Document:

Exhibit 10.1

 

EXECUTION
VERSION

 

 

ASSET PURCHASE AGREEMENT

 

by and among

 

TRADESTAR CONSTRUCTION SERVICES, INC.,

 

STRATUM
HOLDINGS, INC.,

 

and

 

TRADESMEN SERVICES, INC.

 

Dated as of October 26, 2007

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1:

  	
  DEFINITIONS

  	
  1

  
	
  ARTICLE 2:

  	
  PURCHASE AND SALE OF ASSETS

  	
  8

  
	
  2.1

  	
  Assets to be Transferred

  	
  8

  
	
  2.2

  	
  Retained Assets

  	
  9

  
	
  ARTICLE 3:

  	
  LIABILITIES

  	
  10

  
	
  3.1

  	
  Assumed Liabilities

  	
  10

  
	
  3.2

  	
  Retained Liabilities

  	
  10

  
	
  ARTICLE 4:

  	
  PURCHASE PRICE

  	
  10

  
	
  4.1

  	
  Purchase Price

  	
  10

  
	
  4.2

  	
  Purchase Price Adjustment

  	
  11

  
	
  4.3

  	
  Purchase Price Allocation

  	
  12

  
	
  ARTICLE 5:

  	
  DELIVERIES AND OTHER ACTIONS

  	
  12

  
	
  5.1

  	
  Closing

  	
  12

  
	
  5.2

  	
  Deliveries by the Seller

  	
  12

  
	
  5.3

  	
  Deliveries by the Buyer

  	
  13

  
	
  5.4

  	
  Proration

  	
  14

  
	
  ARTICLE 6:

  	
  REPRESENTATIONS AND WARRANTIES
  OF THE SELLER AND PARENT

  	
  14

  
	
  6.1

  	
  Existence and Good Standing

  	
  14

  
	
  6.2

  	
  Power

  	
  14

  
	
  6.3

  	
  Enforceability

  	
  14

  
	
  6.4

  	
  No Conflict

  	
  15

  
	
  6.5

  	
  Consents

  	
  15

  
	
  6.6

  	
  Title

  	
  15

  
	
  6.7

  	
  Necessary Property

  	
  15

  
	
  6.8

  	
  Litigation

  	
  15

  
	
  6.9

  	
  Compliance with Laws

  	
  16

  
	
  6.10

  	
  Conduct of Business

  	
  16

  
	
  6.11

  	
  Labor Matters

  	
  17

  
	
  6.12

  	
  Employee Benefit Plans

  	
  17

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.13

  	
  Environmental

  	
  18

  
	
  6.14

  	
  Contracts

  	
  19

  
	
  6.15

  	
  Licenses and Permits

  	
  21

  
	
  6.16

  	
  Intellectual Property

  	
  21

  
	
  6.17

  	
  Financial Statements

  	
  22

  
	
  6.18

  	
  Undisclosed Liabilities

  	
  22

  
	
  6.19

  	
  Accounts Receivable

  	
  22

  
	
  6.20

  	
  Indebtedness

  	
  23

  
	
  6.21

  	
  Taxes

  	
  23

  
	
  6.22

  	
  Customers

  	
  24

  
	
  6.23

  	
  Disclosure

  	
  24

  
	
  6.24

  	
  Related Party Transactions

  	
  24

  
	
  6.25

  	
  Brokers

  	
  24

  
	
  ARTICLE 7:

  	
  REPRESENTATIONS AND WARRANTIES
  OF THE BUYER

  	
  24

  
	
  7.1

  	
  Existence and Good Standing

  	
  24

  
	
  7.2

  	
  Power

  	
  24

  
	
  7.3

  	
  Enforceability

  	
  25

  
	
  7.4

  	
  No Conflict

  	
  25

  
	
  7.5

  	
  Consents

  	
  25

  
	
  7.6

  	
  Brokers

  	
  25

  
	
  ARTICLE 8:

  	
  CERTAIN COVENANTS

  	
  25

  
	
  8.1

  	
  Assignability and Consents

  	
  25

  
	
  8.2

  	
  Maintenance of, and Access to, Records

  	
  26

  
	
  8.3

  	
  Accounts Receivable

  	
  26

  
	
  8.4

  	
  Expenses; Transfer Taxes

  	
  26

  
	
  8.5

  	
  Employee Matters

  	
  26

  
	
  8.6

  	
  Tax Matters

  	
  27

  
	
  8.7

  	
  Competitive Activity; Non–Solicitation;
  Confidentiality

  	
  28

  
	
  8.8

  	
  Use of Business Name and Related Materials

  	
  29

  
	
  8.9

  	
  Payment of the AICCO Indebtedness

  	
  30

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9:

  	
  REMEDIES

  	
  30

  
	
  9.1

  	
  General Indemnification Obligation

  	
  30

  
	
  9.2

  	
  Notice and Third Party Claims

  	
  31

  
	
  9.3

  	
  Survivability; Limitations

  	
  32

  
	
  9.4

  	
  Specific Performance

  	
  33

  
	
  9.5

  	
  Tax Treatment

  	
  33

  
	
  ARTICLE 10:

  	
  MISCELLANEOUS

  	
  33

  
	
  10.1

  	
  Further Assurances

  	
  33

  
	
  10.2

  	
  Expenses

  	
  33

  
	
  10.3

  	
  No Assignment

  	
  33

  
	
  10.4

  	
  Headings

  	
  33

  
	
  10.5

  	
  Integration, Modification and Waiver

  	
  33

  
	
  10.6

  	
  Construction

  	
  33

  
	
  10.7

  	
  Severability

  	
  34

  
	
  10.8

  	
  Notices

  	
  34

  
	
  10.9

  	
  Governing Law

  	
  35

  
	
  10.10

  	
  Counterparts

  	
  35

  

 

iii

 

Disclosure
Schedules

 

	
  2.1(b)

  	
  Notes Receivable

  
	
  2.2

  	
  Retained Assets

  
	
  4.1

  	
  Purchase Price

  
	
  4.3

  	
  Purchase Price
  Allocation

  
	
  6.1

  	
  Jurisdictions

  
	
  6.4

  	
  No Conflicts

  
	
  6.5

  	
  Consents

  
	
  6.6

  	
  Permitted Exceptions

  
	
  6.9

  	
  Compliance With Laws

  
	
  6.10

  	
  Conduct of Business

  
	
  6.11(b)

  	
  List of Employees

  
	
  6.12

  	
  Employee Benefit Plans

  
	
  6.13

  	
  Environmental

  
	
  6.14

  	
  Contracts

  
	
  6.15

  	
  Licenses and Permits

  
	
  6.16

  	
  Intellectual Property

  
	
  6.17(a) and (b)  Financial
  Statements

  
	
  6.18

  	
  Undisclosed Liabilities

  
	
  6.20

  	
  Indebtedness

  
	
  6.22

  	
  Customers

  
	
  6.24

  	
  Related Party
  Transactions

  
	
  8.1(a)

  	
  Purchased Assets

  

 

 

TABLE OF EXHIBITS

 

	
  Exhibit A

  	
  Bill of Sale

  
	
  Exhibit B

  	
  Assignment and
  Assumption Agreement

  
	
  Exhibit C

  	
  Transition Services
  Agreement

  

 

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”), dated as of October 26,
2007, is by and among Tradestar Construction Services, Inc., a New Mexico
corporation (the “Seller”), Stratum Holdings, Inc., a
Nevada corporation and sole stockholder of Seller (the “Parent”),
and Tradesmen Services, Inc., an Ohio corporation (the “Buyer”).

 

RECITALS

 

A.                                   Seller
engages in the construction staffing business by providing construction
laborers and skilled tradespersons and related construction services to
companies and business units, including those in the industrial, marine, and
construction industries as well as public institutions, including local, state,
and federal entities (collectively, the “Business”).

 

B.                                     Seller
desires to sell substantially all of its assets, properties, rights and
interests relating to the Business to Buyer, and Buyer desires to purchase and
acquire from Seller, upon the terms and subject to the conditions hereinafter
set forth, substantially all of such assets, properties, rights and interests
of Seller, in consideration of certain payments by Buyer and the assumption by
Buyer of certain liabilities and obligations of Seller specifically disclosed
in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants hereinafter contained and other good and valuable
consideration had and received, Buyer, Seller and Parent, on the basis of, and
in reliance upon, the representations, warranties, covenants and agreements set
forth in this Agreement, and upon the terms and subject to the conditions
contained herein, hereby agree as follows:

 

ARTICLE 1:  DEFINITIONS

 

“Accounts Receivable” has the meaning set forth
in Section 2.1(b).

 

“Action” means any complaint, action, suit, legal
proceeding or hearing, investigation, interference, opposition, reexamination,
administrative enforcement proceeding or arbitration proceeding before any
Governmental Authority or commenced by any Person.

 

“Affiliate” means, with respect to any Person,
any other Person that directly or indirectly controls, is controlled by, or is
under common control with, any such Person. The term “control”
(including the terms “controlled by”
or “under common control with”) means,
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through
ownership of voting securities, membership interests, by contract or otherwise.

 

“Agreement” has the meaning set forth in the
preamble.

 

“AICCO Indebtedness” means the amount outstanding at Closing under
the Premium Finance Agreement, Disclosure Statement and Security Agreement,
effective as of June 30, 2007, by and between the Seller and AICCO, Inc.

 

 

“Allocation Schedule” has the meaning set forth in Section 4.3.

 

“Ancillary Agreements” means the Bill of Sale,
the Employment Agreement, the Assignment and Assumption Agreement, the
Transition Services Agreement, and each agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the Buyer or
Seller in connection with the consummation of the transactions contemplated by
this Agreement, in each case only as applicable to the relevant party or
parties to such Ancillary Agreement, as indicated by the context in which such
term is used.

 

“Assumed Contracts” has the meaning set forth in Section 2.1(d).

 

“Assumed Liabilities” has the meaning set forth
in Section 3.1.

 

“Balance Sheet” has the meaning set forth in Section
6.17(a).

 

“Business” has the meaning set forth in Recital
A.

 

“Buyer” has the meaning set forth in the
preamble.

 

“Buyer Indemnified Party” has the meaning set
forth in Section 9.1(a).

 

“Buyer Plans” has the meaning set forth in Section 8.5(d).

 

“Claims” has the meaning set forth in Section 9.2(b).

 

“Claims Notice” has the meaning set forth in Section 9.2(a).

 

“Closing” has the meaning set forth in Section 5.1.

 

“Closing Date” has the meaning set forth in Section 5.1.

 

“Closing Time” has the meaning set forth in Section
5.1.

 

“COBRA” has the meaning set forth in Section
8.5(f).

 

“Code” means the Internal Revenue Code of 1986,
as amended, and the Treasury Regulations promulgated thereunder.

 

“Confidential Information”  means all information, whatever its nature and
form and whether obtained orally, by observation, from written materials or
otherwise, that relates to any research, technical, manufacturing, business or
commercial activities or plans of the Business or Buyer, including, without
limitation, all systems, servicing methods and business techniques, programs,
formulas, processes, compilations of technical and non-technical information,
inventions, discoveries and improvements, designs, drawings, blueprints,
software, software code, databases, pricing information and financial modeling
to develop such pricing information, product ideas, concepts, prototypes, features,
procedures, training, promotional materials, training courses and other
training and instructional materials, vendor and product information, sales
intermediary lists and other sales intermediary information, and customer lists
and other customer information, whether or not patented or patentable, and all other
information that is not 

 

2

 

otherwise
generally available to the public and could constitute a trade secret of the
Seller or one of its Affiliates under the Uniform Trade Secrets Act.

 

“Consent” means any consent, approval,
authorization, qualification, waiver, registration or notification required to
be obtained from, filed with or delivered to a Governmental Authority or any
other Person in connection with the consummation of the transactions provided
for herein.

 

“Contracts” means all contracts, licenses,
agreements (including, without limitation, employment agreements and
non-competition agreements), leases (whether real or personal property), commitments,
instruments, guarantees, bids, orders and proposals.

 

“Controlled Group” means any trade or business
(whether or not incorporated) (i) under common control within the meaning of
Section 4001(b)(1) of ERISA with Seller or (ii) which together with Seller
is treated as a single employer under Section 414(t) of the Code.

 

“Employment Agreement” has the meaning set forth
in Section 5.2(j).

 

“Employee Plan” has the meaning set forth in Section 6.12(a).

 

“Environment” means soil, surface waters, groundwater,
land, stream sediments, surface or subsurface strata, ambient air, or indoor
air, including, without limitation, any material or substance used in the
physical structure of any building or improvement and any environmental medium.

 

“Environmental Condition” means any condition of
the Environment with respect to the Real Property, or with respect to any other
real property at which any Hazardous Material generated by the operation of the
Business prior to the date of this Agreement has been treated, stored or
disposed of, which violates any Environmental Law, or results in any Release or
Threat of Release.

 

“Environmental Law” means any Law with respect to
the Environment or human health and safety.

 

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

 

“Excluded Employee” has the meaning set forth in Section
8.5(b).

 

“Expiration Date” has the meaning set forth in Section 9.3(a).

 

“Final Amount” has the meaning set forth in Section 4.2(b).

 

“Financial Statements” has the meaning set forth
in Section 6.17(a).

 

“GAAP” means United States generally accepted
accounting principles.

 

“General Enforceability Exceptions” has the
meaning set forth in Section 6.3.

 

“Governmental Authority” means any government or
political subdivision or regulatory authority, whether federal, state, local or
foreign, or any agency or instrumentality of any such 

 

3

 

government or political subdivision or regulatory
authority, or any federal state, local or foreign court or arbitrator.

 

“Guarantee” by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing or
otherwise supporting in whole or in part the payment of any Indebtedness or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (b) entered
into for the purpose of assuring in any other manner the obligee of such
Indebtedness or other obligations of the payment of such Indebtedness or to
protect such obligee against loss in respect of such Indebtedness (in whole or
in part); provided, however, that the term Guarantee shall not
include endorsements for deposit or collection in the Ordinary Course of
Business. The term “Guarantee” used as verb has
a correlative meaning.

 

“Hazardous Material” means any pollutant, toxic
substance, including asbestos and asbestos-containing materials, hazardous
waste, hazardous material, hazardous substance, contaminant, petroleum or
petroleum-containing materials, radiation and radioactive materials, leaded
paints, toxic mold and other harmful biological agents, and polychlorinated
biphenyls as defined in, the subject of, or which could give rise to, liability
under any Environmental Law.

 

“Indebtedness” of any Person means:  either (a) any liability of such Person
(i) for borrowed money (including the current portion thereof),
(ii) under any reimbursement obligation relating to a letter of credit,
bankers’ acceptance or note purchase facility, (iii) evidenced by a bond,
note, debenture or similar instrument (including a purchase money obligation),
(iv) for the payment of money relating to leases that are required to be
classified as a capitalized lease obligations in accordance with GAAP,
(v) for all or any part of the deferred purchase price of property or
services (other than trade payables), including any “earnout” or similar payments or any
non-compete payments, (vi) under interest rate swap, hedging or similar
agreements, (vii) for income or franchise Taxes payable, (viii) for
any deferred compensation or accrued incentive compensation, or (ix) for
any unfunded liability for retirement benefits; or (b) any liability of
others described in the preceding clause (a) that such Person has Guaranteed,
that is recourse to such Person or any of its assets or that is otherwise its
legal liability or that is secured in whole or in part by the assets of such
Person. For purposes of this Agreement, Indebtedness (A) includes (x) any
and all accrued interest, success fees, prepayment premiums, make-whole
premiums or penalties and fees or expenses actually incurred (including attorneys’
fees) associated with the prepayment of any Indebtedness, (y) all “cut” but
uncashed checks issued by Seller that are outstanding as of the Closing Date,
and (z) cash, book or bank account overdrafts, and (B) excludes the AICCO
Indebtedness.

 

“Indemnified Party” has the meaning set forth in Section 9.2(a).

 

“Indemnifying Party” has the meaning set forth in
Section 9.2(a).

 

“Independent Arbitrator” has the meaning set
forth in Section 4.2(a).

 

4

 

“Information Systems” means all computer hardware, databases
and data storage systems, computer, data, database and communications networks
(other than the Internet), architecture interfaces and firewalls (whether for
data, voice, video or other media access, transmission or reception) and other
apparatus used to create, store, transmit, exchange or receive information in
any form.

 

“Initial Purchase Price” has the meaning set
forth in Section 4.1.

 

“Intellectual Property” means all (i) patents,
patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice) and any reissue,
continuation, continuation-in-part, revision, extension or reexamination
thereof; (ii) trademarks, service marks, trade dress, logos, domain names,
trade names and corporate names together with all goodwill associated
therewith, including, without limitation, the use of the current corporate name
and all translations, adaptations, derivations and combinations of the
foregoing; (iii) copyrights and copyrightable works; (iv) all registrations,
applications and renewals for any of the foregoing; (v) trade secrets and
confidential business information (including, without limitation, ideas,
formulae, compositions, know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial, business and marketing
plans, sales and promotional literature, and customer, supplier and franchisee lists
and related information); (vi) computer software and websites (including,
without limitation, data, data collections and databases and related
documentation); (vii) other intellectual or industrial property rights and
foreign equivalents or counter rights and forms of protection of a similar or
analogous nature to any of the foregoing; and (viii) copies and tangible
embodiments of the foregoing (in whatever form or medium).

 

“Interim Financial Statements” has the meaning
set forth in Section 6.17(a).

 

“Investment” means any equity interest, directly
or indirectly, in any Person.

 

“IRS” means the Internal Revenue Service.

 

“Knowledge of Seller” or “Seller’s
Knowledge” means the actual knowledge of Seller or Parent after
due inquiry and reasonable investigation. For purposes of this Agreement, “due inquiry and
reasonable investigation” means the knowledge that Seller’s officers and
directors would reasonably be expected to obtain by reviewing with each direct
subordinate and other key employee of Seller the representations and warranties
set forth in this Agreement which are applicable to the duties performed by
such direct subordinate or other key employee on behalf of Seller.

 

“Law” means any law, statute, code, ordinance,
regulation or other requirement of any Governmental Authority, including common
law.

 

“Liability Claim” has the meaning set forth in Section 9.2(a).

 

“Lien” means any mortgage, lien, pledge,
encumbrance, security interest, claim, charge, defect in title or other
restriction.

 

“Litigation Conditions” has the meaning set forth
in Section 9.2(b).

 

5

 

“Loss” or “Losses”
has the meaning set forth in Section 9.1(a).

 

“Material Adverse Change” means any condition,
circumstance, change or effect (or any development that, insofar as can be
reasonably foreseen, would result in any condition, circumstance, change or
effect) that has, or is reasonably likely to have, a materially adverse effect
on (i) the historical, near–term or long–term projected business, assets,
properties, results of operations, condition (financial or otherwise) or
prospects of Seller or of the Business; (ii) the value of the Purchased Assets
or a material increase in the amount of Assumed Liabilities; or (iii) the
ability of Seller to consummate the transactions contemplated by this Agreement
or perform their obligations under this Agreement.

 

“Material Customers” has the meaning set forth in
Section 6.23(b).

 

“Material Suppliers” has the meaning set forth in
Section 6.23(a).

 

“Net Working Capital” means
(i) Accounts Receivable and Prepaid Expenses, minus (ii) the Assumed
Liabilities identified in Sections 3.1(a) and (b), of the Company
as of the Closing Time, each determined in accordance with GAAP applied in a
manner consistent with the accounting principles used in the preparation of the
Balance Sheet with the exceptions set
forth on Schedule 6.17(b).

 

“Net Working Capital Target” means $1,842,000.

 

“Non–Compete Period” means the five year period
following the Closing.

 

“Objections Statement” has the meaning set forth
in Section 4.2(a).

 

“off the shelf” has the meaning set forth in Section
6.14(a)(iii).

 

“Order” means any order, judgment, injunction,
award, decree, ruling, charge or writ of any Governmental Authority.

 

“Ordinary Course of Business” means the ordinary
course of business consistent with past custom and practice (including with
respect to quantity and frequency).

 

“Parent” has the meaning set forth in the
preamble.

 

“Permits” means any license, permit,
authorization, certificate of authority, qualification or similar document or
authority that has been issued or granted by any Governmental Authority.

 

“Permitted Exceptions” has the meaning set forth
in Section 6.6.

 

“Person” means any individual, sole
proprietorship, partnership, corporation, limited liability company,
unincorporated society or association, trust, or other entity.

 

“Pre-Closing Tax Period” means any Tax period
ending on or before the Closing Date.

 

“Preliminary Net Working Capital Statement” has
the meaning set forth in Section 4.2(a).

 

6

 

“Prepaid Expenses” has the meaning set forth in Section
2.1(a).

 

“Property Taxes” has
the meaning set forth in Section 8.6(a).

 

“Purchase Price” has the meaning set forth in Section
4.1(b).

 

“Purchased Assets” has the meaning set forth in Section 2.1.

 

“Purchased Intellectual Property” has the meaning
set forth in Section 2.1(f).

 

“Real Property” means any and all real property and interests
in real property of the Company, including without limitation any real property
leaseholds and subleaseholds, purchase options, easements, licenses, rights to
access and rights of way and any other real property otherwise owned, occupied
or used by the Company.

 

“Release” means any releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, migrating, disposing or dumping of a Hazardous Material into the
Environment (including, without limitation, the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) and any condition that results in the exposure of a Person to a
Hazardous Material.

 

“Restricted Territory” means: (i) the United
States; (ii) the geographic area(s) within a one hundred (100) mile radius of
any and all Seller or Buyer location(s) in, to, or for which employees of the
Seller or Buyer work or are assigned to work (either direct or supervisory);
and (iii) all of the specific customer accounts of the Seller or Buyer, whether
within or outside of the United States.

 

“Retained Assets” has the meaning set forth in Section 2.2.

 

“Retained Liabilities” has the meaning set forth
in Section 3.2.

 

“Seller” and “Sellers”
has the meaning set forth in the preamble.

 

“Seller Indemnified Party” has the meaning set
forth in Section 9.1(b).

 

“Selling Expenses” means all of the fees and
expenses incurred in connection with the transactions contemplated hereby and
any other fees and expenses incurred by or on behalf of the Seller or Parent in
connection with the process of selling the Business or otherwise relating to
the negotiation, preparation or execution of this Agreement or any other
Ancillary Agreements or the performance or consummation of the transactions
contemplated hereby or thereby, including (a) any fees and expenses associated
with obtaining necessary or appropriate Consents of any Governmental Authority
or other third party on behalf of the Seller, (b) any fees or expenses
associated with obtaining the release and termination of any Lien, (c) all
brokers’ or finders’ fees, and (d) fees and expenses of counsel, advisors,
consultants, investment bankers, accountants, auditors and experts.

 

“Special Representations” has the meaning set
forth in Section 9.3(a).

 

7

 

“Tax” means (a) any net income, alternative
or add-on minimum income tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, withholding,
payroll, employment, social security (or similar) excise, severance, stamp,
occupation, property, environmental or windfall profit tax, custom or duty,
tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalty or addition to tax imposed by
any Law or Taxing Authority, whether disputed or not, and (b) any
liability for the payment of any amounts of any of the foregoing types as a
result of being a member of an affiliated, consolidated, combined or unitary
group, or being a party to any agreement or arrangement whereby liability for
payment of such amounts was determined or taken into account with reference to
the liability of any other Person.

 

“Tax Return” means
any return, declaration, report, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

 

“Taxing Authority” means any Governmental
Authority responsible for the administration or imposition of any Tax.

 

“Third Party Claim” has the meaning set forth in Section
9.2(b).

 

“Threat of Release” means a substantial
likelihood of a Release that requires action to prevent or mitigate damage or
injury to health, safety or the Environment that might result from such
Release.

 

“Threshold” has the
meaning set forth in Section 9.3(b).

 

“Transfer Taxes” has
the meaning set forth in Section 8.4.

 

“Transferred Employee”
has the meaning set forth in Section 8.5(a).

 

“Utility Charges” has the meaning set forth in Section 5.4.

 

ARTICLE 2:  PURCHASE AND SALE OF ASSETS

 

2.1                                 Assets
to be Transferred. Subject to Section 2.2, concurrently with the
execution of this Agreement, Buyer shall purchase from Seller, and Seller shall
sell, transfer, assign, convey and deliver to Buyer, all of the assets, properties,
rights and interests owned, used, occupied or held by or for the benefit of
Seller in the operation of the Business or otherwise, wherever situated
(collectively, the “Purchased Assets”),
including, without limitation, the following:

 

(a)                                  All
prepaid expenses, advance payments, deposits (except Seller’s deposits with
insurers), surety accounts and other similar deposits, including, without
limitation, deposits with suppliers and utilities (collectively, “Prepaid Expenses”);

 

(b)                                 All
accounts receivable, notes receivable set forth on Schedule 2.1(b), unbilled revenues,
reimbursable costs and expenses and other claims for money due to Seller
(collectively, “Accounts Receivable”);

 

8

 

(c)                                  All
Contracts to which Seller is a party or by which the Purchased Assets are bound
as listed on Schedule 6.14 (“Assumed Contracts”);

 

(d)                                 All
tangible personal property, inventory, office furniture and office equipment,
other furnishings, trucks, automobiles and other vehicles, and leasehold
improvements;

 

(e)                                  All
Intellectual Property owned, held or used by Seller in the conduct of the
Business, together with all income, royalties, damages and payments due or
payable as of the Closing or thereafter (including, without limitation, damages
and payments for past, present or future infringements, misappropriations or
other violations thereof) and the rights to sue and collect damages for past,
present or future infringements, misappropriations or other violations thereof,
and any corresponding, equivalent or counterpart rights, title or interest that
now exist or may be secured hereafter anywhere in the world, and all copies and
tangible embodiments of the foregoing, including, without limitation, the
Intellectual Property listed on Schedule 6.16 (collectively, the “Purchased Intellectual Property”);

 

(f)                                    All
of the Seller’s right, title and interest in and to the Business as carried on
and conducted by Seller as a going concern, including any and all goodwill and
similar intangible assets associated therewith.

 

(g)                                 All
Permits and building, safety, fire and health approvals, or any waiver of any
of the foregoing;

 

(h)                                 Except
for the corporate minute books and related stock records of the Seller, all
business and employment records, including, without limitation, all books,
records, ledgers, files, documents, correspondence, lists (including, without
limitation, customer lists, in whatever form or medium), plats, drawings,
photographs, creative materials, advertising and promotional materials,
studies, reports and other materials (in whatever form or medium); and

 

(i)                                     All
other assets, properties, rights and interests of Seller otherwise employed in
or related to the operation of the Business or otherwise, of every kind, nature
and description, whether tangible or intangible, real, personal or mixed, and
wherever situated, including those assets, properties, rights and interests set
forth on the Balance Sheet (except assets disposed of by the Seller since the
date of the Balance Sheet in the Ordinary Course of Business of the Seller or
as otherwise permitted pursuant to the terms of this Agreement), all of which
are to be sold, transferred, conveyed, assigned and delivered to Buyer at the
Closing pursuant to this Agreement.

 

2.2                                 Retained
Assets. Notwithstanding anything in this Agreement to the contrary, the
Seller shall retain only those assets, rights and properties specifically
identified on Schedule 2.2 (collectively, the “Retained
Assets”), and the Buyer will in no way be construed to have
purchased or acquired (or to be obligated to purchase or to acquire) any
interest whatsoever in any of the Retained Assets.

 

9

 

ARTICLE 3:  LIABILITIES

 

3.1                                 Assumed
Liabilities. Concurrently with the execution of this Agreement, the Buyer
shall assume and become responsible for, and shall thereafter pay, perform and
discharge as and when due all of the liabilities of Seller set forth below
(collectively, the “Assumed Liabilities”):

 

(a)                                  All
liabilities and obligations of the Seller reflected on the Balance Sheet (and
not in the notes thereto), less payments thereon or discharges thereof prior to
the Closing, to the extent that such liabilities and obligations (i) constitute
trade payables incurred by the Sellers in the Ordinary Course of Business, or
(ii) accrued expenses incurred by Seller in the Ordinary Course of Business,
excluding, in each such case, accrued liabilities as of the Closing relating to
Selling Expenses, Indebtedness of Seller, the AICCO Indebtedness, inter–company
expenses, interest expenses, employee
or other bonuses of any kind, worker comp payable, deferred compensation
arrangements, Employee Plans and Taxes;

 

(b)                                 All
liabilities and obligations of the Seller arising subsequent to the date of the
Balance Sheet in the Ordinary Course of Business of the type specified in Section
3.1(a), less payments thereon or discharges thereof prior to the Closing;
and

 

(c)                                  All
liabilities and obligations of the Seller arising under or related to the
Assumed Contracts; provided, however, that the Buyer will not
assume or be responsible for any such liabilities or obligations (i) to be
performed on or prior to the date of the Closing, (ii) that arise from breaches
of such Assumed Contracts or defaults under such Assumed Contracts by the
Seller, or (iii) consisting of
reimbursements, refunds, setoffs or other similar payments sought from the
Seller relating to any services performed by the Seller prior to the date of
the Closing, all of which liabilities and obligations constitute
Retained Liabilities.

 

3.2                                 Retained
Liabilities. The Assumed Liabilities will not include, and the Buyer will
not assume, any liability or obligation of the Seller unless such liability or
obligation is specifically identified in Section 3.1 (the
liabilities and obligations so retained by the Seller and not assumed by the
Buyer are hereinafter referred to as the “Retained Liabilities”).

 

ARTICLE 4:  PURCHASE PRICE

 

4.1                                 Purchase
Price. In consideration for the Purchased Assets, the Assumed Liabilities,
the performance of services by the Seller and Parent pursuant to the Transition
Services Agreement and the covenants of the Seller and Parent set forth in Section
8.7, concurrently with the execution of this Agreement, the Buyer shall pay
or cause to be paid to the Seller by bank wire transfer of immediately
available funds to an account designated in writing by the Seller an amount in
cash (the “Initial Purchase Price”)
equal to $3,200,000 minus any and all outstanding Indebtedness of the
Seller immediately prior to the Closing and set forth on Schedule 4.1,
subject to adjustment pursuant to Section 4.2. Buyer shall pay, or cause
to be paid, to the Persons entitled thereto all of the Indebtedness of the
Seller set forth on Schedule 4.1 and the Seller shall pay, or cause to
be paid, the AICCO Indebtedness. The Initial Purchase Price as finally adjusted
in accordance with Section 4.2, is referred to herein as the “Purchase Price.”

 

10

 

4.2                                 Purchase
Price Adjustment.

 

(a)                                  Final
Net Working Capital Calculation. Within 90 days after the Closing Date, the
Buyer shall prepare and deliver to the Seller a statement showing the
calculation of the Net Working Capital as of the Closing Time (the “Preliminary Net Working Capital Statement”).
After delivery of the Preliminary Net Working Capital Statement, the Buyer
shall permit the Seller and its representatives to have reasonable access to
the books, records and other documents (including work papers) pertaining to or
used in connection with preparation of the Preliminary Net Working Capital
Statement and shall provide the Seller with copies thereof as reasonably
requested by the Seller. The Seller and its accountants may make inquiries of
the Buyer and the Company and their respective employees, accountants and
representatives regarding the Preliminary Net Working Capital Statement arising
in the course of their review thereof, and the Buyer shall use, and shall cause
the Company to use, its commercially reasonable efforts to cause any such
employees, accountants and representatives to cooperate with and respond to
such inquiries. If the Seller has any objections to the Preliminary Net Working
Capital Statement, the Seller shall deliver to the Buyer a statement setting
forth its objections thereto (an “Objections Statement”).
If an Objections Statement is not delivered to the Buyer within 45 days after
delivery of the Preliminary Net Working Capital Statement, the Preliminary Net
Working Capital Statement shall be final, binding and non-appealable by the
parties hereto. The Seller and the Buyer shall negotiate in good faith to
resolve any such objections, but if they do not reach a final resolution within
15 days after the delivery of the Objections Statement, the Seller and the
Buyer shall submit such dispute to Grant Thornton LLP (the “Independent
Arbitrator”) or, if such firm is unable or unwilling to act,
such other independent public accounting firm recognized as having significant
expertise in construction accounting as shall be agreed upon by the Buyer and
the Seller in writing. If, within 10 days, the Seller and the Buyer are unable
to agree upon the selection of the Accounting Firm, the Seller and the Buyer
shall request the American Arbitration Association to furnish a list of not
less than five accounting firms to potentially arbitrate the disagreement. Selection
of the Accounting Firm shall be made by the Seller and the Buyer alternately
striking any name from such list until only one name remains. The final name
remaining who is available to serve shall be the Accounting Firm. The Seller
and the Buyer shall use their commercially reasonable efforts to cause the
Independent Arbitrator to resolve all disagreements as soon as practicable. The
resolution of the dispute by the Independent Arbitrator, or any written
agreement of the Seller and the Buyer as to the resolution of the dispute,
shall be final, binding and non–appealable on the parties hereto. The costs and
expenses of the Independent Arbitrator shall be allocated between the Buyer, on
the one hand, and the Seller, on the other hand, based upon the percentage
which the portion of the contested amount not awarded to each party bears to
the amount actually contested by such party. For example, if the Seller claims
the Net Working Capital is $1,000 greater than the amount determined by the
Buyer, and the Buyer contests only $500 of the amount claimed by the Seller,
and if the Independent Arbitrator ultimately resolves the dispute by awarding the
Seller $300 of the $500 contested, then the costs and expenses of arbitration 

 

11

 

will be allocated 60%
(i.e., 300 ÷ 500) to the Buyer and 40% (i.e., 200 ÷ 500) to the Seller.

 

(b)                                 Payment
of Excess. If the Net Working Capital as finally determined pursuant to Section
4.2(a) above (the “Final Amount”)
is greater than the Net Working Capital Target, then the Buyer shall promptly
(but in any event within five days) deliver to the Seller such excess by wire
transfer of immediately available funds to an account or accounts designated by
the Seller.

 

(c)                                  Payment
of Shortfall. If the Final Amount is less than the Net Working Capital
Target, then the Seller shall promptly (but in any event within five days)
deliver to the Buyer such shortfall by wire transfer of immediately available
funds to one or more accounts designated by the Buyer.

 

4.3                                 Purchase
Price Allocation. The Purchase Price and the liabilities of the Seller,
plus other relevant items, will be allocated to the assets of the Seller for
income Tax purposes in a manner consistent with the fair market values as set
forth on Schedule 4.3, which was jointly prepared and agreed to by
Seller and Buyer (the “Allocation
Schedule”) and in accordance with applicable Law. Seller, Buyer
and each of their Affiliates shall prepare and file all income Tax Returns in a
manner consistent with the Allocation Schedule, and each of them will not
voluntarily take any position inconsistent therewith upon examination of any
such Tax Return, in any Action or otherwise respect to such Tax Returns.

 

ARTICLE 5:  DELIVERIES AND OTHER ACTIONS

 

5.1                                 Closing.
The closing of the transactions contemplated hereby (the “Closing”)
shall take place at the offices of Jones Day, North Point, 901 Lakeside Avenue,
Cleveland, Ohio 44114, or such other location as the Buyer and the Seller shall
agree in writing, simultaneously with the execution and delivery of this
Agreement. The date on which the Closing occurs shall be the “Closing Date.”  Legal title, equitable title and risk of loss
with respect to the Purchased Assets shall not pass to Buyer until the
Purchased Assets are transferred at the Closing, which transfer, once it has
occurred, shall be deemed effective for Tax, accounting and other computational
purposes as of 11:59 p.m. (Eastern Time) on the Closing Date (the “Closing Time”).

 

5.2                                 Deliveries
by the Seller. Concurrently with the execution of this Agreement, the
Seller shall deliver to the Buyer the following items:

 

(a)                                  possession
of the Purchased Assets;

 

(b)                                 copies
of the Articles of Incorporation (or equivalent organizational document) of
Seller, certified by the applicable authority of the Seller’s jurisdiction of
organization, and copies of the Bylaws (or equivalent governing document) of
Seller, certified by an officer of Seller;

 

(c)                                  a
reasonably current certificate of good standing of Seller issued by the
Secretary of State or equivalent authority in Seller’s respective jurisdiction
of organization;

 

12

 

(d)                                 copies
of resolutions of the Board of Directors and the sole stockholder of Seller
approving the execution and delivery of this Agreement and the Ancillary
Agreements, and the consummation of the transactions contemplated hereby and
thereby, certified by an officer of Seller;

 

(e)                                  a
copy of the Bill of Sale, in the form of Exhibit A attached hereto,
executed by the Seller;

 

(f)                                    a
copy of the Assignment and Assumption Agreement, in the form of Exhibit B
attached hereto, executed by the Seller;

 

(g)                                 all
warranties of all machinery and equipment, and all guarantees from all
manufacturers and suppliers relating to any of the Purchased Assets;

 

(h)                                 all
Assumed Contracts and all files and other data and documents relating to the
Purchased Assets;

 

(i)                                     appropriate
termination statements under the Uniform Commercial Code and other instruments
as may be requested by the Buyer to extinguish all Indebtedness of the Seller
related to the Business or the Purchased Assets and all security interests related
thereto to the extent directed by the Buyer;

 

(j)                                     a
copy of an employment agreement between the Buyer and Darrell Willis, in a
mutually agreeable form, duly executed by Darrell Willis (the “Employment Agreement”);

 

(k)                                  a
copy of a Transition Services Agreement, in the form of Exhibit C
attached hereto, duly executed by the Seller and the Parent (the “Transition Services Agreement”);

 

(l)                                     a certificate of an officer of the Company, dated
as of the date of this Agreement, setting forth in sufficient detail acceptable
to the Buyer the aggregate amount of Indebtedness of the Seller;

 

(m)                               a
certification in the form contained in Treasury Regulation Section
1.1445-2(b)(2)(iv) to the effect that Seller is not a “foreign
person” within the meaning of Section 1445 of the Code and duly
executed by an executive officer of Seller;

 

(n)                                 estoppel
certificates, waivers, collateral access agreements and non-disturbance
agreements relating to the Real Property, as requested by the Buyer or its
lenders, each in a form reasonably acceptable to the Buyer and its lenders; and

 

(o)                                 such
other documents and instruments as the Buyer shall reasonably request to
consummate the transactions contemplated hereby.

 

5.3                                 Deliveries
by the Buyer. Concurrently with the execution of this Agreement, the Buyer
shall deliver to the Seller the following items:

 

13

 

(a)                                  a
copy of the Assignment and Assumption Agreement, in the form of Exhibit B
attached hereto, executed by the Buyer;

 

(b)                                 the
Initial Purchase Price payable as set forth in Section 4.1;

 

(c)                                  a
copy of the Employment Agreement, executed by the Buyer; and

 

(d)                                 such
other documents and instruments as the Seller shall reasonably request to
consummate the transactions contemplated hereby.

 

5.4                                 Proration.

 

(a)                                  All
Utility Charges shall be apportioned between the Seller, on the one hand, and
the Buyer, on the other hand, as of the Closing Date. The Seller and the Buyer
shall cooperate in (i) assuring that Utility Charges are promptly paid and
(ii) having meter readings for Utility Charges and other necessary
arrangements carried out so that Utility Charges relating to periods of time
after the date of this Agreement shall be billed directly to the Buyer. For
purposes of this Section 5.4, “Utility Charges” shall mean water, sewer,
electricity, gas, telephone and other utility charges, if any, applicable to
the Purchased Assets.

 

(b)                                 Property
Taxes (as defined in Section 8.6(a)) with respect to the Purchased
Assets attributable to the calendar year of the Closing will be prorated in the
manner set forth in Section 8.6(a).

 

ARTICLE 6:  REPRESENTATIONS AND WARRANTIES OF THE
SELLER AND PARENT

 

Parent
and Seller jointly and severally represent and warrant to the Buyer as follows:

 

6.1                                 Existence
and Good Standing. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of its incorporation
and is duly qualified to do business as a foreign corporation and is in good
standing in the  jurisdictions set forth
on Schedule 6.1, which are the only jurisdictions in which the
Seller is required to be so qualified, except for such jurisdictions in which
the failure to so qualify would not have a Material Adverse Change.

 

6.2                                 Power.
Seller has the corporate power and authority to (a) own, operate and lease
the Purchased Assets as and where currently owned, operated and leased, and
(b) carry on the Business as currently conducted. Seller has the requisite
power and authority to execute, deliver and perform fully its obligations under
this Agreement and the Ancillary Agreements.

 

6.3                                 Enforceability.
The execution, delivery and performance of this Agreement and the Ancillary
Agreements, and the consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized by all necessary action on the
part of Seller, as applicable, and constitute the valid and legally binding
obligations of the Seller enforceable against Seller in accordance with their
terms, except as limited by (a) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of 

 

14

 

creditors’ rights
generally from time to time in effect and (b) the availability of equitable remedies
(regardless of whether enforceability is considered in a proceeding at law or
in equity) (collectively, the “General Enforceability
Exceptions”).

 

6.4                                 No
Conflict. Except as set forth on Schedule 6.4, neither the execution
of this Agreement or the Ancillary Agreements, nor the performance by Seller of
its obligations hereunder or thereunder will (a) violate or conflict with
Seller’s Articles of Incorporation (or similar organizational document) or
Bylaws (or similar organizational document) or any Law or Order,
(b) violate, conflict with or result in a breach or termination of, or
otherwise give any Person additional rights or compensation under, or the right
to terminate or accelerate, or constitute (with notice or lapse of time, or
both) a default under the terms of any note, deed, lease, instrument, security
agreement, mortgage, commitment, contract, agreement, license or other
instrument or oral understanding to which Seller is a party or by which any of
the Purchased Assets are bound, (c) result in the creation or imposition
of any Lien with respect to, or otherwise have an adverse effect upon, any of
the Purchased Assets, or (d) invalidate or adversely affect any Permit required
related to the Purchased Assets or otherwise used in the conduct of the
Business. The Seller has no Investments.

 

6.5                                 Consents.
Except as set forth on Schedule 6.5, no Consent is required in
connection with the execution and delivery by Seller of this Agreement or the
Ancillary Agreements or the consummation of the transactions contemplated
hereby or thereby.

 

6.6                                 Title.
The Seller has good and marketable title to, or valid and enforceable leasehold
interests in, all of the Purchased Assets, in each case free and clear of all
Liens other than (a) Liens for current Taxes, assessments, fees and other
charges by Governmental Authorities that are not due and payable as of the date
of this Agreement and (b) those matters that are set forth on Schedule
6.6 (collectively, the “Permitted Exceptions”).
The Purchased Assets are in good condition and repair (subject to normal wear
and tear consistent with the age of the Purchased Assets) and are sufficient
for the operation of the Business as it is currently conducted and presently
proposed to be conducted. All of the Purchased Assets have been maintained,
repaired and replaced consistent with past practice in a manner which is
appropriate for the continued operation of the Business.

 

6.7                                 Necessary
Property. The Purchased Assets, when transferred to the Buyer, will be
adequate and sufficient to permit the Buyer to conduct the Business as
conducted by the Seller immediately prior to the Closing Date. The Seller is
the only entity through which the Business is conducted, and neither Seller
nor, to the Knowledge of Seller, any of its Affiliates owns, leases, or uses
any assets (other than the Purchased Assets) that are related to, or conducts
business similar to, the Business.

 

6.8                                 Litigation.
Except as set forth on Schedule 6.8,
there is no instance in which Seller, in connection with the Purchased Assets
or the operation of the Business, is or has been within the three-year period
prior to the date of this Agreement (a) subject to any unsatisfied Order
or (b) a party, or, to the Seller’s Knowledge, is threatened to be made a
party, to any Action. There are no Actions pending or threatened that question
the validity of this Agreement, the Ancillary Agreements or any of the
transactions contemplated hereby or thereby. Without limiting the generality of
the foregoing, there are no pending or threatened Actions to modify the zoning
classification of, or to condemn or take by power of eminent domain (or
purchase in lieu 

 

15

 

thereof), or to classify
as a landmark, or otherwise to take or restrict in any way the right to use,
develop or alter, all or any part of the real property currently leased by
Seller.

 

6.9                                 Compliance
with Laws. Except as set forth on Schedule 6.9, Seller is now, and
has been within the past three years, in compliance in all material respects
with all Laws and Orders applicable to the Purchased Assets and the Business. To
the Seller’s Knowledge, there exists no proposed Law or Order applicable to the
Purchased Assets or the Business that would be expected to have a Material
Adverse Change.

 

6.10                           Conduct
of Business. Except as set forth on Schedule 6.10, since December
31, 2006, the Business has been conducted in the Ordinary Course of Business,
there has not been any adverse change in the operation of the Business or the
performance or financial condition of Seller, and the Purchased Assets are in
substantially the same condition as such assets were on such date, normal wear
and tear excepted. Without limiting the generality of the foregoing, since
December 31, 2006, the Seller has not:

 

(a)                                  borrowed
any amount or incurred or become subject to any liability except (i) current
liabilities incurred in the Ordinary Course of Business, (ii) liabilities under
Contracts entered into in the Ordinary Course of Business, and (iii) borrowings
under lines of credit existing on such date;

 

(b)                                 mortgaged,
pledged or subjected to any Lien, any of the Purchased Assets, except Permitted
Exceptions;

 

(c)                                  sold,
assigned or transferred (including, without limitation, transfers to any
employees, shareholders or Affiliates) any Purchased Assets except in the
Ordinary Course of Business, or canceled any debts or claims;

 

(d)                                 waived
any rights of value or suffered any losses;

 

(e)                                  taken
any other action or entered into any other transaction (including any transactions
with employees, shareholders or Affiliates) other than in the Ordinary Course
of Business or other than the transactions contemplated by this Agreement;

 

(f)                                    suffered
any material theft, damage, destruction or other material loss of or to any Purchased
Assets;

 

(g)                                 (i)
increased the salary, wages or other compensation rates of any officer,
employee, director, partner or consultant of Seller in any material respect;
(ii) made or granted any material increase in any Employee Plan, or amended or
terminated any existing Employee Plan, or adopted any new Employee Plan; or
(iii) made any material commitment or incurred any material liability to any
labor organization;

 

(h)                                 made
any material capital expenditures or commitments therefor;

 

(i)                                     made
any change in accounting or Tax principles, practices or policies from those
utilized in the preparation of the Financial Statements;

 

16

 

(j)                                     made
any write-off or write-down of or made any determination to write-off or
write-down any of the assets and properties of Seller;

 

(k)                                  entered
into any amendment, modification, termination (partial or complete) or granted
any waiver under or given any consent with respect to any agreement that is
required (or had it been in effect on the date hereof would have been required)
to be disclosed in the Schedules to this Agreement;

 

(l)                                     made
any change in the general pricing practices or policies or any change in the
credit or allowance practices or policies of Seller; or

 

(m)                               commenced
or terminated any line of business.

 

6.11                           Labor
Matters.

 

(a)                                  Union
and Employee Contracts. The Seller is not a party to or bound by any union
contract, collective bargaining agreement, employment contract, independent
contractor agreement, consultation agreement, or other similar type of contract.
The Seller has not agreed to recognize any union or other collective bargaining
unit. No union or collective bargaining unit has been certified as representing
the employees of the Seller and no organizational attempt has been made or
threatened by or on behalf of any labor union or collective bargaining unit
with respect to any employees of the Seller employed in connection with the
Business. With respect to the Business, the Seller has not experienced any labor
strike, dispute, slowdown or stoppage or any other material labor difficulty
during the past five years.

 

(b)                                 List
of Employees, Etc. Schedule 6.11(b) sets forth a list of all employees
of the Business as of October 19, 2007, the rate of all regular and special
compensation payable to each such individual in any and all capacities, and any
regular or special compensation that will be payable to each such individual in
any and all capacities as of the Closing Date other than the then–current
accrual of regular payroll compensation. The Seller does not employ any
employee who cannot be dismissed immediately without notice and without further
liability to the Seller, subject to applicable laws, rules and regulations
relating to employment discrimination. To the Seller’s Knowledge, no employees
with respect to the Business intend to terminate their employment relationship
with Seller.

 

6.12                           Employee
Benefit Plans.

 

(a)                                  Schedule
6.12 sets forth a complete list of (i) all “employee benefit plans,” as defined in
Section 3(3) of ERISA, (ii) all other severance pay, salary continuation,
bonus, incentive, stock option, retirement, pension, profit sharing or deferred
compensation plans, contracts, programs, funds, or arrangements of any kind,
and (iii) all other employee benefit plans, contracts, programs, funds, or
arrangements (whether written or oral, qualified or nonqualified, funded or
unfunded, foreign or domestic, currently effective or terminated) and any
trust, escrow, or similar agreement related thereto, whether or not funded, in
respect of any present or former employees, directors, officers, shareholders,
consultants, or independent contractors of the Seller that are 

 

17

 

currently sponsored or
maintained by the Seller or any member of the Controlled Group or with respect
to which the Seller or any member of the Controlled Group has made or is
required to make payments, transfers, or contributions (all of the above being
hereinafter individually or collectively referred to as an “Employee
Plan” or “Employee Plans,”
respectively). Neither the Seller nor any member of the Controlled Group has
any liability with respect to any plan, arrangement or practice of the type
described in the preceding sentence other than the Employee Plans.

 

(b)                                 Copies
of the following materials have been delivered or made available to Buyer:  (i) all current and prior plan documents for
each Employee Plan or, in the case of an unwritten Employee Plan, a written
description thereof, (ii) all determination letters from the IRS with respect
to any of the Employee Plans, (iii) all current and prior summary plan
descriptions, summaries of material modifications, annual reports, and summary
annual reports, (iv) all current and prior trust agreements, insurance
contracts, and other documents relating to the funding or payment of benefits
under any Employee Plan, and (v) any other documents, forms or other
instruments relating to any Employee Plan reasonably requested by the Buyer.

 

(c)                                  Each
Employee Plan has been maintained, operated and administered in material
compliance with its terms and any related documents or agreements and in
material compliance with all applicable Laws.

 

(d)                                 Neither
the Seller, nor any member of the Controlled Group, currently has or at any
time in the prior six years has had an obligation to contribute to a “defined
benefit plan” as defined in Section 3(35) of ERISA, a pension plan subject to
the funding standards of Section 302 of ERISA or Section 412 of the Code, a “multiemployer
plan” as defined in Section 3(37) of ERISA or Section 414(f) of the Code or a “multiple
employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c)
of the Code.

 

(e)                                  With
respect to each group health plan benefiting any current or former employee of
any of the Seller or any member of the Controlled Group that is subject to
Section 4980B of the Code, the Seller and each member of the Controlled Group
has complied with the continuation coverage requirements of Section 4980B of
the Code and Part 6 of Subtitle B of Title I of ERISA.

 

6.13                           Environmental.
Except as set forth on Schedule 6.13:

 

(a)                                  To
Seller’s Knowledge, there are no underground tanks and related pipes, pumps and
other facilities regardless of their use or purpose whether active or abandoned
at the Real Property.

 

(b)                                 To
Seller’s Knowledge, there is no asbestos nor any asbestos-containing materials
used in, applied to or in any way incorporated in any building, structure or
other form of improvement on the Real Property.

 

(c)                                  Seller
is presently and for the past five years has been in compliance with all
Environmental Laws applicable to the Real Property or the Business, and to
Seller’s 

 

18

 

Knowledge, there exist no
Environmental Conditions that require reporting, investigation, assessment,
cleanup, remediation or any other type of response action pursuant to any
Environmental Law or that could be the basis for any liability of any kind
pursuant to any Environmental Law.

 

(d)                                 Seller
has not generated, manufactured, refined, transported, treated, stored,
handled, disposed, transferred, produced or processed any Hazardous Materials
at or upon the Real Property, except in compliance with all applicable
Environmental Laws; and, to Seller’s Knowledge, there has been no Release or
Threat of Release of any Hazardous Material at or in the vicinity of the Real
Property that requires or may require reporting, investigation, assessment,
cleanup, remediation or any other type of response action pursuant to any
Environmental Law.

 

(e)                                  Seller
has not (i) entered into or been subject to any consent decree, compliance
order or administrative order with respect to any Environmental Condition or
relating to obligations under any Environmental Law; (ii) received notice
under the citizen suit provisions of any Environmental Law; (iii) received
any request for information, notice, demand letter, administrative inquiry or
formal or informal complaint or claim with respect to any Environmental Condition
or relating to obligations under any Environmental Law; or (iv) been
subject to or threatened with any governmental or citizen enforcement action
with respect to any Environmental Law.

 

(f)                                    (i) There
currently are effective all Permits required under any Environmental Law which
are necessary for the Seller’s activities and operations at the Real Property;
(ii) any applications for renewal of such Permits have been submitted on a
timely basis; and (iii) such Permits can be transferred without changes to
their terms or conditions.

 

(g)                                 To
the Knowledge of the Seller, the Real Property and the Business will not
require a material capital expenditure or annual operating expense increase
during the three years following the Closing Date to achieve compliance with
any Environmental Law.

 

(h)                                 The
Seller has delivered to the Buyer copies of all documents, records and
information in its possession or control concerning Environmental Conditions,
including, without limitation, previously conducted environmental compliance
audits, environmental site assessments, asbestos surveys and documents
regarding any Release or disposal of Hazardous Materials at, upon or from the
Real Property, spill control plans and environmental agency reports and
correspondence.

 

6.14                           Contracts.

 

(a)                                  Schedule 6.14
contains a complete and accurate list of, and the Seller has delivered true and
complete copies of, each of the following Contracts to which Seller is a party
or by which any Purchased Assets are bound:

 

19

 

(i)            each Contract that
involves the purchase or sale of raw materials, commodities, supplies, products
or other personal property or services in excess of $25,000 per annum;

 

(ii)           each lease, rental or
occupancy agreement, license, installment and conditional sale agreement, and
other Contracts affecting the ownership of, leasing of, title to, use of, or
any leasehold or other interest in, any real or personal property;

 

(iii)          each licensing agreement
and other Contracts with respect to Intellectual Property (other than third
party computer software generally available for license or sale (“off the shelf”) to the public),
including, agreements with current or former employees, agents, consultants or
independent contractors regarding the ownership or the non-disclosure of any
Purchased Intellectual Property and each Contract pursuant to which Seller has
licensed any Purchased Intellectual Property to, or the use of any Purchased
Intellectual Property is otherwise permitted with respect to, any other Person,
and pursuant to which Seller has had Intellectual Property licensed to it, or
has otherwise been permitted to use any Intellectual Property;

 

(iv)          each collective
bargaining agreement and other Contracts to or with any labor union or other
employee representative of a group of employees relating to wages, hours and
other conditions of employment;

 

(v)           each joint venture,
partnership and other Contracts (however named) involving a sharing of profits,
losses, costs or liabilities with any other Person;

 

(vi)          each non-competition
agreement and other Contracts containing covenants that in any way purport to
restrict the business activities of Seller or the Business or limit the freedom
of Seller or the Business to engage in any line of business or to compete with
any Person or in any geographic territory;

 

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

 

(viii)        each Contract under which
any Seller has created, incurred, assumed, or guaranteed Indebtedness or under
which there has been imposed (or may be imposed) a Lien on any of the Purchased
Assets, except for Permitted Exceptions;

 

(ix)           each written warranty,
guaranty and or other similar undertaking with respect to contractual
performance extended by Seller or the Business;

 

(x)            each Contract under
which Seller has created any consulting, independent contractor or agency
relationship with any Person; and

 

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

 

20

 

(b)           Each Contract listed on
Schedule 6.14 (or required to be listed on Schedule 6.14)
is a valid, binding and enforceable obligation of the Seller enforceable in
accordance with its terms. With respect to the Contracts listed on Schedule 6.14
(or required to be listed on Schedule 6.14):  (i) neither Seller nor, to the Seller’s
Knowledge, any other party thereto is in material default under or in violation
of any such Contract; (ii) no event has occurred which, with notice or
lapse of time or both, would constitute such a default or violation under any
such Contract; and (iii) Seller has not released any of its material
rights under any such Contract.

 

6.15         Licenses and Permits.
Schedule 6.15 sets forth a complete and accurate list and
description of all Permits held by the Seller and used in the conduct of the
Business. The Seller is in compliance with the terms of such Permits, and there
is no pending or threatened termination, expiration or revocation thereof. Except
for the Permits set forth and described in Schedule 6.15, there are
no Permits, whether written or oral, necessary or required for the continued
conduct of the Business after the Closing Date or for the ownership or use of
any of the Purchased Assets.

 

6.16         Intellectual Property.
Schedule 6.16 sets forth with the application number, application
date, registration/issue number, registration/issue date, title or mark,
country or other jurisdiction and owner(s), as applicable, an accurate and
complete list of all Intellectual Property owned, used, occupied or held by or
for the benefit of Seller in the operation of the Business or otherwise. The operation of the Business as currently
conducted by Seller or any part thereof, including, without limitation, the
manufacture, use, sale and importation of products of the Business and the
possession, use, disclosure, copying or distribution of any information, data,
products or other tangible or intangible in the possession of Seller, and the
possession or use of the Purchased Intellectual Property has, does and will not
infringe, misappropriate, violate or otherwise conflict with any Intellectual
Property right of any other Person, including any Affiliate of Seller. Except
as set forth on Schedule 6.16, (i) the Seller is the sole and
exclusive owner of all right, title and interest in and to the Purchased
Intellectual Property and has not granted, nor does there exist by implication
or operation of law, any license or other right in respect thereof which does
or which will, subsequent to the date of this Agreement, permit or enable
anyone other than the Buyer to use any of the Purchased Intellectual Property,
(ii) no Person has any rights to utilize any Purchased Intellectual
Property or sell any products or services which utilize or incorporate, or
which were developed utilizing or incorporating, any Purchased Intellectual
Property, and (iii) there is no notice or pending or threatened claim
against Seller (and there has not been any such notice or claim) asserting
(A) that any of the Purchased Intellectual Property infringes or violates
the rights of third parties, (B) that any of the Purchased Intellectual
Property is invalid, (C) that the present or past conduct of the Business
infringes or violates any rights of others with respect to any of the Purchased
Intellectual Property, (D) that any Person has any rights to utilize any
of the Purchased Intellectual Property or sell any products or devices which
utilize or incorporate, or which were developed utilizing or incorporating, any
Purchased Intellectual Property, or (E) which could, if adversely
determined against Seller, adversely affect the Buyer’s ability to utilize any
of the Purchased Intellectual Property, and, to the Seller’s Knowledge, no
basis for any such claim exists. The Seller has not given any notice to any
third parties asserting infringement by such third parties upon any of the
Purchased Intellectual Property. Except as set forth on Schedule 6.16,
all Information Systems used by the Seller in the conduct of the Business are
owned, controlled and operated by the Seller and are not wholly or partly
dependent upon any Information System of any other Person 

 

21

 

(other than the Internet).
Except as set forth on Schedule 6.16, no contract, agreement of
understanding exists which would impede or prevent the Seller from selling,
assigning, transferring, conveying and delivering to the Buyer the entire
right, title and interest of Seller in and to the Purchased Intellectual
Property. The Seller has not subject to any bars or other restrictions with
respect to its rights to practice under any of the Purchased Intellectual
Property, and no bars or other restrictions on the Seller’s rights to practice
under any of the Purchased Intellectual Property will be created by, or will,
by reason of any action or inaction of Seller before or after the date of this
Agreement, exist after the consummation of the transactions contemplated
hereby.

 

6.17         Financial Statements.

 

(a)           Attached as Schedule 6.17(a)
are correct and complete copies of (i) the unaudited balance sheets of the
Seller as of December 31, 2004, 2005, and 2006, and the related statements of
income and shareholders’ equity for the years then ended, together with the
notes thereto, and the other financial information included therewith
(collectively, the “Financial Statements”), and
(ii) the unaudited balance sheet as of August 31, 2007 (the “Balance Sheet”)
and the related unaudited statements of income for the 8-month period then
ended (collectively the “Interim Financial
Statements”).

 

(b)           Except as set forth on Schedule 6.17(b),
the Financial Statements present fairly, in all material respects, the
financial position, results of operations and shareholders’ equity of the
Seller at the dates and for the time periods indicated, and have been prepared
by the management of the Seller in accordance with GAAP consistently applied
throughout the periods indicated. The Interim Financial Statements present
fairly in all material respects the financial position, results of operations
and shareholders’ equity of the Seller at the date and for the period indicated
and have been prepared in accordance with GAAP, except for the absence of
footnote disclosure and customary year-end adjustments. The Financial
Statements and the Interim Financial Statements were derived from the books and
records of the Seller.

 

6.18         Undisclosed
Liabilities. Except as reflected in the Balance Sheet, the Seller has no
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether due or to become due, whether known or unknown, regardless of when
asserted) arising out of transactions or events entered into on or prior to the
Closing Date, or any action or inaction, or any state of facts existing, with
respect to or based upon transactions or events occurring prior to the date
hereof, except (i) liabilities which have arisen after the date of the Balance
Sheet in the Ordinary Course of Business; or (ii) as otherwise set forth in Schedule
6.18.

 

6.19         Accounts Receivable.
All accounts and notes receivable of the Seller represents sales actually made
in the Ordinary Course of Business or valid claims as to which full performance
has been rendered by Seller. The reserve on the Interim Financial Statements
against the accounts receivable for returns and bad debts has been calculated
in a manner consistent with past practice. All of the accounts and notes
receivable of the Seller are, in the aggregate, collectible in full, net of the
reserve therefor, in the Ordinary Course of Business. No counter claims,
defenses or offsetting claims with respect to the accounts or notes receivable
of the Seller are pending or threatened. All of the accounts and notes
receivable of the Seller relates solely to sales of goods or services to
customers of Seller, none of which are Affiliates of Seller.

 

22

 

6.20         Indebtedness. Schedule
6.20 sets forth a true, correct and complete list of the individual
components (indicating the amount and the Person to whom such Indebtedness is
owed) of all the Indebtedness outstanding with respect to the Seller as of the
Closing Date.

 

6.21         Taxes.

 

(a)           All Tax Returns
required to be filed by or on behalf of the Seller with the appropriate Taxing
Authority to the extent required to be filed (taking into account extensions of
the time for filing) on or before the Closing Date, have been filed when due in
accordance with all applicable Laws, and all such Tax Returns were correct and
complete in all material respects.

 

(b)           All Taxes owed by the
Seller (whether or not shown as due and payable on any Tax Return) has been
timely paid, or withheld and remitted to the appropriate Taxing Authority.

 

(c)           The Seller has not
waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.

 

(d)           There is no action,
suit or proceeding, claim, audit, proposed adjustment or investigation now
pending or threatened against or with respect to the Seller, the Business or
the Purchased Assets in respect of any Tax.

 

(e)           There are no liens for
Taxes upon the assets or properties of the Seller (including the Purchased
Assets), except liens for Taxes not yet due and payable.

 

(f)            The Seller has not
received notice of any claim by a Governmental Authority in a jurisdiction
where the Seller does not file Tax Returns that it, the Business or the
Purchased Assets are or may be subject to taxation by that Governmental
Authority.

 

(g)           The Seller has withheld
and timely paid all Taxes required to have been withheld and paid in connection
with any amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.

 

(h)           The Seller has no
liability for Taxes of any other Person under Treasury Regulation
Section 1.1502-6 (or any similar provision of Law), as a transferee or
successor, by contract, or otherwise.

 

(i)            None
of the Assumed Liabilities is an obligation to make a payment that is not
deductible under Section 280G of the Code. None of the Purchased Assets:  (i) are “tax exempt use property” within the meaning
of Section 168(h) of the Code; (ii) are required to be treated as owned by any
person or entity other than the Sellers pursuant to the so-called “safe harbor
lease” provisions of the Internal Revenue Code of 1954; (iii) directly or
indirectly secures any debt the interest of which is exempt from federal income
tax under Section 103(a) of the Code; or (iv) are “limited use” property under
Revenue Procedure 2001-28, 2001-1 C.B. 1156.

 

23

 

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

 

6.22         Customers. Schedule
6.22 sets forth the ten largest customers of the Sellers for the years
ended 2004, 2005 and 2006 (“Material Customers”).
Except as set forth in Schedule 6.22, (a) all Material Customers
continue to be customers of the Company and none of such Material Customers has
reduced materially its business with the Seller from the levels achieved during
the year ended December 31, 2006, and to the Seller’s Knowledge, no such
reduction will occur; (b) no Material Customer has terminated its
relationship with the Seller or has threatened to do so; (c) the Seller is
not involved in any claim, dispute or controversy with any Material Customer;
and (d) the Seller is not involved in any claim, dispute or controversy
with any of its other customers that, individually or in the aggregate could
reasonably be anticipated to result in a Material Adverse Change. Schedule
6.22 includes a copy of the Company’s standard terms and conditions
provided to each of the Company’s customers.

 

6.23         Disclosure. The
Seller has not withheld from the Buyer any material facts relating to the
assets, properties, liabilities, operations, financial condition, results of
operations or prospects of the Business. Neither this Agreement (including the
Exhibits and Schedules hereto) or the Ancillary Agreements nor any other
agreement, document, certificate or written statement furnished to the Buyer by
or on behalf of the Seller in connection with this Agreement, the Ancillary
Agreements or the transactions contemplated by hereunder or thereunder contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.

 

6.24         Related Party
Transactions. Except as set forth in Schedule 6.24, neither
Parent nor any of its respective Affiliates, nor any current or former
director, officer or employee of Seller or any Affiliate of Seller,
(a) has or during the last three fiscal years has had any direct or
indirect interest (i) in, or is or during the last three fiscal years was
a director, officer or employee of, any Person that is a client, customer,
supplier, lessor, lessee, debtor, creditor or competitor of Seller, or
(ii) in any material property, asset or right which is owned or used by
Seller in the conduct of the Business, or (b) is or during the last three
fiscal years has been a party to any agreement or transaction with Seller.

 

6.25         Brokers. No Person
has acted directly or indirectly as a broker, finder or financial advisor for
Seller in connection with the negotiations relating to the transactions
contemplated by this Agreement, and no Person is entitled to any fee or
commission or like payment in respect of a transaction involving Seller based
in any way on any agreement, arrangement or understanding made by or on behalf
of Seller.

 

ARTICLE 7:  REPRESENTATIONS AND WARRANTIES OF THE
BUYER

 

The
Buyer hereby represents and warrants to the Seller as follows:

 

7.1           Existence and Good
Standing. The Buyer is a corporation duly incorporated, validly existing and
in good standing under the laws of Ohio.

 

7.2           Power. The Buyer
has the corporate power and authority to execute, deliver and perform fully its
obligations under this Agreement and the Ancillary Agreements.

 

24

 

7.3           Enforceability. The
execution, delivery and performance of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary action on the part
of the Buyer and constitute the valid and legally binding obligations of the
Buyer enforceable against the Buyer in accordance with their term, except as
may be limited by the General Enforceability Exceptions.

 

7.4           No Conflict. Neither
the execution of this Agreement or the Ancillary Agreements, nor the
performance by the Buyer of its obligations hereunder or thereunder will  violate or conflict with the Buyer’s
Certificate of Incorporation or Bylaws or any Law or Order.

 

7.5           Consents. No
consent, approval or authorization of any third party or Governmental Authority
is required in connection with the execution and delivery by the Buyer of this
Agreement or the Ancillary Agreements or the consummation of the transactions
contemplated hereby or thereby.

 

7.6           Brokers. No
person has acted directly or indirectly as a broker, finder or financial
advisor for the Buyer in connection with the negotiations relating to the
transactions contemplated by this Agreement, and no Person is entitled to any
fee or commission or like payment in respect of a transaction involving Seller
based in any way on any agreement, arrangement or understanding made by or on
behalf of the Buyer.

 

ARTICLE 8:  CERTAIN COVENANTS

 

8.1           Assignability and
Consents.

 

(a)           Schedule 8.1(a)
sets forth a list of all Purchased Assets, including Contracts and Permits,
which are non–assignable or non–transferable or cannot be subleased to Buyer
without the consent of some other Person. The Seller has commenced and shall
continue to take, or cause to be taken by others, all commercially reasonable
actions required to obtain or satisfy, at the earliest practicable date, all
Consents not obtained prior to the date of this Agreement from any Persons
necessary to authorize, approve or permit the full and complete sale,
conveyance, assignment, sublease or transfer of the Purchased Assets, and to
consummate and make effective the transactions contemplated by this Agreement
and to continue such efforts as may be required after the Closing Date to
facilitate the full and expeditious transfer of legal title, or the sublease,
as the case may be, of the Purchased Assets.

 

(b)           Notwithstanding
anything herein to the contrary, this Agreement shall not constitute an
agreement to sell, convey, assign, sublease or transfer any Purchased Asset if
any attempted sale, conveyance, assignment, sublease or transfer of such
assets, without the Consent of the other Person to such transfer, would
constitute a breach by Seller or Buyer with respect to such Purchased Asset. Subject
to Section 10.2, in the event that any required Consent is not obtained
on or prior to the date of this Agreement, Seller and Parent will use their
respective commercially reasonable efforts to (i) provide to Buyer the benefits
of the applicable Contract, Permit, or Lease, (ii) cooperate in any reasonable
and lawful arrangement designed to provide such benefits to Buyer (including
providing to Buyer any out–of–pocket Losses sustained by Buyer to obtain such 

 

25

 

benefits), and (iii)
enforce at the request of Buyer and for the account of Buyer any rights of
Seller or the Business arising from any such Contract, Permit or Lease
(including the right to elect to terminate such Contract, Permit or Lease in
accordance with the terms thereof upon the request of Buyer).

 

8.2           Maintenance of, and
Access to, Records. Seller shall provide Buyer with access (with an
opportunity to make copies), during normal business hours, and upon reasonable
notice, to any records relating to the Business which are retained by the
Seller. Seller shall preserve and maintain any books and records relating to
the Business or the Purchased Assets and retained by Seller for as long as
reasonably necessary after the Closing Date, and shall give the Buyer
reasonable written notice prior to transferring, destroying or discarding any
such books and records. If the Buyer so requests upon receiving such notice,
the Seller will allow the Buyer to take possession of such books and records.

 

8.3           Accounts Receivable.
Except as otherwise provided in Section 2.1(b), if Seller receives any
payment relating to any Purchased Asset, including any Account Receivable,
outstanding on or after the Closing Date, such payment shall be the property
of, and shall be immediately forwarded and remitted to, the Buyer. Seller will
promptly endorse and deliver to Buyer any cash, checks or other documents
received by Seller on account of any such Purchased Asset, including Accounts
Receivable. Seller shall advise Buyer (promptly following such Seller’s
becoming aware thereof) of any counterclaims or set–offs that may arise
subsequent to the Closing Date with respect to any such Purchased Asset,
including any Account Receivable.

 

8.4           Expenses; Transfer
Taxes. Except as otherwise set forth in this Agreement and with respect to
Selling Expenses incurred by the Seller or Parent which shall be borne by each
of them, each party hereto will bear the legal, accounting and other expenses
incurred by such party in connection with the negotiation, preparation and
execution of this Agreement, the Ancillary Agreements, and the transactions
contemplated hereby and thereby. All sales, transfer, recordation and
documentary Taxes and fees which may be payable in connection with the
transactions contemplated by this Agreement (“Transfer Taxes”) shall be divided
evenly between the Seller, on the one hand, and Buyer, on the other hand. Seller
and Buyer shall cooperate in the timely making of all filings, returns, reports
and forms as may be required in connection with such Transfer Taxes, and Seller
shall file, or cause to be filed, all such filings, returns, reports and forms.

 

8.5           Employee Matters.

 

(a)           Transferred
Employees. Prior to the Closing, the Buyer shall deliver, in writing, an
offer of employment (on an “at will” basis) to those employees of the Seller identified by
Buyer on a schedule to be delivered to the Seller no later than three days
prior to the Closing to commence such employment immediately upon the Closing
Date. Each such offer of employment shall be at the same salary or hourly wage
rate and position in effect immediately prior to the Closing Date. Such
individuals who accept such offer by the Closing Date are hereinafter referred
to as the “Transferred
Employees.”  Subject to
applicable Laws, on and after the Closing Date, the Buyer shall have the right
to dismiss any or all Transferred Employees at any time, with or without cause,
and to change the terms and conditions of their employment (including
compensation and employee benefits provided to them).

 

26

 

(b)           Excluded Employees.
Any employee of the Seller who is not offered employment by the Buyer prior to
Closing or who does not accept an offer of employment by Buyer and commence work
with the Buyer immediately after the Closing, in each case pursuant to Section 8.5(a),
is hereinafter referred to as an “Excluded Employee.”

 

(c)           Standard Procedure.
Pursuant to the “Standard Procedure” provided in section 5 of Revenue Procedure
96-60, 1996-2 C.B. 399, (i) the Buyer and the Seller shall report on a
predecessor/successor basis as set forth therein, (ii) the Seller will not
be relieved from filing a Form W-2 with respect to any Transferred Employees,
and (iii) the Buyer will undertake to file (or cause to be filed) a Form W-2
for each such Transferred Employee only with respect to the portion of the year
during which such employees are employed by the Buyer that includes the Closing
Date, excluding the portion of such year that such employee was employed by the
Seller.

 

(d)           Employee Benefits.
As soon as reasonably practicable following the Closing, the Buyer shall
provide the Transferred Employees with benefits under the Buyer’s existing
employee benefit plans (the “Buyer Plans”) provided to similarly situated employees
of the Buyer. Notwithstanding anything to the contrary in this Agreement,
nothing in this Agreement shall be construed as requiring any compensation or
employee benefit plans, programs or arrangements to continue to be maintained
by the Buyer with respect to the Transferred Employees for any specified period
after the Closing Date.

 

(e)           Accrued Vacation.
The Seller shall pay Transferred Employees their accrued and unused vacation,
for all accrued and unused vacation through the Closing Date on the Closing
Date.

 

(f)            COBRA. Effective
as of the Closing Date and in connection with the transactions contemplated
herein, the Seller and all of its Controlled Group Members shall cease to
provide coverage under all group health plans (as defined in Section 5000b of
the Code, Section 607 of ERISA, or both) for the benefit of any of their
current or former employees (or their eligible dependents). The Buyer
acknowledges and agrees that to the extent required by Section 4980B of the
Code (and any regulations issued thereunder), the Buyer shall be exclusively
responsible for complying with the health care coverage continuation
requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) with respect to any
current or former employees of the Seller (and their eligible dependents) who
become “M&A
Qualified Beneficiaries” (as such term is defined by COBRA and any
regulations issued thereunder) in connection with the transactions contemplated
herein.

 

8.6           Tax Matters.

 

(a)           Property Taxes. Property
Taxes (as defined below) with respect to the Purchased Assets attributable to
the calendar year of the Closing will be prorated as of the Closing with the
Seller being liable for such Taxes attributable to the days in the calendar
year through the day before the Closing Date and Buyer being liable for such
Taxes attributable to the days in the calendar year including and after the
Closing Date. 

 

27

 

Proration of Property Taxes
shall be made on the basis of the most recent officially certified Tax
valuation and assessment for the Purchased Assets. If such valuation pertains
to a Tax period other than that in which the Closing occurs, such proration
shall be recalculated at such time as actual Tax bills for such period are
available and the parties shall cooperate with each other in all respects in
connection with such recalculation and pay any sums due in consequence thereof
to the party entitled to recover the same within 60 days after the issuance of
such actual Tax bills. For purposes of this Section 8.6, “Property Taxes”
means ad valorem Taxes, general assessments and special assessments with
respect to the Purchased Assets.

 

(b)           Cooperation. In
connection with the preparation of Tax Returns, audit examinations, and any
administrative or judicial proceedings relating to the Tax liabilities imposed
on Seller for the Pre–Closing Tax Period, the Buyer and the Seller will
cooperate fully with each other, including, but not limited to, the furnishing
or making available during normal business hours of records, personnel (as
reasonably required), books of account, powers of attorney or other materials
necessary or helpful for the preparation of such Tax Returns, the conduct of audit
examinations or the defense of claims by any Taxing Authority as to the
imposition of Taxes.

 

8.7           Competitive
Activity; Non–Solicitation; Confidentiality.

 

(a)           Non–Competition.
The Seller and Parent agree that during the Non–Compete Period, it shall not,
and shall cause its Affiliates not to, directly or indirectly, (i) enter into,
engage in, consult, manage or otherwise participate in the operation of any
business which competes with the Business within the Restricted Territory; (ii)
solicit customers, business, patronage or orders for, or sell, any products and
services in competition with, or for any business that competes with, the
Business; (iii) divert, entice or otherwise take away any customers, business,
patronage or orders of the Buyer or the Business within the Restricted
Territory, or attempt to do so; or (iv) promote or assist, financially or
otherwise, any Person engaged in any business which competes with the Business
within the Restricted Territory. Nothing contained in this Section 8.7
shall prohibit Seller or Parent from acquiring or holding at any one time a
passive investment of less than five percent of the outstanding shares of
capital stock of any publicly traded corporation that may compete with the
Business within the Restricted Territory. For the purposes of this Section
8.7, the Buyer shall also include any and all direct and indirect
subsidiary, parent, or Affiliates of the Buyer.

 

(b)           Non–Solicitation.
During the Non-Compete Period, Seller and Parent agree that it shall not, and shall
cause its respective Affiliates not to, directly or indirectly at any time
solicit or induce or attempt to solicit or induce any employee(s), sales
representative(s), agent(s) or consultant(s) of the Buyer or its Affiliates to
terminate their employment, representation or other association with the Buyer
or its Affiliates.

 

(c)           Non–Disclosure. The
Seller and Parent will keep in strict confidence, and will not, and shall cause
its Affiliates not to, directly or indirectly, at any time, (i) disclose, divulge
or make accessible to any Person any Confidential Information that remains
after Closing in the possession of Seller, Parent or their respective
Affiliates concerning the Business and the Purchased Assets, or (ii) use any
such Confidential Information for Seller’s or Parent’s own account, for the
account of any other Person, or to the detriment of the Buyer or the Business. Upon
request by the Buyer, the Seller and Parent shall deliver to the Buyer all
tangible embodiments relating to the Confidential 

 

28

 

Information that Seller,
Parent, or its respective Affiliates possess or has under its control. Notwithstanding
the foregoing, the non–disclosure obligations of this Section 8.7
shall not apply to Confidential Information (a) which Seller or Parent is
compelled to disclose by applicable Law or Order (but only with respect to the
portion of such information so required to be disclosed and after providing
Buyer with prompt notice), (b) which can be shown to have been generally
available to the public other than as a result of a breach of this Section
8.7; or (c) which can be shown through corroborative written evidence to
have been provided to Seller or Parent by a third party who obtained such
information other than from Seller, Parent, or any of its respective Affiliates
or other than as a result of a breach of this Section 8.7.

 

(d)           Acknowledgement and
Relief. Seller and Parent acknowledge that (i) their respective obligations
under this Section 8.7 are reasonable in the context of the nature of
the Business and the competitive injuries likely to be sustained by the Buyer
if the Seller or Parent were to violate such obligations, (ii) the covenants in
this Section 8.7 are adequately supported by consideration from the
Buyer for the benefit of the Seller and Parent after the Closing Date, and
(iii) the foregoing makes it necessary for the protection of the Business that
Seller and Parent not compete with the Business or the Buyer for the reasonable
period contained herein. Accordingly, Seller and Parent acknowledge and agree
that the remedy at law available to the Buyer for breach of any of such Seller’s
or Parent’s respective obligations under this Section 8.7 would be
inadequate; therefore, in addition to any other rights or remedies that the
Buyer may have at law or in equity, temporary and permanent injunctive relief
may be granted in any proceeding which may be brought to enforce any provision
contained in this Section 8.7, without the necessity of proof of actual
damage. If it shall be judicially determined that Seller or Parent has violated
this Section 8.7, then the period applicable to each obligation that
Seller or Parent has been determined to have violated will automatically be
extended by a period of time equal in length to the period during which such
violation(s) occurred.

 

8.8           Use
of Business Name and Related Materials. Except as contemplated by this
Agreement, following the Closing, neither the Seller nor the Parent will
directly or indirectly, use or do business, or allow any of its respective
Affiliates to use or do business, under the names “Tradestar Construction Services” or “Tradestar
Construction Services, Inc.” or any name that, in the reasonable judgment of
the Buyer, is similar to any such names. Within 30 days following the Closing
Date, the Seller shall (a) amend or terminate (as appropriate) its Articles of
Incorporation and any assumed name or d/b/a filings to eliminate such Seller’s
right to use the names “Tradestar Construction Services” or “Tradestar Construction
Services, Inc.”
or any name that, in the reasonable judgment of the Buyer, is similar to any
such names, and (b) provide to the Buyer any and all consents, documents
and instruments, executed and delivered in form acceptable to the Buyer, that
are reasonably requested by the Buyer to claim, register or file to use the “Tradestar
Construction Services” or “Tradestar Construction Services, Inc.” names or any name
that is similar to any such names.

 

29

 

8.9           Payment of the AICCO
Indebtedness. Within 30 days following the Closing Date, the Seller shall
pay or cause to be paid to the Persons entitled thereto the AICCO Indebtedness.

 

ARTICLE 9:  REMEDIES

 

9.1           General
Indemnification Obligation.

 

(a)           Seller’s and Parent’s
Obligation. The Seller and Parent shall, jointly and severally, indemnify
and hold harmless the Buyer and its officers, directors, employees, agents and
Affiliates (each a “Buyer Indemnified Party”)
from and against any and all losses, liabilities, claims, damages, penalties,
fines, judgments, awards, settlements, taxes, costs, fees, expenses (including
but not limited to reasonable attorneys’ fees) and disbursements (each, a “Loss” and, collectively, the “Losses”) incurred or suffered by
any of such Buyer Indemnified Party based upon, arising out of, or otherwise in
respect of:

 

(i)            any inaccuracies in or
any breach of any representation, warranty, covenant or agreement of any Seller
contained in this Agreement (including any Schedule or Exhibit attached
hereto), any certificate or other document delivered pursuant hereto, or any
Ancillary Agreement,

 

(ii)           any Transferred
Employee resulting from or based upon (A) any employment–related liability
(statutory or otherwise) with respect to employment or termination of
employment on or prior to the Closing Date, (B) any liability relating to,
arising under or in connection with any Employee Plan, including any liability
under COBRA, whether arising prior to, on or after the Closing Date and (C) any
liability under WARN,

 

(iii)          any Retained Asset or
any Retained Liability or Excluded Employee, and

 

(iv)          any Environmental Laws
(including any loss of use of any real property or any tangible personal
property) arising from or related to any condition, act or omission, by Seller
or any predecessor thereof or related to the operations of Seller or any
predecessor thereof at any real property currently or formerly owned, operated
or leased by Seller or any predecessor thereof, or any Environmental Condition,
whether known or unknown, accrued or contingent, in each case to the extent
existing or occurring on or prior to the Closing Date.

 

(b)           Buyer’s Obligation.
The Buyer shall indemnify and hold harmless the Seller and its officers, directors,
employees, agents and Affiliates (each a “Seller Indemnified Party”)
from and against any and all Losses actually sustained by any of such Seller
Indemnified Party based upon, arising out of or otherwise in respect of:

 

(i)            any inaccuracies in or
any breach of any representation, warranty, covenant or agreement of the Buyer
contained in this Agreement (including any Schedule or Exhibit attached
hereto), any certificate or other document delivered pursuant hereto, or any
Ancillary Agreement,

 

30

 

(ii)           any of the Assumed
Liabilities, and

 

(iii)          any Transferred Employee
resulting from or based upon any employment–related liability (statutory or
otherwise) with respect to employment or termination of employment after the
Closing Date.

 

9.2           Notice and Third
Party Claims.

 

(a)           Notice of Asserted
Liability. As soon as is reasonably practicable after Seller, on the one
hand, or the Buyer, on the other hand, becomes aware of any claim that such
party has under Section 9.1 that may result in a Loss for which
such party is entitled to indemnification hereunder (a “Liability
Claim”), such party (the “Indemnified Party”)
shall give notice of such Liability Claim (a “Claims
Notice”) to the other party (the “Indemnifying
Party”). A Claims Notice must describe the Liability Claim in
reasonable detail and must indicate the amount (estimated, if necessary and to
the extent feasible) of the Loss that has been or may be suffered by the
Indemnified Party. No delay in or failure to give a Claims Notice by the
Indemnified Party to the Indemnifying Party pursuant to this Section 9.2(a)
will adversely affect any of the other rights or remedies that the Indemnified
Party has under this Agreement or alter or relieve the Indemnifying Party of
its obligation to indemnify the Indemnified Party except to the extent that
such delay or failure has prejudiced the Indemnifying Party.

 

(b)           Third Party Claims.
If any Claims Notice identifies a Liability Claim brought by a third party (a “Third Party Claim” and together
with the Liability Claims, the “Claims”),
then the Indemnifying Party has the right, exercisable by written notice to the
Indemnified Party within seven days after receipt of such Claims Notice, to
assume and conduct the defense of such Third Party Claim in accordance with the
limits set forth in this Agreement with counsel selected by the Indemnifying
Party and reasonably acceptable to the Indemnified Party; provided, however,
that (i) the defense of such Third Party Claim by the Indemnifying Party
will not, in the reasonable judgment of the Indemnified Party, have a material
adverse effect on the Indemnified Party; (ii) the Indemnifying Party has
sufficient financial resources, in the reasonable judgment of the Indemnified Party,
to satisfy the amount of any adverse monetary judgment that is reasonably
likely to result; (iii) the Third Party Claim solely seeks (and continues
to seek) monetary damages; and (iv) the Indemnifying Party expressly
agrees in writing that as between the Indemnifying Party and the Indemnified
Party, the Indemnifying Party may only satisfy and discharge the Third Party
Claim in accordance with the limits set forth in this Agreement (the conditions
set forth in clauses (i) through (iv) are, collectively, the “Litigation Conditions”). If the
Indemnifying Party does not assume the defense of a Third Party Claim in
accordance with this Section 9.2(b), the Indemnified Party may
continue to defend the Third Party Claim. If the Indemnifying Party has assumed
the defense of a Third Party Claim as provided in this Section 9.2(b),
the Indemnifying Party will not be liable for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense of the Third
Party Claim; provided, however, that if (i) any of the
Litigation Conditions cease to be met or (ii) the Indemnifying Party fails
to take reasonable steps necessary to defend diligently such Third Party Claim,
the Indemnified Party may assume its own defense, and the Indemnifying Party
will be liable for all reasonable costs or expenses paid or incurred in
connection with such defense. 

 

31

 

The Indemnifying Party or
the Indemnified Party, as the case may be, has the right to participate in (but
not control), at its own expense, the defense of any Third Party Claim which
the other is defending as provided in this Agreement. The Indemnifying Party,
if it has assumed the defense of any Third Party Claim as provided in this
Agreement, may not, without the prior written consent of the Indemnified Party,
consent to a settlement of, or the entry of any judgment arising from, any such
Third Party Claim that (i) does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party a
complete release from all liability in respect of such Third Party Claim,
(ii) grants any injunctive or equitable relief or (iii) may
reasonably be expected to have a material adverse effect on the Indemnified
Party. The Indemnified Party has the right to settle any Third Party Claim, the
defense of which has not been assumed by the Indemnifying Party.

 

9.3           Survivability;
Limitations.

 

(a)           The representations and
warranties of the Seller, Parent and Buyer contained in this Agreement or in
any Ancillary Agreement shall survive for a period ending eighteen months
following the date of this Agreement (the “Expiration Date”);
provided, however, that (i) the Expiration Date for any
Claims relating to a breach of or inaccuracy in the representations and
warranties set forth in 6.12 (Employee Benefit Plans), 6.13
(Environmental), and 6.22 (Taxes) shall be 60 days after the
expiration of the applicable statute of limitations, (ii) there will be no
Expiration Date for any Claims relating to a breach of or inaccuracy in the
representations and warranties set forth in Sections 6.1 (Existence and
Good Standing), 6.2 (Power), 6.3 (Enforceability), 6.4 (No
Conflict), 6.5 (Consents), the first sentence of Section 6.6
(Title), 6.7 (Necessary Property), and the second sentence of Section
6.16 (Intellectual Property) (collectively, the “Special
Representations”); and (iii) any Claims pending on any
Expiration Date for which notice has been given in accordance with Section 9.2
on or before such Expiration Date may continue to be asserted and indemnified
against until finally resolved. All of the covenants and agreements of the
Sellers and the Buyer contained in this Agreement will survive after the date
of this Agreement for an indefinite period.

 

(b)           The Seller and Parent
will not have any liability as a result of any breach of or inaccuracy in any
representation or warranty referred to in this Agreement (other than the
Special Representations and the representations in Section 6.22 (Taxes)),
until the aggregate amount of all such Losses sustained by the Buyer exceeds
$25,000 (the “Threshold”),
in which case the Seller and Parent will be liable for all such Losses without
regard to such Threshold.

 

(c)           The Seller and Parent
shall not have any liability under this Agreement as a result of any breach of
or inaccuracy in any of the representations and warranties contained in this
Agreement (other than the Special Representations and the representations in Section
6.22 (Taxes)) in excess of $750,000.

 

(d)           Notwithstanding
anything to the contrary in this Agreement, no Buyer Indemnified Party other
than the Buyer (or any successors–in–interest thereto) and no Seller
Indemnified Party other than the Seller or Parent has any individual right to
assert any Claims under this Article 9. Any and all Claims of the
Buyer Indemnified Parties 

 

32

 

may be brought only by
the Buyer (or any successors–in–interest thereto) and any and all Claims of the
Seller Indemnified Parties may be brought only by the Seller.

 

(e)           Except for a claim
based on fraud, from and after the Closing Date, the sole remedy of the Buyer
and Seller for any and all Losses shall be limited to indemnification as set
forth in Article 9 hereof.

 

9.4           Specific Performance.
Each party’s obligation under this Agreement is unique. If any party should
breach its covenants under this Agreement, the parties each acknowledge that it
would be extremely impracticable to measure the resulting damages; accordingly,
the nonbreaching party or parties, in addition to any other available rights or
remedies, may sue in equity for specific performance, and each party expressly
waives the defense that a remedy in damages will be adequate.

 

9.5           Tax Treatment. Amounts
paid to or on behalf of the Seller or the Buyer as indemnification will be
treated as adjustments to the Purchase Price for Tax purposes to the extent
permitted by applicable Law.

 

ARTICLE 10:  MISCELLANEOUS

 

10.1         Further Assurances.
From and after the date of this Agreement, at the request of the Buyer, the
Seller and Parent shall execute and deliver or cause to be executed and
delivered to the Buyer such deeds, bills of sale, assignments, or other
instruments and documents to the Buyer as the Buyer may reasonably request in
order to implement the transactions contemplated by this Agreement and the
Ancillary Agreements.

 

10.2         Expenses. Each of
the parties hereto shall bear their respective expenses incurred or to be
incurred in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.

 

10.3         No Assignment. The
rights and obligations of the parties hereunder may not be assigned without the
prior written consent of the other party hereto. Notwithstanding the previous
sentence, the Buyer may without the consent of the Seller or Parent assign
Buyer’s rights under this Agreement to any lender of the Buyer or to any
Affiliate of the Buyer.

 

10.4         Headings. The
headings contained in this Agreement are included for purposes of convenience
only, and shall not affect the meaning or interpretation of this Agreement.

 

10.5         Integration,
Modification and Waiver. This Agreement, together with the Exhibits,
Schedules and certificates or other instruments delivered hereunder, constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior understandings of the parties. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to be or shall constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.

 

10.6         Construction. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this 

 

33

 

Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement. Any reference to any federal,
state, local or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise. The word “including” shall mean including without limitation. Any
reference to the singular in this Agreement shall also include the plural and
vice versa.

 

10.7         Severability. If
any provision of this Agreement or the application of any provision hereof to
any party or circumstance shall, to any extent, be adjudged invalid or
unenforceable, the application of the remainder of such provision to such party
or circumstance, the application of such provision to other parties or
circumstances, and the application of the remainder of this Agreement shall not
be affected thereby.

 

10.8         Notices. All
notices and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person or
when dispatched by electronic facsimile transfer (if confirmed in writing by
mail simultaneously dispatched) or one business day after having been dispatched
by a nationally recognized overnight courier service to the appropriate party
at the address or facsimile number specified below:

 

If to Parent:

 

Stratum Holdings, Inc.

Three Riverway, Suite 1500

Houston, Texas 
77056

Attention: 
Chairman and Chief Executive Officer

Facsimile
No.:  (713) 975-6271

 

If
to Seller:

 

Tradestar
Construction Services, Inc.

3451 Candelaria NE, Suite A

Albuquerque, New Mexico  87107

Attention: 
President

Facsimile
No.:  (505) 872-3303

 

In
each case, with a copy to:

 

Haynes and Boone, LLP

One Houston Center

1221 McKinney Street, Suite 2100

Houston, Texas 
77010

Attention: 
Bryce Linsenmayer, Esq.

Facsimile:  (713) 236-5540

 

34

 

If to the Buyer:

 

Tradesmen Services, Inc.

9760 Shepard
Road

Macedonia,
Ohio  44056

Attention:
Joseph Wesley

Facsimile
No.:  (440) 349-4092

 

with
a copy to:

 

Jones
Day

North
Point

901
Lakeside Avenue

Cleveland,
Ohio  44114

Facsimile
No.:  (216) 579-0212

Attention:  John M. Saada, Jr., Esq.

 

Any party hereto may change its address or facsimile
number for the purposes of this Section 10.8 by giving notice as
provided herein.

 

10.9         Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Delaware without regard to principles of conflicts of
law.

 

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

 

[Signature page follows]

 

35

 

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

 

	
   

  	
  TRADESMEN SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Joseph O. Wesley

  
	
   

  	
   

  	
  Name:
  Joseph O. Wesley

  
	
   

  	
   

  	
  Title:
  President and CEO

  

 

 

	
   

  	
  TRADESTAR CONSTRUCTION 

  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Kenneth Thomas

  
	
   

  	
   

  	
  Name:
  Kenneth Thomas

  
	
   

  	
   

  	
  Title:
  Senior Vice President – Finance

  and Treasurer

  

 

 

	
   

  	
  STRATUM HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  D. Hughes Watler

  
	
   

  	
   

  	
  Name:
  D. Hughes Watler

  
	
   

  	
   

  	
  Title:
  Chief Financial OfficerExhibit 10.2

 

TRANSITION SERVICES AGREEMENT

 

THIS
TRANSITION SERVICES AGREEMENT (this “Agreement”)
is entered into as of the 26th day of October, 2007, by and among Tradestar
Construction Services, Inc., a New Mexico corporation (the “Seller”), Stratum Holdings, Inc., a
Nevada corporation and sole stockholder of the Seller (the “Parent”), and Tradesmen
Services, Inc., an Ohio corporation (the “Buyer”).

 

RECITALS

 

A.                                   The
Seller, the Parent and the Buyer are, concurrently with the execution of this
Agreement, consummating the transactions contemplated by that certain Asset
Purchase Agreement, dated as of the date hereof (the “Purchase
Agreement”), whereby the Buyer will purchase from the Seller
substantially all of the assets of the Business.

 

B.                                     The
parties desire to set forth the terms and conditions by which the Seller and
the Parent will continue to provide or cause to be provided to the Buyer
certain identified services during the term of this Agreement.

 

C.                                     Capitalized
terms used herein but not otherwise defined have meanings ascribed to them in
the Purchase Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
subject to the terms and conditions set forth herein, the parties hereby agree
as follows:

 

1.                                       Performance of Transition Services by the
Seller and the Parent. Subject to the terms and conditions set forth
in this Agreement, the Seller and the Parent shall perform, or cause to be
performed, the transition services set forth on Exhibit A (collectively, the “Transition Services”)
for the benefit of the Buyer during the Transition Services Period (as defined
below).

 

2.                                       Payment
for Transition Services. As a condition to the obligation of the Buyer to
close the transactions contemplated by the Purchase Agreement and, in
consideration of the Purchase Price paid to Seller thereunder, the Seller and
the Parent have agreed to enter into this Agreement on the terms and conditions
set forth herein. The Seller and the Parent will provide the Transition
Services to the Buyer during the Transition Services Period (as defined below) in
consideration of the payment by the Buyer to the Seller of a monthly fee in the
amount of $2,700 (the “Monthly
Fee”), which shall be prorated for any portion of a month in
which the Transition Services are provided.

 

3.                                       Term of Agreement. This Agreement
commences as of the date hereof and will continue in effect through December
31, 2007, unless earlier terminated in accordance with Section 5 (the “Transition Services Period”).
Termination or expiration of this Agreement will not act as a waiver of any
breach of this Agreement and will not act as a release of any party hereto for
any liability or obligations incurred under this Agreement through the
effective date of such termination or expiration.

 

 

4.                                       Payment of the Expenses. The Buyer
shall reimburse the Seller and the Parent for all of their actual out-of-pocket
costs and expenses, including reasonable travel expenses and other out-of-pocket
costs and expenses incurred by any employee of the Seller or the Parent in
performing the Transition Services (the “Expenses”). The Seller or the Parent, as
applicable, will send to the Buyer an invoice setting forth the Expenses for
each month during which the Transition Services are provided. The Buyer shall
pay to the Seller or the Parent, as applicable, the amounts due and payable on
each such invoice within 30 days after receipt thereof.

 

5.                                       Termination of Transition Services.

 

(a)                                  The
Buyer may terminate this Agreement by providing the Seller and the Parent with
at least 10 days’ prior written notice, which notice must specify the date on
which the Transition Services are to be terminated; provided, that the Buyer
will be liable for any and all of the Expenses incurred in connection with the
Transition Services prior to the effective date of such termination.

 

(b)                                 The
Buyer may from time to time elect to terminate some of the Transition Services
by providing the Seller and the Parent with at least 10 days’ prior written
notice, which notice must specify which of the Transition Services are to be
terminated (the “Terminated Services”) and the
date on which the Terminated Services are to be terminated; provided,
that the Buyer will be liable for any and all of the Expenses incurred in
connection with the Terminated Services prior to the effective date of such
termination. The termination of the Terminated Services will not affect this
Agreement with respect to any Transition Services not terminated under this Section 5(b).

 

(c)                                  Upon
the breach of the Buyer’s obligations under Section 4 hereof, the Seller and the Parent may, upon 10
days’ prior written notice to the Buyer, terminate this Agreement without any
further obligation or liability to the Buyer; provided, that the Buyer may
cure any defaults under Section 4
during such 10-day period. If the Seller and the Parent terminate this
Agreement pursuant to this Section 5(c),
the Buyer will be liable for any and all of the Expenses incurred prior to the
effective date of such termination.

 

6.                                       Performance of Transition Services; Initial
Designee.

 

(a)                                  The
Buyer will give the Seller and the Parent reasonable advance notice of its need
for the Transition Services. The Transition Services will initially be provided
by Deborah Roberts (the “Initial
Designee”). Upon the Buyer’s reasonable request, and subject to
the parties’ mutual agreement on an appropriate increase to the Monthly Fee,
the Seller and the Parent shall cause an individual or individuals other than
the Initial Designee and reasonably acceptable to the Buyer to perform the
Transition Services.

 

(b)                                 Simultaneous
with the execution of this Agreement, the Buyer shall deliver, in writing, an
offer of employment (on an “at will” basis) to the Initial Designee to commence
such employment with the Buyer on January 1, 2008. The terms of employment
contained in the Buyer’s written offer to the Initial Designee shall not be
less favorable than the terms of the Initial Designee’s employment with the
Seller immediately prior to the Closing.

 

2

 

7.                                       Maintenance of, and Access to, Records. The Buyer shall provide to the Seller and
the Parent access (with an opportunity to make copies), during normal business
hours, and upon reasonable notice, to any records relating to the Business to
enable the Seller and the Parent to close the books of account and prepare tax
returns and financial statements for the period immediately prior to the
Closing. The Buyer shall preserve and maintain such records for as long as
reasonably necessary after the Closing, and shall give the Seller and the
Parent reasonable written notice prior to transferring, destroying or
discarding any such records.

 

8.                                       Confidentiality. The Buyer, the
Seller, the Parent and their respective agents, representatives, employees and
Affiliates will hold all information relating to the Transition Services
confidential from third parties (other than their respective Affiliates) and
will not disclose the same to any Person. In addition, the Buyer, the Seller,
the Parent and their respective agents, representatives, employees and
Affiliates will not disclose to any Person any confidential information
concerning any other party hereto and obtained in the performance of this
Agreement during the Transition Services Period and for a period of three years
following its expiration. Notwithstanding the foregoing, nothing shall prevent any
party hereto from disclosing the foregoing confidential information (i) if such
information becomes generally available to the public, other than as a result
of a breach of this Agreement by the disclosing party; (ii) if such information
is within the possession of the disclosing party before being furnished to the
disclosing party pursuant to the terms of this Agreement, as corroborated by
written or electronic evidence; or (iii) if such information is required to be
produced by Law or Order.

 

9.                                       Independent Contractor. The
parties intend that their relationship hereunder will be that of independent
contractors. Nothing contained in this Agreement is to be construed as creating
any partnership, joint venture or other arrangement among the parties. None of
the parties have any authority to act for, obligate or bind the other parties
in any way, including, without limitation, by way of creating or incurring any
debts, expenses or other liabilities, whether express or implied. Neither the Seller, the Parent nor their
respective employees are or shall be deemed for any purpose to be agents or
employees of the Buyer. All employees and representatives providing the
Transition Services will be under the direction, control and supervision of the
Seller or the Parent (and not of the Buyer), and the Seller and the Parent will
have the sole right to exercise all authority with respect to such employees
and representatives and in no event will such employees and representatives be
deemed to be employees or agents of the Buyer. All persons employed by the
Seller or the Parent in the performance of the Seller and the Parent’s
obligations hereunder shall be the sole responsibility of the Seller and the
Parent, and the Buyer shall have no obligation or responsibility with respect
thereto.

 

10.                                 Indemnification. The Buyer shall indemnify, defend and hold
harmless the Seller and the Parent and their respective directors, officers,
employees and agents (the “Seller Indemnitees”) from and against any and all
damage, loss, liability and expense (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses) in connection with
any and all third-party actions or threatened actions (“Indemnifiable Losses”)
incurred or suffered by any of the Seller Indemnitees arising from, related to
or associated with the performance by the Seller or the Parent of this
Agreement, other than liabilities arising out of the willful misconduct or
gross negligence of the Seller or the Parent.

 

3

 

11.                                 Successors and Assigns. The rights
and obligations of the parties hereunder may not be assigned without the prior
written consent of the other parties hereto.

 

12.                                 Headings. The headings contained
in this Agreement are included for purposes of convenience only, and shall not
affect the meaning or interpretation of this Agreement.

 

13.                                 Integration, Modification and Waiver.
This Agreement, together with Exhibit A,
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings of the parties. No
supplement, modification or amendment to this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to be or shall constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.

 

14.                                 Construction. The parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The word “including” shall mean
including without limitation. Any reference to the singular in this Agreement
shall also include the plural and vice versa.

 

15.                                 Severability. If any provision of
this Agreement or the application of any provision hereof to any party or
circumstance shall, to any extent, be adjudged invalid or unenforceable, the
application of the remainder of such provision to such party or circumstance,
the application of such provision to other parties or circumstances, and the
application of the remainder of this Agreement shall not be affected thereby.

 

16.                                 Notices. All notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person or when dispatched by
electronic facsimile transfer (if confirmed in writing by mail simultaneously
dispatched) or one business day after having been dispatched by a nationally
recognized overnight courier service to the appropriate party at the address or
facsimile number specified below:

 

If to the
Parent or the Seller:

 

Stratum Holdings, Inc.

Three Riverway, Suite 1500

Houston, Texas  77056

Attn:   Chief Executive
Officer

Fax:    (713)
975-6271

 

4

 

In each case, with a copy to:

 

Haynes and Boone, LLP

One Houston Center

1221 McKinney Street, Suite 2100

Attn:   Bryce
Linsenmayer, Esq.

Fax:    (713)
236-5540

 

If to the
Buyer:

 

Tradesmen Services, Inc.

9760 Shepard Road

Macedonia, Ohio  44056

Attn:   Joseph
Wesley

Fax:    (440)
349-4092

 

with a copy to:

 

Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio  44114

Attn:   John M.
Saada, Jr., Esq.

Fax:    (216)
579-0212

 

Any party
hereto may change its address or facsimile number for the purposes of this Section 16 by giving notice as provided
herein.

 

17.                                 Governing Law. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware without regard to principles of conflict of laws.

 

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

 

(Signatures
are on the following page.)

 

5

 

IN WITNESS
WHEREOF, the Seller and the Buyer have caused this Agreement to be executed by
their duly authorized officers as of the date and year first above written.

 

 

	
   

  	
  TRADESMEN SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Joseph O. Wesley

  
	
   

  	
   

  	
  Name: Joseph O. Wesley

  
	
   

  	
   

  	
  Title: President and CEO

  

 

 

	
   

  	
  TRADESTAR CONSTRUCTION 

  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kenneth Thomas

  
	
   

  	
   

  	
  Name: Kenneth Thomas

  
	
   

  	
   

  	
  Title: Senior Vice President – Finance

  and Treasurer

  

 

 

	
   

  	
  STRATUM HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ D. Hughes Watler

  
	
   

  	
   

  	
  Name: D. Hughes Watler

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

 

EXHIBIT A

 

Transition
Services

 

The Transition Services shall comprise (i) payroll
and accounting services, (ii) IT operational support and (iii) the provision of
access to customer and supplier lists and contact information.

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