Document:

exv10w1

 

Exhibit 10.1

CONFIDENTIAL TREATMENT

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. REDACTED PORTIONS ARE
INDICATED WITH THE NOTATION “[***]”

MEMBERSHIP INTEREST

PURCHASE AGREEMENT

AMONG

THE MANAGEMENT NETWORK GROUP, INC.

AND

RVA CONSULTING, LLC,

RVA HOLDINGS, LLC,

MARK MARKOWITZ,

DAWN SAITTA AND

DALE REYNOLDS

DATED JULY 30, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	2. SALE AND TRANSFER OF MEMBERSHIP INTEREST; CLOSING
	 	 	11	 
	2.1 Membership Interest
	 	 	11	 
	2.2 Purchase Price
	 	 	11	 
	2.3 Payment of Purchase Price
	 	 	13	 
	2.4 Closing
	 	 	14	 
	2.5 Sellers’ Deliveries at Closing
	 	 	14	 
	2.6 Buyer’s Deliveries at Closing
	 	 	16	 
	2.7 Intentionally Deleted
	 	 	16	 
	2.8 Sellers Deliveries on Execution Date
	 	 	16	 
	2.9 Calculation of EBITDA and Net Working Capital
	 	 	17	 
	2.10 Vesting of Restricted Stock
	 	 	18	 
	 
	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES OF SELLERS
	 	 	19	 
	3.1 Organization and Good Standing
	 	 	19	 
	3.2 Authority; No Conflict
	 	 	19	 
	3.3 Capitalization
	 	 	20	 
	3.4 Financial Statements
	 	 	21	 
	3.5 Books and Records
	 	 	21	 
	3.6 Title to Properties; Encumbrances
	 	 	21	 
	3.7 Condition and Sufficiency of Assets
	 	 	21	 
	3.8 Accounts Receivable
	 	 	21	 
	3.9 Inventory
	 	 	22	 

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	3.10 No Undisclosed Liabilities
	 	 	22	 
	3.11 Taxes
	 	 	22	 
	3.12 No Material Adverse Change
	 	 	23	 
	3.13 ERISA Representations and Warranties
	 	 	23	 
	3.14 Compliance with Legal Requirements; Governmental Authorizations
	 	 	28	 
	3.15 Legal Proceedings; Orders
	 	 	29	 
	3.16 Absence of Certain Changes and Events
	 	 	30	 
	3.17 Contracts; No Defaults
	 	 	31	 
	3.18 Insurance
	 	 	34	 
	3.19 Environmental Matters
	 	 	36	 
	3.20 Employees
	 	 	36	 
	3.21 Labor Relations; Compliance
	 	 	37	 
	3.22 Intellectual Property
	 	 	37	 
	3.23 Certain Payments
	 	 	42	 
	3.24 Disclosure
	 	 	42	 
	3.25 Relationships with Related Persons
	 	 	43	 
	3.26 Brokers or Finders
	 	 	43	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES OF BUYER
	 	 	43	 
	4.1 Organization and Good Standing
	 	 	43	 
	4.2 Authority; No Conflict
	 	 	43	 
	4.3 Investment Intent
	 	 	44	 
	4.4 Certain Proceedings
	 	 	44	 
	4.5 Brokers or Finders
	 	 	44	 

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	5. COVENANTS PRIOR TO CLOSING DATE
	 	 	44	 
	5.1 Covenants of Sellers
	 	 	44	 
	5.2 Covenants of Buyer
	 	 	46	 
	 
	 	 	 	 
	6. POST CLOSING COVENANTS
	 	 	47	 
	6.1 Section 754 Election
	 	 	47	 
	6.2 Tax Returns
	 	 	47	 
	6.3 Audit
	 	 	47	 
	 
	 	 	 	 
	7. CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE
	 	 	47	 
	7.1 Closing
	 	 	47	 
	 
	 	 	 	 
	8. CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE
	 	 	49	 
	8.1 Closing
	 	 	49	 
	 
	 	 	 	 
	9. TERMINATION
	 	 	50	 
	9.1 Termination Events
	 	 	50	 
	9.2 Effect of Termination
	 	 	50	 
	 
	 	 	 	 
	10. INDEMNIFICATION; REMEDIES
	 	 	51	 
	10.1 Right to Indemnification Not Affected by Knowledge
	 	 	51	 
	10.2 Survival
	 	 	51	 
	10.3 Indemnification and Payment of Damages by Sellers
	 	 	52	 
	10.4 Indemnification and Payment of Damages by Buyer
	 	 	52	 
	10.5 Time Limitations
	 	 	53	 
	10.6 Limitations on Amount — Sellers
	 	 	53	 
	10.7 Limitations on Amount — Buyer
	 	 	53	 
	10.8 Right of Set-off
	 	 	53	 
	10.9 Procedure for Indemnification — Third Party Claims
	 	 	53	 

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	10.10 Procedure for Indemnification — Other Claims
	 	 	55	 
	 
	 	 	 	 
	11. GENERAL PROVISIONS
	 	 	55	 
	11.1 Expenses
	 	 	55	 
	11.2 Public Announcements
	 	 	55	 
	11.3 Confidentiality
	 	 	55	 
	11.4 Notices
	 	 	55	 
	11.5 Jurisdiction; Service of Process
	 	 	56	 
	11.6 Further Assurances
	 	 	57	 
	11.7 Waiver
	 	 	57	 
	11.8 Entire Agreement and Modification
	 	 	57	 
	11.9 Disclosure Letter
	 	 	57	 
	11.10 Assignments, Successors, and No Third-Party Rights
	 	 	57	 
	11.11 Severability
	 	 	58	 
	11.12 Section Headings, Construction
	 	 	58	 
	11.13 Time of Essence
	 	 	58	 
	11.14 Governing Law
	 	 	58	 
	11.15 Counterparts
	 	 	58	 

SCHEDULES

Schedule 2.3.1 – Allocation of Closing Consideration Among Majority Members

Schedule 2.3.2 – Allocation of Closing Consideration Among Minority Members [to be prepared by
Minority Members]

Schedule 2.9.1 – Manner of Calculating Estimated Net Working Capital

- iv -

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

     This Membership Interest Purchase Agreement (“Agreement”) is signed on July 30, 2007
(the “Execution Date”), by RVA Holdings, LLC, a New Jersey limited liability company
(“RVA Holdings”) and Dawn Saitta (“Saitta”), Mark Markowitz (“Markowitz”)
and Dale Reynolds (“Reynolds”) (referred to collectively as the “Sellers” and
individually as a “Seller”) and The Management Network Group, Inc., a Delaware corporation
(“Buyer”). (Markowitz and Reynolds also may be referred to collectively as the
“Minority Members” and individually as a “Minority Member”). (RVA Holdings and
Saitta also may be referred to collectively as the “Majority Members” and individually as a
“Majority Member”)

RECITALS

     Sellers desire to sell, and Buyer desires to purchase one hundred percent (100%) of the Class
A Membership Interest and 100% of the Class B Membership Interests in RVA Consulting, LLC, a New
Jersey limited liability company (the “Company”), for the consideration and on the terms
set forth in this Agreement. Following Closing, the Buyer shall be the only member of Company.

AGREEMENT

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

1. DEFINITIONS.

     For purposes of this Agreement, the following terms have the meanings specified or referred to
in this Section 1:

     “Acquired Membership Interests” – as defined in Section 2.1.

     “Adjusted Balance Amount” – as defined in Section 2.3.2(c).

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

     “Balance Amount” – as defined in Section 2.2.2(b).

     “Balance Sheet” – as defined in Section 3.4.

     “Best Efforts” – the efforts that a prudent Person desirous of achieving a result
would use in similar circumstances to ensure that such result is achieved as expeditiously as
possible; provided, however, that an obligation to use Best Efforts under this Agreement does not
require the Person subject to that obligation to take actions that would result in a materially
adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions.

     “Breach” – a “Breach” of a representation, warranty, covenant, obligation, or
other provision of this Agreement or any instrument delivered pursuant to this Agreement will be

 

 

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. REDACTED PORTIONS ARE INDICATED WITH THE NOTATION “[***]”

deemed to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure
to perform or comply with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent
with such representation, warranty, covenant, obligation, or other provision, and the term “Breach”
means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.

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

     “Buyer’s Advisors” – as defined in Section 5.1.

     “Calculation Year” – as defined in Section 2.3.2(c).

     “Class A Membership Interests” shall mean the membership interests of Class A Members
as defined in the Company’s original Operating Agreement entered into as of January 2, 2006
executed by each Seller. Such Class A Membership Interests are represented by the issuance of
“Class A Units” by the Company: [***] Class A Units to RVA Holdings, [***] Class A Units
to Markowitz and [***] Class A Units to Saitta.

     “Class B Membership Interests” shall mean the membership interests of Class B Members
as defined in the Company’s original Operating Agreement entered into as of January 2, 2006
executed by each Seller. Such Class B Membership Interests are represented by the issuance of
“Class B Units” by the Company: [***] Class B Units to Reynolds.

     “Closing” – as defined in Section 2.4.

     “Closing Date” – the date and time as of which the Closing actually takes place.

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

     “Company Trade Secrets” – as defined in Section 3.22.4.

     “Competing Business” – as defined in Section 3.25.

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

     “Contaminant” – as defined in Section 3.22.10.

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

     (a) the sale of the Acquired Membership Interests by Sellers to Buyer;

     (b) the execution and delivery of the Employment Agreements and the Noncompetition
Agreements; and

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     (c) the performance by Buyer and Sellers of their respective covenants and obligations
under this Agreement.

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

     “Copyright” shall mean collectively the Owned Copyrights and the Licensed Copyrights
as defined in Section 3.22.3.

     “Damages” – as defined in Section 10.3.

     “Deferred Payment” – as defined in Section 2.3.2(c).

     “Deferred Payment Date” – as defined in Section 2.3.2(c).

     “Deferred Purchase Price” – as defined in Section 2.2.2(c).

     “Disabling Codes” – as defined in Section 3.22.10.

     “Disclosure Letter” – the disclosure letter delivered by Sellers to Buyer not less
than five (5) days prior to the execution and delivery of this Agreement.

     “EBITDA” – shall mean the Company’s earnings before interest, taxes, depreciation and
amortization (“EBITDA”) calculated in accordance with GAAP adjusted for the following: i) includes
costs equal to payments made under the Management Agreement, ii) excludes expenses recorded for
share-based compensation, iii) excludes expenses recorded for deferred purchase price payments made
to Sellers, and iv) excludes charges for services rendered from the Buyer or related entities which
exceed the amounts currently paid by the Company for such services, adjusted to take into account
the volume of such services being provided.

     “Employment Agreements” – shall mean collectively, the Markowitz Employment Agreement
and the Reynolds Employment Agreement, each as defined in Section 2.5.2.

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

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

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

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     (a) any environmental, health, or safety matters or conditions (including on-site or
off-site contamination, occupational safety and health, and regulation of chemical
substances or products);

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

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

     (d) any other compliance, corrective, investigative, or remedial measures required
under 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, 42 U.S.C. § 9601 et seq., as amended (“CERCLA”).

     “Environmental Law” – any Legal Requirement that requires or relates to:

     (a) advising appropriate authorities, employees, and the public of intended or actual
releases of pollutants or hazardous substances or materials, violations of discharge limits,
or other prohibitions and of the commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment;

     (b) preventing or reducing to acceptable levels the release of pollutants or hazardous
substances or materials into the Environment;

     (c) reducing the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;

     (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 of;

     (e) protecting resources, species, or ecological amenities;

     (f) reducing to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil, or other potentially harmful substances;

     (g) cleaning up pollutants that have been released, preventing the threat of release,
or paying the costs of such clean up or prevention; or

4

 

     (h) making responsible parties pay private parties, or groups of them, for damages done
to their health or the Environment, or permitting self-appointed representatives of the
public interest to recover for injuries done to public assets.

     “ERISA” – the Employee Retirement Income Security Act of 1974, as amended, or any
successor law, and regulations and rules issued pursuant to that Act or any successor law.

     “Estimated Majority NWC Amount” – as defined in Section 2.9.1.

     “Estimated Minority NWC Amount” – as defined in Section 2.9.1.

     “Estimated Net Working Capital” – as defined in Section 2.9.1.

     “GAAP” – generally accepted United States accounting principles, applied on a
consistent basis.

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

     “Governmental Body” – any:

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

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

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

     (d) multi-national organization or body; or

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

     “Hazardous Activity” – the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer, transportation,
treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in,
on, under, about, or from the Facilities or any part thereof 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, or that may affect the
value of the Facilities.

     “Hazardous Materials” – any waste or other substance that is listed, defined,
designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a
pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or
solution thereof, and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.

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     “Indemnified Persons” – as defined in Section 10.3.

     “Intellectual Property Rights” – means intellectual property rights arising from or in
respect of Marks, Copyrights, Software, Patents and Trade Secrets, whether protected, created or
arising under the laws of the United States, any state therein or any other jurisdiction.

     “IRC” – the Internal Revenue Code of 1986, as amended, or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

     “IRS” – the United States Internal Revenue Service or any successor agency, 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) such individual is actually aware of such fact or other matter; or

     (b) a prudent individual could be expected to discover or otherwise become aware of
such fact or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.

A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact
or other matter if any individual who is serving, or who has at any time served, as a director,
officer, partner, member, manager, executor, or trustee of such Person (or in any similar capacity)
has, or at any time had, Knowledge of such fact or other matter.

     “Legal Requirement” – any federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty.

     “Licensed Marks” – as defined in Section 3.22.1(b).

     “Licensed Copyrights” – as defined in Section 3.22.3(b).

     “Licensed Software” – as defined in Section 3.22.5.

     “Licensed Software Agreements” – as defined in Section 3.22.7.

     “Licensed Technology Agreements” – as defined in Section 3.22.7.

     “Majority Balance Amount” – as defined in Section 2.2.1(b).

     “Majority Closing Consideration” – as defined in Section 2.3.1(a).

     “Majority Members” – as defined in the first paragraph of this Agreement.

     “Majority NWC Amount” – as defined in Section 2.2.1(a).

6

 

     “Majority Noncompetition Agreements” – shall mean collectively, the Saitta
Noncompetition Agreement, the Kalafer Noncompetition Agreement and the Pollock Noncompetition
Agreement, each as defined in Section 2.5.3.

     “Majority Purchase Price” – as defined in Section 2.2.1.

     “Management Agreement” – shall mean that certain management contract between
Healthcare Logistics, LLC (“HCL”) and Company, pursuant to which HCL (or its successors)
provides certain goods and services to the Company through December 31, 2008.

     “Marks” – means registered and unregistered trademarks and service marks and logos
(including any Internet domain names, fictional names and the name “RVA Consulting”), and
applications therefor.

     “Minority Balance Amount” – as set forth in Section 2.2.2(b).

     “Minority Closing Consideration” – as defined in Section 2.3.2.

     “Minority Members” – as defined in the first paragraph of this Agreement.

     “Minority NWC Amount” – as set forth in Section 2.2.2(a).

     “Minority Noncompetition Agreements” – shall mean collectively, the Markowitz
Noncompetition Agreement and the Reynolds Noncompetition Agreement, each as set forth in Section
2.5.2.

     “Minority Purchase Price” – as set forth in Section 2.2.2.

     “Net Working Capital” – shall mean (i) the sum of the Company’s cash, plus cash
equivalents, plus Accounts Receivables less than 120 days from invoice date, plus unbilled
receivables, plus prepaid expenses, MINUS (ii) the sum of the Company’s current liabilities, plus
accrued pre-billed revenues, plus all Company debt plus all other liabilities of the Company.

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

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

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

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

7

 

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

     (c) such action is similar in nature and magnitude to actions customarily taken,
without any authorization by the board of directors (or by any Person or group of Persons
exercising similar authority), 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.

     “Organizational Documents” – the (a) articles or certificate of incorporation and the
bylaws of a corporation and any amendment to any of the foregoing, or (b) the articles of
organization and operating agreement of a limited liability company, and any amendment to the
foregoing.

     “Other Licensed Technology Agreements” – as defined in Section 3.22.7.

     “Owned Copyrights” – as defined in Section 3.22.3(a).

     “Owned Marks” – as defined in Section 3.22.1.

     “Owned Software” – as defined in Section 3.22.5.

     “Patents” – means patents, patent rights and all applications therefor, including any
and all continuation, divisional, continuation-in-part, or reissue patent applications or patents
issuing thereon.

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

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

     “Purchase Price” – as defined in Section 2.2.

     “Reconciliation Date” – as defined in Section 2.3.1(b).

     “Related Person” – with respect to a particular individual:

     (a) each other member of such individual’s Family;

     (b) any Person that is directly or indirectly controlled by such individual or one or
more members of such individual’s Family;

     (c) any Person in which such individual or members of such individual’s Family hold
(individually or in the aggregate) a Material Interest; and

8

 

     (d) any Person with respect to which such individual or one or more members of such
individual’s Family serves as a director, officer, partner, executor, or trustee (or in a
similar capacity).

With respect to a specified Person other than an individual:

     (a) any Person that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with such specified Person;

     (b) any Person that holds a Material Interest in such specified Person;

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

     (d) any Person in which such specified Person holds a Material Interest;

     (e) any Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and

     (f) any Related Person of any individual described in clause (b) or (c).

For purposes of this definition, (a) the “Family” of an individual includes (i) the individual,
(ii) the individual’s spouse and former spouses, if any, (iii) any other natural person who is
related to the individual or the individual’s spouse within the second degree, and (iv) any other
natural person who resides with such individual, and (b) “Material Interest” means direct or
indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least ten percent (10%) of the
outstanding voting power of a Person or equity securities or other equity interests representing at
least ten percent (10%) of the outstanding equity securities or equity interests in a Person.

     “Release” – any spilling, leaking, emitting, discharging, depositing, escaping,
leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

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

     “Securities Act” – the Securities Act of 1933, as amended, or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.

     “Sellers” – as defined in the first paragraph of this Agreement.

     “Sellers Closing Documents” – as defined in Section 3.2.1.

     “Software” – means any and all (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to

9

 

design, plan, organize and develop any of the foregoing, and (iv) all documentation, including
user manuals and training manuals, relating to any of the foregoing, in each case developed or
licensed by the Company, or used in or necessary for the conduct of its business, excluding
generally available computer programs produced by others which are used by the Company “as is” or
without modification, such as standard desktop applications.

     “Survival Periods” – shall mean collectively the Three Year Survival Period, the Tax
Claims Survival Period, the Environmental Claims Survival Period and the General Claims Survival
Period each as defined in Section 10.2; and “Survival Period” shall mean any of the
foregoing.

     “Subsidiary” – with respect to any Person (the “First Person”), 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 First Person or one or more of its Subsidiaries;
when used without reference to a particular Person, “Subsidiary” means a Subsidiary of the Company.

     “Systems” – as defined in Section 3.22.10.

     “Tax” – any tax (including, but not limited to, any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff, duty
(including, but not limited to, any customs duty), deficiency, or other fee, and any related charge
or amount (including any fine, penalty, interest, or addition to tax), imposed, assessed, or
collected by or under the authority of any Governmental Body or payable pursuant to any tax-sharing
agreement or any other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.

     “Tax Return” – any return (including any information return), report, statement,
schedule, notice, form, 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.

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

     “Threatened” – a claim, Proceeding, dispute, action, or other matter will be deemed to
have been “Threatened” if any demand or statement has been made (orally or in writing) or any
notice has been given (orally or in writing), or if any other event has occurred or any other
circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued
in the future.

     “Trade Secrets” – means know-how, inventions, discoveries, concepts, ideas,
methods, processes, designs, formulae, technical data, drawings, specifications, data bases and
other

10

 

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. REDACTED PORTIONS ARE INDICATED WITH THE NOTATION “[***]”

proprietary and confidential information, including customer lists, in each case to the extent
not Marks or Patents.

2. SALE AND TRANSFER OF MEMBERSHIP INTEREST; CLOSING.

     2.1 Membership Interest. Subject to the terms and conditions of this Agreement, the Buyer
shall acquire all of the Class A Membership Interests of the Majority Members and all of the Class
A Membership Interests and Class B Membership Interests of the Minority Members at the Closing
(collectively the “Acquired Membership Interests”). At the Closing, each Seller shall
transfer their entire Membership Interest to Buyer and upon such acquisition the Buyer shall be
admitted as a member of Company:

	 	 	 	 	 	 	 	 	 
	Seller	 	Class A Units	 	% of Class A	 	Class B Units	 	% of Class B
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]

     2.2 Purchase Price. The purchase price for all of the Membership Interests in the Company
(the “Purchase Price”) shall be the sum of the Majority Purchase Price and the Minority
Purchase Price (both as defined below):

     2.2.1 Majority Purchase Price. The purchase price for the Membership Interests
acquired from the Majority Members (the “Majority Purchase Price”) will be the sum
of the following:

     (a) Majority Net Working Capital. An amount equal to 82.9 8% of the
Company’s Net Working Capital as of June 30, 2007 (the “Majority NWC
Amount”), and

     (b) Majority Balance. $5,100,000 (the “Majority Balance
Amount”), and

     (c) One Year Restricted Stock. A number of shares of restricted common
stock of the Buyer equal to the lesser of (i) 550,000 (subject to adjustments for
any stock splits or dividends), or (ii) the number of shares equal to $1,100,000
divided by the weighted average closing price of the Buyer’s common stock on the
NASDAQ exchange for thirty (30) trading days immediately preceding the date two (2)
days before the Closing Date (the “One Year Restricted Stock”). The shares
of One Year Restricted Stock shall not be registered and shall be subject to certain
restrictions provided for in the Securities Act, or any other securities laws, and
the certificate for such stock shall bear an
appropriate legend reflecting such restriction. The shares of One Year
Restricted Stock shall vest as set forth in Section 2.10.2.

     (d) Three Year Restricted Stock. A number of shares of
restricted common stock of Buyer equal to the lesser of (i) 200,000 (subject to
adjustments for any stock splits or dividends), or (ii) the number of shares equal
to $400,000 divided by the weighted average closing price of the Buyer’s common
stock on

11

 

the NASDAQ exchange for thirty (30) trading days immediately preceding the
date two (2) days before the Closing Date (“Three Year Restricted Stock”).
The Three Year Restricted Stock shall not be registered and shall be subject to
certain restrictions provided for in the Securities Act, or any other securities
laws. The certificate for any Three Year Restricted Stock shall bear an appropriate
legend reflecting such restrictions. The Three Year Restricted Stock shall vest as
set forth in Section 2.10.1.

     (e) Ninety Day Restricted Stock. A number of shares of restricted
common stock of the Buyer equal to the lesser of (i) 112,000 (subject to adjustments
for any stock splits or dividends), or (ii) $224,000 divided by the weighted average
closing price of the Buyer’s common stock on the NASDAQ exchange for thirty (30)
trading days immediately preceding the date two (2) days before the Closing Date
(the “Ninety Day Restricted Stock”). The shares of Ninety Day Restricted
Stock shall not be registered and shall be subject to certain restrictions provided
for in the Securities Act, or any other securities laws, and the certificate for
such stock shall bear an appropriate legend reflecting such restriction. The shares
of Ninety Day Restricted Stock shall vest as set forth in Section 2.10.3.

     2.2.2 Minority Purchase Price. The purchase price for the Membership Interests to be
acquired from the Minority Members (the “Minority Purchase Price”) shall be the sum
of the following:

     (a) Minority Net Working Capital. An amount equal to 17.02% of the
Company’s Net Working Capital as of June 30, 2007 (the “Minority NWC
Amount”), and

     (b) Minority Balance. $1,267,000 (the “Minority Balance
Amount”). The sum of the Majority Balance Amount and the Minority Balance
Amount may be referred to as the “Balance Amount”, and

     (c) Deferred Purchase Price. An amount equal to the lesser of (i) the
sum of the Deferred Payments calculated pursuant to Section 2.3.2(c) or (ii)
$1,920,000 (the “Deferred Purchase Price”), and

     (d) Restricted Stock. A number of shares of restricted common stock of
the Buyer equal to the lesser of (i) 426,500 (subject to adjustments for any stock
splits or dividends), or (ii) the number of shares equal to $853,000 divided
by the weighted average closing price of the Buyer’s common stock on the NASDAQ
exchange for thirty (30) trading days immediately preceding the date two (2) days
before the Closing Date (“Three Year Restricted Stock”). The shares of
Three Year Restricted Stock shall not be registered and shall be subject to certain
restrictions provided for in the Securities Act, or any other securities laws. The
certificates for stock shall bear an appropriate legend reflecting such
restrictions. The shares of Three Year Restricted Stock shall vest as set forth in
Section 2.10.1.

12

 

     2.3 Payment of Purchase Price. The Purchase Price shall be paid to the Sellers as set
forth below:

     2.3.1 Payment of Majority Purchase Price. Buyer shall pay to the Majority Members as
set forth in Schedule 2.3.1, the Majority Purchase Price as follows:

     (a) Majority Closing Consideration. At the Closing the Buyer shall pay
the Majority Members as set forth in Schedule 2.3.1, an amount equal to the
sum of (i) 75% of the Estimated Majority NWC Amount, and (ii) $5,100,000
(collectively, the “Majority Closing Consideration”). The parties agree
that of such Majority Closing Consideration, $100,000 shall be allocated to each
Majority Member in exchange for their respective Noncompetition Agreements.

     (b) Deferred Majority Net Working Capital. Within one hundred and
twenty (120) days following the Closing Date, Buyer shall submit to the Sellers a
written accounting and calculation of the Majority NWC Amount in such detail as
shall be reasonably required by Sellers. One Hundred eighty (180) days following the
Closing Date (the “Reconciliation Date”), Buyer shall pay to the Majority
Members as set forth in Schedule 2.3.1, an amount equal to the amount by
which the Majority NWC Amount exceeds 75% of the Estimated Majority NWC Amount. If
75% of the Estimated Majority NWC Amount shall be greater than the Majority NWC
Amount, then on the Reconciliation Date each Majority Member shall pay such excess
to Buyer in their respective proportions as set forth in Schedule 2.3.1.

     2.3.2 Payment of the Minority Purchase Price. Buyer shall pay the Minority Members, as
set forth in Schedule 2.3.2, the Minority Purchase Price as follows:

     (a) Minority Closing Consideration. At the Closing, the Buyer shall
pay an amount equal to the sum of (i) 75% of the Estimated Minority NWC Amount, and
(ii) $400,000 representing a portion of the Minority Balance Amount (collectively,
the “Minority Closing Consideration”). The parties agree that $100,000 of
the Minority Closing Consideration payable to each Minority Member shall be
allocated in exchange for their respective Noncompetition Agreements.

     (b) Deferred Minority Net Working Capital. Within one hundred and
twenty (120) days following the Closing Date, Buyer shall submit to the Sellers a
written accounting and calculation of the Minority NWC Amount in such detail as
shall be reasonably required by Sellers. On the Reconciliation Date Buyer shall pay
the Minority Members in the proportions set forth in Schedule 2.3.2 an
amount equal to the amount by which the Minority NWC Amount exceeds 75% of the
Estimated Minority NWC Amount. If 75% of the Estimated Minority NWC Amount shall be
greater than the Minority NWC Amount, then each Minority Member shall pay such
excess to Buyer in their respective proportions set forth in Schedule 2.3.2
on the Reconciliation Date.

13

 

     (c) Payment of Deferred Purchase Price. The Deferred Purchase Price shall be
paid in three (3) installments (each a “Deferred Payment”) on a date that is
135 days following the end of each of the first three (3) Calculation Years (each a
“Deferred Payment Date”). A “Calculation Year” shall mean the
twelve (12) month period measured from June 30, 2007 or anniversary thereof, as the
case may be. The amount of the first Deferred Payment (if any) shall be 15% of the
amount by which the EBITDA for the first Calculation Year exceeds the sum of the
Balance Amount plus the value, as determined per Section 2.2.1(c) of the vested One
Year Restricted Stock, plus the value, as determined per Section 2.2.1(e), of the
vested Ninety Day Restricted Stock. The amount of the second Deferred Payment (if
any) shall be 15% of the amount by which the cumulative EBITDA for the first two
Calculation Years exceeds the Adjusted Balance Amount, minus the first Deferred
Payment. The amount of the third Deferred Payment (if any) shall be 15% of the
amount by which the cumulative EBITDA for the first three Calculation Years exceeds
the Adjusted Balance Amount, minus the amount of the first and second Deferred
Payments. For purposes of the Agreement, the “Adjusted Balance Amount”
shall be (i) if there is a payment to the Minority Members under Section 2.3.2(d)
below, $5,500,000 plus the amount of such payment plus the value, as determined per
Section 2.2.1(c), of the vested One Year Restricted Stock, plus the value, as
determined per Section 2.2.1(e), of the vested Ninety Day Restricted Stock, and (ii)
if there is no payment to the Minority Members under Section 2.3.2(d) below,
$5,500,000, plus the value, as determined per Section 2.2.1(e), of the vested Ninety
Day Restricted Stock, plus the value, as determined per Section 2.2.1(c), of the
vested One Year Restricted Stock. The foregoing notwithstanding, in no event shall
the sum of the Deferred Payments exceed $1,920,000.

     (d) Remaining Balance Amount. Within one hundred thirty-five (135)
days following the end of the first Calculation Year, Buyer shall pay an amount
equal to the lesser of (i) $867,000 multiplied by a fraction, the numerator of which
is the amount by which EBITDA for the first Calculation Year exceeds $5,500,000 and
the denominator of which is $2,167,000, or (ii) $867,000. The Buyer shall have no
obligation to pay the remainder of the Minority Balance Amount, except as set forth
in the preceding sentence.

     2.4 Closing. The purchase and sale of all of the Membership Interests (the
“Closing”) provided for in this Agreement will take place at the offices of Buyer’s counsel
at 120 W. 12th Street, Suite 1600,
Kansas City, Missouri 64105, at 10:00 a.m. (local time) on or before August 3, 2007 or such other
time and place as the parties may agree, but not later than August 6, 2007.

     2.5 Sellers’ Deliveries at Closing. At the Closing Sellers will deliver to Buyer, in form
and content acceptable to Buyer:

     2.5.1 Employment Agreements. Employment Agreements (collectively, the “Employment
Agreements”) executed by:

14

 

     (a) Mark Markowitz in the form of Exhibit 2.5.1(a) (the “Markowitz
Employment Agreement”), and

     (b) Dale Reynolds in the form of Exhibit 2.5.1(b) (the “Reynolds
Employment Agreement”),

     2.5.2 Minority Noncompetition Agreements. Noncompetition Agreements
(collectively, the “Minority Noncompetition Agreements”) executed by:

     (a) Mark Markowitz in the form of Exhibit 2.5.2(a) (the “Markowitz
Noncompetition Agreement”); and

     (b) Dale Reynolds in the form of Exhibit 2.5.2(b) (the “Reynolds
Noncompetition Agreement”).

     2.5.3 Majority Noncompetition Agreement. Noncompetition Agreements (collectively, the
“Majority Noncompetition Agreement”) executed by:

     (a) RVA Holdings and Steve Kalafer in the form of Exhibit 2.5.3(a) (the
“Kalafer Noncompetition Agreement”);

     (b) RVA Holdings and Bill Pollock in the form of Exhibit 2.5.3(b) (the
“Pollock Noncompetition Agreement”); and

     (c) Dawn Saitta in the form of Exhibit 2.5.3(c) (the “Saitta
Noncompetition Agreement”).

     2.5.4 Bill of Sale. Bill of Sale conveying all of the Membership Interests of the
Company to Buyer executed by each Majority Member and each Minority Member.

     2.5.5 Consent of Customers. Receipt of copy of an email notifying the following
Customers of the Contemplated Transaction and joint meeting with such Customers by Company
representatives and Buyer representatives:

[***]

     2.5.6 Sellers Certificate. A certificate executed by Sellers representing and
warranting to Buyer that each of Sellers’ representations and warranties in this Agreement
was accurate in all respects as of the date of this Agreement and is accurate in
all respects as of the Closing Date as if made on the Closing Date (giving full effect
to any supplements to the Disclosure Letter that were delivered by Seller to Buyer prior to
the Closing Date in accordance with Section 5.1.5).

     2.5.7 Resignations. A resignation, effective as of the Closing Date, executed by each
member, manager or officer of the Company, pursuant to which such person resigns from all
such positions, other than the positions of Markowitz, Reynolds and Saitta set forth in
their respective Employment Agreements or Consulting Agreements, as the case may be.

15

 

     2.5.8 Termination of 401(k) Plan. Documentation reflecting the termination of
the 40 1(k) Plan as adopted by the Company prior to the Closing Date.

     2.5.9 Saitta Consulting Agreement. The consulting agreement executed by Saitta in the
form of Exhibit 2.5.9 (the “Saitta Consulting Agreement”).

     2.5.10 Other Documents. Any other documents facilitating the transfer as shall be
deemed necessary by Buyer.

     2.6 Buyer’s Deliveries at Closing. At the Closing Buyer will deliver:

     2.6.1 Majority Closing Consideration. To the Majority Members by bank cashier’s or
certified check payable to the order of the Majority Members as set forth in Schedule
2.3.1, or by wire transfer to account of the Majority Members as set forth in
Schedule 2.3.1, the Majority Closing Consideration;

     2.6.2 Minority Closing Consideration. To the Minority Members by bank cashier’s or
certified check payable to the order of the Minority Members as set forth in Schedule
2.3.2, or by wire transfer to the accounts of the Minority Members as set forth in
Schedule 2.3.2, the Minority Closing Consideration;

     2.6.3 Noncompetition Agreements. To each Minority Member their respective Minority
Noncompetition Agreement and to each Majority Member each Majority Noncompetition Agreement
executed by Company and Buyer;

     2.6.4 Employment Agreements. To each Minority Member their respective Employment
Agreement executed by Company;

     2.6.5 Saitta Consulting Agreement. To Saitta, the Saitta Consulting Agreement executed
by Company; and

     2.6.6 Buyer’s Certificate. A certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer’s representations and warranties in
this Agreement was accurate in all respects as of the date of this Agreement and is accurate
in all respects as of the Closing Date as if made on the Closing Date.

     2.7 Intentionally Deleted.

     2.8 Sellers Deliveries on Execution Date. Contemporaneously with the execution and
delivery of this Agreement, the Sellers will deliver to Buyer, in form and content acceptable to
Buyer:

     2.8.1 Wacker Redemption. Documentation reflecting the redemption by the Company prior
to the Closing Date of the Class B Units initially issued to Joanne Peda Wacker (“Ms.
Wacker”) and a written severance agreement and release of claims executed by Ms. Wacker
pursuant to which the Company has no ongoing liability to Ms. Wacker past the Closing Date
and Ms. Wacker releases all claims against the Company.

16

 

     2.8.2 Repayment of Loan. Evidence that the loan from the Company to Markowitz in the
original principal amount of $70,000 has been paid in full.

     2.8.3 Insurance Documentation. Certificate of Insurance and/or endorsement issued by
the applicable insurance companies (not the agent) indicating that all employees of Company
are covered as of the Closing Date, and have been covered since the inception of Company by
(i) the CIGNA group health insurance plan, (ii) the Guardian Group Dental Plan and (iii) the
disability income plan. Further, a Certificate of Insurance and/or endorsement (iv) issued
by Chubb Insurance reflecting general liability coverage and E&O coverage for Company and
its line of business from the date of the Company’s inception to the Closing Date, and (v)
issued by the Hartford reflecting worker’s compensation insurance coverage in each
jurisdiction in which the Company maintains employees or contractors during all times such
employees were retained in the applicable jurisdictions.

     2.8.4 Incentive Compensation. Evidence that all employee bonuses and/or incentive
compensation earned or accrued through July 1, 2007 have been paid in full prior to the
Closing Date.

     2.9 Calculation of EBITDA and Net Working Capital.

     2.9.1 Net Working Capital. Prior to the Closing the Buyer and Sellers shall estimate
the Company’s Net Working Capital as of June 30, 2007 (the “Estimated Net Working
Capital”) in the manner as set forth in Schedule 2.9.1. (The “Estimated
Majority NWC Amount” shall be 82.98% of the Estimated Net Working Capital and the
“Estimated Minority NWC Amount” shall be 17.02% of the Estimated Net Working
Capital.)

     2.9.2 EBITDA. Within ninety (90) days of the end of each of the first three (3)
Calculation Years, the Company shall calculate the Company’s EBITDA for such Calculation
Year and provide Buyer and the Minority Members an accounting of such calculation.

     2.9.3 Dispute. If the Sellers do not object in writing to such calculation of Net
Working Capital or EBITDA (as the case may be) within thirty (30) days of receipt of such
calculation (“Objection Period”), such calculation shall be deemed conclusive and
binding upon all parties. If any Seller objects in writing to such calculation during
Objection Period, such objection shall identify with specificity the basis for such
objection.

     Within thirty (30) days following receipt of any such objection, the Buyer and Sellers
shall attempt to resolve such dispute. If the Buyer and Sellers are unable to resolve such
dispute during such thirty (30) day period, the matter shall be resolved by a national
accounting firm not currently the auditor of Buyer or any Sellers (the “Accounting
Firm”). Buyer and Sellers shall each have an opportunity to make statements to the
Accounting Firm explaining their position with respect to the calculation. The Accounting
Firm shall promptly and diligently perform their own calculation of the relevant Net Working
Capital or EBITDA, as the case may be, and

17

 

submit such calculation to both parties in
writing. Such calculation shall be binding upon all parties. The Buyer and Sellers shall
split evenly the cost and expenses of the Accounting Firm.

     In the event there is a dispute regarding the calculation of the Net Working Capital or
EBITDA, any payment relating to such calculation shall be delayed until the later of (i) the
date such payment is due under this Agreement, or (ii) ten (10) days following the
determination of the relevant amount by agreement or the Accounting Firm, as the case may
be.

     2.10 Vesting of Restricted Stock.

     2.10.1 Three Year Restricted Stock. The Three Year Restricted Stock shall vest in the
Minority Members and RVA Holdings over a three (3) year period from the Closing Date, with
the number of shares vesting at the end of each Calculation Year equal to the total number
of shares allocated to RVA Holdings and the Minority Members, respectively, multiplied by a
fraction, the numerator of which is the amount of the Deferred Payment made which is
attributable to such Calculation Year and the denominator of which is $1,920,000. Stock
Certificates representing the vested shares of Three Year Restricted Stock shall be
delivered on the applicable Deferred Payment Date to the Minority Members in accordance with
the allocation set forth in Schedule 2.3.2 and RVA Holdings as applicable.
Certificates shall be rounded to the nearest full share. Three Year Restricted Stock which
does not vest as provided above shall be forfeited and neither the Minority Members nor RVA
Holdings shall have further rights with respect thereto.

     2.10.2 One Year Restricted Stock. The One Year Restricted Stock shall vest in RVA
Holdings at the end of the first Calculation Year following the Closing Date. The number of
shares of One Year Restricted Stock that vest shall be equal to the total number of shares
of One Year Restricted Stock multiplied by a fraction, the denominator of which will be
$16,000,000 and the numerator of which will be the gross revenue of the
Company earned during the first Calculation Year attributable exclusively to customer
contracts existing on June 30, 2007. Stock certificates representing the vested shares of
One Year Restricted Stock shall be issued within ninety (90) days of the end of the
applicable Calculation Year and shall be delivered to RVA Holdings. One Year Restricted
Stock Certificates shall be rounded to the nearest full share. One Year Restricted Stock
which does not vest as provided above shall be forfeited and RVA Holdings shall have no
further rights with respect thereto.

     2.10.3 Ninety Day Restricted Stock. The Ninety Day Restricted Stock shall vest in
Saitta following Saitta’s discharge of all obligations under the Saitta Consulting
Agreement. A stock certificate representing the vested shares of Ninety Day Restricted
Stock shall be issued within fifteen (15) days of the end of the ninety (90) day period
contemplated in the Saitta Consulting Agreement and shall be delivered to Saitta. Ninety Day
Restricted Stock which does not vest as provided above shall be forfeited and Saitta shall
have no further rights with respect thereto.

18

 

3. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each of the Sellers and the Company jointly
and severally represent and warrant to Buyer as follows:

     3.1 Organization and Good Standing.

     3.1.1 Name, Address, Capitalization. Part 3.1 of the Disclosure Letter
contains a complete and accurate list of the Company’s name, jurisdiction of formation,
other jurisdictions in which it is authorized to do business, and its capitalization
(including the identity of each member and a description of the membership interests held by
each). The Company is a limited liability company duly organized, validly existing, and in
good standing under the laws of its jurisdiction of formation, with full power and authority
to conduct its business as it is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its obligations under Applicable
Contracts. The Company is duly qualified to do business as a foreign limited liability
company and is in good standing under the laws of Texas and any other state or jurisdiction
in which either the ownership or use of the properties owned or used by it, or the nature of
the activities conducted by it, requires such qualification.

     3.1.2 Organizational Documents. Sellers have delivered to Buyer copies of the
Organizational Documents of the Company as currently in effect.

     3.1.3 Subsidiaries. The Company has no Subsidiaries and owns no equity securities of
any other Person.

     3.1.4 Operation. Although the Company was formed by filing a Certificate of Formation
on July 18, 2003, the Company did not conduct any business or take any actions until
November, 2005.

     3.2 Authority; No Conflict.

     3.2.1 Authority. This Agreement constitutes the legal, valid, and binding obligation
of each Seller, enforceable against each Seller in accordance with its terms. Upon the
execution and delivery by each Seller of the documents set forth in Section 2.5
(collectively, the “Sellers’ Closing Documents”), the Sellers’ Closing Documents
will constitute the legal, valid, and binding obligation of each Seller which is a party to
such Sellers’ Closing Document, enforceable against each Seller which is a party to such
Sellers’ Closing Document in accordance with their respective terms. Each Seller has the
absolute and unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the Sellers’ Closing Documents to which it is a party, and to perform its
obligations under this Agreement and the relevant Sellers’ Closing Documents. Furthermore,
each Seller hereby represents that any and all conditions or consents required by the terms
of the Organizational Documents of the Company in connection with the sale and transfer of
the Acquired Membership Interests and all Contemplated Transactions have been satisfied
and/or obtained, and in the event such conditions or consents have not been satisfied and/or
obtained, such conditions and consents are hereby waived by each Seller.

19

 

     3.2.2 Conflicts. Except as set forth in Part 3.2.2 of the Disclosure Letter,
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):

     (a) contravene, conflict with, or result in a violation of (i) any provision of
the Organizational Documents of the Company, or (ii) any resolution adopted by the
members or managers of the Company;

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

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

     (d) cause Buyer or the Company to become subject to, or to become liable for
the payment of, any Tax;

     (e) cause any of the assets owned by the Company to be reassessed or revalued
by any taxing authority or other Governmental Body;

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

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

     3.2.3 No Notice. Except as set forth in Part 3.2.3 of the Disclosure Letter and
Section 2.5.5, neither Sellers nor the Company is or will be required to give any notice
to or obtain any Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated Transactions.

     3.3 Capitalization. The Sellers are and will be on the Closing Date, the record and
beneficial owners and holders of all membership interests in the Company (both Class A Membership
Interests and Class B Membership Interests as set forth in Section 2.1), free and clear of all
Encumbrances and all such equity interests are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale, or transfer of any equity securities or other securities
of the Company. None of the outstanding equity securities or other securities of the Company was
issued in violation of the Securities Act or any other Legal Requirement. The

20

 

Company does not
own, and has no Contract to acquire, any equity securities or other securities of any Person or any
direct or indirect equity or ownership interest in any other business.

     3.4 Financial Statements. Sellers have delivered to Buyer: (i) unaudited balance sheets
of the Company as at December 31, 2006, and the related unaudited statements of income, changes in
equity and cash flow for the fiscal year then ended, and (ii) an unaudited balance sheet of Company
as at June 30, 2007 (the “Balance Sheet”) and the related unaudited statements of income,
changes in equity, and cash flow for the six months then ended. With the exception of the accrual
for prepaid revenues which have been presented on a straight line basis, such financial statements
are prepared in accordance with GAAP, and fairly present the financial condition and the results of
operations, changes in equity, and cash flow of the Company as at the respective dates of and for
the periods referred to in such financial statements, subject, in the case of interim financial
statements, to normal recurring year-end adjustments (the effect of which will not, individually or
in the aggregate, be materially adverse) and the absence of notes (that, if presented, would not
differ materially from those included in the prior full year financial statements). The financial
statements referred to in this Section 3.4 (the “Financial Statements”) reflect the
consistent application of such accounting principles throughout the periods involved. No financial
statements of any Person other than the Company are required to be included in the consolidated
financial statements of the Company in order to fairly and clearly reflect the financial condition
of the Company.

     3.5 Books and Records. The books of account, minute books, equity transfer books, and
other records of the Company, all of which have been made available to Buyer, are complete and
correct and have been
maintained in accordance with sound business practices, including the maintenance of an adequate
system of internal controls. At the Closing, all of the books and records of the Company will be
in the possession of the Company.

     3.6 Title to Properties; Encumbrances. Part 3.6 of the Disclosure Letter contains
a complete and accurate list of all tangible assets of the Company, including without limitation,
all equipment, furniture, fixtures, real property, leaseholds, or other interests therein. All
assets of the Company are free and clear of all Encumbrances and are not, in the case of real
property, subject to any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except, with respect to all such properties and assets,
(i) mortgages or security interests as set forth in Part 3.6 of the Disclosure Letter,
securing specified liabilities or obligations, with respect to which no default (or event that,
with notice or lapse of time or both, would constitute a default) exists and (ii) liens for current
taxes not yet due.

     3.7 Condition and Sufficiency of Assets. The equipment of the Company is in good operating
condition and repair, and is adequate for the uses to which it is being put, and none of such
equipment is in need of maintenance or repairs except for ordinary, routine maintenance and repairs
that are not material in nature or cost. The assets of the Company are sufficient for the
continued conduct by the Company of its business after the Closing in substantially the same manner
as such business was conducted by Company prior to the Closing.

     3.8 Accounts Receivable. All accounts receivable of the Company (collectively, the
“Accounts Receivable”) represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course of Business. Unless paid prior
to the Closing Date, the Accounts Receivable are or will be as of the Closing Date current and

21

 

collectible net of the respective reserves shown on the Balance Sheet or on the accounting records
of the Company as of the Closing Date (which reserves are adequate and calculated consistent with
past practice). Subject to such reserves, each of the Accounts Receivable either has been or will
be collected in full, without any set-off, within one hundred twenty (120) days after the day on
which it first becomes due and payable. There is no contest, claim, or right of set-off, other
than returns in the Ordinary Course of Business, under any Contract with any obligor of an Accounts
Receivable relating to the amount or validity of such Accounts Receivable. Part 3.8 of the
Disclosure Letter contains a complete and accurate list of all Accounts Receivable as of the
date of the Balance Sheet, which list sets forth the aging of such Accounts Receivable.

     3.9 Inventory. Intentionally Omitted.

     3.10 No Undisclosed Liabilities. Except as set forth in Part 3.10 of the Disclosure Letter, the Company has no
liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except as clearly disclosed in the Financial Statements.

     3.11 Taxes.

     3.11.1 Filings. The Company has filed or caused to be filed (on a timely basis since
December 31, 2004) all Tax Returns that are or were required to be filed by or with respect
to the Company, pursuant to applicable Legal Requirements. Sellers have delivered to Buyer
copies of, and Part 3.11.1 of the Disclosure Letter contains a complete and accurate
list of, all such Tax Returns filed since December 31, 2004. The Company has paid, or made
provision for the payment of, all Taxes that have or may have become due pursuant to those
Tax Returns or otherwise, or pursuant to any assessment received by Sellers or Company.

     3.11.2 Audits. No Tax Returns listed in Part 3.11.1 of the Disclosure Letter
are being or have been audited. In addition to the Tax Returns listed in Part 3.11.1 of
the Disclosure Letter, no other Tax Returns are being audited. There have been no
adjustments to the United States federal and state income Tax Returns filed by the Company
or any group including the Company for all taxable years since the inception of the Company.
Neither Sellers nor Company has given or been requested to give waivers or extensions (or
is or would be subject to a waiver or extension given by any other Person) of any statute of
limitations relating to the payment of Taxes of Company or for which Company may be liable.

     3.11.3 Tax Reserves. There exists no proposed tax assessment against Company. All
Taxes that Company is or was required by Legal Requirements to withhold or collect have been
duly withheld or collected and, to the extent required, have been paid to the proper
Governmental Body or other Person.

     3.11.4 Accuracy. All Tax Returns filed by Company are true, correct, and complete. No
Tax Returns have been filed with Company and any other entity on a consolidated basis and
Company has not had and/or does not currently have any

22

 

relationship with another entity
which would allow or require filing Tax Returns on a consolidated basis.

     3.12 No Material Adverse Change. Since the date of the Balance Sheet, there has not been
any material adverse change in the business, operations, properties, prospects, assets, or
condition of Company, and no event, has occurred or circumstance exists that may result in such a
material adverse change, other than events expressly contemplated by this Agreement.

     3.13 ERISA Representations and Warranties.

     3.13.1 List of Plans. Part 3.13 of the Disclosure Letter contains a true and
complete list of each:

     (a) Profit-sharing, stock bonus, pension, savings or retirement plan or any
employee pension benefit plan within the meaning of ERISA §3(2);

     (b) Bonus, deferred compensation, stock purchase, stock option, severance pay
or incentive pay plan;

     (c) Hospitalization, medical, retiree medical, dental, life , disability, death
benefit, supplemental unemployment benefit, vacation, sick pay, parenting, child
care, or employee welfare benefit plan within the meaning of ERISA §3(1);

     (d) Cafeteria or Section 125 plan, fringe benefit plan including but not
limited to automobiles, sabbaticals, clubs or any item considered a fringe benefit
plan within the meaning of IRC §32;

     (e) Funding arrangement for any such plan, including but not limited to a
voluntary employee benefits association (“VEBA”) within the meaning of IRC
§501(c)(9);

     (f) Any Multi-Employer Plan to which the Company or any Affiliate is
contributing or has ever contributed.

maintained by, sponsored by, contributed to or required to be contributed to (through a collective
bargaining agreement or otherwise) by the Company or an Affiliate for the benefit of any director,
officer, employee or terminated employee of the Company or an Affiliate. Part 3.13 of the
Disclosure Letter indicates which of the above plans constitutes an employee benefit plan
within the meaning of ERISA §3(3), which plans are subject to Title IV of ERISA and which plans are
Multi-Employer Plans.

     3.13.2 Copies of Plans. With respect to each plan listed on Part 3.13 of
the Disclosure Letter, the Company has delivered a true and complete copy of each of the
following documents (to the extent applicable):

     (a) All plan documents or agreements under which the plan is established,
including all amendments;

23

 

     (b) Most recent summary plan description, including all material modifications;

     (c) Three (3) most recent annual reports and actuarial reports (if required
under ERISA or IRC §6039D);

     (d) Most recent report prepared in accordance with Statement of Financial
Accounting Standards No. 87, Employer’s Accounting for Pensions;

     (e) Most recent actuarial report prepared in accordance with Statement of
Financial Accounting Standards No. 106, Employer’s Accounting for Non-Pension
Postretirement Benefits;

     (f) Insurance contracts and administrative service contracts;

     (g) Trust instruments or instruments under which other funding arrangements are
established;

     (h) Most recent determination letter received from the Internal Revenue Service
intended to qualify under IRC § 40 1(a);

     (i) Written communications to all employees or former employees who may be
affected by this transaction regarding its effect on any plan;

     (j) With respect to any plan that is not in writing, a written summary of its
material terms.

     (k) With respect to any plan subject to Title IV of ERISA, a copy of the form
PBGC- 1 filed for each of the three (3) most recent years.

     3.13.3 Title IV Plans. With respect to each plan that is subject to Title IV
of ERISA:

     (a) No material liability (other than premiums due the PBGC under Title IV of
ERISA has been incurred by the Company or any Affiliate that has not been satisfied
in full;

     (b) To the knowledge of the Company, no condition exists that presents a
material risk to the Company or any Affiliate of incurring a material liability
under Title IV or ERISA;

     (c) The PBGC has not instituted proceedings to terminate such plan, and to the
knowledge of the Company, no condition exists that presents a material risk that
such proceedings will be instituted or that would constitute grounds for appointing
a trustee or receiver to administer any such plan;

     (d) Neither the Company nor any Affiliate has filed a Notice of Intent with the
PBGC to terminate any such plan or adopted an amendment to treat any such plan as
terminated;

24

 

     (e) All required premium payments to the PBGC have been paid when No reportable
event, as defined in ERISA §4043, has occurred; Such plan does not meet the
conditions of ERISA §4043(b)(1);

     (f) All costs have been provided for on the basis of consistent methods in
accordance with sound actuarial assumptions and practices; Part 3.13 of the
Disclosure Letter includes for each such plan, as of its last valuation date,
the amount by which its assets exceeded (or were less than) its benefit liabilities
(within the meaning of ERISA §400 1); since the last valuation date, there has
been no amendment or change to the plan that would increase the amount of benefits
thereunder; and to the best knowledge of Company, there has been no event or
occurrence that would cause the excess of assets over benefit liabilities as listed
on Part 3.13 of the Disclosure Letter to be reduced or the amount by which
benefit liabilities exceed assets as listed on Part 3.13 of the Disclosure
Letter to be increased.

     3.13.4 Multi-Employer Plans. With respect to each plan that is a
Multi-Employer Plan:

     (a) Neither the Company nor any Affiliate has completely or partially withdrawn
from any such plan (within the meaning of Subtitle E of Title IV of ERISA) in a
withdrawal with respect to which there is any outstanding liability as of the date
hereof;

     (b) Neither the Company nor any Affiliate has received any notice of any claim
or demand for withdrawal liability or partial withdrawal liability;

     (c) Neither the Company nor any Affiliate has failed to make any required
contributions;

     (d) No such plan is a party to any pending merger or asset or liability
transfer;

     (e) Neither the Company nor any Affiliate has any (or will have by reason of
the transactions contemplated hereby) withdrawal liability by reason of a sale of
assets pursuant to ERISA §4204;

     (f) No notice has been received any such Multi-Employer Plan that it is
reorganization or insolvency pursuant to ERISA §424 1 or §4245 or that it intends to
terminate or has terminated within the meaning of §§4041A or 4042 of ERISA;

     (g) Part 3.13 of the Disclosure Letter contains as of the last
valuation date, the amount of potential withdrawal liability of the Company and all
Affiliates calculated according to the information made available pursuant to ERISA
§4221(e), and identifies the specific obligor; to the best of the Company’s
knowledge, nothing has occurred or is expected to occur which would materially
increase the amount of the total potential withdrawal liability of a specified

25

 

obligor for any such plan over the amount shown on Part 3.13 of the Disclosure
Letter.

     3.13.5 Funding. The funding method used in connection with each plan which is
subject to the minimum funding requirements of ERISA or IRC §412 is acceptable and the
actuarial assumptions used in connection with funding each such plan are reasonable. No
such plan has incurred any accumulated funding deficiency within the meaning of ERISA §302
and IRC §4 12, whether or not waived, as of the last day of the most recent plan year of
such plan prior to the Closing Date. No such plan has failed to make a
required installment under IRC §412(m) by its due date which has not been paid by the
Closing Date and with respect to which any material liability in the form or excise tax or
other penalty currently exists.

     3.13.6 Contributions. All contributions with respect to any plan listed on
Part 3.13 of the Disclosure Letter due prior to the Closing Date or based on
compensation earned or services provided prior to the Closing Date have been made or will be
made prior to the Closing Date.

     3.13.7 Disclosure. All required governmental reports and filings have been
timely submitted. All participant disclosures as required under ERISA or the IRC have been
timely and appropriately distributed. Neither the Company nor any Affiliate has received
any notice of an incomplete or outstanding disclosure obligation.

     3.13.8 Prohibited Transactions. No prohibited transaction within the meaning
of ERISA §406 or IRC §4975 has occurred (or will occur prior to the Closing Date) with
respect to any plan listed on Part 3.13 of the Disclosure Letter which has not been
corrected and with respect to which any outstanding liability to any participant or any
excise tax or liability exists or will exist as of the Closing Date.

     3.13.9 Fiduciary Liability. To the best knowledge of the Company, with respect
to any plan listed on Part 3.13 of the Disclosure Letter, no breach of a fiduciary
duty under ERISA §404 or §405 has occurred which could subject the Company or any Affiliate
to any material liability as a result of such breach as of the Closing Date, and no
violation of ERISA §510 has occurred.

     3.13.10 Plan Participation and Eligibility. The Company and its Affiliates
have properly adopted or contributed to each plan listed on Part 3.13 of the Disclosure
Letter for the benefit of its employees.

     3.13.11 COBRA. Each plan listed on Part 3.13 of the Disclosure Letter
which is a group health plan within the meaning of IRC §5000(b)(1) is in compliance with the
continuation of health care coverage requirements contained in IRC §4980B and ERISA §601 et
seq. A list of participants or beneficiaries who have elected continuation coverage in
accordance with such laws is provided on Part 3.13 of the Disclosure Letter.

     3.13.12 Qualified Plans. Each plan listed on Part 3.13 of the Disclosure
Letter which is intended to be qualified under IRC §401(a) has received a favorable
determination letter from the Internal Revenue Service with respect to such qualification,

26

 

or a determination letter request is pending and the Company agrees to take any necessary
action, including amendment of the plan, in order to obtain a favorable determination
letter. To the best knowledge of the Company, nothing has occurred or, in connection with
the transactions contemplated by this Agreement, will occur which would adversely affect the
qualified status of the plan and its related trust.

     3.13.13 Retiree Benefits. No plan listed on Part 3.13 of the Disclosure
Letter provides benefits, including but not limited to death or medical benefits with
respect to current or former employees of the Company or any Affiliate beyond their
retirement or
other termination of service other than coverage mandated by applicable law or death
benefits or retirement benefits under any employee pension benefit plan within the meaning
of ERISA § 3(2).

     3.13.14 HIPAA. Each plan listed on Part 3.13 of the Disclosure Letter
which is a group health plan within the meaning of IRC §5000(b)(1) and ERISA §706(a) is in
compliance with the requirements contained in IRC Chapter 100, §§9801 et seq. and ERISA
Title IV, Part 7, §§701 et seq., and has complied with the transitional certification rules
in §101(g)(2)(B) and §401(c)(2)(B) of P.L. 104-191, the Health Insurance Portability and
Accountability Act of 1996. The Company has no liability for any excise tax under IRC
§4980D.

     3.13.15 Cafeteria Plans. Each plan listed on Part 3.13 of the Disclosure
Letter which is intended to constitute a “cafeteria plan” as defined in IRC § 125(d) has
been established and administered in compliance with all requirements of IRC § 125.

     3.13.16 Amendments and New Plans. Neither the Company nor any Affiliate shall
adopt any new employee plan, benefit, arrangement or program prior to the Closing Date, nor
amend any existing such plan, benefit, arrangement or program prior to the Closing Date
except as is necessary to bring it into compliance with applicable law or except as required
in order to terminate the 401(k) plan immediately prior to the Closing Date.

     3.13.17 Definitions. As used within this Section, the following terms have the
meanings described below:

     (a) “ERISA” means the Employee Retirement Security Act of 1974, as
amended or any successor statute.

     (b) “IRC” means the Internal Revenue Code of 1986, as amended, or any
successor statute.

     (c) “PBGC” means the Pension Benefit Guaranty Corporation.

     (d) “Affiliate” means any entity, whether incorporated or
unincorporated, which is required to be aggregated with the Company in accordance
with IRC §414(b),(c) or (m), or which, together with the Company, would be
considered a “single employer” within the meaning of ERISA §4001.

27

 

     (e) “Multi-Employer Plan” means a meaning described in ERISA §3(37).

     3.14 Compliance with Legal Requirements; Governmental Authorizations.

     3.14.1 Compliance. Except as set forth in Part 3.14.1 of the Disclosure Letter:

     (a) Company is, and at all times since December 31, 2003 has been, in material
compliance 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;

     (b) no event has occurred or circumstance exists that (with or without notice
or lapse of time) (i) may constitute or result in a violation by Company of, or a
failure on the part of Company to comply with, any Legal Requirement, or (ii) may
give rise to any obligation on the part of Company to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature; and

     (c) Company has not received, at any time since December 31, 2003, any notice
or other communication (whether oral or written) from any Governmental Body or any
other Person regarding (i) any actual, alleged, possible, or potential violation of,
or failure to comply with, any Legal Requirement, or (ii) any actual, alleged,
possible, or potential obligation on the part of Company to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature.

     3.14.2 List of Authorizations. Part 3.14.2 of the Disclosure Letter contains a
complete and accurate list of each Governmental Authorization that is held by the Company,
or that otherwise relates to the business of, or to any of the assets owned or used by,
Company. Each Governmental Authorization so listed is valid and in full force and effect.
Except as set forth in Part 3.14.2 of the Disclosure Letter:

     (a) Company is, and at all times since December 31, 2003 has been, in full
compliance with all of the terms and requirements of each Governmental Authorization
applicable to them which is identified or required to be identified in Part
3.14.2 of the Disclosure Letter;

     (b) no event has occurred or circumstance exists that may (with or without
notice or lapse of time) (i) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any Governmental
Authorization listed or required to be listed in Part 3.14.2 of the Disclosure
Letter, or (ii) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in Part 3.14.2 of the
Disclosure Letter;

     (c) Company has not received, at any time since December 31, 2003, any notice
or other communication (whether oral or written) from any Governmental Body or any
other Person regarding (i) any actual, alleged,

28

 

possible, or potential violation of
or failure to comply with any term or requirement of any Governmental Authorization
listed or required to be listed in Part 3.14.2 of the Disclosure Letter, or
(ii) any actual, proposed, possible, or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to any Governmental
Authorization listed or required to be listed in Part 3.14.2 of the Disclosure
Letter; and

     (d) all applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed in Part 3.14.2 of
the Disclosure Letter 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.

     3.14.3 All Authorizations Necessary. The Governmental Authorizations listed in
Part 3.14.2 of the Disclosure Letter as held by Company collectively constitute all
of the Governmental Authorizations necessary to permit the Company to lawfully conduct and
operate its business in the manner that it has conducted its business prior to the Closing,
and to permit the Company to own and use its assets in the manner in which it currently owns
and uses such assets and which it previously owned and used such assets.

     3.15 Legal Proceedings; Orders.

     3.15.1 Proceedings. Except as set forth in Part 3.15.1 of the Disclosure
Letter, there is no pending Proceeding:

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

     (b) 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 Sellers and Company, (i) no such Proceeding has been Threatened, and (ii)
no event has occurred or circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding. Sellers have delivered to Buyer copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed in Part 3.15.1 of the
Disclosure Letter. The Proceedings listed in Part 3.15.1 of the Disclosure Letter will
not have a material adverse effect on the business, operations, assets, condition, or prospects of
Company.

     3.15.2 Orders. Except as set forth in Part 3.15.2 of the Disclosure Letter:

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

     (b) Sellers are not subject to any Order that relates to the business of, or
any of the assets owned or used by, the Company; and

29

 

     (c) no officer, director, agent, or employee of the Company is subject to any
Order that prohibits such officer, director, member, manager, agent, or employee
from engaging in or continuing any conduct, activity, or practice relating to the
business they currently conduct for the Company.

     3.15.3 Compliance. Except as set forth in Part 3.15.3 of the Disclosure
Letter:

     (a) the Company is, and at all times since December 31, 2003 has been, in full
compliance with all of the terms and requirements of each Order to which it, or any
of the assets owned or used by it, is or has been subject;

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

     (c) Company has not received, at any time since December 31, 2003, any notice
or other communication (whether oral or written) from any Governmental Body or any
other Person regarding any actual, alleged, possible, or potential violation of, or
failure to comply with, any term or requirement of any Order to which the Company or
any of the assets owned or used by the Company, is or has been subject.

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

     3.16.1 Capital. Change in Company’s ownership or capital structure, and other than as
contemplated by this Agreement, no rights have been granted to any person to acquire equity
or any security convertible into equity of the Company;

     3.16.2 Organizational Documents. Amendment to the Organizational Documents of Company;

     3.16.3 Compensation. Payment or increase by Company of any bonuses, salaries, or other
compensation to any member, manager, director, officer, or (except in the Ordinary Course of
Business) employee or entry into any employment, severance, or similar Contract with any
director, officer, member, manager or employee;

     3.16.4 Benefits. Adoption of, or increase in the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or
other employee benefit plan for or with any employees of Company which have not been
approved in writing by Buyer;

     3.16.5 Damage. Damage to or destruction or loss of any of the Company’s assets
(whether or not covered by insurance) materially and adversely affecting the properties,
assets, business, financial condition, or prospects of the Company, taken as a whole;

30

 

     3.16.6 Contracts. Entry into, termination of, or receipt of notice of termination of
(i) any license, third party payor, Management Agreement, credit, or similar
agreement, or (ii) any Contract or transaction involving a total remaining commitment
by or to Company of at least $25,000;

     3.16.7 Disposition of Assets. Sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of any asset or property of Company or
mortgage, pledge, or imposition of any lien or other encumbrance on any of the Company’s
assets, including the sale, lease, or other disposition of any of the Intellectual Property
Rights;

     3.16.8 Cancellation of Rights. Cancellation or waiver of any claims or rights with a
value to Company in excess of $25,000;

     3.16.9 Accounting methods. Material change in the accounting methods used by Company;

     3.16.10 Agreements. Agreement, whether oral or written, by Company to do any of the
foregoing; or

     3.16.11 Loans. Loans to the Company or other extensions of credit to Company or
granting of any security interest or lien with respect to any assets of the Company.

     3.17 Contracts; No Defaults.

     3.17.1 List of Contracts. Part 3.17.1 of the Disclosure Letter contains a
complete and accurate list, and Sellers have delivered to Buyer true and complete copies,
of:

     (a) each Applicable Contract that involves performance of services or delivery
of goods or materials by Company of an amount or value in excess of $25,000;

     (b) each Applicable Contract that involves performance of services or delivery
of goods or materials to Company of an amount or value in excess of $25,000,
including the Management Agreement;

     (c) each Applicable Contract that was not entered into in the Ordinary Course
of Business and that involves expenditures or receipts of Company in excess of
$25,000;

     (d) each lease, rental or occupancy agreement, license, installment and
conditional sale agreement, and other Applicable Contract affecting the ownership
of, leasing of, title to, use of, or any leasehold or other interest in, any real or
personal property of Company (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate payments of less
than $25,000 and with terms of less than one year);

31

 

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

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

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

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

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

     (j) each power of attorney that is currently effective and outstanding with
respect to Company;

     (k) each Applicable Contract entered into that contains or provides for an
express undertaking by Company to be responsible for consequential damages;

     (l) each Applicable Contract for capital expenditures in excess of $25,000;

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

     (n) each Applicable Contract pursuant to which the Company has been extended
credit in an amount in excess of $25,000 in the aggregate from any Person, including
without limitation all promissory notes, loan agreements, mortgages, deeds of trust,
security agreements, guarantees or equipment leases; and

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

     Part 3.17.1 of the Disclosure Letter sets forth reasonably complete details concerning
such Contracts, including the parties to the Contracts, the amount of the remaining commitment of
the Company under the Contracts, and the office of the Company where details relating to the
Contracts are located.

32

 

     3.17.2 No Rights of Sellers or Restrictions. Except as set forth in Part 3.17.2 of
the Disclosure Letter:

     (a) No Seller (and Related Persons of any Seller) has any rights under, nor may
acquire any rights under, any Contract that relates to the business of, or any of
the assets owned or used by, Company; and

     (b) no officer, director, member, manager, agent, employee, consultant, or
contractor of Company is bound by any Contract that purports to limit the ability of
such officer, director, member, manager, agent, employee, consultant, or contractor
to (i) engage in or continue any conduct, activity, or practice relating to the
business of Company, or (ii) assign to Company or to any other Person any rights to
any invention, improvement, or discovery.

     3.17.3 Enforceable. Except as set forth in Part 3.17.3 of the Disclosure
Letter, each Contract identified or required to be identified in Part 3.17.1 of the
Disclosure Letter is in full force and effect and is valid and enforceable in accordance
with its terms.

     3.17.4 Compliance With Contracts. Except as set forth in Part 3.17.4 of the
Disclosure Letter:

     (a) Company is, and at all times since December 31, 2003 has been, in full
compliance with all applicable terms and requirements of each Contract under which
Company has or had any obligation or liability or by which Company or any of the
assets owned or used by Company is or was bound;

     (b) to the Knowledge of Sellers and Company, each other Person that has or had
any obligation or liability under any Contract under which Company has or had any
rights is, and at all times since December 31, 2003 has been, in full compliance
with all applicable terms and requirements of such Contract;

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

     (d) Company has not given to or received from any other Person, at any time
since December 31, 2003, any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or breach of, or
default under, any Contract.

     3.17.5 Renegotiation. There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to Company under
current or completed Contracts with any Person and no such Person has made written demand
for such renegotiation, other than may have been requested or required by Buyer.

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

     3.18 Insurance.

     3.18.1 Delivery of Copies. Sellers have delivered to Buyer:

     (a) true and complete copies of all policies of insurance providing coverage to
the Company; and

     (b) true and complete copies of all pending applications for such policies of
insurance.

Part 3.18.1 of the Disclosure Letter lists each of the policies identified above.

     3.18.2 Description of Certain Arrangements. Part 3.18.2 of the Disclosure
Letter describes:

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

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

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

     3.18.3 Claims Experience. For Company, Part 3.18.3 of the Disclosure Letter
sets forth, by year, for the current policy year and each of the three preceding policy
years:

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

     (b) a statement describing each claim under an insurance policy for an amount
in excess of $25,000, which sets forth:

     (i) the name of the claimant;

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

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

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

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     3.18.4 Status of Policies. Except as set forth on Part 3.18.4 of the Disclosure
Letter:

     (a) Each of the policies listed in Part 3.18.1 of the Disclosure
Letter:

     (i) are valid, outstanding, and enforceable;

     (ii) are issued by an insurer that is financially sound and reputable;

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

     (iv) are sufficient for compliance with all Legal Requirements and
Contracts to which Company is a party or by which Company is bound;

     (v) will continue in full force and effect following the consummation
of the Contemplated Transactions; and

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

     (b) Neither Sellers nor Company have received (i) any refusal of coverage or
any notice that a defense will be afforded with reservation of rights, or (ii) any
notice of cancellation or any other indication that any insurance policy is no
longer in full force or effect or will not be renewed or that the issuer of any
policy is not willing or able to perform its obligations thereunder.

     (c) The Company has paid all premiums due, and has otherwise performed all of
its obligations, under each policy listed in Part 3.18.1 of the Disclosure
Letter.

     (d) The Company has given notice to the insurer of all claims that may be
insured thereby.

     (e) Each employee of the Company is covered by medical, dental, long term
disability, life insurance or workers compensation insurance pursuant to insurance
policies which are or may be in the name of Healthcare Logistics, LLC
(“HCL”) and Company employees are entitled to coverage and benefits under
such policies in the same amount or manner as employees of HCL during the period
prior to the Closing Date.

     (f) The Company is covered by general liability and E&O insurance policies
which are or may be in the name of HCL and Company is entitled to coverage and
benefits under such policies to the same extent as HCL.

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     3.19 Environmental Matters. Except as set forth in Part 3.19 of the Disclosure
Letter:

     3.19.1 Compliance With Environmental Laws. Each of the Sellers and Company are
currently and have been at all times in full compliance with each Environmental Law or
Occupational Safety and Health Law and any property owned, operated, leased or sublet by the
Company has been at all times in full compliance with each Environmental Law. Neither any
Seller nor Company (i) have engaged in or are currently engaged in, any Hazardous Activity,
(ii) have previously stored, transported, manufactured or generated or are currently
storing, transporting, manufacturing or generating, any Hazardous Materials, or (iii) have
caused or been subject to any Release of Hazardous Materials with respect to any property
owned, leased, subleased or operated by any Seller or Company.

     3.20 Employees. Part 3.20 of the Disclosure Letter contains a complete and
accurate list of the following information for each independent contractor, employee, member,
manager or director of Company, including each employee or independent contractor on leave of
absence or layoff status: employer; name; job title; status (employee, independent contractor,
director) current compensation paid or payable and any change in compensation since December 31,
2006; vacation accrued; and service credited for purposes of vesting and eligibility to participate
under any plans listed in Part 3.13 of the Disclosure Letter.

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

     3.20.2 Retired Employees. Part 3.20 of the Disclosure Letter also contains a
complete and accurate list of the following information for each retired independent
contractor, employee, manager, member or director of any Seller or Company, or their
dependents, receiving benefits or scheduled to receive benefits in the future: name,
pension benefit, pension option election, retiree medical insurance coverage, retiree
life insurance coverage, and other benefits.

     3.20.3 Employment Agreements. Part 3.20.2 of the Disclosure Letter contains a
complete and accurate list of (and Sellers have delivered true and accurate copies of) each
agreement pursuant to which Company employs, retains or engages any Person as an employee or
independent contractor to provide services to Company, including any employment agreement,
and any agreements executed in connection with such

36

 

employment, retention or engagement
including without limitation any non-compete agreement, nondisclosure agreement or
non-solicitation agreement.

     3.21 Labor Relations; Compliance. Neither any Seller nor Company has been or is a party to
any collective bargaining or other labor Contract. There has not been, there is not presently
pending or existing, and to Sellers’ Knowledge there is not Threatened, (i) any strike, slowdown,
picketing, work stoppage, or employee grievance process, (ii) any Proceeding against or affecting
any Seller or Company relating to the alleged violation of any Legal Requirement pertaining to
labor relations or employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any
comparable Governmental Body, (iii) organizational activity, or other labor or employment dispute
against or affecting any Seller or Company or its premises, or (iv) any application for
certification of a collective bargaining agent. Each of the Sellers and the Company have complied
in all respects with all Legal Requirements relating to employment, equal employment opportunity,
nondiscrimination, non-harassment, immigration, wages, hours, benefits, collective bargaining, the
payment of social security and similar taxes, occupational safety and health, and plant closing.

     3.22 Intellectual Property.

     3.22.1 Marks. All Marks that are owned by the Company (“Owned Marks”) are set
forth on Part 3.22.1 of the Disclosure Letter.

     (a) The Company is the owner of all right, title and interest in and to each of
the Owned Marks, free and clear of any and all liens, encumbrances, covenants,
conditions and restrictions or other adverse claims or interests of any kind or
nature (subject to written licenses granted in the ordinary course of business), and
neither the Sellers nor the Company have received any notice or claim (whether
written, oral or otherwise) challenging the Company’s complete and exclusive
ownership of all Owned Marks or claiming that any other Person has any claim of
legal or beneficial ownership with respect thereto;

     (b) Part 3.22.1 of the Disclosure Letter contains a complete and
accurate specific list of all agreements or arrangements pertaining to Marks used in
the business of the Company which are not exclusively owned by the Company (the
“Licensed Marks”).

     (c) no Seller has received any notice or claim (whether written, oral or
otherwise) challenging or questioning the validity or enforceability of any of the
Owned Marks or indicating an intention on the part of any Person to bring a claim
that any Owned Mark is invalid, is unenforceable or has been misused and, to the
Company’s or the Sellers’ Knowledge, no Owned Mark has been otherwise challenged or
threatened in any way;

     (d) the Company has taken all reasonable steps to protect the Company’s rights
in and to the Marks, in each case in accordance with standard industry practice;

37

 

     (e) the Company has not granted to any Person any right, license or permission
to exercise any rights to use any Marks; and

     (f) no other Person has infringed or is infringing in any material respect in
regards to any of the Owned Marks.

     3.22.2 Owned Patents. No Patents are owned by the Company. To the Knowledge of the
Sellers and the Company, there is no Patent or Patent application issued to or filed by any
other Person, which Patent or Patent application is potentially interfering with the
Company’s business. None of the process or know-how or other technology used or practiced
by the Company in the business infringes or is alleged to infringe any Patent or any other
Intellectual Property Right of any other Person.

     3.22.3 Owned Copyrights. Part 3.22.3 of the Disclosure Letter:

     (a) lists each copyright owned by the Company (collectively, the “Owned
Copyrights”). The Company is the owner of all right, title and interest in and
to each of the Owned Copyrights, free and clear of any and all liens, encumbrances,
covenants, conditions and restrictions or other adverse claims or interests of any
kind or nature (subject to written licenses granted in the ordinary course of
business), and neither the Sellers nor the Company have received any notice or claim
(whether written, oral or otherwise) challenging the Company’s complete and
exclusive ownership of all Owned Copyrights or claiming that any other Person has
any claim of legal or beneficial ownership with respect thereto;

     (b) Part 3.22.3 of the Disclosure Letter contains a complete and
accurate specific list of all agreements or arrangements pertaining to copyrights
used in the business of the Company which are not exclusively owned by the Company
(the “Licensed Copyrights”).

     (c) no Seller has received any notice or claim (whether written, oral or
otherwise) challenging or questioning the validity or enforceability of any of the
Owned Copyrights or indicating an intention on the part of any Person to bring a
claim that any Owned Copyright is invalid, is unenforceable or has been misused and,
to the Company’s or the Sellers’ Knowledge, no Owned Copyright has been otherwise
challenged or threatened in any way;

     (d) the Company has taken all reasonable steps to protect the Company’s rights
in and to the Copyrights, in each case in accordance with standard industry
practice;

     (e) the Company has not granted to any Person any right, license or permission
to exercise any rights under any of the Copyrights;

     (f) no other Person has infringed or is infringing in any material respect in
regards to any of the Owned Copyrights; and

     (g) none of the subject matter of any Owned Copyrights nor any other work of
authorship fixed in a tangible medium that is copied, modified, displayed

38

 

or
distributed in connection with the conduct by the Company of its business, including
without limitation, any Owned Software, infringes, violates or conflicts with, or is
alleged to infringe, violate or conflict with, any copyright or any other
Intellectual Property Right or other industrial property right of any other Person.

     3.22.4 Trade Secrets. The Company has taken reasonable precautions to protect the
secrecy, confidentiality and value of all of its material Trade Secrets (“Company Trade
Secrets”). Except as may be set forth in Part 3.22.4 of the Disclosure Letter:

     (a) the Company has the unrestricted right to use all of the Company Trade
Secrets and none of the Company Trade Secrets is subject to any liens, encumbrances,
covenants, conditions and restrictions or other adverse claims or interests of any
kind or nature (subject to written licenses granted in the ordinary course of
business),

     (b) neither any Seller nor the Company have received any notice or claim
(whether written, oral or otherwise) challenging the Company’s absolute and
unrestricted right to use all of the Company Trade Secrets or claiming that any
other Person has any claim of any kind with respect thereto;

     (c) none of the Company Trade Secrets has been misappropriated from another
Person, or is alleged to have been, misappropriated from any other Person and none
of the Company Trade Secrets infringes, violates or conflicts with, or is alleged to
infringe, violate or conflict with, any patent, trade secret or any other
Intellectual Property Right or other industrial property rights of any third party;

     (d) with respect to each Company Trade Secret in accordance with standard
industry practice, the documentation relating thereto 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 special knowledge or memory of others; and

     (e) except under appropriate confidentiality obligations that, to the Knowledge
of the Company or the Sellers, have been fully observed and performed, there has
been no disclosure by any Sellers or the Company of material confidential
information or other Company Trade Secrets.

     3.22.5 Software. Part 3.22.5 of the Disclosure Letter sets forth a complete
and accurate list of all of the Software (excluding licensed software that is contained in
standard desktop applications and is available through commercial distributors or in
consumer retail stores). Part 3.22.5 of the Disclosure Letter specifically
identifies all Software that is owned exclusively by the Company (the “Owned
Software”) and all Software that is used by the Company in the conduct of the business
that is not exclusively owned by the Company (the “Licensed Software”) (excluding
licensed software that is contained in standard desktop applications and is available
through commercial distributors or in consumer retail stores). Except as may be set forth
in Part 3.22.5 of the Disclosure Letter:

39

 

     (a) the Company is the owner of all right, title and interest in and to all
Owned Software, including without limitation all copyrights, Trade Secrets and other
Intellectual Property Rights relating thereto, free and clear of any and all liens,
encumbrances, covenants, conditions and restrictions or other adverse claims or
interests of any kind or nature (subject to written licenses granted in the ordinary
course of business),

     (b) neither any Seller nor the Company have received any notice or claim
(whether written, oral or otherwise) challenging the Company’s complete and
exclusive ownership of all Owned Software and all such Intellectual Property Rights
relating thereto or claiming that any other Person has any claim of legal or
beneficial ownership with respect thereto;

     (c) neither any Seller nor the Company have assigned, licensed, transferred or
encumbered any of its rights in or to any Software, including without limitation any
copyrights, Trade Secrets or other Intellectual Property Rights with respect to any
Owned Software, to any Person;

     (d) neither any Seller nor the Company have licensed the source code of any
Owned Software or otherwise made it available to any Person outside of the Company,
and the Company has treated such source code, and the data associated therewith, as
confidential and proprietary business information, and have taken all reasonable
steps to protect the same as trade secrets of the Company;

     (e) any Person identified in Part 3.22.5 of the Disclosure Letter as
having received any such source code or data is bound by an appropriate
confidentiality and non-disclosure obligation with respect thereto and neither any
Seller nor the Company is aware of any material breach of any such agreement or any
Threatened disputes or disagreements with respect thereto;

     (f) the Company has lawfully acquired the right to use the Licensed Software,
as it is used in the conduct of the business of the Company as presently conducted,
and has not exercised any rights in respect of any Licensed Software, including
without limitation, any reproduction, distribution or derivative work rights,
outside the scope of any license expressly granted by the Person from which the
right to use such Licensed Software was obtained; and

     (g) no royalties, fees, honoraria or other payments are payable by the Company
to any Person by reason of the ownership, use, sale, licensing, distribution or
other exploitation of any Software or any Intellectual Property Right.

     3.22.6 Performance of Existing Software Products. Except as may be set forth in
Part 3.22.6 of the Disclosure Letter, all Software products that have been used by
the Company in connection with the performance of services for any of its customers perform
in all material respects free of significant bugs or programming errors.

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     3.22.7 Agreements in Respect of Licensed Technology. Part 3.22.7 of the Disclosure
Letter contains a complete and accurate specific list of all agreements and arrangements
pertaining to the Licensed Software (excluding licensed software that is contained in
standard desktop applications and available through commercial distributors or in consumer
retail stores) (collectively, “Licensed Software Agreements”) and a complete and
accurate specific list of all agreements and arrangements pertaining to any other technology
used or practiced by the Company as to which a Person other than the Company owns the
applicable Intellectual Property Rights (collectively, “Other Licensed Technology
Agreements” and, together with Licensed Software Agreements, the “Licensed
Technology Agreements”). Part 3.22.7 of the Disclosure Letter sets forth a
complete and accurate list of all royalty obligations of the Company under any Licensed
Technology Agreements. Except as may be set forth in Part 3.22.7 of the Disclosure
Letter:

     (a) all Licensed Technology Agreements are in full force and effect, and the
Company is not in material breach thereof, nor is it aware of any claim or
information to the contrary;

     (b) all Licensed Technology Agreements will be maintained by the Company in
full force and effect through the Closing;

     (c) there are no outstanding and no Threatened disputes or disagreements
involving any Seller or the Company with respect to any Licensed Technology
Agreement;

     (d) the rights licensed under each Licensed Technology Agreement shall be
exercisable by the Company on and after the Closing to the same extent as exercised
by the Company prior to the Closing;

     (e) the Licensed Technology Agreements together expressly confer on the Company
valid and enforceable rights under or in respect of all of the Intellectual Property
Rights that are not owned exclusively by Company and that are used or practiced in
the Company’s business (collectively, the “Licensed Intellectual Property”); and

     (f) neither the execution and delivery of this Agreement, nor the consummation
of the Contemplated Transactions, will conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default
under, or result in the impairment of any rights under, any Licensed Technology
Agreement.

     3.22.8 Sufficiency of Owned and Licensed Intellectual Property. Except as set forth in
Part 3.22.8 of the Disclosure Letter, the Marks, Owned Copyrights, Trade Secrets,
Owned Software and Licensed Intellectual Property, including without limitation the
foregoing to the extent they apply to any Software, constitute all of the Intellectual
Property Rights, which are necessary for the conduct of the business as presently conducted
or contemplated to be conducted by Company and constitute all of the Intellectual Property
Rights necessary to operate such business after the Closing in

41

 

substantially the same manner
as the business heretofore has been operated by the Company.

     3.22.9 Rights of Third Parties. Except as may be set forth in Part 3.22.9 of the
Disclosure Letter, the Company is not, nor during the three-year period prior to the
date hereof has the Company been, a party to any action or Proceeding, and there is not
pending or, during the one-year period prior to date hereof Threatened, any action or
Proceeding that involves or involved a claim of infringement, misappropriation or other
wrongful use or exploitation, either (i) by Company against any other Person or (ii) by any
Person against Company, of any Intellectual Property Right used or exploited by any Seller
or Company in the conduct of its business, nor, to the Knowledge of the Sellers, is there
any reasonable basis therefor. Except as may be set forth in Part 3.22.9 of the
Disclosure Letter, no Intellectual Property Right is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the use thereof by any Seller
(subject to written licenses granted in the ordinary course of business).

     3.22.10 Sufficiency of Software. The Software owned by the Company is free of any
disabling codes or instructions (a “Disabling Code”), and any virus or other
intentionally created, undocumented contaminant (a “Contaminant”), that may, or may
be used to, access, modify, delete, damage or disable the Systems or that may result in
damage thereto. The Company has taken reasonable steps and implemented reasonable procedures
to ensure that its internal computer systems (consisting of hardware, software, databases or
embedded control systems, “Systems”) are free from Disabling Codes and Contaminants.
The Company has in place appropriate disaster recovery plans, procedures and facilities and
has taken all reasonable steps to safeguard its Systems and restrict unauthorized access
thereto.

     3.23 Certain Payments. Neither any Seller nor Company nor any director, member, manager,
officer, agent, or employee of any Seller or Company, nor any other Person associated with or
acting for or on behalf of any Seller or Company, have directly or indirectly (i) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any
Person, private or public, regardless of form, whether in money, property, or services (A) to
obtain favorable treatment in securing business, (B) to pay for favorable treatment for business
secured, (C) to obtain special concessions or for special concessions already obtained, for or in
respect of any Seller or Company, or (D) in violation of any Legal Requirement, (ii) established or
maintained any fund or asset that has not been recorded in the books and records of the Sellers or
Company.

     3.24 Disclosure.

     3.24.1 Complete and Accurate. No representation or warranty of Sellers or Company in
this Agreement and no statement in the Disclosure Letter omits to state a material fact
necessary to make the statements herein or therein, in light of the circumstances in which
they were made, not misleading. No notice given pursuant to Section 5.1.5 will contain any
untrue statement or omit to state a material fact necessary to make the statements therein
or in this Agreement, in light of the circumstances in which they were made, not misleading.

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     3.24.2 Other Facts. There is no fact known to Sellers that has specific application to
Sellers or Company (other than general economic or industry conditions) and that materially
adversely affects or, as far as Sellers can reasonably foresee, materially threatens, the
assets, business, prospects, financial condition, or results of operations of the Company
that has not been set forth in this Agreement or the Disclosure Letter.

     3.25 Relationships with Related Persons. Neither Sellers nor any Related Person of any
Seller has any interest in any property (whether real, personal, or mixed and whether tangible or
intangible), used in or pertaining to the Company’s businesses. Neither Sellers nor any Related
Person of any Seller has owned (of record or as a beneficial owner) an equity interest or any other
financial or profit interest in, a Person that has (i) had business dealings or a material
financial interest in any transaction with Company, other than business dealings or transactions
conducted in the Ordinary Course of Business with the Company at substantially prevailing market
prices and on substantially prevailing market terms and which is disclosed in Part 3.25 of the
Disclosure Letter, or (ii) engaged in competition with Company with respect to any line of the
products or services of Company (a “Competing Business”) in any market, except for less
than one percent of the outstanding capital stock of any Competing Business that is publicly traded
on any recognized exchange or in the over-the-counter market. Except as set forth in Part 3.25
of the Disclosure Letter, neither Sellers nor any Related Person of any Seller is a party to
any Contract with, or has any claim or right against, Company.

     3.26 Brokers or Finders. Neither the Company or Company’s agents nor Sellers or Sellers’
agents, have incurred obligations or liabilities, contingent or otherwise, for brokerage or
finders’ fees or agents’ commissions or other similar payment in connection with this Agreement,
except for fees to be payable solely by the Seller to their advisors.

4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Sellers 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.

     4.2 Authority; No Conflict.

     4.2.1 Authority. This Agreement constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms. Upon the execution and
delivery by Buyer of the documents set forth in Section 2.6 to be executed by Buyer
(collectively, the “Buyer’s Closing Documents”), the Buyer’s Closing Documents will
constitute the legal, valid, and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms. Buyer has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and the Buyer’s Closing Documents
and to perform its obligations under this Agreement and the Buyer’s Closing Documents.

     4.2.2 Conflict. Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated Transactions by Buyer

43

 

will give any
Person the right to prevent, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:

     (a) any provision of Buyer’s Organizational Documents;

     (b) any resolution adopted by the members as managers of Buyer;

     (c) any Legal Requirement or Order to which Buyer may be subject; or

     (d) any Contract to which Buyer is a party or by which Buyer may be bound.

Buyer is not and will not be required to 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.

     4.3 Investment Intent. Buyer is acquiring the Membership Interests for its own account and
not with a view to their distribution within the meaning of Section 2(11) of the Securities Act.

     4.4 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.

     4.5 Brokers or Finders. Buyer and its officers and agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in
connection with this Agreement and will indemnify and hold Sellers harmless from any such payment
alleged to be due by or through Buyer as a result of the action of Buyer or its officers or agents.

5. COVENANTS PRIOR TO CLOSING DATE.

     5.1 Covenants of Sellers.

     5.1.1 Access and Investigation. Between the Execution Date and the Closing Date,
Sellers will, and will cause the Company and its Representatives to, (i) afford Buyer and
its Representatives (collectively, “Buyer’s Advisors”) full and free access to the
Company’s personnel, properties (including subsurface testing), contracts, books and
records, and other documents and data, (ii) furnish Buyer and Buyer’s Advisors with copies
of all such contracts, books and records, and other existing documents and data as Buyer may
reasonably request, and (iii) furnish Buyer and Buyer’s Advisors with such additional
financial, operating, and other data and information as Buyer may reasonably request.

     5.1.2 Operation of the Businesses. Between the date of the Balance Sheet and the
Closing Date, Sellers will, and will cause the Company to:

44

 

     (a) conduct the business of the Company only in the Ordinary Course of
Business, except for the payment of bonuses and distributions to the Sellers,
subject to Section 5.1.2(e) below;

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

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

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

     (e) maintain the Company’s Net Working Capital in an amount of not less than
$1,500,000 as of both June 30, 2007 and the Closing Date, of which not less than
$500,000 shall be cash or cash equivalents, subject to the understanding that Net
Working Capital amounts in excess of $1,500,000 as of June 30, 2007 may be
distributed to the Sellers (as bonuses or distributions on equity), but that no
increases in Net Working Capital following June 30, 2007 may be paid or
distributed in any manner to the Sellers or any other person, except that an
amount equal to not more than 20% of the estimated increase in Net Working Capital
of the Company for the period from June 30, 2007 to the Closing Date (the
“Estimated Tax Adjustment Distribution”) may be distributed to the Sellers.
Within 90 days following the Closing Date, Sellers shall submit to Buyer a copy of
the final Federal tax return of the Company for the period from January 1, 2007
through the Closing Date (which shall include a balance sheet of the Company as of
the Closing Date) along with a written accounting of the calculation of the actual
change in the Net Working Capital for the period from June 30, 2007 to the Closing
Date. The “Actual Tax Adjustment Amount” is equal to 20% of the actual
increase in Net Working Capital of the Company for the period from June 30, 2007 to
the Closing Date. On the Reconciliation Date, Buyer shall pay to the Sellers, as
their respective interest may appear in Schedules 2.3.1 and 2.3.2, an amount
equal to the amount by which the Actual Tax Adjustment Amount exceeds the Estimated
Tax Adjustment Distribution. If the Estimated Tax Adjustment Distribution exceeds
the Actual Tax Adjustment Amount, then on the Reconciliation Date, each Seller shall
pay such excess to Buyer in their respective proportions as set forth in
Schedules 2.3.1 and 2.3.2. Any dispute which may arise from the calculation
of the Actual Tax Adjustment Amount shall be treated in the same manner as a dispute
relating to the calculation of Net Working Capital under Section 2.9.3.

     5.1.3 Negative Covenant. Except as otherwise expressly permitted by this Agreement,
between the date of the Balance Sheet and the Closing Date, Sellers will not, and will cause
the Company not to, without the prior consent of Buyer, take any affirmative action, or fail
to take any reasonable action within their or its control, as a

45

 

result of which any of the
changes or events listed in Section 3.16 will occur or is likely to occur.

     5.1.4 Required Approvals. Prior to the Closing, Sellers will, and will cause the
Company to, make all filings required by Legal Requirements to be made by them in order to
consummate the Contemplated Transactions and to secure any and all consents required
hereunder. Prior to the Closing, Sellers will, and will cause the Company to cooperate with
Buyer with respect to all filings that Buyer elects to make or is required by Legal
Requirements to make in connection with the Contemplated Transactions.

     5.1.5 Notification. Between the Execution Date and the Closing Date, Sellers will
promptly notify Buyer in writing if Sellers or Company becomes aware of any fact or
condition that causes or constitutes a Breach of any of Sellers’ representations and
warranties as of the Execution Date, or if Sellers or Company become aware of the occurrence
after the Execution Date of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such representation or
warranty had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition require any change
in the Disclosure Letter if the Disclosure Letter were dated the date of the occurrence or
discovery of any such fact or condition, Sellers will promptly deliver to Buyer a supplement
to the Disclosure Letter specifying such change. During the same period, Sellers will
promptly notify Buyer of the occurrence of any Breach of any
covenant of Sellers in this Section 5 or of the occurrence of any event that may make
the satisfaction of the conditions in Section 7 impossible or unlikely.

     5.1.6 Payment of Indebtedness by Related Persons. Except as expressly provided in this
Agreement, Sellers will cause all indebtedness owed to Company by Sellers or any Related
Person of Sellers to be paid in full prior to Closing.

     5.1.7 No Negotiation. Until such time, if any, as this Agreement is terminated
pursuant to Section 9, Sellers will not, and will cause Company and each of their
Representatives not to, directly or indirectly solicit, initiate, or encourage any inquiries
or proposals from, discuss or negotiate with, provide any non-public information to, or
consider the merits of any unsolicited inquiries or proposals from, any Person (other than
Buyer) relating to any transaction involving the sale of the business or assets (other than
in the Ordinary Course of Business) of Company, or any of equity interest in Company, or any
merger, consolidation, business combination, or similar transaction involving Company.

     5.1.8 Best Efforts. Between the date of the Balance Sheet and the Closing Date,
Sellers will use their Best Efforts to cause the conditions in Sections 7 and 8 to be
satisfied.

     5.2 Covenants of Buyer.

     5.2.1 Approvals of Governmental Bodies. As promptly as practicable after the date of
this Agreement, Buyer will, and will cause each of its Related Persons to, make all filings
required by Legal Requirements to be made by them to consummate the

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Contemplated
Transactions. Prior to the Closing Date, Buyer will, and will cause each Related Person to,
(i) cooperate with Sellers with respect to all filings that Sellers are required by Legal
Requirements to make in connection with the Contemplated Transactions, and (ii) cooperate
with Sellers in obtaining all consents identified in Part 3.2 of the Disclosure
Letter and Section 2.5.5 of this Agreement; provided that this Agreement will not
require Buyer to dispose of or make any change in any portion of its business or to incur
any other burden to obtain a Governmental Authorization.

     5.2.2 Best Efforts. Prior to the Closing Date, Buyer will use its Best Efforts to cause
the conditions in Sections 7 and 8 to be satisfied.

6. POST CLOSING COVENANTS.

     6.1 Section 754 Election. Each Seller and Buyer hereby agree that, upon the consummation
of purchase of the Acquired Membership Interests by Buyer at the Closing, the Company will make an
election under Section 754 of the IRC to allow Buyer to step up Buyer’s basis in the Company, and
each member of the Company shall take or cause to be taken all actions necessary to effect such
election.

     6.2 Tax Returns. Sellers shall be responsible for and shall prepare all Tax Returns of the
Company with respect to the taxable period up to and including the Closing Date and shall provide
the Company an opportunity to review such Tax Returns before they are filed. The Company’s books
shall be closed for income tax purposes as of the Closing Date for the purpose of allocating
taxable profits and loss for the taxable year within which such date occurs. The Company shall be
responsible for and shall prepare and file all Tax Returns of the Company applicable to the taxable
period beginning after the Closing Date. All parties to this Agreement shall cooperate in good
faith and make available all books and records of the Company necessary to cause such Tax Returns
to be prepared and filed in a timely manner.

     6.3 Audit. Sellers hereby acknowledge that an audit of the Company’s operations and
finances shall be performed by an accounting firm designated by Buyer (for purposes of this
Section, the “Auditors”) following the Closing and that Sellers will, and will cause the
Company and its Representatives to, (i) afford Buyer and its Auditors full and free access to the
Company’s personnel, properties, contracts, books and records, and other documents and data, (ii)
furnish Buyer and its Auditors with copies of all such contracts, books and records, and other
existing documents and data as Buyer or its Auditors may reasonably request, and (iii) furnish
Buyer and its Auditors with such representation letters and additional financial, operating, and
other data and information as Buyer or its Auditors may reasonably request in order to complete
such audit. Sellers expressly acknowledge that they have the power and authority to comply with
the foregoing obligations even if access to books, records, personnel, etc. necessary to comply may
be controlled by or located on premises of Healthcare Logistics, LLC or another company.

7. CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE.

     7.1 Closing. Buyer’s obligation to purchase the Acquired Membership Interest and to take
the other actions required to be taken by Buyer at the Closing is subject to the satisfaction,

47

 

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):

     7.1.1 Accuracy of Representations. All of Sellers’ representations and warranties in
this Agreement (considered collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material respects as of the
Execution Date, and must be accurate in all material respects as of the Closing Date as if
made on the Closing Date, without giving effect to any supplement to the Disclosure Letter.

     7.1.2 Seller’s Performance.

     (a) Perform Obligations. All of the covenants and obligations that
Sellers 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), must have been duly performed and complied
with in all material respects.

     (b) Delivery of Documents. Each document required to be delivered
pursuant to Section 2.5 must have been delivered, and each of the other covenants
and obligations in Section 5.1 must have been performed and complied with in all
respects.

     7.1.3 Consents. Each of the Consents identified in either Section 2.5.5. or Part
3.2 of the Disclosure Letter, must have been obtained and must be in full force and
effect.

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

     (a) Opinion Letter. An opinion of Greenbaum, Rowe, Smith & Davis LLP
dated the Closing Date, in the form of Exhibit 7.1.4;

     (b) Other Documents. Such other documents as Buyer may reasonably
request for the purpose of (i) evidencing the accuracy of any of Sellers’
representations and warranties, (ii) evidencing the performance by Sellers of, or
the compliance by Sellers with, any covenant or obligation required to be performed
or complied with by Sellers, (iii) evidencing the satisfaction of any condition
referred to in this Section 7, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.

     7.1.5 No Proceedings. Since the date of this Agreement, there must not have been
commenced or Threatened against Buyer, or against any Person affiliated with Buyer, any
Proceeding (i) involving any challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, or (ii) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions.

     7.1.6 No Claim Regarding Ownership or Sale Proceeds. There must not have been made or
Threatened by any Person any claim asserting that such Person (i) is

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the holder or the
beneficial owner of, or has the right to acquire or to obtain beneficial ownership of, any
membership interest of, or any other voting, equity, or ownership interest in, the Company,
or (ii) is entitled to all or any portion of the Purchase Price payable for the Acquired
Membership Interests.

     7.1.7 No Prohibition. Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice or lapse of
time), materially contravene, or conflict with, or result in a material violation of, or
cause Buyer or any Person affiliated with Buyer to suffer any material adverse consequence
under, (i) any Legal Requirement or Order applicable to Company, or (ii) any Legal
Requirement or Order that has been published, introduced, or otherwise formally proposed by
or before any Governmental Body.

     7.1.8 No Material Adverse Effect. There shall be no change, effect or occurrence that
has, or is reasonably likely to have individually or in the aggregate, a material adverse
impact on the business, operations, results of operations or condition (financial or
otherwise) of the Company or the assets of the Company.

     7.1.9 Due Diligence. Buyer shall have completed Buyer’s due diligence with respect to
the Company, and Buyer, in its sole discretion, shall be satisfied with the results of such
investigation.

8. CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE.

     8.1 Closing. Seller’s obligation to sell their respective Membership Interest and the
Sellers’ obligation to take the other actions required to be taken by Sellers at or prior to 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 Sellers, in whole or in part):

     8.1.1 Accuracy of Representations. All of Buyer’s representations and warranties in
this Agreement (considered collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material respects as of the
Execution Date and must be accurate in all material respects as of the Closing Date as if
made on the Closing Date.

     8.1.2 Buyer’s Performance.

     (a) Perform Obligations. 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), must have been performed and complied with in
all material respects.

     (b) Delivery of Documents. Buyer must have delivered each of the
documents required to be delivered by Buyer pursuant to Section 2.6 and the Closing
Consideration.

     8.1.3 Additional Documents. Buyer must have caused to be delivered to Sellers such
other documents as Sellers may reasonably request for the purpose of

49

 

(i) evidencing the
accuracy of any representation or warranty of Buyer, (ii) evidencing the performance by
Buyer of, or the compliance by Buyer with, any covenant or obligation required to be
performed or complied with by Buyer, (iii) evidencing the satisfaction of any condition
referred to in this Section 8, or (iv) otherwise facilitating the consummation of any of the
Contemplated Transactions.

     8.1.4 No Injunction. There must not be in effect any Legal Requirement or any
injunction or other Order that (i) prohibits the sale of the Membership Interests by the
Sellers to Buyer, and (ii) has been adopted or issued, or has otherwise become
effective, since the Execution Date.

9. TERMINATION.

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

     9.1.1 Breach. By either Buyer or Sellers if a material Breach of any provision of this
Agreement has been committed by the other party and such Breach has not been waived;

     9.1.2 Failure of Condition.

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

     (b) by Sellers, if any of the conditions in Section 8 has not been satisfied as
of the Closing Date, or if satisfaction of such a condition is or becomes impossible
(other than through the failure of Sellers to comply with Sellers’ obligations under
this Agreement) and Sellers have not waived such condition on or before the Closing
Date;

     9.1.3 Mutual Consent. By mutual consent of Buyer and Sellers; or

     9.1.4 Time. By either Buyer or Sellers if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply fully with
its obligations under this Agreement) on or before August 6, 2007, or such later date as the
parties may agree upon.

     9.2 Effect of Termination. Each party’s right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies. If this Agreement is terminated pursuant
to Section 9.1 prior to the Closing Date, all further obligations of the parties under this
Agreement will terminate, except that the obligations in Sections 11.1 and 11.3 will survive;
provided, however, that if this Agreement is terminated by a party because of the Breach of the
Agreement by the other party or because one or more of the conditions to the terminating party’s
obligations under this Agreement is not satisfied as a result of the other party’s failure to
comply

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with its obligations under this Agreement, the terminating party’s right to pursue all legal
remedies will survive such termination unimpaired.

10. INDEMNIFICATION; REMEDIES.

     10.1 Right to Indemnification Not Affected by Knowledge. The right to indemnification,
payment of Damages or other remedy based on such representations, warranties, covenants, and
obligations will 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, except to the extent
of the actual knowledge of the party seeking indemnification. For purposes of the foregoing
exception, “actual knowledge” of a fact or other matter by the Buyer shall mean those facts or
matters of which any one of the following individuals are aware: Don Klumb, Micky Woo, Jason Wade
and Nancy Morrow. Actual knowledge shall not include imputed knowledge, deemed knowledge or
knowledge of a fact or matter that a person could be expected to discover in the course of
investigation (but did not discover such fact or matter for any reason). Actual knowledge of
conflicting information regarding a fact or matter which is not definitive shall not be considered
actual knowledge of the true status of a fact or matter. The foregoing notwithstanding, the waiver
of any condition based on 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,
payment of Damages, or other remedy based on such representations, warranties, covenants, and
obligations. Further, the actual knowledge of Buyer with respect to any representation or warranty
contained in Sections 3.1, 3.3 and 3.18 of this Agreement, shall not in any manner limit the
Buyer’s right to indemnification and payment of Damages with respect to such representations and
warranties.

     10.2 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 2.5.6, and any other certificate or document delivered pursuant to
this Agreement will survive the Closing Date for the following periods:

     10.2.1 Tax Claims. The representations and warranties of Sellers contained in Section
3.11 and any corresponding Part of the Disclosure Letter or any supplement thereto or any
certificate delivered in connection with such Section of the Agreement (the “Tax
Claims”) shall survive until the expiration of the last statute of limitations with
respect to such Tax Claims (the “Tax Claims Survival Period”).

     10.2.2 Three Year Claims. The representations and warranties contained in Sections
3.1, 3.2, 3.3, 3.4 and 3.10 and any corresponding Parts of the Disclosure Letter or any
supplement thereto or any certificate delivered in connection with such Sections of the
Agreement (collectively, the “Three Year Claims”) shall survive for a period of
three (3) years following the Closing Date (the “Three Year Survival Period”).

     10.2.3 Environmental Claims. The representations and warranties contained in Section
3.19 and any corresponding Part of the Disclosure Letter or any supplement
thereto or any certificate delivered in connection with the such Section of the
Agreement (the “Environmental Claims”) shall survive until the expiration of the
last statute of

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limitation applicable to such Environmental Claims (the “Environmental
Claims Survival Period”).

     10.2.4 General Claims. All other representations and warranties contained in this
Agreement, the Disclosure Letter and any supplements to such Disclosure Letter and any
certificates or documents delivered pursuant to this Agreement, including those of Buyer
(“General Claims”) shall survive for two (2) years following the Closing Date (the
“General Claims Survival Period”).

     10.3 Indemnification and Payment of Damages by Sellers. Sellers will indemnify and hold
harmless Buyer, the Company, and their respective Representatives, members, controlling persons,
and affiliates (collectively, the “Indemnified Persons”) for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage (including incidental and
consequential damages), expense (including costs of investigation and defense and reasonable
attorneys’ fees) or diminution of value, whether or not involving a third-party claim
(collectively, “Damages”), arising, directly or indirectly, from or in connection with:

     10.3.1 Breach. Any untruth, inaccuracy, error in or misstatement of any representation
or warranty made by any Seller in this Agreement (without giving effect to any supplement to
the Disclosure Letter), the Disclosure Letter, the supplements to the Disclosure Letter, or
any other certificate or document delivered by any Seller pursuant to this Agreement.

     10.3.2 Covenant. Any Breach by any Seller of any covenant or obligation of such Seller
in this Agreement.

     10.3.3 Product/Service. Any product shipped or manufactured by, or any services
provided by, the Company prior to the Closing Date.

     10.3.4 Brokerage Fee. Any claim by any Person for brokerage or finder’s fees or
commissions or similar payments based upon any agreement or understanding alleged to have
been made by any such Person with either Sellers or Company (or any Person acting on their
behalf) in connection with any of the Contemplated Transactions.

The remedies provided in this Section 10.3 will not be exclusive of or limit any other remedies
that may be available to Buyer or the other Indemnified Persons. With respect to the foregoing
indemnification obligations, the Sellers shall each be responsible for their portion of any
obligation in proportion to their percentage ownership interest in the Company prior to Closing.
For purposes of the foregoing indemnification each of Steve Kalafer and Bill Pollock agree that
they will each be individually liable for one half of any obligations of RVA Holdings. Such
individual obligations shall in the aggregate be limited to an amount equal to that portion of the
Purchase Price allocable to RVA Holdings. The indemnification obligations of the Sellers other
than RVA Holdings shall also be limited to that portion of the Purchase Price allocable to each of
them.

     10.4 Indemnification and Payment of Damages by Buyer. Buyer will indemnify and hold
harmless Sellers, and will pay to Sellers the amount of any Damages arising, directly or
indirectly, from or in connection with (i) any Breach of any representation or warranty made by

52

 

Buyer in this Agreement or in any certificate delivered by Buyer pursuant to this Agreement, (ii)
any Breach by Buyer of any covenant or obligation of Buyer in this Agreement, or (iii) 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 its behalf) in connection with any of the Contemplated Transactions.

     10.5 Time Limitations. If the Closing occurs, Sellers will have no liability for
indemnification with respect to any representation or warranty, or covenant or obligation of
Sellers contained in this Agreement, unless Buyer notifies any Seller of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by Buyer prior to the
expiration of the applicable Survival Period. If the Closing occurs, Buyer will have no liability
for indemnification with respect to any representation or warranty, or covenant or obligation of
Buyer contained in this Agreement, unless a Seller notifies Buyer of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by Seller, prior to the
expiration of the General Claims Survival Period.

     10.6 Limitations on Amount — Sellers. Sellers will have no liability for indemnification
with respect to Three Year Claims or General Claims until the total of all Damages with respect to
such matters exceeds $75,000, and then only for the amount by which such Damages exceed $75,000.
Sellers will have no liability for indemnification with respect to Tax Claims until the total of
all Damages with respect to such matters exceeds $10,000, and then only for the amount by which
such Damages exceed $10,000. There shall be no such limitation on the liability of Sellers for
Environmental Claims.

     10.7 Limitations on Amount — Buyer. Buyer will have no liability for indemnification with
respect to General Claims until the total of all Damages with respect to such matters exceeds
$75,000, and then only for the amount by which such Damages exceed $75,000.

     10.8 Right of Set-off. Upon notice to Sellers specifying in reasonable detail the basis
for such set-off, Buyer may set off any amount to which it may be entitled under this Section 10
against amounts otherwise payable (either in cash or securities) to Sellers pursuant to the terms
of this Agreement, except for compensation due under any Employment Agreement. The exercise of
such right of set-off by Buyer in good faith, whether or not ultimately determined to be justified,
will not constitute an event of default under this Agreement. Neither the exercise of nor the
failure to exercise such right of set-off 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.

     10.9 Procedure for Indemnification — Third Party Claims.

     10.9.1 Notice of Claim. Promptly after receipt by an indemnified party of notice of
the commencement of any Proceeding against it, such indemnified party will, if a claim is to
be made against an indemnifying party under such Section, give notice to the indemnifying
party of the commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the defense of
such action is prejudiced by the indemnified party’s failure to give such notice.

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     10.9.2 Defense. If any Proceeding referred to in Section 10.9.1 is brought against an
indemnified party and it gives notice to the indemnifying party of the commencement of such
Proceeding, the indemnifying party will, unless the claim is a Tax Claim, be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the indemnified party determines
in good faith that joint representation would be inappropriate, or (ii) the indemnifying
party fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the indemnified party of
its election to assume the defense of such Proceeding, the indemnifying party will not, as
long as it diligently conducts such defense, be liable to the indemnified party under this
Section 10 for any fees of other counsel or any other expenses with respect to the defense
of such Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the defense of a Proceeding, (i) it will
be conclusively established for purposes of this Agreement that the claims made in that
Proceeding are within the scope of and subject to indemnification; (ii) no compromise or
settlement of such claims may be effected by the indemnifying party without the indemnified
party’s consent unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any other claims
that may be made against the indemnified party, and (B) the sole relief provided is monetary
damages that are paid in full by the indemnifying party; and (iii) the indemnifying party
will have no liability with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not, within ten (10) days after the indemnified
party’s notice is given, give notice to the indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party will be bound by any determination made
in such Proceeding or any compromise or settlement effected by the indemnified party.

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

     10.9.4 Jurisdiction. Sellers hereby consent to the non-exclusive jurisdiction of any
court in which a Proceeding 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 Sellers
with respect to such a claim anywhere in the world.

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

11. GENERAL PROVISIONS.

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

     11.2 Public Announcements. Any public announcement or similar publicity with respect to
this Agreement or the Contemplated Transactions will be issued, if at all, at such time and in such
manner as Buyer determines. Unless consented to by Buyer in advance or required by Legal
Requirements, prior to the Closing, Sellers shall, and shall cause the Company to, keep this
Agreement strictly confidential and may not make any disclosure of this Agreement to any Person.
Sellers and Buyer will consult with each other concerning the means by which the Company’s
employees, customers, and suppliers and others having dealings with the Company will be informed of
the Contemplated Transactions, and Buyer will have the right to be present for any such
communication.

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

     If the Contemplated Transactions are not consummated, each party will return or destroy as
much of such written information as the other party may reasonably request. Whether or not the
Closing takes place, Sellers waive, and will upon Buyer’s request cause the Company to waive, any
cause of action, right, or claim arising out of the access of Buyer or its representatives to any
trade secrets or other confidential information of the Company except for the intentional
competitive misuse by Buyer of such trade secrets or confidential information.

     11.4 Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (i) delivered by hand,
(ii) sent by telecopier (with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (iii) when received by the addressee, if sent by a

55

 

nationally recognized overnight delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):

Sellers:

Maffei, Masiello & Company, PA

5 Cold Hill Road South

P.O. Box 210

Mendham, New Jersey 07945

Attention: Stephen Maffei, CPA

Facsimile No.: 973-543-7822

with a copy to:

Greenbaum, Rowe, Smith & Davis LLP

99 Wood Avenue South

P.O. Box 5600

Woodbridge, New Jersey 07095

Attention: W. Raymond Felton

Facsimile No.: (732) 476-2671

Buyer:

The Management Network Group, Inc.

7300 College Boulevard, Suite 302

Overland Park, Kansas 66210

Attention: Micky Woo / Don Klumb

Facsimile No.: (913) 451-1845

with a copy to:

Shughart Thomson & Kilroy, P.C.

120 W. 12th Street, Suite 1600

Kansas City, Missouri 64105

Attention: Jacob W. Bayer, Jr.

Facsimile No.: 816-817-0103

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

56

 

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

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

     11.8 Entire Agreement and Modification. This Agreement supersedes all prior agreements
between the parties with respect to its subject matter (including the Letter of Intent between
Buyer and Sellers dated May 8, 2007) and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement between the parties
with respect to its subject matter. This Agreement may not be amended except by a written
agreement executed by the party to be charged with the amendment.

     11.9 Disclosure Letter.

     11.9.1 Format. The disclosures in the Disclosure Letter, and those in any Supplement
thereto, must relate only to the representations and warranties in the Section of the
Agreement to which they expressly reference and not to any other representation or warranty
in this Agreement.

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

     11.9.3 Delivery. The complete and final Disclosure Letter shall be delivered to Buyer
not less than five (5) business days prior to the Closing Date, and in the event a
supplement to the Disclosure Letter is delivered pursuant to Section 5.1.5, the Buyer may
delay the Closing Date for up to three (3) business days following such delivery.

     11.10 Assignments, Successors, and No Third-Party Rights. Neither party may assign any of
its rights under this Agreement without the prior consent of the other parties, except that Buyer
may assign any of its rights under this Agreement to any Subsidiary of Buyer. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects upon,

57

 

and inure to the
benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to
in this Agreement will be construed to give any Person other than the parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and assigns.

     11.11 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.

     11.12 Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect
its construction or interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless otherwise expressly
provided, the word “including” does not limit the preceding words or terms.

     11.13 Time of Essence. With regard to all dates and time periods set forth or referred to
in this Agreement, time is of the essence.

     11.14 Governing Law. This Agreement will be governed by the laws of the State of Kansas
without regard to conflicts of laws principles.

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

[Remainder of page intentionally left blank]

58

 

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

	 	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	SELLERS:
	The Management Network Group, Inc.	 	 	 	RVA Holdings, LLC,

a New Jersey limited liability company
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Mark Markowitz
	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dawn Saitta
	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dale Reynolds
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	COMPANY:
	 	 	 	 	 	 	RVA Consulting, LLC,
	 	 	 	 	 	 	a New Jersey limited liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 

59

 

     The undersigned, each join this Agreement solely for the purpose of acknowledging their
individual indemnification obligation per Section 10.3 of this Agreement.

	 	 	 	 	 
	 
	 

	 	 	 	 
	 

	 	 	 	Steve Kalafer
	 
	 	 	 	 
	 
	 

	 	 	 	 
	 

	 	 	 	Bill Pollock

60

 

PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. REDACTED PORTIONS ARE INDICATED WITH THE NOTATION “[***]”

Schedule 2.3.1

Allocation of Closing Consideration

Among Majority Members

[***]exv10w1

 

EXECUTION COPY

ASSET PURCHASE AND SALE AGREEMENT

BY AND AMONG

CHEESE & PROTEIN INTERNATIONAL LLC

AS SELLER

AND

LAND O’LAKES, INC.

AND

SAPUTO CHEESE USA INC.

AS BUYER

AND

SAPUTO INC.

Dated as of February 20, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	Article 1 DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 2 SALE AND PURCHASE OF PURCHASED ASSETS; ASSUMPTION OF ASSUMED
OBLIGATION	 	 	8	 
	 

	 	 	2.1	 	 	Purchased Assets
	 	 	8	 
	 

	 	 	2.2	 	 	Excluded Assets
	 	 	9	 
	 

	 	 	2.3	 	 	Nonassignable Contracts and Permits
	 	 	9	 
	 

	 	 	2.4	 	 	Assumed Obligations
	 	 	10	 
	 

	 	 	2.5	 	 	Excluded Obligations
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 3 PURCHASE PRICE AND PAYMENT	 	 	11	 
	 

	 	 	3.1	 	 	Purchase Price
	 	 	11	 
	 

	 	 	3.2	 	 	Post-Closing Adjustment to Purchase Price
	 	 	11	 
	 

	 	 	3.3	 	 	Inventory
	 	 	12	 
	 

	 	 	3.4	 	 	Allocation of Purchase Price
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 4 REPRESENTATIONS AND WARRANTIES OF SELLER AND LOL	 	 	13	 
	 

	 	 	4.1	 	 	Organization and Authorization
	 	 	13	 
	 

	 	 	4.2	 	 	Capitalization
	 	 	13	 
	 

	 	 	4.3	 	 	No Government Authorization Required
	 	 	13	 
	 

	 	 	4.4	 	 	Effect of Agreement
	 	 	13	 
	 

	 	 	4.5	 	 	Third Party Consents
	 	 	14	 
	 

	 	 	4.6	 	 	Financial Statements
	 	 	14	 
	 

	 	 	4.7	 	 	Trade Receivables
	 	 	14	 
	 

	 	 	4.8	 	 	Condition of Assets
	 	 	14	 
	 

	 	 	4.9	 	 	Sufficiency of Assets
	 	 	15	 
	 

	 	 	4.10	 	 	Intellectual Property
	 	 	15	 
	 

	 	 	4.11	 	 	Permits and Orders
	 	 	17	 
	 

	 	 	4.12	 	 	Sales Agreement with Davisco Cheese
	 	 	17	 
	 

	 	 	4.13	 	 	Contracts and Other Data
	 	 	17	 
	 

	 	 	4.14	 	 	640 Pound Block Contract
	 	 	17	 
	 

	 	 	4.15	 	 	Insurance
	 	 	17	 
	 

	 	 	4.16	 	 	Employees and Benefit Plans
	 	 	18	 
	 

	 	 	4.17	 	 	Labor Disputes; Compliance
	 	 	18	 
	 

	 	 	4.18	 	 	Litigation
	 	 	19	 
	 

	 	 	4.19	 	 	No Undisclosed Liabilities
	 	 	19	 
	 

	 	 	4.20	 	 	Compliance with Laws
	 	 	19	 
	 

	 	 	4.21	 	 	Taxes
	 	 	19	 
	 

	 	 	4.22	 	 	Related Party Transactions
	 	 	20	 
	 

	 	 	4.23	 	 	Environmental Matters
	 	 	20	 
	 

	 	 	4.24	 	 	Brokers and Finders
	 	 	21	 
	 

	 	 	4.25	 	 	Claims
	 	 	21	 
	 

	 	 	4.26	 	 	Product Liability; Warranties
	 	 	21	 
	 

	 	 	4.27	 	 	Conduct of Business Since January 1, 2007
	 	 	21	 
	 

	 	 	4.28	 	 	Major Customers and Suppliers
	 	 	22	 
	 

	 	 	4.29	 	 	Dissolution of GVDP
	 	 	22	 
	 

	 	 	4.30	 	 	Ancillary Agreements
	 	 	23	 

-i-

 

	 	 	 	 	 	 	 	 	 	 	 
	Article 5 REPRESENTATIONS AND WARRANTIES OF BUYER AND SAPUTO	 	 	23	 
	 

	 	 	5.1	 	 	Organization, Power
	 	 	23	 
	 

	 	 	5.2	 	 	Corporate Authorization; Binding Effect
	 	 	23	 
	 

	 	 	5.3	 	 	No Government Authorization Required
	 	 	23	 
	 

	 	 	5.4	 	 	Brokers and Finders
	 	 	23	 
	 

	 	 	5.5	 	 	Effect of Agreement
	 	 	23	 
	 

	 	 	5.6	 	 	Financial Capability
	 	 	23	 
	 

	 	 	5.7	 	 	Misrepresentations and Omissions
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 6 PRE-CLOSING COVENANTS OF SELLER AND LOL	 	 	24	 
	 

	 	 	6.1	 	 	Conduct of Business
	 	 	24	 
	 

	 	 	6.2	 	 	Wastewater Sampling
	 	 	25	 
	 

	 	 	6.3	 	 	Additional Negative Covenants
	 	 	25	 
	 

	 	 	6.4	 	 	Required Approvals
	 	 	25	 
	 

	 	 	6.5	 	 	No Negotiation
	 	 	25	 
	 

	 	 	6.6	 	 	Financial Statements
	 	 	25	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 7 OTHER COVENANTS OF BUYER SELLER AND LOL	 	 	25	 
	 

	 	 	7.1	 	 	Access to Information; Inspections
	 	 	25	 
	 

	 	 	7.2	 	 	Title Evidence Closing Fees and Proration of Utilities
	 	 	26	 
	 

	 	 	7.3	 	 	Motor Vehicles
	 	 	27	 
	 

	 	 	7.4	 	 	Tax Matters
	 	 	27	 
	 

	 	 	7.5	 	 	Confidentiality
	 	 	29	 
	 

	 	 	7.6	 	 	Payments Received
	 	 	29	 
	 

	 	 	7.7	 	 	Satisfaction of Conditions
	 	 	29	 
	 

	 	 	7.8	 	 	Change of Name
	 	 	30	 
	 

	 	 	7.9	 	 	HSR Act
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER	 	 	30	 
	 

	 	 	8.1	 	 	Accuracy of Representations and Warranties
	 	 	30	 
	 

	 	 	8.2	 	 	Compliance with Agreements and Covenants
	 	 	30	 
	 

	 	 	8.3	 	 	No Injunctions
	 	 	30	 
	 

	 	 	8.4	 	 	No Material Adverse Effect
	 	 	30	 
	 

	 	 	8.5	 	 	Ancillary Agreements
	 	 	31	 
	 

	 	 	8.6	 	 	HSR Act
	 	 	31	 
	 

	 	 	8.7	 	 	Actions and Corporate Proceedings
	 	 	31	 
	 

	 	 	8.8	 	 	Consents
	 	 	32	 
	 

	 	 	8.9	 	 	Deliveries by Seller
	 	 	32	 
	 

	 	 	8.10	 	 	Emission Reduction Credits
	 	 	33	 
	 

	 	 	8.11	 	 	Title Insurance
	 	 	33	 
	 

	 	 	8.12	 	 	Estoppel Certificates
	 	 	33	 
	 

	 	 	8.13	 	 	Bond Obligation Satisfaction
	 	 	33	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND LOL	 	 	33	 
	 

	 	 	9.1	 	 	Accuracy of Representations and Warranties
	 	 	33	 
	 

	 	 	9.2	 	 	Compliance with Agreements and Covenants
	 	 	33	 
	 

	 	 	9.3	 	 	No Injunctions
	 	 	33	 
	 

	 	 	9.4	 	 	Deliveries by Buyer
	 	 	33	 
	 

	 	 	9.5	 	 	HSR Act
	 	 	34	 

-ii-

 

	 	 	 	 	 	 	 	 	 	 	 
	Article 10 EMPLOYEES AND BENEFIT PLANS	 	 	34	 
	 

	 	 	10.1	 	 	General
	 	 	34	 
	 

	 	 	10.2	 	 	Absent Employees
	 	 	34	 
	 

	 	 	10.3	 	 	Seller’s Plans
	 	 	35	 
	 

	 	 	10.4	 	 	Buyer’s Plans
	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 11 CLOSING	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 12 TERMINATION	 	 	36	 
	 

	 	 	12.1	 	 	Termination
	 	 	36	 
	 

	 	 	12.2	 	 	Effect of Termination
	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 13 INDEMNIFICATION	 	 	36	 
	 

	 	 	13.1	 	 	Indemnification by Seller and LOL
	 	 	36	 
	 

	 	 	13.2	 	 	Limitations upon Seller’s and LOL’s Indemnification Obligations
	 	 	37	 
	 

	 	 	13.3	 	 	Indemnification by Buyer and Saputo
	 	 	38	 
	 

	 	 	13.4	 	 	Procedure
	 	 	39	 
	 

	 	 	13.5	 	 	Payment
	 	 	39	 
	 

	 	 	13.6	 	 	Sole Remedy
	 	 	39	 
	 

	 	 	13.7	 	 	No Third Party Beneficiary Claims
	 	 	40	 
	 

	 	 	13.8	 	 	Not Applicable to Fraud or Ancillary Agreements
	 	 	40	 
	 

	 	 	13.9	 	 	Adjustment to Purchase Price for Actual Current Transferred Assets
	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 14 MISCELLANEOUS	 	 	41	 
	 

	 	 	14.1	 	 	Disclosure Schedules
	 	 	41	 
	 

	 	 	14.2	 	 	Signage
	 	 	41	 
	 

	 	 	14.3	 	 	Expenses
	 	 	41	 
	 

	 	 	14.4	 	 	Amendment
	 	 	41	 
	 

	 	 	14.5	 	 	Interpretation
	 	 	41	 
	 

	 	 	14.6	 	 	Notices
	 	 	41	 
	 

	 	 	14.7	 	 	Waivers
	 	 	42	 
	 

	 	 	14.8	 	 	Successors and Assigns
	 	 	42	 
	 

	 	 	14.9	 	 	Publicity
	 	 	42	 
	 

	 	 	14.10	 	 	Further Assurances
	 	 	42	 
	 

	 	 	14.11	 	 	Severability
	 	 	42	 
	 

	 	 	14.12	 	 	Entire Understanding
	 	 	43	 
	 

	 	 	14.13	 	 	Governing Law; Jurisdiction; Waiver of Jury Trial
	 	 	43	 
	 

	 	 	14.14	 	 	No Third Party Beneficiaries
	 	 	43	 
	 

	 	 	14.15	 	 	Counterparts
	 	 	43	 

-iii-

 

LIST OF EXHIBITS

	 	 	 	 	 
	Exhibit A

	 	—
	 	Non-Competition Agreement
	Exhibit B

	 	—
	 	Product Off-Take Agreement (Denmark)
	Exhibit C

	 	—
	 	Milk Supply Agreement
	Exhibit D

	 	—
	 	Cheese Purchase Agreement
	Exhibit E

	 	—
	 	Stirred Curd Agreement
	Exhibit F

	 	—
	 	Whey Supply Agreement
	Exhibit G

	 	—
	 	Cream Supply Agreement
	Exhibit H

	 	—
	 	Cheese Production Agreement
	Exhibit I

	 	—
	 	Permeate Supply Agreement
	Exhibit J

	 	—
	 	Bill of Sale
	Exhibit K

	 	—
	 	Assignment and Assumption Agreement
	Exhibit L

	 	—
	 	Grant Deed for each parcel of Owned Real Estate
	Exhibit M

	 	—
	 	Cheese By-product Services Agreement
	Exhibit N

	 	—
	 	Form of Seller’s Legal Opinion
	Exhibit O

	 	—
	 	Form of Buyer’s Legal Opinion

-iv-

 

ASSET PURCHASE AND SALE AGREEMENT

     THIS ASSET PURCHASE AND SALE AGREEMENT is made as of the 20th day of February, 2007, by and
among Cheese & Protein International LLC, a Delaware limited
liability company (“Seller”), and
Saputo Cheese USA Inc., a Delaware corporation
(“Buyer”) and Land O’Lakes, Inc. a cooperative
organized under the laws of Minnesota (“LOL”) and Saputo Inc. a corporation organized under the
Canada Business Corporations Act (“Saputo”). Together. Seller, Buyer, LOL and Saputo may be
referred to as the “Parties,’’ individually, a “Party.”

RECITALS

     WHEREAS, Seller is in the business of producing, processing, marketing, selling and
distributing various dairy products;

     WHEREAS, LOL was engaged in the cheese shredding and blending business via the operations
conducted at its GVDP subsidiary (the “GVDP Business”);

     WHEREAS, GVDP was liquidated pursuant to the Articles of Liquidation and the Plan of
Liquidation attached hereto as Schedule 4.29 and, pursuant to such plan, all of GVDP’s assets and
liabilities were contributed and transferred to CPI prior to the date of this Agreement;

     WHEREAS, subject to the terms and conditions contained in this Agreement, Buyer desires to
purchase from Seller and Seller desires to sell and assign to Buyer substantially all of the
assets owned, leased and used by Seller and substantially all of the assets owned, leased and used
in the conduct of the business of manufacturing, shredding, blending, selling, marketing and
distributing mozzarella cheese, provolone cheese and dairy by-products conducted by Seller at its
two facilities located at 800 East Paige, Tulare, California (CPI) and 1025 East Bardsley Avenue,
Tulare, California (GVDP), which includes the GVDP Business (“Business”) and Buyer is willing to
assume certain obligations of the Business;

     WHEREAS, Seller is a direct subsidiary of LOL, LOL has knowledge and information regarding
the operations of the Business deemed important to Buyer’s understanding and willingness to
proceed with the Contemplated Transactions and LOL will directly benefit from the Contemplated
Transactions;

     WHEREAS, LOL agrees to guaranty the obligations of Seller as set forth herein; and

     WHEREAS, Saputo agrees to guaranty the obligations of Buyer as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing which are contractual in nature and not
mere recital, and the mutual warranties, representations, covenants and agreements herein
contained, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby further
agree as follows:

AGREEMENT

ARTICLE 1

DEFINITIONS

     For purposes of this Agreement, the defined terms in this Article 1 have the meanings set
forth below:

 

 

     “Absent Employees” shall mean Company Employees absent from active work as of the Effective
Time due to short-term disability, long-term disability or a work-related condition subject to
workers compensation.

     “Actual
Transferred Current Assets” shall have the meaning set forth on Schedule
3.2(a).

     “Affiliates” as used with respect to one of the parties, shall refer to any other Person that
controls, is controlled by or is under common control with such party; and for purposes of this
definition “control” shall refer to the direct or indirect ownership of a majority of the equity
interests in an entity.

     “Adjusted Base Purchase Price” shall mean the Purchase Price adjusted on the closing date for
any difference between the Required Transferred Current Assets and the Projected Transferred
Current Assets.

     “Agreement” shall mean this Asset Purchase and Sale Agreement, including all exhibits and
schedules attached to this Agreement, which are incorporated as part of this Agreement, as it may
be amended, supplemented or modified from time to time by mutual written agreement of the Parties.

     “Ancillary Agreements” shall mean those agreements set forth in Section
8.5.

     “Assumed Obligations” shall have the meaning set forth in Section
2.4.

     “Books
and Records” shall have the meaning set forth in Section
2.1(a)(4).

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

     “Business Day” shall mean any day of the year other than (1) any Saturday or Sunday, or (2)
any other day on which banks located in either Toronto or New York are closed for business.

     “Business Financial Statements” shall have the meaning set forth in Section
4.6.

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

     “Buyer’s Employees” shall have the meaning set forth in Section
10.1.

     “Cash” shall mean all cash, certificates of deposit, bank accounts and other cash
equivalents, together with all accrued but unpaid interest on the certificates, bank accounts and
cash equivalents.

     “Closing” shall mean the consummation of the transactions contemplated in this Agreement.

     “Closing Date” shall mean the date the Closing takes place in accordance with Article 11.

     “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act, as amended.

     “Code” shall mean the Internal Revenue Code of 1986, as amended, and the temporary and final
regulations promulgated under the Code.

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

     “Confidential Information” shall mean (a) any data or information of Seller or GVDP, other
than Trade Secrets, which has value to the Business, or (b) any data or information of LOL, other
than Trade Secrets, which is directly related to the Business. Excluded from this definition is
data or information that

- 2 -

 

is
generally known to competitors or individuals outside of Seller, LOL and GVDP, is considered
general business know-how of the industry or is not known as a result of disclosure by a third
party.

     “Confidentiality Agreement” shall mean the Confidentiality Agreement, dated December 1,
2006, between LOL and Saputo.

     “Contemplated Transactions” shall mean the transactions contemplated in this Agreement.

     “Continuation Period” shall have the meaning set forth in Section 10.1.

     “Contract” shall mean any contract, lease, sublease, easement, license, sales order, purchase
order, supply agreement, assignment, or any other agreement, commitment, understanding or promise
whether oral or written, other than Permits.

     “Conveyance Documents” shall have the meaning set forth in Section 8.9(a).

     “CPI” shall mean Cheese & Protein International LLC.

     “Cross Link Contracts” shall mean those agreements identified as cross link contracts on
Schedule 4.13.

     “Deeds of Trust” shall mean the deeds of trust and other Encumbrances set forth in
Schedule 4.8(b)(i)(2).

     “Disclosure Schedule” shall mean that document delivered titled as the Disclosure Schedule to
the Agreement.

     “EC” shall have the meaning set forth in Section 4.23.

     “EDD” shall have the meaning set forth in Section 7.4(f)(2).

     “Effective Time” shall mean 12:01 a.m., Pacific Time, on the Closing Date.

     “Emission Reduction Credits” shall mean those credits for reductions or offsets of actual
emissions, recognized by the San Joaquin Air Pollution Control District and utilized by Seller to
obtain or maintain compliance with any air Permits.

     “Encumbrances” shall mean mortgages, deeds of trust, liens (statutory or otherwise), security
interests, claims, licenses, options, conditional sales contracts, assessments, easements,
covenants, reservations, restrictions, rights-of-way, charges and encumbrances.

     “Environment” shall mean soil, land surface, or subsurface strata, surface waters,
groundwater, drinking water supply, stream sediments, ambient air, plant and animal life and any
other environmental medium or natural resource regulated under Environmental Law.

     “Environmental Condition” shall mean (i) the Release of any Hazardous Material, known or
unknown, on, under or emanating from the Real Property, on or before the Closing Date, (ii) the
presence of any Hazardous Material, known or unknown, on, under or emanating from the Real
Property, on or before the Closing Date in violation of Environmental Law; (iii) the violation(s)
of Environmental Law(s) by Seller or related to ownership of the Purchased Assets or the operation
of the Business, in each case, occurring prior to the Closing Date; or (iv) the off-site disposal
of any Hazardous Material by or on behalf of Seller or in connection with the operation of the
Business prior to the Closing.

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     “Environmental Law” shall mean any Law relating to the protection of safety, health or the
Environment, including without limitation federal, state or local law (including common law),
statute, code, ordinance, rule, regulation, or Permit relating to pollution or protection of the
Environment or natural resources, applicable to the Business or the Purchased Assets, and includes
without limitation the Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”), 42 U.S.C. § 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801
et seq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Clean
Water Act, 33, U.S.C. § 1251 et seq., the Clean Air Act 33, U.S.C. § 2601 et seq., the Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. § 136 et seq., the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.
and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., as those laws have been amended
or supplemented, and the regulations promulgated pursuant to those laws, and all analogous state or
local statutes.

     “Equipment and Fixed Assets”shall have the meaning set forth in Section 2.1(a)(l).

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

     
“Excluded Assets” shall have the meaning set,
forth in Section 2.2. 

      “Excluded
Obligations” shall have the meaning set forth in Section 2.5(b). 

     
“FICA” shall have the
meaning set forth in Section 7.4(e). 

        “Governmental Authority” shall mean:

     (a) any federal, state, provincial, municipal or other government body;

     (b) any subdivision, department, bureau, agency, commission, instrumentality or
authority of any of the foregoing governments or bodies;

     (c) any quasi-governmental body exercising any regulatory, expropriation or taxing
authority under or for the account of any of the foregoing governments or bodies; or

     (d) any judicial, arbitration or administrative court, grand jury or commission.

     “GVDP” shall mean Golden Valley Dairy Products.

     “Hazardous
Material” shall mean any waste, pollutant, contaminant, hazardous or toxic
substance or waste, special waste, wastewater, or any constituent of any hazardous or toxic
substance or waste which is regulated by any Environmental Law due to its properties of being
toxic, hazardous, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, or
mutagenic, including, without limitation, petroleum and petroleum products or byproducts, friable
asbestos, urea formaldehyde and polychlorinated biphenyls.

     “HSR Act” shall have the meaning set forth in Section 7.9.

     “Intellectual
Property” shall have the meaning set forth in Section 2.1(a)(7).

     “Inventory” shall mean all raw materials, ingredients, supplies, materials, work-in-progress,
semi-finished goods, finished goods, components, spare parts and packaging materials used in the
Business.

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     “Knowledge”, or similar word or phrase, when used with respect to Seller or LOL, shall mean:
(a) actual awareness of a fact or matter by any of the individuals listed on Schedule 1, or
(b) a fact or matter that the relevant individual listed in Schedule 1 would reasonably be expected
to discover or otherwise become aware of in the course of discharging his or her ordinary course
duties.

     “Law” shall mean any law, statute, code, regulation, ordinance, policy or rule enacted or
promulgated by any Governmental Authority.

     “Leased Real Property” shall mean the real property and interests in real property leased by
Seller listed on Schedule 2.1(a)(3)(ii).

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

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

     “Losses” shall mean any liability, loss, claim, damage, deficiency, surcharge, action, suit,
proceeding, demand, assessment, adjustment, Tax or cost (including, without limitation, reasonable
attorneys’ fees and the costs of defense and settlement).

     “Material Adverse Effect” shall mean any event or circumstance that has a material and
adverse effect on the Purchased Assets or the Business, taken as a whole, other than events or
circumstances generally applicable to the dairy industry or changes in general economic
conditions.

     “Material Consents” shall have the meaning set forth in Section 8.8.

     “Material Purchased Contracts” shall mean those contracts identified as material on
Schedule 2.1(a)(5).

     “Owned Real Property” shall mean the real property owned in fee by Seller and listed on
Schedule 2.1(a)(3)(i).

     “Non-Real Property Assets” shall mean all Purchased Assets other than the Owned Real Property
and the Leased Real Property.

     “Normal Capacity” shall have the meaning set forth in Section 13.6(a).

     “Notice of Claim” shall have the meaning set forth in Section 13.4(a).

     “Notice of Objection” shall have the meaning set forth in Section
13.4(a).

     “Objections” shall have the meaning set forth in Section
7.2(c).

     “Party(ies)” shall have the meaning given in the Preamble.

     “Permits” shall mean permits, tariffs, authorizations, licenses, consents, certificates,
variances, interim permits, approvals, franchises and rights under any Law or otherwise issued or
required by any Governmental Authority and any applications for the foregoing which are currently
used by Seller to engage in the Business as currently conducted.

     “Permitted Encumbrance” shall have the meaning set forth in Section 4.8(b).

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     “Person” shall mean any individual or other entity possessed of juridical personality,
including, without limitation, a corporation, company, limited liability company, cooperative,
partnership, trust unincorporated association, Affiliate or Governmental Body; and pronouns when
they refer to a Person shall have a similarly extended meaning or as used to possess any asset.

     “Post-Transfer Period” shall have the meaning set forth in Section 7.4(a).

     “Pre-Transfer Period” shall have the meaning set forth in Section 7.4(a).

     “Products Liability” shall have the meaning set forth in Section 4.26.

     “Projected Transferred Current Assets” shall have the meaning set forth in Section 3.1(a).

     “Projected Transferred Current Assets Adjustments” shall have the meaning set forth in
Section 3.1(a).

     “Property Taxes” shall have the meaning set forth in Section 7.4(a).

     “Purchased Contracts” shall mean (i) the Contracts set forth on Schedule 2.1(a)(5),
(ii) Contracts to which Seller is a party involving consideration or expenditures of US$150,000 or
less and (iii) all benefits accruing to Seller under the Cross Link Contracts.

     “Purchase Price” shall have the meaning set forth in Section 3.1(b).

     “Purchase Price Allocation” shall have the meaning set forth in Section
3.4.

     “Purchased Assets” shall have the meaning set forth in Section
2.1(b).

     “Ratings
Agencies” shall mean Moody’s Investors Service and Standard and Poor’s Ratings
Service.

     “Real Property” shall mean the Owned Real Property and the Leased Real
Property.

     “Recent Balance
Sheet” shall have the meaning set forth in Section
4.7.

     
 “Recent Financial Statement” shall have the meaning set forth in Section
4.6.

     “Release” shall mean any release, spill, emission, leakage, discharge, disposal, migration or
leaching into the Environment.

     “Required
Transferred Current Assets” shall mean an amount of Transferred Current Assets of
Twenty-One Million dollars (US$21,000,000) at the Closing Date.

     “Return to Work Time” shall have the meaning set forth in Section 10.2.

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

     “SBE” shall have the meaning set forth in Section 7.4(f)(l).

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

     “Settlement Period” shall have the meaning set forth in
Section 3.2(b).

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     “Sierra Cattle Disposal” shall mean the off-site disposal of wastewater and/or any other waste
by or on behalf of Seller, LOL or their Affiliates at the Sierra Cattle Company property located in
Lindsay, Tulare County, California.

     “Subsidiary” shall mean, with respect to any Person, any corporation or other Person of which
securities or other interests having the power to elect a majority of that corporation’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 interest 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.

     “Surveys” has the meaning set forth in Section 7.2(b).

     “Tax” (and, with correlative meanings, “Taxes” and “Taxable”) shall mean taxes, charges, fees,
duties (including customs duties), levies or other assessments, including income, gross receipts,
net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales,
use, franchise, excise, value added, alternative, add-on minimum, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational, interest equalization, windfall profits, license,
payroll, environmental, capital stock, disability, severance, employee’s income withholding, other
withholding, unemployment and Social Security taxes, which are imposed by any Governmental
Authority, and the term “Tax” shall include any interest penalties, fines or additions to Tax
attributable thereto or associated therewith, and shall include any transferee or successor
liability in respect of Taxes (whether by contract or otherwise).

     “Tax Return” shall mean any report, return, statement, notice, form, declaration, claim for
refund or other document or information filed, submitted to. or required to be supplied to a
Governmental Authority in connection with the determination, assessment, collection or payment of
any Tax, including any schedule or attachment to or amendment of the Tax Return.

     “Title Commitment” shall have the meaning set forth in Section
7.2(a).

     “Title Company” shall have the meaning set forth in
Section 7.2(a).

     “Title Evidence” shall have the meaning set forth
in Section 7.2(c).

     “Title Policy” shall have the meaning set forth
in Section 8.11.

     “Trade Receivables” shall mean (a) all trade accounts receivable and other rights to payment
from customers of the Business 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 the Business, (b) all other
accounts or notes receivable of the Business 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.

     “Trade Secrets” shall mean the “trade secrets” (as such term is defined under the Uniform
Trade Secrets Act) owned by Seller or used exclusively in the Business.

     “Transfer Taxes” shall have the meaning set forth in Section 7.4(d).

     “Transferred Current Assets” shall mean all Inventory and prepaid expenses related to the
Business, including, without limitation, those described on Schedule 2. l(a)(2).

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     “Transferred Current Assets Statement” shall have the meaning set forth in Section 3.2(a).

     “U.S. GAAP” shall mean generally accepted accounting principles governing accounting and
financial reporting in the United States as of the date of the Agreement.

     “Unusable Inventory”
shall have the meaning set forth in Section 3.3.

ARTICLE 2

SALE AND PURCHASE OF PURCHASED ASSETS;

ASSUMPTION OF ASSUMED OBLIGATIONS

2.1 Purchased Assets.

     (a) Sale and Purchase. Subject to the terms and conditions set forth herein, on the
Closing Date, Seller shall sell, assign, convey, transfer and deliver to Buyer, and Buyer
shall purchase, acquire and take assignment and delivery of all of Seller’s right, title
and interest in and to all of Seller’s assets and business including without limitation,
the Business and the assets described in clauses 2.1(a)(l) through 2.1(a)(10) below, other
than the Excluded Assets, free and clear of all Encumbrances other than the Permitted
Encumbrances:

          (1) Equipment and Fixed Assets. All fixtures, machinery, equipment, fixed assets,
furniture, tools, automobiles, trucks, loaders and other vehicles, maintenance equipment and
materials and other tangible personal property and any replacements thereto acquired prior
to the Effective Time including, without limitation, such assets set
forth on Schedule 2.1(a)(l) (collectively, the “Equipment and Fixed Assets”);

          (2) Transferred Current Assets. All Transferred Current Assets;

          (3) Owned Real Property and Leased Real Property. All of the Owned Real Property
described on Schedule 2.1(a)(3)(i) and rights under leases for all Leased Real
Property described on Schedule 2.1(a)(3)(ii), which Real Property shall include,
without limitation all appurtenant rights and easements and all buildings, structures,
improvements, plants, facilities, and fixtures located thereon;

          (4) Information and Records. To the extent legally transferable, all books and
records (whether in hard copy, electronic, magnetic or other format) used, or intended to be
used, in the operation of the Business or relating to the Buyer’s Employees (the “Books and
Records”) including, without limitation, accounting records, employee records, customer
lists, vendor lists, databases and database information and copies of all written
Contracts and Permits, provided that only copies of state and federal tax returns shall be
transferred;

          (5) Purchased Contracts. All Purchased Contracts;

          (6) Permits. To the extent legally transferable, all Permits and applications for
Permits which are utilized to own, lease and/or operate the Purchased Assets or to conduct
the Business as presently operated and conducted. Buyer shall pay the transfer fees, if
any, that are required to transfer any Permit (to the extent it is
transferable) to Buyer;

          (7) Intellectual Property. All patents and patent applications; the trademarks and
trade names “GVDP”, “Golden Valley Dairy Products”, “Cheese & Protein International LLC”,
“Cheese & Protein International, Cheese & Protein lnt’1” and “CPI” and the trade dress

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related to such trademarks and trade names; designations of origin; works of authorship;
copyrights; copyrightable works; recipes; technical research (including, without
limitation, the items identified on Schedule 2.1(a)(7)); product formulations, product
specifications, software used exclusively in the Business, manuals, know-how, inventions
(whether patented, patentable or unpatentable); methods; information; data; domain names;
Confidential Information; Trade Secrets; and any other intellectual or proprietary rights
(including without limitation contracts relating to any of the foregoing), in each case,
that are owned by Seller or used exclusively in connection with the conduct of the Business
(the “Intellectual Property”);

          (8) Denmark Customer List. A list of the customers of Products (as such term is
defined in the form of Product Off-Take Agreement (Denmark) attached hereto as Exhibit B)
manufactured at the Denmark Facility (as such term is defined in the form of Product
Off-Take Agreement (Denmark) attached hereto as Exhibit B), on an “as is, where is” basis
representing, in the aggregate, the goodwill related to LOL’s Industrial Cheese Marketing
Business;

          (9) Telephone/Telecopier Numbers. Rights to all telephone (excluding any cellular
phones) and telecopier numbers used specifically at the facilities of the Business located
at 800 East Paige, Tulare, California and 1025 East Bardsley Avenue, Tulare, California; and

          (10) Goodwill. All goodwill related to the Purchased Assets.

     (b) Purchased Assets. All the assets described in this Section 2.1, but
excluding the Excluded Assets, are collectively the “Purchased Assets.”

2.2 Excluded Assets. Seller shall retain and shall not sell, transfer or assign to
Buyer, and Buyer shall not purchase or acquire, any of the following
assets (“Excluded Assets”):

     (a) All Cash and any and all Trade Receivables;

     (b) All hedging deposits;

     (c) Tax refunds and deferred tax assets;

     (d) Seller’s minute books, corporate records and original state and federal tax
returns;

     (e) The rights that accrue or will accrue to Seller, LOL or their Affiliates under this
Agreement, the Ancillary Agreements and all related documents;

     (f) All software that is not assignable; and

     (g) All trademarks, trade names and trade dress other than those described in Section
2. l(a)(7).

     2.3 Nonassignable Contracts and Permits. If any of the Purchased Contracts, Permits
or Books and Records shall require the consent of any party thereto other than Seller, LOL or any
of their Affiliates, this Agreement shall not constitute an agreement to assign the same, and such
Purchased Contract, Permit or Book or Record shall not be assigned to or assumed by Buyer if an
actual or attempted assignment thereof would constitute a breach or default thereunder or a
violation of Law. Each of Seller and LOL shall use its commercially reasonable efforts to obtain
such consents, to the extent

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required, of such other parties to the Purchased Contracts, Permits or Books or Records. If any
such consent cannot be obtained, Seller, LOL and Buyer shall cooperate in any reasonable
arrangement designed to obtain for Buyer all benefits and privileges of the applicable Purchased
Contract, Permits or Book or Record while protecting Seller, LOL and their Affiliates, as
applicable, from continuing liabilities or obligations thereunder.

     2.4 Assumed Obligations. From and after the Effective Time, Buyer shall assume and
agree to pay, perform and discharge only the following: (i) the liabilities and obligations of
Seller arising from or related to the provision of goods and services, in each case which are
delivered or performed on or after the Effective Time pursuant to the Purchased Contracts and the
Cross Link Contracts; (ii) except with respect to obligations arising from Environmental
Conditions, liabilities and obligations of Seller arising and to be fulfilled on or after the
Effective Time under Real Property leases included in Purchased Contracts; (iii) the liabilities
and obligations under the Permits related to the post-closing operations of the Business and the
Purchased Assets; and (iv) liability for accrued vacation and/or sick time attributable to Buyer’s
Employees. Items (i) through (iv) above shall be collectively referred to herein as the “Assumed
Obligations.”

     2.5 Excluded Obligations.

     (a) No Assumption. Buyer does not assume or intend to assume or agree to pay, perform,
fulfill or discharge any obligation not specifically assumed in Section 2.4 and such
obligation shall remain with Seller (which shall pay, perform, fulfill, and discharge such
obligation when and as due) including, without limitation, the following:

     (1) Excluded Assets. Any obligations that relate to the Excluded Assets;

     (2) Company Employees. Except to the extent provided in Article 10, any
obligations related to the Company Employees;

     (3) Debt. Any obligations for any indebtedness for borrowed money;

     (4) Warranties and Returns. Any obligations or liabilities with respect to
product returns or product warranty claims relating to the operation of the Business
prior to the Effective Time;

     (5) Contract Obligations. Obligations arising and to be fulfilled under the
Purchased Contracts prior to the Effective Time;

     (6) Accounts Payable; Accrued Expenses. Any obligations for any
accounts payable and accrued expenses arising from the conduct of the Business prior
to the Effective Time;

     (7) Fees and Expenses. Any obligations for fees and expenses of Seller and
LOL incurred in connection with the negotiation, execution, performance and
delivery of this Agreement and the Contemplated Transactions, including,
without limitation, the fees and expenses of counsel and investment bankers;

     (8) Pre-Closing Operations. Except as specifically set forth
herein, obligations related to or arising from the conduct of the Business prior to
the Effective Time;

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     (9)
Litigation. Any obligations for any Litigation (i) pending as of the
Closing or (ii) commenced after the Closing and to the extent arising out of or
relating to Seller’s operation of the Business prior to the Closing;

     (10) Environmental Condition. Any obligations or liabilities with respect to
any Environmental Condition; and

     (11) Sierra Cattle. Any obligations arising from or related to Sierra Cattle
Disposal.

     (b) Excluded Obligations. The obligations referred to in Section 2.5(a) are the
“Excluded Obligations.”

ARTICLE 3

PURCHASE PRICE AND PAYMENT

     3.1 Purchase Price. In consideration for the sale, assignment, conveyance, transfer
and delivery of the Purchased Assets to Buyer and entering into the Ancillary Agreements, Buyer
shall assume the Assumed Obligations and shall make payments to the Seller as provided in this
Article 3.

     (a) Closing Transferred Current Assets Adjustment. Within two (2) days prior to the
Closing Date, Seller shall provide Buyer a reasonable estimate of the projected Transferred
Current Assets to be transferred to Buyer on the Closing Date (the “Projected Transferred
Current Assets”). The Projected Transferred Current Assets shall be satisfactory to Buyer
acting reasonably. If the Projected Transferred Current Assets are greater than the
Required Transferred Current Assets, the Purchase Price shall be increased on a
dollar-for-dollar basis by the difference; if the Projected Transferred Current Assets are
less than the Required Transferred Current Assets, the Purchase Price shall be decreased on
a dollar-for-dollar basis by the difference. The increased or decreased amount shall be
referred to herein as the “Projected Transferred Current Assets Adjustment.”

     (b) Consideration at Closing. At the Closing, Buyer shall cause to be paid to Seller,
by wire transfer of immediately available funds to accounts designated by Seller, the amount
of Two Hundred Sixteen Million dollars (US$216,000,000); minus (i) amounts payable for the
complete satisfaction of obligations for borrowed money as related to the Business or as
secured by Encumbrances on the Purchased Assets; plus or minus (ii) costs or prorations of
amounts due, by or from either party made pursuant to the terms of this Agreement; and plus
or minus (iii) the Projected Transferred Current Assets Adjustment (the “Purchase Price”).

     3.2 Post-Closing Adjustment to Purchase Price.

     (a) Draft Transferred Current Assets Statements. No later than ten (10) days after the
Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Transferred
Current Assets Statement”) of Seller as of the Closing Date showing the actual amount of
Transferred Current Assets as of the Effective Time prepared in the form of Schedule
3.2(a) (the “Actual Transferred Current Assets”). Seller shall have such post-Closing
access to the financial records of the Business as is reasonably necessary to prepare such
statement. Buyer and its representative(s) shall have the right to be present during the
physical inventory count of the Inventory conducted by Seller as of the Effective Time and
shall have access to all relevant books, records and working papers of Seller and to
appropriate personnel in order to review the Transferred Current Assets Statement.

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     (b) Objection Period and Settlement of Disputes. If Buyer has any objections to the
Transferred Current Assets Statement or the value of the Actual Transferred Current Assets,
Buyer will deliver a detailed statement describing such objections to Seller within ten (10)
days after receiving the Transferred Current Assets Statement. Buyer and Seller, acting
reasonably, shall diligently attempt to settle any disputes and agree upon the value of the
Actual Transferred Current Assets and any adjustments related thereto within fifteen (15)
days of delivery of the Buyer’s statement of objections (the “Settlement Period”). If
Buyer and Seller do not reach a resolution of all objections prior to the expiration of the
Settlement Period, Buyer and Seller will select a mutually acceptable accounting firm to
resolve any remaining objections. If Buyer and Seller are unable to agree on the choice of
an accounting firm, they will select a nationally recognized accounting firm by lot (after
excluding the regular outside accounting firms of Buyer, Saputo, Seller and LOL). The
accounting firm will resolve any objections remaining unresolved between the parties at the
time of submission to such accounting firm and the amount of the Actual Transferred Current
Assets. The parties will provide the accounting firm, within ten (10) days of its
selection, with a definitive statement of the position of each party with respect to each
unresolved objection and will advise the accounting firm that the parties accept the
accounting firm as the appropriate Person to interpret this Agreement for all purposes
relevant to the resolution of the unresolved objections. The accounting firm will have
thirty (30) days to carry out a review of the unresolved objections and prepare a written
statement of its determination regarding each unresolved objection. The determination of
any accounting firm so selected will be set forth in writing and will be conclusive and
binding upon the parties, and enforceable in any court having jurisdiction over the Parties.
Seller will revise the Transferred Current Assets Statement and the determination of the
Actual Transferred Current Assets as appropriate to reflect the resolution of any objections
to the Transferred Current Assets Statement pursuant to this Section 3.2(b). If Buyer and
Seller submit any unresolved objections to an accounting firm for resolution as provided in
Section 3.2(b), Buyer and Seller will each bear their respective costs and expenses and will
share equally in the fees and expenses of the accounting firm.

     (c) Actual Transferred Current Assets Adjustment to Purchase Price. The Purchase
Price shall be (i) increased on a dollar-for-dollar basis by an amount equal to the amount,
if any, by which the Actual Transferred Current Assets (as finally determined pursuant to
the procedures described in Section 3.2(b)) exceeds the Projected Transferred Current Assets
as used to calculate the Closing Transferred Current Assets Adjustment, or (ii) decreased on
a dollar-for-dollar basis by an amount equal to the amount, if any, by which the Actual
Transferred Current Assets (as finally determined pursuant to the procedures described in
Section 3.2(b)) is less than the Projected Transferred Current Assets as used to calculate
the Closing Transferred Current Assets Adjustment. The payment of this adjustment shall be
made by Buyer or Seller, as the case may be, within three (3) Business Days after final
determination of the value of Actual Transferred Current Assets.

     3.3 Inventory. In the event the Inventory includes any inventory which, as of the
Closing Date, was obsolete, damaged or not usable in the normal course of the Business (the
“Unusable Inventory”), Buyer shall have the right on the date thirty (30) days after the Closing
Date to return in whole or in part the Unusable Inventory, (not including any finished goods which
shall be destroyed or disposed of by Buyer, at the sole cost of Seller) on an “as is, where is”
basis, at the sole cost of Seller. Seller shall execute such documents as may be reasonably
requested by Buyer in order to document that the Unusable Inventory is transferred to Seller on an
“as is, where is” basis. Seller shall pay to Buyer the cost of such Unusable Inventory (including
finished goods that shall be destroyed or disposed of by Buyer) calculated on the same basis as the
calculation of the Actual Transferred Current Assets pursuant to the procedures described in
Section 3.2(a). Such amount shall be payable to Buyer on the date forty-five (45) days after the
Closing Date.

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     3.4 Allocation of Purchase Price. The parties hereto agree that the Purchase
Price shall be allocated to the Purchased Assets in accordance with Section 1060 of the Code as set
forth in Schedule 3.4 (“Purchase Price Allocation”). Each party covenants to report gain
or loss or cost basis, as the case may be, in a manner consistent with the Purchase Price
Allocation for all federal and state Tax purposes. As soon as practicable, but no later than thirty
(30) days after the Closing Date, the Buyer and Seller shall exchange mutually acceptable and
completed IRS Forms 8594 which shall be used by all parties hereto use to report the transactions
contemplated by this Agreement to the Internal Revenue Service in accordance with such allocations.
Notwithstanding the foregoing, Buyer’s cost for the Purchased Assets may differ from amounts
reported by Seller on such IRS form to the extent necessary to reflect Buyer’s capitalized
acquisition costs for the Purchased Assets. Seller and Buyer mutually agree to provide each other
with the assistance as is reasonably necessary for the other party to satisfy its reporting
obligations under Section 1060 of the Code.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER AND LOL

     LOL and Seller, jointly and severally, represent and warrant to Buyer as follows.

     4.1 Organization and Authorization.

     (a) Organization, Good Standing and Power. Seller is a limited liability company duly
organized, validly existing and in good standing under the Laws of the State of Delaware
and has the power to own, operate and lease its properties and to carry on its business as
now being conducted. Seller is qualified to conduct business as a foreign corporation or
organization in the jurisdictions set forth on Schedule 4.1(a) and Seller is not
otherwise required to be so qualified to conduct business in any other jurisdiction, except
for those jurisdictions in which failure to be so qualified or authorized would not have a
Material Adverse Effect or a material adverse effect on Seller’s ability to consummate the
transactions contemplated herein.

     (b) Authorization; Binding Effect. This Agreement, the consummation of the
Contemplated Transactions and performance by each of Seller and LOL of its obligations
contained herein have been duly and validly authorized by all necessary corporate or other
action on the part of Seller and LOL. This Agreement constitutes the legal, valid and
binding obligation of each of Seller and LOL enforceable against each of them in accordance
with its terms except to the extent that their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors’ rights generally and by general equitable principles.

     4.2 Capitalization. Seller has no Subsidiary and does not own any shares of capital
stock or other securities of any other Person. All of Seller’s members are set forth on
Schedule 4.2.

     4.3 No Government Authorization Required. Except as set forth on Schedule
4.3, no consent, authorization or approval of, or exemption by, or filings with, any
Governmental Authority is required in connection with the execution, delivery and performance of
this Agreement by Seller or LOL.

     4.4 Effect of Agreement. Except as set forth on Schedule 4.4, the execution,
delivery and performance of this Agreement and the consummation of the Contemplated Transactions
will not, with or without the giving of notice or the lapse of time or both: (i) violate any
provision of Law to which Seller or LOL is subject; (ii) violate any judgment, order, decision,
writ or decree of any Government Authority to which Seller is subject; (iii) result in the breach
of, violate or conflict with, any term, covenant or condition of, result in the modification or
termination of, or constitute a default under any Contract to

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which Seller or, to the Knowledge of Seller or LOL, LOL is a party or any of the Permits, or result
in the creation or imposition of any Encumbrance other than a Permitted Encumbrance upon any of the
Purchased Assets, or (iv) result in the breach of Seller’s or LOL’s articles of organization,
operating agreement or other organizational documents, except in the cases of (i)-(iii) such
violations, breaches or conflict as would not have a material adverse effect on Seller’s ability
to consummate the transactions contemplated herein.

     4.5 Third Party Consents. Except as set forth on Schedule 4.5, Seller and LOL
have obtained all consents or approvals from all Government Authorities, or from any other Person
which is required pursuant to any Law, License and Permit or Contract, or otherwise required to
consummate the Contemplated Transactions, and all necessary filings, registrations, notices or
other similar requirements have been met in connection with the consummation of the transactions
contemplated by this Agreement, except where the failure to obtain such consent or approval would
not have a material adverse effect on Seller’s ability to consummate the transactions contemplated
herein.

     4.6 Financial Statements. The documents attached to Schedule 4.6 are true and
complete copies of (i) GVDP’s unaudited financial statements for the 2004 and 2005 fiscal years,
(ii) CPI’s audited financial statements for the 2004 fiscal year, (iii) CPI’s unaudited financial
statements for the 2005 fiscal year, (iv) the consolidated unaudited financial statements for CPI
and GVDP for the Business for the 2006 fiscal year (collectively, the “Business Financial
Statements”), and (v) Seller’s unaudited balance sheet and summary of operating results for the
Business for the period beginning January 1, 2007 and ending, January 31, 2007 (the “Recent
Financial Statement”). Except as set forth on Schedule 4.6 and except for the omission of
footnote disclosures and, for the Recent Financial Statements, normal recurring year-end
adjustments, the Business Financial Statements and the Recent Financial Statement have been
prepared in accordance with U.S. GAAP applied on a consistent basis with those of previous fiscal
years and each fairly discloses in all material respects: (x) the assets, liabilities, income,
losses and financial position and (y) the results of operations, all in accordance with U.S. GAAP
as at the dates and for the periods therein specified.

     4.7 Trade Receivables. Except as set forth on Schedule 4.7, all Trade
Receivables, other than with Affiliates of LOL, reflected on the balance sheet provided as part of
the Recent Financial Statement (the “Recent Balance Sheet”), and as incurred in the normal course
of business since the date of the Recent Balance Sheet, represent arm’s length sales actually made
in the ordinary course of business and are subject to no known counterclaim, setoff or dispute.

     4.8 Condition of Assets.

     (a) Non-Real Property Assets. Except as set forth on Schedule 4.8(a), Seller
owns good title to all of the physical Non-Real Property Assets free and clear of all
Encumbrances except for Permitted Encumbrances. All of the physical Non-Real Property Assets
are located at the Real Property, except for such Non-Real Property Assets which are located
at the facilities described on Schedule 4.8(a). Except as set forth on Schedule
4.8(a), the Equipment and Fixed Assets are in normal working condition, ordinary wear
and tear excepted and except immaterial exceptions which do not affect their operation in
the normal course of business and the other items of tangible personal property included in
the Purchased Assets are in normal working condition. Seller owns or leases all equipment
comprising part of the Equipment and Fixed Assets that is necessary to conduct the Business
as currently conducted by Seller.

     (b) Real Property. Schedule 2.1(a)(3) sets forth all Owned Real Property and
Leased Real Property which constitutes all real property owned, used or occupied in
operating the Business. Seller has good, valid and marketable fee title to the Owned Real
Property and valid

- 14 -

 

leasehold interests in the Leased Real Property, free and clear of all Encumbrances except
for (1) Encumbrances set forth on Schedule 4.8(b)(i)(l), none of which materially
adversely affects the marketability of title to the Real Property or materially interferes
with the use of the Real Property in the manner consistent with Seller’s current use (the
“Permitted Encumbrances”) and (2) Deeds of Trust set forth on Schedule 4.8(b)(i)(2);
and at Closing, except only for Permitted Encumbrances. There are now in full force and
effect duly issued Permits (including, without limitation, occupancy permits) of all
Governmental Authorities permitting the Real Property and improvements located thereon to be
legally used and occupied as the same are now constituted. Except as set forth on
Schedule 4.8(b)(ii), (a) to Seller’s or LOL’s Knowledge, Seller and the Real
Property are in compliance, in all material respects with all Laws and all restrictions,
covenants and agreements of record, (b) there is no pending or to Seller’s or LOL’s
Knowledge, threatened restriction or denial upon ingress or egress to and from the Real
Property from and to existing publicly dedicated roads, (c) none of the Real Property is
located in a wetland, flood plain, flood hazard area or lakeshore erosion area within the
meaning of any Law in effect as of the Effective Time, (d) to Seller’s or LOL’s Knowledge no
public improvements have been commenced and none are planned which in either case are
reasonably likely to result in special assessments against or otherwise materially adversely
affect any of the Real Property, (e) to Seller’s or LOL’s Knowledge there is no planned or
proposed material increase in assessed valuations of the Real Property, (f) there are no
claims of adverse possession or prescriptive rights affecting any of the Real Property, (g)
neither the whole nor any portion of the Real Property is subject to any governmental decree
or order to be sold or is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor to Seller’s or LOL’s
Knowledge has any condemnation, expropriation or taking been proposed, (h) the Real Property
is platted as separate legal parcels for conveyance and Tax purposes, and (i) the structures
located upon the Real Property have been maintained by Seller or GVDP, as applicable, in
accordance with the usual and customary maintenance practice of the industry and are
sufficient to carry on the Business as conducted during the preceding twelve months.

     4.9 Sufficiency of Assets. Except as set forth on Schedule 4.9 and except for
legal, research and development, customer service, accounts payable and accounts receivable,
inventory management, sales, tax, information technology and human resources services, trademarks
and trade names provided pursuant to Contracts or arrangements with LOL or its Affiliates, the
Purchased Assets (i) constitute all of the assets, tangible and intangible, of any nature
whatsoever, necessary to operate the Business in the manner presently operated by Seller and as
operated by Seller and GVDP since January 1, 2006 and (ii) include all of the operating assets of
Seller and operating assets of GVDP utilized immediately prior to its dissolution.

     4.10 Intellectual Property. Except as set forth on Schedule 4.10:

     (a) The Intellectual Property comprises all trademarks, trade names, brands, names,
logos, designs, trade dress, designations of origin, works of authorship, copyrights,
copyrightable works, recipes, technical research, product formulations, product
specifications, software, manuals, inventions (whether patented, patentable or
unpatentable), methods, information, data, know-how, domain names, Confidential
Information, Trade Secrets and any other intellectual or proprietary rights (including
without limitation contracts relating to any of the foregoing) that Seller owns or is
using, in connection with the conduct of the Business;

     (b) All of the recipes, product formulations, technical research, product
specifications, inventions (whether patented, patentable or unpatentable), methods,
know-how, Confidential Information, Trade Secrets or other intellectual property or
proprietary rights used in the conduct of the Business are owned by Seller as of the date
of this Agreement;

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     (c) Other than the Intellectual Property, Seller does not own, control or possess, nor is the
licensee, assignee or beneficiary of any pending or prospective unpublished patent application, any
patent application in preparation, or any other prospective or potential intellectual property or
proprietary right related to any of the recipes, technical research, product formulations, product
specifications, inventions (whether patented, patentable or unpatentable), methods, know-how
Confidential Information, Trade Secrets or other intellectual property or proprietary rights used
in the conduct of the Business;

     (d) As a result of conveyance of Article 2 herein, the Seller is not retaining or does not
otherwise possess any proprietary rights or prospective proprietary right to any of the recipes,
technical research, product formulations, product specifications, inventions (whether patented,
patentable or unpatentable), methods, know-how, Confidential Information, Trade Secrets or other
intellectual property or proprietary rights used in the conduct of the Business;

     (e) Neither Seller nor LOL has received written notice of any claim that Seller or GVDP was
or currently is in violation of or has infringed any recipe, technical research, product
formulation, product specification, invention (whether patented, patentable or unpatentable),
methods, information data, know-how, of any third Person;

     (f) To the Knowledge of Seller or LOL, neither the operation of the Business or ownership of
the Purchased Assets, nor Seller’s or GVDP’s production, manufacture, marketing or sale of
products infringe upon or conflict with trademark, trade name, brand, name, logo, design, trade
dress, designation of origin, work of authorship, copyright, copyrightable work, recipe, product
formulation, product specification, software, manual invention (whether patented, patentable or
unpatentable), methods, information data, know-how, domain name or any other intellectual or
proprietary right of any third Person;

     (g) Seller neither pays nor is obligated to pay any royalties or other consideration for the
right to use any of the Intellectual Property;

     (h) To Seller’s or LOL’s Knowledge, there has been no infringement by any third Person of any
of the Intellectual Property;

     (i) The Seller has taken and GVDP took all steps reasonably necessary to safeguard
the secrecy and confidential nature of all recipes, technical research, product formulations,
product specifications, inventions (whether patented, patentable or unpatentable), methods,
know-how, Confidential Information, Trade Secrets or other intellectual property or proprietary
rights used in the conduct of the Business;

     (j) To Seller’s or LOL’s Knowledge, the trademarks, trade names, brands, names,
logos, designs, trade dress and designations of origin as related to the Business are valid and
enforceable; and

     (k) Seller is not and, prior to dissolution, GVDP was not a party to any contract or
agreement which restricts the free use or disclosure of any information related to the Business.

     (l) Each employee employed in the Business since March 1, 2004 has executed one
of the agreements regarding confidential information attached hereto as Schedule 4.10(1) substantially in the form of such attached agreement and such agreement is in full force and
effect as to such employees currently employed and as to such employees who terminated employment

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on and after March 1, 2006 and, to the Seller’s or LOL’s Knowledge, no such employee has
breached the terms of such agreement.

     4.11 Permits and Orders. Except as set forth on Schedule 4.11, (i) Seller has
all material Permits, approvals, authorizations and consents of all Government Authorities and all
certification organizations required for the conduct of the Business as conducted during the past
twelve months, and (ii) Seller has all material Permits, approvals, authorizations and consents of
all Government Authorities and certification organizations required as to ownership and use of the
Real Property during the past twelve months. Except as set forth on Schedule 4.11, all
Permits, approvals, authorizations and consents are described on Schedule 4.11 are in full
force and effect and are freely assignable and transferable to Buyer without action or consent of
any third party. Except as set forth on Schedule 4.11, each of Seller and GVDP (including
their operations, properties and assets) is and has been in compliance in all material respects
with all such Permits, approvals, authorizations and consents.

     4.12 Sales Agreement with Davisco Cheese. Seller currently services one customer with
mozzarella cheese, provolone cheese and cheddar cheese produced by and purchased from Davisco
Cheese. Seller is under no contractual obligation to continue doing so, and Davisco could cease
supplying Seller at any time under this arrangement.

     4.13 Contracts and Other Data. Schedule 4.13 sets forth a listing of the
following Contracts: (i) all employment, consultant, contractor, sales agency, broker and dealer
Contracts; (ii) Contracts involving consideration or other expenditures in excess of US$250,000 or
involving performance over a period of more than twelve months; (iii) each Contract containing
exclusivity, noncompetition or nonsolicitation provisions or that would otherwise prohibit Seller
from freely engaging in business; (iv) Contracts between customers of the Business and LOL or any
Affiliate of LOL with a value in excess of US$150,000; (v) Contracts as to any real property.
Except as set forth on Schedule 4.13:

     (a) To Seller’s or LOL’s Knowledge, all of the Material Purchased Contracts are in
full force and effect and are valid and binding on each party thereto;

     (b) Neither Seller nor, to Seller’s or LOL’s Knowledge, any other party to any of the
Material Purchased Contracts is in material breach of any provision of, in material
violation of, or in material default under the terms of any of the Material Purchased
Contracts; and

     (c) Seller has made available to Buyer true and complete copies of all Material
Purchased Contracts, which shall include, without limitation, all supplements, amendments,
modifications and guarantees relating thereto.

     4.14 640 Pound Block Contract. Seller has verbal commitments with two customers to
sell 3.5 million pounds and 2.9 million pounds, respectively, of 640 pound blocks of mozzarella
cheese, through December 2007.

     4.15 Insurance. Seller has attached as Schedule 4.15 a certificate of
insurance listing all policies of fire, general liability, product liability, workers
compensation, directors and officers liability, employee liability, employment practices, excess,
umbrella and other forms of insurance held by Seller presently in effect with respect to the
Business and the Purchased Assets. All such policies are valid and enforceable policies.

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     4.16 Employees and Benefit Plans.

     (a) Employee List. Schedule 4.16(a) sets forth a list of: (i) Seller’s employees and
(ii) any employees of Seller’s Affiliates who principally engage in providing services for the
Business; in each case including Absent Employees (the “Company Employees”). Schedule
4.16(a) provides, for each of the Company Employees, their rates of pay, positions held,
location, and dates of hire and identifies those who would be Absent Employees if the date of this
Agreement were the Effective Time.

     (b) Benefit Plans. Schedule 4.16(b) sets forth a listing of all pension, thrift,
savings, profit-sharing, retirement, incentive bonus or other bonus, medical, dental, life,
accident insurance, benefit, employee welfare, disability, group insurance, stock purchase, stock
option, stock appreciation, stock bonus, executive or deferred compensation, hospitalization and
other similar fringe or employee benefit plans, programs and arrangements, and any employment or
consulting contracts, “golden parachutes,” collective bargaining agreements, severance agreements
or plans, vacation and sick leave plans, programs, arrangements and policies, including, without
limitation, all “employee benefit plans” (as defined in Section 3(e) of ERISA), all employee
manuals, and all written policies or practices relating to employment, which are provided to, for
the benefit of, or relate to, the Company Employees. Schedule 4.16(b) also sets forth a
listing of all materials relating to employee benefits that Seller has not provided to Buyer. No
such arrangement is a “multiemployer plan” (as defined in Section 4001 of ERISA).

     (c) Satisfaction of Obligations. In all material respects as to each of the Company
Employees, Seller has satisfied all obligations to Company Employees under any and all of its or
GVDP’s compensation and benefit plan arrangements.

     (d) WARN Act. Neither Seller nor GVDP has violated the WARN Act or any similar state or local
Law. Schedule 4.16(d) lists the names and date of termination of each employee terminated
from employment with Seller or GVDP during the 90-day period prior to the date of this Agreement.

     (e) Certain Agreements. To the Knowledge of Seller or LOL, no Company Employee is bound by
any agreement, contract, or undertaking (for purposes of this Section only, a “Contract”), that
purports to limit the ability of such Person (i) to engage in or continue or perform any conduct,
activity, duties or practice relating to the Business, or (ii) to assign to Seller or to any other
Person any rights to any invention, improvement or discovery. No current employee of Seller, LOL
or their Affiliates is a party to, or is otherwise bound by, any Contract that in any way
adversely affected, affects, or will affect the ability of Seller or Buyer to conduct the Business
as heretofore conducted.

     4.17 Labor Disputes; Compliance.

     (a) Labor Laws. Seller and GVDP have complied in all material respects with all Laws relating
to employment practices, terms and conditions of employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining and other
requirements under any Law, the payment of social security and similar Taxes and occupational
safety and health. Seller is not liable for the payment of any fines, penalties or other amounts,
however designated, for failure to comply with any of the foregoing Laws.

     (b) Labor Issues. Except as set forth on Schedule 4.17(b), (i) there is not pending
or, to the Knowledge of Seller or LOL, threatened against or affecting Seller or the Business any

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legal or governmental proceeding relating to the alleged violation of any Law pertaining to
labor relations or employment matters, including any charge or complaint filed with the
National Labor Relations Board or any comparable Government Authority, and there is no
organizational activity or other labor dispute against or affecting the Business; (ii) no
application or petition for an election of or for certification of a collective bargaining
agent is pending; (iii) no grievance or arbitration proceeding exists that might have an
material adverse effect upon Seller or the Business; and (iv) there is no lockout of any
employees by Seller, and no such action is contemplated by Seller. Except as set forth on
Schedule 4.17(b), since January 1, 2003 (i) neither Seller nor GVDP has been, and
Seller is not now, a party to any collective bargaining agreement or other labor contract;
(ii) there has not been, there is not presently pending or existing, and to the Knowledge of
Seller or LOL there is not threatened, any strike, slowdown, picketing, work stoppage or
employee grievance process relating to the Business; and (iii) to the Knowledge of Seller or
LOL, there has been no charge of discrimination filed against or threatened against Seller
or GVDP with the Equal Employment Opportunity Commission or similar Government Authority.

     4.18 Litigation. There are no pending lawsuits, claims, administrative proceedings,
arbitrations or governmental investigations (“Litigation”) to which any of Seller, LOL, GVDP or
any of their Affiliates is a party relating to the Business or the Purchased Assets except as set
forth on Schedule 4.18 (which contains a correct list, caption and description of such
Litigation). Except as set forth on Schedule 4.18, to the Knowledge of Seller or LOL,
there is no Litigation threatened which would reasonably be expected to have an adverse affect on
the Business or the Purchased Assets.

     4.19 No Undisclosed Liabilities. Except as set forth on Schedule 4.19, other
than liabilities incurred in connection with Excluded Obligations, Seller has no material
liability except for liabilities reflected or reserved against in the Recent Balance Sheet and
liabilities incurred in the ordinary course of the business of Seller since the date of the Recent
Balance Sheet.

     4.20 Compliance with Laws. Except as set forth on Schedule 4.20 (other than
Laws relating to Employee Benefits, Laws related to Taxes and Environmental Laws, all of which are
exclusively covered solely by Sections 4.16, 4.21 and 4.23), since January 1, 2003 the conduct of
the Business and the ownership and use of the Purchased Assets are in compliance in all material
respects with all Laws. Schedule 4.20 sets forth all investigations, inspections or
citations Known to Seller under any Law (other than those covered by Sections 4.16, 4.21 and 4.23)
with respect to the Business and the Purchased Assets for the past two years, together with the
results thereof and a brief description of all corrective or other action taken with respect
thereto. None of Seller, LOL, GVDP or their Affiliates has received any notice of any pending or
threatened governmental investigations, inspections or citations relating to the Business or the
Purchased Assets.

     4.21 Taxes.

     (a) Provision For Taxes. Since the date of the Recent Financial Statement, Seller has
not incurred any Taxes other than Taxes incurred in the ordinary course of the Business
consistent in type and amount with the past practices of Seller.

     (b) Tax Returns Filed. All Tax Returns with respect to, in connection with, associated
with, or related to, the Business required to be filed by or on behalf of Seller have been
timely filed and, when filed, were true, correct and complete. All Taxes owed and/or due
and payable by (i) Seller with respect to, in connection with or related to the Business or
(ii) for which Buyer may have any successor liability have been paid or will be timely
paid. Seller has duly withheld and paid all Taxes that it is required to withhold and pay
in connection with amounts

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paid or owing to any employee, independent contractor, creditor, shareholder or other third
Person. At all times after December 31, 2005: (i) Seller has neither held, nor been
required under section 6066 of the California Revenue and Tax Code to obtain, a seller’s permit for
purposes of the California sales tax; and (ii) Seller has not undertaken any action outside
California that, if the action had been undertaken within California, would have required
Seller to obtain a seller’s permit for purposes of the California sales tax.

     (c) Tax Audits. To Seller’s or LOL’s Knowledge, no claim has been made in writing
since January 1, 2003 by an authority in a jurisdiction in which Seller does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction or authority with
respect to, in connection with, associated with, or related to, the Business. There are
outstanding no agreements or waivers extending the statutory period of limitations
applicable to any Tax Return with respect to a Tax assessment or deficiency of Seller.
Since January 1, 2003, Seller has not received any (i) notice of underpayment of Taxes or
other deficiency that has not been paid with respect to, in connection with, associated
with, or related to, the Business, or (ii) any objection to any Tax Return, with respect
to, in connection with, associated with, or related to, the Business. All deficiencies
asserted or assessments made as a result of any examinations with respect to, in connection
with, associated with, or related to, the Business have been fully paid or are fully
reflected as a liability in the financial statements of the Business.

     (d) Other. Seller has not (i) filed any consent or agreement under Section 341(f) of
the Code, (ii) applied for any Tax ruling, with respect to, in connection with, associated
with, or related to, the Business, (iii) entered into a closing agreement with any Tax
authority, with respect to, in connection with, associated with, or related to, the
Business, (iv) made any payments, or been a party to an agreement (including this
Agreement), that under any circumstances could obligate it to make payments (either before
or after the Closing Date) that will not be deductible because of Sections 280G or 162(m) of
the Code or (v) been a party to any Tax allocation or Tax sharing agreement. Seller has not
agreed, nor is required to make, any adjustment under Section 481 or Section 482 of the Code
(or any corresponding or similar provision of state, local or foreign law) by reason of a
change in accounting method or otherwise.

     (e) No Tax Liens. There are no liens for Taxes with respect to, in connection with,
associated with, or related to, the Business or the Purchased Assets, except for Permitted
Encumbrances.

     (f) Safe Harbor Leases. None of the Purchased Assets constitutes property that Seller
is required to treat as being owned by any other Person or entity pursuant to the so-called
“safe harbor lease” provisions of former Section 168(f)(8) of the Code or is tax-exempt
property within the meaning of Section 168(h) of the Code.

     4.22 Related Party Transactions. Schedule 4.22 sets forth a description of all
services and assets provided for the Business by any of the Seller’s Affiliates thereto since
January 1, 2006. All such services and assets have been accurately reflected in all material
respects on the books and records of Seller and in the Business Financial Statements.

     4.23 Environmental Matters. Except as set forth on Schedule 4.23: Since
January 1, 2006 (i) there has been no Release of Hazardous Materials on, at or under the Real
Property in violation of Environmental Laws, (ii) there has been no Release, discharge or disposal
of Hazardous Materials at any third party disposal site as a result of the conduct of the Business
for which Seller has been identified as a responsible party under Environmental Laws; (iii) none of
the Real Property is subject to any Encumbrances in favor of any Governmental Authority for
liability under any Environmental Laws or for

- 20 -

 

costs incurred by a Governmental Authority in response to a release or threatened release of a
Hazardous Material; (iv) none of the Real Property is subject to a written notice, request for
information or order from or written agreement with any person or entity asserting Seller’s
liability under any Environmental Law or imposing cleanup obligations against Seller with respect
to the Release or threatened Release of a Hazardous Material into the Environment that has not
been resolved to the satisfaction of such person or entity; (v) with respect to the Real Property
or the operation of the Business or Purchased Assets thereon, there are no judicial or
administrative proceedings pending or, to the Knowledge of Seller or LOL, threatened, arising
under or relating to any Environmental Law, including but not limited to any claim for personal
injury, wrongful death or property damage; (vi) Seller and GVDP have operated and Seller is
operating the Business and Purchased Assets in compliance in all material respects with applicable
Environmental Laws; and (vii) the wastewater discharges associated with the Business and the Real
Property, during December 1, 2006 through January 31, 2007 have at all times been in compliance
with and have not exceeded applicable electrical conductivity
(“EC”) limits, and there is no basis
for the Seller or the Business being subject to any notices of violation, fines, penalties, or
surcharges associated with EC exceedances during that period under any applicable Environmental
Laws. This Section 4.23 and Section 4.11 set forth the only representations of the Seller and LOL
with respect to any matters relating to Environmental Laws.

     4.24 Brokers and Finders. Except as set forth on Schedule 4.24, None of
Seller, LOL, GVDP or any of their Affiliates has employed any investment banker, broker or finder
or incurred any liability for any brokerage fees, commissions or finders fees in connection with
the transactions contemplated by this Agreement.

     4.25 Claims. Schedule 4.25 sets forth a summary of information pertaining to
all claims related to worker’s compensation, personal injury or death relating to the Business
which are currently pending or were made during the preceding two fiscal years or the current
fiscal year. Except as set forth on Schedule 4.25, all of such claims are fully satisfied
or are being defended by an insurance carrier.

     4.26 Product Liability; Warranties. Except as set forth on Schedule 4.26, with
respect to the Business, to Seller’s or LOL’s Knowledge: (i) there exists no (A) defect in the
design or manufacture of any product designed, manufactured, reworked, distributed or sold by
Seller or GVDP, or (B) pending or threatened action, suit, inquiry, proceeding or investigation by
or before any Person relating to any services rendered or product alleged to have been
manufactured, reworked, distributed or sold by Seller or GVDP to others, and alleged to have been
defective or improperly designed or manufactured or in breach of any express or implied product
warranty (“Products Liability”) and (ii) there exists no pending or threatened Products Liability
claim. Since January 1, 2005, there have been no product recalls or voluntary withdrawals of any
CPI or GVDP products from the market.

     4.27 Conduct of Business Since January 1, 2007. Except as set forth on Schedule
4.27, since January 1, 2007 the Business has been operated in the ordinary course and there
has not been any:

     (a) Change in Seller’s authorized or issued membership units, grant of any unit
purchase option or right to purchase membership units of Seller or issuance of any security
convertible into such membership units;

     (b) Amendment to Seller’s operating agreement, articles of organization or other
similar governing documents;

     (c) Payment or increase (except in the ordinary course of business) of any bonuses,
salaries or other compensation to any member, manager, officer or employee or entry into
any employment, severance or similar Contract with any manager, officer or employee;

- 21 -

 

     (d) Adoption of, amendment to or increase in the payments to or benefits under, any
employee benefit or compensation arrangement;

     (e) Damage to or destruction or loss of Purchased Assets, whether or not covered by
insurance, in excess of US$100,000 in the aggregate;

     (f) Other than in the ordinary course of business, entry into, termination of or
receipt of notice of termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit or similar Contract relating to the Business, or (ii)
any Contract or transaction relating to the Business involving a total remaining commitment
of at least US$150,000;

     (g) Sale (other than sales of Inventory in the ordinary course of business), lease or
other disposition of any Purchased Asset or property (including the Intellectual Property)
in excess of US$50,000 or the creation of any Encumbrance on any Purchased Assets;

     (h) Cancellation or waiver of any claims or rights with a value in excess of
US$200,000;

     (i) Written notice by any customer or supplier of an intention to discontinue or materially decrease the volume of its business with the Business;

     (j) Material change in the accounting methods used by Seller; or

     (k) Contract to do any of the items listed in this Section 4.27.

     4.28 Major Customers and Suppliers.

     (a) Major Customers. Schedule 4.28(a)(i) contains a list of the ten largest
cheese customers, including distributors, of the Business for the twelve months ended
December 31, 2006, showing the total dollar amount of net sales to each such customer
during such year. Schedule 4.28(a)(ii) contains a list of the ten largest whey
customers, including distributors, of the Business for the twelve months ended December 31,
2006, showing the total dollar amount of net sales to each such customer during such year.
No customer listed on Schedule 4.28(a)(i) or Schedule 4.28(a)(ii) has
notified Seller in writing or, to the Knowledge of Seller, orally, that it will stop or
materially decrease the rate of business done with the Business.

     (b) Major Suppliers. Schedule 4.28(b) contains a list of the ten largest
suppliers of the Business, taken as a whole, during the twelve months ended December 31,
2006 (determined on the basis of the total dollar amount of purchases), showing the total
dollar amount of purchases from each such supplier during such year. No supplier listed on
Schedule 4.28(b) has notified Seller in writing or, to the Knowledge of Seller or
LOL, orally, that it will stop or materially decrease the rate of business done with the
Business except for changes in the ordinary course of business of the Business.

Notwithstanding anything in this Section 4.28, Seller and LOL expressly disclaim all
representations and warranties as to whether any customer, patron or supplier will decline to do
business with Buyer following the Closing for reasons specifically relating to Buyer, rather than
the Business itself.

     4.29 Dissolution of GVDP. The Articles of Dissolution and the Plan of Dissolution
with respect to the dissolution of GVDP contained in Schedule 4.29 were filed with the
Secretary of State of the State of California on December 28, 2006.

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     4.30 Ancillary Agreements. The Business as presently conducted by Seller and LOL
permits compliance with the terms and conditions of the Ancillary Agreements.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER AND SAPUTO

     Saputo and Buyer, jointly and severally, represent and warrant to Seller and LOL as follows:

     5.1 Organization, Power. Buyer is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware and has the power to own, operate and
lease its properties and to carry on its business as now being conducted.

     5.2 Corporate Authorization; Binding Effect. This Agreement, the consummation of the
transactions contemplated hereby and the performance by each of Buyer and Saputo of its obligations
contained herein have been duly and validly authorized by all necessary corporate or other action
on the part of Buyer and Saputo. This Agreement constitutes the legal, valid and binding obligation
of Buyer and Saputo enforceable against each of them in accordance with its terms except to the
extent that their enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally
and by general equitable principles.

     5.3 No Government Authorization Required. Except for as set forth on Schedule
5.3, no consent, authorization or approval of, or exemption by, or filings with, any
Governmental Authority is required in connection with the execution, delivery and performance of
this Agreement by Buyer or Saputo.

     5.4 Brokers and Finders. Except as set forth on Schedule 5.4, neither Buyer
nor Saputo nor any of their Affiliates has employed any investment banker, broker or finder or
incurred any liability for any brokerage fees, commissions or finders fees in connection with the
transactions contemplated by this Agreement.

     5.5 Effect of Agreement. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not, with or without the giving
of notice or the lapse of time or both: (i) violate any provision of Law to which Buyer or Saputo
is subject; (ii) violate any judgment, order, writ or decree of any Governmental Authority to
which Buyer or Saputo is subject; or (iii) result in a breach of, violate or conflict with any
term, covenant or condition of, result in the modification or termination of or constitute a
default under any contract or agreement to which Buyer or Saputo is a party, except in the cases
of (i)-(iii) such violations, breaches or conflict as would not have a material adverse effect on
Buyer’s ability to consummate the transactions contemplated herein. Except as otherwise provided
in this Agreement, neither Buyer nor Saputo is required by Law to provide notice to, make any
filing with or obtain any authorization, consent or approval of any Government Authority in order
to consummate the transactions contemplated by this Agreement.

     5.6 Financial Capability. Buyer: (1) has sufficient funds available to pay the
Purchase Price and any expenses incurred by Buyer in connection with the Contemplated
Transactions; and (2) at the Closing, will have the resources and capabilities (financial or
otherwise) to perform its obligations under this Agreement, including payment of the Purchase
Price and discharge of the Assumed Obligations.

     5.7 Misrepresentations and Omissions. No representation, warranty, covenant or
statement by Buyer in this Agreement, the Ancillary Agreements, the Schedules or the certificates
to be furnished to Seller or LOL pursuant to this Agreement contains or will contain any untrue
statement of a

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material fact, or omits or will omit to state a material fact required or necessary to be stated
to make the statements contained in this Agreement not false or materially misleading.

ARTICLE 6

PRE-CLOSING COVENANTS OF SELLER AND LOL

     6.1 Conduct of Business. Except as otherwise contemplated by this Agreement, as
consented to by Buyer in writing or as otherwise required to comply with applicable antitrust or
competition Law, from the date of this Agreement until the Closing, Seller shall conduct the
Business in the ordinary course and none of the following shall occur without notice to and,
except in the case of Section 6.1(e), the consent of Buyer:

     (a) Amendment to the authorized or issued membership units, grant of any unit purchase
option or right to purchase membership units of Seller or issuance of any security
convertible into such membership units;

     (b) Amendment to Seller’s operating agreement, articles of organization or other
similar governing documents;

     (c) Payment or increase (except in the ordinary course of business) of any bonuses,
salaries or other compensation to any Company Employee or entry into any employment,
severance or similar Contract with any manager, officer or employee other than in the
ordinary course of business;

     (d) Adoption of, amendment to or increase in the payments to or benefits under, any
employee benefit or compensation plan, except as required by Law;

     (e) Damage to or destruction or loss of any Purchased Asset, whether or not covered by
insurance in excess of $100,000 in the aggregate;

     (f) Entry into or termination of (other than in the ordinary course of business) (i)
any license, distributorship, dealer, sales representative or joint venture Contract
relating to the Business, or (ii) any other Contract or transaction involving a total
remaining commitment by Seller of at least US$200,000 or with respect to the Leased Real
Property;

     (g) Other than in the ordinary course of business, Sale, lease or other disposition of
any Purchased Asset or property of Seller (including the Intellectual Property) or the
creation of any Encumbrance other than a Permitted Encumbrance on any Purchased Assets;

     (h) Cancellation or waiver of any claims or rights with a value to Seller in excess of US$250,000;

     (i) Material change in the accounting methods used by Seller, other than changes required by U.S. GAAP or law;

     (j) Acquire a seller’s permit for purposes of the California sales tax;

     (k) Undertake any action that: (i) results in Seller being required under section 6066
of the California Revenue and Tax Code to obtain a seller’s permit for purposes of the
California sales tax; or (ii) would have resulted in Seller being required under section
6066 of the California

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Revenue and Tax Code to obtain a seller’s permit for purposes of the California sales tax
if the action had been undertaken within California; or

     (1) Contract to do any of the items listed in this Section 6.1.

     6.2 Wastewater Sampling. From and after the date of this Agreement until Closing,
Seller shall sample wastewater discharge from the facility located at 800 East Paige Avenue,
Tulare, California, as required by and for all parameters required under applicable Permits or
agreements with the Governmental Authority, and shall provide Buyer with complete copies of the
sampling results and analysis.

     6.3 Additional Negative Covenants. Except as otherwise expressly permitted herein,
neither Seller nor LOL shall, without the prior written consent of Buyer: (i) make any material
modification to any Purchased Contract or Permit, other than in the ordinary course of business;
(ii) allow the levels of Inventory to vary materially from the levels customarily maintained; or
(iii) take any affirmative action which is reasonably likely to cause Seller to violate the WARN
Act or any similar state or local law; or (iv) enter into any compromise or settlement of any
Litigation, proceeding or governmental investigation relating to the Purchased Assets, the Business
or the Assumed Obligations which would materially restrict the ability of Buyer to operate the
Business after Closing.

     6.4 Required Approvals. As promptly as practicable after the date of this Agreement,
Seller and LOL shall make and shall use commercially reasonable efforts to obtain all filings
required by Law to be made by them in order to consummate the transactions contemplated by this
Agreement, including obtaining the expiration or early termination of any applicable waiting
periods under the HSR Act. Seller and LOL also shall cooperate with Buyer and its representatives
with respect to all filings that Buyer elects to make or, pursuant to Law, shall be required to
make in connection with the transactions contemplated by this Agreement. Seller and LOL shall use
commercially reasonable efforts to obtain all Material Consents necessary to transfer the benefits
of the Purchased Contracts and Permits to Buyer.

     6.5 No Negotiation. Until such time as this Agreement shall be terminated pursuant to
Section 12.1, none of Seller, LOL or their Affiliates shall directly or indirectly solicit,
initiate, encourage or entertain any inquiries or proposals from, discuss or negotiate with,
provide any nonpublic information to or consider the merits of any inquiries or proposals from any
Person (other than Buyer) relating to any business combination transaction involving Seller or the
Business, including the sale of Seller’s membership units, the merger or consolidation of Seller
or the sale of the Business or any of the Purchased Assets (other than in the ordinary course of
business).

     6.6 Financial Statements. Until the Closing Date, Seller shall deliver to Buyer
within twenty (20) days after the end of each month a copy of the balance sheet and income
statement of Seller for such month prepared in a manner and containing information consistent with
U.S. GAAP.

ARTICLE 7

OTHER COVENANTS OF BUYER, SELLER AND LOL

     7.1 Access to Information; Inspections.

     (a) Access to Seller. During the period from the date of this Agreement through the
Closing Date, upon the terms and conditions required by Seller (including any biosecurity
protocols) and upon reasonable advance notice received from Buyer, Seller shall give Buyer
and its authorized representatives reasonable access during regular business hours, to all
properties, offices, facilities, and Books and Records relating to the Business, the access
to be exercised in a

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manner that does not unreasonably interfere with Seller’s or LOL’s operations or result in a
breach of confidentiality under this Agreement or the Confidentiality Agreement, provided that
Buyer shall indemnify and hold Seller harmless from all claims, liabilities, personal injury,
property damage, costs and expenses related to any such access. In addition, Seller will cooperate
fully in keeping with Law (including providing introductions where necessary) with Buyer to enable
Buyer to contact customers of the Business and will keep Buyer reasonably informed of the
relationship between the Business and its customers.

     (b) Access to Information Post Closing. Buyer acknowledges that Seller and LOL may need access
to information relating to the Business acquired by Buyer after the Closing Date. The Parties agree
that upon reasonable advance notice by Seller or LOL, Buyer shall, at and after the Closing,
provide requested information about the Business reasonably necessary to determine any matter
relating to or arising during the period ending on or before the Closing Date. If Buyer cannot, or
chooses not to, provide the requested information, then upon Seller’s request, Buyer shall grant
Seller and LOL, or their agents, access to the Books and Records of the Business and, if necessary,
the Buyer’s Employees and properties of the Business on terms and conditions reasonably established
by Buyer to protect biosecurity, confidentiality, and in a manner that does not unreasonably
interfere with Buyer’s operations. Buyer shall notify LOL of its record retention and destruction
policy as related to the Purchased Assets and the Business. If LOL desires records that are
scheduled to be destroyed, it shall notify Buyer at least thirty (30) days prior to the destruction
date and Buyer shall provide copies to LOL at LOL’s expense; provided, however,
Buyer agrees not to destroy any Books and Records received from Seller and LOL hereunder during the
one (1) year period following the Closing Date.

     7.2 Title Evidence, Closing Fees and Proration of Utilities.

     (a) Title Commitment. As evidence of title to the Owned Real Property, Seller has caused to
be prepared and delivered to Buyer, at Seller’s expense, a commitment or preliminary title report
(a “Title Commitment”) from First American Title Insurance Company (the “Title Company”) together
with copies of all exception documents.

     (b) Surveys. With respect to the Owned Real Property, within ten (10) Business Days after the
date of this Agreement, Seller, at its expense, shall deliver to Buyer original current surveys
(“Surveys”) of the Owned Real Property, certified to Buyer and to the Title Company, prepared by
registered surveyor, which Surveys shall be prepared in accordance with the 2005 Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys (including all Table A Items noted on
Schedule 7.2(b)), including, without limitation, depicting in drawing format (as opposed
to photograph format) all matters to be shown in such a survey and all matters set forth in the
Title Commitment, all as reasonably acceptable to Buyer.

     (c) Cure. The Title Commitment and the Surveys are collectively called the “Title Evidence”.
Within five (5) Business Days after receiving the last of the Title Evidence, Buyer will inform
Seller, in writing, of Buyer’s objections, if any (“Objections”), to the form and/or contents of
the Title Evidence. All items identified on the Title Evidence and not so objected to by Buyer are
Permitted Encumbrances. Seller, at its expense, will use commercially reasonable efforts to cure
the Objections to the reasonable satisfaction of Buyer, and Buyer will cooperate with Seller in
Seller’s cure efforts. To the extent that Seller is unable to cure one or more Objections prior to
Closing, Buyer and Seller will enter into a separate agreement at Closing under which Seller will
agree to continue it commercially reasonable efforts to cure the Objections at Seller’s expense
within six months after Closing.

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     (d) Title Fees and Costs. All fees charged by the Title Company for the Title
Commitment shall be paid by Seller. The Buyer shall pay all costs to record the grant deeds
and the costs for the final Title Policy and endorsements. Buyer and Seller shall each pay
one-half of any transfer taxes in accordance with the custom and practice of the county
where the Owned Real Property is located.

     (e) Utility Charges. All utility charges, including gas, oil, electricity, telephone,
sewer and water, pertaining to the Purchased Assets shall be prorated between Seller and
Buyer as of the Closing Date and settled outside of Closing; and accordingly, the portion
of any invoices for utility charges received following the Closing Date which have accrued
up to and including the Closing Date shall be for Seller’s account, and paid for or
reimbursed by Seller to Buyer with five (5) Business Days of receipt and written notice to
Seller. Any invoices for utility charges which accrue after the Closing Date shall be for
Buyer’s account.

     7.3 Motor Vehicles. Seller shall take all actions and prepare all documents necessary
to effect the transfer to Buyer of all motor vehicle registrations pertaining to automobiles,
trucks, and other motor vehicles of whatever kind used in the Business in compliance with the
motor vehicle. All Transfer Taxes related to the sale of motor vehicles in connection with the
consummation of the Contemplated Transactions shall be borne by Buyer.

     7.4 Tax Matters.

     (a) Property Taxes. At the Closing, all state and local real and personal property
Taxes, tonnage taxes, ad valorem and similar Taxes and assessments (“Property Taxes”) which
are past due or have become due and payable in the normal course of business upon any of the
Purchased Assets on or before the Effective Time shall be paid by Seller together with any
penalty or interest. All Property Taxes imposed by any Tax authority with respect to the
Purchased Assets that have been paid or are due and payable with respect to a taxable period
beginning before the Effective Time and ending after the Effective Time (regardless of
whether the Property Taxes are payable in advance or in arrears) shall be apportioned
between: (1) the period beginning before and ending immediately before the Effective Time
(the “Pre-Transfer Period”), and (2) the period beginning on the Effective Time and ending
on the last day of the relevant taxable period (the “Post-Transfer Period’’). In performing
the apportionment, all Property Taxes shall be prorated on the assumption that an equal
amount of Property Tax applies to each day of the relevant taxable period regardless of how
installment payments are billed or made. Seller shall be liable for all Property Taxes
apportioned to the Pre-Transfer Period. Buyer shall be liable for all the Property Taxes
apportioned to the Post-Transfer Period; provided, however, that to the extent such Property
Taxes are included within the calculations of Projected Transferred Current Assets or Actual
Transferred Current Assets as a prepaid expense or otherwise, Buyer shall have no obligation
as to such Property Taxes.

     (b) Tax Payments at Closing. At the Closing, Buyer or Seller, as the case may be,
shall pay to the other the amount of any previously paid Property Taxes for which such
party is liable under Section 7.4(a), net of any payments due from the other. Buyer shall
pay to the appropriate Governmental Authority all Property Taxes which become due and
payable after the Effective Time with respect to a Taxable period beginning before the
Effective Time and ending after the Effective Time, subject to Seller’s obligation to pay
Buyer amounts for which Seller is liable under Section 7.4(a). To the extent the Title
Company handles the Closing as it relates to the Owned Real Property, all Property Tax
payments as noted in Section

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7.4(a) shall be paid to the Title Company or noted as debits and/or credits on the closing
statement and the Title Company shall pay the applicable Governmental Authority directly.

     (c) Foreign Person Certificate. At or before the Closing Date, Seller shall provide a
certificate to Buyer, in the form prescribed by Treasury Regulations under Section 1445 of the
Code, that Seller is not a foreign person within the meaning of Section 1445 of the Code and the
Treasury Regulations thereunder.

     (d) Transfer Taxes. Notwithstanding anything herein to the contrary, all sales, use, transfer
and similar Taxes (the “Transfer Taxes”) imposed on the sale and purchase of the Purchased Assets
hereunder shall be paid one-half by the Buyer and one-half by the Seller when due and payable,
regardless of the party on which such Transfer Taxes are imposed pursuant to applicable Law. The
party that is responsible, pursuant to applicable Law, for preparing and filing Tax Returns with
respect to the Transfer Taxes shall timely prepare and file the Tax Returns required with respect
to the Transfer Taxes, and timely remit any Transfer Taxes due and payable, subject to the
obligations of the other party to pay one-half of such Transfer Taxes. The other party shall
cooperate with the party preparing such Tax Returns to obtain and provide to the party preparing
and filing such Tax Returns any available resale or exemption certificates. Each party, acting in
a reasonable manner, shall have the right to review and approve the Tax Returns relating to the
Transfer Taxes before the filing of such Tax Returns. Neither Seller nor LOL shall have any
liability to Buyer or Saputo pursuant to the indemnity obligations contained in Section 13.1 for
any failure of the representation contained in the last sentence of Section 4.21(b) to be correct.

     (e) Payroll Tax. The Parties agree that, with respect to Buyer’s Employees, they respectively
meet the definition of “predecessor” and “successor” as those terms are used in Revenue Procedure
2004-53. For purposes of reporting employee remuneration to the Internal Revenue Service on Forms
W-2 and W-3 for the calendar year in which the Closing Date occurs, the parties shall utilize the
“Standard Procedure” described in Section 4 of Revenue Procedure 2004-53. The parties agree that,
for purposes of reporting employee remuneration for Federal Insurance Contributions Act (“FICA”)
purposes for the calendar year within which the Closing Date occurs, Seller meets the definition of
“predecessor” and Buyer meets the definition of “successor” as defined in Code Section 3121(a)(1).
Seller shall supply Buyer, with respect to all Buyer’s Employees, all cumulative year-to-date
payroll information as of the Closing Date reasonably required by Buyer to determine FICA tax
liability with respect to Buyer’s Employees for the year in which the Closing occurs. Each party
shall cooperate in good faith to adopt similar procedures under applicable state, municipal,
county, local, foreign or other Laws.

     (f) Clearance Certificates. Seller and Buyer shall request such clearance letters or
certificates from such tax authorities as Buyer shall reasonably request in order for Buyer to
avoid successor liability for Seller’s Taxes, and shall cooperate to the extent reasonably
required in resolving any issues arising therefrom.

     (1) Without limiting the foregoing, at least sixty (60) days prior to the Closing,
Buyer shall request a Certificate of Sales and Use Tax Clearance from the California State
Board of Equalization (“SBE”) to determine its withholding obligations, if any, under
section 6811 of the California Revenue and Tax Code.

     (2) In addition, Seller and Buyer shall request a Certificate of Release of Buyer
(Form DE 2220) from the California Employment Development Department (“EDD”).

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     7.5 Confidentiality.

     (a) General Confidential Information. Seller has agreed to sell all of its
Confidential Information to Buyer pursuant to the terms of this Agreement and, for a period
of five years following the Effective Time, none of Seller, LOL or their Affiliates shall
have any right to disclose or publish any of the Confidential Information (except as may be
required by the terms of this Agreement or by Law). Seller and LOL shall not and shall cause
their Affiliates not to disclose, publish or make use of Confidential Information without
the prior written consent of Buyer (except as may be required by the terms of this Agreement
or by Law). The foregoing obligations of confidentiality will not apply to any Confidential
Information that is now or subsequently becomes generally publicly known, other than as a
direct or indirect result of the breach of this Agreement by Seller or LOL.

     (b) Trade Secrets. Seller has agreed to sell its Trade Secrets to Buyer
pursuant to the terms of this Agreement and, after the Effective Time, none of Seller, LOL
or their Affiliates shall have any right to disclose, publish or make use of any of the
Trade Secrets (except as may be required by the terms of this Agreement or by Law). Each of
Seller and LOL shall hold and shall cause their Affiliates to hold in strictest confidence
at all times after the date hereof all Trade Secrets (as long as such information remains a
Trade Secret), and shall not disclose, publish or make use of Trade Secrets (as long as
such information remains a Trade Secret) at any time after the date hereof, without the
prior written consent of Buyer (except as may be required by the terms of this Agreement or
by Law). Nothing in this Agreement shall diminish the rights of Buyer regarding the
protection of Trade Secrets and other intellectual property pursuant to applicable Law. The
foregoing obligations will not apply to any Trade Secrets that are now or subsequently
become generally publicly known, other than as a direct or indirect result of the breach of
this Agreement by Seller or LOL.

     7.6 Payments Received. After the Closing, Seller and Buyer shall hold and promptly
transfer and deliver to the other, from time to time as and when received by them, any cash,
checks with appropriate endorsements (using their best efforts not to convert the checks into
cash), or other property that they may receive on or after the Closing which property belongs to
the other Party, including any insurance proceeds, and shall account to the other for all of the
receipts. The Trade Receivables of the Business arising prior to the Effective Time remain the
property of Seller. Seller shall have the sole and exclusive right to enforce payment of the Trade
Receivables of the Business arising prior to the Effective Time, to send out bills or statements
therefor and to make downward adjustments thereto. Buyer agrees to reasonably cooperate with
Seller in the collection of any Trade Receivables of the Business arising prior to the Effective
Time. Buyer hereby agrees to deliver to Seller or its assignee, within three (3) Business Days
after its receipt, any checks made payable to Seller (if properly payable to Seller) and all
monies delivered to Buyer representing payment on any Trade Receivables of the Business arising
prior to the Effective Time. Payments received will be applied as designated by customer,
provided, however, Buyer shall not instruct any customer owing amounts representing Trade
Receivables arising both prior to and after the Effective Time, to designate any payment as
applying to Trade Receivables arising after the Effective Time in preference to Trade Receivables
arising prior to the Effective Time.

     7.7 Satisfaction of Conditions. Without limiting the generality or effect of any
provision of Articles Article 8 and Article 9, prior to the Closing, each of the Parties shall use
their respective commercially reasonable efforts with due diligence and in good faith to satisfy
promptly all conditions required hereby to be satisfied by the Party in order to expedite the
consummation of the Contemplated Transactions.

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     7.8 Change of Name. On the Closing Date, Seller shall execute and file the proper
documents to change its name so that it is not confusingly similar to the name of Seller.

     7.9 HSR Act. Each of Seller and Buyer and, if applicable, Saputo and LOL, shall file
as promptly as practicable, but in no event later than ten (10) Business Days following the date
of execution hereof, any notification and report forms required for the Contemplated Transactions
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”),
and will promptly file or cause to be filed any supplemental information requested under the HSR
Act. Seller, Buyer, Saputo and LOL shall furnish to the other such necessary information and
reasonable assistance as the other may request in connection with its preparation of any filing or
submission which is necessary under the HSR Act. Seller, LOL, Saputo and Buyer shall keep each
other apprised of the status of any communications with, and inquiries or requests for additional
information from the Federal Trade Commission, the United States Department of Justice or any
other Governmental Authority. Saputo and Buyer each shall bear the costs and expenses for all
filings under the HSR Act; provided, however, that Seller and Buyer will split the cost of all
filing fees required to be paid under the HSR Act. Nothing in this Agreement shall require that
Buyer divest, sell, dispose of or hold separate, or agree to the divestiture of, sale of, disposal
of or holding separate of any of its, its affiliates or the Business’ assets, product lines,
businesses or properties. Further, nothing in this Agreement shall require that Buyer enter into a
consent decree or assume any obligations, except for obligations explicitly agreed to in the
Agreement and Ancillary Agreements, with respect to the ongoing operations of Buyer, its
affiliates or the Business.

ARTICLE 8

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

     The obligations of Buyer to consummate the Contemplated Transactions are subject to the
satisfaction or waiver by Buyer of the conditions precedent in this Article 8 on or before the
Closing Date or as otherwise required in this Agreement.

     8.1 Accuracy of Representations and Warranties. The representations and warranties of
Seller and LOL contained in this Agreement and in any certificate or other writing delivered by
Seller or LOL pursuant to this Agreement or the Ancillary Agreements shall be true, accurate and
correct as of the date of this Agreement and as of the Closing Date, as if made at and as of the
date (unless any representation or warranty refers specifically to a specified date, in which case
the representation or warranty shall be true, accurate and correct on and as of the specified date)
in all material respects unless such representation is qualified by the word “material” in which
case such responsibility or warranty shall be true in all respects. The Buyer shall have received a
certificate signed by an executive officer of Seller and LOL to the foregoing effect.

     8.2 Compliance with Agreements and Covenants. Seller and LOL shall have performed and
complied in all material respects with all covenants, obligations and agreements contained in this
Agreement to be performed and complied with by it on or prior to the Closing Date or any other
date specified in this Agreement.

     8.3 No Injunctions. There shall not be in effect any temporary restraining order,
preliminary injunction, injunction or other pending or threatened action by any third party or any
order of any court or Governmental Authority restraining or prohibiting the Closing of the
Contemplated Transactions.

     8.4 No Material Adverse Effect. There shall not have occurred any event,
circumstance, change or effect that has had, or could reasonably be expected to result in, a
Material Adverse Effect to the Business or on or to the Purchased Assets.

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     8.5 Ancillary Agreements. The following agreements shall be delivered fully executed
by each party thereto (collectively, the “Ancillary Agreements”):

     (a) Non-Competition Agreement in substantially the form attached to this Agreement as Exhibit A;

     (b) Product Off-Take Agreement (Denmark) in substantially the form attached to this Agreement as Exhibit B;

     (c) Milk Supply Agreement in substantially the form attached to this Agreement as Exhibit C;

     (d) Cheese Purchase Agreement in substantially the form attached to this Agreement as Exhibit D;

     (e) Stirred Curd Agreement in substantially the form attached to this Agreement as Exhibit E;

     (f) Whey Supply Agreement in substantially the form attached to this Agreement as Exhibit F;

     (g) Cream Supply Agreement in substantially the form attached to this Agreement as Exhibit G;

     (h) Cheese Production Agreement in substantially the form attached to this Agreement as Exhibit H;

     (i) Permeate Supply Agreement in substantially the form attached to this Agreement as Exhibit I;

     (j) Bill of Sale in substantially the form attached to this Agreement as Exhibit J;

     (k) Assignment and Assumption Agreement in substantially the form attached to this Agreement as Exhibit K;

     (l) Grant Deed for each parcel of Owned Real Estate in substantially the form attached to this Agreement as Exhibit L;

     (m) Cheese By-product Services Agreement in substantially the form attached to this Agreement as Exhibit M;

     (n) Transition Services Agreement in a form acceptable to Buyer and LOL, acting reasonably.

     8.6 HSR Act. All filings required under the HSR Act shall have been made, and the
waiting period required thereby shall have expired or terminated.

     8.7 Actions and Corporate Proceedings. All corporate proceedings and actions of the
Seller and LOL necessary to the Closing of the Contemplated Transactions in form and substance
reasonably acceptable to Buyer shall have been completed and performed.

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     8.8 Consents. Each of the consents to assign the Contracts listed on Schedule
8.8 (the “Material Consents”) to Buyer in form and substance reasonably acceptable to Buyer
shall have been obtained and shall be in full force and effect.

     8.9 Deliveries by Seller. At or prior to the Closing, Seller shall deliver to Buyer
the following, each dated the Closing Date and duly executed:

     (a) Real and Personal Property. One or more assignment and assumption agreements,
without warranty (other than the grant deeds conveyed with respect to the Owned Real
Property), for the Purchased Contracts, bills of sale and other conveyance documents
(collectively, the “Conveyance Document”) with respect to tangible personal property
included in the Purchased Assets in forms acceptable to Buyer and Seller; such affidavits,
certificates, agreements or evidence of authority or other instruments required by the
Title Company to issue the Title Policy;

     (b) Possession of Assets. Possession of the Purchased Assets, including, without
limitation, all Purchased Contracts;

     (c) Vehicle Certificates. Certificates of title for all owned vehicles included in the
Purchased Assets, duly endorsed for transfer to the Buyer;

     (d) Transfer Instruments. Other instruments of transfer reasonably requested by Buyer
at least five (5) Business Days prior to the Closing Date to evidence the transfer of the
Purchased Assets to Buyer and consummation of the Contemplated Transactions;

     (e) Conditions Precedent Certificate. A certificate, dated the Closing Date, of Seller
and LOL, certifying as to the compliance by Seller and LOL with Sections 8.1 and 8.2;

     (f) Authorization Certificate. A certificate, dated the Closing Date, of Seller and
LOL certifying that all necessary actions have been taken by Seller and LOL to approve and
authorize this Agreement and the Ancillary Agreements to which Seller or LOL is a party and
the consummation by Seller and LOL of the Contemplated Transactions (together with an
incumbency and signature certificate regarding the officer or member signing on behalf of
Seller and LOL);

     (g) Non-Foreign Person Certificate. A certificate, in the form prescribed by Treasury
regulations under Section 1445 of the Code, that Seller is not a foreign Person within the
meaning of Section 1445 of the Code;

     (h) Certificate of Good Standing. Certificates of Good Standing for Seller in each
state where Owned Real Property is located;

     (i)
Releases and Satisfactions. Releases and satisfactions of the
deeds of trust, financing statements and Encumbrances listed on
Schedule 8.9(0)(i);

     (j) Employee List. A list showing the changes through a date no more than five (5) Business Days prior to Closing Date to the listing of Company Employees pursuant to
Schedule 4.16(a) and Schedule 4.16(d); and

     (k) Legal Opinion. A legal opinion of Seller’s and LOL’s counsel in the form attached hereto as Exhibit N.

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     8.10 Emission Reduction Credits. Ownership of all Emission Reduction Credits shall be
effectively transferred to Buyer as of the Closing.

     8.11 Title Insurance. Buyer shall have obtained a standard ALTA Form 2006 owner’s
policy of title insurance (or, in final form, irrevocably “marked up” title insurance binder
equivalent to the title insurance policy) (“Title
Policy”), in the full amount of the Purchase
Price allocated to Owned Real Property, insuring good and marketable title to the Owned Real
Property (expressly including all easements and other appurtenances thereto), subject only to
Permitted Encumbrances (but with all standard exceptions deleted), and including such endorsements
available in California and as Buyer may reasonably request, including without limitation (i)
zoning 3.1 endorsement, (ii) owner’s comprehensive endorsement insuring over violations of title
covenants, conditions and restrictions and insuring surface rights against any reserved mineral
interests, (iii) access endorsement, (iv) “same as” survey endorsement, (v) location endorsement,
and (vi) contiguity endorsement.

     8.12 Estoppel Certificates. Estoppel certificates, in the form attached to
Schedule 8.12, executed by each party other than Seller under the leases for Leased Real
Property listed on Schedule 8.12 shall be delivered to Buyer not less two (2) Business
Days prior to Closing.

     8.13 Bond Obligation Satisfaction. Seller shall have satisfied, to Buyer’s reasonable
satisfaction, all obligations pursuant to the tax exempt bonds in the amount of US$10,000,000 as
issued by the California Pollution Control Financing Authority.

ARTICLE 9

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND LOL

     The obligations of Seller and LOL to consummate the Contemplated Transactions are subject to
the satisfaction or waiver by Seller and LOL of the following conditions precedent in this Article 9 on or before the Closing Date or as otherwise required in this Agreement.

     9.1 Accuracy of Representations and Warranties. The representations and warranties of
Buyer contained in this Agreement and in any certificate or other writing delivered by Buyer
pursuant to this Agreement or the Ancillary Agreements shall be true, accurate and correct as of
the date of this Agreement and as of the Closing Date, as if made at and as of the date (unless any
representation or warranty refers specifically to a specified date, in which case the
representation or warranty shall be true, accurate and correct on and as of the specified date) in
all material respects. Seller shall have received a certificate signed by an executive officer of
Buyer to the foregoing effect.

     9.2 Compliance with Agreements and Covenants. Buyer shall have performed and complied
with in all material respects all the covenants, obligations and agreements contained in this
Agreement to be performed and complied with by it on or prior to the Closing Date or any other
date specified in this Agreement.

     9.3 No Injunctions. There shall not be in effect any temporary restraining order,
preliminary injunction, injunction or other pending or threatened action by any Third Party or any
order of any court or Governmental Authority restraining or prohibiting the Closing of the
Contemplated Transactions.

     9.4 Deliveries by Buyer. At the Closing, Buyer shall make the payment described in
Article 3 and shall deliver to Seller the following, each dated the Closing Date:

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     (a) Legal Opinion. A legal opinion of Buyer’s counsel in the form attached hereto as
Exhibit O;

     (b) Assignment and Assumption Agreements. One or more assignment and assumption
agreements under which the Purchased Contracts and Permits are assigned to Buyer and Buyer
agrees to comply with Seller’s obligations under the Purchased Contracts and Permits
pursuant to the terms of Section 2.4;

     (c) Conditions Precedent Certificate. A certificate, dated the Closing Date, of Buyer,
certifying as to compliance by Buyer with Sections 9.1 and 9.2;

     (d) Authorization Certificate. A certificate, dated the Closing Date, of Buyer
certifying that all necessary actions have been taken by Buyer to approve and authorize
this Agreement and the Ancillary Agreements to which Buyer is a party and the consummation
by Buyer of the Contemplated Transactions (together with an incumbency and signature
certificate regarding the officer(s), partners or members signing on behalf of Buyer); and

     (e) Ancillary Agreements. The Ancillary Agreements, fully executed.

     9.5 HSR Act. All filings required under the HSR Act shall have been made, and the
waiting period required shall have expired or terminated.

ARTICLE 10

EMPLOYEES AND BENEFIT PLANS

     10.1 General. Seller and, as applicable, LOL, shall terminate all of the Seller’s
employees and the individuals listed on Schedule 10.1, except the Absent Employees,
effective as of the Effective Time. As of a time immediately following the Effective Time, Buyer
shall offer employment to all of the Seller’s employees and the individuals listed on Schedule
10.1, except the Absent Employees. Buyer shall hire all of Seller’s employees and the
individuals listed on Schedule 10.1, except the Absent Employees, who accept its offer of
employment and report to work for Buyer on a timely basis (the
“Buyer’s Employees”). Seller makes
no representation as to whether employees will accept employment with Buyer. For the one (1) year
period ending on the first anniversary of the Effective Time (the
“Continuation Period”), Buyer
shall provide a compensation and benefits package that contains, in the aggregate, substantially
the same terms and conditions in respect of each employee as the compensation and benefits package
provided to such employees by Seller or LOL, as applicable, with the exception that Buyer will not
offer any defined benefit plans or any post-retirement health benefits other than as required by
COBRA or applicable law.

     10.2 Absent Employees. When any Absent Employee is physically and/or mentally able to
return to work and, if applicable, has received a doctor’s clearance to return to work, at that
time such Absent Employee shall be deemed a Company Employee for purposes of this Section 10.2 and
Seller or LOL shall terminate such Absent Employee and Buyer shall immediately offer employment to
such Absent Employee under the same conditions as provided above; provided, however, that any
Absent Employee who has not returned to work within one (1) year of the Effective Time shall cease
to be an Absent Employee eligible to become a Buyer’s Employee unless otherwise agreed by Buyer.
Buyer shall hire such Absent Employee if he or she accepts Buyer’s offer of employment and reports
to work for Buyer on a timely basis in which event such employee (as of the date of such hire, the
“Return to Work Time”) shall be deemed a “Buyer’s Employee” for purposes of this Agreement. Buyer
shall comply with all applicable Laws regarding non-discrimination in making its decisions about
making offers of

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employment to Absent Employees and the employees listed on Schedule 10.1, including,
without limitation, requirements for reasonable accommodation of employees on disability leave.

     10.3 Seller’s Plans. Seller and LOL shall retain responsibility for all of Seller’s,
LOL’s and their Affiliates’ employee compensation and benefit arrangements. Buyer’s Employees
shall become fully vested in the qualified retirement plans (including, but not limited to defined
contribution and defined benefit plans) of Seller and/or LOL in which the Buyer’s Employees
participated immediately prior to Closing. Notwithstanding the foregoing, no employee listed on
Schedule 10.1 shall become vested in either the Land O’ Lakes Employee Retirement Plan or
the Land O’ Lakes Cooperative Value Incentive Program. With respect to any such plan that requires
employment as of the end of the year or some other date in order for an otherwise accrued benefit
to be earned, Seller and LOL shall provide Buyer’s Employees a pro rata benefit based on the
period elapsed through the Effective Time or Return to Work Time, as the case may be.
Notwithstanding the foregoing, at Closing or the Return to Work Time, as the case may be, Seller
and LOL shall transfer to Buyer funds equivalent to the value of accrued vacation and/or sick time
attributable to Buyer’s Employees and Buyer agrees to credit each of the Buyer’s Employees with
the vacation and/or sick time balances in accordance with Buyer’s customary practice or policy. As
an example and not by way of limitation, Seller, LOL and their Affiliates shall be responsible for
all health and accident claims and expenses (i) with respect to services provided to a Company
Employee prior to the Effective Time or the Return to Work Time, as the case may be, (ii) with
respect to a Company Employee who does not elect to become a Buyer’s Employee at the Effective
Time or the Return to Work Time, as the case may be, (iii) with respect to any person covered by
Seller’s arrangement who is not a Buyer’s Employee or a spouse or a dependent thereof as defined
in Buyer’s plan, and (iv) with respect to disability benefits for Company Employees for any
disability event occurring on or before the Effective Time.

     10.4 Buyer’s Plans. Buyer shall be responsible for any and all liabilities,
obligations and claims of any kind arising out of its employment (or termination of employment,
whether actual or constructive) of Buyer’s Employees and other employees whom Buyer hires after
the Effective Time, including, without limitation, any severance, termination pay, or similar
obligations with respect to Buyer’s Employees whom it terminates after the Effective Time. Buyer
shall cause the continuous periods of service with Seller or LOL, as applicable, immediately prior
to the Effective Time or Return to Work Time, as the case may be, to count for purposes of
eligibility to participate, vesting, and, solely with respect to vacation and severance benefits,
benefit accrual in any of Buyer’s plans in which the Buyer’s Employees are eligible to participate
after the Effective Time, to the extent that such service was recognized for that purpose under
the analogous plan of Seller or LOL, as applicable; provided ,however, that the foregoing shall
not apply to the extent it would result in duplication of benefits. As an example and not by way
of limitation, Buyer and its Affiliates shall be responsible for all health and accident claims
and expenses (i)with respect to services provided to a Buyer’s Employee subsequent to the
Effective Time or the Return to Work Time, as the case may be, or (ii) with respect to disability
benefits for Buyer’s Employees for any disability event occurring subsequent to the Effective
Time.

ARTICLE 11

CLOSING

     The Closing shall take place on the later of April 2, 2007 and such date which is three (3)
Business Days following satisfaction of the conditions set forth in Article 8 and Article 9, at the
offices of Dorsey & Whitney LLP in Minneapolis, Minnesota, at or about 9:00 a.m. Central Standard
Time. The parties agree that time is of the essence. The date on which the Closing occurs is
referred to in this Agreement as the “Closing Date.” The Closing shall be effective as of the
Effective Time.

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     (d) Any Losses arising from any misrepresentation or breach of a warranty contained in
Article 4 or from any misrepresentation in or omission from any certificate furnished to Buyer
under Article 8;

     (e) Any Losses arising from any breach of covenant or of any agreement on the part of the
Seller or LOL set forth in this Agreement including, without limitation, amounts payable pursuant
to Section 3.2 or Section 3.3;

     (f) Any Losses arising from operations or conduct of the Business or ownership or use of the
Purchased Assets at any time prior to Closing, or any incident, occurrence, condition or claim
existing, arising or accruing prior to Closing and relating to operation of the Business or
Seller’s, GVDP’s or LOL’s ownership or use of the Purchased Assets, other than any liability or
obligation of Seller expressly assumed by Buyer pursuant to this Agreement;

     (g) Any and all Losses resulting from Seller’s or LOL’s failure to comply with any “bulk
sales,” “bulk transfer” or similar Laws: and

     (h) Any liability for Taxes of or against Seller or GVDP for all Tax periods ending on or
prior to the Closing Date and for that portion of all Tax periods that include the Closing Date up
to and including the Closing Date.

13.2 Limitations upon Seller’s and LOL’s Indemnification Obligations.

     (a) Time. The indemnification obligations set forth in Section 13.1 shall survive the Closing Date for the following periods of time:

     (1) Five (5) years for Sections 13.1(b), 13.1(c), and Section 2.5(a)(10);

     (2) The expiration of the period of time prescribed by the applicable statutes of
limitation for Section 13.1(g), Section 13.1(h), and matters related to Taxes as set forth
in Section 4.21 and Section 7.4;

     (3) Forever in the case of fraud, matters relating to those obligations listed in
Sections 2.5(a)(1), 2.5(a)(3), 2.5(a)(7) and 2.5(a)(ll) or breaches of any of the
representations or warranties set forth in Sections 4.1, 4.2, 4.3 and the first sentence of
Section 4.8(a) and the second sentence of Section 4.8(b);

     (4) The date that is thirty (30) days following the expiration of a covenant or an
agreement on the part of the Seller or LOL contained in Article 7 or Article 14 of this
Agreement which, pursuant to the terms of such covenant or agreement, obligates Seller or
LOL for a period longer than eighteen months following the Closing Date; and

     (5) Eighteen (18) months for all other matters.

Notwithstanding any other provision in this Agreement, any claim first asserted by giving
a Notice of Claim on or before the expiration of the applicable period provided in this
Article 13 shall neither be abated nor barred.

     (b) Indemnification Cap.

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     (1) Generally. The maximum total indemnification obligation under Section 13.1
shall not exceed US$35,000,000.

     (2) Exceptions. The provisions of Section 13.2(b)(1) shall not apply to any
indemnification claims made by Buyer arising from or related to the items described
in Sections 2.5(a)(1), 2.5(a)(3), 2.5(a)(7), 2.5(a)(ll), 13.1(g), 13.1(h),or
breaches of any of the representations or warranties set forth in Sections 4.1, 4.2,
4.3, 4.21 and the first sentence of Section 4.8(a) and the second sentence of
Section 4.8(b) or any Losses arising from fraud.

     (c) Indemnification Basket.

     (1) Generally. In general, Buyer shall not be entitled to indemnification under
Section 13.1 unless the amount of all Losses exceeds US$1,500,000 in the aggregate
for all claims for which indemnity is sought hereunder, in which case Seller and LOL
shall jointly and severally indemnify Buyer for all such Losses in excess of
US$1,500,000.

     (2) Exceptions. The provisions of Article 13.2(c)(1) shall not apply to any
indemnification claims made by Buyer arising from or related to Sections 13.1(e),
13.1(g) and 13.1(h), the items described in Sections 2.5(a)(1), 2.5(a)(2),
2.5(a)(3), 2.5(a)(6), 2.5(a)(7) and 2.5(a)(11) or breaches of any of the
representations or warranties set forth in Sections 4.1, 4.2, 4.3 and the first
sentence of Section 4.8(a) and the second sentence of Section 4.8(b), or any Losses
arising from fraud.

     (d) Assumed Obligation. Buyer shall not be entitled to indemnification under Article
13 for any Losses resulting from Buyer’s failure to pay, perform or discharge any
Assumed Obligation.

     13.3 Indemnification by Buyer and Saputo. Buyer and Saputo, jointly and severally,
shall indemnify and hold each of Seller, LOL and each of their Affiliates, officers, directors and
employees harmless against and in respect of:

     (a) Any Losses arising from any misrepresentation or breach of a warranty contained in
Article 5 or from any misrepresentation in or omission from any certificate any certificate
furnished by Buyer under Article 9;

     (b) Any Losses arising from any breach of covenant or of any agreement on the part of
Buyer set forth in this Agreement, including, without limitation, the failure to pay and
perform when due any Assumed Obligation and amounts payable pursuant to Section 3.2; and

     (c) Any Losses (other than Losses arising from an Environmental Condition) arising
from Buyer’s ownership or use of the Purchased Assets or Buyer’s operation of the Business
after the Effective Time, including without limitation:

          (1) any Losses for Taxes arising from or incurred in connection with Buyer’s operation
of the Business after the Effective Time;

          (2) any Losses arising from or incurred in connection with Buyer’s employment
of the Company Employees after the Effective Time; and

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          (3) any Losses under the WARN Act arising from or incurred in connection with
Buyer’s operation of the Business after the Effective Time.

     13.4 Procedure.

     (a) Notice of Claims. Buyer agrees to give Seller notice of any and all claims asserted
against Buyer for which indemnification is sought under this Section 13.4 (the “Notice of
Claiml”). The Notice of Claim shall be given within fifteen (15) days after receipt of
written notice of such claim by Buyer. Failure to give the Notice of Claim shall not
abrogate or diminish the obligations under this Section 13.4 if Seller or LOL has or
receives knowledge of the existence of any such claim by any other means such that failure
to receive a Notice of Claim does not prejudice Seller’s ability to defend such claim. If
Seller shall object to such Notice of Claim, Seller shall deliver a notice of objection (the
“Notice of Objection”) to Buyer within fifteen (15) days after Buyer’s delivery of the
Notice of Claim. If the Notice of Objection shall not have been so delivered within such
period of fifteen (15) days, Seller shall be conclusively deemed to have acknowledged the
correctness of the claim or claims specified in the Notice of Claim for the full amount
thereof, and the Seller shall promptly pay the Losses set forth in the Notice of Claim to
Buyer in immediately available funds. If Seller shall object to a claim or claims set forth
in any Notice of Claim within fifteen (15) days of Buyer’s delivery of the Notice of Claim,
and if such claim or claims shall not have been resolved within fifteen (15) days from the
date of delivery of the Notice of Objection, then Buyer may take such actions at Law as it
deems necessary.

     (b) Defense of Claim. In any third-party litigation, administrative proceeding,
negotiation or arbitration for which indemnification is sought under this Section 13.4,
which, if successful, might result in an obligation for Seller or LOL to pay Losses, Seller
may, at the cost and expense of Seller, select legal counsel (reasonably acceptable to
Buyer) to assume the primary defense of such litigation, proceedings, negotiations and
arbitration, but only if, and so long as, (i) Seller diligently pursues such claim and (ii)
in the case that any such third-party litigation, administrative proceeding, negotiation or
arbitration may result in any adverse consequences to Buyer other than the payment of money
damages, Seller and its counsel proceed according to Buyer’s reasonable requirements
regarding defense and/or settlement of such litigation, proceeding, negotiation or
arbitration. If Seller shall, within a reasonable time after notice, fail or is unable to
assume the primary defense, Buyer shall have the right, but not the obligation, to
undertake the defense of and to compromise or settle the claim or other matter on behalf,
for the account, and at the risk of the Seller. If the Seller assumes the defense of any
third-party litigation, administrative proceeding, negotiation or arbitration, Seller shall
not effect any compromise or settlement of such third-party action which may result in any
adverse consequence to Buyer other than the payment of money damages unless Seller proceeds
according to Buyer’s reasonable requirements or with Buyer’s prior written consent, and
Buyer shall have no liability with respect to any compromise or settlement effected
otherwise.

     (c) Notice and Defense of Claims by the Seller. The provisions of (a) and (b) above
shall apply to claims against Buyer as if the references to Buyer, on the one hand, and
Seller, on the other hand, were reversed.

     13.5 Payment. Subject to the provisions of this Article 13, the indemnifying party
shall promptly pay and/or reimburse the indemnified party for any amounts due hereunder.

     13.6 Sole Remedy.

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     (a) In the event that, at any time before the eighteen-month anniversary of the
Closing Date, the Buyer is unable to operate the Plant (as such term is defined in the
Milk Supply Agreement) at a capacity consistent with Seller’s operation of the Plant prior to the
Closing Date (“Normal Capacity”) and such inability to operate the Plant at Normal Capacity is
directly related to Seller’s misrepresentation or breach of the representation contained in the third
sentence of Section 4.8(a), LOL shall agree to temporarily reduce the Daily Minimum Requirement (as
such term is defined in the Milk Supply Agreement) by an amount determined according to the following formula:

R = DMR*(.15*Y)

where

R = the reduction in the Daily Minimum Requirement,

DMR = equals the Daily Minimum Requirement immediately prior to the time of the period of Plant inoperability,

Y = the proportion that Plant capacity attributable to the inoperable portion of the Plant bears to the entire capacity of the Plant.

In no event shall any reduction in the Daily Minimum Requirement pursuant to this Section
13.6(a) exceed 15% of the then-applicable Daily Minimum Requirement. LOL shall have no
obligation to reduce the Daily Minimum pursuant to this Section 13.6(a) unless Buyer and
Saputo use their best efforts to fully mitigate any inability to operate the Plant at
Normal Capacity. Any reduction in the Daily Minimum Requirement pursuant to this Section
13.6(a) shall only apply only until such time as the Plant becomes operable at Normal
Capacity and any reduction in the Daily Minimum Requirement shall be adjusted to reflect
any incremental return to Normal Capacity. In no event will any reduction in the Daily
Minimum Requirement apply beyond the eighteen-month anniversary of the Closing Date.

     (b) With the exception of fraud, or unless another remedy is specifically provided for
elsewhere in this Agreement (including as provided in Section 13.6(a)), Buyer, Seller
and LOL each agree that the indemnification obligations set forth in this Article 13
constitute the sole and exclusive remedy with respect to any and all claims relating to the subject matter of
this Agreement. Neither Party shall be liable to the other for incidental, special,
punitive, exemplary or consequential damages including, but not limited to, loss of profits or revenue,
interference with business operations, loss of lenders, buyers, diminution in value of the
Purchased Assets.

     13.7 No Third Party Beneficiary Claims. This Article 13 regarding Indemnification is
not intended to create, and does not create, any third party beneficiary or similar rights in any
third party.

     13.8 Not Applicable to Fraud or Ancillary Agreements. Notwithstanding anything to the
contrary contained in this Agreement, the indemnification limitations set forth in this Article 13
shall not apply to any instance of fraud or for any claims solely arising out of or connected
solely with any of the Ancillary Agreements.

     13.9 Adjustment to Purchase Price for Actual Current Transferred Assets. The
determination of the liability of Buyer and/or Saputo, on the one hand, and Seller and/or LOL, on
the other hand, for any of the matters included in the adjustment to the Purchase Price described
in Section 3.2 shall be made exclusively pursuant to the procedure for adjusting the Purchase
Price described in Section 3.2 and no

- 40 -

 

Saputo Inc.

6869 Métropolitain Blvd. East

Montréal (Saint-Léonard), Québec

Canada H1P 1X8

Attention: Legal Affairs

or to such other individual or address or facsimile number as a Party may designate for itself by
notice given under this Section.

     14.7 Waivers. The failure of a Party at any time or times to require performance of
any provision shall in no manner affect its right at a later time to enforce the same. No waiver by
a party of any condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any condition or breach in other
instances or a waiver of any other condition or breach of any other term, covenant, representation
or warranty.

     14.8 Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective permitted successors and assigns, provided,
however, that neither this Agreement, nor any Ancillary Agreements (except as may be expressly
provided otherwise in any Ancillary Agreement) nor any right or obligation under this Agreement
may be assigned by any Party without the prior written consent of the other Parties except that
any Party may assign any of its rights under this Agreement or any Ancillary Agreement to one or
more of its Affiliates; provided that no assignment shall relieve a Party from its obligations
under this Agreement or any Ancillary Agreement.

     14.9 Publicity. No public announcement or other publicity regarding the transactions
referred to in this Agreement shall be made by Buyer, Seller or LOL or any of their respective
officers, directors, employees, representatives or agents, without the prior written agreement of
the other Party, unless the announcement or disclosure is required by any Governmental Authority
or Law, and even then advance notice shall be given to the other Party. To the extent possible,
any announcement shall be agreed to by the Parties as to form, content, timing and manner of
distribution or publication. Nothing in this Section 14.9 shall prevent the Parties from
discussing the transactions with the Ratings Agencies or those persons whose consent, approval,
agreement or opinion, as the case may be, is required for consummation of the transactions. The
Parties shall exercise all reasonable efforts to assure that such persons keep confidential any
information relating to this Agreement or any agreement, document or instrument contemplated in
this Agreement.

     14.10 Further Assurances. Seller, LOL and Buyer agree to cooperate fully with each
other in connection with obtaining the satisfaction of the conditions set forth in Article 8 and
Article 9. Seller and Buyer agree to execute and deliver other documents, certificates, agreements
and other writings and to take other actions as may be reasonable, necessary or desirable in order
to consummate or implement expeditiously the Contemplated Transactions and any agreement, document
or instrument contemplated in this Agreement. Without limiting the foregoing, Seller and LOL agree
to execute and deliver such documents and take such other actions as may be reasonably necessary
to complete the dissolution of GVDP in California.

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

- 42 -

 

     14.12 Entire Understanding. This Agreement, the Confidentiality Agreement, and the
Ancillary Agreements set forth the entire agreement and understanding of the Parties with respect
to the Contemplated Transactions and supersede any and all prior agreements, arrangements and
understandings among the Parties relating to the subject matter.

     14.13 Governing Law; Jurisdiction; Waiver of Jury Trial.

     (a) Governing Law. This Agreement shall be construed and interpreted according to the
internal laws of the State of Delaware, excluding any choice of law rules that may direct
the application of the laws of another jurisdiction.

     (b) Jurisdiction; Service of Process. Any proceeding arising out of or relating to this
Agreement may be brought in the courts of the State of Delaware, New Castle County, or, if
it has or can acquire jurisdiction, in the United States District Court for the District of
Delaware, and each of the parties to this Agreement submits to the jurisdiction of 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 in any other court. The parties agree that any 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
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.

     (c) Waiver of Jury Trial. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF
THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY
AND THAT ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE
CONTEMPLATED TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

     14.14 No Third Party Beneficiaries. Nothing expressed or referred to in this
Agreement confers any rights or remedies upon any Person that is not a party or permitted assign
of a Party to this Agreement.

     14.15 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same original
instrument.

- 43 -

 

     IN WITNESS WHEREOF, the Parties have executed and delivered this Asset Purchase and Sale
Agreement as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SAPUTO CHEESE USA INC.	 	 	 	CHEESE & PROTEIN INTERNATIONAL LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

	 	  

	 	 	 	By:
	 	/s/ Peter S. Janzen
 

	 	  
	Name:	 	 	 	Name: Peter S. Janzen	 	 
	Title:	 	 	 	Title: Secretary	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SAPUTO:	 	 	 	LOL:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	In addition to the other rights and obligations set
forth in this Agreement, Saputo Inc. hereby
unconditionally and irrevocably guarantees all of
the obligations of Buyer under this Agreement.	 	 	 	In addition to the other rights and obligations set
forth in this Agreement, Land O’Lakes, Inc. hereby
unconditionally and irrevocably guarantees all of
the obligations of Seller under this Agreement.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SAPUTO INC.	 	 	 	LAND O’LAKES, INC.	 	 
	 
	By: 

	 	  

	 	 	 	By:
	 	/s/ Lisa Deverell
 

	 	  
	Name:	 	 	 	Name: Lisa Deverell	 	 
	Title:	 	 	 	Title: Vice President Strategic Planning

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]