is covered by
this indemnity to be forwarded to the indemnifying party. The indemnifying party shall have the
right, at its sole expense, to be represented by counsel of its choice, which must be reasonably
satisfactory to the indemnified party, and to defend against, negotiate, settle or otherwise deal
with any Indemnification Claim which relates to any Losses indemnified against hereunder;
provided that the indemnifying party shall have acknowledged in writing to the indemnified
party its unqualified obligation to indemnify the indemnified party as provided hereunder. If the
indemnifying party elects to defend against, negotiate, settle or otherwise deal with any
Indemnification Claim which relates to any Losses indemnified against hereunder, it shall within
ten (10) days (or sooner, if the nature of the Indemnification Claim so requires) notify the
indemnified party of its intent to do so. If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Indemnification Claim which relates to any Losses
indemnified against hereunder, fails to notify the indemnified party of its election as herein
provided or contests its obligation to indemnify the indemnified party for such Losses under this
Agreement, the indemnified party may defend against, negotiate, settle or otherwise deal with such
Indemnification Claim. If the indemnified party defends any Indemnification Claim, then the
indemnifying party shall reimburse the indemnified party for the Expenses of defending such
Indemnification Claim upon submission of periodic bills. If the indemnifying party shall assume
the defense of any Indemnification Claim, the indemnified party may participate, at his or its own
expense, in the defense of such Indemnification Claim; provided, however, that such
indemnified party shall be entitled to participate in any such defense with separate counsel at the
expense of the indemnifying party if (i) so requested by the indemnifying party to participate or
(ii) in the reasonable opinion of counsel to the indemnified party a conflict or potential conflict
exists between the indemnified party and the indemnifying party that would make such separate
representation advisable; and provided, further, that the indemnifying party shall
not be required to pay for more than one such counsel for all indemnified parties in connection
with any Indemnification Claim. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such Indemnification Claim.
Notwithstanding anything in this Section 11.3 to the contrary, neither the indemnifying
party nor the indemnified party shall, without the written consent of the other party, settle or
compromise any Indemnification Claim or permit a default or consent to entry of any judgment unless
the claimant and such party provide to such other party an unqualified release from all liability
in respect of the Indemnification Claim. Notwithstanding the foregoing, if a settlement offer
solely for money damages is made by the applicable third party claimant, and the indemnifying party
notifies the indemnified party in writing of the indemnifying party’s willingness to accept the
settlement offer and, subject to the applicable limitations of Section 11.4, pay the amount
called for by such offer, and the indemnified party declines to accept such offer, the indemnified
party may continue to contest such Indemnification Claim, free of any participation by the
indemnifying party, and the amount of any ultimate liability with respect to such Indemnification
Claim that the indemnifying party has an obligation to pay hereunder shall be limited to the lesser
of (A) the amount of the settlement offer that the indemnified party declined to accept plus the
Losses of the indemnified party relating to such Indemnification Claim through the date of its
rejection of the settlement offer or (B) the aggregate Losses of the indemnified party with respect
to such Indemnification Claim. If the indemnifying party makes any payment on any Indemnification
Claim, the indemnifying party shall be subrogated, to the extent of such payment, to all rights and
remedies of the indemnified party to any insurance benefits or other claims of the indemnified
party with respect to such Indemnification Claim.



(b) After any final judgment or award shall have been rendered by a Governmental Body of
competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement
shall have been consummated, or the indemnified party and the indemnifying party shall have arrived
at a mutually binding agreement with respect to an Indemnification Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing by the indemnifying
party pursuant to this Agreement with respect to such matter and the indemnifying party shall be
required to pay all of the sums so due and owing to the indemnified party by wire transfer of
immediately available funds within ten (10) Business Days after the date of such notice.



(c) The failure of the indemnified party to give reasonably prompt notice of any
Indemnification Claim shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying party can demonstrate
actual loss and prejudice as a result of such failure.



11.4 Breaches of Representations and Warranties. For purposes of calculating Losses
hereunder, any materiality or material adverse effect qualifications in the representations,
warranties, covenants and agreements shall be ignored.



11.5 Limitations on Indemnification . Neither Seller nor Purchaser shall be required
to indemnify any Person hereunder for an aggregate amount of Losses and Expenses above the amount
of the Indemnity Escrow Fund. The Indemnity Escrow Fund shall be the sole source of payment of any
of Seller’s indemnification obligations hereunder.



11.6 Indemnity Escrow. On the Closing Date, Purchaser shall pay from the Purchase
Price to the Indemnity Escrow Agent, in immediately available funds, to the account designated by
the Indemnity Escrow Agent, the Indemnity Escrow Amount, in accordance with the terms of this
Agreement and the Indemnity Escrow Agreement. Any payment Seller is obligated to make to any
Purchaser Indemnified Parties pursuant to this Article XI shall be paid first from the
Indemnity Escrow Fund. Following the first (1st) anniversary of the Closing Date, the
Indemnity Escrow Agent shall release the Indemnity Escrow Fund (to the extent not utilized to pay
Purchaser for any indemnification claim) to Seller, except that the Indemnity Escrow Agent shall
retain an amount equal to the amount of claims for indemnification under this Article XI
asserted prior to such first (1st) anniversary but not yet resolved (“Unresolved
Claims”). The Indemnity Escrow Amount retained for Unresolved Claims shall be released by the
Indemnity Escrow Agent (to the extent not utilized to pay Purchaser for any such claims resolved in
favor of Purchaser) upon their resolution in accordance with this Article XI.



11.7 Tax Treatment of Indemnity Payments. Seller and Purchaser agree to treat any
indemnity payment made pursuant to this Article XI as an adjustment to the Purchase Price
for all Tax purposes. If, notwithstanding the treatment required by the preceding sentence, any
indemnification payment is determined to be taxable to the party receiving such payment by any
Taxing Authority, the paying party shall also indemnify the party receiving such payment for any
Taxes incurred by reason of the receipt of such payment and any Expenses incurred by the party
receiving such payment in connection with such Taxes (or any asserted deficiency, claim, demand,
action, suit, proceeding, judgment or assessment, including the defense or settlement thereof,
relating to such Taxes).



ARTICLE XII




TAXES




12.1 Transfer Taxes. Seller shall (i) be responsible for (and shall indemnify and
hold harmless Purchaser against) any and all Liabilities for any sales, use, stamp, documentary,
filing, recording, transfer, real estate transfer, stock transfer, gross receipts, registration,
duty, securities transactions or similar fees or taxes or governmental charges (together with any
interest or penalty, addition to tax or additional amount imposed) as levied by any Taxing
Authority in connection with the transactions contemplated by this Agreement (collectively,
“Transfer Taxes”), regardless of the Person liable for such Transfer Taxes under applicable
Law and (ii) timely file or caused to be filed all necessary documents (including all Tax Returns)
with respect to Transfer Taxes. Notwithstanding the foregoing, the Seller shall use its
commercially reasonable efforts to cause the Sale Order to contain a provision that Seller’s sale,
transfer, assignment and conveyance of the Purchased Assets to Purchaser hereunder shall be
entitled to the protections afforded under Section 1146(c) of the Bankruptcy Code. The parties
will reasonably cooperate to minimize any such taxes, including with respect to delivery location.



12.2 Prorations. Seller shall bear all property and ad valorem tax liability with
respect to the Purchased Assets if the lien or assessment date arises prior to the Closing Date
irrespective of the reporting and payment dates of such taxes. All other real property taxes,
personal property taxes, or ad valorem obligations and similar recurring taxes and fees on the
Purchased Assets for taxable periods beginning before, and ending after, the Closing Date, shall be
prorated between Purchaser and Seller as of 12:01 a.m. eastern standard time on the Closing Date.
With respect to Taxes described in this Section 12.2, Seller shall timely file all Tax
Returns due before the Closing Date with respect to such Taxes and Purchaser shall prepare and
timely file all Tax Returns due after the Closing Date with respect to such Taxes. If one party
remits to the appropriate Taxing Authority payment for Taxes, which are subject to proration under
this Section 12.2 and such payment includes the other party’s share of such Taxes, such
other party shall promptly reimburse the remitting party for its share of such Taxes.



12.3 Purchase Price Allocation. Not later than sixty (60) days after the Closing
Date, Purchaser shall prepare and deliver to Seller copies of Form 8594 and any required exhibits
thereto (the “Asset Acquisition Statement”) allocating the purchase price among the
Purchased Assets. Purchaser shall prepare and deliver to Seller from time to time revised copies
of the Asset Acquisition Statement (the “Revised Statements”) so as to report any matters
on the Asset Acquisition Statement that need updating (including purchase price adjustments, if
any). The purchase price for the Purchased Assets shall be allocated in accordance with the Asset
Acquisition Statement or, if applicable, the last Revised Statements, provided by Purchaser to
Seller, and all income Tax Returns and reports filed by Purchaser and Seller shall be prepared
consistently with such allocation.



12.4 Cooperation on Tax Matters.



(a) Purchaser and Seller shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the Purchased Assets as is reasonably
necessary for the preparation and filing of any Tax Return, claim for refund or other required or
optional filings relating to Tax matters, for the preparation for any Tax audit, for the
preparation for any Tax protest, for the prosecution or defense of any suit or other proceeding
relating to Tax matters.



(b) Purchaser shall retain possession of all accounting, business, financial and Tax records
and information relating to the Purchased Assets that are in existence on the Closing Date and
transferred to Purchaser hereunder for a period of at least three (3) years from the Closing Date.
Purchaser shall give Seller notice and an opportunity to retain any such records in the event that
Purchaser determines to destroy or dispose of them after such period. In addition, from and after
the Closing Date, Purchaser shall provide access to Seller (after reasonably detailed prior notice
and during normal business hours), to the books, records, documents and other information relating
to the Purchased Assets as is reasonably necessary for Seller to properly prepare for, file, prove,
answer, prosecute and/or defend any Tax Return, claim, filing, tax audit, tax protest, suit,
proceeding or answer.



ARTICLE XIII




MISCELLANEOUS




13.1 Expenses. Except for the Expense Reimbursement and as otherwise provided in this
Agreement, each of Seller and Purchaser shall bear its own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions contemplated hereby and
thereby.



13.2 Specific Performance. Each of Seller and Purchaser acknowledges and agrees that
the breach of this Agreement would cause irreparable damage to Purchaser or Seller, as the case may
be, and that Purchaser or Seller, as the case may be, will not have an adequate remedy at law.
Therefore, the obligations of Seller under this Agreement, including, without limitation, Seller’s
obligation to sell the Purchased Assets to Purchaser and Purchaser’s obligation to purchase the
Purchased Assets from Seller, shall be enforceable by a decree of specific performance issued by
any court of competent jurisdiction, and appropriate injunctive relief may be applied for and
granted in connection therewith. Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.



13.3 Submission to Jurisdiction; Consent to Service of Process.



(a) The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the
Bankruptcy Court over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto may be heard and determined
in the Bankruptcy Court; provided, however, that in the event the Bankruptcy Court
abstains from exercising or declines to exercise jurisdiction with respect to any matter provided
for in this sentence or is without jurisdiction, such abstention, refusal or lack of jurisdiction
shall have no effect upon and shall not control, prohibit or limit the exercise of jurisdiction of
any other court having competent jurisdiction with respect to any such matter. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.



(b) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by the mailing of a copy thereof in accordance with the
provisions of Section 13.7.



13.4 Waiver of Right to Trial by Jury. Each party to this Agreement waives any right
to trial by jury in any action, matter or proceeding regarding this Agreement or any provision
hereof.



13.5 Entire Agreement; Amendments and Waivers. This Agreement (including the
schedules and exhibits hereto) represent the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof. This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a further or continuing waiver
of such breach or as a waiver of any other or subsequent breach. No failure on the part of any
party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by
such party preclude any other or further exercise thereof or the exercise of any other right, power
or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.



13.6 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and performed in such State.



13.7 Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand (with written confirmation
of receipt), (ii) when sent by facsimile (with written confirmation of transmission) or (iii) one
business day following the day sent by overnight courier (with written confirmation of receipt), in
each case at the following addresses and facsimile numbers (or to such other address or facsimile
number as a party may have specified by notice given to the other party pursuant to this
provision):



If to Seller, to:



TeraForce Technology Corporation



1240 E. Campbell Road



Richardson, TX 75081



Facsimile: (469) 330-4972



Attention: Chief Executive Officer



With a copy to:



Munsch Hardt Kopf & Harr, P.C.



1445 Ross Avenue, Suite 4000



Dallas, TX 75202



Facsimile: 214-855-7584



Attention: Joseph J. Wielebinski



If to Purchaser, to:



GE Fanuc Embedded Systems, Inc.



P.O. Box 8106



Charlottesville, VA 22906



Facsimile: (434) 978-6435



Attention: President and Chief Executive Officer



With a copy to:



GE Fanuc Embedded Systems, Inc.



P.O. Box 8106



Charlottesville, VA 22906



Facsimile: (434) 978-5997



Attention: Vice President & General Counsel



and




Weil, Gotshal & Manges LLP


767 Fifth Avenue


New York, NY 10153


Facsimile: (212) 310-8007


Attention: Gary T. Holtzer



13.8 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any law or public policy, all other terms or provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.



13.9 Binding Effect; Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights in any person or
entity not a party to this Agreement except as provided below. No assignment of this Agreement or
of any rights or obligations hereunder may be made by either Seller or Purchaser (by operation of
law or otherwise) without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void; provided, however, that
Purchaser may assign this Agreement and any or all rights or obligations hereunder (including,
without limitation, Purchaser’s rights to purchase the Purchased Assets and Purchaser’s rights to
seek indemnification hereunder) to any Affiliate of Purchaser. Upon any such permitted assignment,
the references in this Agreement to Purchaser shall also apply to any such assignee unless the
context otherwise requires.



13.10 Non-Recourse. No past, present or future director, officer, employee,
incorporator, member, partner, equityholder, Affiliate, agent, attorney or representative of
Purchaser or its Affiliates shall have any liability for any obligations or liabilities of
Purchaser under this Agreement or the Purchaser Documents of or for any claim based on, in respect
of, or by reason of, the transactions contemplated hereby and thereby.



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



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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first written above.




GE FANUC EMBEDDED SYSTEMS, INC.




By: /s/ Jeff Garwood

Name: Jeff Garwood

Title: President and Chairman





TERAFORCE TECHNOLOGY CORPORATION




By: /s/ Robert P. Capps

Name: Robert P. Capps

Title: Executive Vice President





DNA COMPUTING SOLUTIONS, INC.




By: /s/ Robert P. Capps

Name: Robert P. Capps

Title: Executive Vice President





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