Exhibit 10.47 Asset Purchase Agreement

Exhibit
    10.47

    


    


    


    


    


    


    


    ASSET
      PURCHASE AGREEMENT

    


    by
      and
      among

    


    Cabot
      Microelectronics Corporation,

    a
      Delaware corporation, 

    


    QED
      Technologies International, Inc.,

    a
      Delaware corporation,

    


    QED
      Technologies, Inc.,

    a
      New
      York corporation,

    


    Don
      Golini,

    


    and

    


    Lowell
      Mintz

    


    Dated
      June 15,
      2006

    


    



    
      
        
          CONFIDENTIAL

        

        
        

      

      
        
        

        
          

        

      

       

    

     

    
       

       

      
        
        

        
           Execution
            Version

        

      

    



    


    Table
      of Contents:

    


    Section                                              Page
      Number

    
 

    
      
        	 1.	 Definitions
                and Usage	 1
	 2.	 Sale
                and Transfer of Assets; Closing	 13
	 3.	 Representations
                and Warranties of Seller and Shareholders	 23
	 4.	 Representations
                and Warranties of Buyer	 46
	 5.	 Covenants
                of Seller Prior to Closing	 47
	 6.	 Covenants
                of Buyer Prior to Closing	 50
	 7.	 Conditions
                Precedent to Buyer's Obligation to Close	 51
	 8.	 Conditions
                Precedent to Seller's Obligation to Close	 53
	 9.	 Termination	 53
	 10.	 Additional
                Covenants	 55
	 11.	 Indemnification;
                Remedies	 59
	 12.	 Confidentiality	 67
	 13.	 General
                Provisions	 69


      

    

    
    

     

    Exhibits:

    


    
      	 2.5	 Preliminary
              Allocation of Initial Purchase Price and Consideration
	 2.7(a)(i)	 Bill
              of Sale, Assignment and Assumption Agreement
	 2.8	 Sample
              Adjustment Amount Calculation


    

     

    
 


    
      
        
          -
            -CONFIDENTIAL

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           Execution
            Version

        

      

    



    


    


    ASSET
      PURCHASE AGREEMENT

     

    This
      Asset Purchase Agreement (this “Agreement”)
      is
      dated June 15,
      2006,
      by and among, Cabot Microelectronics Corporation, a Delaware corporation
      (“CMC”),
      QED
      Technologies International, Inc., a Delaware corporation and wholly owned
      subsidiary of CMC (“Buyer”),
      QED
      Technologies, Inc., a New York corporation ("Seller"),
      Don
      Golini, an individual and resident of the State of New York (“Mr.
      Golini”),
      and
      Lowell Mintz, an individual and resident of the State of New York (“Mr.
      Mintz”
and,
      together with Mr. Golini, the “Shareholders”
and,
      each, a “Shareholder”).
      

     

    RECITALS

     

    Mr.
      Golini, individually and through various Affiliated trusts and immediate family
      members, beneficially owns One Million (1,000,000) shares of Class A common
      stock of Seller, which constitute Fifty Percent (50%) of the issued and
      outstanding shares of voting capital stock of Seller. Mr. Mintz, individually
      and through various Affiliated trusts, beneficially owns One Million (1,000,000)
      shares of Class A common stock of Seller, which constitute Fifty Percent (50%)
      of the issued and outstanding shares of voting capital stock of Seller. Seller
      and the Shareholders desire to sell, and Buyer desires to purchase, the
      Purchased Assets (as defined below) of Seller for the consideration and on
      the
      terms set forth in this Agreement.

     

    AGREEMENT

    


    The
      parties, intending to be legally bound, agree as follows:

     

    1. Definitions
      and Usage

     

     

    1.1 Definitions

     

    


    For
      purposes of this Agreement, the following terms and variations thereof have
      the
      meanings specified or referred to in this Section 1.1:

    


    "Accounts
      Receivable"--(a) all trade accounts receivable and other rights to payment
      from
      customers of Seller and the full benefit of all security for such accounts
      or
      rights to payment, including all trade accounts receivable representing amounts
      receivable in respect of goods shipped or products sold or services rendered
      to
      customers of Seller, (b) all other accounts or notes receivable of Seller and
      the full benefit of all security for such accounts or notes and (c) any claim,
      remedy or other right related to any of the foregoing.

    


    "Active
      Employee"--as defined in Section 10.1(a).

    


    "Adjustment
      Amount"--as defined in Section 2.8.

    


    "Affiliate"--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. For purposes of this definition "control" (including
      "controlling," "controlled by," and "under common control with") means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract or otherwise, and shall be construed
      as such term is used in the rules promulgated under the Securities
      Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Agreed
      Firm” --as defined in Section 2.3(c).

    


    "Assumed
      Liabilities"--as defined in Section 2.4(a).

    


    "Audited
      Financial Statements"--as defined in Section 3.4.

    


    “Bid”--any
      outstanding quotation bid or proposal by the Seller which, if accepted or
      awarded, would lead to a contract with the U.S. government, any other
      Governmental Body or a prime contractor or a higher tier subcontractor to the
      U.S. government or any other Governmental Body, for the design, manufacture
      or
      sale of products or the provision of services directly or indirectly to the
      U.S.
      government or any other Governmental Body. 

    


    "Bill
      of
      Sale"--as defined in Section 2.7(a)(i).

    


    "Breach"--any
      breach of, or any inaccuracy in, any representation or warranty or any breach
      of, or failure to perform or comply with, any covenant or obligation, in or
      of
      this Agreement or any other Contract, or any event which with the passing of
      time or the giving of notice, or both, would constitute such a breach,
      inaccuracy or failure.

    


    "BSI"--Byelocorp
      Scientific, Inc., a New York corporation.

    


    “BSI
      Agreements”--as defined in section 2.7(c).

    


    "BSI
      Intellectual Property"--Purchased Assets, as such term is defined in the BSI
      Purchase Agreement.

    


    “BSI
      License Agreement” --the agreement, dated July 25, 1996, between BSI and MR
      Finishing Systems, LLC, a New York limited liability company and the predecessor
      of Seller.

    


    “BSI
      Purchase Agreement” --the technology asset purchase agreement, dated the date
      hereof, among Buyer, Seller, the Shareholders and BSI, in the form executed
      by
      Buyer and BSI as of the date hereof, pursuant to which Buyer will purchase
      the
      BSI Intellectual Property on the Closing Date, which purchase shall include
      an
      assignment by BSI to Buyer of that certain Exclusive License Agreement between
      BSI and the University of Rochester dated June 12, 2006 (the “Rochester License
      Agreement”), subject to the terms hereof and thereof.

    


    “Business”--as
      defined in Section 2.3(b). 

    


    "Business
      Conducted by Buyer and/or CMC"--all businesses conducted by the Buyer or CMC
      as
      of the Closing Date (including, but not limited to, the Business), of whatever
      kind, within or outside of the United States of America, including, but not
      limited to, the development, use, sales, manufacture or incorporation for use,
      of products, in or into fine finish polishing and/or chemical mechanical
      planarization (CMP) products, applications and/or compositions, and/or the
      development, use, sale, and/or manufacture of such fine finish polishing and/or
      CMP products, applications or compositions, for the polishing of or use in
      connection with magnetic recording structures and/or devices, magnetic recording
      media substrates, integrated circuit devices and/or semiconductor wafers,
      optical and optical-electronic devices and/or surfaces (e.g., fiber optics
      or
      other optics), micro-electro mechanical systems (MEMS), flat panel displays,
      light emitting diodes, photovoltaic devices, metallic and/or crystalline
      surfaces, and/or other industries or products that could benefit from fine
      finish polishing applications.

    


    "Business
      Day"--any day other than (a) Saturday or Sunday or (b) any other day on which
      banks in Illinois are permitted or required to be closed.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    


    "Buyer
      Group"--as defined in Section 5.1.

    


    "Buyer
      Indemnified Persons”--as defined in Section 11.2.

    


    "Buyer’s
      Closing Documents"--as defined in Section 4.2(a).

    


    “Calculation
      Notice” --as defined in Section 2.3(c).

    


    “Cash
      Purchase Price” --as defined in Section 2.3(c).

    


    "Closing”--as
      defined in Section 2.6.

    


    "Closing
      Date"--the date on which the Closing actually takes place.

    


    "Closing
      Financial Statements"--as defined in Section 2.9(b).

    


    "Closing
      Working Capital"--as defined in Section 2.9(b).

    


    "CMC"--as
      defined in the first paragraph of this Agreement.

    


    "COBRA"--as
      defined in Section 3.16(e).

    


    "Code"--the
      Internal Revenue Code of 1986, as amended.

    


    "Confidential
      Information"--as defined in Section 12.1.

    


    “Conflict”--means
      conflict with, or any violation of or default under (with or without notice
      or
      lapse of time, or both) any obligation or benefit, including, but not limited
      to, such conflicts, violations or defaults giving rise to a right of
      termination, cancellation, modification or acceleration of any obligation or
      benefit.

    


    "Consent"--any
      approval, consent, ratification, waiver or other required
      authorization.

    


    "Contemplated
      Transactions"--all of the transactions contemplated by this
      Agreement.

    


    "Contract"--any
      agreement, contract, Lease, consensual obligation, promise or undertaking
      (whether written or oral and whether express or implied), whether or not legally
      binding.

    


    "Copyrights"--as
      defined in Section 3.25(a)(iii).

    


    "Damages"--as
      defined in Section 11.2.

    


    "Defined
      Benefit Plans"--as defined in Section 3.16(a).

    


    "Disclosing
      Party"--as defined in Section 12.1.

    


    "Disclosure
      Letter"--the disclosure letter delivered by Seller and the Shareholders to
      Buyer
      concurrently with the execution and delivery of this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Earn-Out
      Amount"--as defined in Section 2.3(b).

    


    “Earn-Out
      Dispute Notice” --as defined in Section 2.3(c).

    


    "Effective
      Time"--the time at which the Closing is consummated on the Closing
      Date.

    


    "Employee
      Plans"--as defined in Section 3.16(a).

    


    "Employment
      Agreements"--as defined in Section 2.7(a)(v).

    


    "Employment
      Loss"--as defined in Section 11.2(f).

    


    "Encumbrance"--any
      charge, claim, community or other marital property interest, condition,
      equitable interest, lien, option, pledge, security interest, mortgage, right
      of
      way, easement, encroachment, servitude, right of first option, right of first
      refusal or similar restriction, including any restriction on use, voting (in
      the
      case of any security or equity interest), transfer, receipt of income or
      exercise of any other attribute of ownership.

    


    "Environment"--soil,
      land surface or subsurface strata, surface waters (including navigable waters
      and ocean waters), publicly or privately owned treatment works, drains, sewer
      systems (including septic systems), wetlands, groundwaters, drinking water
      supply, stream sediments, ambient air (including indoor air), plant and animal
      life and any other environmental medium or natural resource.

    


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

     

    
      	 	
              (a)

            	
              any
                environmental, health or safety matter or condition (including on-site
                or
                off-site contamination, occupational safety and health and regulation
                of
                any chemical substance or product);

            


    

     

    
      	 	
              (b)

            	
              any
                fine, penalty, judgment, award, settlement, legal or administrative
                proceeding, damages, loss, claim, demand or response, remedial or
                inspection cost or expense arising under any Environmental Law or
                Occupational Safety and Health Law, including, but not limited to,
                attorney, expert and consultant fees and
                costs;

            


    

     

    
      	 	
              (c)

            	
              financial
                responsibility under any Environmental Law or Occupational Safety
                and
                Health Law for cleanup costs or corrective action, including any
                cleanup,
                removal, containment or other remediation or response actions ("Cleanup")
                required by any Environmental Law or Occupational Safety and Health
                Law
                (whether or not such Cleanup has been required or requested by any
                Governmental Body or any other Person) and for any natural resource
                damages; or

            


    

     

    
      	 	
              (d)

            	
              any
                other compliance, corrective or remedial measure required under any
                Environmental Law or Occupational Safety and Health
                Law.

            


    

    


    The
      terms
      "removal," "remedial" and "response action" include the types of activities
      covered by the United States Comprehensive Environmental Response, Compensation
      and Liability Act of 1980 (CERCLA).

    


    "Environmental
      Law"--any Legal Requirement, at any time in force or effect, relating
      to:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (a)

            	
              emissions,
                discharges, spills, Release or Threat of Release of Hazardous Material
                into the Environment;

            


    

     

    
      	 	
              (b)

            	
              the
                use, treatment, storage, disposal, handling, manufacturing, transportation
                or shipment of Hazardous Material;

            


    

     

    
      	 	
              (c)

            	
              the
                regulation of storage tanks;

            


    

     

    
      	 	
              (d)

            	
              assuring
                that products are designed, formulated, packaged and used so that
                they do
                not present unreasonable risks to human health or the Environment
                when
                used or disposed; or

            


    

     

    
      	 	
              (e)

            	
              otherwise
                relating to pollution or the protection of human health or the
                Environment.

            


    

    


    "ERISA"--the
      Employee Retirement Income Security Act of 1974, as amended.

    


    "ERISA
      Affiliate"--as defined in Section 3.16(a).

    


    “Escrow
      Agent” --means J.P. Morgan Trust Company, National Association.

    


    "Escrow
      Agreement"--as defined in Section 2.7(a)(vi).

    


    "Escrow
      Amount"--as defined in Section 2.3(a).

    


    "Escrow
      Exclusions"--as defined in Section 11.5.

    


    "Exchange
      Act"--the Securities Exchange Act of 1934, as amended.

    


    "Excluded
      Assets"--as defined in Section 2.2.

    


    "Facilities"--any
      real property, leasehold or other interest in real property currently owned
      or
      operated by Seller. Notwithstanding the foregoing, for purposes of the
      definitions of "Hazardous Activity" and "Remedial Action" and Sections 3.22
      ("Environmental Matters") and 11.3 ("Indemnification and Reimbursement by Seller
      and Shareholders for Environmental Matters"), "Facilities" shall mean any real
      property, leasehold or other interest in real property currently or formerly
      owned or operated by Seller.

    


    "Family"--as
      defined in the defined term “Related Person.”

    


    "GAAP"--generally
      accepted accounting principles for financial reporting in the United
      States.

    


    "Governing
      Documents"--with respect to any particular entity, (a) if a corporation, the
      articles or certificate of incorporation and the bylaws; (b) if a general
      partnership, the partnership agreement and any statement of partnership; (c)
      if
      a limited partnership, the limited partnership agreement and the certificate
      of
      limited partnership; (d) if a limited liability company, the articles of
      organization and operating agreement; (e) if another type of Person, any other
      charter or similar document adopted or filed in connection with the creation,
      formation or organization of the Person; (f) all equityholders' agreements,
      voting agreements, voting trust agreements, joint venture agreements,
      registration rights agreements or other agreements or documents relating to
      the
      organization, management or operation of any Person or relating to the rights,
      duties and obligations of the equityholders of any Person; and (g) any amendment
      or supplement to any of the foregoing.

    


    “Government
      Contract”--any prime contract, subcontract, contract modification, teaming
      agreement or arrangement, joint venture, basic ordering agreement, letter
      contract, purchase order, delivery order, change order, arrangement or other
      commitment of any kind between Seller and (A) the U.S. government 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    or
      any
      other Governmental Body, (B) any prime contractor to the U.S. government or
      any
      other Governmental Body or (C) any subcontractor with respect to any contract
      described in clause (A) or (B).

    


    "Governmental
      Authorization"--any Consent, license, registration or permit issued, granted,
      given or otherwise made available by or under the authority of any Governmental
      Body or pursuant to any Legal Requirement.

    


    "Governmental
      Body"--any:

     

    
      	 	
              (a)

            	
              nation,
                state, county, city, town, borough, village, district or other
                jurisdiction;

            


    

     

    
      	 	
              (b)

            	
              federal,
                state, local, municipal, foreign or other
                government;

            


    

     

    
      	 	
              (c)

            	
              governmental
                or quasi-governmental authority of any nature (including any agency,
                branch, department, board, commission, court, tribunal or other entity
                exercising governmental or quasi-governmental
                powers);

            


    

     

    
      	 	
              (d)

            	
              multinational
                organization or body;

            


    

     

    
      	 	
              (e)

            	
              body
                exercising, or entitled or purporting to exercise, any administrative,
                executive, judicial, legislative, police, regulatory or taxing authority
                or power; or

            


    

     

    
      	 	
              (f)

            	
              official
                of any of the foregoing.

            


    

     

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

     

    "Hazardous
      Material"--at any time, any substance, material or waste which is regulated
      by
      any Governmental Body, including any material, substance or waste which is
      defined as a "hazardous waste," "hazardous material," "hazardous substance,"
      "extremely hazardous waste," "restricted hazardous waste," "contaminant,"
“pollutant,” "toxic waste" or "toxic substance" under any provision of
      Environmental Law, and including radon, petroleum, petroleum products, asbestos
      (including, but not limited to, presumed asbestos-containing material or
      asbestos-containing material), radioactive material, PCB-containing materials,
      urea formaldehyde, polychlorinated biphenyls, trichloroethylene,
      perchloroethylene, mineral spirits, kerosene and naptha solvents. 

     

    "Hired
      Active Employees"--as defined in Section 10.1(b)(i).

     

    "Indemnified
      Person"--as defined in Section 11.9(a).

     

    "Indemnifying
      Person"--as defined in Section 11.9(a).

     

    "Indemnity
      Cap"--as defined in Section 11.5.

     

    "Independent
      Accountants"--as defined in Section 2.9(d).

     

    “Initial
      Cash Amount” --as defined in Section 2.3(a).

     

    "Initial
      Purchase Price"--as defined in Section 2.3(a).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Intellectual
      Property Assets"--as defined in Section 3.25(a).

     

    "Interim
      Balance Sheet"--as defined in Section 3.4.

     

    "Inventories"--all
      inventories of Seller, wherever located, including all finished goods, work
      in
      process, raw materials, spare parts and all other materials and supplies to
      be
      used or consumed by Seller in the production of finished goods.

     

    "IRS"--the
      United States Internal Revenue Service and, to the extent relevant, the United
      States Department of the Treasury.

     

    "Knowledge"--an
      individual will be deemed to have Knowledge of a particular fact or other matter
      if:

     

    
      	 	
              (a)

            	
              that
                individual is actually aware of that fact or matter;
                or

            


    

     

    
      	 	
              (b)

            	
              a
                prudent individual could be expected to discover or otherwise become
                aware
                of that fact or matter in the course of conducting a reasonable
                investigation regarding the accuracy of any representation or warranty
                contained in this Agreement.

            


    

     

    A
      Person
      (other than an individual) will be deemed to have Knowledge of a particular
      fact
      or other matter if any individual who is serving as a director or officer (
      for
      the purposes of Seller, officers shall be Don Golini, Leo Catarisano, Marc
      Tricard and David Kolczynski) of that Person has, or at any time had, Knowledge
      of that fact or other matter (as set forth in (a) and (b) above), and any such
      individual (and any individual party to this Agreement) will be deemed to have
      conducted a reasonable investigation regarding the accuracy of the
      representations and warranties made herein by that Person or
      individual.

     

    "Lease"--means
      any real property lease or any lease or rental agreement, license, right to
      use
      or installment and conditional sale agreement to which Seller is a party and
      any
      other Seller Contract pertaining to the leasing or use of any Tangible Personal
      Property.

     

    "Legal
      Requirement"--any federal, state, local, municipal, foreign, international,
      multinational or other constitution, law, ordinance, principle of common law,
      code, regulation, statute or treaty.

     

    “Letter
      of Credit” --as defined in the definition of “M&T Loan Documents”
herein.

     

    "Liability"--with
      respect to any Person, any liability or obligation of such Person of any kind,
      character or description, whether known or unknown, absolute or contingent,
      accrued or unaccrued, disputed or undisputed, liquidated or unliquidated,
      secured or unsecured, joint or several, due or to become due, vested or
      unvested, executory, determined, determinable or otherwise, and whether or
      not
      the same is required to be accrued on the financial statements of such
      Person.

    


    "Marks"--as
      defined in Section 3.25(a)(i).

    


    "Material
      Adverse Effect"--any change, event or effect that is or could reasonably be
      expected to be materially adverse to (a) the results of operations, financial
      condition, business, prospects, rights, properties, assets or liabilities of
      Seller, (b) Seller's relations with its management, employees, creditors,
      suppliers, customers, regulators, insurers or others having business
      relationships with Seller, in each case, taken as a whole, or (c) the ability
      of
      Seller to consummate the Contemplated Transactions or perform its obligations
      hereunder; provided, that none of the following shall be deemed to constitute,
      and none of the following shall be taken into account in determining whether
      there has been, a Material Adverse Effect: (i) any adverse change or development
      relating to the United States financial, banking or securities 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    markets,
      (ii) any adverse change in the economic conditions that generally affect
      Seller’s industry, (iii) conditions resulting from the announcement of the
      Contemplated Transactions or (iv) any outbreak or escalation of hostilities
      or
      act of terrorism involving the United States or any declaration of war by the
      United States.

     

    "Material
      Consents"--as defined in Section 7.3.

     

    “M&T
      Bank” --as defined in the defined term “M&T Loan Documents.”

     

    “M&T
      Loan Agreement” --as defined in the defined term “M&T Loan
      Documents.”

     

    “M&T
      Loan Documents”--the
      Loan
      Agreement, dated as of June 14, 2002, by and between Seller and Manufacturers
      and Traders Trust Company (“M&T
      Bank”),
      as
      amended by Amendment No.1 thereto, dated as of November 13, 2003, Amendment
      No.
      2 thereto, dated as of June 18, 2004 and Amendment No. 3 thereto, dated as
      of
      November 24, 2004 (collectively, the “M&T
      Loan Agreement”),
      together with the $1,500,000 Standard Libor Grid Note, dated June 18, 2004,
      made
      by Seller, the General Security Agreement, dated June 14, 2002, between Seller
      and M&T Bank, the $1,225,000 Demand Grid Note, dated August 26, 2002,
      secured by a standby letter of credit in the amount of $1,218,000 to Elbit
      Systems Electro-Optics, as beneficiary (the “Letter
      of Credit”),
      made
      by Seller, and any other notes issued under, or documents executed and delivered
      in connection with, the M&T Loan Agreement.

     

    


    “Multiemployer
      Plan”--as defined in Section 3.16(a).

     

    "Net
      Names"--as defined in Section 3.25(a)(v).

     

    "Notes"--as
      defined in Section 12.1.

     

    "Occupational
      Safety and Health Law"--any Legal Requirement designed to provide safe and
      healthful working conditions and to reduce occupational safety and health
      hazards, including the Occupational Safety and Health Act, and any program,
      whether governmental or private (such as those promulgated or sponsored by
      industry associations and insurance companies), designed to provide safe and
      healthful working conditions.

     

    "Order"--any
      order, injunction, judgment, decree, ruling, assessment or arbitration award
      of
      any Governmental Body or arbitrator.

     

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

     

    
      	 	
              (a)

            	
              is
                consistent in nature, scope and magnitude with the past practices
                of such
                Person and is taken in the ordinary course of the normal, day-to-day
                operations of such Person;

            


    

     

    
      	 	
              (b)

            	
              does
                not require authorization by the board of directors or shareholders
                of
                such Person (or by any Person or group of Persons exercising similar
                authority) and does not require any other separate or special
                authorization of any nature; and

            


    

     

    
      	 	
              (c)

            	
              is
                similar in nature, scope and magnitude to actions customarily taken,
                without any separate or special authorization, in the ordinary course
                of
                the normal, day-to-day operations of other Persons that are in the
                same
                line of business as such Person.

            


    

     

    “Paid
      Earn-Out Amount” --as defined in Section 2.3(c).

     

    "Part"--a
      part or section of the Disclosure Letter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Patents"--as
      defined in Section 3.25(a)(ii).

     

    "PBGC"--as
      defined in Section 3.16(b).

     

    "Period"--as
      defined in Section 10.7(a).

     

    "Permitted
      Encumbrances"--as defined in Section 3.9.

     

    "Person"--an
      individual, partnership, corporation, business trust, limited liability company,
      limited liability partnership, joint stock company, trust, unincorporated
      association, joint venture or other entity or any Governmental
      Body.

     

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

     

    "Purchase
      Price"--as defined in Section 2.3(c).

     

    “Purchase
      Price Allocation Schedule” --as defined in Section 2.5(a).

     

    “Purchased
      Assets”--as defined in Section 2.1.

     

    "Real
      Property Leases"--the Leases of the following properties: (i) Seller’s
      headquarters located at 1040 University Avenue, Rochester, New York 14607;
      (ii)
offices
      located at Mitsuru Plaza, 103-1-2-4 Azuchi Chou, Chou-Ku, Osaka 541-0052
      Japan (each,
      a
“Real Property Lease”)

     

    "Receiving
      Party"--as defined in Section 12.1.

     

    "Record"--information
      that is inscribed on a tangible medium or that is stored in an electronic or
      other medium and is retrievable in perceivable form.

     

    "Related
      Person"--

    


    With
      respect to a particular individual:

     

    
      	 	
              (a)

            	
              each
                other member of such individual's Family;
                and

            


    

     

    
      	 	
              (b)

            	
              any
                Person that is an Affiliate of a member of such individual's
                Family.

            


    

     

    With
      respect to a specified Person other than an individual:

     

    
      	 	
              (a)

            	
              any
                Affiliate of such specified Person;
                and

            


    

     

    
      	 	
              (b)

            	
              each
                Person that serves as a director, officer, partner, executor or trustee
                of
                such specified Person (or in a similar
                capacity).

            


    

     

    For
      purposes of this definition, the "Family" of an individual includes (i) the
      individual, (ii) the members of such individual's “immediate family” as such
      term is defined in Rule 16a-1 of the Securities Exchange Act of 1934, as
      amended, and (iii) any other natural person who is related to the individual
      and
      resides with such individual.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Release"--any
      release, spill, emission, leaking, pumping, pouring, dumping, emptying,
      injection, deposit, disposal, discharge, dispersal, leaching or migration on
      or
      into the Environment or into or out of any property.

     

    "Remedial
      Action"--all actions, including any capital expenditures, required or
      voluntarily undertaken (a) to clean up, remove, treat or in any other way
      address any Hazardous Material or other substance; (b) to prevent the Release
      or
      Threat of Release or to minimize the further Release of any Hazardous Material
      or other substance so it does not migrate or endanger or threaten to endanger
      public health or welfare or the Environment; (c) to perform pre-remedial studies
      and investigations or post-remedial monitoring and care; or (d) to bring all
      Facilities and the operations conducted thereon into compliance with
      Environmental Laws and environmental Governmental Authorizations.

     

    "Representative"--with
      respect to a particular Person, any director, officer, manager, employee, agent,
      consultant, advisor, accountant, financial advisor, legal counsel or other
      representative of that Person.

     

    “Reserves”
      --as defined in Section 3.11.

     

    "Restricted
      Contracts"--as defined in Section 2.10.

     

    "Retained
      Liabilities"--as defined in Section 2.4(b).

     

    “Revenue”
      --as defined in Section 2.3(b)(i).

     

    “Rochester
      License Agreement” --as defined in the definition of “BSI Purchase
      Agreement”.

     

    "SEC"--the
      United States Securities and Exchange Commission.

     

    "Securities
      Act"--the Securities Act of 1933, as amended.

     

    "Seller"--as
      defined in the first paragraph of this Agreement.

     

    "Seller
      Contract"--any Contract (a) under which Seller or any of its Subsidiaries has
      or
      may acquire any rights or benefits; (b) under which Seller or any of its
      Subsidiaries has or may become subject to any obligation or liability; or (c)
      by
      which Seller or any of its Subsidiaries or any of the assets owned or used
      by
      Seller or any of its Subsidiaries is or may become bound.

     

    "Seller’s
      Closing Documents"--as defined in Section 3.2(a).

     

    "Shareholder"
      and "Shareholders" --as defined in the first paragraph of this
      Agreement.

     

    "Software"--all
      computer and other software and subsequent versions thereof, including source
      code, object, executable or binary code, objects, comments, screens, user
      interfaces, report formats, templates, menus, buttons and icons and all files,
      data, materials, manuals, design notes and other items and documentation related
      thereto or associated therewith.

     

    "Subsidiary"--with
      respect to any Person (the "Owner"), any corporation or other Person of which
      securities or other interests having the power to elect a majority of that
      corporation's or other Person's board of directors or similar governing body,
      or
      otherwise having the power to direct the business and policies of that
      corporation or other Person (other than securities or other interests having
      such power only upon the happening of a contingency that has not occurred),
      are
      held by the Owner or one or more of its Subsidiaries.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Tangible
      Personal Property"--all machinery, equipment (including, but not limited to,
      demonstration equipment), tools, furniture, office equipment, computer hardware,
      supplies, materials, vehicles and other items of tangible personal property
      (other than Inventories) of every kind owned or leased by Seller (wherever
      located and whether or not carried on Seller's books), together with any express
      or implied warranty by the manufacturers or sellers or lessors of any item
      or
      component part thereof and all maintenance records and other documents relating
      thereto.

     

    "Tax"--any
      income, gross receipts, license, payroll, employment, excise, severance, stamp,
      occupation, premium, property, environmental, windfall profit, customs, vehicle,
      airplane, boat, vessel or other title or registration, capital stock, franchise,
      employees' income withholding, foreign or domestic withholding, social security,
      unemployment, disability, real property, personal property, sales, use,
      transfer, value added, alternative, add-on minimum and other tax, fee,
      assessment, levy, tariff, charge or duty of any kind whatsoever and any
      interest, penalty, addition or additional amount thereon imposed, assessed
      or
      collected by or under the authority of any Governmental Body or payable under
      any tax-sharing agreement or any other similar Contract.

     

    "Tax
      Return"--any return (including any information return), report, statement,
      schedule, notice, form, declaration, claim for refund or other document or
      information filed with or submitted to, or required to be filed with or
      submitted to, any Governmental Body in connection with the determination,
      assessment, collection or payment of any Tax or in connection with the
      administration, implementation or enforcement of or compliance with any Legal
      Requirement relating to any Tax.

     

    “Transfer
      Taxes” --as defined in Section 2.5(b).

     

    "Third
      Party"--a Person that is not a party to this Agreement.

     

    "Third-Party
      Claim"--any claim against any Indemnified Person by a Third Party, whether
      or
      not involving a Proceeding.

     

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

     

    "Trade
      Secret"--as defined in Section 3.2(a)(iv).

     

    "WARN
      Act"--the Worker Adjustment and Retraining Notification Act.

     

    "Working
      Capital"--as defined in Section 2.9(a).

    


    "Year
      One"--as defined in Section 2.3(b)(i).

    


    "Year
      One
      Earn Out"--as defined in Section 2.3(b)(iii).

    


    "Year
      One
      Pro-Rata Earn Out"--as defined in Section 2.3(b)(iii).

    


    "Year
      One
      Threshold"--as defined in Section 2.3(b)(i).

     

    "Year
      One
      Threshold Earn Out"--as defined in Section 2.3(b)(i).

     

    "Year
      Two"--as defined in Section 2.3(b)(ii).

    


    "Year
      Two
      Earn Out"--as defined in Section 2.3(b)(iv).

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Year
      Two
      Pro-Rata Earn Out"--as defined in Section 2.3(b)(iv).

    


    "Year
      Two
      Threshold"--as defined in 2.3(b)(ii).

    


    "Year
      Two
      Threshold Earn Out"--as defined in Section 2.3(b)(ii).

     

    1.2 Usage

     

     

    (a) Interpretation.
      In this Agreement, unless a clear contrary intention appears:

     

    (i) the
      singular number includes the plural number and vice versa;

     

    (ii) reference
      to any Person includes such Person's successors and assigns but, if applicable,
      only if such successors and assigns are not prohibited by this Agreement, and
      reference to a Person in a particular capacity excludes such Person in any
      other
      capacity or individually;

     

    (iii) reference
      to any gender includes each other gender;

     

    (iv) reference
      to any agreement, document or instrument means such agreement, document or
      instrument as restated, amended or modified and in effect from time to time
      in
      accordance with the terms thereof;

     

    (v) reference
      to any Legal Requirement means such Legal Requirement as amended, modified,
      codified, replaced or reenacted, in whole or in part, and in effect from time
      to
      time, including rules and regulations promulgated thereunder, and reference
      to
      any section or other provision of any Legal Requirement means that provision
      of
      such Legal Requirement from time to time in effect and constituting the
      substantive amendment, modification, codification, replacement or reenactment
      of
      such section or other provision;

     

    (vi) "hereunder,"
      "hereof," "hereto," “herein,” and words of similar import shall be deemed
      references to this Agreement as a whole and not to any particular Article,
      Section or other provision hereof;

     

    (vii) "including"
      (and with correlative meaning "include") means including without limiting the
      generality of any description preceding such term;

     

    (viii) "or"
      is
      used in the inclusive sense of "and/or";

     

    (ix) with
      respect to the determination of any period of time, "from" means "from and
      including" and "to" means "to but excluding"; and

     

    (x) references
      to documents, instruments or agreements shall be deemed to refer as well to
      all
      addenda, exhibits, schedules or amendments thereto.

     

    (b) Accounting
      Terms and Determinations. Unless otherwise specified herein, all accounting
      terms used herein shall be interpreted and all accounting determinations
      hereunder shall be made in accordance with GAAP.

     

    (c) Legal
      Representation of the Parties. This Agreement was negotiated by the parties
      with
      the benefit of legal representation, and any rule of construction or
      interpretation otherwise requiring this Agreement to be construed or interpreted
      against any party shall not apply to any construction or interpretation hereof,
      including, but not limited to, by reason of the drafting thereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. Sale
      and
      Transfer of Assets; Closing

     

     

    2.1 Assets
      to
      be Sold

     

     

    Upon
      the
      terms and subject to the conditions set forth in this Agreement, at the Closing,
      but effective as of the Effective Time, Seller shall, and shall cause its
      Subsidiaries to, sell, convey, assign, transfer and deliver to Buyer, and Buyer
      shall purchase and acquire from Seller and its Subsidiaries, free and clear
      of
      any Encumbrances other than Permitted Encumbrances, all of Seller's and its
      Subsidiaries’ respective right, title and interest in and to all of Seller's and
      its Subsidiaries’ respective property and assets, real, personal or mixed,
      tangible and intangible, of every kind and description, wherever located,
      including the following (but excluding the Excluded Assets):

     

    (a) all
      cash
      and cash equivalents on hand or in banks or other depositories, marketable
      securities, or any other similar investments or accounts;

     

    (b) all
      Tangible Personal Property, including those items described in Part 2.1(b);

     

    (c) all
      Inventories;

     

    (d) all
      Accounts Receivable;

     

    (e) all
      fixed
      assets, including all leasehold improvements (to the extent owned by Seller
      and
      transferable to Buyer) and those assets listed in Part 2.1(e);

     

    (f) all
      Seller Contracts, including any listed in Part
      3.20(a),
      and all
      outstanding offers or solicitations made by or to Seller to enter into any
      Contract;

     

    (g) all
      Governmental Authorizations of Seller or any of its Subsidiaries and all pending
      applications therefor or renewals thereof, in each case to the extent
      transferable to Buyer, including those listed in Part
      3.17(b);

     

    (h) all
      data
      and Records related to the operations of Seller and its Subsidiaries, including
      client and customer lists and Records, referral sources, research and
      development reports and Records, production reports and Records, service and
      warranty Records, equipment logs, operating guides and manuals, financial and
      accounting Records, creative materials, advertising materials, promotional
      materials, studies, reports, correspondence and other similar documents and
      Records and, subject to Legal Requirements, copies of all personnel Records
      and
      other Records described in Section 2.2(c);

     

    (i) all
      of
      the intangible rights and property of Seller and its Subsidiaries, including
      Intellectual Property Assets, going concern value, goodwill, telephone, telecopy
      and e-mail addresses and listings and those items listed in Parts
      3.25(d), (e), (f), (g) and (h);

     

    (j) all
      insurance benefits, including rights and proceeds, arising from or relating
      to
      the Purchased Assets or the Assumed Liabilities prior to the Effective
      Time;

     

    (k) all
      claims of Seller or its Subsidiaries against third parties relating to the
      Purchased Assets, whether choate or inchoate, known or unknown, contingent
      or
      noncontingent, including all such claims listed in Part
      2.1(k);

     

    (l) all
      rights of Seller or its Subsidiaries relating to deposits and prepaid expenses,
      claims for refunds and rights to offset in respect thereof;

     

    (m) all
      Software (including, but not limited to, proprietary software) and other
      licenses used in the business to the extent such licenses are assignable or
      transferable;

     

    (n) costs
      and
      estimated earnings in excess of billings on uncompleted projects of Seller
      or
      its Subsidiaries;

     

    (o) platform
      deposits paid by Seller or its Subsidiaries;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (p) prepaid
      expenses and other current assets of Seller or its Subsidiaries;
      and

     

    (q) deposits
      paid by Seller or its Subsidiaries related to leased property.

     

    All
      of
      the property and assets to be transferred to Buyer hereunder are herein referred
      to collectively as the "Purchased
      Assets."

     

    Notwithstanding
      the foregoing, the transfer of the Purchased Assets pursuant to this Agreement
      shall not include the assumption of any Liability related to the Purchased
      Assets unless Buyer expressly assumes that Liability pursuant to Section
      2.4(a).

     

    2.2 Excluded
      Assets

     

     

    Notwithstanding
      anything to the contrary contained in Section 2.1 or elsewhere in this
      Agreement, the following assets of Seller and/or its Subsidiaries (collectively,
      the "Excluded
      Assets")
      are
      not part of the sale and purchase contemplated hereunder, are excluded from
      the
      Purchased Assets and shall remain the property of Seller after the
      Closing:

     

    (a) all
      minute books, stock Records and corporate seals;

     

    (b) the
      shares of capital stock of Seller held in treasury, if any, and all shares
      of
      capital stock of any Subsidiary of Seller;

     

       (c) all
      personnel records and other Records that Seller and its Subsidiaries are
      required by law to retain in its possession; and

     

    (d) all
      rights of Seller under this Agreement, the Bill of Sale and the Escrow
      Agreement.

     

    2.3 Consideration
      and
      Purchase Price

     

     

    (a) Initial
      Purchase Price. The initial consideration for the Purchased Assets will be
      Sixteen Million Seven Hundred Seventy Five Thousand Dollars ($16,775,000)
      consisting of the sum of (i) Thirteen Million Seven Hundred Seventy Five
      Thousand Dollars ($13,775,000) (the
      “Initial
      Cash Amount”),
      plus
      or minus the Adjustment Amount, (ii) Three Million Dollars ($3,000,000) (the
      “Escrow
      Amount”
and,
      together with the Initial Cash Amount, the “Initial
      Purchase Price”)
      and
      (iii) the assumption of the Assumed Liabilities. In accordance with Section
      2.7(b), at the Closing Buyer shall deliver, (x) the Initial Cash Amount, prior
      to adjustment on account of the Adjustment Amount, to Seller by wire transfer
      to
      an account of Seller designated by Seller; (y) the Escrow Amount paid to the
      Escrow Agent pursuant to the Escrow Agreement; and (z) to Seller, the execution
      and delivery of the Bill of Sale. The Adjustment Amount, if any, shall be paid
      by Buyer or Seller, as applicable, after Closing in accordance with Section
      2.8.


     

    (b) Earn-Out
      Amount. In addition to the Initial Purchase Price and the assumption of the
      Assumed Liabilities, consideration for the Purchased Assets will include the
      aggregate amount equal to up to Four Million Five Hundred Thousand Dollars
      ($4,500,000) (the “Earn-Out
      Amount”)
      to be
      earned and paid as follows:

    


    (i) Five
      Hundred Thousand Dollars ($500,000) of the Earn-Out Amount (the “Year
      One Threshold Earn Out”)
      will
      be earned upon the Business achieving at least Fourteen Million Two Hundred
      Thousand Dollars ($14,200,000) (the “Year
      One Threshold”)
      in
      total revenue, on an accrual basis in accordance with GAAP consistent with
      the
      current accounting practices of Seller, net of sales returns and allowances
      (“Revenue”),
      during the twelve months following the Closing Date (“Year
      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
One”),
        payable by Buyer within 45 days following the end of the calendar quarter
        in
        which the Year One Threshold is reached, by wire transfer to an account of
        Seller designated by Seller;

    

    


    (ii) Five
      Hundred Thousand Dollars ($500,000) of the Earn-Out Amount (the “Year
      Two Threshold Earn Out”)
      will
      be earned upon the Business achieving at least Sixteen Million Dollars
      ($16,000,000) (the “Year
      Two Threshold”)
      in
      Revenue (in addition to the Revenue of the Business during Year One), during
      the
      second twelve months following the Closing Date (“Year
      Two”),
      payable by Buyer within 45 days following the end of the calendar quarter in
      which the Year Two Threshold is reached, by wire transfer to an account of
      Seller designated by Seller;

     

    (iii) if
      the
      Revenue of the Business during Year One is at least Fourteen Million Two Hundred
      Thousand Dollars ($14,200,000), then Seller shall be entitled to earn up to
      Two
      Million Dollars ($2,000,000) (the “Year
      One Pro-Rata Earn Out”),
      in
      addition to the Year One Threshold Earn Out, as follows: for Revenue between
      Fourteen Million Two Hundred Thousand Dollars ($14,200,000) and Seventeen
      Million Eight Hundred Thousand Dollars ($17,800,000) earned during Year One,
      Seller shall receive a pro-rata percentage (based
      on
      the amount by which such Revenue in Year One exceeds Fourteen Million Two
      Hundred Thousand Dollars ($14,200,000)) of
      the
      Year One Pro-Rata Earn Out, payable by Buyer to Seller within 45 days following
      the end of Year One, by wire transfer to an account of Seller designated by
      Seller (the Year One Threshold Earn Out and the Year One Pro-Rata Earn Out
      are
      together referred to as the “Year
      One Earn Out”);
      

     

    (iv)
       if
      the
      Revenue of the Business during Year Two is at least Sixteen Million Dollars
      ($16,000,000), then Seller shall be entitled to earn up to One Million Five
      Hundred Thousand Dollars ($1,500,000) (the “Year
      Two Pro-Rata Earn Out”),
      in
      addition to the Year Two Threshold Earn Out, as follows: for Revenue between
      Sixteen Million Dollars ($16,000,000) and Twenty Million Dollars ($20,000,000),
      Seller shall receive from Buyer a pro-rata percentage (based on the amount
      by
      which such Revenue in Year Two exceeds Sixteen Million Dollars ($16,000,000))
      of
      the Year Two Pro Rata Earn Out within 45 days following the end of Year Two,
      by
      wire transfer to an account of Seller designated by Seller (the Year Two
      Threshold Earn Out and the Year Two Pro-Rata Earn Out are together referred
      to
      as the “Year
      Two Earn Out”);
      

     

    (v)
       except
      as
      set forth in Section 2.3(b)(ix), if Year One Revenue of the Business is less
      than the Year One Threshold, no Year One Earn-Out shall be paid;

     

    (vi) in
      no
      event will the Year One Earn Out exceed Two Million Five Hundred Thousand
      Dollars ($2,500,000) in the aggregate;

     

    (vii)
       except
      as
      set forth in Section 2.3(b)(ix), if Year Two Revenue of the Business is less
      than the Year Two Threshold, no Year Two Earn-Out shall be paid;

     

    (viii) in
      no
      event will the Year Two Earn Out exceed Two Million Dollars ($2,000,000) in
      the
      aggregate;

     

    (ix) At
      the
      end of Year Two, there shall be a “true up” such that, if the Business achieves
      aggregate Revenues of at least Thirty Seven Million Eight Hundred Thousand
      Dollars ($37,800,000) in Year One and Year Two, the entire Earn-Out Amount,
      to
      the extent not previously earned and paid, shall be paid by Buyer to Seller
      within 45 days following the end of Year Two, by wire transfer to an account
      of
      Seller designated by Seller. If aggregate Revenues of the Business for Year
      One
      and Year Two are between Thirty Million Two Hundred Forty Thousand Dollars
      ($30,240,000) and Thirty Seven Million Eight Hundred Thousand Dollars
      ($37,800,000), Seller shall receive from Buyer a pro-rata percentage (based
      on
      the amount by which such aggregate Revenues are between Thirty Million


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Two
        Hundred Forty Thousand Dollars ($30,240,000) and Thirty Seven Million Eight
        Hundred Thousand Dollars ($37,800,000)) of the Earn-Out Amount, to the extent
        not previously earned and paid, within 45 days following the end of Year
        Two, by
        wire transfer to an account of Seller designated by Seller. In no event will
        the
        Earn-Out Amount exceed Four Million Five Hundred Thousand Dollars ($4,500,000)
        in the aggregate.

    

     

    For
      purposes of the Earn-Out Amount, the “Business”
shall
      mean the business operations conducted by Seller on and as of the Closing Date
      and the business operations conducted by Buyer following the Closing Date using
      the Intellectual Property Assets. It is the intent of the parties that, for
      purposes of calculating the Earn-Out Amount, “Revenues” shall include revenue of
      the business operations conducted by Buyer following the Closing Date that
      is
      derived from the core competencies, expertise and skills of the Seller’s
      employees employed by Buyer following the Closing Date, as well as the
      Intellectual Property Assets and equipment used by Buyer in the Business. If,
      after the Closing, (i) Buyer or CMC proposes to undertake or consummate any
      acquisition and the acquired business, assets or employees will be integrated
      into Buyer and will report into and be under the responsibility of Seller’s
      executive officers employed by Buyer following the Closing Date, or (ii) Buyer
      or CMC proposes that Buyer engage in any business other than the Business,
      each
      of Buyer and CMC hereby agree to negotiate in good faith with Seller and the
      Shareholders to arrive at a mutually acceptable treatment of any revenue from
      the acquired business, assets or employees or the new business, as the case
      may
      be, for purposes of the Earn-Out Amount. By way of clarification, the Earn-Out
      Amount is not contingent upon the continuing employment of any executive
      employee or other employee of Seller following the Closing.

    


    (c) Together
      with the payment of any Earn-Out Amount or, if no Earn-Out Amount is to be
      paid
      with respect to Year One or Year Two,
      within
      45 days after the end of the applicable year, Buyer shall deliver to the
      Shareholders a written report setting forth Buyer’s computation of Revenue and
      the Earn-Out Amount for the applicable year, if any, together with reasonably
      detailed data supporting such calculation (a “Calculation
      Notice”).
      In
      the event that the Shareholders shall dispute the calculation of Revenue or
      the
      Earn-Out Amount as calculated by Buyer, the Shareholders shall notify Buyer
      in
      writing (the“Earn-Out
      Dispute Notice”),
      setting forth in reasonable detail the basis of the dispute, within 30 days
      of
      receiving the Calculation Notice. If the Shareholders do not provide Buyer
      with
      an Earn-Out Dispute Notice within such 30-day
      period, the Shareholders shall be deemed to have accepted the calculation of
      Revenues and the Earn-Out Amount as set forth in the Calculation Notice as
      correct and final. 

    


    In
      the
      event that the Shareholders provide Buyer with an Earn-Out Dispute Notice,
      then
      the Shareholders and Buyer shall confer in good faith for a period of up to
      30
      days following the delivery of any Earn-Out Dispute Notice concerning the
      subject matter of the Earn-Out Dispute Notice in an attempt to resolve the
      dispute. If a final resolution of such dispute is reached, the agreed upon
      amount of Revenue and Earn-Out Amount shall be deemed final and binding. If,
      after such 30-day period, the Shareholders and Buyer cannot resolve such
      dispute, then Buyer and the Shareholders shall mutually agree upon a nationally
      recognized accounting firm to resolve such dispute, or if they cannot agree
      on
      such a firm within five (5) days, they shall each designate a nationally
      recognized accounting firm, and the two firms shall agree upon a third
      nationally recognized accounting firm which third firm shall have the sole
      authority to resolve such dispute. The firm so agreed upon (the“Agreed
      Firm”)
      shall
      as promptly as practicable (and in any event within 30 days) make a final
      determination of the amount of Revenue and the Earn-Out Amount, if any, which
      shall be binding on the parties. Each of Buyer and the Shareholders shall
      provide the Agreed Firm with all information and documentation that the Agreed
      Firm reasonably requests. The Sellers and Shareholders shall be jointly and
      severally responsible for the payment of all fees and expenses of the Agreed
      Firm, provided, however, that if the Agreed Firm in its final determination
      of
      the Earn-Out Amount disagrees with Buyer’s calculation of Revenues or the
      Earn-Out 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Amount
        such that Revenues as provided in the Calculation Notice are understated
        by five
        percent (5%) or more, then Buyer shall pay all fees and expenses of the Agreed
        Firm. 

    

    


    Buyer
      shall use its commercially reasonable efforts and act in good faith to make
      from
      time to time such business decisions and take such actions or refrain from
      taking such actions in the conduct of the Business following the Closing so
      as
      to not materially adversely affect the ability of Seller to earn all or any
      portion of the Earn-Out Amount. Neither Seller nor any Shareholder shall have
      any right to claim any lost Earn-Out Amount as a result of such decisions or
      actions taken in a commercially reasonable manner and in good faith by Buyer.
      Notwithstanding the foregoing, the prior written consent of the Shareholders,
      which consent shall not be unreasonably withheld, delayed or conditioned, shall
      be required in connection with any dissolution, combination or material
      contraction of the Business in the period from the Closing Date until the end
      of
      Year Two if, and only if, in connection with such event (i) the obligations
      under this Section 2.3(b) are not assumed by any successor entity, (ii) the
      Business does not continue in a substantially similar form following such event
      or (iii) the ability of Seller to earn all or any portion of the Earn-Out Amount
      is materially adversely impaired. By way of clarification and not limitation,
      notwithstanding the foregoing, the consent of the Shareholders shall not be
      required in connection with: (i) hiring and termination decisions; (ii) the
      failure to qualify or seek qualification as a contractor or subcontractor to
      the
      U.S. government or any other Governmental Body; (iii) the loss of, or failure
      to
      enter into, agreements with, customers, suppliers, vendors or other contractual
      relationships; or (iv) force majeure. In addition, consent of the Shareholders
      shall not be required if the maximum Earn-Out Amount payments are paid on or
      before the payment dates set forth in this Section 2.3(b).

    


    The
      Initial Purchase Price, as adjusted in accordance with Sections 2.8 and 2.9
      below, together with the Earn-Out Amount to the extent actually paid hereunder
      (the “Paid
      Earn-Out Amount”)
      and
      the assumption of the Assumed Liabilities, shall be the “Purchase
      Price.”
The
      Initial Purchase Price, as adjusted in accordance with Sections 2.8 and 2.9
      below, together with the Paid Earn-Out Amount shall be the “Cash
      Purchase Price”.

     

    2.4 Liabilities

     

     

    (a) Assumed
      Liabilities. On the Closing Date, but effective as of the Effective Time, Buyer
      shall assume and agrees to discharge only the following Liabilities of Seller
      (the "Assumed
      Liabilities"):
      

     

    (i) current
      liabilities (including bona fide trade accounts payable, but excluding the
      current portion of long-term debt and outstanding balances of Seller’s line of
      credit with M&T Bank) incurred by Seller in the Ordinary Course of Business
      (which shall not include any account payable to Needham & Company LLC or its
      Affiliates or any Shareholder or any other equity holder or Affiliate of Seller,
      other than the current liabilities of Seller to BSI incurred in the Ordinary
      Course of Business under the BSI License Agreement, or any Subsidiary of Seller
      or any other advisor (including legal and financial advisors) engaged in
      connection with the Contemplated Transactions), reflected on the Closing
      Financial Statements and used in the calculation of the Closing Working
      Capital;

     

    (ii) subject
      to Section 2.10 below, any Liability arising after the Closing Date under any
      Seller Contract or the operation of the Business after the Effective Time (other
      than any Liability that arises out of or relates to any Breach or Conflict
      that
      occurred prior to the Effective Time);

     

    (iii) Buyer’s
      portion of the liability for transfer, sales and similar Taxes that will arise
      as a result of the sale of the Purchased Assets pursuant to this Agreement
      in
      accordance with Section 2.5(b) hereof;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iv) any
      obligation to provide service under any product warranty of Seller arising
      in
      the Ordinary Course of Business, including, without limitation, those relating
      to the installed base of machines sold by Seller;

     

    (v)
       payment
      obligations of Seller to Schneider GmbH & Co. KG incurred in the Ordinary
      Course of Business relating to machines in Seller’s inventory, in Schneider GmbH
& Co. KG’s possession, under assembly by Schneider GmbH & Co. KG or on
      order from Schneider GmbH & Co. KG;

     

    (vi) current
      liabilities of Seller to BSI incurred in the Ordinary Course of Business under
      the BSI License Agreement.

     

    (b) Retained
      Liabilities. The Retained Liabilities shall remain the sole responsibility
      of
      and shall be retained, paid, performed and discharged solely by Seller.
      "Retained Liabilities" shall mean every Liability of Seller or any of its
      Subsidiaries other than the Assumed Liabilities, including, but not limited
      to:

     

    (i) any
      obligation or accrual (as should be accrued under GAAP) to pay any account
      payable or amount owed to any Shareholder or any other equity holder or
      Affiliate of Seller, any Subsidiary of Seller (other than current liabilities
      owed to BSI under the BSI License Agreement) or Needham & Company LLC or its
      Affiliates or any other advisor (including legal and financial advisors) engaged
      in connection with the Contemplated Transactions;

     

    (ii) any
      Liability arising out of or relating to products of Seller or any Subsidiary
      of
      Seller to the extent manufactured or sold prior to the Effective Time other
      than
      specifically assumed under Section 2.4(a)(iv);

     

    (iii) any
      Liability under any Contract assumed by Buyer pursuant to Section 2.4(a) that
      arises after the Effective Time but that arises out of any Breach or Conflict
      that occurred prior to the Effective Time;

     

    (iv) other
      than Liabilities for Taxes included in the Closing Working Capital, any
      Liability for Taxes arising as a result of Seller's operation of its business,
      ownership of the Purchased Assets or the employment of its employees on or
      prior
      to the Effective Time, except as set forth in Section 2.5(b) with respect to
      Transfer Taxes;

     

    (v) any
      Liability under any Contract not assumed by Buyer under Section 2.4(a),
      including any Liability arising out of or relating to Seller's or any Subsidiary
      of Seller’s credit facilities or indebtedness for borrowed money or any security
      interest related to any of the foregoing;

     

    (vi) any
      Environmental, Health and Safety Liabilities arising out of or relating to
      the
      operation of Seller's or any Subsidiary of Seller’s business or Seller's or any
      Subsidiary of Seller’s leasing, or operation of real property prior to the
      Effective Time;

     

    (vii) any
      Liability under the Employee Plans or relating to payroll, vacation, sick leave,
      workers' compensation, unemployment benefits, pension benefits, employee stock
      option or profit-sharing plans, health care plans or
      benefits or any other employee plans or benefits of any kind for Seller's or
      any
      Subsidiary of Seller’s employees or former employees or both, other than any
      such Liabilities included in the Closing Working Capital;

     

    (viii) any
      Liability under any employment, severance, retention or termination agreement
      with any employee of Seller of any Subsidiary of Seller or any of its respective
      Related Persons, including, but not limited to, any vacation pay or accrued
      vacation pay (as should be accrued in accordance with GAAP) owed to employees
      or
      former employees of Seller or any Subsidiary of Seller, other than any such
      Liabilities included in the Closing Working Capital;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ix) any
      Liability arising out of or relating to any employee grievance by any employee
      or former employee of Seller, against Seller whether or not the affected
      employees or former employees of Seller are hired by Buyer;

     

    (x) 
      any
      Liability to indemnify, reimburse or advance amounts to any officer, director,
      employee or agent of Seller or any Subsidiary of Seller;

     

    (xi) any
      Liability to distribute to any of Seller's or any Subsidiary of Seller’s
      shareholders or otherwise apply all or any part of the consideration received
      hereunder;

     

    (xii) any
      Liability arising out of any Proceeding pending as of the Effective
      Time;

     

    (xiii) any
      Liability arising out of any Proceeding commenced after the Effective Time
      and
      arising out of any occurrence or event happening prior to the Effective
      Time;

     

    (xiv) any
      Liability arising out of or resulting from Seller's or any Subsidiary of
      Seller’s compliance or noncompliance with any Legal Requirement or Order of any
      Governmental Body;

     

    (xv) any
      Liability of Seller, any Subsidiary of Seller’s or any Shareholder under this
      Agreement or any other document executed in connection with the Contemplated
      Transactions; and

     

    (xvi) any
      Liability of Seller, any Subsidiary of Seller or any Shareholder based upon
      Seller's, such Subsidiary’s or any Shareholder’s (as such) acts or omissions
      occurring after the Effective Time.

     

    2.5 Allocation
      and
      Transfer Taxes

     

     

    (a) A
      preliminary allocation of the Initial Purchase Price (and Assumed Liabilities
      and other relevant items) and an allocation of the consideration among the
      Purchased Assets are shown on Exhibit 2.5 attached hereto. Within thirty (30)
      days of the determination of the Closing Working Capital, Buyer shall provide
      to
      Seller a schedule allocating the Initial Purchase Price (and Assumed Liabilities
      and other relevant items) and an allocation of the consideration among the
      Purchased Assets and the covenants set forth in Section 10.7 (the “Purchase
      Price Allocation Schedule”).
      The
      Purchase Price Allocation Schedule will be prepared in accordance with the
      applicable provisions of the Code and shall reflect appropriate adjustments
      to
      the preliminary allocation of the Initial Purchase Price to reflect changes
      in
      the Purchase Price as provided herein. 

     

    Seller
      shall have a period of thirty (30) days after the delivery of the Purchase
      Price
      Allocation Schedule during which to present in writing to Buyer notice of any
      objections Seller may have to the allocations set forth in the Purchase Price
      Allocation Schedule. In the event that Seller does not provide such notice
      within such thirty (30) day period, the Purchase Price Allocation Schedule
      shall
      be binding on the parties without further adjustment. If Seller shall raise
      any
      objections within such thirty (30) day period, Buyer and Seller shall negotiate
      in good faith and use best efforts to resolve such dispute. If Buyer and Seller
      fail to agree upon the Purchase Price Allocation Schedule within thirty (30)
      days after the delivery of the notice of objections by Seller, then the disputed
      items shall be resolved in accordance with the procedure set forth in Section
      2.9(d). 

     

    Buyer,
      Seller and each Shareholder agree for all tax reporting purposes (including,
      but
      not limited to, the reports required to be filed under Section 1060 of the
      Code)
      to report the Contemplated Transactions in accordance with the Purchase Price
      Allocation Schedule, unless otherwise required by law. Buyer shall prepare
      and
      deliver IRS Form 8594 to Seller to be filed with the IRS. In any Proceeding
      related to the determination of any Tax, neither Buyer, Seller nor any
      Shareholder shall contend or represent that the Purchase Price Allocation
      Schedule is not a correct allocation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Any
      and
      all transfer, sales, use, purchase, value added, excise, property, withholding,
      stamp, or similar taxes ("Transfer
      Taxes")
      imposed on, or resulting from, the transfer of any Purchased Assets pursuant
      to
      this Agreement (including those Transfer Taxes imposed on the Buyer or the
      Purchased Assets) that result from the transfer of the Purchased Assets to
      the
      Buyer pursuant to the terms of this Agreement shall be allocated equally between
      Seller and Buyer and fifty percent (50%) of such Transfer Taxes shall be paid
      by
      the Seller and fifty percent (50%) of such Transfer Taxes shall be paid by
      the
      Buyer. Accordingly, (i) to the extent any Transfer Taxes are imposed on, or
      incurred by, the Buyer, the Seller shall promptly reimburse the Buyer for fifty
      percent (50%) of such Transfer Taxes or expenses and (ii) to the extent any
      Transfer Taxes are imposed on, or incurred by, the Seller, the Buyer shall
      promptly reimburse the Seller for fifty percent (50%) of such Transfer Taxes
      or
      expenses. Each party shall, at its own expense, file all necessary Tax Returns
      and other documentation with respect to all relevant Transfer Taxes imposed
      on
      or incurred by it and, if required by applicable Law, will join the other party
      in the execution of any such Tax Returns and other documentation.

     

     

    2.6 Closing

     

     

    The
      purchase and sale provided for in this Agreement (the "Closing")
      will
      take place at the offices of Buyer at 870 North Commons Drive, Aurora, Illinois,
      commencing at 10:00 a.m. (local time) on July 6, 2006, unless Buyer and Seller
      otherwise agree. Subject to the provisions of Article 9, failure to consummate
      the purchase and sale provided for in this Agreement on the date and time and
      at
      the place determined pursuant to this Section 2.6 will not result in the
      termination of this Agreement and will not relieve any party of any obligation
      under this Agreement. In such a situation, the Closing will occur as soon as
      practicable, subject to Article 9.

     

    2.7 Closing
      Obligations

     

     

    In
      addition to any other documents to be delivered under other provisions of this
      Agreement, at the Closing:

     

    (a) Seller
      shall deliver to Buyer:

     

    (i) a
      bill of
      sale and assignment and assumption for all of the Purchased Assets that are
      Tangible Personal Property in the form of Exhibit 2.7(a)(i)
      (the
      "Bill
      of Sale")
      executed by Seller;

     

    (ii) [intentionally
      omitted];

     

    (iii) assignments
      of all Intellectual Property Assets owned by Seller and separate assignments
      of
      all registered, issued or applied for Marks, Patents and Copyrights owned by
      Seller;

     

    (iv) such
      other bills of sale, assignments, certificates of title, documents and other
      instruments of transfer and conveyance as may reasonably be requested by Buyer,
      each in form and substance satisfactory to Buyer and its legal counsel and
      executed by Seller;

     

    (v) (A)
      that
      certain employment agreement executed by Buyer and Mr. Golini on date hereof
      and
      (B) an employment agreement executed between Buyer and Greg Forbes, to be
      substantially in form and substance as presented by the Buyer as of the date
      hereof (collectively, the "Employment
      Agreements"
      and,
      each, an “Employment
      Agreement”);

     

    (vi) an
      escrow
      agreement executed among Seller, the Shareholders, Buyer and the Escrow Agent,
      in form and substance as agreed upon among Seller, the Shareholders, Buyer
      and
      the Escrow Agent as of the date hereof (the "Escrow
      Agreement");

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (vii) the
      legal
      opinion of Fulbright & Jaworski L.L.P., counsel to the Seller, dated as of
      the Closing Date, in form and substance as agreed upon by Buyer as of the date
      hereof;

     

    (viii) a
      certificate executed by Seller and the Shareholders as to the accuracy of their
      representations and warranties as of the date of this Agreement and as of the
      Closing in accordance with Section 7.1 and as to their compliance with and
      performance of their covenants and obligations to be performed or complied
      with
      at or before the Closing in accordance with Section 7.2;

     

    (ix) a
      certificate, duly completed and executed by the Seller pursuant to Section
      1.1445-2(b)(2) of the Treasury Regulations, certifying that the Seller is not
      a
      "foreign person" within the meaning of Section 1445 of the Code; and


     

     

    (x) a
      certificate of the Secretary of Seller certifying, as complete and accurate
      as
      of the Closing, attached copies of the Governing Documents of Seller, certifying
      and attaching all requisite resolutions or actions of Seller's board of
      directors and shareholders approving the execution and delivery of this
      Agreement and the consummation of the Contemplated Transactions and the change
      of name contemplated by Section 5.9 and certifying to the incumbency and
      signatures of the officers of Seller executing this Agreement and any other
      document relating to the Contemplated Transactions and accompanied by the
      requisite documents for amending the relevant Governing Documents of Seller
      required to effect such change of name in form sufficient for filing with the
      appropriate Governmental Body.

     

    (b) Buyer
      shall deliver to Seller:

     

    (i) Thirteen
      Million Seven Hundred Seventy Five Thousand Dollars ($13,775,000) by wire
      transfer to an account specified by Seller in a writing;

     

    (ii) the
      Escrow Agreement, executed by Buyer and the Escrow Agent, together with the
      delivery of Three Million Dollars ($3,000,000) to the Escrow Agent thereunder,
      by wire transfer to an account specified by the Escrow Agent;

     

    (iii) the
      Bill
      of Sale executed by Buyer; and

     

    (iv) the
      Employment Agreements executed by Buyer and CMC, as applicable; and

     

    (v)
       a
      certificate of the Secretary of Buyer and CMC certifying, as complete and
      accurate as of the Closing, attached copies of the Governing Documents of Buyer,
      certifying and attaching all requisite resolutions or actions of Buyer's board
      of directors approving the execution and delivery of this Agreement and the
      consummation of the Contemplated Transactions, certifying all requisite
      resolutions or actions of CMC's board of directors approving the execution
      and
      delivery of this Agreement and the consummation of the Contemplated
      Transactions, and certifying to the incumbency and signatures of the officers
      of
      Buyer and CMC executing this Agreement and any other document relating to the
      Contemplated Transactions.

     

    (c) Mr.
      Mintz
      shall cause BSI to sell the BSI Intellectual Property to Buyer as of the Closing
      Date pursuant to the BSI Purchase Agreement, the Rochester License Agreement
      and
      the assignment agreement, bill of sale and all deliverables required under
      the
      BSI Purchase Agreement (collectively, the “BSI
      Agreements”),
      as
      executed among Buyer, BSI and CMC as of the date hereof. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) None
      of
      the Purchased Assets shall be owned by, nor shall title to any Purchased Asset
      be held by, any Subsidiary of Seller and no Subsidiary of Seller shall have
      any
      right, title or interest to any of the Purchased Assets.2.8 Adjustment
      Amount and Payment

     

     

    The
      "Adjustment
      Amount"
      (which
      may be a positive or negative number) will be equal to the amount determined
      as
      follows: 

     

    (a) If
      Closing Working Capital is between $4.5 million and $5.5 million, the Adjustment
      Amount will equal zero and no adjustment of the Initial Purchase Price based
      on
      the Closing Working Capital shall occur. 

     

    (b) If
      Closing Working Capital is less than $4.5 million or greater than $5.5 million,
      the Initial Purchase Price shall be adjusted as follows: (i) if Closing Working
      Capital is greater than $5.5 million, the Adjustment Amount will equal the
      amount by which Closing Working Capital exceeds $5.5 million and shall be
      payable by Buyer by wire transfer to an account designated by Seller within
      10
      days after the date that the Closing Working Capital is binding and conclusive
      on the parties hereto as determined pursuant to Section 2.9 hereof and (ii)
      if
      Closing Working Capital is less than $4.5 million, the Adjustment Amount will
      equal the difference between $4.5 million and the actual Closing Working Capital
      amount and shall be payable by Seller by wire transfer to an account designated
      by Buyer within 10 days after the date that the Closing Working Capital is
      binding and conclusive on the parties hereto as determined pursuant to Section
      2.9 hereof. 

     

    By
      way of
      example and not limitation, a sample calculation of the Adjustment Amount is
      attached as Exhibit 2.8 hereto.

     

    2.9 Adjustment
      Procedure

     

     

    (a) "Working
      Capital"
      as of a
      given date shall mean the amount of total current assets minus total current
      liabilities (excluding the current portion of long-term debt and other
      indebtedness for borrowed money), each as reflected on the balance sheet of
      the
      same date. For purposes of calculating Working Capital on any date the Retained
      Liabilities of Seller shall not be considered.

     

    (b) Within
      forty-five (45) days following the Closing Date, Seller shall prepare and
      deliver to Buyer financial statements of Seller as of the Effective Time and
      for
      the period from the date of the Interim Balance Sheet through the Effective
      Time
      in accordance with GAAP and on a basis consistent with current accounting
      practices of Seller. Buyer shall then, within sixty (60) following its receipt
      of such financial statements from Seller, audit such financial statements (as
      audited, the "Closing
      Financial Statements")
      and
      determine the Working Capital as of the Effective Time (the "Closing
      Working Capital")
      based
      upon the Closing Financial Statements. Buyer shall deliver the Closing Financial
      Statements and its determination of the Closing Working Capital to Seller and
      the Shareholders within sixty (60) days following its receipt of the Closing
      Financial Statements from Seller.

     

    (c) If,
      within thirty (30) days following delivery of the Closing Working Capital
      calculation to Seller from Buyer, Seller and the Shareholders have not given
      Buyer written notice of its or their objection as to the Closing Working Capital
      calculation (which notice shall state the basis of Seller's and the
      Shareholders’ objection), then the Closing Working Capital calculated by Buyer
      shall be binding and conclusive on the parties and be used in computing the
      Adjustment Amount.

     

    (d) If
      Seller
      or any Shareholder duly gives Buyer such notice of objection, and if Seller,
      the
      Shareholders and Buyer fail to resolve the issues outstanding with respect
      to
      the Closing Financial Statements and the calculation of the Closing Working
      Capital within thirty (30) days of Buyer's receipt of Seller's or any
      Shareholder’s objection notice, Seller, the Shareholders and Buyer shall submit
      the issues remaining in dispute to KPMG, independent public accountants, or
      such
      other 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
independent
        public accountants as mutually agreed to (the "Independent
        Accountants")
        for
        resolution applying the principles, policies and practices referred to in
        Section 2.8 and this Section 2.9. If issues are submitted to the Independent
        Accountants for resolution: (i) Seller, the Shareholders and Buyer shall
        furnish
        or cause to be furnished to the Independent Accountants such work papers
        and
        other documents and information relating to the disputed issues as the
        Independent Accountants may request and are reasonably available to that
        party
        or its agents and shall be afforded the opportunity, together with the
        respective independent accountants or auditors, as applicable, of Seller
        and
        Buyer (if different from the Independent Accountants), to present to the
        Independent Accountants any material relating to the disputed issues and
        to
        discuss the issues with the Independent Accountants; (ii) the determination
        by
        the Independent Accountants, as set forth in a notice to be delivered to
        Seller,
        the Shareholders and Buyer within sixty (60) days of the submission to the
        Independent Accountants of the issues remaining in dispute, shall be final,
        binding and conclusive on the parties and shall be used in the calculation
        of
        the Closing Working Capital; and (iii) Seller and Buyer will each bear fifty
        percent (50%) of the fees and costs of the Independent Accountants for such
        determination.

    

     

    2.10 Consents;
      Assignments

     

     

    If,
      as of
      the Closing, there are any consents that have not yet been obtained (or
      otherwise are not in full force and effect) or if any Seller Contract has not
      been assigned to Buyer which is required to be assigned hereunder, in the case
      of each Seller Contract as to which such consents were not obtained (or
      otherwise are not in full force and effect) or any Seller Contract which has
      not
      been assigned to Buyer as required hereunder (the "Restricted
      Contracts"),
      Buyer
      may waive the closing conditions as to any such consent or assignment and,
      in
      the event that Buyer elects, in its sole discretion, to waive any such closing
      condition as to any such consent or assignment, Buyer may either:

     

    (a) elect
      to
      have Seller continue all commercially reasonable efforts to obtain the consent
      or assignment, as applicable; or

     

    (b) elect
      to
      have Seller retain that Restricted Contract and all Liabilities arising
      therefrom or relating thereto.

     

    If
      Buyer
      elects to have Seller continue its efforts to obtain any consents or assignments
      and the Closing occurs, notwithstanding Sections 2.1, 2.2 and 2.4, neither
      this
      Agreement nor the Bill of Sale nor any other document related to the
      consummation of the Contemplated Transactions shall constitute a sale,
      assignment, assumption, transfer, conveyance or delivery or an attempted sale,
      assignment, assumption, transfer, conveyance or delivery of the Restricted
      Contracts, and following the Closing, the parties shall use best efforts, and
      cooperate with each other, to obtain the consent or assignment, as applicable,
      relating to each Restricted Contract as quickly as practicable. Pending the
      obtaining of such consents or assignments relating to any Restricted Contract,
      the parties shall cooperate with each other in any reasonable and lawful
      arrangements designed to provide to Buyer the benefits of use of the Restricted
      Contract for its term (or any right or benefit arising thereunder, including
      the
      enforcement for the benefit of Buyer of any and all rights of Seller against
      a
      third party thereunder).

     

    3. Representations
      and Warranties of Seller and the Shareholders

     

     

    Seller
      and the Shareholders each represent and warrant, jointly and severally, to
      Buyer
      and CMC that the statements contained in this Section 3 are true, correct and
      complete, subject in each case to those exceptions set forth in the Disclosure
      Letter delivered by Seller and the Shareholders. The Disclosure Letter will
      be
      arranged in Parts corresponding to the numbered and lettered paragraphs
      contained in this Section 3. Any reference herein to any “Part” shall be a
      reference to that Part of the Disclosure Letter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.1 Organization
      and Good Standing

     

     

    Seller
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of New York, with full corporate power and authority to
      conduct its business as it is now being conducted, to own, lease or use the
      properties and assets that it purports to own, lease or use, and to perform
      all
      its obligations under the Seller Contracts. Seller is duly qualified to do
      business and is in good standing as a foreign corporation in each jurisdiction
      in which such qualification is necessary under applicable law as a result of
      the
      conduct of its business or the ownership of the Purchased Assets, except where
      the failure to be so qualified or in good standing would not, individually
      or in
      the aggregate, have a Material Adverse Effect on Seller or the Purchased Assets.
      Seller has no Subsidiary and does not own any shares of capital stock or other
      securities of any other Person, other than QED Technologies Japan, Inc., a
      New
      York corporation and wholly owned subsidiary of Seller. Except as set forth
      in
Part
      3.1,
      none of
      the Purchased Assets is owned by, nor is title to any Purchased Asset held
      by,
      any Subsidiary of Seller. Except as set forth in Part
      3.1,
      no
      Subsidiary of Seller has any right, title or interest to any of the Purchased
      Assets.

     

    3.2 Enforceability;
      Authority; No Conflict

     

     

    (a) This
      Agreement has been duly executed and delivered by Seller and each Shareholder
      and constitutes the legal, valid and binding obligation of Seller and each
      Shareholder, enforceable against each of them in accordance with its terms,
      except as may be limited by bankruptcy, insolvency, moratorium or other similar
      laws affecting or relating to creditors’ rights generally and is subject to
      general principles of equity. Upon the execution and delivery by Seller and
      each
      Shareholder of the Escrow Agreement and each other agreement to be executed
      or
      delivered by any or all of Seller, Shareholders or any Shareholder at the
      Closing (collectively, the "Seller's
      Closing Documents"),
      each
      of Seller's Closing Documents will constitute the legal, valid and binding
      obligation of each of Seller and each Shareholder, as applicable, enforceable
      against each of them in accordance with its terms, except as may be limited
      by
      bankruptcy, insolvency, moratorium or other similar laws affecting or relating
      to creditors’ rights generally and are subject to general principles of equity.
      Seller has the absolute and unrestricted right, power and authority to execute
      and deliver this Agreement and the Seller's Closing Documents to which it is
      a
      party and to perform its obligations under this Agreement and the Seller's
      Closing Documents, and such action has been duly authorized by all necessary
      action by Seller's shareholders and board of directors. Each Shareholder has
      all
      necessary legal capacity to enter into this Agreement and the Seller's Closing
      Documents to which such Shareholder is a party and to perform its obligations
      hereunder and thereunder.

     

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

     

    (i) Conflict
      with (A) any provision of any of the Governing Documents of Seller or (B) any
      resolution adopted by the board of directors of Seller; 

     

    (ii) Conflict
      with or give any Governmental Body or other Person the right to challenge any
      of
      the Contemplated Transactions, or to exercise any remedy or obtain any relief
      under, any Legal Requirement or any Order to which Seller or any Shareholder,
      or
      any of the Purchased Assets, may be subject, except where any such Conflicts,
      individually or in the aggregate, would not have a Material Adverse Effect
      on
      the ability of Buyer to conduct the business of Seller as currently conducted
      and as currently proposed by Seller to be conducted and the waiver of which
      is
      not otherwise required in order to consummate the Contemplated
      Transactions;

     

    (iii) Conflict
      with any Governmental Authorization that is held by Seller or give any
      Governmental Body the right to revoke, withdraw, suspend, cancel, terminate
      or
      modify any 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Governmental
        Authorization that is held by Seller or that otherwise relates to the Purchased
        Assets or to the business of Seller, except where such Conflict, individually
        or
        in the aggregate, would not have a Material Adverse Effect on the ability
        of
        Buyer to conduct the business of Seller as currently conducted and as currently
        proposed by Seller to be conducted and the waiver of which is not otherwise
        required in order to consummate the Contemplated
        Transactions;

    

     

    (iv) Breach
      any provision of, or give any Person the right to declare a default or exercise
      any remedy under, or to accelerate the maturity or performance of, or payment
      under, or to cancel, terminate or modify, any Seller Contract; 

     

    (v) result
      in
      the imposition or creation of any Encumbrance upon or with respect to any of
      the
      Purchased Assets; or

     

    (vi) except
      in
      accordance with the Business Corporation Law of the State of New York, result
      in
      any shareholder of the Seller having the right to exercise dissenters' appraisal
      rights.

     

    (c) Except
      as
      set forth in Part
      3.2(b) or Part 3.2(c),
      Seller
      is not required to give any notice to or obtain any Consent from any Person
      in
      connection with the execution and delivery of this Agreement or the consummation
      or performance of any of the Contemplated Transactions.

     

    3.3 Capitalization

     

     

    The
      authorized equity securities and capitalization table of Seller and each
      Subsidiary of Seller is as set forth in Part
      3.3.
      All
      issued and outstanding shares of equity securities of the Seller and each
      Subsidiary of Seller are duly authorized and validly issued, fully paid,
      nonassessable, free and clear of all Encumbrances other than restrictions under
      the applicable organizational documents of Seller and each Subsidiary of Seller.
      

     

    3.4 Financial
      Statements

     

     

    Seller
      has delivered to Buyer: (a) an unaudited balance sheet of Seller as at
      March 31, 2006 (the "Interim
      Balance Sheet")
      and
      the related unaudited statement of income for the one (1) month and three (3)
      months then ended; and (b) the audited financial statements of Seller as at
      December 31, 2005 (the “Audited
      Financial Statements”).
      All
      of such financial statements fairly present (and the financial statements
      delivered pursuant to Section 5.8 will fairly present) the financial condition
      and the results of operations of Seller as at the respective dates of and for
      the periods referred to in such financial statements, all in accordance with
      GAAP except, in the case of the Interim Balance Sheet and the related unaudited
      statement of income for the one (1) month and three (3) months then ended,
      for
      the absence of footnote disclosure, and subject to normal year-end adjustments.
      The financial statements referred to in this Section 3.4 and delivered pursuant
      to Section 5.8 reflect and will reflect the consistent application of such
      accounting principles throughout the periods involved, except as disclosed
      in
      any notes to such financial statements, subject, in the case of unaudited
      financial statements, to normal year-end adjustments. The financial statements
      have been and will be prepared from and are in accordance with the accounting
      Records of Seller in all material respects. Seller has also delivered to Buyer
      copies of all letters from Seller's auditors to Seller's board of directors
      during the thirty-six (36) months preceding the execution of this Agreement,
      together with copies of all responses thereto.

     

    3.5 Books
      and
      Records

     

     

    The
      books
      of account and other financial Records of Seller, all of which have been made
      available to Buyer, are complete and correct in all material respects and
      represent actual, bona fide transactions and have been maintained in accordance
      with sound business practices. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.6 Sufficiency
      of Assets

     

     

    The
      Purchased Assets (a) together with the BSI Intellectual Property, constitute
      all
      of the assets, tangible and intangible, of any nature whatsoever, necessary
      to
      operate Seller's business in the manner presently operated by Seller and (b)
      include all of the operating assets of Seller.

     

    3.7 Description
      of Owned Real Property

     

     

    Seller
      does not have any ownership interest in any tracts or parcels of
      land.

     

    3.8 Description
      of Leased Real Property

     

     

    Part
      3.8
      contains
      a correct legal description and street address of all tracts, parcels and
      subdivided lots in which Seller has a leasehold interest and an accurate
      description (by location, name of lessor, date of Lease and term expiry date)
      of
      all Real Property Leases.

     

    3.9 Title
      to
      Assets; Encumbrances

     

     

    Seller
      owns good and marketable title to all Purchased Assets free and clear of any
      Encumbrances other than (i) statutory liens for Taxes which are not yet due
      and
      payable, (ii) mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or
      other similar liens arising in the Ordinary Course of Business or (iii) those
      which are described in Part
      3.9.
      Seller
      warrants to Buyer that, at the time of Closing, all Purchased Assets shall
      be
      free and clear of all Encumbrances other than (i) statutory liens for Taxes
      which are not yet due and payable, (ii) mechanics’, workmen’s, repairmen’s,
      warehousemen’s, carriers’ or other similar lines arising in the Ordinary Course
      of Business and (iii) those identified on Part
      3.9
      as
      acceptable to Buyer (collectively, "Permitted Encumbrances").

     

    3.10 Condition
      of Facilities

     

     

    All
      property subject to the Real Property Leases and each item of material Tangible
      Personal Property are each in good repair and good condition, ordinary wear
      and
      tear excepted, are each suitable for immediate use in the Ordinary Course of
      Business and, to the Seller’s and the Shareholders’ Knowledge, are each free
      from latent and patent defects. To Seller’s and the Shareholders’ Knowledge, no
      item of Tangible Personal Property is in need of repair or replacement other
      than as part of routine maintenance in the Ordinary Course of Business. Except
      as described in Part
      3.10,
      all
      material Tangible Personal Property used in Seller's business is in the
      possession of Seller.

     

    3.11 Accounts
      Receivable

     

     

    All
      Accounts Receivable that are reflected on the Audited Financial Statements
      or
      the Interim Balance Sheet or on the accounting Records of Seller as of the
      Closing Date represent or will represent valid obligations arising from sales
      actually made or services actually performed by Seller in the Ordinary Course
      of
      Business. Except to the extent paid prior to the Closing Date, such Accounts
      Receivable are or will be as of the Closing Date current in all material
      respects and collectible net of the respective reserves shown on the Audited
      Financial Statements or the Interim Balance Sheet or on the Closing Financial
      Statements (collectively, the “Reserves”) (which
      Reserves are adequate and calculated consistent with past practice and, in
      the
      case of the reserve on the Closing Financial Statements, will
      not
      represent a greater percentage of the Accounts Receivable reflected on the
      Closing Financial Statement than the reserve reflected on the Interim Balance
      Sheet represented of the Accounts Receivable reflected thereon and will not
      reflect any Material Adverse Effect in the composition of such Accounts
      Receivable in terms of aging). There is no contest, claim, defense or right
      of
      setoff, other than returns in the Ordinary Course 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
of
        Business of Seller, under any Contract with any account debtor of an Account
        Receivable relating to the amount or validity of such Account Receivable,
        subject to the Reserves. Part
        3.11
        contains
        a complete and accurate list of all Accounts Receivable as of the date of
        this
        Agreement, which list sets forth the aging of each such Account Receivable
        and
        which Part
        3.11
        shall be
        updated by Seller as of the Closing Date.

    

     

    3.12 Inventories

     

     

    Except
      as
      set forth in Part
      3.12,
      all
      items included in the Inventories consist of a quality and quantity usable
      and,
      with respect to finished goods, saleable, in the Ordinary Course of Business
      of
      Seller except for obsolete items and items of below-standard quality, all of
      which have been written off or written down to net realizable value in the
      Audited Financial Statements or the Interim Balance Sheet or on the accounting
      Records of Seller as of the Closing Date, as the case may be. Except as set
      forth in Part 3.12,
      Seller
      is not in possession of any inventory not owned by Seller, including goods
      already sold. The quantities of each item of Inventories (whether raw materials,
      work-in-process or finished goods) are not excessive but are reasonable in
      the
      present circumstances of Seller. Work-in-process Inventories are now valued,
      and
      will be valued on the Closing Date, in accordance with GAAP.

     

    3.13 No
      Undisclosed Liabilities

     

     

    Except
      as
      set forth in Part
      3.13,
      Seller
      has no Liability except for Liabilities reflected or reserved against in the
      Audited Financial Statements or the Interim Balance Sheet, current liabilities
      incurred in the Ordinary Course of Business of Seller since the date of the
      Interim Balance Sheet and those Liabilities incurred in connection with the
      execution of this Agreement. Part
      3.13
      contains
      a complete and accurate list of all open purchase orders and accounts payable
      as
      of the date of this Agreement, which list also sets forth the due date and
      age
      of each such account payable and which Part
      3.13
      shall be
      updated by Seller as of the Closing Date.

     

    3.14 Taxes

     

     

    (a) Tax
      Returns Filed and Taxes Paid. Seller has filed or caused to be filed on a timely
      basis all material Tax Returns that were required to be filed pursuant to
      applicable Legal Requirements. All Tax Returns filed by Seller are true, correct
      and complete in all material respects. Seller has paid all Taxes shown to be
      due
      on such Tax Returns. Except as set forth in Part 3.14, Seller currently is
      not
      the beneficiary of any extension of time within which to file any Tax Return.
      No
      claim has ever been made by any Governmental Body in a jurisdiction where Seller
      does not file Tax Returns that it is or may be subject to taxation by that
      jurisdiction. There are no Encumbrances on any of the Purchased Assets that
      arose in connection with any failure (or alleged failure) to pay any Tax, and
      neither Seller nor any Shareholder has Knowledge that any Governmental Body
      is
      likely to assert a claim attributable to Taxes of Seller which, if adversely
      determined, would result in any such Encumbrance.

     

    (b) Delivery
      of Tax Returns and Information Regarding Audits and Potential Audits. No Tax
      Returns of Seller have ever been audited or, to Seller’s and each Shareholder’s
      Knowledge, are currently under audit. Neither Seller nor any Shareholder has
      any
      Knowledge that any Governmental Body is likely to assess any additional Taxes
      against Seller for any period for which Tax Returns have been filed. There
      is no
      dispute or claim concerning any Taxes of Seller claimed or raised by any
      Governmental Body in writing. 

     

    (c) Proper
      Accrual. The charges, accruals and reserves with respect to Taxes on the Records
      of Seller are adequate (as determined in accordance with GAAP). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Specific
      Potential Tax Liabilities and Tax Situations.

     

    (i) All
      material Taxes that Seller is or was required by Legal Requirements to withhold,
      deduct or collect have been duly withheld, deducted and collected and, to the
      extent required, have been paid to the proper Governmental Body or other
      Person.

     

    (ii) Seller
      (A) has not been a member of an affiliated group within the meaning of Code
      Section 1504(a) (or any similar group defined under a similar provision of
      state, local or foreign law) and (B) has no liability for Taxes of any person
      (other than Seller and its Subsidiaries) under Treas. Reg. sect. 1.1502-6 (or
      any similar provision of state, local or foreign law), as a transferee or
      successor by contract or otherwise.

     

    (iii) Seller
      is
      an S corporation as defined in Code Section 1361.

     

    (iv) Seller
      has disclosed on its federal income Tax Returns all positions taken therein
      that
      could give rise to a substantial understatement of federal income Tax within
      the
      meaning of Code Section 6662.

     

    3.15 No
      Material Adverse Effect

     

     

    Since
      the
      date of the Audited Financial Statements, there has not been any Material
      Adverse Effect and no event has occurred or circumstance exists that is
      reasonably likely to result in a Material Adverse Effect.

     

    3.16 Employee
      Benefits

     

     

    (a) Set
      forth
      in Part
      3.16(a)
      is a
      complete and correct list of all "employee benefit plans" as defined by Section
      3(3) of ERISA, all specified fringe benefit plans as defined in Section 6039D
      of
      the Code, and all other bonus, incentive-compensation, deferred-compensation,
      profit-sharing, stock-option, stock-appreciation-right, stock-bonus,
      stock-purchase, employee-stock-ownership, savings, severance, change-in-control,
      supplemental-unemployment, layoff, salary-continuation, retirement, pension,
      health, life-insurance, disability, accident, group-insurance, vacation,
      holiday, sick-leave, fringe-benefit or welfare plan, and any other material
      employee compensation or benefit plan, agreement, policy, practice, commitment,
      contract or understanding (whether qualified or nonqualified written or
      unwritten) and any trust, escrow or other agreement related thereto that (i)
      is
      maintained or contributed to by Seller or any other corporation or trade or
      business controlled by, controlling or under common control with Seller (within
      the meaning of Section 414 of the Code or Section 4001(a)(14) or 4001(b) of
      ERISA) ("ERISA
      Affiliate"),
      or
      with respect to which Seller or any ERISA Affiliate has or may have any
      liability, and (ii) provides benefits to any current or former director,
      officer, employee or service provider of Seller or any ERISA Affiliate, or
      the
      dependents of any thereof, regardless of how (or whether) liabilities for the
      provision of benefits are accrued or assets are acquired or dedicated with
      respect to the funding thereof (collectively the "Employee
      Plans").
      No
      Employee Plan is (w) a "Defined Benefit Plan" (as defined in Section 414(j)
      of
      the Code or Section 3(35) of ERISA); (x) a "Multiemployer Plan" (as defined
      in
      Section 3(37) of ERISA); or (y) a plan subject to Title IV of ERISA, other
      than
      a Multiemployer Plan. Also set forth on Part
      3.16(a)
      is a
      complete and correct list of all ERISA Affiliates, if any, of Seller during
      the
      last six (6) years.

     

    (b) Seller
      has delivered to Buyer true, accurate and complete copies of (i) the documents
      comprising each Employee Plan (or, with respect to any Employee Plan which
      is
      unwritten, a written summary thereof); (ii) all trust agreements, insurance
      contracts or any other funding instruments related to the Employee Plans; (iii)
      all rulings, determination letters, no-action letters or advisory opinions
      from
      the IRS, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation
      ("PBGC")
      or any
      other Governmental Body that pertain to each Employee Plan and any open requests
      therefor; (iv) all 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
contracts
        with third-party administrators, actuaries, investment managers, consultants
        and
        other independent contractors that relate to any Employee Plan, (v) the last
        three years of Form 5500, including all attachments, that have been filed
        with
        respect to any Employee Plan, and (vi) all summary plan descriptions, summaries
        of material modifications and employee handbooks and other material written
        communications regarding the Employee Plans. 

    

     

    (c) Except
      as
      disclosed in Part
      3.16(c),
      full
      payment has been made of all amounts that are required to be paid as
      contributions under the terms of each Employee Plan and, if applicable, under
      the terms of any agreement requiring the Seller or any ERISA Affiliate to pay
      contributions to such Employee Plan, with respect to all periods prior to and
      including the last day of the most recent fiscal year of such Employee Plan
      ended on or before the date of this Agreement and all periods thereafter prior
      to the Closing Date have been paid or will be paid on a timely basis, and no
      accumulated funding deficiency or liquidity shortfall (as those terms are
      defined in Section 302 of ERISA and Section 412 of the Code) has been incurred
      with respect to any such Employee Plan, whether or not waived. The value of
      the
      assets of each Employee Plan subject to Title IV of ERISA exceeds the amount
      of
      all benefit liabilities (determined on a plan termination basis using the
      actuarial assumptions established by the PBGC as of the Closing Date) of such
      Employee Plan. Seller is not required to provide security to an Employee Plan
      under Section 401(a)(29) of the Code. Seller has paid in full all required
      insurance premiums, subject only to normal retrospective adjustments in the
      ordinary course, with regard to the Employee Plans for all policy years or
      other
      applicable policy periods ending on or before the Closing Date.

     

    (d) No
      Employee Plan is subject to Title IV of ERISA or is a multiemployer plan within
      the meaning of the Code or ERISA and neither Seller nor any ERISA Affiliate
      has
      any direct or indirect liability under Title IV or Section 302 of ERISA or
      Section 412 of the Code or with respect to any such multiemployer
      plan.

     

    (e) Seller
      has, at all times since January 1, 2002, complied, and currently complies,
      in
      all material respects with the applicable continuation coverage requirements
      for
      its group health plans, including (1) Section 4980B of the Code and Sections
      601
      through 608, inclusive, of ERISA, which provisions are hereinafter referred
      to
      collectively as "COBRA" and (2) any applicable state statutes mandating health
      insurance continuation coverage for employees.

     

    (f) The
      form
      of all Employee Plans is in all material respects in compliance with the
      applicable terms of ERISA, the Code, and any other applicable laws, including
      the Americans with Disabilities Act of 1990, the Family Medical Leave Act of
      1993 and the Health Insurance Portability and Accountability Act of 1996, and
      such plans have been operated in all material respects in compliance with such
      laws and the written Employee Plan documents since January 1, 2002. To the
      knowledge of the Seller and the Shareholders’, neither Seller nor any fiduciary
      of an Employee Plan has violated the requirements of Section 404 of ERISA which
      could result in a material liability to Buyer. To the knowledge of the Seller
      and the Shareholders’, all material reports and descriptions of the Employee
      Plans (including Internal Revenue Service Form 5500 Annual Reports, Summary
      Annual Reports and Summary Plan Descriptions and Summaries of Material
      Modifications) have been (when required) timely filed with the IRS, the U.S.
      Department of Labor or other Governmental Body and distributed as required,
      and
      all material notices required by ERISA or the Code or any other Legal
      Requirement with respect to the Employee Plans have been appropriately
      given.

     

    (g) Each
      Employee Plan that is intended to be qualified under Section 401(a) of the
      Code
      has received a favorable determination or opinion letter from the IRS, and
      Seller has no Knowledge of any circumstances that will or could reasonably
      be
      expected to result in revocation of any such favorable determination letter.
      Each trust created under any Employee Plan has been determined to be exempt
      from
      taxation under Section 501(a) of the Code, and Seller is not aware of any
      circumstance that 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
will
        or
        could result in a revocation of such exemption. Each Employee Welfare Benefit
        Plan (as defined in Section 3(1) of ERISA) that utilizes a funding vehicle
        described in Section 501(c)(9) of the Code or is subject to the provisions
        of
        Section 505 of the Code has been the subject of a notification by the IRS
        that
        such funding vehicle qualifies for tax-exempt status under Section 501(c)(9)
        of
        the Code or that the plan complies with Section 505 of the Code, unless the
        IRS
        does not, as a matter of policy, issue such notification with respect to
        the
        particular type of plan. With respect to each Employee Plan, to Seller’s and
        each Shareholder’s knowledge, no event has occurred or condition exists that
        will or could give rise to a loss of any intended tax consequence or to any
        Tax
        under Section 511 of the Code.

    

     

    (h) There
      is
      no material pending or, to Seller’s and each Shareholder’s Knowledge, threatened
      Proceeding relating to any Employee Plan, nor to Seller’s and each Shareholder’s
      Knowledge, is there any basis for any such Proceeding. To Seller’s and each
      Shareholder’s knowledge, neither Seller nor any fiduciary of an Employee Plan
      has engaged in a prohibited transaction with respect to any Employee Plan that,
      assuming the taxable period of such transaction expired as of the date hereof,
      could subject Buyer to a Tax or penalty imposed by either Section 4975 of the
      Code or Section 502(l) of ERISA or a violation of Section 406 of ERISA.


     

    (i) Seller
      has maintained workers' compensation coverage as required by applicable state
      law through purchase of insurance and not by self-insurance or otherwise except
      as disclosed to Buyer on Part
      3.16(i).

     

    (j) Except
      as
      required by Legal Requirements and as set forth in Part
      3.16(j),
      the
      consummation of the Contemplated Transactions will not accelerate the time
      of
      vesting or the time of payment, or increase the amount, of compensation due
      to
      any director, employee, officer, former employee or former officer of Seller.
      There are no contracts or arrangements with Seller providing for payments that
      could subject any person to liability for tax under Section 4999 of the
      Code.

     

    (k) Except
      for the continuation coverage requirements of COBRA or applicable Legal
      Requirements, Seller has no obligations or potential liabilities for benefits
      to
      employees, former employees or their respective dependents following termination
      of employment or retirement under any of the Employee Plans that are Employee
      Welfare Benefit Plans.

     

    (l) Except
      as
      provided in Section 10.1(d), none of the Contemplated Transactions will result
      in an amendment, modification or termination of any of the Employee Plans.
      No
      written or oral representations have been made to any employee or former
      employee of Seller promising or guaranteeing any employer payment or funding
      for
      the continuation of medical, dental, life or disability coverage for any period
      of time beyond the end of the current plan year (except to the extent of
      coverage required under COBRA). No written or oral representations have been
      made to any employee or former employee of Seller concerning the employee
      benefits of Buyer.

     

    3.17 Compliance
      with Legal Requirements; Governmental Authorizations

     

     

    (a) Except
      as
      set forth in Part
      3.17(a):

     

    (i) Seller
      is, and at all times since January 1, 2002, has been, in full compliance in
      all material respects with each Legal Requirement that is or was applicable
      to
      it or to the conduct or operation of its business or the ownership or use of
      any
      of its assets; and

     

    (ii) 
      Seller
      has not received, at any time since January 1, 2002, any notice or other
      communication (whether oral or written) from any Governmental Body or any other
      Person regarding any actual, alleged, or potential violation of, or failure
      to
      comply with, any Legal Requirement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Part
      3.17(b)
      contains
      a complete and accurate list of each Governmental Authorization that is held
      by
      Seller or that otherwise relates to Seller's business or the Purchased Assets.
      Each Governmental Authorization listed or required to be listed in Part
      3.17(b)
      is valid
      and in full force and effect. Except as set forth in Part
      3.17(b):

     

    (i) Seller
      is, and at all times since January 1, 2002, has been, in full compliance in
      all material respects with all of the terms and requirements of each
      Governmental Authorization identified or required to be identified in
Part
      3.17(b);

     

    (ii) 
      Seller
      has not received, at any time since January 1, 2002, any notice or other
      communication (whether oral or written) from any Governmental Body or any other
      Person regarding (A) any actual, alleged, possible or potential violation of
      or
      failure to comply with any term or requirement of any Governmental Authorization
      or (B) any actual, proposed, possible or potential revocation, withdrawal,
      suspension, cancellation, termination of or modification to any Governmental
      Authorization; and

     

    (iii) all
      applications required to have been filed for the renewal of the Governmental
      Authorizations listed or required to be listed in Part
      3.17(b)
      have
      been duly filed on a timely basis with the appropriate Governmental Bodies,
      and
      all other filings required to have been made with respect to such Governmental
      Authorizations have been duly made on a timely basis with the appropriate
      Governmental Bodies, except such failure as would not be expected to have a
      material adverse effect on such Government Authorization.

     

    The
      Governmental Authorizations listed in Part
      3.17(b)
      collectively constitute all of the Governmental Authorizations necessary to
      permit Seller to lawfully conduct and operate its business in the manner in
      which it currently conducts and operates such business and to permit Seller
      to
      own, lease and use its assets in the manner in which it currently owns, leases
      and uses such assets.

     

    3.18 Legal
      Proceedings; Orders

     

     

    (a) Except
      as
      set forth in Part
      3.18(a),
      there
      is no pending or, to Seller's and each Shareholder’s Knowledge, threatened
      Proceeding:

    


     

    (i) by
      or
      against Seller or that otherwise relates to or may affect the business of,
      or
      any of the assets owned or used by, Seller; or

     

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

     

    To
      the
      Knowledge of Seller and each Shareholder, no event has occurred or circumstance
      exists that is reasonably likely to give rise to or serve as a basis for the
      commencement of any such Proceeding. Seller has delivered to Buyer copies of
      all
      pleadings, correspondence and other documents relating to each Proceeding listed
      in Part
      3.18(a).
      There
      are no Proceedings listed or required to be listed in Part
      3.18(a)
      that
      could have a Material Adverse Effect.

     

    (b) Except
      as
      set forth in Part
      3.18(b):

     

    (i) there
      is
      no Order to which Seller, its business or any of the Purchased Assets is
      subject; and

     

    (ii) to
      the
      Knowledge of Seller and each Shareholder, no executive officer or director
      of
      Seller is subject to any Order that prohibits such executive officer or director
      from engaging in or continuing any conduct, activity or practice relating to
      the
      business of Seller.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.19 Absence
      of Certain Effects and Events

     

     

    Except
      as
      set forth in Part
      3.19,
      since
      the date of the Audited Financial Statements, Seller has conducted its business
      only in the Ordinary Course of Business (other than in connection with the
      Contemplated Transactions) and there has not been any:

     

    (a) change
      in
      Seller's authorized or issued capital stock, grant of any stock option or right
      to purchase shares of capital stock of Seller or issuance of any security
      convertible into such capital stock;

     

    (b) amendment
      to the Governing Documents of Seller;

     

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

     

    (d) except
      as
      required by Legal Requirements, adoption of, amendment to or increase in the
      payments to or benefits under, any Employee Plan;

     

    (e) material
      damage to or destruction or loss of any Purchased Asset, whether or not covered
      by insurance;

     

    (f) entry
      into (other than the entry into the supply agreement with Schneider GmbH &
Co. KG), termination (other than termination of the BSI License Agreement as
      contemplated hereunder) of or receipt of notice of termination of (i) any
      license, distributorship, dealer, sales representative, joint venture, credit
      or
      similar Contract to which Seller is a party, or (ii) any Contract or transaction
      involving a total remaining commitment by Seller of at least Twenty Five
      Thousand Dollars ($25,000);

     

    (g) sale
      (other than pursuant to the Contemplated Transactions and sales of Inventories
      in the Ordinary Course of Business), lease or other disposition of any Purchased
      Asset or property of Seller (including the Intellectual Property Assets) or
      the
      creation of any Encumbrance on any Purchased Asset other than pursuant to the
      M&T Loan Documents;

     

    (h) cancellation
      or waiver of any claims or rights with a value to Seller in excess of Twenty
      Five Thousand Dollars ($25,000);

     

    (i) indication
      by any customer or supplier of an intention to discontinue or change the terms
      of its relationship with Seller in any manner that is adverse to Seller (other
      than the termination of the BSI License Agreement as contemplated hereunder);
      

     

    (j) except
      as
      required by GAAP or Legal Requirements, change in the accounting methods used
      by
      Seller; or

     

    (k) Contract
      by Seller to do any of the foregoing.

     

    3.20 Contracts;
      No Defaults

     

     

    (a) Part
      3.20(a)
      contains
      an accurate and complete list, and Seller has delivered, or disclosed and made
      available, to Buyer accurate and complete copies, of:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i) each
      Seller Contract that involves performance of services or delivery of goods
      or
      materials by Seller of an amount or value in excess of Twenty Five Thousand
      Dollars ($25,000);

     

    (ii) each
      Seller Contract that involves performance of services or delivery of goods
      or
      materials to Seller of an amount or value in excess of Twenty Five Thousand
      Dollars ($25,000);

     

    (iii) each
      Seller Contract that was not entered into in the Ordinary Course of Business
      and
      that involves expenditures or receipts of Seller in excess of Twenty Five
      Thousand Dollars ($25,000);

     

    (iv) each
      Seller Contract affecting the ownership of, leasing of, title to, use of or
      any
      leasehold or other interest in any real or personal property (except personal
      property leases and installment and conditional sales agreements having a value
      per item or aggregate payments of less than Twenty Five Thousand Dollars
      ($25,000) and with a term of less than one year);

     

    (v) each
      Seller Contract with any labor union or other employee representative of a
      group
      of employees relating to wages, hours and other conditions of
      employment;

     

    (vi) each
      Seller Contract (however named) involving a sharing of profits, losses, costs
      or
      liabilities by Seller with any other Person;

     

    (vii) each
      Seller Contract containing covenants that in any way purport to restrict
      Seller's business activity or limit the freedom of Seller to engage in any
      line
      of business or to compete with any Person;

     

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

     

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

     

    (x) each
      Seller Contract entered into other than in the Ordinary Course of Business
      that
      contains or provides for an express undertaking by Seller to be responsible
      for
      consequential damages;

     

    (xi) each
      Seller Contract for capital expenditures in excess of Twenty Five Thousand
      Dollars ($25,000);

     

    (xii) each
      Seller Contract not denominated in U.S. Dollars;

     

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

     

    
      	(xiv)  	
              each
                foreign exchange hedging or similar agreement or
                arrangement;

            


    

     

    
      	(xv)  	
              each
                guaranty by Seller of the indebtedness of any third party;
                and

            


    

     

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

     

    (b) Except
      as
      set forth in Part
      3.20(b),
      no
      Shareholder has or can acquire any rights under, and no Shareholder has or
      can
      become subject to any obligation or liability under, any Contract that relates
      to the business of Seller or any of the Purchased Assets. 

     

    (c) Except
      as
      set forth in Part
      3.20(c):

     

    (i) each
      Contract identified or required to be identified in Part
      3.20(a)
      and
      which is to be assigned to or assumed by Buyer under this Agreement is in full
      force and effect and is 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
valid
        and
        enforceable against Seller and, to the Seller’s and each Shareholder’s
        Knowledge, the other parties thereto, in accordance with its terms, except
        as
        may be limited by bankruptcy, insolvency, moratorium or other similar laws
        affecting or relating to creditors’ rights generally and subject to general
        principles of equity; and

    

     

    (ii) each
      Contract identified or required to be identified in Part
      3.20(a)
      and
      which is being assigned to or assumed by Buyer is assignable by Seller to Buyer
      without the consent of any other Person.

     

    (d) Except
      as
      set forth in Part
      3.20(d):

     

    (i) Seller
      is, and at all times has been, in compliance in all material respects with
      all
      applicable terms and requirements of each Seller Contract which is being assumed
      by Buyer;

     

    (ii) to
      Seller’s and each Shareholder’s Knowledge, each other Person that has or had any
      obligation or liability under any Seller Contract which is being assigned to
      Buyer is, and at all times has been, in full compliance in all material respects
      with all applicable terms and requirements of such Contract;

     

    (iii) to
      Seller’s and each Shareholder’s Knowledge, no event has occurred or circumstance
      exists that (with or without notice or lapse of time) may contravene, conflict
      with or result in a Breach of, or give Seller or any other Person the right
      to
      declare a default or exercise any remedy under, or to accelerate the maturity
      or
      performance of, or payment under, or to cancel, terminate or modify, any Seller
      Contract that is being assigned to or assumed by Buyer;

     

    (iv) to
      Seller’s and each Shareholder’s Knowledge, no event has occurred or circumstance
      exists under or by virtue of any Contract that (with or without notice or lapse
      of time) would cause the creation of any Encumbrance affecting any of the
      Purchased Assets; and

     

    (v) neither
      Seller nor any Shareholder has given to or received from any other Person any
      notice or other communication (whether oral or written) regarding any actual,
      alleged, possible or potential violation or Breach of, or default or Conflict
      under, any Contract which is being assigned to or assumed by Buyer.

     

    (e) There
      are
      no renegotiations of, attempts to renegotiate or outstanding rights to
      renegotiate any material amounts paid or payable to Seller under current or
      completed Contracts with any Person having the contractual or statutory right
      to
      demand or require such renegotiation and no such Person has made written demand
      for such renegotiation.

     

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

     

    3.21 Insurance

     

     

    (a) Seller
      has delivered to Buyer:

     

    (i) accurate
      and complete copies of all policies of insurance (and correspondence relating
      to
      coverage thereunder) to which Seller is a party or under which Seller is or
      has
      been covered at any time since January 1, 2003 a list of which is included
      in Part
      3.21(a);

     

    (ii) accurate
      and complete copies of all pending applications by Seller for policies of
      insurance; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iii) any
      written statement by the auditor of Seller's financial statements or any
      consultant or risk management advisor with regard to the adequacy of Seller's
      coverage or of the reserves for claims.

     

    (b) Part
      3.21(b)
      describes:

     

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

     

    (ii) any
      Contract or arrangement, other than a policy of insurance, for the transfer
      or
      sharing of any risk to which Seller is a party or which involves the business
      of
      Seller; and

     

    (iii) all
      obligations of Seller to provide insurance coverage to Third Parties (for
      example, under Leases or service agreements) and identifies the policy under
      which such coverage is provided.

     

    (c) Part
      3.21(c)
      sets
      forth, by year, for the current policy year and each of the three (3) preceding
      policy years:

     

    (i) a
      summary
      of the loss experience under each policy of insurance;

     

    (ii) a
      statement describing each claim under a policy of insurance for an amount in
      excess of Five Thousand dollars ($5,000), which sets forth:

     

    
      	 	
              (A)

            	
              the
                name of the claimant;

            


    

     

    
      	 	
              (B)

            	
              the
                amount and a brief description of the claim;
                and

            


    

     

    
      	 	
              (C)

            	
              the
                status of each claim;

            


    

     

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

     

    (d) Except
      as
      set forth in Part
      3.21(d):

     

    (i) all
      policies of insurance to which Seller is a party or that provide coverage to
      Seller:

     

    
      	 	
              (A)

            	
              are
                valid, outstanding and enforceable;


            


    

     

    
      	 	
              (B)

            	
              taken
                together, provide adequate insurance coverage for the Purchased Assets
                and
                the operations of Seller of the kind and in the amount as is customarily
                obtained by entities engaged in the same or similar business as Seller
                and
                are similarly situated; and

            


    

     

    
      	 	
              (C)

            	
              are
                sufficient for compliance with all Legal Requirements and Seller
                Contracts;

            


    

     

    (ii) Seller
      has not received (A) any refusal of coverage or any notice that a defense will
      be afforded with reservation of rights or (B) any notice of cancellation or
      any
      other indication that any policy of insurance is no longer in full force or
      effect or that the issuer of any policy of insurance is not willing or able
      to
      perform its obligations thereunder;

     

    (iii) Seller
      has paid all premiums due, and has otherwise performed all of its obligations,
      under each policy of insurance to which it is a party or that provides coverage
      to Seller; and

     

    (iv) Seller
      has given notice to the insurer of all claims that may be insured
      thereby.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.22 Environmental
      Matters

     

     

    (a) To
      the
      Seller’s and the Shareholders’ Knowledge, Seller is, and at all times has been,
      in full compliance in all material respects with, and has not been and is not
      in
      violation of or liable under, any Environmental Law. To the Seller’s and the
      Shareholders’ Knowledge, neither Seller nor any Shareholder has any basis to
      expect, nor has any of them or any other Person for whose conduct they are
      or
      may be held to be responsible received, any actual or threatened Order, notice,
      letter of inquiry, claim or other material communication from (i) any
      Governmental Body or private citizen acting in the public interest or (ii)
      the
      current or prior owner or operator of any Facilities, of any actual or potential
      violation or failure to comply with any Environmental Law, or of any actual
      or
      threatened obligation to undertake or bear the cost of any Environmental, Health
      and Safety Liabilities with respect to any Facility or other property or asset
      (whether real, personal or mixed) in which Seller has or had an interest, or
      with respect to any property or Facility at or to which Hazardous Materials
      were
      generated, manufactured, refined, transferred, imported, used or processed
      by
      Seller or any other Person for whose conduct it is or may be held responsible,
      or from which Hazardous Materials have been transported, treated, stored,
      handled, transferred, disposed, recycled or received, including any
      communication as a potentially responsible party under the Comprehensive
      Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section
      9601
      et. seq., any amendments thereof, or any state or local counterpart
      thereof.

     

    (b) There
      are
      no pending or, to the Knowledge of Seller or any Shareholder, threatened claims,
      Encumbrances, or other restrictions of any nature resulting from any
      Environmental, Health and Safety Liabilities or arising under or pursuant to
      any
      Environmental Law with respect to or affecting any Facility or any other
      property or asset (whether real, personal or mixed) in which Seller has or
      had
      an interest.

     

    (c) Neither
      Seller nor any Shareholder has any Knowledge of or any basis to expect, nor
      has
      any of them, or any other Person for whose conduct they are or may be held
      responsible, received, any citation, directive, inquiry, notice, Order, summons,
      warning or other communication that relates to Hazardous Activity, Hazardous
      Materials, or any alleged, actual, or potential violation or failure to comply
      with any Environmental Law, or of any alleged, actual, or potential obligation
      to undertake or bear the cost of any Environmental, Health and Safety
      Liabilities with respect to any Facility or property or asset (whether real,
      personal or mixed) in which Seller has or had an interest, or with respect
      to
      any property or facility to which Hazardous Materials generated, manufactured,
      refined, transferred, imported, used or processed by Seller or any other Person
      for whose conduct it is or may be held responsible, have been transported,
      treated, stored, handled, transferred, disposed, recycled or
      received.

     

    (d) To
      the
      Seller’s and the Shareholders’ Knowledge, neither Seller nor any other Person
      for whose conduct it is or may be held responsible has any Environmental, Health
      and Safety Liabilities with respect to any Facility or, to the Knowledge of
      Seller or any Shareholder, with respect to any other property or asset (whether
      real, personal or mixed) in which Seller (or any predecessor) has or had an
      interest or at any property geologically or hydrologically adjoining any
      Facility or any such other property or asset.

     

    (e) To
      the
      Seller’s and the Shareholders’ Knowledge, except as set forth in Part
      3.22(e),
      there
      are no Hazardous Materials present on or in the Environment at any Facility,
      including any Hazardous Materials contained in barrels, aboveground or
      underground storage tanks, landfills, land deposits, dumps, equipment (whether
      movable or fixed) or other containers, either temporary or permanent, and
      deposited or located in land, water, sumps, wells or septic systems or any
      other
      part of the Facility, or incorporated into any structure therein or thereon.
      Neither Seller nor any Person for whose conduct it is or may be held
      responsible, or to the Knowledge of Seller or any Shareholder, any other Person,
      has permitted or conducted, or is aware of, any Hazardous Activity conducted
      with respect to any 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Facility
        or any other property or assets (whether real, personal or mixed) in which
        Seller has or had an interest except in full compliance with all applicable
        Environmental Laws.

    

     

    (f) To
      the
      Seller’s and the Shareholders’ Knowledge, there has been and is no Release or,
      to the Knowledge of Seller or any Shareholder, Threat of Release, of any
      Hazardous Materials at or from any Facility or at any other location where
      any
      Hazardous Materials were generated, manufactured, refined, transferred,
      produced, imported, used, or processed from or by any Facility, or from any
      other property or asset (whether real, personal or mixed) in which Seller has
      or
      had an interest, or to the Knowledge of Seller or any Shareholder, any
      geologically or hydrologically adjoining property, whether by Seller or any
      other Person.

     

    (g) Neither
      Seller nor any Shareholder has received any notice of potential responsibility
      or letter of inquiry.

     

    (h) Seller
      has delivered to Buyer true and complete copies and results of any reports,
      studies, analyses, tests, or monitoring possessed or initiated by Seller
      pertaining to Hazardous Materials or Hazardous Activities in, on, or under
      the
      Facilities, or concerning compliance, by Seller or any other Person for whose
      conduct it is or may be held responsible, with Environmental Laws. 

     

    3.23 Employees,
      etc.

     

     

    (a) Part
      3.23(a)
      contains
      a complete and accurate list of the following information for each employee,
      independent contractor, consultant and sales agent of Seller, including each
      employee on leave of absence or layoff status: employer; name; job title; date
      of hiring or engagement; date of commencement of employment or engagement;
      current compensation paid or payable; sick and vacation leave that is accrued
      but unused; and service credited for purposes of vesting and eligibility to
      participate under any Employee Plan, or any other employee benefit
      plan.

     

    (b) Except
      with regard to obligations under Seller’s 401(k) Plan or as required by COBRA or
      applicable Legal Requirements, Seller has no continuing obligations to retired
      employees or directors of Seller, or their dependents, with respect to benefits,
      including, but not limited to, retiree medical insurance coverage or pension
      benefits.

     

    (c) Seller
      has not violated the WARN Act or any similar state or local Legal
      Requirement.

     

    (d) No
      officer, director nor, to the Seller’s or the Shareholders’ Knowledge, any sales
      agent or employee of Seller is bound by any Contract that purports to limit
      the
      ability of such officer, director, sales agent or employee (i) to engage in
      or
      continue or perform any conduct, activity, duties or practice relating to the
      business of Seller or (ii) to assign to Seller or to any other Person any rights
      to any invention, improvement, or discovery. 

     

    3.24 Labor
      Disputes; Compliance

     

     

    (a) Seller
      has complied in all material respects with all Legal Requirements relating
      to
      employment practices, terms and conditions of employment, equal employment
      opportunity, nondiscrimination, immigration, wages, hours, benefits, the payment
      of social security and similar Taxes and occupational safety and health. To
      Seller’s and each Shareholder’s Knowledge, Seller is not liable for the payment
      of any Taxes, fines, penalties, or other amounts, which have become due and
      payable, however designated, for failure to comply with any of the foregoing
      Legal Requirements.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Except
      as
      disclosed in Part
      3.24(b),
      (i)
      Seller has not been, and is not now, a party to any collective bargaining
      agreement; (ii) Seller has not been, there is not presently pending or existing,
      and to Seller's or any Shareholder’s Knowledge there is not threatened, any
      strike, slowdown, picketing, work stoppage or employee grievance process
      involving Seller; (iii) to Seller's or any Shareholder’s Knowledge no event has
      occurred or circumstance exists that could provide the basis for any work
      stoppage or other labor dispute; (iv) there is not pending or, to Seller's
      or
      any Shareholder’s Knowledge, threatened against or affecting Seller any
      Proceeding relating to the alleged violation of any Legal Requirement pertaining
      to labor relations or employment matters, including any charge or complaint
      filed with the National Labor Relations Board or any comparable Governmental
      Body, and, to Seller’s and each Shareholder’s Knowledge, there is no
      organizational activity or other labor dispute against or affecting Seller
      or
      the Facilities; (v) no application or petition for an election of or for
      certification of a collective bargaining agent is pending; (vi) no grievance
      or
      arbitration Proceeding exists that is reasonably likely to have an adverse
      effect upon Seller or the conduct of its business; (vii) there is no lockout
      of
      any employees by Seller, and no such action is contemplated by Seller; and
      (viii) there has been no charge of discrimination filed against or, to Seller’s
      and each Shareholder’s Knowledge, threatened against Seller with the Equal
      Employment Opportunity Commission or similar Governmental Body.

     

    3.25 Intellectual
      Property Assets.
      The
      representations and warranties and required disclosures set forth in this
      Section 3.25 shall not include or apply to the BSI Intellectual Property. The
      parties acknowledge that the representations and warranties and required
      disclosures regarding the BSI Intellectual Property shall be as set forth in
      the
      BSI Purchase Agreement. 

     

     

    (a) The
      term
      "Intellectual
      Property Assets"
      means
      all intellectual property, on a worldwide basis, whether or not included in
      Part
      3.25(b)
      below,
      that is (i) owned or co-owned by Seller and related to Seller's business; or
      (ii) used in or necessary to the operation of Seller's business as operated,
      or
      proposed to be operated, on the Closing Date, including, but not limited
      to:

     

    (i) business
      name(s), all assumed fictional business names, trade names, registered and
      unregistered trademarks, service marks, trade dress and product configurations,
      logos, and all other indicia of source, together with all goodwill associated
      with any of the foregoing, and all registrations and applications therefor
      including all extensions, modifications, and renewals of the same (collectively,
      "Marks");

     

    (ii) all
      inventions, developments, discoveries, concepts and ideas (whether or not
      patentable and whether or not reduced to practice) and all patents and patent
      applications, patent disclosures, and all related continuations, divisionals,
      continuations-in-part, reissues, reexaminations, utility models, certificates
      of
      invention, industrial designs, and design patents, as well as the rights to
      file
      for, and to claim priority to, any such patent rights (collectively,
      "Patents");

     

    (iii) all
      registered and unregistered copyrights in both published works and unpublished
      works, and all moral rights and all applications for registration thereof
      (collectively, "Copyrights");

     

    (iv) all
      trade
      secrets and confidential or proprietary business information, whether patentable
      or unpatentable and whether or not reduced to practice, including know-how,
      formulas, drawings and technical plans and information, schematics, prototypes,
      designs, models, unpublished works of authorship, data and databases,
      manufacturing and production processes and techniques, research and development
      information, other copyrightable works, financial, marketing and business data,
      pricing and cost information, business and marketing plans and customer and
      supplier lists and information, and Software and documentation therefor
      (collectively, "Trade
      Secrets");
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (v) all
      rights in internet web sites, internet domain names and registration rights,
      uniform resource locators, protocol addresses, and all related content and
      programming, and related security passwords or codes used by Seller
      (collectively "Net
      Names");

     

    (vi)
       all
      other
      proprietary rights relating to any of the foregoing; and 

     

    (vii)
       all
      copies and tangible embodiments thereof (in whatever form or medium), in each
      case including without limitation the items set forth in Part
      3.25(b)
      below.

     

    (b) Part
      3.25(b)
      contains
      a complete and accurate list, of (i) each registered, issued, or applied for
      item of the Intellectual Property Assets that is owned or co-owned by Seller;
      and (ii) each Seller Contract through which any item of the Intellectual
      Property Assets owned by a third party is licensed to Seller or owned by Seller
      is licensed to a third party, including any royalties since January 1, 2004
      received by or paid to Seller, but in each case excluding any license implied
      by
      the sale of a product and perpetual, paid-up licenses for commonly available
      Software programs with a value of less than Five Thousand Dollars ($5,000)
      under
      which Seller is the licensee ("Off
      the Shelf Licenses").
      Further, Seller has delivered to Buyer accurate and complete copies of all
      Seller Contracts relating to the Intellectual Property Assets, except for any
      Off the Shelf Licenses. There are no outstanding and, to Seller's and any
      Shareholder’s Knowledge, no threatened disputes or disagreements with respect to
      any such Seller Contract. As of the Closing Date, the Seller owns, or validly
      licenses in or otherwise possesses valid rights to use, each item of the
      Intellectual Property Assets listed in Part
      3.25(b).
      There
      is no other item of the Intellectual Property Assets that is necessary for
      the
      conduct of the Seller’s business as presently operated, except those (i) owned
      by the Seller, (ii) included in Parts 3.25(b), 3.25(d), 3.25(e), 3.25(f) and
      3.25(h), (iii) items of intellectual property owned by Schneider GmbH & Co.
      KG and (iv) the BSI Intellectual Property.

     

    (c) Intellectual
      Property Assets Generally.

     

    (i)
       With
      respect to each item of the Intellectual Property Assets, including the
      Intellectual Property Assets listed as “owned” in Part
      3.25(b):
      (i) the
      Seller possesses exclusive right, title and interest in and to the item, free
      and clear of any Encumbrances and any obligation to make payment to a Third
      Party; (ii) the item is in good standing and is not subject to any outstanding
      order, decree, judgment, stipulation, award, past due payment, decision,
      injunction or agreement in any restricting manner, including restricting the
      transfer, commercialization, enforcement or licensing thereof; (iii) no
      Proceeding is pending or, to the Seller’s or any Shareholder’s Knowledge,
      threatened, that challenges the legality, validity, enforceability of, or
      Seller's ownership of or right to use or otherwise exploit, the item; (iv)
      there
      is no reason that any item would be considered invalid or unenforceable; and
      (v)
      each such item is presently pending or in force in accordance with its terms.
      Except as set forth in Part
      3.25(b),
      no
      license, sublicense, covenant, agreement or permission has been granted or
      entered into by Seller in respect of any item of the Intellectual Property
      Assets which is owned by Seller or represented to be owned by Seller
      hereunder.

     

    (ii) With
      respect to each item of the Intellectual Property Assets that any third party
      owns that is used in, or necessary to, the Seller's business as conducted,
      or
      proposed by Seller to be conducted, as of the Closing Date, and that is used
      by
      Seller pursuant to license, sublicense, agreement, or permission, including
      the
      Intellectual Property Assets listed as “licensed” in Part
      3.25(b) and
“Off
      the Shelf Licenses," (i) the rights covering the item are legal, valid, binding,
      enforceable and in full force and effect in all material respects against Seller
      and, to the Knowledge of Seller and each Shareholder, the other parties thereto;
      (ii) no party thereto is in material breach or default and no event has occurred
      which with notice or lapse of time would constitute a material breach or default
      or permit termination, modification or acceleration thereunder; (iii) Seller
      has
      not received written notice that any party to the license, sublicense, agreement
      or permission intends to cancel, not renew, or terminate the license,
      sublicense, agreement or permission or to exercise or not exercise an option
      thereunder; and (iv) 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
the
        license, sublicense, agreement or permission will not be terminated or
        cancelled, or the Seller’s rights thereunder diminished or impaired, or Seller’s
        obligations thereunder increased, as a result of the consummation of the
        transactions contemplated by this Agreement.

    

     

    (iii)
       Seller
      has the exclusive right to file, prosecute and maintain each registered, issued,
      or applied for item of the Intellectual Property Assets listed as "owned" in
      Part
      3.25(b),
      and to
      register or apply for each such item of the Intellectual Property Assets owned
      by it, including any inventions or ideas that have not yet been the subject
      of
      such an application, and has the exclusive right to maintain exclusive ownership
      of each such item of Intellectual Property, and is not aware of any claim by
      any
      third party regarding title to the same or derivative works of the same.
      Further, Seller has taken all commercially reasonable actions to maintain and
      protect each item of Intellectual Property Assets in Part
      3.25(b),
      including use of non-disclosure and related agreements to retain control over
      certain Intellectual Property Assets, payment of all fees, annuities and all
      other payments that have heretofore become due to any Governmental Authority
      or
      third party licensor with respect to the Intellectual Property Asset(s), and
      have taken all commercially reasonable steps necessary to prosecute, maintain,
      protect and enforce the same, up to and including the Closing Date, in addition
      to the actions noted below for specific types of the Intellectual Property
      Assets. Moreover, Seller has not authorized any third party to use or otherwise
      exploit any Intellectual Property Assets owned by or licensed to the Seller's
      business except pursuant to a binding, written license and except any implied
      licenses granted as the result of commercial sales of products or services
      incorporating such Intellectual Property Assets.

     

    (iv) Except
      as
      set forth in Part
      3.25(c)(iv),
      all
      former and current employees and independent contractors of Seller have executed
      written Contracts with Seller that (i) assign to Seller all rights to any
      inventions, improvements, discoveries, works of authorship, or information
      developed while conducting the business of Seller, or necessary to the business
      of Seller whether or not an application for patent or other Intellectual
      Property Asset protection has not yet been filed, and (ii) impose
      confidentiality obligations in favor of Seller as to the assigned rights. No
      current or former employee or independent contractor of Seller has any interest
      in any Intellectual Property Assets used by Seller in connection with Seller's
      business. Seller has paid to its respective employees and independent
      contractors all fees due, if any, for the assignment of such rights pursuant
      to
      individual agreements or applicable legal provisions.

     

    (v)
       None
      of
      the rights in or to any Intellectual Property Assets used in connection with
      or
      necessary to the Business as conducted, or proposed by Seller to be conducted,
      as of the Closing Date shall be adversely affected by the execution or delivery
      of this Agreement by Seller, nor by the full performance by Seller of any of
      its
      obligations hereunder.

     

    (d) Patents.

     

    (i) Part
      3.25(d)
      contains
      a complete and accurate list and summary description of each applied for or
      issued item of the Patents owned by Seller, and a schedule of all maintenance
      fees or taxes of actions falling due within ninety (90) days after the date
      hereof.

     

    (ii) All
      of
      the applied for and issued Patents owned by Seller or represented to be owned
      by
      Seller hereunder are currently in compliance in all material respects with
      all
      formal Legal Requirements (including, as applicable, payment of filing,
      examination, search, publication, issue, and maintenance fees and proofs of
      working or use), are not invalid or unenforceable and neither Seller nor any
      Shareholder knows of any reason that any Patents would be invalid or
      unenforceable. 

     

    (iii) No
      Patent
      owned by Seller or represented to be owned by Seller hereunder has been or
      is
      now involved in any interference, reissue, reexamination, opposition or other
      Proceeding. To Seller's and each Shareholder’s Knowledge, there is no
      potentially interfering patent or patent application of any Third
      Party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iv) Except
      as
      set forth in Part
      3.25(d),
      (A) to
      Seller’s and each Shareholder’s Knowledge, there has been, and presently is, no
      unauthorized use, interference, disclosure, infringement, misappropriation
      or
      violation by any Third Party of any of the Patents owned by Seller or
      represented to be owned by Seller hereunder. Seller has not brought or
      considered bringing against any Third Party any Proceeding for infringement
      of
      any of the Patents or for breach of any license, sublicense or agreement
      involving Patents owned or used by Seller; and (B) to Seller’s and each
      Shareholder’s Knowledge, there is not now, and has not been, any infringement
      (including inducing, contributory or vicarious infringement), misuse, or
      misappropriation by Seller of any Patent(s) owned or licensed by any Third
      Party, such as by Seller's operation of the business; and Seller is not and
      has
      not been the subject of any Proceeding concerning Patents belonging to any
      Third
      Party (or received any notice, charge, complaint, claim or demand), and, to
      Seller's and each Shareholder's Knowledge, there is not now existing any
      threatened claim against any Seller for such a violation.

     

    (v) All
      products sold or offered for sale under the Patents owned by Seller or
      represented to be owned by Seller hereunder have been marked with the proper
      patent notice.

     

    (e) Marks.

     

    (i) Part
      3.25(e)
      contains
      a complete and accurate list and summary description of all applied for and
      registered Marks owned by Seller. 

     

    (ii) All
      Marks
      set forth on Part
      3.25(e)
      have
      been registered, or an application for registration is currently pending, with
      the United States Patent and Trademark Office and, to the extent registered,
      are
      currently in compliance in all material respects with all formal Legal
      Requirements (including the timely post-registration filing of affidavits of
      use
      and incontestability and renewal applications). 

     

    (iii) No
      Mark
      set forth on Part
      3.25(e)
      has been
      or is now involved in any opposition, invalidation, cancellation or other
      Proceeding and, to Seller’s and each Shareholder’s Knowledge, no such action has
      been or is threatened or asserted with respect to any of the Marks set forth
      on
Part
      3.25(e).

     

    (iv) To
      Seller’s and the Shareholders’ Knowledge, there is no potentially interfering
      trademark or trademark application of any other Person.

     

    (v) (A)
      To
      Seller’s and each Shareholder’s Knowledge, there has been, and presently is, no
      unauthorized use, infringement, misappropriation or violation by any Third
      Party
      of any of the Marks owned by Seller or represented to be owned by Seller
      hereunder. Seller has not brought or considered bringing against any Third
      Party
      any Proceeding for infringement of any of the Marks owned by Seller or
      represented to be owned by Seller hereunder or for breach of any license,
      sublicense or agreement involving Marks owned, or represented to be owned,
      or
      used by Seller; and (B) to Seller’s and each Shareholder’s Knowledge, there is
      not now, and has not been, any type of infringement, misuse, or misappropriation
      by Seller of any Marks owned or licensed by any Third Party, such as by Seller's
      operation of the business; and Seller is not and has not been the subject of
      any
      Proceeding concerning any Marks belonging to any Third Party (and has not
      received any notice, charge, complaint, claim or demand regarding a claim to
      such Third Party Mark(s)), and, to Seller's and each Shareholder's Knowledge,
      there is not now existing any threatened claim against any Seller for such
      a
      violation.

     

    (f) Copyrights.

     

    (i) Part
      3.25(f)
      contains
      a complete and accurate list and summary description of all registered and
      applied for Copyrights owned by Seller.

     

    (ii) All
      of
      the registered or applied for Copyrights owned by Seller or represented to
      be
      owned by Seller hereunder are currently in compliance with formal Legal
      Requirements 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
in
        all
        material respects, are valid and enforceable, and are not subject to any
        maintenance fees or taxes or other action falling due within ninety (90)
        days
        after the date hereof.

    

     

    (iii) (A)
      To
      Seller’s and each Shareholder’s Knowledge, there has been, and presently is, no
      unauthorized use, infringement, misappropriation or violation by any Third
      Party
      of any of the Copyrights owned by Seller or represented to be owned by Seller
      hereunder. Seller has not brought or considered bringing against any Third
      Party
      any Proceeding for infringement of any of the Copyrights owned by Seller or
      represented to be owned by Seller hereunder or for breach of any license,
      sublicense or agreement involving Copyrights owned, or represented to be owned,
      or used by Seller; and (B) to Seller’s and each Shareholder’s Knowledge, there
      is not now, and has not been, any type of infringement, misuse, or
      misappropriation by Seller of any Copyright(s) owned or licensed by any Third
      Party, such as by Seller's operation of the business; and Seller is not and
      has
      not been the subject of any Proceeding concerning Copyrights belonging to any
      Third Party (or received any notice, charge, complaint, claim or demand), and,
      to Seller's and each Shareholder's Knowledge, there is not now existing any
      threatened claim against any Seller for such a violation. 

     

    (g) Trade
      Secrets.

     

    (i) With
      respect to each material Trade Secret owned by Seller or represented to be
      owned
      by Seller hereunder, the documentation relating to such Trade Secret owned
      by
      Seller or represented to be owned by Seller hereunder is current, accurate
      and
      sufficient in detail and content to identify and explain it and to allow its
      full and proper use without reliance on the knowledge or memory of any
      individual.

     

    (ii) Seller
      has taken all reasonable precautions, and in no event less than commercially
      reasonable precautions, to protect the secrecy, confidentiality and value of
      all
      Trade Secrets owned by Seller or represented to be owned by Seller hereunder
      (including the enforcement by Seller of a policy requiring each employee or
      contractor to execute proprietary information and confidentiality agreements
      substantially in Seller's standard form, and all current and former employees
      and contractors of Seller have executed such an agreement). The Trade Secrets
      owned by Seller or represented to be owned by Seller hereunder have not been
      intentionally divulged to a Third Party except under a sufficient obligation
      of
      confidentiality.

     

    (iii) To
      Seller’s and each Shareholder’s Knowledge, Seller has good title to, and an
      absolute right to use, the Trade Secrets owned by Seller or represented to
      be
      owned by Seller hereunder. To Seller’s and each Shareholder’s Knowledge, the
      Trade Secrets owned by Seller or represented to be owned by Seller hereunder
      are
      not part of the public knowledge or literature and, to Seller's and each
      Shareholder’s Knowledge, have not been used, divulged, or appropriated either
      for the benefit of any Person (other than Seller) or to the detriment of Seller.
      

     

    (iv)
       To
      Seller’s and each Shareholder’s Knowledge, there has been, and presently is, no
      unauthorized use, misappropriation or violation by any Third Party of any of
      the
      Trade Secrets owned by Seller or represented to be owned by Seller hereunder.
      Seller has not brought or considered bringing against any Third Party any
      Proceeding for infringement of any of the Trade Secrets owned by Seller or
      represented to be owned by Seller hereunder or for breach of any license,
      sublicense or agreement involving Trade Secrets owned or used by Seller.
      Additionally, to Seller’s and each Shareholder’s Knowledge, there is not now,
      and has not been, any type of infringement, misuse, or misappropriation by
      Seller of any Trade Secret(s) owned or licensed by any Third Party, such as
      by
      Seller's operation of the business; and Seller is not and has not been the
      subject of any Proceeding concerning Trade Secrets belonging to any Third Party
      (or received any notice, charge, complaint, claim or demand from any Third
      Party), and, to Seller's and each Shareholder's Knowledge, there is not now
      existing any threatened claim against any Seller for such a
      violation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h) Net
      Names.

     

    (i) Part
      3.25(h)
      contains
      a complete and accurate list and summary description of all Net Names owned
      by
      Seller and used by Seller or necessary in its business as conducted, or as
      proposed by Seller to be conducted, as of the Closing Date.

     

    (ii) All
      material Net Names are set forth on Part
      3.25(h)
      and have
      been registered in the name of Seller and are in compliance with all formal
      Legal Requirements.

     

    (iii) No
      Net
      Name set forth on Part
      3.25(h)
      has
      been, or is now involved in, any dispute including any Proceeding and, to
      Seller's and each Shareholder’s Knowledge, no action has been or is threatened
      or asserted with respect to any Net Name set forth on Part
      3.25(h).

     

    3.26 Compliance
      with the Foreign Corrupt Practices Act and Export Control and Antiboycott
      Laws

     

     

    (a) Seller
      and each Subsidiary of Seller and, to Seller’s and each Shareholder’s Knowledge,
      its respective Representatives have not, to obtain or retain business, directly
      or indirectly offered, paid or promised to pay, or authorized the payment of,
      any money or other thing of value (including any fee, gift, sample, travel
      expense or entertainment with a value in excess of Two Hundred Dollars ($200)
      in
      the aggregate to any one individual in any year) or any commission payment
      of
      any amount payable, to:

     

    (i) any
      person who is an official, officer, agent, employee or representative of any
      Governmental Body or of any existing or prospective customer (whether government
      owned or nongovernment owned);

     

    (ii) any
      political party or official thereof;

     

    (iii) any
      candidate for political or political party office; or

     

    (iv) any
      other
      individual or entity;

     

    while
      knowing or having reason to believe that all or any portion of such money or
      thing of value would be offered, given, or promised, directly or indirectly,
      to
      any such official, officer, agent, employee, representative, political party,
      political party official, candidate, individual, or any entity affiliated with
      such customer, political party or official or political office.

     

    (b) To
      Seller’s and each Shareholder’s Knowledge, each transaction is properly and
      accurately recorded on the books and Records of Seller, and each document upon
      which entries in Seller's books and Records are based is complete and accurate
      in all respects. Seller maintains a system of internal accounting controls
      adequate to insure that Seller maintains no off-the-books accounts and that
      Seller's assets are used only in accordance with Seller's management
      directives.

     

    (c) Seller
      has at all times been in compliance with all Legal Requirements relating to
      export control and trade embargoes. No product sold or service provided by
      Seller during the last five (5) years has been, directly or, to Seller’s and
      each Shareholder’s knowledge, indirectly, sold to or performed on behalf of
      Burma (Myanmar), Cuba, Iran, Iraq, Liberia, Libya, North Korea, Sudan, Syria
      or
      Zimbabwe in violation of any Legal Requirement.

     

    (d) Seller
      has not violated the antiboycott prohibitions contained in 50 U.S.C. sect.
      2401
      et seq. or taken any action that can be penalized under Section 999 of the
      Code. During the last five (5) years, Seller has not been a party to, is not
      a
      beneficiary under and has not performed any service or sold any product under
      any Seller Contract under which a product has been sold to customers in Bahrain,
      Burma (Myanmar), Cuba, Iran, Iraq, Jordan, Kuwait, Lebanon, Liberia, Libya,
      North Korea, Oman, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Quatar,
        Saudi Arabia, Sudan, Syria, United Arab Emirates, the Republic of Yemen or
        Zimbabwe in violation of any Legal Requirement.

    

     

    3.27 Relationships
      with Related Persons

     

     

    (a) Neither
      Seller nor any Shareholder, nor any Related Person of any of them owns, or
      has
      owned, of record, or as a beneficial owner, an equity interest or any other
      financial or profit interest in any Person that has engaged in competition
      with
      Seller with respect to any line of the products or services of Seller, except
      for passive ownership of less than one percent (1%) of the outstanding capital
      stock of any publicly traded company.

     

    (b) Except
      as
      set forth in Part 3.27,
      neither
      Seller nor any Shareholder nor any Related Person of any of them is a party
      to
      any Contract with, or has any claim or right against, Seller.

     

    (c) Except
      as
      set forth in Part 3.27,
      no
      Shareholder or any Related Person of any Shareholder is a party to any loan
      agreement with Seller or owes any amount to Seller under a promissory note
      or
      any other instrument.

     

    3.28 Brokers
      or Finders

     

     

    Except
      for Seller’s arrangement with Needham & Company LLC, neither Seller nor any
      of its Representatives have incurred any obligation or liability, contingent
      or
      otherwise, for brokerage or finders' fees or agents' commissions or other
      similar fees, expenses, commissions or payments to any investment banker,
      financial advisor, broker, or other intermediary in connection with the sale
      of
      Seller's business or the Purchased Assets or the Contemplated Transactions.
      Seller shall pay any and all such fees, expenses and commissions in full and
      Buyer will not become liable or obligated for all or any portion of such fees
      expenses or commissions.

     

    3.29 Solvency

     

     

    (a) Seller
      is
      not now insolvent and will not be rendered insolvent by any of the Contemplated
      Transactions. As used in this section, "insolvent" means that the sum of the
      debts and other probable Liabilities of Seller exceeds the present fair saleable
      value of Seller's assets.

     

    (b) Immediately
      after giving effect to the consummation of the Contemplated Transactions: (i)
      Seller will be able to pay its Liabilities as they become due in the usual
      course of its business; (ii) Seller will not have unreasonably small capital
      with which to conduct its present or proposed business; (iii) Seller will have
      assets (calculated at fair market value) that exceed its Liabilities; and (iv)
      taking into account all pending and threatened litigation, final judgments
      against Seller in actions for money damages are not reasonably anticipated
      to be
      rendered at a time when, or in amounts such that, Seller will be unable to
      satisfy any such judgments promptly in accordance with their terms (taking
      into
      account the maximum probable amount of such judgments in any such actions and
      the earliest reasonable time at which such judgments might be rendered) as
      well
      as all other obligations of Seller. The cash available to Seller, after taking
      into account all other anticipated uses of the cash, will be sufficient to
      pay
      all such debts and judgments promptly in accordance with their
      terms.

     

    3.30 Disclosure

     

     

    No
      representation or warranty or other statement made by Seller or any Shareholder
      in this Agreement, the Disclosure Letter, any supplement to the Disclosure
      Letter, the certificates delivered pursuant to Section 2.7(a) or in any written
      statement furnished to Buyer pursuant hereto or in connection with the
      Contemplated Transactions, when all such documents are read together in their
      entirety, contains, or will contain at the Closing Date, any untrue statement
      of
      a material fact, or omits, or will omit at the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Closing
        Date, to state any material fact necessary in order to make the statements
        contained herein or therein, in the light of the circumstances under which
        they
        were made, not misleading.

    

    


    3.31 Government
      Contract Rights. Except as set forth in Part
      3.31:

    


    (a) The
      Seller has no outstanding Bid which has been submitted to the U.S. government
      or
      any other Governmental Body or any proposed prime contractor under an existing
      or proposed prime Government Contract;

    


    (b) The
      Seller has complied in all material respects with all statutory and regulatory
      requirements affecting its contracts with the U.S. government, any other
      Governmental Body or any prime contractor under a Government Contract or Bid
      and
      with all certificates and representations executed in connection therewith
      (which certificates and representations were current, accurate and complete
      in
      all material respects as of their effective date). With respect to each
      Government Contract or Bid, (i) no termination for convenience, termination
      for
      default, cure notice or show cause notice has been issued, (ii) no cost incurred
      by the Seller has been questioned or disallowed and (iii) no money due to the
      Seller has been or, to the knowledge of Seller, has been threatened to be,
      withheld or set off. Except as disclosed on Part
      3.31,
      the
      Seller has no offset obligations with respect to any Government Contract or
      Bid;

    


    (c) Neither
      the Seller nor any of its directors, officers or, to Seller’s and each
      Shareholder’s Knowledge, employees is (or for the last six years has been)
      debarred or suspended from doing business with the U.S. government or any other
      Governmental Body. The Seller has not been informed in writing or threatened
      that it will be subject to the institution of debarment or suspension
      proceedings against it. To the Knowledge of Seller, there exist no circumstances
      that would warrant the institution of suspension or debarment proceedings with
      respect to the Seller in the future; 

    


    (d) The
      Seller has not received any written show cause notices, cure notices or default
      determinations on any Government Contracts or with any prime contractor under
      a
      prime Government Contract;

    


    (e) The
      Seller has not received any written negative determinations of responsibility
      or
      been declared ineligible by the U.S. government or any other Governmental Body
      with respect to any Bid submitted by the Seller. To the Knowledge of Seller
      and
      each Shareholder, there exist no circumstances that would warrant the finding
      of
      nonresponsibility or ineligibility with respect to the Seller in the future;
      

    


    (f) None
      of
      Seller, its directors or officers, or, to Seller’s Knowledge, its employees is
      or has been under any administrative, civil or criminal investigation,
      indictment or information, audit or internal investigation with respect to
      any
      alleged irregularity, misstatement or omission arising out of or in any way
      relating to any of its Government Contracts or Bids. The Seller has not made
      any
      voluntary disclosure to the U.S. government or any other Governmental Body
      with
      respect to any alleged irregularity, misstatement or omission arising under
      or
      relating to any Government Contract or Bid;

    


    (g) The
      Seller is not involved in any qui tam actions; 

    


    (h) The
      Seller possesses all necessary security clearances for the performance of its
      obligations under each of its Government Contracts and Bids with the U.S.
      government or with the prime contractor under a prime Government Contract,
      which
      security clearances are set forth on in Part
      3.31(h);

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)
       There
      exist (i) no financing arrangements with respect to performance of any current
      Government Contract; (ii) no outstanding claims against the Seller, either
      by
      the U.S. government, any other Governmental Body or by any prime contractor,
      subcontractor, vendor or other third party, arising under or relating to any
      Government Contract or Bid; (iii) to the Knowledge of Seller, no facts upon
      which such a claim could reasonably be based in the future; (iv) no disputes
      between the Seller and the U.S. government, any other Governmental Body or
      any
      prime contractor, subcontractor or vendor arising under or relating to any
      Government Contract or Bid; and (v) to the Knowledge of Seller, no facts over
      which such a dispute could reasonably arise in the future; and

    


    (j) The
      Seller has no interest in any pending or potential claim against the U.S.
      government, any other Governmental Body or any prime contractor, subcontractor
      or vendor arising under or relating to any Government Contract or
      Bid.

     

    4. Representations
      and Warranties of Buyer
      and
      CMC

     

     

    Buyer
      and
      CMC each represent and warrant, jointly and severally, to Seller and the
      Shareholders as follows:

     

    4.1 Organization
      and Good Standing

     

     

    Buyer
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of Delaware, with full corporate power and authority to
      conduct its business as it is now conducted. CMC is a corporation duly
      organized, validly existing and in good standing under the laws of the State
      of
      Delaware, with full corporate power and authority to conduct its business as
      it
      is now conducted.

     

    4.2 Authority;
      No Conflict

     

     

    (a) This
      Agreement has been duly executed and delivered by each of Buyer and CMC and
      constitutes the legal, valid and binding obligation of each of Buyer and CMC,
      enforceable against Buyer and CMC in accordance with its terms, except as may
      be
      limited by bankruptcy, insolvency, moratorium or other similar laws affecting
      or
      relating to creditors’ rights generally and is subject to general principles of
      equity. The execution and delivery by Buyer of the Bill of Sale, the Escrow
      Agreement, the Employment Agreements and each other agreement to be executed
      or
      delivered by Buyer at Closing (collectively, the "Buyer's
      Closing Documents"),
      each
      of the Buyer's Closing Documents will constitute the legal, valid and binding
      obligation of Buyer, enforceable against Buyer in accordance with its respective
      terms, except as may be limited by bankruptcy, insolvency, moratorium or other
      similar laws affecting or relating to creditors’ rights generally and are
      subject to general principles of equity. Each of Buyer and CMC has the absolute
      and unrestricted right, power and authority to execute and deliver this
      Agreement and the Buyer's Closing Documents to which it is a party and to
      perform its obligations under this Agreement and the Buyer's Closing Documents
      to which it is a party, and such action has been duly authorized by all
      necessary corporate action.

     

    (b) Neither
      the execution and delivery of this Agreement by Buyer or CMC nor the
      consummation or performance of any of the Contemplated Transactions by Buyer
      or
      CMC will give any Person the right to prevent, delay or otherwise interfere
      with
      any of the Contemplated Transactions pursuant to:

     

    (i) any
      provision of Buyer's or CMC’s Governing Documents;

     

    (ii) any
      resolution adopted by the board of directors or the shareholders of Buyer or
      CMC; or

     

    (iii) any
      Legal
      Requirement or Order to which Buyer or CMC may be subject.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.3 Certain
      Proceedings

     

     

    There
      is
      no pending Proceeding that has been commenced against Buyer and that challenges,
      or may have the effect of preventing, delaying, making illegal or otherwise
      interfering with, any of the Contemplated Transactions. To Buyer's Knowledge,
      no
      such Proceeding has been threatened.

     

    4.4 Brokers
      or Finders

     

     

    Neither
      Buyer nor any of its Representatives have incurred any obligation or liability,
      contingent or otherwise, for brokerage or finders' fees or agents' commissions
      or other similar fees, expenses, commissions or payments to any investment
      banker, financial advisor, broker, or other intermediary in connection with
      the
      Contemplated Transactions.

     

    5. Covenants
      of Seller Prior to Closing

     

     

    5.1 Access
      and Investigation

     

     

    Between
      the date of this Agreement and the Closing Date, and upon reasonable advance
      notice received from Buyer, Seller shall (and each Shareholder shall cause
      Seller to): (a) afford Buyer and its Representatives (collectively,
      "Buyer
      Group")
      reasonable access, during regular business hours, to Seller's personnel,
      properties, Contracts, Governmental Authorizations, books and Records and other
      documents and data, such rights of access to be exercised in a manner that
      does
      not unreasonably interfere with the operations of Seller; (b) furnish Buyer
      Group with copies of all such Contracts, Governmental Authorizations, books
      and
      Records and other existing documents and data as Buyer may reasonably request;
      (c) furnish Buyer Group with such additional financial, operating and other
      relevant data and information as Buyer may reasonably request; and (d) otherwise
      cooperate and assist, to the extent reasonably requested by Buyer, with Buyer's
      investigation of the properties, assets and financial condition related to
      Seller. In addition, Buyer shall have the right to have the Facilities and
      Tangible Personal Property inspected by Buyer Group, at Buyer's sole cost and
      expense, for purposes of determining the physical condition and legal
      characteristics of the Facilities and Tangible Personal Property.

     

    5.2 Operation
      of the Business of Seller

     

     

    Between
      the date of this Agreement and the Closing, Seller shall (and each Shareholder
      shall cause Seller to):

     

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

     

    (b) except
      as
      otherwise directed by Buyer in writing, and without making any commitment on
      Buyer's behalf, use its best efforts to preserve intact its current business
      organization, keep available the services of its officers, key employees and
      agents and maintain its relations and good will with suppliers, customers,
      landlords, creditors, key employees, agents and others having business
      relationships with it;

     

    (c) confer
      with Buyer prior to implementing operational decisions of a material
      nature;

     

    (d) otherwise
      report periodically to Buyer concerning the status of its business, operations
      and finances;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) maintain
      the Purchased Assets in a state of repair and condition that complies with
      Legal
      Requirements in all material respects and is consistent with the requirements
      and normal conduct of Seller's business including maintaining the level of
      inventory in accordance with Seller’s past practices;

     

    (f) keep
      in
      full force and effect, without amendment, all material rights relating to
      Seller's business;

     

    (g) comply
      in
      all material respects with all Legal Requirements and contractual obligations
      applicable to the operation of Seller's business;

     

    (h) continue
      in full force and effect the insurance coverage under the policies set forth
      in
Part
      3.21
      or
      substantially equivalent policies;

     

    (i) except
      as
      required to comply with ERISA or to maintain qualification under Section 401(a)
      of the Code, not amend, modify or terminate any Employee Plan without the
      express written consent of Buyer, and except as required under the provisions
      of
      any Employee Plan, not make any contributions to or with respect to any Employee
      Plan without the express written consent of Buyer;

     

    (j) cooperate
      with Buyer and assist Buyer in identifying the Governmental Authorizations
      required by Buyer to operate the business from and after the Closing Date and
      either transferring existing Governmental Authorizations of Seller to Buyer,
      where permissible, or obtaining new Governmental Authorizations for
      Buyer;

     

    (k) except
      as
      required by GAAP, maintain all books and Records of Seller relating to Seller's
      business in the Ordinary Course of Business;

     

    (l) cause
      all
      Purchased Assets owned by any Subsidiary of Seller as of the date hereof to
      be
      transferred to and owned by Seller at Closing;

     

    (m) use
      reasonable commercial efforts to cause each Government Contract to which Seller
      is a party as of the date hereof to be assigned to Buyer pursuant to a novation
      or similar assignment agreement;

     

    (n) use
      commercially reasonable efforts to assist Buyer to negotiate and finalize the
      Employment Agreement with Greg Forbes; and

     

    (o) use
      commercially reasonable efforts to assist Buyer to negotiate and finalize
      employment agreements, substantially in the form of the Employment Agreements,
      with each of Marc Tricard, David Kolczynski, William Kordonski, Paul Dumas
      and
      Leo Catarisano..

     

    5.3 Negative
      Covenant

     

     

    Except
      as
      otherwise expressly permitted herein, between the date of this Agreement and
      the
      Closing Date, Seller shall not, and each Shareholder shall not permit Seller
      to,
      without the prior written Consent of Buyer: (a) take any affirmative action,
      or
      fail to take any reasonable action within its control, as a result of which
      any
      of the changes or events listed in Sections 3.15 or 3.19 would be likely to
      occur; (b) make any modification to any material Contract or Governmental
      Authorization; (c) allow the levels of raw materials, supplies, finished goods
      or other materials included in the Inventories to vary materially from the
      levels customarily maintained in the Ordinary Course of Business; (d) enter
      into
      any compromise or settlement of any litigation, proceeding or governmental
      investigation relating to the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Purchased
        Assets, the business of Seller or the Assumed Liabilities in excess of $25,000;
        or (e) make any material change in compensation or bonus arrangements (other
        than hiring and the termination of employees in the Ordinary Course of
        Business); (f) issue or declare any dividends or distributions to any equity
        holder (other than tax distributions to equity holders, limited to the amounts
        required for payment of income taxes then due and payable solely in connection
        with the net income of Seller); (g) make any change in its current accounting
        practices (other than as required by GAAP); or (h) issue or authorize the
        issuance of any equity security (other than pursuant to the exercise of
        outstanding stock options).

    

     

    5.4 Required
      Approvals

     

     

    As
      promptly as practicable after the date of this Agreement, Seller shall make
      all
      filings required by Legal Requirements to be made by it prior to the Closing
      in
      order to consummate the Contemplated Transactions. Seller and each Shareholder
      also shall cooperate with Buyer and its Representatives with respect to all
      filings that Buyer elects to make or, pursuant to Legal Requirements, shall
      be
      required to make in connection with the Contemplated Transactions. Seller and
      each Shareholder also shall cooperate with Buyer and its Representatives in
      obtaining all Material Consents.

     

    5.5 Notification

     

     

    Between
      the date of this Agreement and the Closing, Seller and each Shareholder shall
      promptly notify Buyer in writing if any of them becomes aware of (a) any fact
      or
      condition that causes or constitutes a Breach of any of Seller's or any
      Shareholder’s representations and warranties made as of the date of this
      Agreement or (b) the occurrence after the date of this Agreement of any fact
      or
      condition that would or would be reasonably likely to cause or constitute a
      Breach of any such representation or warranty had that representation or
      warranty been made as of the time of the occurrence of, or Seller's or
      Shareholder’s discovery of, such fact or condition. Should any such fact or
      condition require any change to the Disclosure Letter, Seller shall promptly
      deliver to Buyer a supplement to the Disclosure Letter specifying such change.
      Such delivery shall not affect any rights of Buyer under Section 9.2 and Article
      11. During the same period, Seller and each Shareholder also shall promptly
      notify Buyer of the occurrence of any Breach of any covenant of Seller or any
      Shareholder in this Article 5 or of the occurrence of any event that may make
      the satisfaction of the conditions in Article 7 impossible or
      unlikely.

     

    5.6 No
      Negotiation

     

     

    Until
      such time as this Agreement shall be terminated pursuant to Section 9.1: (a)
      neither Seller nor any Shareholder shall directly or indirectly, through any
      Representative or otherwise, solicit or entertain offers from, negotiate with
      or
      in any manner encourage, discuss, accept or consider any proposal of any other
      person or entity relating to the acquisition of, purchase or sale of assets
      or
      stock of, or other transaction relating to any merger, consolidation, business
      combination or similar transaction involving, Seller; and (b) Seller and each
      Shareholder will immediately notify CMC regarding any contact between Seller
      or
      any Shareholder and any other person regarding any such solicitation, offer
      or
      proposal or any related inquiry.

     

    5.7 Best
      Efforts

     

     

    Subject
      to the terms and conditions of this Agreement, Seller and each Shareholder
      will
      use their reasonable best efforts in good faith to take, or cause to be taken,
      all actions and to do, or cause to be done, and to assist and cooperate with
      the
      other parties in doing, all things necessary, proper or advisable under
      applicable Legal Requirements to cause the conditions in Article 7 and Section
      8.3 to be satisfied and otherwise to consummate the Contemplated Transactions;
      provided, however, that for purposes of 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
clarification,
        such efforts shall not require Seller to waive any conditions to close or
        any of
        its other rights in the course thereof.

    

     

    5.8 Interim
      Financial Statements

     

     

    Until
      the
      Closing Date, Seller shall deliver to Buyer within thirty (30) days after the
      end of each month a copy of the unaudited balance sheet and income statement
      for
      such month prepared in a manner and containing information consistent with
      Seller's current practices for preparing such financial statements.

     

    5.9 Change
      of
      Name

     

     

    On
      or
      before the Closing Date, Seller shall amend its Governing Documents and take
      all
      other actions necessary to change its name to one sufficiently dissimilar to
      Seller's present name, in Buyer's judgment, to avoid confusion.

     

    5.10 Payment
      of Liabilities

     

     

    Seller
      shall pay or otherwise satisfy in the Ordinary Course of Business its
      Liabilities and obligations. 

    


    5.11 Payment
      of Debt

    


    Prior
      to,
      or contemporaneous with the Closing, all secured debt of the Seller shall be
      repaid, including, but not limited to, all senior and subordinate debt, and
      all
      security interests attached to the Purchased Assets released.

     

    6. Covenants
      of Buyer Prior to Closing

     

     

    6.1 Required
      Approvals

     

     

    As
      promptly as practicable after the date of this Agreement, Buyer shall make,
      or
      cause to be made, all filings required by Legal Requirements to be made by
      it to
      consummate the Contemplated Transactions. Buyer also shall cooperate, and cause
      its Related Persons to cooperate, with Seller (a) with respect to all filings
      Seller shall be required by Legal Requirements to make and (b) in obtaining
      all
      Consents identified in Part
      3.2(c),
      provided, however, that Buyer shall not be required to dispose of or make any
      change to its business or expend any material funds in order to comply with
      this
      Section 6.1.

     

    6.2 Best
      Efforts

     

     

    Subject
      to the terms and conditions of this Agreement, Buyer will use its reasonable
      best efforts in good faith to take, or cause to be taken, all actions and to
      do,
      or cause to be done, and to assist and cooperate with the other parties in
      doing, all things necessary, proper or advisable under applicable Legal
      Requirements to cause the conditions in Article 8 to be satisfied and otherwise
      to consummate the Contemplated Transactions; provided, however, that for
      purposes of clarification, such efforts shall not require Buyer to waive any
      conditions to close or any of its other rights in the course
      thereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7. Conditions
      Precedent to Buyer's Obligation to Close

     

     

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

     

    7.1 Accuracy
      of Representations

     

     

    All
      of
      Seller's and each Shareholder’s representations and warranties in this Agreement
      that are qualified by materiality (considered collectively), and each of these
      representations and warranties qualified by materiality (considered
      individually), shall have been accurate in all respects as of the date of this
      Agreement, and shall be accurate in all respects as of the time of the Closing
      as if then made, except for representations and warranties in this Agreement
      which address matters only as of a particular date (which representations and
      warranties shall have been accurate in all respects as of such particular date)
      and all of Seller's and each Shareholder’s representations and warranties in
      this Agreement that are not qualified by materiality (considered collectively),
      and each of these representations and warranties not qualified by materiality
      (considered individually), shall have been accurate in all material respects
      as
      of the date of this Agreement, and shall be accurate in material all respects
      as
      of the time of the Closing as if then made, except for representations and
      warranties in this Agreement which address matters only as of a particular
      date
      (which representations and warranties shall have been accurate in all material
      respects as of such particular date). 

     

    7.2 Performance

     

     

    All
      of
      the covenants and obligations that Seller and Shareholders are required to
      perform or to comply with pursuant to this Agreement at or prior to the Closing
      (considered collectively), and each of these covenants and obligations
      (considered individually), shall have been duly performed and complied
      with.

     

    7.3 Consents

     

     

    Seller
      shall have obtained each Consent required under any Seller Contract (other
      than
      the Government Contracts) necessary for the consummation of the Contemplated
      Transactions and each such Consent shall be in full force and effect, except
      where the failure to obtain such Consent would not have a Material Adverse
      Effect, individually or in the aggregate (the "Material
      Consents").
      Such
      Material Consents are set forth on Part
      7.3.

     

    7.4 Additional
      Documents

     

     

    Seller
      and the Shareholders shall have caused the documents and instruments required
      by
      Sections 2.7(a) and 2.7(c) and the following documents to be delivered (or
      tendered subject only to Closing) to Buyer:

     

    (a) the
      articles of incorporation and all amendments thereto of Seller, duly certified
      as of a recent date by the Secretary of State of the jurisdiction of Seller's
      incorporation; 

     

    (b) releases
      of all Encumbrances on the Purchased Assets, other than Permitted
      Encumbrances;

     

    (c) Certificates
      dated as of a date not earlier than the fifth business day prior to the Closing
      as to the good standing of Seller, executed by the appropriate officials of
      the
      State of New York;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) that
      certain definitive supply agreement between Seller and Schneider GmbH & Co.
      KG dated June 12, 2006, as of the date hereof ; and

     

    (e) Such
      other documents as Buyer may reasonably request for the purpose of:

     

    (i) evidencing
      the accuracy of any of Seller's and any Shareholder’s representations and
      warranties;

     

    (ii) evidencing
      the performance by Seller and Shareholders of, or the compliance by Seller
      and
      Shareholders with, any covenant or obligation required to be performed or
      complied with by Seller and Shareholders;

     

    (iii) evidencing
      the satisfaction of any condition referred to in this Article 7; or

     

    (iv) otherwise
      facilitating the consummation or performance of any of the Contemplated
      Transactions.

     

    7.5 No
      Proceedings

     

     

    Since
      the
      date of this Agreement, there shall not have been commenced or threatened
      against Buyer, or against any Related Person of Buyer, any Proceeding (a)
      involving any challenge to, or seeking Damages or other relief in connection
      with, any of the Contemplated Transactions or (b) that may have the effect
      of
      preventing, delaying, making illegal, imposing limitations or conditions on
      or
      otherwise interfering with any of the Contemplated Transactions. 

     

     

    7.6 Simultaneous
      Closing of BSI Agreements.

     

    The
      Closing shall be contingent upon the simultaneous closing of the transactions
      contemplated by the BSI Agreements, all in form and substance as agreed upon
      among Buyer, BSI and Mr. Mintz as of the date hereof.

     

    7.7 Governmental
      Authorizations

     

     

    Buyer
      shall have received such Governmental Authorizations as are necessary or
      desirable to allow Buyer to operate the Purchased Assets from and after the
      Closing.

     

    7.8 No
      Material Adverse Effect

     

     

    Since
      the
      date of this Agreement, there shall not have been any Material Adverse Effect
      and no event shall have occurred or circumstance exist that may result in a
      Material Adverse Effect.

    


    7.9 Seller
      Contracts

     

    All
      Seller Contracts (other than the Government Contracts) shall be assigned to
      Buyer without restriction, upon the same or more favorable terms, provided,
      however, that this condition shall be deemed to have been waived by Buyer with
      respect to the Restricted Contracts to the extent Buyer has elected to waive
      any
      such assignment as a closing condition as set forth in Section
      2.10.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8. Conditions
      Precedent to Seller's Obligation to Close

     

     

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

     

    8.1 Accuracy
      of Representations

     

     

    All
      of
      Buyer's and CMC’s respective representations and warranties in this Agreement
      that are qualified by materiality (considered collectively), and each of these
      representations and warranties qualified by materiality (considered
      individually), shall have been accurate in all respects as of the date of this
      Agreement, and shall be accurate in all respects as of the time of the Closing
      as if then made, except for representations and warranties in this Agreement
      which address matters only as of a particular date (which representations and
      warranties shall have been accurate in all respects as of such particular date)
      and all of Buyer's and CMC’s respective representations and warranties in this
      Agreement that are not qualified by materiality (considered collectively),
      and
      each of these representations and warranties not qualified by materiality
      (considered individually), shall have been accurate in all material respects
      as
      of the date of this Agreement, and shall be accurate in material all respects
      as
      of the time of the Closing as if then made, except for representations and
      warranties in this Agreement which address matters only as of a particular
      date
      (which representations and warranties shall have been accurate in all material
      respects as of such particular date). 

     

    8.2 Buyer’s
      Performance

     

     

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

     

    8.3 Additional
      Documents

     

     

    Buyer
      shall have caused the documents and instruments required by Section 2.7(b)
      to be
      delivered (or tendered subject only to Closing) to Seller.

     

    8.4 No
      Injunction

     

     

    There
      shall not be in effect any Legal Requirement or any injunction or other Order
      that (a) prohibits the consummation of the Contemplated Transactions and (b)
      has
      been adopted or issued, or has otherwise become effective, since the date of
      this Agreement.

     

    8.5 Simultaneous
      Closing of BSI Agreements.

     

    The
      Closing shall be contingent upon the simultaneous closing of the transactions
      contemplated by the BSI Agreements, all in form and substance as agreed upon
      among Buyer, BSI and Mr. Mintz as of the date hereof.

     

    9. Termination

     

     

    9.1 Termination
      Events

     

     

    By
      notice
      given prior to or at the Closing, subject to Section 9.2, this Agreement may
      be
      terminated as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a) by
      Buyer
      if a material Breach of any provision of this Agreement has been committed
      by
      Seller or any Shareholder and such Breach has not been waived by Buyer;
      provided, however, that if any such Breach is curable by Seller or any
      Shareholder through the exercise of reasonable efforts, then Buyer may not
      terminate this Agreement under this Section 9.1(a) prior to the end of a 30-day
      period following written notice of such Breach being given to Seller and each
      Shareholder, provided that Seller and each Shareholder, as applicable, continues
      to exercise reasonable efforts to cure such Breach (it being understood that
      Buyer may not terminate this Agreement pursuant to this Section 9.1(a) if such
      Breach has been cured prior to the end of such period);

     

    (b) by
      Seller
      if a material Breach of any provision of this Agreement has been committed
      by
      Buyer and such Breach has not been waived by Seller; provided, however, that
      if
      any such Breach is curable by Buyer through the exercise of reasonable efforts,
      then Seller may not terminate this Agreement under this Section 9.1(b) prior
      to
      the end of a 30-day period following written notice of such Breach being given
      to Buyer, provided that Buyer continues to exercise reasonable efforts to cure
      such Breach (it being understood that Seller may not terminate this Agreement
      pursuant to this Section 9.1(b) if such Breach has been cured prior to the
      end
      of such period);

     

    (c) by
      Buyer
      if any condition in Article 7 has not been satisfied as of September 15, 2006
      or
      if satisfaction of such a condition by such date is or becomes impossible (other
      than through the failure of Buyer to comply with its obligations under this
      Agreement), and Buyer has not waived such condition on or before such
      date;

     

    (d) by
      Seller
      if any condition in Article 8 has not been satisfied as of September 15, 2006
      or
      if satisfaction of such a condition by such date is or becomes impossible (other
      than through the failure of Seller or Shareholders to comply with their
      obligations under this Agreement), and Seller has not waived such condition
      on
      or before such date;

     

    (e) by
      mutual
      consent of Buyer and Seller; 

     

    (f) by
      Buyer
      if the Closing has not occurred on or before September 15, 2006, or such later
      date as the parties may agree upon, unless the Buyer is in material Breach
      of
      this Agreement; or

     

    (g) by
      Seller
      if the Closing has not occurred on or before September 15, 2006, or such later
      date as the parties may agree upon, unless the Seller or any Shareholder is
      in
      material Breach of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.2 Effect
      of
      Termination

     

     

    Each
      party's right of termination under Section 9.1 is in addition to any other
      rights it may have under this Agreement or otherwise, and the exercise of such
      right of termination will not be an election of remedies. If this Agreement
      is
      terminated pursuant to Section 9.1, all obligations of the parties under this
      Agreement will terminate, except that the obligations of the parties in this
      Section 9.2 and Articles 12 and 13 (except for those in Section 13.5) will
      survive, provided, however, that, if this Agreement is terminated because of
      a
      Breach of this Agreement by the nonterminating party or because one or more
      of
      the conditions to the terminating party's obligations under this Agreement
      is
      not satisfied as a result of the non-terminating
      party's failure to comply with its obligations under this Agreement, the
      terminating party's right to pursue all legal remedies will survive such
      termination unimpaired. If this Agreement is terminated and the Closing does
      not
      occur, Buyer shall promptly amend its Governing Documents to exclude “QED” from
      its name. Buyer acknowledges that Seller grants no license to Buyer for the
      mark
“QED” prior to the Closing.

     

     

    10. Additional
      Covenants

     

     

    10.1 Employees
      and Employee Benefits

     

     

    (a) For
      the
      purpose of this Agreement, the term "Active
      Employees"
      shall
      mean all employees employed on the Closing Date by Seller for its business
      who
      are employed exclusively in Seller's business as currently conducted, including
      employees on temporary leave of absence, including family medical leave,
      military leave, temporary or short-term disability or sick leave, but excluding
      employees on long-term disability leave.

     

    (b) Employment
      of Active Employees by Buyer.

     

    (i) Buyer
      is
      not obligated to hire any Active Employee but may interview all Active
      Employees. Buyer will provide Seller with a list of Active Employees to whom
      Buyer has made an offer of employment that has been accepted to be effective
      on
      the Closing Date (the "Hired
      Active Employees").
      Subject to Legal Requirements, Buyer will have reasonable access to the
      Facilities and personnel Records (including performance appraisals, disciplinary
      actions and grievances) of Seller for the purpose of preparing for and
      conducting employment interviews with all Active Employees and will conduct
      the
      interviews as expeditiously as possible prior to the Closing Date. Access will
      be provided by Seller upon reasonable prior notice during normal business hours.
      Effective immediately before the Closing, Seller will terminate the employment
      of all of its Hired Active Employees effective as of the close of business
      on
      the Closing Date.

     

    (ii) Neither
      Seller nor any Shareholder nor their respective Related Persons shall solicit
      the continued employment of any Active Employee (unless and until Buyer has
      informed Seller in writing that the particular Active Employee will not receive
      any employment offer from Buyer) or the employment of any Hired Active Employee
      after the Closing. Buyer shall inform Seller promptly of the identities of
      those
      Active Employees to whom it will not make employment offers.

     

    (iii) Except
      for the Employment Agreements, it is understood and agreed that (A) Buyer's
      expressed intention to extend offers of employment as set forth in this section
      shall not constitute any commitment, Contract or understanding (expressed or
      implied) of any obligation on the part of Buyer to a post-Closing employment
      relationship of any fixed term or duration or upon any terms or conditions
      other
      than those that Buyer may establish pursuant to individual offers of employment,
      and (B) employment offered by Buyer is "at will" and may be terminated by Buyer
      or by an employee at any time for any reason (subject to any written commitments
      to the contrary made by Buyer or an employee and Legal Requirements). Except
      for
      any terms and conditions contained in an executed Employment Agreement, nothing
      in this Agreement shall be deemed to prevent or restrict in any way the right
      of
      Buyer 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
to
        terminate, reassign, promote or demote any of the Hired Active Employees
        at any
        time or to change adversely or favorably the title, powers, duties,
        responsibilities, functions, locations, salaries, other compensation or terms
        or
        conditions of employment of such employees.

    

     

    (c) Salaries
      and Benefits

     

    (i) Seller
      shall be responsible for: (A) the payment of any termination or severance
      payments and the provision of health plan continuation coverage in accordance
      with the requirements of COBRA and Sections 601 through 608 of ERISA; and (B)
      any and all payments to employees required under the WARN Act.

     

    (ii) Seller
      shall be liable for any claims made or incurred by Active Employees and their
      beneficiaries through the Closing Date under the Employee Plans. For purposes
      of
      the immediately preceding sentence, a claim will be deemed incurred, in the
      case
      of hospital, medical or dental benefits, when the services, treatments,
      procedures, prescriptions or other supplies that are the subject of the claim
      are performed or provided and, in the case of other benefits (such as disability
      or life insurance), when an event has occurred or when a condition has been
      diagnosed that entitles the employee to the benefit.

     

    (d) No
      Transfer of Purchased Assets. Neither Seller nor any Shareholder nor their
      respective Related Persons will make any transfer of pension or other employee
      benefit plan assets to Buyer.

     

    (e) Terms
      of
      Employment. Buyer will set its own terms and conditions of employment for the
      Hired Active Employees and others it may hire, including work rules, benefits
      and salary and wage structure, all as permitted by law, provided, however,
      that:
      (i) the base salary provided by Buyer to each Hired Active Employee shall be
      at
      least equivalent to the base salary provided by Seller to such Hired Active
      Employee immediately prior to the Closing Date (provided that Seller has
      complied with Section 5.3(e)); (ii) the material benefits provided by Buyer
      to
      Hired Active Employees from the Closing Date through December 31, 2006 shall
      be
      a continuation of the benefits provided by Seller to the Hired Active Employees
      immediately prior to the Closing Date (provided that Seller has complied with
      Section 5.3(e)); and (iii) the benefits provided by Buyer to Hired Active
      Employees employed by Buyer as of January 1, 2007 shall be substantially
      equivalent to the benefits provided by CMC to its domestic employees generally.
      In connection with the benefits to be provided to the Hired Active Employees
      by
      CMC or Buyer hereunder (other than with respect to personal time off (PTO)
      accrual rates and accrual limitations, severance policies, if any, and any
      retirement or pension plans CMC or Buyer may adopt or define after the date
      hereof), the Hired Active Employees shall receive credit for the years of their
      employment with Seller as if they had been employed by Buyer during such period,
      subject to the terms of and to the extent permitted by the existing governing
      terms of the applicable benefit plans and documents and applicable law. Buyer
      is
      not obligated to assume any collective bargaining agreements under this
      Agreement. Subject to Section 2.4(a), Seller shall be solely liable for any
      severance, change-of-control, “golden parachute” or other payments required to
      be made to its employees due to the Contemplated Transactions.

     

    (f) General
      Employee Provisions.

     

    (i) Seller
      and Buyer shall give any notices required by Legal Requirements and take
      whatever other actions with respect to the plans, programs and policies
      described in this Section 10.1 as may be reasonably necessary or desirable
      to
      carry out the arrangements described in this Section 10.1.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii) Seller
      and Buyer shall provide each other with such plan documents and summary plan
      descriptions, employee data or other information as may be reasonably required
      to carry out the arrangements described in this Section 10.1.

     

    (iii) If
      any of
      the arrangements described in this Section 10.1 are determined by the IRS or
      other Governmental Body to be prohibited by law, Seller and Buyer shall modify
      such arrangements to as closely as possible reflect their expressed intent
      and
      retain the allocation of economic benefits and burdens to the parties
      contemplated herein in a manner that is not prohibited by law.

     

    (iv) Seller
      shall provide Buyer with completed I-9 forms and attachments with respect to
      all
      Hired Active Employees, except for such employees as Seller certifies in writing
      to Buyer are exempt from such requirement.

     

    (v) Buyer
      shall not have any responsibility, liability or obligation, whether to Active
      Employees, former employees, their beneficiaries or to any other Person, with
      respect to any employee benefit plans, practices, programs or arrangements
      (including the establishment, operation or termination thereof and the
      notification and provision of COBRA coverage extension) maintained by
      Seller.

     

    10.2 Taxes

     

     

    Except
      as
      otherwise expressly provided in this Agreement, all Taxes in respect of the
      Purchased Assets (including fifty percent (50%) of any transfer, sales, use,
      stamp or other Taxes, if any, arising from the sale of the Purchased Assets
      and
      any deferred Taxes of Seller of any nature) and arising in connection with
      the
      conduct of Seller’s business for the period prior to the Closing Date shall be
      borne by Seller. Except as otherwise provided in this Agreement, all Taxes
      in
      respect of the Purchased Assets (including fifty percent (50%) of any transfer,
      sales, use, stamp or other Taxes, if any, arising from the sale of the Purchased
      Assets) and arising in connection with the conduct of the Business for the
      period after the Closing Date shall be borne by Buyer.

     

    10.3 Payment
      of Other Retained Liabilities

     

     

    In
      addition to payment of Taxes pursuant to Section 10.2, Seller shall pay, or
      make
      adequate provision for the payment, in full all of the Retained Liabilities
      of
      Seller.

     

    10.4 Restrictions
      on Seller Dissolution and Distributions;
      Insurance

     

     

    Seller
      shall not dissolve, or make any distribution of the proceeds received pursuant
      to this Agreement, until the later of: (a) thirty (30) days after the completion
      of all adjustment procedures contemplated by Section 2.9; (b) Seller's payment,
      or adequate provision for the payment, of all of its obligations pursuant to
      Sections 10.2 and 10.3; or (c) the lapse of more than nine (9) months after
      the
      Closing Date, unless, with respect to the distribution of proceeds, after giving
      effect to any such distribution, Seller has cash and cash equivalents equal
      to
      at least One Million Dollars ($1,000,000) in the aggregate. Seller shall
      maintain and not terminate its existing insurance coverages until at least
      six
      (6) months after the Closing Date. Seller and Shareholders shall provide at
      least ten (10) Business Days’ prior written notice to Buyer and CMC prior to
      effecting any dissolution of the Seller.

     

    10.5 Reports
      and Returns

     

     

    Seller
      shall after the Closing prepare and timely file all reports and returns required
      by Legal Requirements relating to the business of Seller as conducted using
      the
      Purchased Assets, to and including the Effective Time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.6 Intentionally
      Omitted

     

    10.7 Noncompetition,
      Nonsolicitation and Nondisparagement

     

     

    (a) Noncompetition.
      For a period of five (5) years after the Closing Date (the "Period"),
      neither Seller nor any Shareholder shall, without the prior written consent
      of
      the Chairman of the Buyer’s board of directors, or the President of CMC,
      participate or engage in, directly or indirectly (as an owner, shareholder
      (other than passive ownership of up to two percent (2%) of the outstanding
      stock
      of any class that is publicly traded), partner, independent contractor,
      consultant, advisor or in any other capacity calling for the rendition of
      services, advice, or acts of management, operation or control), any business
      (other than on behalf of Buyer or CMC) that, during the Period, is competitive
      with the Business sold by Seller to Buyer hereunder or is competitive with
      the
      Business Conducted by Buyer and/or CMC within the United States, France, the
      United Kingdom, the Netherlands, Germany, Italy, Japan, Taiwan, the People’s
      Republic of China, Korea, Malaysia, and Singapore.

     

    (b) Nonsolicitation.
      During the Period, neither Seller nor any Shareholder shall, directly or
      indirectly:

     

    (i) cause,
      induce or attempt to cause or induce any customer, supplier, licensee, licensor,
      employee, consultant or other business relation of Buyer or CMC to cease doing
      business with Buyer or CMC, to deal with any competitor of Buyer or CMC or
      in
      any way interfere with its relationship with Buyer or CMC;

     

    (ii) cause,
      induce or attempt to cause or induce any customer, supplier, licensee, licensor,
      employee, consultant or other business relation of Seller on the Closing Date
      or
      within the year preceding the Closing Date to cease doing business with Buyer
      or
      CMC, to deal with any competitor of Buyer or CMC or in any way interfere with
      its relationship with Buyer or CMC; or

     

    (iii) hire,
      retain or attempt to hire or retain any employee or independent contractor
      of
      Buyer or CMC or in any way interfere with the relationship between Buyer or
      CMC
      and any of its respective employees or independent contractors. For purposes
      of
      clarity, Buyer in this Section 10.7(b)(iii) includes the employees and
      contractors of Seller up to and including the Closing Date, as well as those
      retained by Buyer during the Period.

     

    (c) Nondisparagement.
      After the Closing Date, none of the parties hereto will disparage any other
      party hereto or such party’s shareholders, directors, officers, employees or
      agents publicly or to any third party, other than in connection with any
      Proceeding.

     

    (d) Modification
      of Covenant. If a final judgment of a court or tribunal of competent
      jurisdiction determines that any term or provision contained in Section 10.7(a)
      through (c) is invalid or unenforceable, then the parties agree that the court
      or tribunal will have the power to reduce the scope, duration or geographic
      area
      of the term or provision, to delete specific words or phrases or to replace
      any
      invalid or unenforceable term or provision with a term or provision that is
      valid and enforceable and that comes closest to expressing the intention of
      the
      invalid or unenforceable term or provision. This Section 10.7 will be
      enforceable as so modified after the expiration of the time within which the
      judgment may be appealed. Seller and each Shareholder expressly agrees that
      this
      Section 10.7 is reasonable and necessary to protect and preserve Buyer's
      legitimate business interests and the value of the Purchased Assets and to
      prevent any unfair advantage conferred on Seller or any
      Shareholder.

     

    10.8 Customer
      and Other Business Relationships

     

     

    After
      the
      Closing, Seller and each Shareholder will reasonably cooperate with Buyer in
      its
      efforts to continue and maintain for the benefit of Buyer those business
      relationships of Seller existing prior to 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
the
        Closing and relating to the business to be operated by Buyer after the Closing,
        including relationships with lessors, employees, regulatory authorities,
        licensors, customers, suppliers and others, and Seller will satisfy the Retained
        Liabilities in a manner that is not detrimental to any of such relationships.
        Seller and each Shareholder will refer to Buyer all inquiries relating to
        such
        business. 

    

     

    10.9 Retention
      of and Access to Records

     

     

    After
      the
      Closing Date, each of Seller and Buyer shall provide the other and its
      respective Representatives and, in the case of Buyer, the Shareholders,
      reasonable access to Records that are Excluded Assets or Purchased Assets,
      as
      the case may be, during normal business hours and on at least three (3) days'
      prior written notice, for any reasonable business purpose specified by Buyer,
      the Shareholders or Seller, as the case may be, in such notice.

     

    10.10 Further
      Assurances

     

     

    Subject
      to the proviso in Section 6.1, the parties shall cooperate reasonably with
      each
      other and with their respective Representatives in connection with any steps
      required to be taken as part of their respective obligations under this
      Agreement, and shall: (a) furnish upon request to each other such further
      information; (b) execute and deliver to each other such other documents; and
      (c)
      do such other acts and things, all as the other party may reasonably request
      for
      the purpose of carrying out the provisions of this Agreement and the
      Contemplated Transactions.

     

    10.11 Guarantee
      of Payment. 

     

     

    Notwithstanding
      anything in this Agreement to the contrary, CMC unconditionally guarantees
      Buyer’s obligation to make payments to Seller under Article 2 to the extent
      earned and otherwise due and payable and unpaid by Buyer.

     

     

    11. Indemnification;
      Remedies

     

     

    11.1 Survival

     

     

    All
      representations, warranties, covenants and obligations in this Agreement, the
      Disclosure Letter, the supplements to the Disclosure Letter, the certificates
      delivered pursuant to Section 2.7 and any other certificate or document
      delivered pursuant to this Agreement shall survive the Closing and the
      consummation of the Contemplated Transactions, subject to Section 11.7. The
      right to indemnification, reimbursement or other remedy based upon such
      representations, warranties, covenants and obligations shall not be affected
      by
      any investigation conducted with respect to, or any Knowledge acquired (or
      capable of being acquired) at any time, whether before or after the execution
      and delivery of this Agreement or the Closing Date, with respect to the accuracy
      or inaccuracy of or compliance with any such representation, warranty, covenant
      or obligation. The waiver of any condition based upon the accuracy of any
      representation or warranty, or on the performance of or compliance with any
      covenant or obligation, will not affect the right to indemnification,
      reimbursement or other remedy based upon such representations, warranties,
      covenants and obligations.

     

    11.2 Indemnification
      and Reimbursement by Seller and Shareholders

     

     

    From
      and
      after the Closing Date, Seller and each Shareholder, jointly and severally,
      will
      indemnify and hold harmless Buyer and CMC and their Representatives,
      shareholders, subsidiaries and Related Persons (collectively, the "Buyer
      Indemnified Persons")
      against, and will reimburse the Buyer Indemnified Persons for any loss,
      liability, claim, damage (excluding incidental, punitive and 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
consequential
        damages except to the extent paid by Buyer Indemnified Person to a third
        party),
        expense (including costs of investigation and defense and reasonable attorneys'
        fees and expenses), whether or not involving a Third-Party Claim (collectively,
        "Damages"),
        arising, directly or indirectly, from or in connection with:

    

     

    (a) any
      Breach of any representation or warranty made by Seller or any Shareholder
      in
      (i) this Agreement (without giving effect to any supplement to the Disclosure
      Letter unless expressly consented to in writing by Buyer), (ii) the Disclosure
      Letter, (iii) the supplements to the Disclosure Letter, (iv) the certificates
      delivered pursuant to Section 2.7, (v) any transfer instrument or (vi) any
      other
      certificate, document, writing or instrument delivered by Seller or any
      Shareholder pursuant to this Agreement;

     

    (b) any
      Breach of any covenant or obligation of Seller or any Shareholder in this
      Agreement or in any other certificate, document, writing or instrument delivered
      by Seller or any Shareholder pursuant to this Agreement;

     

    (c) any
      Liability arising out of the ownership or operation of the Purchased Assets
      prior to the Effective Time other than the Assumed Liabilities;

     

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

     

    (e) 
      any
      matter disclosed in Parts 7.3
      and
3.18
      of the
      Disclosure Letter; provided, that Damages recoverable hereunder for matters
      disclosed in Part 3.18 shall not exceed $25,000, other than Damages resulting
      of
      the gross negligence or willful misconduct of Seller;

     

    (f) any
      liability under the WARN Act or any similar state or local Legal Requirement
      that may result from an "Employment Loss", as defined by 29 U.S.C. sect.
      2101(a)(6), caused by any action of Seller prior to the Closing or by Buyer's
      decision not to hire previous employees of Seller;

     

    (g) any
      Retained Liabilities; or

     

    (h) any
      Excess Damages under and as defined in the BSI Purchase Agreement.

     

    Notwithstanding
      anything to the contrary contained herein, to the extent that any Damages have
      been included in the calculation of Closing Working Capital and taken into
      account in determining whether any adjustment is required under Sections 2.8
      and
      2.9 hereof, and the amount of the adjustment, if any, then a claim for
      indemnification cannot be brought by Buyer or any Buyer Indemnified Person
      against Seller and/or the Shareholders under this Article 11 to the extent
      of
      such adjustment or amount actually included in the calculation of Closing
      Working Capital and such included and adjusted amounts shall not be applied
      to
      any limitation under Section 11.5 hereof.

     

    11.3 Indemnification
      and Reimbursement by Seller and Shareholders for Environmental
      Matters

     

     

    From
      and
      after the Closing Date, in addition to the other indemnification provisions
      in
      this Article 11 (provided that, to the extent that indemnification is sought
      under this Section 11.3 and any other Section of this Article 11 with respect
      to
      any matter, the Buyer Indemnified Parties shall not be entitled to 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
collect
        Damages twice for the same matter) and subject to Sections 11.5
        and 11.7(c), Seller and each Shareholder, jointly and severally, will
        indemnify and hold harmless Buyer and the other Buyer Indemnified Persons,
        and
        will reimburse Buyer and the other Buyer Indemnified Persons, for any Damages
        (including costs of cleanup, containment or other remediation) arising from
        or
        in connection with:

    

     

    (a) any
      Environmental, Health and Safety Liabilities arising out of or relating to:
      (i)
      the ownership or operation by any Person at any time on or prior to the Closing
      Date of any of the Facilities, Purchased Assets or the business of Seller;
      or
      (ii) any Hazardous Materials or other contaminants that were present on the
      Facilities or Purchased Assets at any time on or prior to the Closing Date;
      or

     

    (b) any
      bodily injury (including illness, disability and death, regardless of when
      any
      such bodily injury occurred, was incurred or manifested itself), personal
      injury, property damage (including trespass, nuisance, wrongful eviction and
      deprivation of the use of real property) or other damage of or to any Person
      or
      any Purchased Assets in any way arising from or allegedly arising from any
      Hazardous Activity conducted by any Person with respect to the business of
      Seller or the Purchased Assets prior to the Closing Date or from any Hazardous
      Material that was (i) present or suspected to be present on or before the
      Closing Date on or at the Facilities (or present or suspected to be present
      on
      any other property, if such Hazardous Material emanated or allegedly emanated
      from any Facility and was present or suspected to be present on any Facility,
      on
      or prior to the Closing Date) or (ii) Released or allegedly Released by any
      Person on or at any Facilities or Purchased Assets at any time on or prior
      to
      the Closing Date.

     

    Buyer
      will be entitled to control any Remedial Action, any Proceeding relating to
      an
      Environmental Claim and, except as provided in the following sentence, any
      other
      Proceeding with respect to which indemnity may be sought under this
      Section 11.3, provided, however, that Buyer shall not enter into any
      settlement with respect to such Proceeding without a release of Seller and
      the
      Shareholders included as a provision in such settlement and providing the Seller
      and the Shareholders with five (5) days’ prior written notice of such
      settlement, which shall provide the Seller and the Shareholders a reasonable
      opportunity to object thereto and discuss the reasons for such objection with
      Buyer. The procedure described in Section 11.9 will apply to any claim
      solely for monetary damages relating to a matter covered by this Section
      11.3.

     

    11.4 Indemnification
      and Reimbursement by Buyer

     

     

    From
      and
      after the Closing Date, Buyer will indemnify and hold harmless Seller and/or
      the
      Shareholders, and will reimburse Seller and/or the Shareholders, for any Damages
      arising from or in connection with:

     

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

     

    (b) any
      Breach of any covenant or obligation of Buyer in this Agreement or in any other
      certificate, document, writing or instrument delivered by Buyer pursuant to
      this
      Agreement;

     

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

     

    (d) any
      Assumed Liabilities;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) any
      Environmental, Health and Safety Liabilities arising out of: (i) the ownership
      or operation by Buyer or CMC, directly or indirectly, at any time after the
      Closing Date of any of the Facilities, Purchased Assets or the Business; or
      (ii)
      any Hazardous Materials or other contaminants that are present on the Facilities
      (to the extent such Facility is owned, leased or operated by Buyer or CMC,
      directly or indirectly, after the Closing Date) or Purchased Assets at any
      time
      after the Closing Date to the extent that such Hazardous Materials or other
      contaminants were not present on the Facilities or Purchased Assets prior to
      the
      Closing Date and are not otherwise the subject of indemnification by Seller
      and
      the Shareholders in favor of Buyer Indemnified Persons pursuant to Section
      11.2
      or Section 11.3 above; or

     

    (f) any
      bodily injury (including illness, disability and death), personal injury,
      property damage (including trespass, nuisance, wrongful eviction and deprivation
      of the use of real property) or other damage of or to any Person or any
      Purchased Assets in any way arising from or allegedly arising from any Hazardous
      Activity conducted by Buyer or CMC, directly or indirectly, with respect to
      the
      Business or the Purchased Assets after the Closing Date or from any Hazardous
      Material that was (i) present or suspected to be present after the Closing
      Date
      on or at the Facilities (or present or suspected to be present on any other
      property, if such Hazardous Material emanated or allegedly emanated from any
      Facility and was present or suspected to be present on any Facility, after
      the
      Closing Date) or (ii) Released or allegedly Released by any Person on or at
      any
      Facilities or Purchased Assets at any time after the Closing Date; provided,
      however, that, for all purposes under this subsection (f): (x) such Facility
      is
      owned, leased or operated by Buyer or CMC, directly or indirectly, after the
      Closing Date, (y) such Hazardous Material or Hazardous Activity was not present
      on or at the Facilities or Purchased Assets prior to the Closing Date and (z)
      such claim or event is not otherwise the subject of indemnification by Seller
      and the Shareholders in favor of Buyer Indemnified Persons pursuant to Section
      11.2 or Section 11.3 above.

     

    11.5 Limitation
      on Amount—Seller and Shareholders

     

     

    Neither
      Seller nor any Shareholder shall have liability (for indemnification or
      otherwise) with respect to claims under Section 11.2 and 11.3 until the total
      of
      all Damages with respect to such matters exceeds Two Hundred Thousand Dollars
      ($200,000.00) and then for all amounts of such Damages in excess of One Hundred
      Thousand Dollars ($100,000.00); provided,
      however,
      that
      the total aggregate amount of Damages recoverable by Buyer and the other Buyer
      Indemnified Persons pursuant to the provisions of this Section 11 shall be
      limited to the Escrow Amount, other than for Damages arising in respect of
      Sections 3.14 (“Taxes”), 3.16 (“Employee Benefits”), 3.22 or 11.3
      (“Environmental Matters”), 3.25 (“Intellectual Property”) and 3.31 (“Government
      Contract Rights”) and Sections 8.01(g)(i), (ii) and (iii), 8.01(i) and 8.01(k)
      of the BSI Purchase Agreement, (collectively, the “Escrow
      Exclusions”).
      Damages for the Escrow Exclusions, together with Damages under any other
      provision of this Section 11 which are subject to the limitation of the Escrow
      Amount as set forth in the proviso in the preceding sentence, shall be limited
      to an indemnity cap of Eight Million Five Hundred Thousand Dollars
      ($8,500,000.00) (the
      “Indemnity
      Cap”).
      Subject to the foregoing limitations, Seller and Shareholders will be jointly
      and severally liable for all Damages recoverable hereunder, including, but
      not
      limited to, Excess Damages under the BSI Purchase Agreement as provided in
      Section 11.2(h) and this Section 11.5. Seller and Shareholders acknowledge
      and
      agree that upon execution of this Agreement and at Closing, the Seller and
      Shareholders will directly benefit from the BSI Purchase Agreement. Seller
      and
      Shareholders acknowledge and agree that the benefit conferred upon them in
      connection with the BSI Purchase Agreement constitutes adequate consideration
      for their indemnification obligations hereunder related to the BSI Purchase
      Agreement. Seller and Shareholders further acknowledge and agree that the BSI
      Purchase Agreement is a Contemplated Transaction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.6 Limitation
      on Amount--Buyer

     

     

    Buyer
      will have no liability (for indemnification or otherwise) with respect to claims
      under Section 11.4(a) until the total of all Damages with respect to such
      matters exceeds Fifty Thousand Dollars ($50,000) and then for the entire amount
      of such Damages; provided,
      however,
      that
      the total aggregate amount of Damages recoverable by Seller and the other Seller
      Indemnified Persons pursuant to the provisions of this Section 11 shall be
      limited to Damages not exceeding an indemnity cap Eight Million Five Hundred
      Thousand Dollars ($8,500,000.00). For purposes of clarity, this Section 11.6
      will not apply to claims under Section 11.4(b) through (d) or matters arising
      in
      respect of Section 4.4 (“Brokers or Finders”).

     

    11.7 Time
      Limitations

     

     

    (a) If
      the
      Closing occurs, Seller and Shareholders will have liability (for indemnification
      or otherwise) with respect to any Breach of (i) a covenant or obligation to
      be
      performed or complied with prior to the Closing Date (other than those in
      Sections 2.1 (“Assets to be Sold”) and 2.4(b) (“Retained Liabilities”) and
      Articles 10 (“Additional Covenants”) and 12 (“Confidentiality”), as to which a
      claim may be made at any time) or (ii) a representation or warranty (other
      than
      those relating to the Escrow Exclusions, as to which a claim may be made at
      any
      time within three (3) years after the Closing Date), only if on or before the
      date that is eighteen (18) months after the Closing Date, Buyer notifies Seller
      and the Shareholders of a claim specifying the factual basis of the claim in
      reasonable detail to the extent then known by Buyer.

     

    (b) If
      the
      Closing occurs, Buyer will have liability (for indemnification or otherwise)
      with respect to any Breach of (i) a covenant or obligation to be performed
      or
      complied with prior to the Closing Date (other than those in Article 12
      (“Confidentiality”), as to which a claim may be made at any time) or (ii) any
      representation or warranty (other than that set forth in Section 4.4 (“Brokers
      or Finders”), as to which a claim may be made at any time within three (3) years
      of the Closing Date), only if on or before eighteen (18) months following the
      Closing Date, Seller or any Shareholder notifies Buyer of a claim specifying
      the
      factual basis of the claim in reasonable detail to the extent then known by
      Seller or such Shareholder.

     

    (c) The
      indemnification and reimbursement obligations of Seller and Shareholders set
      forth in Section 11.3 hereof shall survive the Closing for a period of
      three (3) years.

     

    11.8 Escrow

     

     

    Upon
      notice to Seller and the Shareholders specifying in reasonable detail the basis
      therefor, Buyer may give notice of a claim in any amount to which it may be
      entitled under this Article 11 against the amount held in escrow under the
      Escrow Agreement. To the extent that Seller or any Shareholder has any
      obligation or liability pursuant to this Article 11 other than matters arising
      in respect of the Escrow Exclusions, such obligation or liability shall be
      discharged solely from the Escrow Amount in accordance with the Escrow Agreement
      and, with respect to matters arising from the Escrow Exclusions, first from
      the
      Escrow Amount (to the extent then available) in accordance with the Escrow
      Agreement and thereafter by the Seller and the Shareholders on a joint and
      several basis, up to the Indemnity Cap. Neither the exercise of nor the failure
      to exercise such right to give a notice of a claim under the Escrow Agreement
      will constitute an election of remedies or limit Buyer in any manner in the
      enforcement of any other remedies that may be available to it.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.9 Third-Party
      Claims

     

     

    (a) Promptly
      after receipt by a Person entitled to indemnity under Section 11.2, 11.3 (to
      the
      extent provided in the last sentence of Section 11.3) or 11.4 (an "Indemnified
      Person")
      of
      notice of the assertion of a Third-Party Claim against it, such Indemnified
      Person shall give notice to the Person obligated to indemnify under such Section
      (an "Indemnifying
      Person")
      of the
      assertion of such Third-Party Claim, provided that the failure to notify the
      Indemnifying Person will not relieve the Indemnifying Person of any liability
      that it may have to any Indemnified Person, except to the extent that the
      Indemnifying Person demonstrates that the defense of such Third-Party Claim
      is
      prejudiced by the Indemnified Person's failure to give such notice.

     

    (b) If
      an
      Indemnified Person gives notice to the Indemnifying Person pursuant to Section
      11.9(a) of the assertion of a Third-Party Claim, the Indemnifying Person shall
      be entitled to participate in the defense of such Third-Party Claim and, to
      the
      extent that it wishes (unless (i) the Indemnifying Person is also a Person
      against whom the Third-Party Claim is made and the Indemnified Person determines
      in good faith that joint representation would be inappropriate or (ii) the
      Indemnifying Person fails to provide reasonable assurance to the Indemnified
      Person of its financial capacity to defend such Third-Party Claim and provide
      indemnification with respect to such Third-Party Claim), to assume the defense
      of such Third-Party Claim with counsel reasonably satisfactory to the
      Indemnified Person. After notice from the Indemnifying Person to the Indemnified
      Person of its election to assume the defense of such Third-Party Claim, the
      Indemnifying Person shall not, so long as it diligently conducts such defense,
      be liable to the Indemnified Person under this Article 11 for any fees of other
      counsel or any other expenses with respect to the defense of such Third-Party
      Claim, in each case subsequently incurred by the Indemnified Person in
      connection with the defense of such Third-Party Claim, other than reasonable
      costs of investigation. If the Indemnifying Person assumes the defense of a
      Third-Party Claim, no compromise or settlement of such Third-Party Claims may
      be
      effected by the Indemnifying Person without the Indemnified Person's Consent
      unless (A) there is no finding or admission of any violation of Legal
      Requirement or any violation of the rights of any Person; (B) subject to
      Sections 11.5 and 11.6, the sole relief provided is monetary damages that are
      paid in full by the Indemnifying Person; and (C) the Indemnified Person shall
      have no liability with respect to any compromise or settlement of such
      Third-Party Claims effected without its Consent, which Consent shall not be
      unreasonably withheld, delayed or conditioned. Subject to Section 11.11 hereof,
      if notice is given to an Indemnifying Person of the assertion of any Third-Party
      Claim and the Indemnifying Person does not, within thirty (30) days after the
      Indemnified Person's notice is given, give notice to the Indemnified Person
      of
      its election to assume the defense of such Third-Party Claim, the Indemnifying
      Person will be bound by any determination made in such Third-Party Claim or
      any
      compromise or settlement effected by the Indemnified Person.

     

    (c) Notwithstanding
      the foregoing, if an Indemnified Person determines in good faith that there
      is a
      reasonable probability that a Third-Party Claim may adversely affect it or
      its
      Related Persons other than as a result of monetary damages for which it would
      be
      entitled to indemnification under this Agreement, the Indemnified Person may,
      by
      notice to the Indemnifying Person, assume the exclusive right to defend,
      compromise or settle such Third-Party Claim, but the Indemnifying Person will
      not be bound by any determination of any Third-Party Claim so defended for
      the
      purposes of this Agreement or any compromise or settlement effected without
      its
      Consent (which may not be unreasonably withheld).

     

    (d) Notwithstanding
      the provisions of Section 13.4, each party hereto hereby consents to the
      nonexclusive jurisdiction of any court in which a Proceeding in respect of
      a
      Third-Party Claim is brought against any Indemnified Person for purposes of
      any
      claim that an Indemnified Person may have under this Agreement with respect
      to
      such Proceeding or the matters alleged therein and agree that process may be
      served on each such party with respect to such a claim anywhere in the
      world.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) With
      respect to any Third-Party Claim subject to indemnification under this Article
      11: (i) both the Indemnified Person and the Indemnifying Person, as the case
      may
      be, shall keep the other Person fully informed of the status of such Third-Party
      Claim and any related Proceedings at all stages thereof where such Person is
      not
      represented by its own counsel; and (ii) the parties agree (each at its own
      expense) to render to each other such assistance as they may reasonably require
      of each other and to cooperate in good faith with each other in order to ensure
      the proper and adequate defense of any Third-Party Claim.

     

    (f) With
      respect to any Third-Party Claim subject to indemnification under this Article
      11, the parties agree to cooperate in such a manner as to preserve in full
      (to
      the extent possible) the confidentiality of all Confidential Information and
      the
      attorney-client and work-product privileges. In connection therewith, each
      party
      agrees that: (i) it will use its best efforts, in respect of any Third-Party
      Claim in which it has assumed or participated in the defense, to avoid
      production of Confidential Information (consistent with applicable law and
      rules
      of procedure), and (ii) all communications between any party hereto and counsel
      responsible for or participating in the defense of any Third-Party Claim shall,
      to the extent possible, be made so as to preserve any applicable attorney-client
      or work-product privilege.

     

    11.10 Other
      Claims

     

     

    Within
      thirty (30) Business Days after a party obtains Knowledge that it has sustained
      any Damages not involving a Third-Party Claim or action which such party
      reasonably believes may give rise to a claim for indemnification from another
      party hereunder, such Indemnified Person shall deliver notice of such claim
      to
      the Indemnifying Person, together with a brief description of the facts and
      data
      which support the claim for indemnification; provided,
      however,
      that
      failure to so notify the Indemnifying Person shall not relieve the Indemnifying
      Person of its indemnification obligations hereunder, except to the extent that
      the Indemnifying Person is actually prejudiced thereby. Any such notice must
      be
      made to the Indemnifying Person not later than the expiration of the applicable
      survival period specified in Sections 11.1 and 11.7 above. If the Indemnifying
      Person does not notify the Indemnified Person within thirty (30) Business Days
      following its receipt of such notice that the Indemnifying Person disputes
      its
      liability to the Indemnified Person under this Article 11, such claim specified
      by the Indemnified Person in such notice shall be conclusively deemed a
      Liability of the Indemnifying Person under this Article 11 and the Indemnifying
      Person shall pay the amount of such claim to the Indemnified Person on demand
      or, in the case of any notice in which the amount of the claim (or any portion
      thereof) is estimated, on such later date when the amount of such claim (or
      such
      portion thereof) becomes finally determined. If the Indemnifying Person has
      timely disputed its liability with respect to such claim, as provided above,
      the
      Indemnifying Person and the Indemnified Person shall proceed in good faith
      to
      negotiate a resolution of such dispute and, if not resolved through
      negotiations, such dispute shall be resolved pursuant to Section 11.11
      below.

    11.11 Resolution
      of Conflicts. 

    


    (a) For
      purposes of Article 11, if no agreement can be reached after good faith
      negotiation between the parties, either Buyer, Seller or the Shareholders may,
      by written notice to the other parties, request that appropriate representatives
      of each party with decision-making authority, together with their respective
      counsel, meet in New York, New York (if such request is made by Buyer) or in
      Chicago, Illinois (if such request is made by Seller or the Shareholders) for
      one (1) day in an effort to directly resolve the dispute. In the event such
      a
      meeting or subsequent meetings fail to resolve the dispute, the parties agree
      that they shall submit the claim to the following alternative dispute resolution
      process: The parties first agree to submit the claim and attempt in good faith
      to resolve the claim pursuant to non-binding mediation or non-binding
      arbitration of the dispute by a neutral third-party mediator or arbitrator,
      as
      applicable, mutually agreed upon and selected in good faith by the parties
      (in


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    either
      case, the party conducting such mediation or arbitration shall be referred
      to
      herein as a “mediator”) and conducted on terms and conditions to be determined
      by agreement of the parties and such mediator. The mediator shall set a limited
      time period and establish procedures designed to reduce the cost and time
      expended by the parties while allowing the parties an opportunity, adequate
      in
      the reasonable judgment of the mediator, to discover relevant information from
      the opposing parties about the subject matter of the dispute. In the case of
      non-binding arbitration, such mediator may render findings and such findings
      may
      be admissible in court, but neither party shall be deemed to have stipulated
      or
      agreed to such findings or otherwise be bound by such findings. In the event
      that non-binding mediation or non-binding arbitration fails to resolve the
      dispute, then either party may resort to litigation, provided, however, that
      the
      party who does not prevail in such litigation will be responsible for all costs,
      expenses and attorneys’ fees related to such litigation both for and on behalf
      of itself and the prevailing party. 

    


    (b) It
      is the
      intent of the parties hereto that all claims between the parties, except those
      seeking equitable relief, shall be settled by the procedures as set forth in
      this Section 11.11.

     

    11.12 INDEMNIFICATION
      IN CASE OF STRICT LIABILITY OR INDEMNITEE NEGLIGENCE

     

     

    THE
      INDEMNIFICATION PROVISIONS IN THIS ARTICLE  11 SHALL BE ENFORCEABLE
      REGARDLESS OF WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS,
      CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY PAST, PRESENT OR FUTURE
      ENVIRONMENTAL LAW, OCCUPATIONAL SAFETY AND HEALTH LAW OR PRODUCTS LIABILITY,
      SECURITIES OR OTHER LEGAL REQUIREMENT) AND REGARDLESS OF WHETHER ANY PERSON
      (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES
      THE
      SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING
      INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE
      PERSON SEEKING INDEMNIFICATION.

     

    11.13 Knowledge
      and Materiality Qualifiers

     

    Any
      Knowledge or materiality qualifiers in Seller’s, any Shareholder’s, CMC’s or
      Buyer’s representations and warranties shall be disregarded for purposes of
      determining Seller’s, such Shareholder’s, CMC’s or Buyer’s indemnification
      obligations, as applicable (including the extent of Damages) under Sections
      11.2, 11.3 and 11.4.

     

    11.14 Exclusive
      Remedy

     

     

    In
      the
      absence of fraud and except as provided in Section 13.5, the
      indemnification provisions set forth in this Article 11 shall provide the
      exclusive remedy for breach of any covenant, agreement, representation or
      warranty of Seller, the Shareholders, CMC or Buyer, as the case may be, set
      forth in this Agreement or any of the Disclosure Letter, the supplements to
      the
      Disclosure Letter, the certificates delivered pursuant to Section 2.7, any
      transfer instrument or any other certificate, document, writing or instrument
      delivered by Seller, any Shareholder, CMC or Buyer, as the case may be, pursuant
      to this Agreement. In the case of fraud and as provided in Section 13.5, the
      remedies provided in this Article 11 will not be exclusive of or limit any
      other
      remedies that may be available to Seller, the Shareholders, CMC or Buyer and
      the
      other Indemnified Persons, as the case may be.

     

     

    11.15 Tax
      Treatment of Indemnification Payments and Escrow

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Unless
      otherwise required by applicable law, Seller, the Shareholders and Buyer agree
      to treat any payment made pursuant to this Article 11 as an adjustment to the
      Purchase Price for federal, state and local income Tax purposes. All interest
      earned on the Escrow Amount shall be treated as earned by the Seller for all
      income tax purposes.

    


    11.16 Effect
      of
      Tax and Insurance Benefits

    


    Notwithstanding
      anything to the contrary contained herein, for purposes of this Article 11,
      the
      amount of Damages for a particular claim for which indemnification is provided
      under this Article 11 shall be offset by (i) any Tax benefits actually realized
      by an Indemnified Person pursuant to Section 11.15 as a result of payments
      made
      under such claim or otherwise directly as a result of such claim and (ii) the
      amount of any insurance proceeds received by an Indemnified Person by reason
      or
      in respect of such Damages (exclusive of deductibles, retrospective premiums
      and
      self-insured retentions under such insurance policies and any costs associated
      with making or pursuing any claims); provided, however that neither Buyer nor
      CMC shall be required or obligated to make or pursue any claims under any
      insurance policies as a condition to indemnification pursuant to this Article
      11
      or otherwise and any such claims actually made shall be in the sole discretion
      of Buyer or CMC, as applicable, provided, however, that Buyer and CMC shall
      accept any such insurance proceeds resulting from any such claim in offset
      under
      this Section 11.16, subject only to the commercially reasonable requirements
      or
      conditions of its insurer. 

     

     

    12. Confidentiality

     

     

    12.1 Definition
      of Confidential Information

     

     

    As
      used
      in this Article 12, and except as noted in Section 12.3, the term "Confidential
      Information"
      means
      non-public confidential and proprietary information of each party and includes
      all non-public information, whether written or oral, (whatever the form or
      storage medium) or gatherable by inspection of tangible objects, or other means
      that is disclosed by one party (Buyer on the one hand or Seller and
      Shareholders, collectively, on the other hand) or its Representatives
      (collectively, a "Disclosing
      Party")
      to the
      other party or its Representatives (collectively, a "Receiving
      Party")
      in
      connection with the Contemplated Transactions including certain information
      concerning the business, financial condition, operations, assets and
      liabilities, or any other non-public information that derives value by virtue
      of
      being non-public, of the Disclosing Party which is designated as “Confidential”,
“Proprietary”, or similar designation when disclosed. Information communicated
      orally shall be considered Confidential Information if it is disclosed as
      confidential. All notes, analyses, compilations, studies, interpretations or
      other documents prepared by the Receiving Party or its Representatives that
      contain or are based upon non-public information furnished to the Receiving
      Party or its Representatives pursuant hereto (the “Notes”)
      shall
      also be deemed to included in the term “Confidential Information.”

     

    12.2 Restricted
      Use of Confidential Information

     

     

    (a) Except
      as
      otherwise required by applicable law or regulatory authority, each Receiving
      Party agrees to keep confidential and not disclose, and cause its
      Representatives to keep confidential and not disclose, to any person the
      Confidential Information it or its Representatives receives from the Disclosing
      Party or its Representatives without the Disclosing Party’s prior written
      consent, except as provided below. The Receiving Party or its Representatives
      shall be entitled to disclose the Confidential Information of the Disclosing
      Party and provide copies of the same, without the Disclosing Party’s prior
      written consent, to those Representatives of the Receiving Party who need to
      know such Confidential Information to evaluate and consummate the Contemplated
      Transactions. The Receiving Party shall be responsible for any violations of
      the
      provisions of this Agreement caused by any of the Receiving Party’s
      Representatives.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Except
      as
      otherwise required by applicable law or regulatory authority, the Receiving
      Party will not, and will direct the Receiving Party’s Representatives not to,
      disclose to any other person that such Confidential Information has been made
      available, that discussions or negotiations are taking place concerning the
      Contemplated Transactions, or any of the terms, conditions or other facts with
      respect to the Contemplated Transactions, including the status thereof, or
      the
      terms of this Agreement, without the prior written consent of the Disclosing
      Party.

     

    (c) Unless
      and until this Agreement is terminated, Seller and each Shareholder shall
      maintain as confidential any Confidential Information of the Seller or
      Shareholders relating to any of the Purchased Assets or the Assumed Liabilities.
      Notwithstanding the preceding sentence, Seller may use any Confidential
      Information of Seller, to the extent that Seller possessed such Confidential
      Information before any disclosure by Buyer, before the Closing in the Ordinary
      Course of Business in connection with the transactions permitted by Section
      5.2
      (“Operation of the Business of Seller”).

     

    (d) From
      and
      after the Closing, the provisions of Sections 12.2(a) and 12.2(b) above shall
      not apply to or restrict in any manner Buyer's use of any Confidential
      Information of Seller or the Shareholders relating to any of the Purchased
      Assets or the Assumed Liabilities. In the event this Agreement is terminated
      pursuant to Section 9.1, Buyer and Seller hereby agree that, notwithstanding
      Section 13.7, the Confidentiality Letter Agreement, dated August 3, 2005,
      between Buyer and Seller shall remain in full force and effect. 

     

    12.3 Exceptions

     

     

    The
      term
“Confidential Information” does not include information which (i) is or becomes
      generally available to the public other than as a result of a disclosure by
      the
      Receiving Party or its Representatives in violation of this Agreement, (ii)
      was
      within the Receiving Party’s possession prior to its being furnished to the
      Receiving Party by or on behalf of the Disclosing Party pursuant hereto,
      provided that the source of such information was not known by the Receiving
      Party to be bound by a confidentiality agreement with, or other contractual,
      legal or fiduciary obligation of confidentiality to, the Disclosing Party or
      any
      other party with respect to such information, (iii) becomes available to the
      Receiving Party on a non-confidential basis from a source other than the
      Disclosing Party or any of its Representatives, provided that such source is
      not
      bound by a confidentiality agreement with or other contractual, legal or
      fiduciary obligation of confidentiality to the Disclosing Party or any other
      party with respect to such information or (iv) is independently developed by
      the
      Receiving Party or any of its Representatives as demonstrated by the written
      records of the Receiving Party or Representatives which have not had access
      to
      the Disclosing Party’s Confidential Information. Neither Seller nor any
      Shareholder shall disclose any Confidential Information of Seller or any
      Shareholder relating to any of the Purchased Assets or the Assumed Liabilities
      in reliance on the exceptions in clauses (ii), (iii) or (iv) above.

     

    12.4 Legal
      Proceedings

     

     

    In
      the
      event that a Receiving Party or anyone to whom the Receiving Party transmits
      such Confidential Information pursuant to this Agreement is legally requested
      (by oral questions, interrogatories, request for information or documents,
      subpoena, civil investigative demand or similar process) or otherwise required
      to disclose any Confidential Information of a Disclosing Party, the Receiving
      Party will provide the Disclosing Party with prompt notice, prior to disclosing
      such Confidential Information, so that the Disclosing Party may seek an
      appropriate protective order or waive compliance with this Agreement. Receiving
      Party will additionally use commercially reasonable efforts to resist or
      otherwise oppose such legally requested or required disclosure, including
      seeking to narrow the scope of any such required disclosure. If, in the absence
      of a protective order or the receipt of a waiver hereunder, the Receiving Party
      is nonetheless legally compelled to disclose such Confidential 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Information,
        it may, without liability hereunder, furnish that portion of such Confidential
        Information that is legally required and will exercise reasonable efforts
        to
        obtain assurance that confidential treatment will be accorded such Confidential
        Information.

    

     

    12.5 Return
      or
      Destruction of Confidential Information

     

     

    If
      this
      Agreement is terminated, the Receiving Party shall upon the written request
      of
      the Disclosing Party either: (i) return to the Disclosing Party all Confidential
      Information of the Disclosing Party (other than the Notes) including drawings,
      data, memoranda and other written materials together with any tapes and computer
      stored information, including any copies thereof, in the possession of the
      Receiving Party or its Representatives and destroy the Notes; or (ii) destroy
      and cause each of its Representatives to destroy all Confidential Information
      (including the Notes); provided, however, that one (1) copy of such Confidential
      Information may be retained by the Receiving Party on a confidential basis
      for
      purposes of verification and the Receiving Party and its Representatives will
      not be required to destroy any copies stored on backup tapes or media as part
      of
      its regular email system backup procedures. Upon written request of the
      Disclosing Party, any destruction pursuant to (i) or (ii) in the preceding
      sentence shall be confirmed in writing.

     

    12.6 Attorney-Client
      Privilege

     

     

    The
      Disclosing Party is not waiving, and will not be deemed to have waived or
      diminished, any of its attorney work product protections, attorney-client
      privileges or similar protections and privileges as a result of disclosing
      its
      Confidential Information (including Confidential Information related to pending
      or threatened litigation) to the Receiving Party, regardless of whether the
      Disclosing Party has asserted, or is or may be entitled to assert, such
      privileges and protections. The parties: (a) share a common legal and commercial
      interest in all of the Disclosing Party's Confidential Information that is
      subject to such privileges and protections; (b) are or may become joint
      defendants in Proceedings to which the Disclosing Party's Confidential
      Information covered by such protections and privileges relates; (c) intend
      that
      such privileges and protections remain intact should either party become subject
      to any actual or threatened Proceeding to which the Disclosing Party's
      Confidential Information covered by such protections and privileges relates;
      and
      (d) intend that after the Closing the Receiving Party shall have the right
      to
      assert such protections and privileges. No Receiving Party shall admit, claim
      or
      contend, in Proceedings involving either party or otherwise, that any Disclosing
      Party waived any of its attorney work-product protections, attorney-client
      privileges or similar protections and privileges with respect to any
      information, documents or other material not disclosed to a Receiving Party
      due
      to the Disclosing Party disclosing its Confidential Information (including
      Confidential Information related to pending or threatened litigation) to the
      Receiving Party.

     

    13. General
      Provisions

     

     

    13.1 Expenses

     

     

    Except
      as
      otherwise provided in this Agreement, each party to this Agreement will bear
      its
      respective fees and expenses incurred in connection with the preparation,
      negotiation, execution and performance of this Agreement and the Contemplated
      Transactions, including all fees and expense of its Representatives, brokers
      or
      finders. Buyer will pay one-half and Seller will pay one-half of the fees and
      expenses of the escrow agent under the Escrow Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.2 Public
      Announcements

     

     

    Following
      the date hereof and prior to the Closing, any public announcement, press release
      or similar publicity with respect to this Agreement or the Contemplated
      Transactions will be issued at such time and in such manner as Buyer and CMC
      determine, provided, however, that the text of any press release shall be
      subject to the prior review and comment of Seller. From and after the Closing,
      any public announcement, press release or similar publicity with respect to
      this
      Agreement or the Contemplated Transactions will be issued, if at all, at such
      time and in such manner as Buyer determines. Except with the prior consent
      of
      Buyer or as permitted by this Agreement, neither Seller nor any Shareholder
      nor
      any of their Representatives shall disclose to any Person (a) the fact that
      any
      Confidential Information of Seller or any Shareholder has been disclosed to
      Buyer or its Representatives, that Buyer or its Representatives have inspected
      any portion of the Confidential Information of Seller or any Shareholder, that
      any Confidential Information of Buyer has been disclosed to Seller, Shareholders
      or their Representatives or that Seller, Shareholders or their Representatives
      have inspected any portion of the Confidential Information of Buyer or (b)
      any
      information about the Contemplated Transactions, including the status of such
      discussions or negotiations, the execution of any documents (including this
      Agreement) or any of the terms of the Contemplated Transactions or the related
      documents (including this Agreement). Seller and Buyer will consult with each
      other concerning the means by which Seller's employees, customers, suppliers
      and
      others having dealings with Seller will be informed of the Contemplated
      Transactions, and Buyer will have the right to be present for any such
      communication.

     

    13.3 Notices

     

     

    All
      notices, Consents, waivers and other communications required or permitted by
      this Agreement shall be in writing and shall be deemed given to a party when:
      (a) delivered to the appropriate address by hand or by nationally recognized
      overnight courier service (costs prepaid); (b) sent by facsimile with
      confirmation of transmission by the transmitting equipment; or (c) received
      or
      rejected by the addressee, if sent by certified mail, return receipt requested,
      in each case to the following addresses or facsimile numbers and marked to
      the
      attention of the person (by name or title) designated below (or to such other
      address, facsimile number or person as a party may designate by notice to the
      other parties):

    


    Seller
      (before the Closing):

    


    QED
      Technologies, Inc.

    Attention:
      Don Golini, President

    1040
      University Avenue

    Rochester,
      New York 14607

    Fax
      no.:


    


    Seller
      (after the Closing): 

    


    QED
      Technologies, Inc.

    c/o
      Don
      Golini

    31
      Palmerston Road

    Rochester,
      NY 14618Fax no.: None

    


    Shareholders:

    


    Don
      Golini

    31
      Palmerston Road

    Rochester,
      NY 14618

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Fax
      no.:
      None

    


    Lowell
      Mintz

    c/o
      Mintz
& Co.

    70
      Pine
      Street, 57th Floor

    New
      York,
      NY 10270

    Fax
      no.:
      (212)
      785-2724

    


    Buyer
      or
      CMC:

    


    Cabot
      Microelectronics Corporation

    Attention:
      H. Carol Bernstein, General Counsel

    870
      North
      Commons Drive

    Aurora,
      Illinois 60504

    Fax
      no.:
      (630) 499-2644

     

    13.4 Jurisdiction;
      Service of Process

     

     

    Any
      Proceeding arising out of or relating to this Agreement or any Contemplated
      Transaction may be brought in the courts of the State of Illinois, County of
      DuPage, or, if it has or can acquire jurisdiction, in the United States District
      Court for the Northern District of Illinois, Eastern Division, and each of
      the
      parties irrevocably submits to the exclusive jurisdiction of each such court
      in
      any such Proceeding, waives any objection it may now or hereafter have to venue
      or to convenience of forum, agrees that all claims in respect of the Proceeding
      shall be heard and determined only in any such court and agrees not to bring
      any
      Proceeding arising out of or relating to this Agreement or any Contemplated
      Transaction in any other court. The parties agree that either or both of them
      may file a copy of this paragraph with any court as written evidence of the
      knowing, voluntary and bargained agreement between the parties irrevocably
      to
      waive any objections to venue or to convenience of forum. Process in any
      Proceeding referred to in the first sentence of this section may be served
      on
      any party anywhere in the world.

     

    13.5 Enforcement
      of Agreement

     

     

    Seller
      and each Shareholder acknowledge and agree that Buyer would be irreparably
      damaged if any of the provisions of this Agreement are not performed in
      accordance with their specific terms and that any Breach of this Agreement
      by
      Seller or any Shareholder could not be adequately compensated in all cases
      by
      monetary damages alone. Accordingly, in addition to any other right or remedy
      to
      which Buyer may be entitled, at law or in equity, it shall be entitled to
      enforce any provision of this Agreement by a decree of specific performance
      and
      to temporary, preliminary and permanent injunctive relief to prevent Breaches
      or
      threatened Breaches of any of the provisions of this Agreement, without posting
      any bond or other undertaking.

     

    13.6 Waiver;
      Remedies Cumulative

     

     

    The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative. Neither any failure nor any delay by any party in exercising any
      right, power or privilege under this Agreement or any of the documents referred
      to in this Agreement will operate as a waiver of such right, power or privilege,
      and no single or partial exercise of any such right, power or privilege will
      preclude any other or further exercise of such right, power or privilege or
      the
      exercise of any other right, power or privilege. To the maximum extent permitted
      by applicable law: (a) no claim or right arising out of this Agreement or any
      of
      the documents referred to in this Agreement can be discharged by one party,
      in


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
whole
        or
        in part, by a waiver or renunciation of the claim or right unless in writing
        signed by the other party; (b) no waiver that may be given by a party will
        be
        applicable except in the specific instance for which it is given; and (c)
        no
        notice to or demand on one party will be deemed to be a waiver of any obligation
        of that party or of the right of the party giving such notice or demand to
        take
        further action without notice or demand as provided in this Agreement or
        the
        documents referred to in this Agreement. 

    

     

    13.7 Entire
      Agreement and Modification

     

     

    This
      Agreement supersedes all prior agreements, whether written or oral, between
      the
      parties with respect to its subject matter (including, except as set forth
      in
      Section 12.2(d), that certain Confidentiality Letter Agreement dated August
      3,
      2005 between Buyer and Seller and that certain Letter of Intent dated February
      24, 2006 by and among Buyer, Seller and the Shareholders) and constitutes (along
      with the Disclosure Letter, Exhibits and other documents delivered pursuant to
      this Agreement) a complete and exclusive statement of the terms of the agreement
      between the parties with respect to its subject matter. This Agreement may
      not
      be amended, supplemented, or otherwise modified except by a written agreement
      executed by the party to be charged with the amendment. 

     

    13.8 Assignments,
      Successors and No Third-Party Rights

     

     

    No
      party
      may assign any of its rights or delegate any of its obligations under this
      Agreement without the prior written consent of the other parties, except that
      Buyer may assign any of its rights and delegate any of its obligations under
      this Agreement to CMC or any Subsidiary of Buyer. Subject to the preceding
      sentence, this Agreement will apply to, be binding in all respects, including
      Buyer’s obligation to pay the Earn-Out Amount, to the extent earned or otherwise
      owing, pursuant to Section 2.3 hereof, upon and inure to the benefit of the
      successors and permitted assigns of the parties. Nothing expressed or referred
      to in this Agreement will be construed to give any Person other than the parties
      to this Agreement any legal or equitable right, remedy or claim under or with
      respect to this Agreement or any provision of this Agreement, except such rights
      as shall inure to a successor or permitted assignee pursuant to this Section
      13.8.

     

    13.9 Severability

     

     

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

     

    13.10 Construction

     

     

    The
      headings of Articles and Sections in this Agreement are provided for convenience
      only and will not affect its construction or interpretation. All references
      to
      "Articles," "Sections" and "Parts" refer to the corresponding Articles, Sections
      and Parts of this Agreement and the Disclosure Letter.

     

    13.11 Governing
      Law

     

     

    This
      Agreement will be governed by and construed under the laws of the State of
      Illinois without regard to conflicts-of-laws principles that would require
      the
      application of any other law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.12 Execution
      of Agreement

     

     

    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. The exchange
      of copies of this Agreement and of signature pages by facsimile transmission
      shall constitute effective execution and delivery of this Agreement as to the
      parties and may be used in lieu of the original Agreement for all purposes.
      Signatures of the parties transmitted by facsimile shall be deemed to be their
      original signatures for all purposes.

     

    13.13 WAIVER
      OF
      TRIAL BY JURY

     

     

    EACH
      PARTY HERETO HEREBY, TO THE EXTENT PERMITTED BY LAW, KNOWINGLY, VOLUNTARILY,
      AND
      INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR OTHER LEGAL
      PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
      IT
      CONTEMPLATES. THIS WAIVER APPLIES TO ANY ACTION OR LEGAL PROCEEDING, WHETHER
      SOUNDING IN CONTRACT, TORT, OR OTHERWISE.

     

    13.14 Obligations
      of Seller and Shareholders

     

     

    The
      liability of the Shareholders or any Shareholder and Seller shall be joint
      and
      several. Where in this Agreement provision is made for any action to be taken
      or
      not taken by Seller, the Shareholders jointly and severally undertake to cause
      Seller to take or not take such action, as the case may be. Without limiting
      the
      generality of the foregoing, the Shareholders shall be jointly and severally
      liable with Seller for the indemnities set forth in
      Article 11.

     

    
      	13.15  	
              Pre-Closing
                Undertaking of Seller, Buyer and
                CMC

            


    

    


    Immediately
      following the date hereof, Seller shall contact Elbit-Systems Electro-Optics,
      the beneficiary under the Letter of Credit, and M&T Bank, the issuer of the
      Letter of Credit, in order to renegotiate and restructure the commercial
      relationship with Elbit, in an effort to cause M&T Bank and Elbit to release
      the liens securing the Letter of Credit, terminate the Letter of Credit and
      consent to the Contemplated Transactions. Such negotiations and discussions
      shall be conducted by Seller in good faith, with all diligence using
      commercially reasonable efforts. Likewise, Buyer and CMC each covenant and
      agree
      to use their good faith, diligent and commercially reasonable efforts to
      negotiate with Elbit and M&T Bank and structure a mutually acceptable
      commercial relationship with Elbit, in an effort to cause M&T Bank and Elbit
      to release the liens securing the Letter of Credit, terminate the Letter of
      Credit and consent to the Contemplated Transactions. If, despite these efforts,
      the liens securing the Letter of Credit are not released prior to Closing,
      Buyer
      shall assume the Letter of Credit (subject to the consent of Elbit and M&T
      Bank) and, simultaneously with such assumption, Seller and the Shareholders
      shall (i) establish an escrow in favor of Buyer (separate from the Escrow)
      pursuant to a mutually agreeable and customary escrow agreement, in the amount
      of $800,000 in order to reimburse Buyer in the event the Letter of Credit is
      drawn upon by Elbit (provided, however, that if such liens are released, Seller
      and the Shareholders shall not be required to establish such an escrow) and
      (ii)
      to the extent not already assigned hereunder, assign to Buyer the commercial
      letter of credit in the amount of $812,000 under which Seller is a beneficiary
      (as described in Part 3.2 of the Disclosure Letter). Thereafter, in the event
      the Letter of Credit is terminated and the liens securing the Letter of Credit
      are released, the escrow proceeds shall be immediately released and


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
distributed
        to Seller and the Shareholders. In
        the
        event that (i) Buyer is required to pay any amount to Elbit under the Letter
        of
        Credit, (ii) Buyer draws any amount from the escrow referred to above (such
        amount, the “LOC
        Escrow Draw”)
        and
        (iii) the product built for Elbit is subsequently sold, then Buyer shall
        pay to
        Seller or the Shareholders an amount equal to the lesser of the amount of
        Revenues from the sale of the product or the LOC Escrow Draw. Any Revenues
        received by Buyer from the sale of the product shall be included in Revenues
        for
        purposes of Section 2.3(b) hereof. The parties agree to reasonably cooperate
        to
        effect the purposes and intent of this Section 13.15.

    

     

    


    [Signature
      Page Follows]

    



    
      
        
          -
            -CONFIDENTIAL

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
           Execution
            Version

        

      

    



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

    


    


    QED
      TECHNOLOGIES INTERNATIONAL, INC.,

    a
      Delaware corporation  QED
      TECHNOLOGIES, INC., a New York corporation

    


    


    


    By:   By:  

    Name:    Don
      Golini

    Title:    President 

    


    


    


    CABOT
      MICROELECTRONICS CORPORATION 

    


    By:   

    Name:    

    Title:  _______________________

    


    


    


    By:   By:  

    Don
      Golini, as an individual   Lowell
      Mintz, as an individual

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Pursuant
        to Item 601(b)(2) of Regulation S-K, Cabot Microelectronics Corporation hereby
        agrees to furnish supplementally to the Securities and Exchange Commission
        a
        copy of the following schedules to the QED Asset Purchase Agreement, which
        have
        been omitted from this filing:

      


      
        	
                 Schedule

              	
                 Contents

              
	
                Exhibit
                  2.5

              	
                Preliminary
                  Allocation of Initial Purchase Price and Consideration

              
	
                Exhibit
                  2.7(a)(i)

              	
                Bill
                  of Sale, Assignment and Assumption Agreement

              
	
                Exhibit
                  2.8

              	
                Sample
                  Adjustment Account Calculation

              
	
                 Disclosure
                  Letter:

              	
                Contains
                  disclosure information from parties

              
	
                Part
                  2.1(b)

              	
                List
                  of tangible personal property transferred

              
	
                Part
                  2.1(e)

              	
                List
                  of fixed assets transferred

              
	
                Part
                  2.1(k)

              	
                List
                  of claims against third parties

              
	
                Part
                  3.1

              	
                List
                  of interests of subsidiaries of Seller in purchased
                  assets

              
	
                Part
                  3.2(b)

              	
                List
                  of execution and delivery conflicts

              
	
                Part
                  3.2(c)

              	
                List
                  of required consents 

              
	
                Part
                  3.3

              	
                Capitalization
                  table of Seller and subsidiaries

              
	
                Part
                  3.8

              	
                List
                  of real property leased interests

              
	
                Part
                  3.9

              	
                List
                  of Seller encumbrances

              
	
                Part
                  3.10

              	
                List
                  of tangible personal property not in Seller’s
                  possession

              
	
                Part
                  3.11

              	
                List
                  of Seller’s accounts receivable

              
	
                Part
                  3.12

              	
                List
                  of non-conforming inventory

              
	
                Part
                  3.13

              	
                List
                  of additional liabilities

              
	
                Part
                  3.14

              	
                List
                  of tax exceptions

              
	
                Part
                  3.16

              	
                List
                  of employee benefit plans and information

              
	
                Part
                  3.17

              	
                List
                  of exceptions to legal compliance representations and government
                  authorizations

              
	
                Part
                  3.18

              	
                List
                  of legal proceedings and orders

              
	
                Part
                  3.19

              	
                List
                  of exceptions to ordinary course of business
                  representation

              
	
                Part
                  3.20

              	
                List
                  of Seller contracts and exceptions

              
	
                Part
                  3.21

              	
                List
                  of insurance matters

              
	
                Part
                  3.22

              	
                List
                  of environmental matters

              
	
                Part
                  3.23

              	
                List
                  of employee information

              
	
                Part
                  3.24

              	
                List
                  of employment and labor exceptions

              
	
                Part
                  3.25

              	
                List
                  of Intellectual Property items

              
	
                Part
                  3.26

              	
                List
                  of related party matters

              
	
                Part
                  3.31

              	
                List
                  of governmental contract matters

              
	
                Part
                  7.3

              	
                List
                  of material consents