Document:

Unassociated Document

    
      

    

    

     

    STOCK
      PURCHASE AGREEMENT 

     

    by
      and among

     

    M.
      S. KENNEDY CORP.

     

    THE
      PRINCIPAL STOCKHOLDERS, 

     

    and

     

    THE
      MINORITY STOCKHOLDERS,

     

    and

     

    ANAREN,
      INC.

     

    

    Dated
      as of July 30, 2008

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	 	 	
                
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                    Version

                

              
	 	 	 
	 	
                TABLE
                  OF
                  CONTENTS

              	 
	 	 	 
	 	 	Page:
	 	 	 
	
                ARTICLE
                  I 

              	
                DEFINITIONS

              	
                1

              
	 	 	 
	
                ARTICLE
                  II 

              	
                PURCHASE
                  AND SALE OF STOCK

              	
                11

              
	 	 	 
	
                2.1

              	
                Purchase
                  and Sale

              	
                11

              
	
                2.2

              	
                Purchase
                  Price

              	
                11

              
	
                2.3

              	
                Escrow

              	
                12

              
	
                2.4

              	
                Transaction
                  Expenses

              	
                12

              
	
                2.5

              	
                Purchase
                  Price Adjustment

              	
                12

              
	 	 	 
	
                ARTICLE
                  III 

              	
                CLOSING
                  AND CLOSING DELIVERIES AND SELLERS’
REPRESENTATIVE

              	
                16

              
	 	 	 
	
                3.1

              	
                Closing

              	
                16

              
	
                3.2

              	
                Minimum
                  Acquisition

              	
                16

              
	
                3.3

              	
                Closing
                  Date Deliveries

              	
                16

              
	
                3.4

              	
                Sellers’
                  Representative

              	
                18

              
	 	 	 
	
                ARTICLE
                  IV

              	
                REPRESENTATIONS
                  AND WARRANTIES OF MSK AND PRINCIPAL STOCKHOLDERS

              	
                20

              
	 	 	 
	
                4.1

              	
                Authorizations,
                  etc

              	
                20

              
	
                4.2

              	
                Corporate
                  Status

              	
                21

              
	
                4.3

              	
                Subsidiaries

              	
                21

              
	
                4.4

              	
                Capitalization

              	
                21

              
	
                4.5

              	
                No
                  Conflicts and Governmental Approvals, etc

              	
                22

              
	
                4.6

              	
                Financial
                  Statements

              	
                22

              
	
                4.7

              	
                Absence
                  of Undisclosed Liabilities

              	
                22

              
	
                4.8

              	
                Taxes

              	
                22

              
	
                4.9

              	
                Absence
                  of Changes

              	
                24

              
	
                4.10

              	
                Litigation

              	
                26

              
	
                4.11

              	
                Governmental
                  Approvals

              	
                26

              
	
                4.12

              	
                Compliance
                  with Laws

              	
                26

              
	
                4.13

              	
                Title
                  to Assets

              	
                26

              
	
                4.14

              	
                Contracts

              	
                26

              
	
                4.15

              	
                Proprietary
                  Rights

              	
                29

              
	
                4.16

              	
                Real
                  Property

              	
                31

              
	
                4.17

              	
                Environmental
                  Matters

              	
                32

              
	
                4.18

              	
                Employees,
                  Labor Matters, etc

              	
                34

              
	
                4.19

              	
                Employee
                  Benefit Plans and Related Matters

              	
                34

              
	
                4.20

              	
                Related
                  Party Transactions

              	
                38

              
	
                4.21

              	
                Insurance

              	
                38

              
	
                4.22

              	
                Product
                  and Service Warranties

              	
                39

              
	
                4.23

              	
                Product
                  Liability

              	
                39

              

      

       

      
        
          
          

        

        
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                4.24

              	
                Inventory

              	
                39

              
	
                4.25

              	
                Receivables
                  and Payables

              	
                40

              
	
                4.26

              	
                No
                  Material Adverse Effect

              	
                40

              
	
                4.28

              	
                Suppliers
                  and Customers

              	
                40

              
	
                4.29

              	
                Product
                  Lines

              	
                41

              
	
                4.30

              	
                Indebtedness

              	
                41

              
	
                4.31

              	
                Government
                  Contracts

              	
                41

              
	
                4.32

              	
                Capital
                  Expenditures and Investments

              	
                43

              
	
                4.33

              	
                Brokers,
                  Finders, etc.

              	
                43

              
	
                4.34

              	
                Books
                  and Records

              	
                43

              
	
                4.35

              	
                Condition
                  and Sufficiency of Assets

              	
                43

              
	
                4.36

              	
                Trade
                  Controls

              	
                43

              
	
                4.37

              	
                Ethical
                  Practices

              	
                44

              
	 	 	 
	
                ARTICLE
                  V 

              	
                REPRESENTATIONS
                  AND WARRANTIES OF SELLERS

              	
                44

              
	 	 	 
	
                5.1

              	
                Authorizations,
                  Due Execution, etc.

              	
                44

              
	
                5.2

              	
                Execution,
                  Delivery, Binding Obligation

              	
                45

              
	
                5.3

              	
                Ownership

              	
                45

              
	
                5.4

              	
                Non-Contravention

              	
                45

              
	
                5.5

              	
                Brokers,
                  Finders, etc.

              	
                46

              
	
                5.6

              	
                Foreign
                  Person

              	
                46

              
	 	 	 
	
                ARTICLE
                  VI 

              	
                REPRESENTATIONS
                  AND WARRANTIES OF BUYER

              	
                46

              
	 	 	 
	
                6.1

              	
                Corporate
                  Status; Authorization, etc

              	
                46

              
	
                6.2

              	
                No
                  Conflicts, etc

              	
                46

              
	
                6.3

              	
                Governmental
                  Approvals

              	
                46

              
	
                6.4

              	
                Brokers,
                  Finders, etc

              	
                47

              
	
                6.5

              	
                Financial
                  Arrangements of Buyer

              	
                47

              
	
                6.6

              	
                Investment
                  Intent

              	
                47

              
	 	 	 
	
                ARTICLE
                  VII 

              	
                COVENANTS

              	
                47

              
	 	 	 
	
                7.1

              	
                Conduct
                  of Business

              	
                47

              
	
                7.2

              	
                Access
                  and Information

              	
                50

              
	
                7.4

              	
                Public
                  Announcements

              	
                50

              
	
                7.5

              	
                Further
                  Actions

              	
                50

              
	
                7.6

              	
                Return
                  of Confidential Materials

              	
                51

              
	
                7.7

              	
                Record
                  Retention

              	
                51

              
	
                7.8

              	
                No
                  Solicitation

              	
                51

              
	
                7.9

              	
                Certain
                  Tax Matters

              	
                52

              
	
                7.10

              	
                Termination
                  of Options

              	
                55

              
	
                7.11

              	
                Related
                  Party Transactions

              	
                55

              
	
                7.12

              	
                Alternate
                  Structure

              	
                55

              
	
                7.13

              	
                Environmental
                  Condition

              	
                55

              
	
                7.14

              	
                Adjustments
                  to Inventory

              	
                55

              

      

       

      
        
          
          

        

        
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                7.15

              	
                Adjustment
                  to the Security Value

              	
                56

              
	
                7.16

              	
                Liquidation
                  of the Security

              	
                56

              
	
                7.17

              	
                Purchase
                  Requirements

              	
                56

              
	
                7.18

              	
                Environmental
                  Action Items

              	
                56

              
	 	 	 
	
                ARTICLE
                  VIII 

              	
                CONDITIONS
                  PRECEDENT

              	
                57

              
	 	 	 
	
                8.1

              	
                Conditions
                  to Obligations of Each Party

              	
                57

              
	
                8.2

              	
                Conditions
                  to Obligations of Buyer

              	
                57

              
	
                8.3

              	
                Conditions
                  to Obligations of MSK

              	
                58

              
	 	 	 
	
                ARTICLE
                  IX 

              	
                TERMINATION

              	
                59

              
	 	 	 
	
                9.1

              	
                Termination

              	
                59

              
	
                9.2

              	
                Effect
                  of Termination

              	
                59

              
	 	 	 
	
                ARTICLE
                  X 

              	
                INDEMNIFICATION

              	
                60

              
	 	 	 
	
                10.1

              	
                Survival

              	
                60

              
	
                10.2

              	
                Indemnification
                  by Sellers

              	
                60

              
	
                10.3

              	
                Indemnification
                  by Buyer

              	
                63

              
	
                10.4

              	
                Purchase
                  Price Adjustment

              	
                64

              
	
                10.5

              	
                Notification
                  of Claims

              	
                64

              
	
                10.6

              	
                Third
                  Party Claims

              	
                64

              
	
                10.7

              	
                No
                  Waiver by Knowledge

              	
                65

              
	
                10.8

              	
                Exclusive
                  Remedy

              	
                66

              
	 	 	 
	
                ARTICLE
                  XI 

              	
                MISCELLANEOUS

              	
                66

              
	 	 	 
	
                11.1

              	
                Expenses

              	
                66

              
	
                11.2

              	
                Severability

              	
                66

              
	
                11.3

              	
                Notices

              	
                66

              
	
                11.4

              	
                Entire
                  Agreement

              	
                67

              
	
                11.5

              	
                Counterparts;
                  Headings

              	
                67

              
	
                11.6

              	
                Governing
                  Law, Etc

              	
                67

              
	
                11.7

              	
                Binding
                  Effect; No Third Party Beneficiaries

              	
                68

              
	
                11.8

              	
                Schedules

              	
                68

              
	
                11.9

              	
                Assignment

              	
                68

              
	
                11.10

              	
                Amendment;
                  Waivers, etc

              	
                69

              

      

    

     

    
      
        	
                EXHIBITS:

              	 
	
                Exhibit
                  2.3 

              	
                Escrow
                  Agreement

              
	
                Exhibit
                  3.3(a)(iii)

              	
                Non-Competition
                  Agreement

              
	
                Exhibit
                  3.3(a)(v) 

              	
                Proprietary
                  Information Agreement

              
	 	 
	
                SCHEDULES:

              	 
	
                Schedule
                  1

              	
                Sellers

              
	
                Schedule
                  3.3(b)

              	
                Disbursing
                  Agent Wire Instructions

              

      

       

      
        
          
          

        

        
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                Schedule
                  4.1

              	
                Authorizations

              
	
                Schedule
                  4.2(b)

              	
                Corporate
                  Status

              
	
                Schedule
                  4.4

              	
                Capitalization

              
	
                Schedule
                  4.5(b)

              	
                Governmental
                  Approvals

              
	
                Schedule
                  4.6

              	
                Financial
                  Statements

              
	
                Schedule
                  4.8(c)

              	
                Filing
                  Jurisdictions

              
	
                Schedule
                  4.8(d)

              	
                Income
                  Inclusions and Deduction Exclusions

              
	
                Schedule
                  4.8(h)(v)

              	
                Audited
                  Tax Returns

              
	
                Schedule
                  4.8(h)(vi)

              	
                Tax-Exempt
                  Bond Financed Property

              
	
                Schedule
                  4.9

              	
                Absence
                  of Changes

              
	
                Schedule
                  4.10

              	
                Litigation

              
	
                Schedule
                  4.11

              	
                Governmental
                  Approvals

              
	
                Schedule
                  4.12

              	
                Compliance
                  with Laws

              
	
                Schedule
                  4.13

              	
                Title
                  to Assets

              
	
                Schedule
                  4.14

              	
                Contracts

              
	
                Schedule
                  4.15(b)

              	
                List
                  of Proprietary Rights

              
	
                Schedule
                  4.15(c)

              	
                Royalties
                  or Fees

              
	
                Schedule
                  4.15(e)

              	
                Infringement
                  by Third Parties

              
	
                Schedule
                  4.16(a)

              	
                Owned
                  Real Property

              
	
                Schedule
                  4.16(b)

              	
                Leased
                  Real Property

              
	
                Schedule
                  4.17

              	
                Environmental
                  Matters

              
	
                Schedule
                  4.19(a)

              	
                Employee
                  Benefit Plans and Related Matters

              
	
                Schedule
                  4.19(c)

              	
                Employee
                  Benefit Plans and Related Matters

              
	
                Schedule
                  4.19(g)

              	
                Employee
                  Benefit Plans and Related Matters

              
	
                Schedule
                  4.19(h)

              	
                Employee
                  Benefit Plans and Related Matters

              
	
                Schedule
                  4.20

              	
                Related
                  Party Transactions

              
	
                Schedule
                  4.21

              	
                Insurance

              
	
                Schedule
                  4.22

              	
                Product
                  and Service Warranties

              
	
                Schedule
                  4.23

              	
                Product
                  Liability

              
	
                Schedule
                  4.25

              	
                Receivables
                  and Payables

              
	
                Schedule
                  4.28

              	
                Suppliers
                  and Customers

              
	
                Schedule
                  4.29

              	
                Product
                  Lines

              
	
                Schedule
                  4.30

              	
                Indebtedness

              
	
                Schedule
                  4.31(a)

              	
                Government
                  Contracts Compliance

              
	
                Schedule
                  4.31(f)

              	
                Government
                  Property

              
	
                Schedule
                  4.31(g)

              	
                Performance

              
	
                Schedule
                  4.32

              	
                Capital
                  Expenditures and Investments

              
	
                Schedule
                  4.35

              	
                Condition
                  and Sufficiency of Assets

              
	
                Schedule
                  4.36

              	
                Trade
                  Controls

              
	
                Schedule
                  5.3

              	
                Ownership

              
	
                Schedule
                  7.14

              	
                Write
                  Down of Inventory

              
	
                Schedule
                  7.15

              	
                Adjustment
                  to Security Value

              
	
                Schedule
                  10.2(a)(vi)

              	
                Environmental
                  Costs and Liabilities

              

      

    

     

    
      
        
        

      

      
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        STOCK
          PURCHASE AGREEMENT

      

    

     

    THIS
      STOCK PURCHASE AGREEMENT (“Agreement”)
      is
      made and entered into as of July 30, 2008, by and among M. S. KENNEDY CORP.,
      a
      New York corporation (“MSK”),
      the
      individuals and entities whose names appear on Schedule
      1
      hereto
      under the heading “Principal
      Stockholders”
      (collectively, the “Principal
      Stockholders”)
      and
      the individuals whose names appear on Schedule
      1
      hereto
      under the heading “Minority
      Stockholders”
(each
      a
“Minority
      Stockholder”
and,
      together with the Principal Stockholders, each a “Seller”
and,
      collectively, the “Sellers”)
      and
Klaus
      O.
      Baasch, C.P.A, of Sirchia & Cuomo, LLP of East Syracuse, New York
(as
      “Sellers’
      Representative”),
      on
      the one hand, and Anaren, Inc., a New York corporation (“Buyer”),
      on
      the other hand.

     

    WHEREAS,
      MSK is
      a privately-owned company that is an industry leader in the design and
      production of high performance analog microelectronics and power hybrid
      microcircuits;

     

    WHEREAS,
      the
      Sellers and Buyer have determined that it is in their respective best interests
      for Buyer to acquire the Sellers’ shares of capital stock in MSK (the
“Transaction”),
      upon
      the terms and subject to the conditions set forth herein;

     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing and the mutual covenants, representations, and
      agreements herein contained, and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the parties agree
      as
      follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    The
      terms
      defined in this ARTICLE
      I,
      whenever used in this Agreement (including in the Schedules), shall have the
      respective meanings indicated below for all purposes of this Agreement (each
      such meaning to be equally applicable to the singular and the plural forms
      of
      the respective terms so defined). All references herein to a Section, Article
      or
      Schedule are to a Section, Article or Schedule of or to this Agreement, unless
      otherwise indicated. The words “hereby”, “herein”, “hereof”, “hereunder” and
      words of similar import refer to this Agreement as a whole (including any
      Exhibits and Schedules hereto) and not merely to the specific Section, paragraph
      or clause in which such word appears. The words “include”, “includes”, and
“including” shall be deemed to be followed by the phrase “without limitation.”
Whenever the context may require, any pronoun shall include the corresponding
      masculine, feminine and neuter forms. Except as otherwise expressly provided
      herein, all references to “dollars” and “$” shall be deemed references to the
      lawful money of the United States of America.

     

    “Accrued
      Tax Liability”
shall
      mean the accrued Tax liability of the business of MSK for the Pre-Closing Period
      set forth on the Final Balance Sheet.

     

    “Adjustment
      Notice”
is
      defined in Section
      2.5(b).

     

    “Acquisition
      Proposal”
is
      defined in Section
      7.8
      hereof.

     

    
      
        
        

      

      
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    “Affiliate”
of
      a
      Person means a Person that directly or indirectly through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      the
      first Person. “Control” (including the terms “controlled by” and “under common
      control with”) means the possession, directly or indirectly, of the power to
      direct or cause the direction of the management policies of a Person, whether
      through the ownership of voting securities, by contract or credit arrangement,
      as trustee or executor, or otherwise.

     

    “Agreement”
is
      defined in the preamble hereof.

     

    “Ancillary
      Documents”
shall
      mean, collectively, any and all certificates, instruments, agreements and other
      documents contemplated by this Agreement.

     

    “Applicable
      Law”
shall
      mean the applicable provisions of all (i) constitutions, treaties, statutes,
      laws (including the common law), rules, regulations, ordinances, codes or orders
      of any Governmental Authority, (ii) Governmental Approvals and (iii) orders,
      decisions, injunctions, judgments, awards and decrees of or agreements with
      any
      Governmental Authority.

     

    “Balance
      Sheet”
is
      defined in Section
      4.7
      hereof.

     

    “Business”
shall
      mean the business, operations, assets and properties of MSK.

     

    “Buyer”
is
      defined in the preamble of this Agreement.

     

    “Buyer
      Damages”
is
      defined in Section
      10.2
      hereof.

     

    “Buyer
      Indemnitees”
is
      defined in Section
      10.2
      hereof.

     

    “Buyer
      Threshold”
is
      defined in Section
      10.2
      hereof.

     

    “Carve
      Out Claim”
or
      “Carve
      Out Claims”
is
      defined in Section
      10.2(b)(i).

     

    “Closing”
is
      defined in ARTICLE
      III
      hereof.

     

    “Closing
      Date”
is
      defined in ARTICLE
      III
      hereof.

     

    “Closing
      Schedule”
shall
      mean the statement of sources and uses of cash, and reflecting all payments
      to
      be made by or to the parties, at Closing, such statement to be agreed to by
      the
      parties at least five (5) days prior to Closing.

     

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

     

    “Confidentiality
      Agreement”
is
      defined in Section
      7.2
      hereof.

     

    “Consent”
shall
      mean any consent, approval, authorization, waiver, permit, grant, franchise,
      concession, certificate, exemption, order, registration, declaration, vote,
      filing, report or notice of, with or to any Person, other than any Governmental
      Approval.

     

    “Contract”
shall
      mean any agreement, contract, license, commitment, instrument, undertaking,
      understanding or arrangement, whether written or oral.

     

    
      
        
        

      

      
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    “Defended
      Party”
is
      defined in Section
      10.6(c)
      hereof.

     

    “Defending
      Party”
is
      defined in Section
      10.6(c)
      hereof.

     

    “Deluxe”
is
      defined in Section
      4.17(f)
      hereof.

     

    “Disbursing
      Agent”
shall
      mean Manufacturers and Traders Trust Company.

     

    “Election”
is
      defined in Section
      7.9(e)(i)
      hereof.

     

    “Employment
      and Withholding Taxes”
shall
      mean any federal, state, provincial, local, foreign or other employment,
      unemployment insurance, social security, disability, workers’ compensation,
      payroll, health care or other similar Tax, estimated Tax, duty or other
      governmental charge or assessment or deficiencies thereof and all Taxes required
      to be withheld by or on behalf of MSK in connection with amounts paid, deemed
      paid, or owing or deemed owing to any employee, independent contractor, creditor
      or other party, in each case, on or in respect of MSK (including, but not
      limited to, all interest and penalties thereon and additions thereto, whether
      disputed or not).

     

    “Environmental
      Laws”
shall
      mean all Applicable Laws relating to the protection of the environment, to
      human
      health and safety, or to any use, sale, manufacture, treatment, generation,
      processing, storage, disposal, abatement, existence, Release, threatened
      Release, transportation or handling of any Hazardous Substance, including,
      without limitation, (i) the Comprehensive Environmental Response, Compensation,
      and Liability Act, the Resource Conservation and Recovery Act, and the
      Occupational Safety and Health Act, (ii) all other requirements pertaining
      to
      reporting, licensing, permitting, investigation or remediation of Releases
      or
      threatened Releases of Hazardous Substances into the air, surface water,
      sediment, groundwater or land, or relating to the manufacture, processing,
      distribution, use, sale, treatment, receipt, storage, disposal, transport or
      handling of Hazardous Substances and (iii) all other requirements pertaining
      to
      the protection of the health and safety of employees or the public.

     

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

     

    “Escrow
      Account”
is
      defined in Section
      2.3.

     

    “Escrow
      Agent”
shall
      mean Manufacturers and Traders Trust Company.

     

    “Escrow
      Agreement”
is
      defined in Section
      2.3.

     

    “Escrow
      Amount”
shall
      mean $3,080,000 in the case of a Total Acquisition and $5,600,000 in the case
      of
      a Partial Acquisition.

     

    “ESOP”
shall
      mean the M. S. Kennedy Corp. Employee Stock Ownership Plan, EIN
      16-1515732.

     

    “Estimated
      Balance Sheet”
shall
      mean an estimated balance sheet of MSK as of the Closing Date prepared in
      accordance with GAAP applied on a consistent basis with the Financial Statements
      and certified in good faith as accurate and correct by MSK’s chief financial
      officer.

     

    
      
        
        

      

      
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    “Estimated
      Net Working Capital”
shall
      mean the Net Working Capital based on the Estimated Balance Sheet; provided,
      however, the Estimated Net Working Capital shall be computed as if the Security
      were a current asset valued at the Security Value.

     

    “Exchange
      Act”
shall
      mean the Security Exchange Act of 1934, as amended.

     

    “Facilities”
shall
      mean, collectively, the real properties and facilities currently or formerly
      owned, leased or otherwise occupied or used in the operation of the Business
      by
      MSK.

     

    “FCPA”
is
      defined in Section
      4.37
      hereof.

     

    “Final
      Balance Sheet”
shall
      mean the Proposed Balance Sheet or, if an Adjustment Notice is delivered, a
      balance sheet of MSK as of the Closing Date prepared in accordance with GAAP
      applied on a consistent basis with the Financial Statements and as agreed to
      by
      Buyer and Sellers’ Representative or the Proposed Balance Sheet with the
      adjustments determined by resolution of disputed items by the Independent
      Accountant, as provided in Section
      2.5(b).

     

    “Final
      Date”
is
      defined in Section
      9.1(b)
      hereof.

     

    “Final
      Net Working Capital”
shall
      mean the Net Working Capital based on the Final Balance Sheet; provided,
      however, the Final Net Working Capital shall be computed as if the Security
      were
      a current asset valued at the Security Value.

     

    “Financial
      Statements”
is
      defined in Section
      4.6
      hereof.

     

    “Forms”
is
      defined in Section
      7.9(e)(i)
      hereof.

     

    “GAAP”
shall
      mean generally accepted accounting principles as in effect in the United
      States.

     

    “Government
      Bid”
means
      any quotation, bid or proposal by MSK that, if accepted or awarded, would lead
      to a Government Contract.

     

    “Government
      Contract”
means
      any contract or binding obligation (whether performed or not) (i) between MSK,
      on one hand, and a Governmental Authority, on the other, or (ii) entered into
      by
      MSK as a subcontractor (at any tier) in connection with any contract or other
      binding obligation between another Person (to include a state or local
      government agency or instrumentality for purposes of this definition only and
      its use in Section
      4.31
      herein)
      and a Governmental Authority.

     

    “Governmental
      Approval”
shall
      mean any consent, approval, authorization, waiver, permit, concession,
      agreement, license, exemption or order of, declaration or filing with, or report
      or notice to, any Governmental Authority.

     

    
      
        
        

      

      
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    “Governmental
      Authority”
shall
      mean any Federal, state, local or foreign court, arbitrator or governmental
      agency, authority, instrumentality or regulatory body.

     

    “Governmental
      Damages”
shall
      mean (i) any civil or criminal penalties or fines paid or payable to a
      Governmental Authority, (ii) any restitution paid to a third party, in each
      case, resulting from the (x) conviction (including as a result of the entry
      of a
      guilty plea, a consent judgment or a plea of nolo contendere) of MSK of a crime
      or (y) settlement with a Governmental Authority for the purpose of closing
      Litigation, or (iii) any injunctive relief or requirement to alter business
      practices.

     

    “Guarantee”
shall
      mean any guarantee or other contingent liability (other than any endorsement
      for
      collection or deposit in the ordinary course of business), direct or indirect
      with respect to any obligations of another Person, through a contract or
      otherwise, including, without limitation, (a) any endorsement or discount with
      recourse or undertaking substantially equivalent to or having economic effect
      similar to a guarantee in respect of any such obligations and (b) any contract
      (i) to purchase, or to advance or supply funds for the payment or purchase
      of,
      any such obligations, (ii) to purchase, sell or lease property, products,
      materials or supplies, or transportation or services, in respect of enabling
      such other Person to pay any such obligation or to assure the owner thereof
      against loss regardless of the delivery or nondelivery of the property,
      products, materials or supplies or transportation or services or (iii) to make
      any loan, advance or capital contribution to or other investment in, or to
      otherwise provide funds to or for, such other Person in respect of enabling
      such
      Person to satisfy an obligation (including any liability for a dividend, stock
      liquidation payment or expense) or to assure a minimum equity, working capital
      or other balance sheet condition in respect of any such obligation.

     

    “Hazardous
      Substances”
shall
      mean any substance that: (i) is or contains asbestos, urea formaldehyde foam
      insulation, polychlorinated biphenyls, petroleum or petroleum-derived substances
      or wastes, radon gas or related materials, (ii) is defined, listed or identified
      as a “hazardous waste” or “hazardous substance” under any Environmental Law, or
      (iii) is toxic, explosive, corrosive, flammable, infectious, radioactive,
      carcinogenic, mutagenic, or otherwise hazardous and is regulated by any
      Governmental Authority or Environmental Law.

     

    “Improper
      Payment Laws”
is
      defined in Section
      4.37
      hereof.

     

    “Improvements”
is
      defined in Section
      4.16(f).

     

    “Indebtedness”
shall
      mean all indebtedness (including the current portion of any indebtedness) and
      obligations of MSK outstanding on, or Guarantees of the foregoing in place
      on,
      the measurement date other than the balance sheet items incurred in the ordinary
      course of business consistent with past practice and identified as accounts
      payables, accrued expenses, accrued post-retirement benefits, deferred Taxes
      and
      other liabilities (but only to the extent that each such amount accrued as
      of
      the measurement date does not exceed 120% of such amount reflected on the
      Balance Sheet) then outstanding (all determined in accordance with
      GAAP).

     

    “Indemnification
      Cap”
is
      defined in Section
      10.2(b)(ii)
      hereof.

     

    “Indemnified
      Party”
is
      defined in Section
      10.5
      hereof.

     

    
      
        
        

      

      
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    “Indemnifying
      Party”
is
      defined in Section
      10.5
      hereof.

     

    “Independent
      Accountant”
shall
      mean Bowers & Company CPAs, PLLC, of Syracuse, New York.

     

    “Intercompany
      Arrangement”
is
      defined in Section
      4.20
      hereof.

     

    “IRS”
means
      the Internal Revenue Service.

     

    “Knowledge
      of MSK”
shall
      mean the knowledge of Christopher Heiselman, Daniel Miller, Greg Overend and
      Richard Roehm after reasonable investigation and inquiry, which includes
      diligent review of files and books and records and the making of reasonable
      inquiry of the Sellers, directors, officers and employees of MSK and its
      Affiliates, who have knowledge of, responsibility for, or control over the
      relevant subject matter, and the awareness that such individuals could
      reasonably be expected to have acquired in the course of having acted in such
      capacity with the care that an ordinarily prudent person in a like position
      would use.

     

    “Leased
      Real Property”
means
      all leasehold or subleasehold estates and other rights to use or occupy any
      land, buildings, structures, improvements, fixtures, or other interest in real
      property held by MSK and set forth on Schedule
      4.16(b).

     

    “Leases”
means
      all leases, subleases, licenses, concessions and other agreements (written
      or
      oral), including all amendments, extensions, renewals, guaranties, and other
      agreements with respect thereto, pursuant to which MSK holds any Leased Real
      Property.

     

    “Lien”
shall
      mean any mortgage, pledge, hypothecation, right of others, claim, security
      interest, encumbrance, lease, sublease, license, occupancy agreement, adverse
      claim or interest, easement, covenant, encroachment, burden, title defect,
      title
      retention agreement, voting trust agreement, interest, equity, option, lien,
      right of first refusal, charge or other restrictions or limitations of any
      nature whatsoever, including but not limited to such as may arise under any
      Contracts, but excluding in each case any Permitted Liens.

     

    “Litigation”
shall
      mean any action, cause of action, claim, demand, suit, proceeding, hearing,
      notice of violation or noncompliance, citation, summons, subpoena, inquiry
      or
      investigation of any nature, or any other dispute, civil, criminal, regulatory
      or otherwise, in law or in equity, by or before any court, tribunal, arbitrator
      or other Governmental Authority.

     

    “Material
      Adverse Effect”
shall
      mean any change, effect, event, occurrence or state of facts (including any
      matter or condition that has given, or would reasonably by expected to give,
      rise to criminal liability) that (a) is, or would reasonably be expected to
      be,
      materially adverse to the business, financial condition or results of operation
      of the Business taken as a whole, to the properties, assets, liabilities or
      prospects of MSK on a consolidated basis, or result in harm to Buyer or (b)
      materially impairs, or would reasonably be expected to materially impair, the
      ability of Sellers, as a whole, to consummate the transactions contemplated
      by
      this Agreement. 

     

    “Material
      Contracts”
is
      defined in Section
      4.14
      hereof.

     

    
      
        
        

      

      
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    “Minority
      Stockholder”
is
      defined in the preamble hereof.

     

    “MSK”
is
      defined in the preamble of this Agreement.

     

    “MSK
      Common Stock”
shall
      mean shares of capital stock of MSK, which consist solely of one class of voting
      common stock.

     

    “Net
      Working Capital”
shall
      mean the difference between MSK’s current assets and its current liabilities
      (excluding any liabilities for the current portion of any Indebtedness) based
      on
      the Estimated Balance Sheet, the Proposed Balance Sheet or the Final Balance
      Sheet, as applicable; provided, however, for this purpose, Net Working Capital
      shall be computed as if the Security were a current asset valued at the Security
      Value.

     

    “Non-US
      Plan”
is
      defined in Section
      4.19
      hereof.

     

    “Occurrence”
means
      any accident, happening or event which occurs or has occurred at any time prior
      to the Closing Date that is caused or allegedly caused by any hazard or defect
      in manufacture, design, materials or workmanship including, without limitation,
      any failure or alleged failure to warn or any breach or alleged breach of
      express or implied warranties or representations with respect to a product
      manufactured, shipped, sold and/or delivered by or on behalf of MSK which
      results or is alleged to have resulted in injury or death to any Person or
      damage to or destruction of property (including damage to or destruction of
      the
      product itself) or other consequential damages, at any time.

     

    “OFAC
      Regulations”
means
      the regulations set forth in 31 C.F.R., Subtitle B, Chapter V, as
      amended.

     

    “Option”
shall
      mean each outstanding option to purchase shares of any class of equity of
      MSK.

     

    “Option
      Termination Agreement”
is
      defined in Section
      3.3(a)(ii)
      hereof.

     

    “Owned
      Real Property”
means
      all land, together with all buildings, structures, improvements, and fixtures
      located thereon, and all easements and other rights and interests appurtenant
      thereto, owned by MSK and set forth on Schedule
      4.16(a).

     

    “Partial
      Acquisition”
shall
      mean Buyer acquiring less than all of the issued and outstanding shares of
      MSK
      Common Stock at the Closing so that after the Closing Buyer does not own all
      of
      the issued and outstanding shares of capital stock of MSK or, if Buyer elects
      an
      alternative structure pursuant to Section
      8.2(g),
      one or
      more of the Stockholders contest or otherwise dispute (including, without
      limitation, exercising appraisal rights) the transactions contemplated by the
      alternative structure, regardless of whether Buyer acquires all of the issued
      and outstanding shares of capital stock of MSK in such transaction.

     

    “Per
      Share Closing Consideration”
is
      defined in Section
      2.2(a)
      hereof.

     

    
      
        
        

      

      
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    “Permits”
shall
      mean all licenses, permits, franchises, registrations, approvals,
      authorizations, consents, waivers, exemptions, releases, variances or orders
      of,
      or filings with, or issued by, any Governmental Authority or other
      Person.

     

    “Person”
shall
      mean an individual, corporation, partnership, bank, limited liability company,
      trust, association, unincorporated organization, other entity or group (as
      defined in Section 13(d)(3) of the Exchange Act).

     

    “Permitted
      Liens”
shall
      mean (i) Liens for Taxes not yet due and payable or which are being contested
      in
      good faith and by appropriate proceedings, (ii) carriers’, warehousemen’s,
      mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
      arising in the ordinary course of business and securing obligations that are
      not
      overdue by more than 30 days or are being contested in good faith, (iii) pledges
      and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
      regulations, (iv) deposits to secure the performance of bids, trade contracts,
      leases, statutory obligations, surety and appeal bonds, performance bonds and
      other obligations of a like nature, in each case in the ordinary course of
      business; (v) easements, rights-of-way, restrictions or other similar
      encumbrances on real property that do not, individually or in the aggregate,
      materially detract from the value of such real property or materially interfere
      with the current use thereof, or (vi) Liens in the nature of zoning
      restrictions, easements or other restrictions of record on the uses of real
      property if the same do not and would not materially detract from the value
      of
      any of the property or assets of MSK or materially interfere with the current
      use thereof.

     

    “Plans”
is
      defined in Section
      4.19(a)
      hereof.

     

    “Post-Closing
      Period”
shall
      mean all taxable periods after the Closing Date and the portion of any Straddle
      Period that begins after the Closing Date.

     

    “Pre-Closing
      Period”
shall
      mean all taxable periods ending on or before the Closing Date and the portion
      of
      any Straddle Period that begins before the Closing Date and ends on the Closing
      Date.

     

    “Principal
      Stockholders”
is
      defined in the preamble hereof.

     

    “Prohibited
      Person”
means
      (a) a person who is a “designated national,” “specially designated national,”
“specially designated terrorist,” “specially designated global terrorist,”
“foreign terrorist organization,” “specially designated narcotics trafficker,”
or ‘blocked person” within the definitions set forth in the Foreign Assets
      Control Regulations contained in the OFAC Regulations, or who otherwise appears
      on the list of Specially Designated Nationals and Blocked Persons, Appendix
      A to
      the OFAC Regulations; (b) the government, including any political subdivision,
      agency, instrumentality, or national thereof, of any country against which
      the
      United States of America maintains economic sanctions or embargos; (c) a person
      acting or purporting to act, directly or indirectly, on behalf of, or an entity
      owned or controlled by, any of the persons listed in subparagraphs (a) - (b)
      above; (d) a person in violation of any other civil or criminal federal or
      state
      law, regulation, or order of similar import, as each such law has been or may
      be
      amended, adjusted or modified or reviewed from time to time; or (f) a person
      or
      any other export control, terrorism or drug trafficking related list
      administered by any federal, state or local governmental agency as that list
      may
      be amended, adjusted, or modified from time to time.

     

    
      
        
        

      

      
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    “Proposed
      Balance Sheet”
shall
      mean a balance sheet of MSK as of the Closing Date prepared in accordance with
      GAAP applied
      on a consistent basis with the Financial Statements by Buyer and certified
      in
      good faith as accurate and correct by Buyer’s chief financial
      officer.

     

    “Proprietary
      Rights”
shall
      mean any and all United States and foreign: (a) patents (including design
      patents, industrial designs and utility models) and patent applications
      (including patent disclosures, reissues, divisions, continuations-in-part and
      extensions), inventions and improvements thereto; (b) trademarks, service marks,
      certification marks, trade names, trade dress, logos, domain names, business
      and
      product names, slogans, and registrations and applications for registration
      thereof; (c) copyrights and registrations thereof; (d) inventions, processes,
      designs, formulae, trade secrets, know-how, industrial models, confidential
      technical information, manufacturing, engineering and technical drawings,
      product specifications and confidential business information (including customer
      lists, pricing information, menus and order guides); (e) computer software,
      firmware, data and documentation; (f) mask works and registrations thereof;
      (g)
      intellectual property rights substantially similar to any of the foregoing;
      (h)
      copies and tangible embodiments thereof (in whatever form or medium, including
      electronic media); and (i) licenses of any of the foregoing.

     

    “PSA”
is
      defined in Section
      4.17(f)
      hereof.

     

    “Real
      Property”
is
      defined in Section
      4.16(c)
      hereof.

     

    “Receivables”
is
      defined in Section
      4.25
      hereof.

     

    “Release”
shall
      mean any releasing, disposing, discharging, injecting, spilling, leaking,
      leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal,
      migration, transporting, placing and the like, including without limitation,
      the
      moving of any materials through, into or upon, any land, soil, surface water,
      ground water or air, or otherwise entering into the environment.

     

    “Returns”
is
      defined in Section
      4.8
      hereof.

     

    “Sale
      Notice”
is
      defined in Section
      7.16
      hereof.

     

    “Security”
shall
      mean the Vermont Student Assistance Corporation, Education Loan Revenue Bond
      owned by MSK in the principal amount of $1,500,000 and classified as cash on
      the
      Balance Sheet.

     

    “Security
      Value”
shall
      mean $1,500,000.

     

    “Sellers”
is
      defined in the preamble hereof.

     

    “Sellers’
      Representative”
is
      defined in the preamble hereof.

     

    
      
        
        

      

      
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    “Seller
      Damages”
is
      defined in Section
      10.3
      hereof.

     

    “Seller
      Indemnitees”
is
      defined in Section
      10.3
      hereof.

     

    “Seller
      Threshold”
is
      defined in Section
      10.3
      hereof.

     

    “Stockholder”
shall
      mean an owner of one or more shares of capital stock of MSK.

     

    “Subsidiary”
shall
      mean with respect to any party, any Person which is consolidated with such
      party
      for financial reporting purposes.

     

    “Survival
      Period”
is
      defined in Section
      10.1
      hereof.

     

    “Straddle
      Period”
shall
      mean a tax period which begins before the Closing Date and ends after the
      Closing Date.

     

    “Taxes”
shall
      mean all taxes, however denominated, including any interest, penalties, criminal
      sanctions or additions to tax (including, without limitation, any underpayment
      penalties for insufficient estimated tax payments) or other additional amounts
      that may become payable in respect thereof (or in respect of a failure to file
      any tax return when and as required), imposed by any federal, state, local
      or
      foreign government or any agency or political subdivision of any such
      government, which taxes shall include, without limiting the generality of the
      foregoing, all income taxes, payroll and employment taxes, withholding taxes
      (including withholding taxes in connection with amounts paid or owing to any
      employee, independent contractor, creditor, stockholder or other person or
      entity), unemployment insurance taxes, social security (or similar) taxes,
      sales
      and use taxes, excise taxes, franchise taxes, gross receipts taxes, occupation
      taxes, real and personal property taxes, stamp taxes, value added taxes,
      transfer taxes, profits or windfall profits taxes, licenses in the nature of
      taxes, estimated taxes, severance taxes, duties (custom and others), workers’
compensation taxes, premium taxes, environmental taxes (including taxes under
      Section 59A of the Code), disability taxes, registration taxes, alternative
      or
      add-on minimum taxes, estimated taxes, and other fees, assessments, charges
      or
      obligations of the same or of a similar nature.

     

    “Total
      Acquisition”
shall
      mean Buyer acquiring all of the issued and outstanding shares of MSK Common
      Stock at the Closing so that after the Closing Buyer owns all of the issued
      and
      outstanding shares of capital stock of MSK.

     

    “Transaction”
is
      defined in the preamble of this Agreement.

     

    “Transaction
      Expenses”
      shall
      mean (i) the aggregate attorneys’, investment bankers’ and accountants’ fees and
      expenses incurred or to be incurred by MSK, the Sellers, and the Sellers’
Representative and (ii) transfer Taxes imposed upon MSK by Applicable Law,
      in
      each case, in connection with the transactions contemplated by this Agreement
      (including without limitation, New York real estate transfer tax based on the
      fair market value of the Owned Real Property). The Transaction Expenses shall
      be
      set forth on the Closing Schedule, and the Closing Schedule shall indicate
      any
      portion of the Transaction Expenses that has been paid or advanced by MSK prior
      to the Closing Date, any Indebtedness that remains outstanding on the Closing
      Date, and the name, address, respective amounts and bank account information
      from each recipient of Transaction Expenses and payee of amounts relating to
      such Indebtedness.

     

    
      
        
        

      

      
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    “Treasury
      Regulations”
shall
      mean the treasury regulations promulgated under the Code by the United States
      Treasury Department.

     

    “Working
      Capital Shortfall”
shall
      mean the amount by which MSK’s Estimated Net Working Capital or Final Net
      Working Capital is less than $10,700,000.

     

    “Working
      Capital Surplus”
shall
      mean the amount by which MSK’s Estimated Net Working Capital or Final Net
      Working Capital exceeds $11,100,000.

     

    For
      purposes of this Agreement, the terms “MSK,” “Buyer,” “Sellers” and “Subsidiary”
include all of the respective predecessors thereof (including without
      limitation, any previously acquired Person).

     

    ARTICLE
      II

    PURCHASE
      AND SALE OF STOCK

     

    2.1 Purchase
      and Sale.
      Subject
      to the terms and conditions of this Agreement, at the Closing, each Seller
      will
      sell and transfer all and not less than all of the shares of such Seller’s MSK
      Common Stock to Buyer, and Buyer will purchase all and not less than all of
      the
      shares of MSK Common Stock from such Seller.

     

    2.2 Purchase
      Price.

     

    (a) Per
      Share Closing Consideration.
      The
      purchase price for each share of MSK Common Stock acquired by Buyer shall be
      an
      amount (rounded
      to the nearest cent) equal to (i) $28,000,000.00 minus
      the
amounts
      paid to
      the Escrow
      Agent
      pursuant to Section
      2.3,
      minus
      the
      Transaction Expenses paid pursuant to Section
      2.4,
      minus
      any
      outstanding Indebtedness as of the Closing plus
      the
      estimated Working Capital Surplus minus
      the
      estimated Working Capital Shortfall, divided by (ii) the aggregate number of
      shares of MSK Common Stock issued and outstanding immediately prior to the
      Closing, which shall be referred to as the “Per
      Share Closing Consideration”.
      The
      Per
      Share Closing Consideration shall be calculated, in part, based upon the
      Estimated Balance Sheet and the Closing Schedule. MSK shall provide the
      Estimated Balance Sheet and the Closing Schedule (and a copy of all supporting
      documents and data as reasonably requested by Buyer) to Buyer at least five
      (5)
      business days prior to the Closing, both of which shall be subject to reasonable
      review and approval by Buyer, which shall not be unreasonably withheld, before
      being used to calculated the Per Share Closing Consideration, and will be
      further subject to adjustment in accordance with Sections
      2.5(c)
      and/or
2.5(d).
      The Per
      Share Closing Consideration shall be paid in accordance with Section
      3.3(b).

     

    (b) 338
      Consideration.
      If Buyer
      makes a valid Election, the following shall be additional purchase price paid
      by
      Buyer for shares of MSK Common Stock it acquires pursuant to this
      Agreement:

     

    
      
        
        

      

      
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              (i)

            	
              $209,011
                for the ESOP if all of its shares of MSK Common Stock are acquired
                by
                Buyer, and 

            

    

     

    
      	 	
              (ii)

            	
              An
                amount per share of MSK Common Stock acquired by Buyer from other
                than the
                ESOP equal to $396,022 divided by the aggregate
                number of shares of MSK Common Stock issued and outstanding immediately
                prior to the Closing and not owned by the
                ESOP.

            

    

     

    The
      consideration to be paid pursuant to this Section
      2.2(b)
      shall be
      paid by Buyer to the Disbursing Agent by wire transfer pursuant to the wire
      instructions set forth on Schedule
      3.3(b)
      attached
      hereto within five (5) business days after Buyer makes a valid Election. As
      soon
      as reasonably practicable thereafter, the consideration provided by Section
      2.2(b)(i)
      shall be
      paid to the ESOP and the consideration provided by Section
      2.2(b)(ii)
      shall be
      paid by the Disbursing Agent to the Sellers (other than the ESOP) pro rata
      in
      accordance with their ownership of MSK Common Stock immediately before the
      Closing.

     

    (c) Fair
      Market Value.
      The
      parties hereto agree that the purchase price for the shares of MSK Common Stock
      as provided in this Agreement represents the fair market value of all of the
      issued and outstanding shares of MSK Common Stock and was negotiated at arm’s
      length. Each party represents and warrants that he is entering into this
      Agreement of his own free will and
      accord
      and acknowledges that prior to signing this Agreement he had the right to forgo
      selling his shares of MSK Common Stock to Buyer.

     

    2.3 Escrow.
      At the
      Closing, the Escrow Amount shall be deposited by Buyer into an escrow account
      (the “Escrow
      Account”)
      to be
      held by the Escrow Agent for the purpose of securing the indemnification
      obligations of the Sellers pursuant to the terms of this Agreement and funding
      the post-Closing adjustments pursuant to the terms set forth in Section
      2.5.
      The
      Escrow Amount shall be held by the Escrow Agent pursuant to the terms of the
      escrow agreement substantially in the form of Exhibit
      2.3
      attached
      hereto (the “Escrow
      Agreement”).
      The
      Escrow Amount shall be held as a trust fund and shall not be subject to any
      Lien, attachment, trustee process or any other judicial process of any creditor
      of any party, and shall be administered, held and disbursed solely for the
      purposes and in accordance with the terms of the Escrow Agreement.

     

    2.4 Transaction
      Expenses.
      At
      the
      Closing, Buyer shall pay by wire transfer the unpaid Transaction Expenses to
      the
      recipients thereof and in the amounts specified on the Closing Schedule
pursuant
      to the wire instructions for each such recipient thereof as set forth
      thereon.

     

    2.5 Purchase
      Price Adjustment. 

     

    (a) Post
      Closing Working Capital Adjustments.
      Within
      thirty (30) days after the Closing Date, the Sellers’ Representative shall
      provide an update of the Estimated Balance Sheet with any adjustments that
      are
      required to make it accurate. Within ninety (90) days after the Closing Date,
      Buyer shall prepare and deliver to Sellers’ Representative the Proposed Balance
      Sheet and the proposed Net Working Capital based on the Proposed Balance Sheet.
      Buyer shall also make available to the Sellers’ Representative copies of all
supporting
      documents and data as reasonably requested by Sellers’ Representative
and
      related to the preparation of the Proposed Balance Sheet. 

     

    
      
        
        

      

      
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    (b) Final
      Balance Sheet and Net Working Capital Adjustment.
      The
      Proposed Balance Sheet and proposed Net Working Capital shall be final and
      binding on the parties and the Sellers unless Sellers’ Representative shall,
      within twenty (20) days following the date of receipt of the Proposed Balance
      Sheet and proposed Net Working Capital, deliver to Buyer a written notice of
      objection (the “Adjustment
      Notice”)
      with
      respect to the Proposed Balance Sheet and/or proposed Net Working Capital.
      The
      Adjustment Notice shall specify in reasonable detail the proposed adjustments
      to
      the disputed items on the Proposed Balance Sheet and/or Net Working Capital
      and
      describe in reasonable detail the basis for the disputed items. Sellers’
Representative and Sellers shall be deemed to have agreed with respect to all
      items and amounts contained in the Proposed Balance Sheet and proposed Net
      Working Capital not identified in a timely submitted Adjustment
      Notice.

     

    
      	 	
              (i)

            	
              If
                an Adjustment Notice is delivered, Buyer and the Sellers’ Representative
                shall consult with each other with respect to the disputed items
                and
                attempt in good faith to resolve the dispute within twenty (20) days
                after
                delivery of the Adjustment Notice. If Buyer and the Sellers’
                Representative are unable to reach agreement within such twenty (20)
                day
                period, either Buyer or the Sellers’ Representative shall refer any
                unresolved disputed items to the Independent Accountant. The Independent
                Accountant shall be directed to render a written report as promptly
                as
                practicable on the unresolved disputed items set forth in the Adjustment
                Notice, to resolve those items of dispute set forth in the Adjustment
                Notice and to make such modifications, if any, to the Proposed Balance
                Sheet and proposed Net Working Capital as shall reflect such resolutions.
                The determination by the Independent Accountant of any item in dispute
                shall not, however, be in excess of, nor less than, the greatest
                or lowest
                value, respectively, claimed for that particular item in the Proposed
                Balance Sheet and proposed Net Working Capital, in the case of Buyer,
                or
                in the Adjustment Notice, in the case of Sellers’ Representative. The
                Independent Accountant shall have no right to make any determination
                with
                respect to the undisputed portions of the Proposed Balance Sheet
                and
                proposed Net Working Capital or consider rationales for any dispute
                offered by Sellers’ Representative other than those set forth in the
                Adjustment Notice, and no such determination with respect to the
                undisputed portions of the Proposed Balance Sheet and proposed Net
                Working
                Capital shall be binding on the parties. The resolution of the dispute
                by
                the Independent Accountant shall be final and binding on the parties.
                The
                fees and expenses of the Independent Accountant shall be borne 50%
                by the
                Sellers’ (which amount shall be released from the Escrow Fund pursuant to
                the terms of the Escrow Agreement) and 50% by
                Buyer.

            

    

     

    
      
        
        

      

      
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              (ii)

            	
              If
                additional or other information is required by the Independent Accountant,
                the Independent Accountant shall give notice thereof to Buyer and
                the
                Sellers’ Representative as soon as practicable before the expiration of
                such thirty (30)-day period, and Buyer and the Sellers’ Representative
                shall promptly respond; provided,
                however,
                that without the written consent of Buyer and the Sellers’ Representative,
                no request for additional or other information shall act as an extension
                of the thirty (30)-day period in which the Independent Accountant
                must
                render its decision.

            

    

     

    (c) Net
      Working Capital Adjustment.
      After
      the Final Net Working Capital is determined the following purchase price
      adjustment shall be made:

     

    
      	 	
              (i)

            	
              If
                the final Working Capital Shortfall is less than the estimated Working
                Capital Shortfall within
                five (5) business days Buyer shall pay to the Disbursing Agent the
                amount
                of such excess, which shall then be paid to the Sellers in the same
                manner
                as provided in Section
                3.3(b);

            

    

     

    
      	 	
              (ii)

            	
              If
                the final Working Capital Shortfall is greater than the estimated
                Working
                Capital Shortfall, the
                Sellers’ Representative and Buyer shall jointly direct the Escrow Agent in
                accordance with the terms and conditions of the Escrow Agreement
                to pay to
                Buyer the
                amount of such excess within five (5) business days
                by
                wire transfer of immediately available funds to the account designated
                in
                writing by Buyer;

            

    

     

    
      	 	
              (iii)

            	
              If
                there is a final Working Capital Shortfall and there was an estimated
                Working Capital Surplus, no estimated Working Capital Shortfall or
                no
                estimated Working Capital Surplus, the
                Sellers’ Representative and Buyer shall jointly direct the Escrow Agent in
                accordance with the terms and conditions of the Escrow Agreement
                to pay to
                Buyer the
                amount of such Working Capital Shortfall plus the amount of any estimated
                Working Capital Surplus, if any, within five (5) business days
                by
                wire transfer of immediately available funds to the account designated
                in
                writing by Buyer;

            

    

     

    
      	 	
              (iv)

            	
              If
                the final Working Capital Surplus is less than the estimated Working
                Capital Surplus, the
                Sellers’ Representative and Buyer shall jointly direct the Escrow Agent in
                accordance with the terms and conditions of the Escrow Agreement
                to pay to
                Buyer the
                amount of the difference within five (5) business days
                by
                wire transfer of immediately available funds to the account designated
                in
                writing by Buyer;
                

            

    

     

    
      
        
        

      

      
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              (v)

            	
              If
                the final Working Capital Surplus is greater than the estimated Working
                Capital Surplus, the amount of such excess shall be paid by Buyer
                to
                the
                Disbursing Agent
                within five (5) business days,
                which shall then be paid to the Sellers in the same manner as provided
                in
                Section
                3.3(b);

            

    

     

    
      	 	
              (vi)

            	
              If
                there is a final Working Capital Surplus and there was an estimated
                Working Capital Shortfall, no estimated Working Capital Shortfall
                or no
                estimated Working Capital Surplus at the Closing, the amount of such
                Working Capital Surplus plus the amount of any estimated Working
                Capital
                Shortfall, if any, shall be paid by Buyer to the
                Disbursing Agent
                within five (5) business days,
                which shall then be paid to the Sellers in the same manner as provided
                in
                Section
                3.3(b);
                or

            

    

     

    
      	 	
              (vii)

            	
              If
                none of paragraphs (i) through (vi) of this subsection are applicable,
                there shall be no adjustment pursuant to this
                subsection.

            

    

     

    (d) Indebtedness
      Adjustment.
      After
      the Final Balance Sheet is determined, the following purchase price adjustments
      shall be made:

     

    
      	 	
              (i)

            	
              If
                the Final Balance Sheet shows Indebtedness less than the Indebtedness
                shown on the Estimated Balance Sheet within
                five (5) business days Buyer shall pay to the Disbursing Agent the
                amount
                of such excess, which shall then be paid to the Sellers in the same
                manner
                as provided in Section
                3.3(b);

            

    

     

    
      	 	
              (ii)

            	
              If
                the Final Balance Sheet shows Indebtedness greater than the Indebtedness
                shown on the Estimated Balance Sheet, the
                Sellers’ Representative and Buyer shall jointly direct the Escrow Agent in
                accordance with the terms and conditions of the Escrow Agreement
                to pay to
                Buyer the
                amount of such excess within five (5) business days
                by
                wire transfer of immediately available funds to the account designated
                in
                writing by Buyer;

            

    

     

    
      	 	
              (iii)

            	
              If
                the Final Balance Sheet shows Indebtedness and there was no Indebtedness
                shown on the Estimated Balance Sheet, the
                Sellers’ Representative and Buyer shall jointly direct the Escrow Agent in
                accordance with the terms and conditions of the Escrow Agreement
                to pay to
                Buyer the
                amount of such Indebtedness shown on the Final Balance Sheet within
                five
                (5) business days
                by
                wire transfer of immediately available funds to the account designated
                in
                writing by Buyer;
                or

            

    

     

    
      	 	
              (iv)

            	
              If
                none of paragraphs (i) through (iii) of this subsection are applicable,
                there shall be no adjustment pursuant to this
                subsection.

            

    

     

    
      
        
        

      

      
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    (e) Escrow
      Adjustment.
      Amounts
      paid from the Escrow Amount to the Sellers’ Representative shall be considered
      additional Per Share Closing Consideration and shall be paid to the Sellers
      by
      the Sellers’ Representative in
      the
      same manner as provided in Section
      3.3(b).

     

    ARTICLE
      III

    CLOSING
      AND CLOSING DELIVERIES AND SELLERS’ REPRESENTATIVE

     

    3.1 Closing.
      The
      closing of the Transaction and the other transactions contemplated by this
      Agreement and the Ancillary Documents (the “Closing”)
      shall
      take place at the offices of Bond, Schoeneck & King, PLLC, One Lincoln
      Center, Syracuse, New York 13202, at 10:00 A.M. Eastern Time, on July 31, 2008
      or, in the event that any conditions have not been satisfied or waived on such
      date, on the third business day after the conditions to each party’s obligations
      hereunder (other than receipt of closing deliveries) have been satisfied or
      waived, or such other time and place upon which the parties may agree. The
      date
      on which the Closing actually occurs is herein referred to as the “Closing
      Date.”

     

    3.2 Minimum
      Acquisition.
      Subject
      to ARTICLE
      VIII,
      Buyer
      shall not refuse to close the transactions contemplated by this Agreement if
      the
      Stockholders owning at least seventy percent (70%) of the issued and outstanding
      shares of MSK Common Stock as of the Closing Date have become parties to and
      bound by the terms and conditions of this Agreement and have complied with
      the
      pre-Closing covenants required of the Sellers in this Agreement on or before
      July 25, 2008, unless, Buyer, in its sole discretion, elects prior to the
      Closing an alternate structure as provided for in Section
      7.12,
      in
      which case, Buyer shall not refuse to close the transactions contemplated by
      such alternate structure if the Stockholders have obtained the necessary
      approvals, consents and signatures to close the transactions contemplated by
      such alternate structure. Buyer, in its sole discretion, shall not be obligated
      to close the transactions contemplated by this Agreement if the Stockholders
      owning at least seventy percent (70%) of the issued and outstanding shares
      of
      MSK Common Stock as of the Closing Date have not become parties to and bound
      by
      the terms and conditions of this Agreement and/or have not complied with the
      pre-Closing covenants required of the Sellers in this Agreement on or before
      noon on July 25, 2008. Additionally, Buyer, in its sole discretion, shall not
      be
      obligated to close the transactions contemplated by an alternate structure
      as
      provided for in Section
      7.12
      if the
      Stockholders have not obtained the necessary approvals, consents and signatures
      to close the transactions contemplated by such alternate structure.

     

    3.3 Closing
      Date Deliveries.
      At the
      Closing:

     

    (a) Deliveries
      by Sellers.
      Sellers’
Representative will deliver, or cause to be delivered, to Buyer:

     

    
      	 	
              (i)

            	
              certificates
                representing all of the outstanding MSK Common Stock, duly endorsed
                (or
                accompanied by duly executed stock powers) for transfer to
                Buyer;

            

    

     

    
      	 	
              (ii)

            	
              termination
                agreements (each an “Option
                Termination Agreement”),
                each of which shall be effective at or prior to Closing, fully executed
                by
                MSK and each holder of outstanding Options, if any, and pursuant
                to which
                the Option held by each such holder is terminated and cancelled at
                or
                prior to Closing;

            

    

     

    
      
        
        

      

      
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              (iii)

            	
              the
                Non-Competition Agreement, substantially in the form attached hereto
                as
                Exhibit
                3.3(a)(iii),
                each duly executed by each Principal Stockholder and
                MSK;

            

    

     

    
      	 	
              (iv)

            	
              all
                Consents and Governmental Approvals required to be obtained in connection
                with the execution and delivery of this Agreement and the Ancillary
                Documents and the consummation of the transactions contemplated hereby
                or
                thereby, dated as of the Closing Date and in full force and
                effect;

            

    

     

    
      	 	
              (v)

            	
              the
                Proprietary Information Agreement, substantially in the form attached
                hereto as Exhibit
                3.3(a)(v),
                duly executed by each employee and director of MSK and
                MSK;

            

    

     

    
      	 	
              (vi)

            	
              a
                certificate executed by MSK and the Principal Stockholders representing
                and warranting to Buyer that each of the representations and warranties
                made in this Agreement by such Person is accurate in all respects
                as of
                the date of this Agreement and is accurate in all respects as of
                the
                Closing Date as if made on the Closing
                Date;

            

    

     

    
      	 	
              (vii)

            	
              evidence,
                in form and substance reasonably satisfactory to Buyer, of the discharge,
                removal or termination of all Liens (other than Permitted Liens)
                to which
                any of MSK’s assets are subject, which releases shall be effective at or
                prior to the Closing;

            

    

     

    
      	 	
              (viii)

            	
              evidence,
                in form and substance reasonably satisfactory to Buyer, that Sellers’ and
                MSK’s legal counsel and other agents and representatives have been paid
                in
                full (or will be paid in full at Closing) and that, as of the Closing,
                MSK
                has no liability or obligation to any of such legal counsel and other
                agents and representatives;

            

    

     

    
      	 	
              (ix)

            	
              evidence,
                in form and substance reasonably satisfactory to Buyer, that all
                Indebtedness has been repaid in full and extinguished (or will be
                repaid
                in full and extinguished at Closing) and that, as of the Closing,
                MSK has
                no liability or obligation for any Indebtedness;
                

            

    

     

    
      	 	
              (x)

            	
              an
                opinion from MSK’s counsel relating to the transactions contemplated by
                this Agreement reasonably acceptable to
                Buyer;

            

    

     

    
      	 	
              (xi)

            	
              each
                other document or instrument reasonably required by Buyer to be delivered
                at Closing by MSK and/or the
                Sellers;

            

    

     

    
      
        
        

      

      
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              (xii)

            	
              Buyer
                shall have received a certificate from MSK dated as of the Closing
                Date
                and sworn under penalty of perjury stating that MSK is or has been
                at any
                time during the five (5)-year period ending on the date of certification
                a
                “United States real property holding company” within the meaning of Code
                Section 897(c)(2); and

            

    

     

    
      	 	
              (xiii)

            	
              the
                ALTA owner’s policy of title insurance required by Section
                4.16(a)
                of
                this Agreement, along with any other evidence, in form and substance
                reasonably satisfactory to Buyer, that Seller’s representations contained
                within Section
                4.16
                of
                this Agreement are true and correct as of the date of
                Closing.

            

    

     

    (b) Delivery
      of Per Share Closing Consideration.
      At
      the
      Closing, the aggregate Per Share Closing Consideration (as described in
Section
      2.2(a))
      shall
      be paid by Buyer to the Disbursing Agent by wire transfer pursuant to the wire
      instructions set forth on Schedule
      3.3(b)
      attached
      hereto. As soon as reasonably practicable thereafter, the Per Share Closing
      Consideration shall be paid by the Disbursing Agent to the Sellers pro rata
      in
      accordance with their ownership of MSK Common Stock immediately prior to the
      Closing.

     

    (c) Buyer
      Deliveries.
      Buyer
      will deliver to the Sellers’ Representative:

     

    
      	 	
              (i)

            	
              a
                certificate executed by Buyer representing and warranting to the
                Sellers
                that each of the representations and warranties made in this Agreement
                by
                Buyer is accurate in all respects as of the date of this Agreement
                and is
                accurate in all respects as of the Closing Date as if made on the
                Closing
                Date; and

            

    

     

    
      	 	
              (ii)

            	
              each
                other document or instrument reasonably required by Sellers’
                Representative to be delivered at Closing by
                Buyer.

            

    

     

    3.4 Sellers’
      Representative.

     

    (a) Appointment.
      The
      Stockholders hereby irrevocably constituted and appointed, effective as of
      the
      date of this Agreement, Sellers’ Representative, as their true, exclusive and
      lawful agent, representative and attorney-in-fact in connection with the
      transactions contemplated by this Agreement and the Ancillary Documents, and
      authorized the Sellers’ Representative to (i) exercise all or any of the
      powers, authority and discretion conferred on it under any such agreement,
      including preparing, negotiating, executing and delivering any documents,
      incurring any costs and expenses and making any and all determinations,
      (ii) waive any terms and conditions of any such agreement, (iii) give
      and receive notices and communications (including relating to indemnification),
      (iv) authorize delivery to Buyer of any part of the Escrow Fund in
      satisfaction of claims by Buyer, (v) object to such deliveries,
      (vi) agree to, negotiate, enter into settlements and compromises of, and
      demand arbitration (if applicable) and comply with orders of courts and awards
      of arbitrators with respect to such claims, and (vii) take all actions
      necessary or appropriate in the judgment of the Sellers’ Representative for the
      accomplishment of the foregoing, and Sellers’ Representative hereby accepts such
      appointment.
      Without
      limiting the generality of the appointment hereunder, the Sellers’
Representative shall have authority to make all decisions and exercise all
      powers, authority and discretion of the Sellers’ Representative as set forth in
      the Escrow Agreement.

     

    
      
        
        

      

      
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    (b) Bindingness.
      The
      Sellers shall be irrevocably and absolutely bound by all actions taken, rights,
      powers or authority exercised, and decisions and determinations made by the
      Sellers’ Representative in its capacity thereof (including for indemnification),
      as if such Seller personally had taken such action, exercised such rights,
      powers or authority or made such decision or determination in such Seller’s
      capacity. The Sellers’ Representative shall promptly, and in any event within
      ten (10) business days, provide written notice to the Sellers of any action
      taken on their behalf by the Sellers’ Representative pursuant to the authority
      delegated to the Sellers’ Representative under this Section. The Sellers’
Representative shall at all times act in its capacity as the Sellers’
Representative in a manner that the Sellers’ Representative believes in good
      faith to be in the best interest of the Sellers.

     

    (c) Liability
      and Reliance.
      None of
      Buyer, MSK, the Sellers’ Representative or their respective stockholders,
      officers, directors, Affiliates, members, agents or representatives shall be
      liable to any Seller or its shareholders, partners, members, officers,
      directors, beneficiaries, participants, Affiliates and agents for any error
      of
      judgment, or any action taken, suffered or omitted to be taken, on the part
      of
      the Sellers’ Representative, except that the Sellers’ Representative shall be
      liable for its gross negligence, bad faith or willful misconduct. The Sellers’
Representative may consult with legal counsel, independent public accountants
      and other experts selected by it and shall not be liable for any action taken
      or
      omitted to be taken in good faith by it in reasonable reliance on the advice
      of
      such counsel, accountants or experts. The Sellers’ Representative shall not have
      any duty to ascertain or to inquire as to the performance or observance of
      any
      of the terms, covenants or conditions of this Agreement or any other Ancillary
      Document. As to any matters not contemplated by this Agreement or any other
      Ancillary Document, the Sellers’ Representative shall not be required to
      exercise any discretion or take any action. Buyer and MSK shall be entitled
      to
      deal exclusively with the Sellers’ Representative on all matters relating to
      this Agreement and the Ancillary Documents, and shall be entitled to rely
      conclusively (without further evidence of any kind whatsoever) on any document
      executed by or purported to be executed on behalf of any Seller by the Sellers’
Representative, and on any other action taken or purported to be taken on behalf
      of any Seller by the Sellers’ Representative, as fully binding upon each such
      Seller. 

     

    (d) Resignation,
      Appointment of Successor.
      The
      Sellers’ Representative may resign by providing thirty (30) days’ prior
      written notice to the Sellers and Buyer. Upon the resignation of the Sellers’
Representative, the Sellers who owned more than a majority of the outstanding
      shares of MSK Common Stock immediately prior to the Closing shall, within thirty
      (30) days after receipt of any resignation, appoint a replacement Sellers’
Representative to serve in accordance with the terms of this Agreement. Such
      replacement Sellers’ Representative shall promptly notify Buyer in writing of
      his, her or its appointment.

     

    (e) Indemnification.
      Each
      Seller, severally but not jointly, shall indemnify and hold harmless and shall
      reimburse the Sellers’ Representative from and against such Seller’s ratable
      share of any and all liabilities, losses, damages, claims, reasonable third
      party costs or reasonable third party expenses (including reasonable attorneys’
fees and cost of investigation) suffered or incurred by the Sellers’
Representative arising out of or resulting from any action taken or omitted
      to
      be taken by the Sellers’ Representative under this Agreement or any other
      Ancillary Document, other than such liabilities, losses, damages, claims, costs
      or expenses arising out of or resulting from the Sellers’ Representative’s gross
      negligence, bad faith or willful misconduct (the “Sellers’
      Representative Expenses”).
      In
      all matters relating to this Section, the Sellers’ Representative shall be the
      only party entitled to assert the rights of the Sellers, and the Sellers’
Representative shall perform all of the obligations of the Sellers delegated
      to
      it hereunder.

     

    
      
        
        

      

      
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    (f) Representations
      and Warranties of Sellers’ Representative.
      The
      Sellers’ Representative represents and warrants to Buyer as follows:

     

    
      	 	
              (i)

            	
              Subject
                to approval of this Agreement by the Sellers, the Sellers’ Representative
                has the full power and authority to execute and deliver this Agreement
                and
                the Ancillary Documents to which it will be a party, to perform fully
                its
                obligations hereunder and thereunder. All actions, authorizations
                and
                consents required by any Applicable Law for the execution, delivery
                and
                performance by the Sellers’ Representative of this Agreement and each of
                the Ancillary Documents to which it is or will be a party have been
                properly taken or obtained. The Sellers’ Representative has duly executed
                and delivered this Agreement and, on the Closing Date, will have
                duly
                executed and delivered each of the Ancillary Documents to which the
                Sellers’ Representative will be a party;
                and

            

    

     

    
      	 	
              (ii)

            	
              This
                Agreement constitutes, and on the Closing Date each of such Ancillary
                Documents will constitute, the legal, valid and binding obligations
                of the
                Sellers’ Representative, enforceable against it in accordance with their
                respective terms, subject to applicable bankruptcy, insolvency,
                reorganization, moratorium and other laws affecting creditors’ rights
                generally and rules of Applicable Law governing specific performance,
                injunctive relief and other equitable
                remedies.

            

    

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF

    MSK
      AND PRINCIPAL STOCKHOLDERS

     

    Except
      as
      otherwise set forth in the Schedules to this Agreement, MSK and each Principal
      Stockholder in his capacity as an officer and/or director of MSK and not in
      his
      personal capacity, jointly and severally, hereby represent and warrant to Buyer
      as follows:

     

    4.1 Authorizations,
      etc.
      MSK has
      full power and authority to execute and deliver this Agreement and the Ancillary
      Documents to which it is or will be a party, to perform fully its obligations
      hereunder or thereunder, and to consummate the transactions contemplated hereby
      and thereby. Except as set forth in Schedule
      4.1,
      all
      actions, authorizations and consents required by any Applicable Law for the
      execution, delivery and performance by MSK of this Agreement and each of the
      Ancillary Documents to which it is or will be a party, and the consummation
      of
      the transactions contemplated thereby, have been properly taken or obtained.
      MSK
      has duly executed and delivered this Agreement and, on the Closing Date, will
      have duly executed and delivered each of the Ancillary Documents to which MSK
      will be a party. This Agreement constitutes, and on the Closing Date each of
      such Ancillary Documents will constitute, the legal, valid and binding
      obligations of MSK enforceable against it in accordance with their respective
      terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
      and other laws affecting creditors’ rights generally and general principles of
      equity.

     

    
      
        
        

      

      
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    4.2 Corporate
      Status. 

     

    (a) MSK
      is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction of its incorporation, with full corporate power and
      authority to carry on its business and to own or lease and to operate its
      properties as and in the places where its business is conducted and such
      properties are owned, leased or operated.

     

    (b) MSK
      is
      duly qualified or licensed to do business and is in good standing in each of
      the
      jurisdictions specified in Schedule
      4.2(b),
      which
      are the only jurisdictions in which the operation of the Business or the
      character of the properties owned, leased or operated by it in connection with
      the Business makes such qualification or licensing necessary.

     

    (c) MSK
      has
      delivered to Buyer complete and correct copies of the certificate of
      incorporation and by-laws of MSK, as amended through, and in full force and
      effect on, the date hereof.

     

    4.3 Subsidiaries.
      MSK
      does not have and has never had any Subsidiaries.

     

    4.4 Capitalization.
      The
      authorized capital stock of MSK consists of 2,000,000 shares of MSK Common
      Stock, of which 1,388,598 shares are issued and outstanding on the date hereof.
      Schedule
      4.4
      sets
      forth the true and correct name of each record holder of the issued and
      outstanding shares of MSK Common Stock, and the number of shares of Common
      Stock
      owned by such holder. Other than the MSK Common Stock, no class or series of
      capital stock of MSK is or has been authorized. All of the issued and
      outstanding shares have been duly authorized and validly issued and are fully
      paid and nonassessable, and none of the outstanding shares are subject to,
      nor
      have been issued in violation of any pre-emptive or similar rights. All
      issuances, sales and repurchases of equity interests by MSK have been effected
      in compliance with all applicable laws, including, without limitation,
      applicable foreign, federal and state securities laws. Schedule
      4.4
      sets
      forth a true, correct and complete list of each outstanding Option on the date
      of this Agreement, as well as the number of shares subject to such Option,
      the
      exercise price and the expiration date thereof. At Closing, there will be no
      Options and there are no (i) options, warrants, calls, preemptive rights,
      subscriptions or other rights, convertible securities, agreements or commitments
      of any character obligating MSK to issue, transfer or sell any shares of capital
      stock, options, warrants, calls or other equity interest of any kind whatsoever
      in MSK or securities convertible into or exchangeable for such shares or equity
      interests, or (ii) contractual obligations of MSK to repurchase, redeem or
      otherwise acquire any of their respective capital stock or equity
      interest.

     

    
      
        
        

      

      
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    4.5 No
      Conflicts and Governmental Approvals, etc. 

     

    (a) Conflicts.
      The
      execution, delivery and performance by MSK of this Agreement and the Ancillary
      Documents to which it is or will be a party, and the consummation of the
      transactions contemplated hereby and thereby, do not and will not (with or
      without the giving of notice, the lapse of time, or both): conflict with;
      contravene; result in a violation or breach of; result in a default under;
      give
      rise to a right of, acceleration, amendment, cancellation, modification,
      termination or vesting under; result in a decreased right of MSK or obligation
      of any other Person under; result in an increased or additional obligation
      of
      MSK or right of any other Person under (i) any Applicable Law, (ii) the
      certificate of incorporation or by-laws of MSK, (iii) any Material Contract
      to
      which MSK is a party or by which MSK or any of its material properties or assets
      may be bound or affected.

     

    (b) Governmental
      Approvals.
      Except
      as specified in Schedule
      4.5(b),
      (i) no
      Governmental Approval or other Consent is required to be obtained or made by
      MSK
      and (ii) MSK is not or will not be required to give any notice to any Person
      in
      connection with the execution and delivery of this Agreement and the Ancillary
      Documents to which each is a party, or the consummation of the transactions
      contemplated hereby and thereby.

     

    4.6 Financial
      Statements.
      Attached hereto as Schedule
      4.6
      are (i)
      reviewed financial statements of MSK for the years ended December 31, 2004,
      December 31, 2005, December 31, 2006 and December 31, 2007, and (ii) unaudited
      financial statements of MSK for the interim period ended on the last day of
      the
      month immediately preceding the date of this Agreement (collectively, (i) and
      (ii) are the “Financial
      Statements”).
      Except as set forth on Schedule
      4.6,
      the
      Financial Statements have been derived from the books and records of MSK and
      were prepared in accordance with GAAP applied on a consistent basis for the
      periods involved and fairly present, in all material respects, the consolidated
      financial position of MSK as of the respective dates thereof and the results
      of
      its operations and cash flows for the respective periods then ended, subject,
      in
      case of the unaudited Financial Statements, to the absence of notes and
      presentations items required by GAAP and to normal year-end
      adjustments.

     

    4.7 Absence
      of Undisclosed Liabilities.
      MSK has
      no liabilities or obligations of a nature required to be disclosed on a balance
      sheet prepared in accordance with GAAP, whether known, absolute, accrued,
      contingent or otherwise and whether due or to become due, except (a) as and
      to
      the extent disclosed, provided for and reserved for in the reviewed balance
      sheet (the “Balance
      Sheet”)
      of MSK
      as of December 31, 2007, included in the Financial Statements (or notes
      thereto), (b) for liabilities and obligations that were incurred after the
      date
      of the Balance Sheet in the ordinary course of business,
      and (c)
      the Transaction Expenses.

     

    4.8 Taxes.

     

    (a) Returns,
      Payments and Jurisdiction Claims.
      MSK has
      timely filed with the appropriate Governmental Authorities all returns and
      reports in respect of Taxes (the “Returns”)
      required to be filed by each of them in respect of the Business (taking into
      account any extension of time to file granted with respect thereto). The
      information on such Returns (as amended, if applicable) is complete and accurate
      in all material respects. MSK has paid on a timely basis all Taxes, whether
      or
      not show on the foregoing Returns. There are no Liens for Taxes (other than
      for
      current Taxes not yet due and payable) upon the assets of MSK. No claim has
      been
      made in writing in the past five (5) years by any Governmental Authority in
      a
      jurisdiction where MSK does not file Returns that MSK is or may be subject
      to
      taxation under that jurisdiction.

     

    
      
        
        

      

      
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    (b) Deficiencies,
      Audits, Claims, Extensions, etc.
      No
      unpaid (or unreserved in accordance with GAAP) deficiencies for Taxes have
      been
      claimed, proposed or assessed by any taxing authority or other Governmental
      Authority with respect to MSK for any Pre-Closing Period and, to the Knowledge
      of MSK, there are no pending audits, investigations or claims for or relating
      to
      any liability in respect of Taxes of MSK, nor has MSK been notified of any
      request for such an audit, investigation or claim. MSK has not requested any
      extension of time within which to file any currently unfiled Returns in respect
      of any Taxes. No extension of a statute of limitations relating to any Taxes
      is
      in effect with respect to MSK.

     

    (c) Accrual,
      Withholding, Taxes of Others and Filing Jurisdictions.
      (i) MSK
      has accrued or will accrue on its books a liability for Taxes payable by it
      for
      any Pre-Closing Period which are not paid prior to the Closing Date; (ii) MSK
      has withheld and paid all Taxes required to have been withheld and paid in
      connection with amounts paid or owing to any employee, independent contractor,
      creditor, shareholder or other third party; (iii) MSK is not liable for Taxes
      of
      any other Person, or is currently under any contractual obligation to indemnify
      any Person with respect to Taxes, or is a party to any Tax sharing agreement
      or
      any other agreement providing for payments by MSK with respect to Taxes
      (including any obligations under Treasury Regulations Section 1.1502-6 or
      similar state or local law for Taxes of an affiliated, consolidated and/or
      unitary group); and (iv) Schedule
      4.8(c)
      contains
      a list of all jurisdictions in which MSK is required to file
      Returns.

     

    (d) Income
      Inclusions and Deduction Exclusions.
      Except
      as disclosed on Schedule
      4.8(d),
      MSK
      will not be required to include any item of income in, or exclude any item
      of
      deduction from, taxable income for any period ending after the Closing Date
      as a
      result of any (i) change in method of accounting for a Taxable period
      ending on or prior to the Closing Date or any adjustment pursuant to
      Section 481(a) of the Code (or any analogous provision of other Applicable
      Law), (ii) closing agreement as described in Section 7121 of the Code
      (or any corresponding or similar provision of other Applicable Law) executed
      on
      or prior to the Closing Date, (iii) installment sale or open transaction
      disposition made on or prior to the Closing Date or (iv) prepaid amount received
      on or prior to the Closing Date.

     

    (e) Safe
      Harbor Lease, Alternative Depreciation, Tax-Exempt Use
      Property.
      None of
      the assets of MSK: (i) is property that MSK is required to treat as being owned
      by any other Person pursuant to the “safe harbor lease” provisions of former
      Section 168(f)(8) of the Code, (ii) is required to be depreciated
      under the alternative depreciation system under Section 168(g)(2) of the
      Code or (iii) is a “tax-exempt use property” within the meaning of
      Section 168(h) of the Code.

     

    (f) Listed
      Transactions.
      MSK is
      not required to make any disclosure to the IRS with respect to a “listed
      transaction” pursuant to Treasury Regulation Section 1.6011-4(b)(2) or any
      similar provision of other Applicable Law. MSK has made all other necessary
      disclosures required by Treasury Regulation Section 1.6011-4 and any
      similar provision of other Applicable Law, and MSK has not been a participant
      in
      a transaction described in Treasury Regulation Section 1.6011-4(b)(3) or
      1.6011-4(b)(4) or any similar provision of other Applicable Law. MSK has
      disclosed on its Returns all positions taken therein that could give rise to
      a
      substantial understatement penalty under Code Section 6662 or any similar
      provision of other Applicable Law, and is in possession of supporting
      documentation as may be required under any such provision.

     

    
      
        
        

      

      
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    (g) Joint
      Ventures, Partnerships, Etc.
      MSK is
      not a party to any joint venture, partnership or other agreement, contract
      or
      arrangement that could be treated as a partnership for federal income Tax
      purposes.

     

    (h) Miscellaneous.

     

    
      	 	
              (i)

            	
              No
                indebtedness of MSK consists of “corporate acquisition indebtedness”
                within the meaning of Section 279 of the
                Code.

            

    

     

    
      	 	
              (ii)

            	
              MSK
                is not a party to any agreement that would require MSK or any affiliate
                thereof to make any payment that would constitute an “excess parachute
                payment” for purposes of Sections 280G and 4999 of the
                Code.

            

    

     

    
      	 	
              (iii)

            	
              MSK
                has delivered or made available to the Purchaser copies of each of
                the
                Returns for income Taxes filed on behalf of MSK since January 1,
                2004.

            

    

     

    
      	 	
              (iv)

            	
              MSK
                has not filed a consent under Section 341(f) of the
                Code.

            

    

     

    
      	 	
              (v)

            	
              Schedule
                4.8(h)(v)
                lists all federal, state, local and foreign Returns for taxable periods
                ending on or after December 31, 2003 that have been audited and those
                that
                are the subject of audit.

            

    

     

    
      	 	
              (vi)

            	
              Except
                as set forth on Schedule
                4.8(h)(vi),
                none of the assets of MSK constitutes tax-exempt bond financed
                property.

            

    

     

    
      	 	
              (vii)

            	
              No
                power of attorney has been granted by MSK with respect to any matter
                relating to Taxes which is currently in
                force.

            

    

     

    
      	 	
              (viii)

            	
              MSK
                has made a valid S election under Section 1361 of the Code and the
                corresponding provision of New York law. Such election was effective
                as of
                the year commencing September 1, 2001 for federal and New York state
                income tax purposes.

            

    

     

    4.9 Absence
      of Changes.
      Except
      as set forth in Schedule
      4.9,
      since
      the date of the Balance Sheet, MSK has not:

     

    (a) declared,
      set aside, made, set a record date for or paid any dividend or other
      distribution in respect of its capital stock or otherwise purchased or redeemed,
      directly or indirectly, any shares of its capital stock;

     

    
      
        
        

      

      
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    (b) issued
      or
      sold any shares of any class of its capital stock or other ownership interest,
      or any securities convertible into or exchangeable for any such shares or
      interest, or issued, sold, granted or entered into any subscription, options,
      warrants, conversion or other rights, agreements, commitments, arrangements
      or
      understandings of any kind, contingently or otherwise, to purchase or otherwise
      acquire any such shares or interest or any securities convertible into or
      exchangeable for any such shares or interest, except for any shares of MSK
      Common Stock issued upon the exercise of any Options outstanding on the date
      hereof;

     

    (c) incurred
      any material obligation or liability except Transaction Expenses and current
      liabilities for trade or business obligations incurred in connection with the
      purchase of goods or services in the ordinary course of business;

     

    (d) discharged
      or satisfied any Lien, other than those required to be discharged or satisfied,
      or paid any obligation or liability, absolute, accrued, contingent or otherwise,
      whether due or to become due, other than (i) current liabilities shown on the
      Balance Sheet, (ii) current liabilities incurred since the date thereof in
      the
      ordinary course of business, and (iii) scheduled payments of principal or
      interest on any Indebtedness through the Closing Date;

     

    (e) subjected
      any of its assets to any Lien other than any Permitted Lien;

     

    (f) sold,
      transferred, leased to others or otherwise disposed of any of its assets, except
      in the ordinary course of business or fixed assets having an aggregate value
      of
      less than $50,000, or canceled or compromised any debt or claim in excess of
      $50,000 in each case or $100,000 in the aggregate, or waived or released any
      right of substantial value, except in the ordinary course of
      business;

     

    (g) received
      any written notice of termination of any Material Contract;

     

    (h) suffered
      any damage, destruction or loss (whether or not covered by insurance) in excess
      of $50,000 to any of its assets;

     

    (i) changed
      in any material respect its tax or accounting practices, policies or principles
      except as required by any Applicable Law or GAAP;

     

    (j) paid,
      granted or committed to grant any increase in any remuneration or benefits
      (including salary, incentive, change in control, retention or severance
      compensation) of any current or former director, officer, agent, other employee
      of or consultant to MSK outside of the ordinary course of business, except
      where
      such payment or increase is required by any Applicable Law or any contractual
      obligation existing on the date of this Agreement;

     

    (k) made
      or
      committed to make any capital expenditures or capital additions or improvements
      in excess of an aggregate of $50,000, except for capital expenditures or capital
      additions or improvements made in the ordinary course of business or
      contemplated by an approved budget of MSK;

     

    
      
        
        

      

      
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    (l) instituted,
      settled or agreed to settle any Litigation before any Governmental Authority,
      other than in the ordinary course of business;

     

    (m) transferred
      or granted any material rights or licenses under, or entered into any settlement
      regarding the infringement of, its Proprietary Rights or entered into any
      licensing or similar agreements or arrangements with respect
      thereto;

     

    (n) made
      any
      amendment or changes in its certificate of incorporation or bylaws;

     

    (o) incurred
      any obligation or liability in excess of $10,000 that binds MSK for a term
      of
      more than one year;

     

    (p) engaged
      in any other transactions outside the ordinary course of business and not
      heretofore identified on Schedule
      4.19;
      or

     

    (q) made
      a
      commitment to take any of the foregoing actions.

     

    4.10 Litigation.
      Except
      as disclosed on Schedule
      4.10,
      there
      is no Litigation pending or, to the Knowledge of MSK, threatened, against MSK
      or
      its assets, or seeking to prevent, hinder or delay the transactions contemplated
      by this Agreement or any of the Ancillary Documents. No citations, fines or
      penalties have been asserted against MSK under any Applicable Law which remain
      outstanding. There are no outstanding orders, judgments, decrees or injunctions
      issued by any Governmental Authority against MSK.

     

    4.11 Governmental
      Approvals.
      Schedule
      4.11
      sets
      forth all material Governmental Approvals required to be held and/or used in
      the
      Business. All such Governmental Approvals have been duly obtained and are in
      full force and effect, and MSK is in compliance with each such Governmental
      Approval.

     

    4.12 Compliance
      with Laws.
      Except
      as set forth in Schedule
      4.12,
      MSK is,
      and at all times since January 1, 2000 has been, in compliance with all material
      Applicable Laws; provided, however, to the extent the failure to comply with
      one
      or more immaterial Applicable Laws exceeds twenty thousand dollars ($20,000)
      individually or in the aggregate such failure(s) shall be considered a failure
      to comply with a material Applicable Law. MSK has not received any written
      notice alleging any violation or breach of, or failure to be in compliance
      with,
      any Applicable Law that has not been cured or waived. MSK hold all Permits
      required to operate its business. MSK is in material compliance with the terms
      of such Permits.

     

    4.13 Title
      to Assets.
      Except
      as
      disclosed on Schedule
      4.13,
      MSK has
      good and marketable title to all of the tangible and intangible assets owned
      by
      it, free and clear of any Liens. Except as disclosed on Schedule
      4.13,
      MSK
      owns, leases, licenses or otherwise has the contractual right to use all of
      the
      assets used in or necessary for the conduct of its business as currently
      conducted.

     

    4.14 Contracts.
      Schedule
      4.14
      sets
      forth a true and complete list, and MSK has provided Buyer complete copies
      (including all amendments and extensions thereof) or, if oral, an accurate
      and
      complete description of all material terms, of each of the following to which
      MSK is a party or is otherwise bound (each, a “Material
      Contract”):

     

    
      
        
        

      

      
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              (i)

            	
              all
                loan agreements, indentures, mortgages, notes, installment obligations,
                capital leases, or other agreements or instruments relating to
                Indebtedness (or guarantees
                thereof);

            

    

     

    
      	 	
              (ii)

            	
              all
                continuing contracts or commitments for the future purchase, sale
                or
                manufacture of products, materials, supplies, equipment or services,
                and
                all agreements with independent dealers or manufacturer’s representatives,
                in each case requiring payment to or from MSK in an amount in excess
                of
                $20,000 per annum which are not terminable on 60 days’ or less notice
                without cost or other liability;

            

    

     

    
      	 	
              (iii)

            	
              all
                collective bargaining, employment, severance and other agreements
                requiring change of control or parachute payments from MSK, or any
                other
                type of contract or understanding between MSK and any of its respective
                officers or employees, other than pursuant to the Plans, which is
                not
                terminable by MSK upon 30 days’ or less notice without cost or other
                liability;

            

    

     

    
      	 	
              (iv)

            	
              all
                joint venture, partnership or other contracts involving a sharing
                of
                profits, losses, costs or liabilities by MSK with any other
                Person;

            

    

     

    
      	 	
              (v)

            	
              all
                rights to use the intellectual property of a third party, whether
                pursuant
                to a license, sublicense, agreement or
                otherwise;

            

    

     

    
      	 	
              (vi)

            	
              all
                Government Contracts; 

            

    

     

    
      	 	
              (vii)

            	
              pension,
                profit sharing, Option, employee stock purchase, stock appreciation
                right,
                phantom stock option or other plan providing for deferred or other
                compensation to employees or any other employee benefit
                plan;

            

    

     

    
      	 	
              (viii)

            	
              contract
                relating to loans to officers, directors, Sellers or their Affiliates;
                

            

    

     

    
      	 	
              (ix)

            	
              Guarantee
                of any obligation; 

            

    

     

    
      	 	
              (x)

            	
              contract
                under which MSK has advanced or loaned, or agreed to advance or loan,
                any
                Person amounts in the aggregate exceeding $10,000;
                

            

    

     

    
      	 	
              (xi)

            	
              contract
                pursuant to which MSK is lessor of or permits any third party to
                hold or
                operate any property, real or personal, owned or controlled by MSK;
                

            

    

     

    
      
        
        

      

      
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              (xii)

            	
              warranty
                contract with respect to its services rendered or its products sold
                or
                leased; 

            

    

     

    
      	 	
              (xiii)

            	
              contract
                for the purchase, acquisition or supply of inventory and other property
                and assets, whether for resale or otherwise in excess of $10,000;
                

            

    

     

    
      	 	
              (xiv)

            	
              contracts
                with independent agents, brokers, dealers or distributors which provide
                for annual payments in excess of $10,000;

            

    

     

    
      	 	
              (xv)

            	
              employment,
                consulting, sales, commissions, advertising or marketing contracts;
                

            

    

     

    
      	 	
              (xvi)

            	
              contracts
                providing for “take or pay” or similar unconditional purchase or payment
                obligations; 

            

    

     

    
      	 	
              (xvii)

            	
              contracts
                with Persons with which, directly or indirectly, a Seller also has
                a
                contract; 

            

    

     

    
      	 	
              (xviii)

            	
              contract
                that requires the consent of any Person, or contains any provision
                that
                would result in a modification of any rights or obligation of any
                Person
                thereunder upon a change in control of MSK or which would provide
                any
                Person any remedy (including rescission or liquidated damages), in
                connection with the execution, delivery or performance of this Agreement
                and the agreements contemplated hereby and the consummation of the
                transactions contemplated hereby and thereby;

            

    

     

    
      	 	
              (xix)

            	
              nondisclosure
                or confidentiality contracts; 

            

    

     

    
      	 	
              (xx)

            	
              power
                of attorney or other similar contract or grant of
                agency;

            

    

     

    
      	 	
              (xxi)

            	
              any
                other contract which is material to its operations and business prospects
                or involves a consideration in excess of $50,000 annually, excluding
                any
                purchase orders in the ordinary course of business;
                and

            

    

     

    
      	 	
              (xxii)

            	
              all
                agreements containing covenants that in any way purport to restrict
                the
                business activity of MSK or limit the freedom of MSK to engage in
                any line
                of business or to compete with any
                Person.

            

    

     

    Except
      as
      disclosed on Schedule
      4.14,
      MSK is
      not in material default, and to the Knowledge of MSK, no other party is in
      material default, under any Material Contract and no event has occurred which
      (after notice or lapse of time or both) would become a breach or default under,
      or would otherwise permit modification, cancellation, acceleration or
      termination of, any Material Contract or would result in the creation of or
      right to obtain any Lien upon, or any Person obtaining any right to acquire,
      any
      assets, rights or interests of MSK. Except as disclosed on Schedule
      4.14:
      (i)
      each Material Contract is in full force and effect and is a valid and binding
      obligation of MSK and, to the Knowledge of MSK, the other parties thereto;
      and
      (ii) MSK has not received notice from any party to a Material Contract that
      such
      party intends either to modify, cancel or terminate a Material Contract. Except
      as disclosed on Schedule
      4.14
      or, in
      respect of Leases, Schedule
      4.16,
      MSK is
      not required under any Material Contract to obtain the Consent of any party
      to a
      Material Contract to transfer the MSK Common Stock to Buyer and otherwise
      consummate the transactions contemplated by this Agreement

     

    
      
        
        

      

      
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    4.15 Proprietary
      Rights.

     

    (a) MSK’s
      Rights to Proprietary Rights.
      MSK
      owns or has the right to use pursuant to licenses, sublicenses, agreement,
      permission or other rights to use all Proprietary Rights that are necessary
      to
      the conduct of its business as currently conducted. The stockholders, directors,
      officers and employees of MSK have heretofore transferred to MSK all right,
      title and interest of such person in and to all of the Proprietary Rights that
      are necessary for MSK to conduct its business as currently conducted, which
      are
      listed on Schedule
      4.15(b).
      Following the consummation of the transactions contemplated by this Agreement,
      each Proprietary Right listed on Schedule
      4.15(b)
      (except
      to the extent, if any, otherwise indicated thereon) will be owned or available
      for use by MSK on the same terms and conditions as were applicable immediately
      prior to Closing.

     

    (b) List
      of Proprietary Rights.
      Schedule
      4.15(b)
      sets
      forth a true and complete list of:

     

    
      	 	
              (i)

            	
              all
                material unregistered trademarks used by MSK, and all trademark
                registrations and applications to register trademarks used by MSK,
                including for each such trademark, identification of the owner, the
                application or registration number, country, filing or registration
                date,
                expiration date, filing class and description of the
                mark;

            

    

     

    
      	 	
              (ii)

            	
              all
                service mark registrations and applications to register service marks
                used
                by MSK, including for each such service mark, identification of the
                owner,
                the application or registration number, country, filing or registration
                date, expiration date, filing class and description of the
                mark;

            

    

     

    
      	 	
              (iii)

            	
              all
                copyrights registrations and applications to register copyrights
                for
                copyrights used by MSK, including for each such copyright, identification
                of the owner, the application or registration number, country, filing
                or
                registration date, expiration date, filing class and description
                of the
                copyrighted work;

            

    

     

    
      	 	
              (iv)

            	
              all
                patents and patent applications used by MSK, including for each such
                patent and patent application, identification of the owner, the
                application serial number or issue patent number and country;
                and

            

    

     

    
      
        
        

      

      
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              (v)

            	
              any
                other material Proprietary Rights used by MSK, or licensed or sublicensed
                by MSK to a third party, including without limitation, any of the
                Stockholders and their respective Affiliates (and a summary description
                of
                the Proprietary Rights subject to such license or sublicense, and
                the
                names of the parties thereto).

            

    

     

    (c) Royalties
      or Fees.
      Except
      as disclosed in Schedule
      4.15(c),
      MSK is
      not required to pay any royalty, license fee or similar compensation in
      connection with the conduct of its business as currently conducted.

     

    (d) Infringement
      by MSK.
      MSK has
      not infringed upon or misappropriated any Proprietary Rights of third parties
      in
      any respect. No claims have been asserted in writing by any Person alleging
      that
      MSK infringed upon or misappropriated the Proprietary Rights of any other
      Person. No action, suit, proceeding, complaint, claim or demand is pending,
      or
      to the Knowledge of MSK, threatened, which challenges the legality, validity,
      use or ownership of the Proprietary Rights listed as owned by MSK on
Schedule
      4.15(b).

     

    (e) Infringement
      by Third Parties.
      Except
      as disclosed in Schedule
      4.15(e),
      to the
      Knowledge of MSK, no Person is infringing upon or misappropriating any
      Proprietary Rights of MSK.

     

    (f) Actions
      or Suits.
      No
      material action, suit, proceeding, assertion, challenge or claim is pending
      or,
      to the Knowledge of MSK, threatened against a third party challenging the
      legality, validity, use or ownership of the same Proprietary Rights licensed
      or
      otherwise used by MSK.

     

    (g) Restrictions.
      No
      Proprietary Rights listed as owned by MSK on Schedule
      4.15(b),
      nor any
      of MSK’s products or services are subject to an outstanding injunction,
      judgment, order, decree, agreement or ruling restricting the use of the
      Proprietary Rights with respect to MSK or restricting the licensing thereof
      to
      any Person.

     

    (h) Licensed
      Proprietary Rights.
      With
      respect to the Proprietary Rights listed on Schedule
      4.15(b)
      as
      resulting from a license, sublicense, agreement, or permission, except for
      Permitted Liens, each such license, sublicense, agreement or permission is
      valid, binding, and in full force and effect in all material respects; MSK
      is
      not in material breach or default thereunder, and no event has occurred which
      with notice or lapse of time would constitute a breach or default or permit
      termination thereunder; and MSK has not granted a sublicense or similar right
      with respect to the license, sublicense, agreement or permission, except as
      otherwise set forth on Schedule
      4.15(b).

     

    (i) Enforcement.
      All
      Proprietary Rights that are capable of being enforced, are fully enforceable.
      All required maintenance fees concerning the Proprietary Rights have been
      paid.

     

    (j) Confidentiality
      Agreements.
      To the
      extent MSK or any of its officers or representatives have disclosed Proprietary
      Rights to any Person, whether in connection with a sale of MSK assets or equity
      or otherwise (but excluding disclosures to the MSK employees in connection
      with
      their employment with MSK), MSK has done so only after having each such Person
      enter into a confidentiality agreement or non-disclosure agreement that prevents
      such Person and its agents, directors, employees and officers from disclosing
      or
      using such Proprietary Rights other than in furtherance of an MSK purpose.
      The
      foregoing confidentiality agreements and/or non-disclosure agreements have
      a
      perpetual duration.

     

    
      
        
        

      

      
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    4.16 Real
      Property. 

     

    (a) Owned
      Real Property. Schedule
      4.16(a)
      sets
      forth the address and description of each parcel of Owned Real Property. With
      respect to each parcel of Owned Real Property: (i) except as set forth on
Schedule
      4.16(a),
      MSK has
      fee simple title, free and clear of all Liens, except Permitted Liens; (ii)
      except as set forth on Schedule
      4.16(a),
      MSK has
      not leased or otherwise granted to any Person the right to use or occupy such
      Owned Real Property or any portion thereof; and (iii) there are no outstanding
      options, rights of first offer or rights of first refusal to purchase such
      Owned
      Real Property or any portion thereof or interest therein. Seller shall provide
      Buyer at Closing an ALTA owner’s policy of title insurance insuring the
      marketable title to, a bring down of the abstract for, and a non-imputation
      endorsement with respect to, the Owned Real Property.

     

    (b) Leased
      Real Property. Schedule
      4.16(b)
      sets
      forth the address of each parcel of Leased Real Property, and a true and
      complete list of all Leases for each such Leased Real Property (including the
      date and name of the parties to such Lease document). Sellers have delivered
      to
      Buyer a true and complete copy of each such Lease document, and in the case
      of
      any oral Lease, a written summary of the material terms of such Lease. Except
      as
      set forth in Schedule
      4.16(b),
      with
      respect to each of the Leases: (i) such Lease is legal, valid, binding,
      enforceable and in full force and effect; (ii) the transactions contemplated
      by
      this Agreement do not require the consent of any other party to such Lease,
      will
      not result in a breach of or default under such Lease, and will not otherwise
      cause such Lease to cease to be legal, valid, binding, enforceable and in full
      force and effect on identical terms following the Closing; (iii) as of the
      date
      hereof, Seller has not received a notice of default or termination with respect
      to any of the Leases; (iv) there has not occurred any event which would
      constitute a material breach by the MSK of, or material default by MSK in,
      the
      performance of any covenant, agreement or condition contained in any Lease,
      and
      to the Knowledge of MSK, no lessor under a Lease is in material breach or
      default in the performance of any covenant, agreement or condition contained
      in
      such Lease; (v) the other party to such Lease is not an affiliate of, and
      otherwise does not have any economic interest in, the Seller; (vi) MSK has
      not
      subleased, licensed or otherwise granted any Person the right to use or occupy
      the Leased Real Property or any portion thereof; and (vii) MSK has not
      collaterally assigned or granted any Lien in such Lease or any interest
      therein.

     

    (c) All
      Property. The
      Owned
      Real Property and the Leased Real Property (collectively, the “Real
      Property”)
      comprise all of the real property used in the business of MSK; and the Seller
      is
      not a party to any option or agreement to purchase any other real property
      or
      interest therein.

     

    (d) Condemnation.
      Seller
      has not received written notice of any condemnation, expropriation or other
      proceeding in eminent domain affecting any parcel of Owned Real Property or
      any
      portion thereof or interest therein.

     

    
      
        
        

      

      
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    (e) Use.
      To
      the
      Knowledge of MSK, the current use and occupancy of the Owned Real Property
      and
      the operation of the business of MSK as currently conducted thereon does not
      violate in any material respect any easement, covenant, condition, restriction
      or similar provision in any instrument of record or other unrecorded agreement
      affecting such Owned Real Property.

     

    (f) Improvements.
      The
      buildings, structures and improvements included within the Owned Real Property
      (collectively, the “Improvements”)
      comply
      in all material respects with all Applicable Laws, including building and zoning
      ordinances and no material alteration, repair, improvement or other work that
      could give rise to a Lien has been performed in respect to such Improvements
      within the last 120 days. The Improvements and the mechanical systems situated
      therein, including without limitation the heating, electrical, air conditioning
      and plumbing systems, are in good operating condition and repair, ordinary
      wear
      and tear excepted, and are adequate and suitable for the purposes for which
      they
      are presently being used, and the roof of each Improvement is in satisfactory
      condition and is not in need of current repair or replacement. The Real Property
      and its continued use, occupancy and operation as currently used, occupied
      and
      operated does not constitute a nonconforming use under any Applicable Law
      affecting the Real Property (other than possible set back violations, none
      of
      which will have a Material Adverse Effect on the Real Property or its continued
      use, occupancy and operation as currently used, occupied and operated), and
      the
      continued existence, use, occupancy and operation of each Improvement, and
      the
      right and ability to repair and/or rebuild such Improvements in the event of
      casualty, is not dependent on any special Permit, exception, approval or
      variance. There is no pending for which notice has been served on MSK, or to
      the
      Knowledge of MSK, threatened or proposed proceeding or governmental action
      to
      modify the zoning classification of, or to take by the power of eminent domain
      (or to purchase in lieu thereof), or to classify as a landmark, or to impose
      special assessments on, or otherwise to take or restrict in any way the right
      to
      use, develop or alter, all or any part of the Real Property which would have
      a
      Material Adverse Effect. There are no encroachments upon any of the Real
      Property, and no portion of any Improvement owned by MSK encroaches upon any
      property not included within the Real Property or upon the area of any easement
      affecting the Real Property. Each Improvement has direct access, adequate for
      the operation of the business of MSK, in the ordinary course, to a public street
      adjoining the Real Property on which such Improvement is situated, and no
      existing way of access to any Improvement crosses or encroaches upon any
      property or property interest not owned by MSK.

     

    4.17 Environmental
      Matters.
      Except
      as
      disclosed in Schedule
      4.17:

     

    (a) Releases.
      No
      Release, threatened Release, leak, discharge, spill, disposal or emission of
      Hazardous Substances has occurred in, on or about the Facilities, and no
      migration of Hazardous Substances into the environment off site of the
      Facilities has occurred, and the Facilities are free of Hazardous Substances
      as
      of the date of this Agreement, except those that are in compliance with
      Environmental Laws.

     

    (b) Operations.
      The
      operations of MSK have been in compliance with Environmental Laws, except where
      the failure to so comply would not, individually or in the aggregate, reasonably
      be expected to have a Material Adverse Effect. The operations of MSK currently
      are in compliance with all Environmental Laws and, to the Knowledge of MSK,
      there are no facts, circumstances or conditions that currently exist that could
      adversely affect such continued compliance with Environmental Laws. Schedule
      4.17
      contains
      a list of all environmental permits which are required for the operations of
      MSK. MSK currently has all environmental permits which are required for its
      operations and MSK is not in violation in any material respect of any term,
      condition or provision of any environmental permit. During the time that MSK
      has
      owned or leased any of the Facilities, MSK has not used, generated, manufactured
      or stored on, under or about such Facilities or transported or arranged for
      disposal to or from such Facilities, any Hazardous Substances in violation
      of
      applicable Environmental Law. There is not now, nor has there ever been located
      at any of the Facilities any (i) underground storage tanks, (ii)
      asbestos-containing material, (iii) polychlorinated biphenyls, or (iv)
      chlorinated solvents, except those that are in compliance with Environmental
      Laws.

     

    
      
        
        

      

      
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    (c) Litigation,
      Orders, Claims.
      During
      the time that MSK has owned or leased any of the Facilities, there has been
      no
      litigation brought or, to the Knowledge of MSK, threatened in writing against
      MSK by, or any settlement reached by MSK with, any party or parties respecting
      any Environmental Laws, or alleging the presence, disposal, Release or
      threatened Release of any Hazardous Substances on, from or under such
      Facilities. MSK is not the subject of any investigation or outstanding written
      order with any Governmental Authority respecting Environmental Laws or any
      Release or threatened Release of a Hazardous Substance. No claim has been made,
      is pending or, to the Knowledge of MSK, threatened against MSK alleging either
      or both that MSK may be in violation of any Environmental Law or an
      environmental permit, or may have any liability under any Environmental Law,
      including but not limited to liability for having arranged for the disposal
      or
      treatment of Hazardous Substances at non-owned disposal sites, and there are
      no
      facts, circumstances or conditions that could reasonably be expected to result
      in such a claim.

     

    (d) Audit
      and Assessment Documentation.
      MSK
      previously has furnished or made available to Buyer accurate, true, and complete
      copies of any and all environmental audits or risk assessments, site
      assessments, documentation regarding on- or off-site disposal of Hazardous
      Substances or Release of Hazardous Substances, spill control plans, and all
      other material correspondence, documents or communications with any Governmental
      Authority or other entity regarding the foregoing, that MSK currently has in
      its
      possession, or otherwise exists to the Knowledge of MSK (in which case, MSK
      has
      previously disclosed the existence of such documents and the identity of the
      party possessing the same, if known).

     

    (e) Environmental
      Investigations.
      MSK
      will allow Buyer and Buyer’s environmental consultant to conduct mutually agreed
      upon investigations (including mutually agreed upon intrusive testing of
      buildings, soil and groundwater) of the environmental conditions of any real
      property owned, operated or leased by or for MSK and the operations conducted
      thereat (subject to any limitations contained in valid, previously executed
      leases) as Buyer shall deem necessary or prudent (“Buyer’s
      Environmental Assessments”).
      Buyer’s Environmental Assessments shall be conducted by a qualified
      environmental consulting firm in compliance with applicable laws and in a manner
      that minimizes the disruption of MSK’s operations. Nothing contained herein
      shall invalidate the representations and warranties contained in this Agreement,
      and Buyer may rely on such representations and warranties notwithstanding
      Buyer’s Environmental Assessments and without proof of reliance.

     

    
      
        
        

      

      
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    (f) Deluxe
      Indemnity.
      MSK is
      a party to a Purchase and Sale Agreement dated as of October 26, 1999 between
      MSK and Deluxe Financial Services, Inc., a Minnesota corporation (“Deluxe”)
      as
      amended by an Amendment to the Purchase and Sale Agreement dated as of December
      30, 1999 (the “PSA”).
      The
      covenants relating to environmental matters in the PSA are enforceable and
      will
      be enforceable after the transactions contemplated by this Agreement. Pursuant
      to the PSA, Deluxe has an environmental indemnification obligation of up to
      $500,000 and as of the date of this Agreement the remaining environmental
      indemnification obligation of Deluxe under the PSA is $257,000.
      To the
      Knowledge of MSK, Deluxe is in compliance with its obligations under the PSA.
      The parties acknowledge and agree, however, that MSK makes no representation
      or
      warranty regarding Deluxe’s obligations under the PSA that might no longer be
      enforceable due to the effect of an applicable statute of
      limitations.

     

    4.18 Employees,
      Labor Matters, etc.
      MSK is
      not a party to or bound by any collective bargaining agreement, and there are
      no
      labor unions, work councils or other organizations representing or, to the
      Knowledge of MSK, purporting or attempting to represent any employee of MSK.
      No
      strike, slowdown, picketing, work stoppage, concerted refusal to work overtime
      or other similar labor activity with respect to any current employee of MSK
      is
      currently ongoing or, to the Knowledge of MSK, has been threatened since January
      1, 2002. To the Knowledge of MSK, MSK has complied in all material respects
      with
      all applicable provisions of Applicable Law pertaining to the employment or
      termination of employment of any Person, including, without limitation, all
      such
      Applicable Laws relating to labor relations, affirmative action plans, equal
      employment, leaves of absence, reasonable accommodations, wage payments
      (including vacation and other accrued benefits), other fair employment
      practices, entitlements, prohibited discrimination, immigration status, Tax
      information reporting, Employment and Withholding Taxes or other similar
      employment practices or acts. MSK has not withheld from a paycheck of any
      current or former employee any amounts due from such employee to MSK, except
      to
      the extent permitted by Applicable Law. There is no claim against MSK alleging
      any form of discrimination that has been filed with the United States Equal
      Employment Opportunity Commission, New York State Division of Human Rights
      or
      any other federal or state agency by any current or former employee of MSK
      since
      January of 2005 that has been served on MSK and to the Knowledge of MSK, there
      is no reasonable basis for any such claim. MSK has no employees in any country
      of the world other than the United States.

     

    4.19 Employee
      Benefit Plans and Related Matters. 

     

    (a) Schedule
      4.19(a)
      sets
      forth a true and complete list, separately by plan sponsor, of each (i)
“employee benefit plan,” as such term is defined in Section 3(3) of ERISA
      without regard to whether ERISA applies thereto, (ii) all other employee benefit
      plans, agreements, policies or arrangements or payroll practices; consulting,
      independent contractor, and leased employee agreements; all plans, agreements,
      policies or arrangements providing for bonus or other incentive compensation,
      equity or equity-based compensation, deferred compensation, change in control
      rights or benefits, termination or severance benefits, retention bonuses or
      other retention or salary continuation compensation, sick leave, vacation pay,
      stock purchase, fringe benefits and perquisites (including without limitation,
      club memberships), medical, dental, and hospitalization benefits, life
      insurance, short-term and long-term disability benefits, educational assistance,
      rabbi trusts, Code Section 501(c)(9) trusts, Code Section 125 plans, multiple
      employer welfare plans or arrangements, and multiemployer welfare plans or
      arrangements; and (iii) all other plans, arrangements, policies or practices
      or
      contracts involving direct or indirect compensation or benefits (including
      any
      contracts entered into between MSK and any current or former officer, director,
      or employee of MSK), currently or previously maintained, established or entered
      into by MSK or to which MSK contributes or is or has been obligated or required
      to contribute or with respect to which MSK has or may have any liability
      (collectively, the “Plans”).

     

    
      
        
        

      

      
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    (b) True,
      current and complete copies of the following documents, with respect to each
      of
      the current Plans, have been delivered to Buyer by MSK, to the extent
      applicable: (i) all Plans’ plan documents, all amendments thereto and
      related trust documents, insurance contracts or other funding arrangements,
      and
      amendments thereto; (ii) the three (3) most recent annual Forms 5500
      and all required schedules thereto and all top hat notices; (iii) the three
      (3)
      most recent annual actuarial reports, if any; (iv) determination letters,
      or other compliance documentation, issued by the Internal Revenue Service or
      other governmental authority since January 1, 1995; (v) summary plan
      descriptions, or if there is none for a particular current Plan, the primary
      written explanation to employees of that plan; (vi) all written
      interpretations of the Plans, and all written descriptions of all non-written
      agreements relating to the Plans; (vii) the three (3) most recent annual
      financial statements for each Plan (to the extent applicable); and (viii) all
      material communications to or from government agencies (including, without
      limitation, the Internal Revenue Service and U.S. Department of Labor) relating
      to current Plans.

     

    (c) Except
      as
      disclosed in Schedule
      4.19(c),
      (i) MSK
      has not sponsored, contributed or been required to contribute to, and (ii)
      none
      of the Plans is: (aa) a plan subject to Title IV of ERISA or Code Section 412,
      or (bb) a “multiemployer plan” as defined in Section 4001(a)(8) of
      ERISA.

     

    (d) Nothing
      has occurred that would be a breach of fiduciary responsibility by any
“fiduciary”
(within
      the meaning of ERISA Section 3(21)) of any Plan. The Plans have been maintained
      (and all obligations required to be performed have been performed), in all
      material respects, in accordance with their terms and with all applicable
      provisions of ERISA, the Code and other Applicable Laws, and neither MSK nor
      any
“party
      in interest”
or
      “disqualified
      person”
with
      respect to any Plan has engaged in a “prohibited
      transaction”
within
      the meaning of Section 4975 of the Code or Section 406 of ERISA or in a
      violation of any other Applicable Laws. No Plan fiduciary has any liability
      (under ERISA Section 502(l) or otherwise) for breach of fiduciary duty, or
      any
      other failure to act or comply in connection with the administration or
      investment of the assets of any Plan. Participation in each Plan has been made
      available to all individuals who, pursuant to the terms of such Plan, are
      entitled to participate.

     

    (e) Each
      Plan
      that is intended to meet the requirements for tax-favored treatment under
      Subchapter B of Chapter 1 of Subtitle A of the Code meets such
      requirements in all material respects, including, without limitation,
      (i) any Plans intended to qualify under Section 401 of the Code meet
      such requirements in all material respects and (ii) any trusts intended to
      be exempt from federal income taxation under Section 501 of the Code meet
      such requirements in all material respects. Nothing has occurred with respect
      to
      the form or operation of such Plans that (unless corrected without liability
      to
      MSK) would cause the loss of such tax-favored treatment, qualification or
      exemption, or the imposition of any material liability, penalty or tax under
      ERISA, the Code or other Applicable Law. There is no form or operational
      problems with the Plans.

     

    
      
        
        

      

      
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    (f) None
      of
      the Plans is a “multiple
      employer welfare arrangement”
(as
      defined in ERISA Section 3(40)) or a multiple employer plan (within the meaning
      of ERISA Section 210).

     

    (g) Except
      as
      disclosed in Schedule
      4.19(g),
      none of
      the Plans provides for post-employment welfare benefits other than (x) a
      governmental plan to which contributions are mandatory, such as Social Security
      or Medicare, (y) a Plan for which the sole post-employment benefit is required
      under COBRA or similar laws of any state within the United States, or (z) where
      all liabilities under such Plan are fully the obligation of an insurer or other
      person unaffiliated with MSK.

     

    (h) Except
      as
      disclosed in Schedule
      4.19(h),
      all
      contributions (including all employer contributions and employee salary
      reduction contributions) required to have been made under any of the Plans
      or by
      Applicable Law (without regard to any waivers granted under Section 412 of
      the
      Code or any other Applicable Law) to any funds or trusts established thereunder
      or in connection therewith have been made by the due date thereof (including
      any
      valid extension). All contributions that are not yet due will have been paid
      or
      sufficient accruals for such contributions and other payments in accordance
      with
      GAAP are duly and fully provided for on the Balance Sheet. No “partial
      termination”
within
      the meaning of Code Section 411(d)(3) has occurred with respect to any Plan
      intended to be qualified under Code Section 401(a) for which the vesting
      requirement thereof has not been met.

     

    (i) There
      are
      no material pending actions, claims or lawsuits which have been asserted or
      instituted with respect to or against the Plans, the assets of any of the trusts
      under such Plans or the sponsor or administrator of any of the Plans, or against
      any fiduciary of the Plans (other than routine benefit claims), in each case
      that could cause liability for MSK, nor, to the Knowledge of MSK, are there
      any
      facts that would reasonably be expected to form the basis for any such claim
      or
      lawsuit.

     

    (j) Each
      Plan
      intended to be qualified under Section 401(a) of the Code, and the trust (if
      any) forming a part thereof, has received a favorable determination letter
      from
      the IRS as to its qualification under the Code and to the effect that each
      such
      trust is exempt from taxation under Section 501(a) of the Code. No event has
      occurred and no action has been taken to jeopardize the qualified status of
      any
      such Plan or the tax-exempt status of any such trust.

     

    (k) With
      respect to the Plans:

     

    
      	 	
              (i)

            	
              Each
                Plan subject to Section 412 of the Code or Section 302 of ERISA meets
                the
                minimum funding requirements of those
                Sections.

            

    

     

    
      	 	
              (ii)

            	
              No
                material liability has been incurred by, and no event, transaction
                or
                condition has occurred or exists that could result in any material
                liability of MSK under or pursuant to Title I or IV of ERISA or the
                penalty, excise tax or joint and several liability provisions of
                the Code
                relating to employee benefit plans.

            

    

     

    
      
        
        

      

      
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              (iii)

            	
              Each
                of the Plans has been operated and administered in compliance with
                all
                Applicable Laws. There are no material pending or, to the
                Knowledge of
                MSK, threatened claims by or on behalf of any of the Plans, by any
                Governmental Authority, by any Person or otherwise involving any
                such Plan
                or the assets of any Plan (other than routine claims for
                benefits).

            

    

     

    
      	 	
              (iv)

            	
              The
                consummation of the transactions contemplated by this Agreement or
                any of
                the Ancillary Documents will not result in (y) an increase in the
                amount
                of compensation or benefits of any Person, or (z) the acceleration
                of the
                vesting or timing of payment of any compensation or benefits payable
                to or
                in respect of any Person.

            

    

     

    (l) There
      are
      no contracts, plans, agreements or arrangements covering any employee or former
      employee that, individually or collectively, could give rise to the payment
      of
      any amount that would not be deductible pursuant to the terms of Section 280G
      of
      the Code.

     

    (m) The
      present value of the accrued benefit liabilities (whether or not vested) under
      each Plan that is maintained outside the United States primarily for the benefit
      of persons substantially all of whom are not residents in the United States
      that
      provides pension, retirement, early retirement, profit-sharing, deferred
      compensation or other similar benefits (each, a “Non-U.S.
      Plan”),
      determined as of the date of this Agreement and as of the Closing Date, either
      does not exceed the current value of the assets of such Non-U.S. Plan allocable
      to such benefit liabilities or any such excess has been accrued and reflected
      in
      the Balance Sheet. All benefits (whether or not vested) earned by employees
      that
      will be payable under each Non-U.S. Plan are, as of the Closing Date, properly
      accrued and reflected in the Balance Sheet. MSK does not maintain a Non-US
      Plan
      that is a private Plan.

     

    (n) There
      is
      no “amount of unfunded benefit liabilities” as defined in Section 4001(a)(18) of
      ERISA in any of the Plans (i) that are subject to Title IV of ERISA, or (ii)
      that, although not subject to Title IV of ERISA, would be subject to Title
      IV of
      ERISA if they were sponsored or otherwise maintained by MSK in the United
      States, as determined in accordance with the actuarial assumptions used by
      the
      PBGC to determine the level of funding required in the event of the termination
      of such Plan.

     

    (o) Neither
      MSK nor the PBGC has terminated any Plan that is subject to Title IV of ERISA,
      nor has MSK incurred any outstanding liability under Section 4062 of ERISA
      to
      the PBGC or to a trustee appointed under Section 4042 of ERISA. All premiums
      due
      the PBGC with respect to Plans that are subject to Title IV of ERISA have been
      timely paid. No reportable event within the meaning of ERISA Section 4043 has
      occurred.

     

    
      
        
        

      

      
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    (p) Except
      with respect to the ESOP, no stock or other security issued by MSK forms or
      has
      formed a part of the assets of any Plan. Solely for purposes of this
      subparagraph (p), a stock option shall not be deemed to be a Plan.

     

    (q) Any
      individual who performs, or has performed, services for MSK and who is not,
      or
      has not been, treated as an employee of MSK for federal income tax purposes
      is
      not, and was not, an employee for such purposes.

     

    4.20 Related
      Party Transactions.
      Schedule
      4.20
      contains
      a complete and correct list (and if oral, an accurate and complete description
      of all material terms) of all Contracts pursuant to which any loans, leases,
      goods, services, materials or supplies are provided (a) by MSK, on the one
      hand,
      to Sellers or their Affiliates (other than MSK), on the other hand, or (b)
      by
      Sellers or their Affiliates (other than MSK), on the one hand, to MSK, on the
      other hand (each, an “Intercompany
      Arrangement”),
      in
      each case entered into, in effect, occurring or incurred within the past 24
      months. Except as set forth on Schedule
      4.20,
      neither
      the Principal Stockholders nor any of their respective Affiliates have been
      involved in any Intercompany Arrangement within the past 24 months. Schedule
      4.20
      sets
      forth a list of any material asset, tangible or intangible, which is used by
      MSK
      but owned by one or more Sellers or their Affiliates. Except as set forth in
      Schedule
      4.20,
      no
      Intercompany Arrangement shall survive Closing.

     

    4.21 Insurance.
      Schedule
      4.21
      sets
      forth a true and correct list of all insurance policies currently maintained
      by
      or for the benefit of MSK, including policies providing property, fire and
      extended coverage and casualty, liability and workers’ compensation coverage and
      bond and surety agreements, and other forms of insurance, and sets forth the
      following information with respect to each such insurance policy:

     

    (a) the
      name,
      address and telephone number of the agent who is the contact person for such
      policy;

     

    (b) the
      name
      of the insurer, the name of the policyholder and the name of each covered
      insured;

     

    (c) the
      policy number and the period of coverage; and

     

    (d) the
      type
      and limits of coverage provided under the policy.

     

    With
      respect to each such insurance policy: (i) all policy premiums due to date
      have
      been paid in full and, to the Knowledge of MSK, the policy is legal, valid
      binding and enforceable; and in full force and effect in all material respects;
      and (ii) none of MSK or its Affiliates and, to the Knowledge of MSK, no other
      party to the policy is in material breach or default (including with respect
      to
      the payment of premiums or the giving of notices) and no event has occurred
      which, with notice or the passage of time, would constitute such a material
      breach or default, or permit termination, modification, or acceleration, under
      the policy. Except as set forth in Schedule
      4.21,
      all of
      the insurance policies remain in full force and effect through thirty (30)
      days
      after the Closing Date. MSK has not during the last five (5) years been refused
      any insurance with respect to its assets or operations, nor, during the same
      period, has coverage ever been limited by any insurance carrier to which MSK
      has
      applied for any insurance policy or with which it has carried a insurance
      policy.

     

    
      
        
        

      

      
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    4.22 Product
      and Service Warranties.
      Set
      forth on Schedule
      4.22
      are
      copies of the standard forms of warranty offered by MSK to third parties with
      respect to each of the products marketed by MSK at any time since January 1,
      2003. All material service or warranty liabilities of MSK to customers or other
      Persons are reflected on the Financial Statements or on the accounting records
      of MSK as of the Closing Date.
      From
      January 1, 2004 to the Closing Date, there have been no pending (for which
      MSK
      has been notified), nor to the Knowledge of the MSK, threatened, claims under
      or
      pursuant to any warranty, whether expressed or implied, on products or services
      sold prior to the Closing Date by MSK that are not disclosed or referred to
      in
      the Financial Statements and that are not fully reserved against in accordance
      with GAAP. All of the services rendered by MSK (whether directly or indirectly
      through independent contractors) have been performed in material conformity
      with
      all expressed warranties and, in all material respects, with all applicable
      contractual commitments, and MSK does not have nor shall it have any liability
      for replacement or repair or for other damages relating to or arising from
      any
      such services, except for amounts incurred in the ordinary course of business
      which are not required by GAAP to be disclosed in the Financial Statements.
      Set
      forth on Schedule
      4.22
      are the
      aggregate amount of warranty claims incurred by MSK in fulfillment of its
      obligation under any warranty for the last three (3) years. There is no
      reasonable basis upon which to expect an increase in warranty claims in the
      future.

     

    4.23 Product
      Liability.
      Except
      as
      set forth in Schedule
      4.23,
      (a)
      there has been no claim served on MSK or to the Knowledge of MSK any Stockholder
      or their respective Affiliates by or before any Governmental Authority against
      or involving MSK or concerning any product manufactured, shipped, sold and/or
      delivered by or on behalf of MSK relating to or resulting from an alleged defect
      in design, manufacture, materials or workmanship of any product manufactured,
      shipped, sold and/or delivered by or on behalf of MSK or any alleged failure
      to
      warn, or any alleged breach of implied warranties or representations, and,
      to
      the Knowledge of MSK, none has been threatened nor is there any valid basis
      for
      any such claim; (b) there has not been any Occurrence; (c) there has not been
      any recalls conducted with respect to any product manufactured (or to be
      manufactured), shipped, sold or delivered by or on behalf of MSK, or any
      investigation or consideration of or decision made by any Person or Governmental
      Authority concerning whether to undertake or not undertake, any recalls and
      (d)
      there have been no material defects in design, manufacturing, materials or
      workmanship including, without limitation, any failure to warn, or any breach
      of
      express or implied warranties or representations, which involve any product
      manufactured, shipped, sold and/or delivered by or on behalf of MSK. All
      manufacturing standards applied, testing procedures used, and product
      specifications disclosed to customers by MSK have complied in all material
      respects with all requirements established by any Applicable Laws and
      Contracts.

     

    4.24 Inventory.
      Except
      for reserves for obsolescence reflected on the Financial Statements or books
      of
      account of MSK, the inventory of MSK (including that reflected on the Financial
      Statements), taken as a whole, is in merchantable condition, and suitable and
      usable or salable in the ordinary course of business for the purposes for which
      it was intended, and has been reflected on the Financial Statements and carried
      on the books of account of MSK in accordance with GAAP applied on a consistent
      basis with the Financial Statements. Without limiting the generality of the
      foregoing, such inventory does not include any obsolete materials or any excess
      stock items, except as have been reserved against as reflected on the Financial
      Statements or the books of MSK and for adjustments to be made pursuant to
Section
      7.14.
      The
      reserves created by MSK to cover returns have been calculated and carried on
      the
      books of account of MSK in accordance with GAAP applied on a consistent basis
      with the Financial Statements.

     

    
      
        
        

      

      
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    4.25 Receivables
      and Payables.
      Except
      as disclosed on Schedule
      4.25:
      (i) the
      accounts and notes receivable reflected on the Financial Statements or arising
      since the date of the Balance Sheet (collectively, the “Receivables”),
      are
      bona fide, represent valid obligations to MSK, and have arisen or were acquired
      in the ordinary course of business and in a manner substantially consistent
      with
      recent past practice and with the regular credit practices of MSK; (ii) MSK’s
      provision for doubtful accounts reflected on its Financial Statements or
      reserved on its books since the date of the Balance Sheet has been determined
      in
      accordance with GAAP applied on a consistent basis with the Financial
      Statements; (iii) none of the Receivables will at the Closing Date be subject
      to
      any valid defense, counterclaim or setoff; (iv) since the date of the Balance
      Sheet, MSK has not canceled, reduced, discounted, credited or rebated or agreed
      to cancel, reduce, discount, credit or rebate, in whole or in part, any
      Receivables, except in the ordinary course of business consistent with past
      practice; and (v) there has not been any material change since the date of
      the
      Balance Sheet in the amounts of Receivables or the allowances with respect
      thereto, or accounts payable of MSK, from those reflected in the Balance Sheet.
      MSK has provided or made available to Buyer a schedule of aged Receivables
      and
      payables for MSK as of a date which is within three (3) business days of the
      date of this Agreement.

     

    4.26 No
      Material Adverse Effect.
      Since
      the date of the Balance Sheet, no change, event, occurrence, condition or
      development has occurred that, either individually or in the aggregate with
      other changes, events, occurrences, conditions or developments, has had or
      could
      reasonably be expected to have a Material Adverse Effect. MSK and the Principal
      Stockholders have disclosed to Buyer all material information relating to MSK
      and/or the transactions contemplated by this Agreement.

     

    4.27 Disclosure.
      Neither
      this Agreement nor any Ancillary Documents nor any other items prepared for
      or
      supplied to Buyer by or on behalf of MSK or the Sellers with respect to the
      transactions contemplated hereby and thereby contains any untrue statement
      of a
      material fact or omits a material fact necessary to make each statement
      contained herein or therein not misleading.

     

    4.28 Suppliers
      and Customers.
      Schedule
      4.28
      sets
      forth the ten (10) largest suppliers and ten (10) largest customers of MSK,
      based on the dollar amount of sales or purchases for each of the three years
      ended December 31, 2007. Except as set forth on Schedule
      4.28,
      no such
      supplier or customer has cancelled or terminated, or provided notice that it
      intends to cancel or otherwise terminate its relationship with MSK, or has
      during the last 12 months provided notice that it will materially decrease
      or
      materially limit, its services, supplies or materials for use by MSK or its
      usage or purchase of the services and products of MSK.
      Except
      as set forth on Schedule
      4.28,
      no
      unfilled customer order or commitment obligating MSK to process, manufacture
      or
      deliver products or perform services will, to the Knowledge of MSK, result
      in a
      loss to MSK upon completion of performance, assuming that the cost of labor
      and
      material does not change. No purchase order or commitment of MSK is in excess
      of
      normal requirements, nor are prices provided therein in excess of current market
      prices for the products or services to be provided thereunder. To the Knowledge
      of MSK, the consummation of the transactions contemplated hereby will not have
      a
      Material Adverse Effect on MSK’s relationship with any customer or supplier
      listed on Schedule
      4.28
      attached
      hereto.

     

    
      
        
        

      

      
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    4.29 Product
      Lines.
      Schedule 4.29
      sets
      forth the profit margins and gross revenues (both determined in accordance
      with
      GAAP) for eighty percent (80%) of the highest revenue producing products
      manufactured and sold by MSK during the eighteen (18) month period preceding
      the
      date of this Agreement.

     

    4.30 Indebtedness.
      Except
      for Indebtedness set forth on Schedule
      4.30
      and on
      the Balance Sheet, MSK did not have any Indebtedness outstanding or had not
      Guaranteed any Indebtedness as of December 31, 2007. Except as disclosed on
      Schedule
      4.30,
      MSK is
      not in material default with respect to any agreement or instrument governing
      the terms of any outstanding Indebtedness. Complete and correct copies, and
      if
      oral, accurate and complete descriptions of the material terms, of all
      instruments, (including amendments, waivers and consents) relating to any
      Indebtedness or any Guaranty thereof has been made available to Buyer. As of
      the
      Closing Date, MSK will have no Indebtedness outstanding and no Guaranty of
      any
      Indebtedness.

     

    4.31 Government
      Contracts.

     

    (a) Compliance.
      With
      respect to each Government Contract, except as disclosed in Schedule
      4.31(a),
      since
      January 1, 2000 (i) MSK has complied in all material respects with all terms
      and
      conditions of such Government Contract, including all clauses, provisions,
      and
      requirements incorporated expressly, by reference, or by operation of Applicable
      Law therein, (ii) MSK has complied in all material respects with all
      requirements of Applicable Law or agreements pertaining to such Government
      Contract, including, where applicable, the Truth in Negotiations Act, the Price
      Reductions and Industrial Funding Fee clauses of MSK’s General Services
      Administration Schedule Contract, if any, and each MSK’s Cost Accounting
      Standards disclosure statement, if any, (iii) all representations and
      certifications executed, acknowledged or set forth in or pertaining to such
      Government Contract were complete and correct as of their effective date and
      MSK
      has complied in all material respects with all such representations and
      certifications, (iv) neither the United States Government nor any non-US
      government, state government, local government, prime contractor, subcontractor
      or other person has notified MSK, either in writing or orally, that MSK has
      breached or violated any Applicable Law, certification, representation, clause,
      provision or requirement pertaining to such Government Contract, (v) no
      termination for convenience, termination for default, cure notice, show cause
      notice, or stop work order is currently in effect pertaining to such Government
      Contract, (vi) no cost incurred by MSK pertaining to such Government Contract
      has been challenged, is the subject of any audit or investigation or has been
      disallowed by any Governmental Authority and (vii) no money due to MSK
      pertaining to such Government Contract has been withheld, reduced or set off
      nor
      has any claim been made to withhold or set off money and, to the Knowledge
      of
      MSK, MSK is entitled to all progress payments received with respect
      thereto.

     

    (b) Investigations,
      etc.
      Neither
      MSK nor any of its directors, officers, employees, consultants or agents is
      or
      since January 1, 2000 has (A) been under administrative, civil or criminal
      investigation, indictment or information by any Governmental Authority or any
      audit investigation by any Governmental Authority with respect to any alleged
      act or omission arising under or relating to any Government Contract or (B)
      conducted or initiated any internal investigation, any investigation or made
      a
      voluntary disclosure to any Governmental Authority with respect to any alleged
      act or omission arising under or relating to a Government Contract.

     

    
      
        
        

      

      
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    (c) Claims
      and Disputes.
      With
      respect to MSK, there exist (A) no outstanding claims against it by any
      Governmental Authority or by any non-US government, state or local government,
      prime contractor, subcontractor, vendor or other Person, arising under or
      relating to any Government Contract and (B) no disputes between MSK and the
      United States Government under the Contract Disputes Act or any other federal
      statute or between MSK and any prime contractor, subcontractor or vendor arising
      under or relating to any Government Contract. MSK does not have any direct
      financial interest in any pending or potential claim against any Governmental
      Authority or any non-US government, state or local government, prime contractor,
      subcontractor or vendor arising under or relating to any Government
      Contract.

     

    (d) Disbarment,
      Suspension, Improper Payments.
      Since
      January 1, 2000, (A) MSK has not been debarred or suspended from participation
      in the award of contracts with the United States Government or any other
      Governmental Authority; (B) there exist no facts or circumstances that would
      warrant the institution of suspension or debarment proceedings or the finding
      of
      nonresponsibility or ineligibility on the part of MSK or any director, officer
      or employee of such; (C) no payment has been made by MSK or, to the Knowledge
      of
      MSK, by any person on behalf of MSK, in connection with any Government Contract
      in violation of applicable procurement laws or in violation of, or requiring
      disclosure pursuant to, the FCPA; (D) all of MSK’s cost accounting and
      procurement systems and the associated entries reflected in the MSK’s financial
      statements with respect to the Government Contracts are in compliance in all
      material respects with Applicable Law.

     

    (e) Tests
      and Inspections.
      Since
      January 1, 2000 (A) all test and inspection results provided by MSK to any
      Governmental Authority pursuant to any Government Contract or to any other
      Person pursuant to a Government Contract or as a part of the delivery to any
      Governmental Authority or other Person pursuant to a Government Contract of
      any
      article designed, engineered, manufactured or repaired by MSK were complete
      and
      correct in all material respects as of the date so provided; and (B) MSK have
      provided all test and inspection results to the United States Government or
      to
      any other Person pursuant to a Government Contract as required by Applicable
      Law
      and the terms of the applicable Government Contract.

     

    (f) Government
      Property.
      Except
      as set forth on Schedule
      4.31(f),
      as of
      the date of this Agreement, MSK is not in possession of any material
      government-owned property, including material, tooling and test equipment,
      provided under, necessary to perform the obligations under or for which Buyer
      could be held accountable under the Government Contracts. Schedule
      4.31(f)
      sets
      forth a description of each item of material government-owned property and
      the
      value of such item.

     

    (g) Performance.
      All of
      the Government Contracts were entered into in the ordinary course of the
      business and are capable of performance by MSK in accordance with the terms
      and
      conditions thereof and except as set forth on Schedule
      4.31(g),
      to the
      Knowledge of the MSK, without loss if Sellers had continued to own and operate
      MSK without regard to the transaction contemplated by this Agreement and
      assuming that the cost of material and labor does not change.

     

    
      
        
        

      

      
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    4.32 Capital
      Expenditures and Investments.
      As of
      the date of this Agreement, MSK has outstanding Contracts and a 2008 budget
      for
      capital expenditures and investments as set forth in Schedule
      4.32
      which
      includes a schedule of all monies disbursed on account of capital expenditures
      and investments made by MSK since January 1, 2008.

     

    4.33 Brokers,
      Finders, etc.
      There
      are and will be no claims for brokerage commissions, investment banking or
      finders’ fees or expenses or similar compensation in connection with the
      transactions contemplated by this Agreement based on any arrangement or Contract
      binding upon MSK.

     

    4.34 Books
      and Records.
      The
      books of account, minute books, stock record books, and other records of MSK,
      all of which have been made available to Buyer, are complete and correct and
      have been maintained in accordance with sound business practices, including
      the
      maintenance of an adequate system of internal controls. The minute books of
      MSK
      contain substantially accurate and complete records of all meetings held of,
      and
      corporate action taken by, the stockholders, the Boards of Directors, and
      committees of the Boards of Directors of MSK, and no meeting of any such
      stockholders, Board of Directors, or committee has been held for which minutes
      have not been prepared and are not contained in such minute books. At the
      Closing, all of those books and records will be in the possession of
      MSK.

     

    4.35 Condition
      and Sufficiency of Assets.
      Except
      as set forth on Schedule
      4.35,
      the
      buildings, plants, structures, and equipment of MSK are structurally sound,
      are
      in good operating condition and repair (given the use and age of such assets),
      and are adequate for the uses to which they are being put, and none of such
      buildings, plants, structures, or equipment is in need of maintenance or repairs
      except for ordinary, routine maintenance and repairs that are not material
      in
      nature or cost, given the use and age of such assets and except for repairs
      and
      replacements that do not exceed ten thousand dollars ($10,000) per item. The
      real property, personal property, intangible property and intellectual property
      of MSK are sufficient for the continued conduct of the businesses of MSK after
      the Closing in substantially the same manner as conducted prior to the
      Closing.

     

    4.36 Trade
      Controls.

     

    (a) Prohibited
      Person.
      Except
      as set forth on Schedule
      4.36,
      MSK is
      not a party to any Contract or bid with, or has not conducted business with,
      a
      Prohibited Person.

     

    (b) Proceedings,
      Claims, etc.
      Except
      as set forth on Schedule
      4.36,
      there
      is no pending or, to the Knowledge of MSK, threatened, legal, administrative,
      arbitral or other proceeding, claim, suit or action against, or, to the
      Knowledge of MSK, investigation by a Governmental Authority of, MSK, nor is
      there any injunction, order, judgment, ruling or decree imposed (or, to the
      Knowledge of MSK, threatened to be imposed) upon MSK or any of MSK’s assets or
      properties by or before any Governmental Authority, in each case, in connection
      with an alleged violation of Applicable Law relating to the export of data,
      goods or services to any foreign jurisdiction against which the United States
      of
      America or the United Nations maintains sanctions or export controls, including
      applicable regulations of the United States Department of Commerce, the United
      States Department of State and the Office of Foreign Asset Control of the United
      States Department of Treasury.

     

    
      
        
        

      

      
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    (c) Compliance
      with Export Laws.
      MSK is
      in compliance with, and for the past five (5) years has maintained compliance
      with all laws and regulations controlling the export of products, services
      and
      technologies promulgated by any Governmental Authority, including without
      limitation, the Export Administration Regulations (EAR), 15 C.F.R. Parts
      730-774, as amended, and regulations governing the manufacture and export of
      defense articles, defense services and associated technical data, as set forth
      in the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts
      120-130, as amended.

     

    (d) Compliance
      with Import Laws.
      MSK is
      in compliance with, and for the past five (5) years has maintained compliance
      with all laws and regulations controlling the import of products into the United
      States, including without limitation, United States Customs Regulations, 19
      C.F.R. Parts 1-199, as amended.

     

    4.37 Ethical
      Practices.
      Each of
      MSK and its employees, agents, consultants and each other Person acting for,
      or
      on behalf of, MSK, has complied with the United States Foreign Corrupt Practices
      Act (the “FCPA”)
      and
      all other Applicable Laws regarding illegal payments and gratuities
      (collectively with the FCPA, the “Improper
      Payment Laws”),
      and
      has not, directly or indirectly, used funds or other assets, or made any promise
      or undertaking in such regard, for any illegal payments to or for the benefit
      of
      any Person or the establishment or maintenance of a secret or unrecorded fund.
      Notwithstanding the provisions of the immediately preceding sentence, the
      representations set forth in such sentence shall be applicable to MSK’s
      employees, agents, and consultants and other Persons acting for, or on behalf
      of, MSK solely to the extent that such actions of such Persons could result
      in
      the imposition of liability on MSK or Buyer under any Improper Payment Laws.
      There have been no false or fictitious entries made in the books or records
      of
      MSK relating to any such illegal payment or secret or unrecorded
      fund.

     

    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF SELLERS

     

    Except
      as
      otherwise set forth in the Schedules to this Agreement, each Seller, severally,
      but not jointly, hereby represent and warrant to Buyer as follows:

     

    5.1 Authorizations,
      Due Execution, etc.
      Each
      Seller has all the requisite legal authority to execute and deliver this
      Agreement and the Ancillary Documents to which he is or will be a party, to
      perform fully his obligations hereunder or thereunder, and to consummate the
      transactions contemplated hereby and thereby. The execution and delivery of
      this
      Agreement and the Ancillary Document to which the Seller is or will be a party
      by such Seller and the performance of its obligations hereunder and thereunder,
      and the consummation by such Seller of the transactions contemplated hereby
      and
      thereby, have been duly authorized and no other action on the part of such
      Seller is necessary to authorize the execution and delivery of this Agreement
      or
      the consummation of the transactions contemplated hereby. 

     

    
      
        
        

      

      
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    5.2 Execution,
      Delivery, Binding Obligation.
      This
      Agreement and the Ancillary Documents have been duly and validly executed and
      delivered by the Seller (to the extent he is a party thereto) and constitutes
      a
      legal, valid and binding obligation of such Seller, enforceable against such
      Seller in accordance with its terms, subject to applicable bankruptcy,
      insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
      affecting creditors’ rights and remedies generally. Neither the execution and
      delivery of this Agreement or the Ancillary Documents by the Seller nor the
      consummation by such Seller of the transactions contemplated hereby and thereby
      nor compliance by such Seller with any of the provisions hereof or thereof
      will
      (a) result in a violation or breach of, or constitute (with or without due
      notice or lapse of time or both) a default (or give rise to any right of
      termination, modification, cancellation or acceleration or loss of material
      benefits) under any of the terms, conditions or provisions of any contract,
      document, agreement, organizational or governance document to which such Seller
      is a party or may be subject or (b) violate any order, writ, injunction, decree,
      statute, treaty, rule or regulation applicable to such Seller.

     

    5.3 Ownership.
      Each
      Seller is the holder of record of the number of shares of MSK Common Stock
      set
      forth across from such Seller’s name on Schedule
      5.3.
      All of
      the shares held by the Seller are held free and clear of all Liens, have been
      duly authorized and validly issued and are fully paid and nonassessable. Except
      as set forth on Schedule
      5.3,
      there
      are no options, warrants, calls, preemptive rights, subscriptions or other
      rights, convertible securities, agreements or commitments of any character
      obligating the Seller to transfer or sell any shares of capital stock, options,
      warrants, calls or other equity interest of any kind whatsoever in MSK or
      securities convertible into or exchangeable for such shares or equity
      interests.
      Upon
      payment of the consideration provided for in Section
      2.2
      allocable to the Seller to the Disbursing Agent at the Closing, such Seller
      will
      convey good and marketable title to all of such Seller’s shares of MSK Common
      Stock, free and clear of all Liens, Contracts or other limitations whatsoever.
      The assignments, endorsements, stock powers and other instruments of transfer
      delivered by the Seller to Buyer at the Closing will be sufficient to transfer
      all of such Seller’s entire interest, legal and beneficial, in such Seller’s
      shares of MSK Common Stock to Buyer free and clear of all Liens, Contracts
      or
      other limitations whatsoever. The Seller is the sole owner of and has full
      right, power and authority to sell and vote his shares of MSK Common Stock
      set
      forth on Schedule
      5.3.
      The
      Seller has full power and authority to deliver his shares of MSK Common Stock
      and the certificates evidencing such shares to Buyer as provided for herein,
      free and clear of all Liens, Contracts or other limitations
      whatsoever.

     

    5.4 Non-Contravention.
      The
      execution, delivery and performance by the Seller of this Agreement and the
      Ancillary Documents to be entered into by the Seller, and the fulfillment of
      and
      compliance with the respective terms hereof and thereof by such Seller, do
      not
      and will not (a) conflict with or result in a breach of the terms, conditions
      or
      provisions of, (b) constitute a default or event of default under (whether
      with
      or without due notice, the passage of time or both), (c) result in the creation
      of any Lien upon such Seller’s shares of MSK Common Stock or assets pursuant to,
      (d) give any third party the right to modify, terminate or accelerate any
      obligation under, (e) result in a violation of, or (f) require any
      authorization, consent, approval, exemption or other action by, notice to,
      or
      filing with any third party or Governmental Authority pursuant to, the
      organizational and governance documents, if any, of such Seller or any
      Applicable Law, Contract to which such Seller or such Seller’s properties or
      such Seller’s shares of MSK Common Stock are subject. The Seller has complied
      with all applicable Regulations and Orders in connection with the execution
      of,
      delivery of and performance of such Seller’s obligations under this Agreement,
      the agreements contemplated hereby to which such Seller is a party and the
      transactions contemplated hereby and thereby.

     

    
      
        
        

      

      
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    5.5 Brokers,
      Finders, etc. There
      are
      and will be no claims for brokerage commissions, investment banking or finders’
fees or expenses or similar compensation in connection with the transactions
      contemplated by this Agreement based on any arrangement or Contract binding
      upon
      the Seller.

     

    5.6 Foreign
      Person.
      The
      Seller is not a “foreign person” within the meaning of Section 1445 of the
      Code.

     

    ARTICLE
      VI

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

     

    Buyer
      represents and warrants to the Principal Stockholders and MSK as
      follows:

     

    6.1 Corporate
      Status; Authorization, etc.
      Buyer is
      a corporation, duly incorporated, validly existing and in good standing under
      the laws of the State of New York. Buyer has the corporate power and authority
      to execute and deliver this Agreement and the Ancillary Documents to which
      it is
      or will be a party, to perform its obligations hereunder and thereunder and
      to
      consummate the transactions contemplated hereby and thereby. The execution
      and
      delivery of this Agreement and the Ancillary Documents to which Buyer will
      be a
      party, and the consummation of the transactions contemplated hereby or thereby
      have been duly authorized by all requisite corporate action of Buyer. Buyer
      has
      duly executed and delivered this Agreement and on the Closing Date will have
      duly executed and delivered the Ancillary Documents to which Buyer will be
      a
      party. This Agreement is, and on the Closing Date each of the Ancillary
      Documents to which Buyer will be a party will be, valid and legally binding
      obligations of Buyer enforceable against Buyer in accordance with their
      respective terms, subject to applicable bankruptcy, insolvency, reorganization,
      moratorium or other laws affecting creditors’ rights generally and general
      principles of equity.

     

    6.2 No
      Conflicts, etc.
      The
      execution, delivery and performance by Buyer of this Agreement and the Ancillary
      Documents to which it will be a party, and the consummation of the transactions
      contemplated hereby and thereby, do not and will not conflict with or result
      in
      a violation of or a default under or give rise to a right of acceleration,
      termination or vesting under (with or without the giving of notice or the lapse
      of time, or both) (i) the articles or certificate of incorporation or by-laws
      of
      Buyer, (ii) any Applicable Law applicable to Buyer or any Affiliate of Buyer
      or
      any properties or assets of Buyer or Affiliate thereof or (iii) any material
      contract, agreement or other instrument applicable to Buyer or any Affiliate
      thereof or any of their respective properties or assets.

     

    6.3 Governmental
      Approvals.
      Buyer
      has obtained all Governmental Approvals required of it to consummate the
      transactions contemplated by this Agreement and the Ancillary Documents, except
      where the failure to obtain such Governmental Approvals would not, individually
      or in the aggregate, reasonably be expected to prevent, restrict, hinder or
      delay the consummation of this transactions contemplated by Agreement. Buyer
      is
      qualified to obtain, and there are no conditions in existence which could
      reasonably be expected to delay, impede or condition the receipt by Buyer of
      the
      required Governmental Approvals.

     

    
      
        
        

      

      
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    6.4 Brokers,
      Finders, etc.
      There
      are and will be no claims for brokerage commissions, investment banking or
      finders’ fees or expenses or similar compensation in connection with the
      transactions contemplated by this Agreement based on any arrangement or Contract
      binding upon MSK.

     

    6.5 Financial
      Arrangements of Buyer.
      Buyer
      has an adequate amount of cash on hand to pay the purchase price contemplated
      by
      this Agreement.

     

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

     

    ARTICLE
      VII

    COVENANTS

     

    7.1 Conduct
      of Business.
      From
      the date hereof to the Closing, except as expressly permitted or required by
      this Agreement or as otherwise consented to by Buyer in writing, MSK agrees
      to
      use its commercially reasonable efforts to (i) carry on its business in the
      ordinary course, in substantially the same manner as heretofore conducted,
      and
      to preserve intact in all material respects the present business organization
      of
      MSK, maintain the properties thereof in good operating condition and repair,
      keep available the services of the present officers and significant employees
      thereof, and preserve the relationship with customers thereof, suppliers thereof
      and others having business dealings with MSK; and (ii) not take any action
      or
      omit to take any action, which action or omission would result in a breach
      of
      any of the representations and warranties forth herein. Without limiting the
      generality of the foregoing, except as may be reasonably required to satisfy
      the
      conditions set forth in ARTICLE
      VIII,
      MSK
      shall not, without the written consent of Buyer (which consent shall not be
      unreasonably withheld, delayed or conditioned):

     

    
      	 	
              (i)

            	
              authorize,
                issue, sell or transfer any capital stock of MSK or any other securities
                of MSK, including any securities convertible or exercisable into
                or
                exchangeable for any capital stock or other securities of, or any
                warrants, options or other rights to acquire any capital stock or
                other
                securities of MSK;

            

    

     

    
      	 	
              (ii)

            	
              change
                or authorize any change in the certificate of incorporation or by-laws
                of
                MSK;

            

    

     

    
      	 	
              (iii)

            	
              declare
                or pay any dividend on, or make any other distribution except tax
                distributions to cover the Stockholders’ income taxes on their pass
                through income from MSK with respect to, any securities of
                MSK;

            

    

     

    
      
        
        

      

      
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              (iv)

            	
              acquire
                (whether by merger, consolidation, recapitalization or otherwise)
                the
                shares of capital stock or any other equity interest in, or a substantial
                portion of the assets of, any Person and/or any division or business
                thereof, or otherwise acquire any assets (other than inventory and
                other
                assets in the ordinary course of business) in any
                amount;

            

    

     

    
      	 	
              (v)

            	
              incur
                any Indebtedness or assume, Guarantee, or otherwise become responsible
                for
                the obligations of, or make any loans or advances of any money or
                other
                property to, any other Person including, without limitation, to any
                director, officer or employee of
                MSK;

            

    

     

    
      	 	
              (vi)

            	
              waive
                or release any rights of material value, or cancel, compromise, release
                or
                assign any material indebtedness owed to MSK, or any material claims
                held
                by MSK, other than in the ordinary course of
                business;

            

    

     

    
      	 	
              (vii)

            	
              settle
                or compromise any Litigation involving amounts in excess of
                $10,000;

            

    

     

    
      	 	
              (viii)

            	
              make
                any capital expenditures in excess of $10,000 individually or $50,000
                in
                the aggregate;

            

    

     

    
      	 	
              (ix)

            	
              sell,
                assign, license, lease, or otherwise dispose of any assets, rights
                or
                properties which are material, individually or in the aggregate,
                to MSK,
                except in the ordinary course of
                business;

            

    

     

    
      	 	
              (x)

            	
              mortgage,
                pledge or otherwise encumber or subject to a Lien (other than a Permitted
                Lien) any properties or assets;

            

    

     

    
      	 	
              (xi)

            	
              make
                any changes in any accounting method, principle or practice other
                than
                those required by GAAP;

            

    

     

    
      	 	
              (xii)

            	
              accelerate
                the delivery or sale of products, or offer discounts or price protection
                on the sale of products or premiums on the purchase of raw materials,
                except in the ordinary course of business consistent with prior
                practice;

            

    

     

    
      	 	
              (xiii)

            	
              make
                any changes in the selling, distribution, advertising, promotion,
                terms of
                sale or collection, purchase or payment practices of MSK other than
                in the
                ordinary course of business consistent with prior practice; provided
                that,
                notwithstanding whether any such change is in the ordinary course
                of
                business consistent with past practice, MSK shall not make any change
                in
                practice without the written consent of Buyer if such change results
                in a
                failure to collect any accounts receivable in accordance with their
                terms
                or a failure to pay any accounts payable when due, in each case,
                in excess
                of $10,000 individually or $50,000 in the
                aggregate;

            

    

     

    
      
        
        

      

      
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              (xiv)

            	
              purchase,
                order or otherwise acquire inventory in excess of reasonably forecasted
                requirements in the ordinary course of
                business;

            

    

     

    
      	 	
              (xv)

            	
              increase
                in any manner the compensation of, or enter into any new bonus or
                incentive agreement or arrangement with, any of its employees, officers,
                directors, or consultants, except for any such increases that are
                granted
                in the ordinary course of business consistent with past
                practices;

            

    

     

    
      	 	
              (xvi)

            	
              other
                than as contemplated by this Agreement, adopt, amend, suspend, or
                terminate any benefit plan (including a Plan) in any manner that
                could
                reasonably be expected to increase the costs, liabilities, or obligations
                of MSK;

            

    

     

    
      	 	
              (xvii)

            	
              other
                than benefits or payments that become effective with the passage
                of time
                pursuant to the terms of existing Plans or as disclosed in Schedule
                4.19(a),
                accelerate the vesting or timing of any payment or benefit under
                any Plan,
                for any current or former employee, officer, director, consultants,
                or
                independent contractor of MSK in a manner which could reasonably
                be
                expected to increase costs, liabilities, or obligations of
                MSK;

            

    

     

    
      	 	
              (xviii)

            	
              except
                as required by this Agreement, enter into, amend, or terminate any
                employment contract, consulting agreement, termination or severance
                agreement, change of control agreement, or any other agreement containing
                the terms and conditions of employment, service, or payment of
                compensation with respect to any future, current, or former employee,
                officer, director, consultant, or independent
                contractor;

            

    

     

    
      	 	
              (xix)

            	
              fail
                to timely file or fail to cause to be filed all reports and returns
                required to be filed with any Governmental Authority and fail to
                promptly
                pay when due all Taxes, assessments and governmental charges or fees,
                including interest and penalties levied or assessed, unless diligently
                contested in good faith by appropriate
                proceedings;

            

    

     

    
      	 	
              (xx)

            	
              institute
                or commence any action, investigation, proceeding or litigation by
                or
                before any Governmental Authority in which a Governmental Authority
                is a
                party that would or is reasonably likely to result in Governmental
                Damages
                or an investigation of MSK by a Governmental Authority for the purpose
                of
                imposing criminal sanctions or civil penalties, fines or injunctions
                on
                MSK; 

            

    

     

    
      
        
        

      

      
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              (xxi)

            	
              enter
                into, amend or terminate any agreement containing covenants that
                in any
                way purport to restrict the business activity of MSK or limit the
                freedom
                of MSK to engage in any line of business or compete with any Person;
                or

            

    

     

    
      	 	
              (xxii)

            	
              agree
                or make a commitment, whether in writing or otherwise, to do any
                of the
                foregoing.

            

    

     

    7.2 Access
      and Information.
      From
      the date hereof to the Closing, MSK will give Buyer and Buyer’s accountants,
      counsel, consultants, employees and agents, full, complete and timely access
      during normal business hours upon reasonable prior notice to, and furnish them
      with all documents, records, Returns, and information with respect to, all
      properties, assets, books, Contracts, reports, records and senior management
      personnel, in each case, relating to MSK, as Buyer shall from time to time
      reasonably request; provided,
      however,
      that
      such investigation shall be conducted in a manner so as to minimize any
      unreasonable disruptions to the operations of MSK’s business and, consistent
      with the confidential nature of the transaction, Buyer shall not contact any
      customers, distributors, suppliers or employees of MSK without prior written
      consent of MSK. All information disclosed pursuant to this Section
      7.2
      shall be
      subject to the confidentiality agreement, dated February 18, 2008, by and
      between MSK and Buyer (the “Confidentiality
      Agreement”).

     

    7.3 Return
      of Confidential Information.
      Immediately prior to the Closing, MSK will request that all confidential
      material provided during the past two (2) years to prospective purchasers of
      MSK
      (other than to Buyer and its Subsidiaries) be returned to MSK and that any
      information derived from the confidential material be destroyed, with written
      confirmation of such destruction by the prospective purchasers (other than
      Buyer
      and its Subsidiaries).

     

    7.4 Public
      Announcements.
      Except
      as required by Applicable Law or rules of a national stock exchange, each party
      shall not, and shall not permit its Affiliates to, make any public announcement
      in respect of this Agreement or the transactions contemplated hereby without
      the
      prior consent of the other party. For clarity, discussion about the terms and
      conditions of the Transaction, this Agreement or the Ancillary Documents with
      any Person (other than professionals engaged by MSK or any Seller for the
      purpose of consummating the Transaction) that is not a Stockholder or
      participant in the ESOP shall be considered making a public
      announcement.

     

    7.5 Further
      Actions.

     

    (a) Consents,
      Litigation, Notice, etc.
      MSK and
      Buyer shall cooperate with one another (i) in determining whether any actions,
      Consents, approvals, or waivers are required to be taken or obtained with
      respect to parties to any Contract in connection with the consummation of the
      transactions contemplated by this Agreement and/or the Ancillary Documents
      and
      (ii) in taking such actions and seeking timely to obtain any such actions,
      Consents, approvals, or waivers. As promptly as practicable, MSK and Buyer
      shall
      use all reasonable efforts to make all filings, and thereafter make any other
      submissions, with respect to this Agreement that may be required or helpful
      under Applicable Law; provided, however, that Sellers and Buyer shall co-operate
      with each other in connection with the making of all such filings.
      Notwithstanding anything in this Agreement to the contrary, (i) in no event
      shall Buyer be obligated to propose or agree to accept any undertaking or
      condition, to enter into any consent decree, to make any divestiture, to accept
      any operational restriction, or to take any other action that could limit the
      right of Buyer or its Affiliates to own or operate all or any portion of the
      business of MSK or to limit the right of Buyer or its Affiliates to own or
      operate any portion of their existing businesses or assets, and (ii) in no
      event
      shall Buyer or any of its Affiliates be obligated to litigate before or with,
      or
      contest any decree or order of, any Governmental Authority. From the date of
      this Agreement until the Closing Date, each party shall promptly upon its
      becoming aware of the same notify the other parties in writing of any pending
      or, to the knowledge of the first party, threatened Litigation or investigation
      by any Governmental Authority or any other Person (i) challenging or seeking
      material damages in connection with consummation of the transactions
      contemplated under this Agreement or (ii) seeking to restrain or prohibit the
      consummation of the transactions contemplated under this Agreement or otherwise
      limit the right of Buyer or its Affiliates to own or operate all or any portion
      of the business or of MSK or any of Buyer’s Affiliates to own or operate any
      portion of their existing businesses or assets as a result of the transactions
      contemplated under this Agreement.

     

    
      
        
        

      

      
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    (b) Notice
      Regarding Conditions Precedent.
      At all
      times prior to the Closing, each party shall promptly notify the other party
      in
      writing of any fact, condition, event or occurrence that will or is reasonably
      likely to result in the failure of any of the conditions contained in
ARTICLE
      VIII
      to be
      satisfied.

     

    7.6 Return
      of Confidential Materials.
      In the
      event the transactions contemplated hereby are not consummated and this
      Agreement is terminated pursuant to Section
      9.1,
      each
      party hereto shall return all confidential materials to the appropriate other
      party or destroy such confidential materials exchanged in connection with this
      Agreement or the Ancillary Documents.

     

    7.7 Record
      Retention.
      MSK
      shall retain all books and records and any other documents, information, and
      files relating to any period ending on or prior to the Closing Date for a period
      the longer of six (6) years after the Closing Date or the expiration of any
      applicable statute of limitations. For so long as such books and records or
      other documents, information, and files are required to be retained by MSK
      pursuant to the terms hereof.

     

    7.8 No
      Solicitation.
      From
      and after the date of this Agreement until the earlier of the Closing or the
      termination of this Agreement in accordance with its terms, none of the Sellers,
      MSK, or any Person acting on behalf of the Sellers or MSK shall, directly or
      indirectly, (a) solicit, initiate or respond to discussions or engage in
      negotiations with any Person (whether such negotiations are initiated by a
      Seller or MSK or otherwise) or take any other action intended or designed to
      facilitate the efforts of any Person, other than Buyer, relating to the possible
      acquisition, recapitalization or other business combination involving MSK
      (whether by way of merger, purchase of capital stock, purchase of assets or
      otherwise) or any material portion of its capital stock or assets (with any
      such
      efforts by any such Person, including a firm proposal to make such an
      acquisition, to be referred to as “Acquisition
      Proposal”),
      (b)
      provide non-public information with respect to MSK to any Person, other than
      Buyer and its professional advisors or a Seller’s or MSK’s professional
      advisors, or (c) enter into an agreement, or a letter of intent or term sheet,
      with any Person, other than Buyer, providing for a possible Acquisition
      Proposal.

     

    
      
        
        

      

      
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    7.9 Certain
      Tax Matters.

     

    (a) Preparation
      and Filing of Tax Returns and Payment of Taxes.

     

    
      	 	
              (i)

            	
              The
                Sellers’ Representative shall prepare and timely file or shall cause to be
                prepared and timely filed, taking into account all applicable extension,
                all Tax Returns with respect to MSK or in respect of its business,
                assets
                or operations, for all taxable periods ending on or before the Closing
                Date (the “Pre-Closing
                Tax Returns”).
                Except to the extent otherwise required by applicable law, the Pre-Closing
                Tax Returns shall be prepared in a manner consistent with such Tax
                Returns
                as previously filed by MSK. If
                any Pre-Closing Tax Return must be signed by MSK (or any representative
                of
                MSK) following the Closing Date, Buyer
                agrees
                that it will cause MSK or its appropriate representative to cooperate
                fully and punctually in signing such Pre-Closing Tax
                Return.

            

    

     

    
      	 	
              (ii)

            	
              MSK
                shall prepare and timely file or shall cause to be prepared and timely
                filed, taking into account all applicable extension, all Tax Returns
                with
                respect to MSK or in respect of its business, assets or operations,
                for
                all taxable period ending after the Closing Date, including, Straddle
                Period Tax Returns and Tax Returns for periods beginning after and
                ending
                after the Closing Date. 

            

    

     

    
      	 	
              (iii)

            	
              The
                Sellers’ Representative and Buyer
                shall
                jointly instruct the Escrow Agent to release funds held in the Escrow
                Account to pay to Buyer
                at
                least three (3) days prior to the date on which Taxes of MSK are
                due with
                respect to any period ending on or before the Closing Date an amount
                equal
                to the Taxes attributable to the Pre-Closing Period to the extent
                such
                Taxes exceed the Accrued Tax Liability. MSK
                shall pay all Taxes of MSK related to the Pre-Closing Period to the
                extent
                such Taxes do not exceed the Accrued Tax Liability and all Taxes
                relating
                to the Post-Closing Period. Buyer shall be entitled to indemnification
                under ARTICLE
                X
                to
                the extent Taxes relating the Pre-Closing Period exceed the amount
                of the
                Accrued Tax Liability.

            

    

     

    (b) Procedure
      for Requesting Payment of Taxes and Review of Tax Returns.
      At
      least thirty (30) days prior to filing each Pre-Close Tax Return and Tax Return
      for the Straddle Period the Sellers’ Representative and MSK, respectively, shall
      provide a copy of such Tax Return to Buyer or the Sellers’ Representative,
      respectively, for its review and approval, which shall not be unreasonably
      withheld. Within twenty (20) days after receiving a copy of a Tax Return
      relating to the Pre-Closing Period, Sellers’ Representative or Buyer, as the
      case may be, shall notify the other whether or not it has any reasonable
      objections to such Tax Return or the contents thereof. If Sellers’
Representative or Buyer has not objected to the proposed Tax Return or the
      contents thereof within twenty (20) days after receiving such Tax Return,
      Sellers’ Representative and Sellers, and Buyer, as the case may be, shall be
      deemed to accept the same. If Sellers’ Representative or Buyer objects to the
      Tax Return and/or the contents thereof, Sellers’ Representative or Buyer,
      respectively, shall provide a notice of such objection together with a statement
      describing in reasonable detail the basis for such objection within twenty
      (20)
      days after receiving such Tax Return. If Sellers’ Representative and Buyer
      cannot agree to a resolution of the dispute regarding a Tax Return and/or the
      contents thereof within ten (10) days, the Independent Accountant shall resolve
      such dispute and such resolution shall be binding on Sellers, Buyer, Sellers’
Representative and MSK, and Sellers on one hand, and MSK on the other hand,
      shall each pay one-half of the cost of the Independent Accountant.

     

    
      
        
        

      

      
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    (c) Cooperation
      on Tax Matters.

     

    
      	 	
              (i)

            	
              Subject
                to the limitations set forth in this paragraph, Principal Stockholders,
                MSK and Buyer and their respective Affiliates shall cooperate in
                the
                preparation of all Tax Returns in respect of MSK for any taxable
                periods
                for which one party could reasonably require the assistance of the
                other
                party in obtaining any necessary information. Such cooperation shall
                include, but not be limited to, furnishing MSK’s Tax Returns or Tax Return
                preparation packages, MSK’s previous reporting practices, schedules
                accompanying such Tax Returns and related work papers, documents
                relating
                to rulings or other determinations by any Governmental Authority
                related
                to MSK, copies of appropriate notices and forms or other communications
                received from or sent to any Governmental Authority which relate
                to MSK,
                records concerning the ownership and Tax basis of MSK’s property, and such
                other information within such party’s possession requested by MSK and/or
                Buyer. Principal Stockholders, Buyer, MSK and their respective Affiliates
                shall make their respective employees and facilities available on
                a
                mutually convenient basis to provide explanation of any documents
                or
                information provided hereunder. 

            

    

     

    
      	 	
              (ii)

            	
              Except
                as required by Applicable Law, for a period the longer of six (6)
                years
                after the Closing Date or the expiration of any applicable statute
                of
                limitations, Buyer shall, and shall cause MSK to, retain and not
                destroy
                or dispose of any Tax Returns (including supporting materials), and
                books
                and records (including computer files) with respect to the Taxes,
                of MSK
                for all taxable periods ending or deemed to end on or prior to the
                Closing
                Date to the extent Buyer or MSK received or had possession of such
                records
                on the Closing Date.

            

    

     

    (d) Amendment
      to Returns.
      Except
      as required by Applicable Law, Buyer shall not, and after the Closing shall
      not
      permit MSK to, amend any Tax Return, report or filing (directly or by way of
      a
      separate agreement with a Governmental Authority) with respect to any taxable
      period ending on or before the Closing Date without the Sellers’
Representative’s prior written consent (which consent shall not be unreasonably
      withheld). Following the Closing, Buyer shall not make, and shall not permit
      MSK, any elections or changes in accounting methods if such elections or changes
      will adversely affect the Tax liabilities of MSK or the Sellers for any taxable
      period ending on or before the Closing Date, except as required by Applicable
      Law after ten (10) days’ prior written notice to the Sellers’ Representative.
      Neither MSK, any of the Principal Stockholders, any Seller nor the Sellers’
Representative shall amend any Tax Return, report or filing (directly or by
      way
      of a separate agreement with a Governmental Authority) relating to MSK with
      respect to a taxable period ending on or before the Closing Date without Buyer’s
      written consent (which consent shall not be unreasonably withheld).

     

    
      
        
        

      

      
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    (e) 338
      Election. 

     

    
      	 	
              (i)

            	
              Contemporaneously
                with the signing of this Agreement, Buyer and Sellers shall sign
                in blank
                the appropriate federal, state and local forms (the “Forms”)
                to make the election provided for by Section 338(h)(10) of the Code
                and
                any corresponding elections under state, local or foreign tax law
                (the
                “Election”)
                with respect to the purchase and sale of the MSK Common Stock provided
                for
                in this Agreement. The Forms shall be held in escrow by Buyer’s counsel
                until such time as they are completed and Buyer elects, in its sole
                discretion and subject to its obligations under Section
                2.2(b),
                to make the valid Election.
                Buyer will promptly inform Sellers’ Representative if the Election is
                filed with the IRS.

            

    

     

    
      	 	
              (ii)

            	
              Sellers’
                Representative, on behalf of the Sellers, and Buyer shall take all
                actions
                that are reasonable, necessary, customary and required by Applicable
                Law
                to effectuate and preserve the Election, including without limitation,
                (W)
                completing the Forms in accordance with Applicable Law, (X) determining
                if
                any additional forms, returns, elections, schedules, attachments
                and other
                documents are to be prepared and/or filed (and the content thereof)
                to
                effectuate the Election in accordance with Applicable Law, (Y) the
                allocation of the purchase price contemplated by this Agreement among
                the
                assets of MSK in accordance with Applicable Law relating to the Election,
                and (Z) any other matters and decisions that are necessary and/or
                customary to effectuate the Election in accordance with Applicable
                Law. To
                the extent that Sellers’ Representative and Buyer cannot agree upon a
                matter related to the Election, such matter shall be resolved by
                the
                Independent Accountant and such resolution shall be binding on the
                Sellers, the Sellers’ Representative and Buyer. If the services of the
                Independent Accountant are utilized to settle a dispute relating
                to the
                Election, Buyer shall pay the costs and expenses associated with
                such
                services. The Sellers’ Representative and Buyer shall complete the
                Election and file all appropriate forms (including the Forms) on
                or before
                the applicable due dates.

            

    

     

    
      
        
        

      

      
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              (iii)

            	
              Each
                Seller covenants and agrees to be bound by the determinations made
                by the
                Sellers’ Representative and the Independent Accountant with respect to the
                Election, and authorizes the Sellers’ Representative and covenants and
                agrees to sign any additional forms, elections or other materials
                necessary to timely effectuate the
                Election.

            

    

     

    7.10 Termination
      of Options.
      On or
      before the Closing Date, each outstanding Option shall be terminated by
      MSK.

     

    7.11 Related
      Party Transactions.
      Except
      as expressly provided in this Agreement and the Ancillary Documents and as
      incurred in the ordinary course of business consistently applied, the Principal
      Stockholders and MSK will cause all Intercompany Arrangements set forth on
      Schedule
      4.20
      to be
      paid in full or extinguished at or prior to the Closing.

     

    7.12 Alternate
      Structure.
      Notwithstanding anything contained in this Agreement to the contrary, Buyer
      may,
      in its sole discretion, elect, anytime prior to the Closing, to modify or change
      the structure of the acquisition of the MSK Common Stock set forth herein,
      provided, that the non-structural terms and conditions of the modified structure
      are materially the same as set forth herein, including, gross, net and type
      of
      consideration (i.e., cash) to the Sellers, the adjustments to the purchase
      price, the payment of the consideration at the Closing, indemnification
      obligations, escrow arrangements, representations and warranties, and covenants.
      Furthermore, notwithstanding anything contained in this Agreement to the
      contrary, should Buyer elect to change the structure of the acquisition as
      provided in this subsection, Sellers agree to extend the time for the Closing
      for up to an additional sixty (60) days and, subject to the alternate structure
      complying with the first sentence of this Section
      7.12,
      hereby
      agree to vote in favor of and approve of such structure;
      provided, however, that Buyer shall not be obligated to close the transactions
      contemplated by this Agreement if it elects the alternate structure and cannot
      file the necessary applications or obtain the necessary approvals for the
      alternate structure.

     

    7.13 Environmental
      Condition.
      MSK
      shall allow Buyer and its agents reasonable access to the Facilities to conduct
      environmental site assessments. MSK shall use commercially reasonable efforts
      to
      address and bring to closure such that no further action is required any and
      all
      unresolved or open violations of Environmental Laws relating to the Facilities,
      which violations are in existence as of the date of this Agreement (and any
      discovered after the date of this Agreement, but before the Closing), whether
      or
      not any enforcement action with respect to such violations has been brought
      by
      any Governmental Authority. If environmental remediation at the Facilities
      (or
      any other real property or any improvements thereon as a result of environmental
      contamination at the Facilities) is required under Environmental Laws and/or
      by
      any Governmental Authority, MSK shall use commercially reasonable efforts before
      the Closing to cause each Person responsible for the contamination, including
      MSK if it is responsible, to commence the required remediation.

     

    7.14 Adjustments
      to Inventory.
      Before
      the Closing Date, MSK shall make the adjustments to its inventory on the
      Estimated Balance Sheet and its books and records (for both financial accounting
      and tax purposes) as set forth on Schedule
      7.14.

     

    
      
        
        

      

      
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    7.15 Adjustment
      to the Security Value.
      Before
      the Closing Date, MSK shall make the adjustments to the Security on the
      Estimated Balance Sheet and its books and records (for both financial accounting
      and tax purposes) as set forth on Schedule
      7.15.

     

    7.16 Liquidation
      of the Security.
      After
      the Closing Date and before the second anniversary of the Closing Date, each
      of
      the Sellers’ Representative and Buyer shall have the right to direct MSK to sell
      the Security. The Sellers’ Representative and/or Buyer may exercise the
      foregoing right by sending a written notice (the “Sale
      Notice”)
      to
      Buyer and the Sellers’ Representative, respectfully, and MSK, at least 10 days
      before the date it desires MSK to sell the Security. The Sale Notice shall
      direct MSK to sell the Security and contain the material terms (e.g., price,
      date of sale, etc.) and procedure for the sale of the Security. Before the
      Security may be sold pursuant to the terms set forth in the Sale Notice, MSK
      must obtain Buyer’s consent (in the case of the Sellers’ Representative
      exercising the right under this Section
      7.16),
      or the
      Sellers’ Representative’s consent (in the case of Buyer exercising the right
      under this Section
      7.16),
      to the
      terms of the sale set forth in the Sale Notice, which consent shall not be
      unreasonably withheld. The Sellers’ Representative or Buyer, as the case may be,
      shall notify Buyer or the Sellers’ Representative, respectively, and MSK of its
      consent or objection to the terms of sale of the Security within 10 days after
      receiving the Sale Notice. Upon receiving Buyer’s or the Sellers’
Representative’s, as the case may be, consent to the terms of the sale of the
      Security, MSK shall sell the Security pursuant to the terms set forth in the
      Sale Notice. Notwithstanding anything to the contrary in this Section
      7.16,
      if
      neither Buyer nor the Sellers’ Representative have sent a Sale Notice that
      definitively provides for the sale of the Security at least 30 days before
      the
      second anniversary of the Closing Date, MSK shall sell the Security before
      the
      second anniversary of the Closing Date using commercially reasonable efforts
      to
      obtain the best price for the Security or, at the option of Buyer, value the
      Security as of a date within such 30 day period, as determined by Buyer;
      provided, however, if there is no market for the Security (to effectuate a
      sale
      of the Security or determine the Security’s value), effective on the second
      anniversary of the Closing Date, MSK shall be deemed to have sold the Security
      for zero dollars.

     

    7.17 Purchase
      Requirements.
      The
      Sellers, MSK and Buyer agree that Buyer is not obligated to purchase any shares
      of MSK Common Stock directly or indirectly owned and/or controlled by Keith
      S.
      McIntosh and/or any of his Affiliates, family members, friends or associates
      unless all (and not less than all) of the shares of MSK Common Stock directly
      or
      indirectly owned and/or controlled by such Persons are being offered and are
      sold pursuant to this Agreement. If Keith S. McIntosh and/or any of his
      Affiliates, family members, friends or associates become a party to this
      Agreement and tenders for sale such Person’s shares of MSK Common Stock pursuant
      to this Agreement, but one or more of Keith S. McIntosh and/or any of his
      Affiliates, family members, friends or associates do not both become a party
      to
      this Agreement and/or tender for sale such Person’s shares of MSK Common Stock
      pursuant to this Agreement, such Person shall, at the option of Buyer, be deemed
      not to be selling such Person’s shares of MSK Common Stock pursuant to this
      Agreement and return to Buyer any consideration such Person may have received
      pursuant to this Agreement and Buyer shall return such Person’s shares of MSK
      Common Stock to such Person.

     

    7.18 Environmental
      Action Items.
      The
      parties hereto agree that after the Closing Buyer and/or MSK may, at their
      discretion, undertake any and all actions reasonably necessary to bring MSK
      and
      the Facility in compliance with Applicable Laws in effect on the Closing Date,
      which shall include, but not be limited to carrying out the action items set
      forth on Schedule 10.2(a)(vi).
      The
      parties hereto further agree that the Sellers shall indemnify Buyer and/or
      MSK
      for all of the costs and expenses (including reasonable professional fees)
      incurred after the Closing to bring MSK and the Facility in compliance with
      Applicable Laws and that such indemnification shall first be funded from the
      Escrow Account. When the indemnification referred to in this Section is to
      be
      funded from the Escrow Account, Buyer and Sellers’ Representative shall issue
      the appropriate notice(s) to the Escrow Agent to release such amounts of money
      from the Escrow Account to Buyer or MSK, as the case may be.

     

    
      
        
        

      

      
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    ARTICLE
      VIII

    CONDITIONS
      PRECEDENT

     

    8.1 Conditions
      to Obligations of Each Party.
      The
      obligations of the parties to consummate the transactions contemplated hereby
      shall be subject to the fulfillment on or prior to the Closing Date of the
      following conditions:

     

    (a) Law
      Suits, etc.
      Consummation of the transactions contemplated hereby shall not have been
      restrained, enjoined or otherwise prohibited by any Applicable Law. No
      Governmental Authority shall have determined that any Applicable Law will make
      illegal the consummation of the transactions hereby, and no proceeding with
      respect to the application of any such Applicable Law to such effect, or seeking
      to restrain, enjoin or prohibit the transactions contemplated hereby, is
      pending.
      No
      Person shall have commenced Litigation or other legal type proceeding against
      MSK, any officer or director of MSK, or any Seller.

     

    (b) Approvals
      and Licenses, etc.
      Each
      party shall have obtained all Governmental Approval necessary for the
      consummation of the transactions contemplated hereby and by the Ancillary
      Documents to which it will be a party.

     

    8.2 Conditions
      to Obligations of Buyer.
      The
      obligations of Buyer to consummate the transactions contemplated hereby shall
      be
      subject to the fulfillment (or waiver by Buyer), on or prior to the Closing
      Date, of the following additional conditions.

     

    (a) Representations,
      Performance, etc.
      The
      representations and warranties contained in ARTICLE
      IV
      and
ARTICLE
      V
      shall be
      true and correct in all respects at and as of the date hereof and as of the
      Closing Date. The Sellers and MSK shall have duly performed and complied in
      all
      respects with all agreements and conditions required by this Agreement to be
      performed or complied with by the Sellers or MSK, respectively, prior to or
      at
      the Closing. Each of the Principal Stockholders and MSK shall have delivered
      to
      Buyer certificates, dated the Closing Date, duly signed by each of the Principal
      Stockholders and MSK to the foregoing effect.

     

    (b) Consents.
      The
      Principal Stockholders and MSK shall have obtained and shall have delivered
      to
      Buyer copies of (i) all Governmental Approvals required to be obtained by the
      Sellers or MSK in connection with the execution and delivery of this Agreement
      and the Ancillary Documents and the consummation of the transactions
      contemplated hereby or thereby; and (ii) all Consents necessary to be obtained
      (including Consents of ESOP participants, if required), and all notices required
      to be given, in order to consummate the Transaction pursuant to this Agreement
      and the consummation of the other transactions contemplated hereby and by the
      Ancillary Documents.

     

    
      
        
        

      

      
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    (c) Closing
      Deliveries.
      The
      items required to be delivered in accordance with Section
      3.3(a)
      shall be
      delivered at the Closing.

     

    (d) No
      Material Adverse Event.
      On or
      before Closing, there shall not have occurred any event having a Material
      Adverse Effect upon MSK; provided, however, for purposes of this subsection,
      in
      determining whether a Material Adverse Effect has occurred, there shall be
      excluded any effect on MSK the primary cause of which is
      any
      adverse event, affecting the industry in which MSK participates, the U.S.
      economy as a whole, or the U.S. financial or the capital markets in
      general.

     

    (e) Performance.
      MSK,
      the Principal Stockholders, the Sellers and the Sellers’ Representative shall
      have duly performed or complied in all material respects with all covenants,
      acts and obligations to be performed or complied with by them hereunder at
      or
      prior to the Closing.

     

    (f) Ancillary
      Documents.
      The
      party to each Ancillary Document shall have entered into such Ancillary
      Documents.

     

    (g) Alternative
      Structure.
      Buyer
      has not, prior to the Closing, elected to employ an alternate structure for
      the
      acquisition of MSK as permitted by Section
      7.12.

     

    (h) Satisfaction
      of Indebtedness and Termination of Rate Swaps.
      MSK has
      satisfied all of its Indebtedness and terminated all rate swapping and/or
      similar arrangements and all related contracts. 

     

    (i) Environmental.
      Buyer
      has received the final reports from the Phase I and Phase II Environmental
      Site
      Assessments to be performed by Conestoga-Rovers & Associates (including but
      not limited to ground water and indoor air quality sampling) relating to the
      Facilities that Buyer elected to undertake prior to the Closing and, based
      on
      these reports and any other information concerning the environmental condition
      of the Facilities reviewed by Buyer (the “Environmental
      Reports”),
      Buyer
      determines (in its sole discretion) that the Environmental Condition of the
      Facilities is acceptable to Buyer.

     

    (j) Minimum
      Acquisition.
      The
      minimum acquisition requirement of Section
      3.2
      have
      been satisfied and each Seller has tendered for sale all and not less than
      all
      of such Seller’s shares of MSK Common Stock to Buyer pursuant to the terms of
      this Agreement.

     

    (k) Purchases
      Requirements.
      The
      purchase requirements in Section
      7.17
      are
      satisfied.

     

    8.3 Conditions
      to Obligations of MSK.
      The
      obligation of MSK and Sellers to consummate the transactions contemplated hereby
      shall be subject to the fulfillment on or prior to the Closing Date, of the
      following additional conditions.

     

    
      
        
        

      

      
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    (a) Representations,
      Performance, etc.
      The
      representations and warranties of Buyer contained in ARTICLE
      VI
      shall be
      true and correct in all respects at and as of the date hereof and as of the
      Closing Date. Buyer shall have duly performed and complied in all respects
      with
      all agreements and conditions required by this Agreement to be performed or
      complied with by Buyer prior to or on the Closing Date. Buyer shall have
      delivered to the Principal Stockholders and MSK a certificate, dated the Closing
      Date, duly signed by an officer of Buyer to the foregoing effect.

     

    (b) Performance.
      Buyer
      shall have duly performed or complied in all material respects with all
      covenants, acts and obligations to be performed or complied with by it hereunder
      at or prior to the Closing.

     

    (c) Closing
      Deliveries.
      The
      items required to be delivered in accordance with Sections
      3.3(b)
      and
3.3(c)
      shall be
      delivered at the Closing.

     

    (d) Ancillary
      Documents.
      Buyer
      shall have entered into each of the Ancillary Documents to which it is a
      party.

     

    ARTICLE
      IX

    TERMINATION

     

    9.1 Termination.
      This
      Agreement may be terminated at any time prior to the Closing Date:

     

    (a) by
      the
      written agreement of MSK and Buyer;

     

    (b) by
      Buyer
      by written notice to the Principal Stockholders and MSK if any of the conditions
      set forth in Sections
      8.1
      or
8.2
      shall
      not have been, or if it becomes reasonably apparent to Buyer that any of such
      conditions will not be, fulfilled by 5:00 p.m. Eastern time, on the August
      29,
      2008 (the “Final
      Date”);

     

    (c) by
      MSK by
      written notice to Buyer if any of the conditions set forth in Sections
      8.1
      or
8.3
      shall
      not have been, or if it becomes reasonably apparent to MSK that any of such
      conditions will not be, fulfilled by 5:00 p.m. Eastern time, on the Final Date;
      or

     

    (d) by
      any
      party hereto in writing, if the applications for any required Governmental
      Approval have been finally denied, and the time period for appeals and requests
      for reconsideration has expired, or if any Governmental Authority of competent
      jurisdiction shall have issued a final nonappealable order enjoining or
      otherwise prohibiting the transactions contemplated by this Agreement or the
      Ancillary Documents.

     

    9.2 Effect
      of Termination.
      In the
      event of the termination of this Agreement pursuant to the provisions of
Section
      9.1,
      this
      Agreement shall become void and have no further effect, without any liability
      to
      any Person in respect hereof or of the transactions contemplated hereby on
      the
      part of any party hereto, or any of its directors, officers, employees, agents,
      consultants, representatives, advisers, stockholders or Affiliates, except
      as
      specified in Section
      11.1,
      and
      except for any liability resulting from any party’s willful breach of this
      Agreement. No termination of this Agreement shall adversely affect the parties’
respective rights and obligations under the Confidentiality
      Agreement.

     

    
      
        
        

      

      
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    ARTICLE
      X

    INDEMNIFICATION

     

    10.1 Survival.
      The
      representations, warranties and covenants of the parties shall survive the
      Closing until the third (3rd)
      anniversary of the Closing Date in the case of a Partial Acquisition and the
      second (2nd)
      anniversary of the Closing Date in the case of a Total Acquisition, except
      for
      (i) those representations and warranties set forth in Section
      4.1
      (Authorizations), Section
      4.2
      (Corporate Status), Section
      4.4
      (Capitalization), Section
      4.32
      (Brokers), Section
      5.1
      (Authorization), Section
      5.2
      (Execution, Binding, Delivery, etc.), Section
      5.3
      (Ownership), and Section
      5.5
      (Brokers), which shall survive in perpetuity, (ii) those representations and
      warranties set forth in Section
      4.8
      (Taxes),
Section
      4.12
      (Compliance with Laws), and Section
      4.19
      (Employee Benefit Plans and Related Matters), which shall survive until the
      expiration of the applicable statute of limitations, (iii) those representations
      and warranties set forth in Section
      4.17
      (Environmental), which shall survive until the tenth (10th)
      anniversary of the Closing Date, and (iv) the covenants set forth in this
      Agreement, which shall survive in perpetuity except as they may be limited
      by a
      specific period of time expressly set forth therein (as applicable “Survival
      Period”).
      Nothing contained in the foregoing sentence shall prevent recovery under this
      Section
      10.1
      after
      the expiration of the Survival Period so long as the party making a claim or
      seeking recovery complies with the provisions of clause (x) and (y) of the
      following sentence. No party shall have any claim or right of recovery for
      any
      breach of a representation, warranty, covenant or agreement unless (x) written
      notice is given in good faith by that party to the other party of the
      representation, warranty, covenant or agreement pursuant to which the claim
      is
      made or right of recovery is sought setting forth in reasonable detail the
      basis
      for the purported breach of the representation, warranty, covenant or agreement,
      the amount or nature of the claim being made, if then ascertainable, and the
      general basis therefor and (y) such notice is given prior to the expiration
      of
      the Survival Period.
      The
      representations and warranties in this Agreement and the schedules attached
      hereto or in any writing delivered in connection herewith shall in no event
      be
      affected by any investigation, inquiry or examination made for or on behalf
      of
      any party seeking indemnification therefor or be affected by the knowledge
      of
      any officer, director, stockholder, employee, partner or agent of any party
      seeking indemnification hereunder or by the acceptance of any certificate or
      opinion from any third party. In addition, in no event will any disclosure
      of
      any event or circumstance made after the Closing serve to amend any
      representation or warranty for any purpose of this Agreement.

     

    10.2 Indemnification
      by Sellers.

     

    (a) Indemnification
      Items.
      Subject
      to Section
      10.2(b),
      the
      ESOP severally, and the other Sellers (excluding the ESOP) jointly and
      severally, from and after the Closing agree to indemnify Buyer and its
      Affiliates and their respective officers, directors, shareholders, employees,
      attorneys, accountants and agents (the “Buyer
      Indemnitees”),
      and
      hold them harmless from and against, any and all damages, losses, liabilities,
      costs and expenses (including, without limitation, reasonable attorneys’ fees in
      connection with any action, suit or proceeding and cost of investigation)
      (collectively, “Buyer
      Damages”)
      incurred or suffered by Buyer Indemnitees as a result of, attributable to or
      arising out of:

     

    
      
        
        

      

      
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              (i)

            	
              any
                breach or inaccuracy of any representation, warranty, covenant or
                agreement of any Seller, Principal Stockholder or MSK contained in
                this
                Agreement, or any of the Ancillary Documents, delivered by any Seller,
                Principal Stockholders or MSK pursuant to this
                Agreement;

            

    

     

    
      	 	
              (ii)

            	
              any
                indemnification by Buyer or MSK to or for any officer, director or
                employee of MSK relating to or arising out of actions, omissions
                or other
                indemnifiable events occurring on or before the Closing
                Date;

            

    

     

    
      	 	
              (iii)

            	
              any
                indemnification by Buyer or MSK to or for any trustee of the ESOP
                or agent
                thereof relating to or arising out of any actions, omissions or other
                indemnifiable events occurring on or before the Closing
                Date;

            

    

     

    
      	 	
              (iv)

            	
              any
                Taxes (A) of MSK attributable to any Pre-Closing Period, (B) under
                Treasury Regulation Section 1.1502-6 (or any similar provision under
                state, local or foreign law) attributable to any Person due to MSK’s prior
                affiliation or relationship with such Person for any Tax period and/or
                (C)
                of any of the Sellers; 

            

    

     

    
      	 	
              (v)

            	
              any
                ERISA or the Plans attributable to events occurring on or before
                the
                Closing Date (including, for the avoidance of doubt, the costs and
                expenses of bringing the Plans in compliance with Applicable Laws);
                

            

    

     

    
      	 	
              (vi)

            	
              any
                violation of the Environmental Laws arising out of any event that
                occurred
                on or before the Closing Date and related to MSK or any of its current
                or
                former real or personal property,
                which shall include, but not be limited to any and all costs and
                expenses
                (including reasonable fees and expenses of professionals) associated
                with
                bringing MSK in compliance with Applicable Laws, which shall include,
                but
                not be limited to the costs and expenses associated with the action
                items
                set forth on Schedule
                10.2(a)(vi)
                (for avoidance of doubt, Buyer or MSK shall be entitled to fund,
                and
                Sellers shall pay, the costs and expenses associated with the action
                items
                on Schedule
                10.2(a)(vi)
                from the Escrow Account and Buyer and Sellers’ Representative shall issue
                the appropriate notice(s) to the Escrow Agent to release such amounts
                of
                money from the Escrow Account to Buyer);
                and/or

            

    

     

    
      	 	
              (vii)

            	
              the
                Security Value minus the sale price of the Security (or the deemed
                sale
                price of the Security as provided in Section
                7.16)
                plus all of the costs and expenses associated with selling the Security
                (for avoidance of doubt, indemnification is not required if the difference
                is a negative number) up to
                $560,000.

            

    

     

    
      
        
        

      

      
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    (b) Limitations.
      The
      indemnification provided by Section
      10.2(a)
      shall be
      subject to the following limitations:

     

    
      	 	
              (i)

            	
              the
                Sellers shall have no liability under this Section
                10.2
                arising out of or as a result of a breach of any representation or
                warranty for any Buyer Damages incurred or suffered by Buyer Indemnitees
                unless and until Buyer Damages exceed $100,000 in the aggregate (the
                “Buyer
                Threshold”)
                in which case the Sellers shall be liable for all Buyer Damages on
                a
                dollar for dollar basis beginning with the first dollar of Buyer
                Damages
                (e.g., if there are $100,001 of Buyer Damages, Buyer shall be entitled
                to
                $100,001 dollars of indemnification), subject to Section
                10.2(b)(ii);
                provided,
                however,
                that Buyer Threshold shall not apply to any claim for indemnification
                or
                reimbursement based upon the following (each a “Carve
                Out Claim”
                and collectively, the “Carve
                Out Claims”):
                (A) a representation and warranty contained in Section
                4.1
                (Authorizations), Section
                4.2
                (Corporate Status), Section
                4.4
                (Capitalization), Section
                4.8
                (Taxes), Section
                4.17
                (Environmental), Section
                4.19
                (Employee Benefit Plans and Related Matters), Section
                5.1
                (Authorization), Section
                5.2
                (Execution, Binding, Delivery, etc.), and/or Section
                5.3
                (Ownership), and (B) any claim for indemnification or reimbursement
                based
                upon fraud, intentional misrepresentations, or Section
                10.2(a)(ii),
                (iii),
                (iv),
                (v),
                (vi)
                and/or (vii);

            

    

     

    
      	 	
              (ii)

            	
              notwithstanding
                anything to the contrary in this Agreement, the Sellers’ aggregate
                liability to Buyer Indemnitees under this Agreement shall not in
                any event
                exceed the Escrow Amount (the “Indemnification
                Cap”);
                provided,
                however,
                except in the case of the ESOP, the Indemnification Cap shall not
                apply to
                any claim for indemnification or reimbursement that constitutes a
                Carve
                Out Claim;
                provided further,
                however,
                a
                Seller’s liability shall not exceed such Seller’s share of the purchase
                price contemplated by this Agreement. For avoidance of doubt, the
                ESOP’s
                indemnification obligations under this Section
                10.2
                shall not exceed its share of the Escrow
                Amount;

            

    

     

    
      	 	
              (iii)

            	
              the
                amount of any Buyer Damages shall be reduced by any amount received
                by a
                Buyer Indemnitee with respect thereto under any insurance coverage
                or from
                any other party alleged to be responsible therefor. If a Buyer Indemnitee
                receives an amount under insurance coverage or a third party payment
                with
                respect to Buyer Damages at any time subsequent to any indemnification
                provided by the Sellers pursuant to this Section
                10.2,
                then such Buyer Indemnitee shall promptly pay to the Sellers’
                Representative the amount of such insurance or third party payment
                up to
                such amount received by such Buyer Indemnitee and the Sellers’
                Representative shall make the appropriate reimbursement to the appropriate
                Sellers; 

            

    

     

    
      
        
        

      

      
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              (iv)

            	
              it
                is the explicit understanding and intention of each party hereto
                that none
                of MSK, the Sellers, or the Principal Stockholders is making any
                representation or warranty whatsoever to Buyer, express or implied,
                other
                than those representations and warranties specifically set forth
                in this
                Agreement and the Ancillary Documents, and MSK, the Sellers and the
                Principal Stockholders hereby disclaim any such representation or
                warranty, whether by or on behalf of MSK or any of its officers,
                directors, employees, stockholders or agents or representatives or
                any
                other Person;

            

    

     

    
      	 	
              (v)

            	
              notwithstanding
                anything in this Section to the contrary, no Seller shall be liable
                for a
                breach of the representations and warranties made pursuant to Section
                4.31(g),
                provided, however, if such breach constitutes a breach of a different
                representation and warranty for which Sellers are required to provide
                indemnification, this paragraph shall not interfere with Sellers
                obligation to indemnify under such different representation and/or
                warranty; 

            

    

     

    
      	 	
              (vi)

            	
              notwithstanding
                anything in this Section to the contrary, the ESOP shall not be liable
                for
                any other Seller’s (but it shall be liable for its own) breach of the
                representations and warranties made pursuant to ARTICLE
                V;
                and

            

    

     

    
      	 	
              (vii)

            	
              notwithstanding
                anything in this Section to the contrary, the Buyer Damages attributable
                to any claim made for indemnification for a breach of a representation
                or
                warranty in Section
                4.17
                (Environmental) and/or pursuant to Section
                10.2(a)(vi)
                after the fifth (5th)
                anniversary of the Closing Date shall be reduced by fifty percent
                (50%).

            

    

     

    10.3 Indemnification
      by Buyer.
      Buyer
      from and after the Closing agrees to indemnify the Sellers and their respective
      officers, directors, stockholders, members, managers, employees, Affiliates,
      attorneys, accountants and agents (the “Seller
      Indemnitees”)
      and
      hold them harmless from and against any and all damages, losses, liabilities,
      costs and expenses (including, without limitation, reasonable attorneys’ fees
      and expenses in connection with any action, suit or proceeding) (collectively,
      “Seller
      Damages”)
      incurred or suffered by Seller Indemnitees as a result of, attributable to
      or
      arising out of any breach of any representation, warranty, covenant or agreement
      of Buyer contained in this Agreement or the Ancillary Documents. Notwithstanding
      the foregoing, Buyer shall have no liability under this Section
      10.3
      arising
      out of or as a result of a breach of any covenant, representation, warranty
      or
      agreement for any Seller Damages suffered by Seller Indemnitees unless and
      until
      Seller Damages exceed $100,000 (the “Seller
      Threshold”),
      in
      which case Buyer shall be liable for all Seller Damages on a dollar for dollar
      basis beginning with the first dollar of Seller Damages (e.g., if there are
      $100,001 of Seller Damages, Buyer shall be entitled to $100,001 dollars of
      indemnification); provided,
      however,
      Buyer’s
      aggregate liability to Seller Indemnitees under this Agreement shall not in
      any
      event exceed the Escrow Amount.
      It is
      the explicit understanding and intention of each party hereto that Buyer is
      not
      making any representation or warranty whatsoever to MSK, the Sellers, the
      Principal Stockholders or the Shareholders, express or implied, other than
      those
      representations and warranties specifically set forth in this Agreement and
      the
      Ancillary Documents, and Buyer hereby disclaims any such representation or
      warranty, whether by or on behalf of Buyer or any of its officers, directors,
      employees, stockholders or agents or representatives or any other
      Person.

     

    
      
        
        

      

      
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    10.4 Purchase
      Price Adjustment.
      The
      parties agree to treat any indemnification payments made pursuant to this
ARTICLE
      X
      as
      adjustments to the purchase price for income tax purposes, unless they are
      required to treat such payments otherwise pursuant to Applicable
      Law.

     

    10.5 Notification
      of Claims.
      Upon
      any party becoming aware of a fact, condition or event that constitutes a basis
      for a claim for Buyer Damages or Seller Damages, as the case may be, against
      any
      other party (the “Indemnifying
      Party”)
      under
Section
      10.2,
      or
10.3,
      such
      party will with reasonable promptness and specificity notify the parties to
      this
      Agreement in writing of such fact, condition or event. The failure to notify
      the
      Indemnifying Party or Parties under this Section
      10.5
      shall
      not relieve any Indemnifying Party of any liability that it may have to the
      party to be indemnified (the “Indemnified
      Party”)
      except
      to the extent that such failure to notify was by the Indemnified Party and
      shall
      have resulted in a waiver of any lawful and valid affirmative defense to any
      third-party claim or otherwise materially prejudices the Indemnifying Party
      or
      Parties in connection with the administration or defense of such third-party
      claim.

     

    10.6 Third
      Party Claims.
      

     

    (a) Indemnifying
      Party’s Right to Control Administration and Defense. Upon
      receipt by the Indemnifying Party or Parties of any notice of claim for
      indemnification hereunder arising from a third party claim, the Indemnifying
      Party or Parties shall be entitled to assume, upon written notice (that includes
      an acknowledgement that the Indemnifying Party has an indemnification obligation
      with respect to such claim under this Agreement) to the Indemnified Parties
      the
      administration and defense of such third party claim, unless (i) the
      Indemnifying Party is also a party to such proceeding and the Indemnified Party
      determines in good faith that joint representation would be inappropriate,
      (ii)
      the Indemnifying Party fails to provide reasonable assurance to the Indemnified
      Party of its financial capacity to defend such proceeding, (iii) the claim
      will
      likely have a Material Adverse Effect on the business or financial condition
      of
      the Indemnified Party after the Closing Date (including an effect on the Tax
      liabilities, earnings or ongoing business relationships of the Indemnified
      Party), (iv) the third party is seeking an
      injunction or other equitable relief that might materially and adversely affect
      any Indemnified Party, (v) the claim involves any criminal action or any
      claim that could reasonably be expected to result in a criminal action against
      any Indemnified Party, (vi) the claim involves any material customer or
      supplier of MSK, (vii)  the Indemnifying Party fails to fully acknowledge
      in writing its indemnification obligations to the Indemnified Party or contests,
      in whole or in part, its indemnification obligations therefor, or (viii) it
      is
      reasonably expected that the indemnification payments to be made by the
      Indemnifying Party in respect of such third party claim will be (A) less
      than the Buyer Damages or Seller Damages (as applicable) to be paid by the
      Indemnified Party as a result of such third party claim due to the inadequacy
      of
      amounts remaining in the Escrow Fund and not otherwise subject to
      indemnification claims or (B) less than the amount of the Buyer Threshold
      or Seller Threshold, as applicable, less Buyer Damages or Seller Damages
      previously claimed against the Buyer Threshold or Seller Threshold, as
      applicable. In any third party claim where an Indemnified Party is not
      controlling the defense and which involves any customer or supplier of the
      Indemnified Party or its Affiliates, the Indemnified Party shall have the right
      to participate in direct discussions with the other parties to such third party
      claim, including discussions concerning the claim and potential resolution
      thereof, but the Indemnified Party shall not have the authority to settle such
      claim over the objection of the Indemnifying Party unless the Indemnified Party
      releases the Indemnifying Party from any indemnification obligations therefore.
      If the Indemnifying Party is in control of the administration and defense of
      a
      third party claim, it must do so with
      counsel that is reasonably satisfactory to the Indemnified Party and it shall
      proceed with the administration and defense of such third party claim diligently
      and in good faith. 

     

    
      
        
        

      

      
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    (b) Indemnified
      Party Control of Administration and Defense. If
      the
      Indemnifying Party does not assume the administration and defense of such third
      party claim, then the Indemnified Party shall assume the administration and
      defense of any such third party claim with counsel that is reasonably
      satisfactory to the Indemnifying Party. In such event, the Indemnified Party
      shall proceed with the administration and defense of such third party claim(s)
      diligently and in good faith, and the Indemnifying Party shall be fully
      consulted by the Indemnified Party or Parties and shall have the right to
      participate, at its own expense, in the investigation, administration and
      defense of such third party claim.

     

    (c) Settlement.
      Any
      party hereto receiving notice of any proposed settlement of any such third
      party
      claim shall promptly provide a copy of such notice to the other parties hereto.
      The party assuming the administration and defense (the “Defending
      Party”)
      shall
      not have the right to settle or compromise any third party claim for which
      indemnification is being sought hereunder without the consent of the other
      party
      (the “Defended
      Party”)
      (which
      consent shall not be unreasonably withheld or delayed) unless as a result of
      such settlement or compromise the Defended Party is fully discharged and
      released from any and all liability with respect to such third party claim.
      The
      Defended Party shall make available to the Defending Party and its counsel
      all
      books, records, documents and other information relating to any third party
      claim for which indemnification is sought hereunder, and the parties to this
      Agreement shall render to each other reasonable assistance in the defense of
      any
      such third party claim. Each party’s counsel in connection with the transactions
      contemplated by this Agreement shall be deemed to be reasonably satisfactory
      to
      the other party for purposes of this Agreement.

     

    10.7 No
      Waiver by Knowledge.
      An
      Indemnified Party’s right to indemnification under this ARTICLE
      X
      based on
      the breach of any representation, warranty or covenant (or based on the failure
      of any representation or warranty to be true as of the date of this Agreement
      or
      as of the Closing) shall not be diminished or otherwise affected in any way
      as a
      result of the existence of such indemnified person’s knowledge of such breach or
      untruth as of the date of this Agreement or as of the Closing Date, regardless
      of whether such knowledge exists as a result of the Indemnified Party’s
      investigation, as a result of disclosure by the Indemnifying Party (or any
      other
      Person) or otherwise.

     

    
      
        
        

      

      
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    10.8 Exclusive
      Remedy.
      Except
      with respect to a claim based upon fraud or intentional misrepresentation,
      after
      the Closing, the parties’ sole and exclusive recourse against each other for any
      Seller Damages or Buyer Damages, as the case may be, arising out of or relating
      to this Agreement (including any claims or causes of action arising from or
      under any statute or the common law) shall be expressly limited to this
ARTICLE
      X.

     

    ARTICLE
      XI

    MISCELLANEOUS

     

    11.1 Expenses.
      Except
      as otherwise specifically provided herein, the Sellers and MSK, on one hand,
      and
      Buyer, on the other hand, shall each pay its own expenses including, but not
      limited to, attorneys’ accountants’ and financial advisors’ incurred in
      connection with negotiating and preparing this Agreement and the Ancillary
      Documents and closing the transactions contemplated hereby and thereby. Except
      as provided in the previous sentence, the Sellers, MSK and Buyer shall each
      pay
      its own expense, including,
      but not limited to, attorneys’ accountants’ and financial advisors’ incurred in
      connection with the transactions contemplated by this Agreement and the
      Ancillary Documents.

     

    11.2 Severability.
      If any
      provision of this Agreement is inoperative or unenforceable for any reason,
      such
      circumstances shall not have the effect of rendering the provision in question
      inoperative or unenforceable in any other case or circumstance, or of rendering
      any other provision or provisions herein contained invalid, inoperative, or
      unenforceable to any extent whatsoever. The invalidity of any one or more
      phrases, sentences, clauses, Sections or subsections of this Agreement shall
      not
      affect the remaining portions of this Agreement.

     

    11.3 Notices.
      All
      notices and other communications made in connection with this Agreement shall
      be
      in writing and shall be deemed to have been duly given if (a) mailed by
      first-class, registered or certified mail, return receipt requested, postage
      prepaid, (b) transmitted by hand delivery, (c) sent by next-day or overnight
      mail by a nationally recognized overnight courier, delivery charges prepaid,
      or
      (d) sent by telecopy, in each case addressed as follows:

     

    if
      to
      Buyer or MSK (after the Closing),

    

    Anaren,
      Inc.

    6635 Kirkville
      Road

    P.O.
      Box
      178

    E.
      Syracuse New York 13057

    Attention:
      General Counsel

    Telecopy:
      (315) 432-9121 

    

    with
      copies to:

     

    Bond,
      Schoeneck & King, PLLC

    One
      Lincoln Center

    Syracuse,
      New York 13202

    Attention:
      Courtney Alan Wellar, Esq.

    Telecopy:
      (315) 218-8100

    

    
      
        
        

      

      
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    if
      to the
      Sellers or MSK (prior to the Closing), then to Sellers’
Representative:

    

    Sirchia
      & Cuomo, LLP

    6007
      Fair
      Lakes Road

    Suite
      200

    East
      Syracuse, New York 13057

    Attention:
      Klaus O. Baasch, CPA

    Telecopy:
      (315) 471-2173

    

    with
      copies to:

    

    Hiscock
      & Barclay, LLP

    One
      Park
      Place

    300
      South
      State Street

    Syracuse,
      New York 13202

    Attention:
      Christopher J. Bonner Esq.

    Telecopy:
      (315) 425-8568 

    

    or,
      in
      each case, at such other address as may be specified in writing to the other
      party hereto in accordance with this Section. Notices sent by mail shall be
      deemed given three (3) business days after being deposited in the mail; notice
      hand delivered shall be deemed given the day of delivery; notices sent by
      next-day or overnight delivery shall be deemed given the next business day;
      and
      notices sent by telecopy shall be deemed given upon confirmation of
      transmission.

     

    11.4 Entire
      Agreement.
      This
      Agreement (including the Exhibits and Schedules hereto) and the Ancillary
      Documents (when executed and delivered) constitute the entire agreement and
      supersede all prior agreements and understandings, both written and oral,
      between or among the parties with respect to the subject matter hereof and
      thereof.

     

    11.5 Counterparts;
      Headings.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original and all of which shall together constitute one and the same instrument.
      The headings contained in this Agreement are for purposes of convenience only
      and shall not affect the meaning or interpretation of this
      Agreement.

     

    11.6 Governing
      Law, Etc. 

     

    (a) Governing
      Law, Venue.
      This
      Agreement shall be governed in all respects, including as to validity,
      interpretation and effect, by the internal laws of the State of New York,
      without giving effect to the conflict of laws rules thereof. Each party hereby
      irrevocably submits to the non-exclusive jurisdiction of the courts of the
      State
      of New York in and for the County of Onondaga and of the United States of
      America for the Northern District of New York (in each case sitting in the
      County of Onondaga) in respect of the interpretation and enforcement of the
      provisions of this Agreement and of the documents referred to in this Agreement,
      and in respect of the transactions contemplated hereby and thereby. Each party
      hereby waives and agrees not to assert, as a defense in any action, suit or
      proceeding for the interpretation and enforcement hereof, or any such document
      or in respect of any such transaction, that such action, suit or proceeding
      may
      not be brought or is not maintainable in such courts or that the venue thereof
      may not be appropriate or that this Agreement or any such document may not
      be
      enforced in or by such courts. Each party hereby consents to and grants any
      such
      court jurisdiction over the person of such parties and over the subject matter
      of any such dispute and agrees that the mailing of process or other papers
      in
      connection with any such action or proceeding in the manner provided in
Section
      11.3
      or in
      such other manner as may be permitted by law, shall be valid and sufficient
      service thereof.

     

    
      
        
        

      

      
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    (b) Waiver
      of Trial by Jury.
      EACH
      PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
      AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
      EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
      MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR INDIRECTLY
      ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR
      VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
      EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
      ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
      OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
      WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
      OF
      THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv)
      EACH
      SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
      THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
      11.6(b).

     

    11.7 Binding
      Effect; No Third Party Beneficiaries.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and permitted assigns. Except as provided in
      Sections
      10.2
      and
10.3
      with
      respect to indemnification of Indemnified Parties hereunder, nothing in this
      Agreement shall confer any rights upon any person or entity other than the
      parties hereto and their respective heirs, successors and permitted assigns.
      None of the parties hereto assumes any liability to any third party because
      of
      any reliance on any of their respective representations, warranties, and
      agreements contained in this Agreement.

     

    11.8 Schedules.
      An
      exception and/or disclosure (a “Disclosure”)
      to a
      representation or warranty disclosed on one schedule shall not constitute a
      Disclosure to any other representation and/or warranties made in this Agreement,
      unless, however, it would be obvious to a reasonable Person with no knowledge
      of
      MSK that such disclosure also constitutes a disclosure to another representation
      or warranty made in this Agreement.

     

    11.9 Assignment.
      No
      party to this Agreement may assign any of its rights under this Agreement
      without the prior written consent of the other parties hereto. Subject to the
      preceding sentence, this Agreement will apply to, be binding in all respects
      upon, and inure to the benefit of the successors, permitted assigns, heirs,
      executors, administrators and legal representatives of the parties hereto.
      Notwithstanding anything to the contrary in this Section
      11.8,
      upon
      written notice to the Sellers’ Representative, Buyer shall be permitted to
      assign this Agreement and the rights and obligations under it to an Affiliate
      of
      Buyer; provided that, in the event of any such assignment, Buyer shall remain
      liable in full for the performance of its obligations hereunder.

     

    
      
        
        

      

      
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    11.10 Amendment;
      Waivers, etc.
      No
      amendment, modification or discharge of this Agreement, and no waiver hereunder,
      shall be valid or binding unless set forth in writing and duly executed by
      the
      party against whom enforcement of the amendment, modification, discharge or
      waiver is sought. Any such waiver shall constitute a waiver only with respect
      to
      the specific matter described in such writing and shall in no way impair the
      rights of the party granting such waiver in any other respect or at any other
      time. Neither the waiver by any of the parties hereto of a breach of or a
      default under any of the provisions of this Agreement, nor the failure by any
      of
      the parties, on one or more occasions, to enforce any of the provisions of
      this
      Agreement or to exercise any right or privilege hereunder, shall be construed
      as
      a waiver of any other breach or default of a similar nature, or as a waiver
      of
      any of such provisions, rights or privileges hereunder. The rights and remedies
      of any party based upon, arising out of or otherwise in respect of any
      inaccuracy or breach of any representation, warranty, covenant or agreement
      or
      failure to fulfill any condition shall in no way be limited by the fact that
      the
      act, omission, occurrence or other state of facts upon which any claim of any
      such inaccuracy or breach is based may also be the subject matter of any other
      representation, warranty, covenant or agreement as to which there is no
      inaccuracy or breach.

     

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

     

    
      
        
        

      

      
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    Signature
      Page for Entities & Sellers’ Representative

    

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

     

    
      	ANAREN,
              INC.	 	M.
              S.
              KENNEDY CORP. EMPLOYEE STOCK OWNERSHIP PLAN
	 	 	 	 	 
	By:
              	/s/
              Lawrence A.
              Sala	 	By:	s/s
              Greg Overend
	 	
              Lawrence
                A. Sala, 

              President
                & CEO

            	 	Name:
	Greg
              Overend

    

     

    
      
        	M.
                S.
                KENNEDY CORP.	 	M.
                S.
                KENNEDY CORP. EMPLOYEE STOCK OWNERSHIP PLAN
	 	 	 	 	 
	By:
                	s/s
                Richard
                Roehm	 	By:	s/s
                Richard Roehm
	Name:	
                Richard
                  Roehm

              	 	Name:
	Richard
                Roehm
	Title:	General
                Manager	 	 	 
	 	 	 	By:	s/s
                Christopher Heiselman
	 	 	 	Name:
                	Christopher
                Heiselman

      

       

      
        
          
            	ESTATE
                    OF
                    JANNIE ROEHM	 	 
	 	 	 	 	 
	By:
                    	/s/
                    Richard
                    Roehm	 	By:	 
	 	
                    Richard
                      Roehm, Administrator

                  	 	Name:
	 
	 	 	 	 	 
	SELLERS’
REPRESENTATIVE:	 	 	 
	 	 	 	 	 
	s/s
                    Klaus O. Baasch	 	 	 
	
                    Klaus
                      O. Baasch, CPA

                  	 	 	 

          

           

          
            
              
              

            

            
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    Signature
      Page for Individuals

    

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

    

    
      	
              s/s
                Becky Burrows

              Becky
                Burrows

               

              s/s
                James D. Burrows

              James
                D. Burrows

               

              s/s
                Timothy J. Burrows

              Timothy
                J. Burrows

               

              s/s
                Timothy A. Crysler

              Timothy
                A. Crysler

               

              s/s
                Darlene Baum Fischer

              Darlene
                Baum Fischer

               

              s/s
                Denise Grochan

              Denise
                Grochan

               

              s/s
                Donna Heagle

              Donna
                Heagle

               

              s/s
                Christopher Heiselman

              Christopher
                Heiselman

               

              s/s
                David House

              David
                House

               

              s/s
                Gary Lundy

              Gary
                Lundy

               

              s/s
                Susan M. Lundy

              Susan
                M. Lundy

               

              s/s
                Andrea L. Martin

              Andrea
                L. Martin

               

              s/s
                Archer N. Martin II

              Archer
                N. Martin II

               

              s/s
                Archer N. Martin III

              Archer
                N. Martin III

            	
              s/s
                Ellen Martin

              Ellen
                Martin

               

              s/s
                John L. Martin

              John
                L. Martin

               

              s/s
                Stuard C. Martin

              Stuart
                C. Martin

               

              s/s
                David A. McIntosh

              David
                A. McIntosh

               

              s/s
                Susan H. McIntosh

              Susan
                H. McIntosh

               

              s/s
                James R. McIntosh

              James
                R. McIntosh

               

              s/s
                Judy McIntosh

              Judy
                McIntosh

               

              s/s
                Kathlene T. McIntosh

              Kathlene
                T. McIntosh

               

              s/s
                Keith M. McIntosh

              Keith
                M. McIntosh

               

              s/s
                Jane H. McIntosh

              Jane
                H. McIntosh

               

              s/s
                Keith S. McIntosh

              Keith
                S. McIntosh

               

              s/s
                Mary G. McIntosh

              Mary
                G. McIntosh

               

              s/s
                Peter G. McIntosh

              Peter
                G. McIntosh

               

              s/s
                Lois A. Melvin

              Lois
                A. Melvin

            

    

     

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

        Execution
          Version

      

    

     

    Signature
      Page for Individuals (cont.)

    

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

    

    
      	 	
              s/s
                Daniel E. Miller

              Daniel
                E. Miller

               

              s/s
                Terry Miller

              Terry
                Miller

               

              s/s
                Greg Overend

              Greg
                Overend

               

              s/s
                Richard Roehm

              Richard
                Roehm

               

              s/s
                Suzanne Seeley

              Suzanne
                Seeley

               

              s/s
                Frederick Smith

              Frederick
                Smith

               

              s/s
                Karen W. Story

              Karen
                W. Story

               

              s/s
                Thomas G. Story

              Thomas
                G. Story

               

              s/s
                Sharon Stoutenger

              Sharon
                Stoutenger

               

              s/s
                Colleen Taylor

              Colleen
                Taylor

               

              s/s
                Remalda Tuttle

              Remalda
                Tuttle

               

              s/s
                Daniel L. Williams

              Daniel
                L. Williams

            

    

     

    
      
        
        

      

      
        72Unassociated Document

    LOAN
      AGREEMENT

    

    THIS
      AGREEMENT (as
      the
      same may be amended, restated or otherwise modified, the “Agreement”) is made
      this 31st day of July, 2008, between ANAREN,
      INC.,
      a New
      York with offices at 6635 Kirkville Road, East Syracuse, NY 13057 (“Borrower”)
      and KEYBANK
      NATIONAL ASSOCIATION,
      a
      national banking association, with offices at 201 South Warren Street, Syracuse,
      NY 13202, and its successors and assigns (“Lender”).

    

    In
      consideration of the covenants and agreements contained herein, the Borrower
      and
      the Lender hereby mutually agree as follows:

    

    1.
      DEFINITIONS

    

    1.1.
       General.
      Any
      accounting term used but not specifically defined herein shall be construed
      in
      accordance with GAAP (as defined below). The definition of each agreement,
      document, and instrument set forth in Section 1.2 hereof shall be deemed to
      mean
      and include such agreement, document, or instrument as amended, restated, or
      modified from time to time.

    

    1.2.
       Defined
      Terms.
      As used
      in this Agreement:

    

    “Affiliate”
      of any specified entity means any other entity directly or indirectly
      controlling or controlled by or under direct or indirect common control with
      such specified entity and “control”, when used with respect to any specified
      entity, means the power to direct the management and policies of such entity,
      directly or indirectly, whether through the ownership of voting securities,
      by
      contract or otherwise; and the terms “controlling” and “controlled” have
      meanings correlative to the foregoing.

    

    “Business
      Day” means a day of the year on which banks are not required or authorized to
      close in Cleveland, Ohio.

    

    “Code”
      shall mean the Internal Revenue Code of 1986, as amended, together with the
      rules and regulations promulgated thereunder.

    

    “Collateral”
      means the collateral in which Borrower has given the Lender a security interest
      pursuant to the N/A,
      and any
      other instrument given to Lender to secure the Indebtedness and/or this
      Agreement.

    

    “Controlled
      Group” shall mean Borrower and each Person required to be aggregated with
      Borrower under Code Sections 414(b), (c), (m) or (o).

    

    “Environmental
      Law” means any federal, state or local statute, law, ordinance, code, rule,
      regulation, order or decree regulating, relating to, or imposing liability
      upon
      a Person in connection with the use, release or disposal of any hazardous,
      toxic
      or dangerous substance, waste or material.

    

    “ERISA”
      shall mean the Employee Retirement Income Security Act of 1974, as amended
      from
      time to time, and the regulations promulgated pursuant thereto.

    

    “ERISA
      Event” shall mean (a) the existence of a condition or event with respect to an
      ERISA Plan that presents a risk of the imposition of an excise tax or any other
      liability on the Borrower or of the imposition of a Lien on the assets of
      Borrower; (b) the engagement by a Controlled Group member in a non-exempt
“prohibited transaction” (as defined under ERISA Section 406 or Code Section
      4975) or a breach of a fiduciary duty under ERISA that could result in liability
      to Borrower; (c) the application by a Controlled Group member for a waiver
      from the minimum funding requirements of Code Section 412 or ERISA Section
      302
      or a Controlled Group member is required to provide security under Code Section
      401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with
      respect to any Pension Plan as to which notice is required to be provided to
      the
      PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer
      Plan in a “complete withdrawal” or a “partial withdrawal” (as such terms are
      defined in ERISA Sections 4203 and 4205, respectively); (f) the involvement
      of, or occurrence or existence of any event or condition that makes likely
      the
      involvement of, a Multiemployer Plan in any reorganization under ERISA Section
      4241; (g) the failure of an ERISA Plan (and any related trust) that is
      intended to be qualified under Code Sections 401 and 501 to be so qualified
      or
      any “cash or deferred arrangement” under any such ERISA Plan to meet the
      requirements of Code Section 401(k); (h) the taking by the PBGC of any steps
      to
      terminate a Pension Plan or appoint a trustee to administer a Pension Plan,
      or
      the taking by a Controlled Group member of any steps to terminate a Pension
      Plan; (i) the failure by a Controlled Group member or an ERISA Plan to
      satisfy any requirements of law applicable to an ERISA Plan; (j) the
      commencement, existence or threatening of the incurrence by a Controlled Group
      member of a claim, action, suit, audit or investigation with respect to an
      ERISA
      Plan, other than a routine claim for benefits; or (k) any occurrence by or
      any expectation of the incurrence by a Controlled Group member of any liability
      for post-retirement benefits under any Welfare Plan, other than as required
      by
      ERISA Section 601, et. seq.
      or Code
      Section 4980B.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    “ERISA
      Plan” shall mean an “employee benefit plan” (within the meaning of ERISA Section
      3(3)) that a Controlled Group member at any time sponsors, maintains,
      contributes to, has liability with respect to or has an obligation to contribute
      to such plan.

    

    “ERISA
      Affiliate” means each Person (whether or not incorporated) which together with
      Borrower would be treated as a single employer under ERISA.

    

    “Event
      of
      Default” means any one or more of the occurrences described in Section 6
      hereof.

    

    “GAAP”
      means generally accepted accounting principles as in effect, which shall include
      the official interpretations thereof by the Financial Accounting Standards
      Board, consistently applied.

    

    “Guarantor”
      means each Person that now or hereafter guarantees any portion of the Borrower’s
      Indebtedness payable to the Lender, and such Person’s heirs, administrators,
      successors and assigns, including, without limitation, Anaren Microwave, Inc.,
      Anaren Ceramics, Inc., and Anaren Properties, LLC.

    

    “Guaranty”
      means the guaranty agreement executed by Guarantor and delivered to
      Lender.

    

    “Indebtedness”
      shall mean, for any Person (excluding in all cases trade payables payable in
      the
      ordinary course of business by such Person), (a) all obligations to repay
      borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all
      obligations for the deferred purchase price of capital assets, (c) all
      obligations under conditional sales or other title retention agreements, (d)
      all
      obligations (contingent or otherwise) under any letter of credit, banker’s
      acceptance, currency swap agreement, or Interest Rate Agreement, (e) all
      synthetic leases, (f) all lease obligations that have been or should be
      capitalized on the books of such Person in accordance with GAAP, (g) all
      obligations of such Person with respect to asset securitization financing
      programs to the extent that there is recourse against such Person or such Person
      is liable (contingent or otherwise) under any such program, (h) all obligations
      to advance funds to, or to purchase assets, property or services from, any
      other
      Person in order to maintain the financial condition of such Person, and (i)
      any
      other transaction (including forward sale or purchase agreements) having the
      commercial effect of a borrowing of money entered into by such Person to finance
      its operations or capital requirements.

    

    “Interest
      Rate Agreement” means any agreement for a derivative or hedging product,
      including, without limitation, interest rate or equity swaps, futures, options,
      caps, floors, collars, or forwards now or hereafter executed by and between
      Borrower and Lender or any Lender Affiliate. 

    

    "Lender
      Affiliate" means any one or more bank or non-bank subsidiaries (other than
      the
      Lender) of KeyCorp and its successors.

    

    “Lien”
      means any mortgage, security interest, lien, charge, encumbrance on, pledge
      or
      deposit of, or conditional sale or other title retention agreement with respect
      to any property or asset.

    

    “Loan”
or
      “Loans” means the credit to the Borrower extended by the Lender in accordance
      with Section 2 hereof.

    

    “Loan
      Documents” means the collective reference to this Agreement and all other
      instruments, agreements and documents entered into from time to time, evidencing
      or securing the Loan or any obligation of payment thereof or performance of
      Borrower’s or Guarantor’s obligations in connection with the transaction
      contemplated hereunder, each as amended.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    “Margin
      Stock” shall have the meaning given to it under Regulation U of the Board of
      Governors of the Federal Reserve System, as amended from time to
      time.

    

    “Material
      Adverse Change” means any condition or event that Lender determines has or is
      reasonably likely to have a material adverse effect on (a) the business,
      operations, property or condition (financial or otherwise) or prospects of
      Borrower, (b) the business, operations, property, condition (financial or
      otherwise) or prospects of Borrower and its Subsidiaries, if any, taken as
      a
      whole, or (c) the validity or enforceability of this Agreement or any of the
      other Loan Documents or the rights and remedies of Lender hereunder or
      thereunder.

    

    “Multiemployer
      Plan” shall mean a Pension Plan that is subject to the requirements of Subtitle
      E of Title IV of ERISA.

    

    “Note”
or
      “Notes” means, as the case may be, the promissory note(s) signed and delivered
      by the Borrower to evidence its Indebtedness to the Lender pursuant to Section
      2
      hereof . 

    

    “Obligation”
      or “Obligations” means, collectively, (a) all Indebtedness and other obligations
      incurred by Borrower to Lender pursuant to this Agreement and includes the
      principal of and interest on all Notes; (b) each extension, renewal or
      refinancing thereof in whole or in part; (c) the commitment and other fees,
      and
      any prepayment fees payable under this Agreement or any other Loan Document;
      (d)
      every other liability, now or hereafter owing to Lender or any Lender Affiliate
      by Borrower, and includes, without limitation, any Interest Rate Agreement
      entered into by Borrower with Lender or any Lender Affiliate and every other
      liability, whether owing by only Borrower or by Borrower with one or more others
      in a several, joint or joint and several capacity, whether owing absolutely
      or
      contingently, whether created by note, overdraft, guaranty of payment or other
      contract or by quasi-contract, tort, statute or other operation of law, whether
      incurred directly to Lender or any Lender Affiliate or acquired by Lender or
      any
      Lender Affiliate by purchase, pledge or otherwise and whether participated
      to or
      from Lender or any Lender Affiliate in whole or in part; and (e) all Related
      Expenses.

    

    “Obligor”
      shall mean (a) a Person whose credit or any of whose property is pledged to
      the
      payment of the Obligations and includes, without limitation, any Guarantor,
      and
      (b) any signatory to a Loan Document.

    

    "Organization"
      means a corporation, government or government subdivision or agency, business
      trust, estate, trust, partnership, association, two or more Persons having
      a
      joint or common interest, and any other legal or commercial entity.

    

    “PBGC”
      shall mean the Pension Benefit Guaranty Corporation, or its
      successor.

    

    “Pension
      Plan” shall mean an ERISA Plan that is a “pension plan” within the meaning of
      ERISA Section 3(2).

    

    “Permitted
      Distributions” means distributions to Borrower’s shareholders in an amount equal
      to the amount of tax required to be paid by such shareholder as a result of
      the
      Borrower’s taxable income passing through and being taxable to such
      shareholder.

    

    “Permitted
      Encumbrances” means, as of any particular time, (a) liens for ad valorem taxes
      and special assessments not then delinquent, (b) this Agreement, and any
      security interest or other lien created thereby, (c) any Permitted Encumbrances
      defined in any of the Loan Documents, including, without limitation, as defined
      in any Security Instrument, (d) any liens permitted by Section 5.15 hereof,
      and
      (e) such minor defects, irregularities, encumbrances and clouds on title as
      normally exist with respect to property similar in character to the Collateral
      and as do not materially interfere with or impair the use or value of the
      property affected thereby.

    

    “Person”
      means an individual or an Organization.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    “Plan”
      means any plan (other than a Multiemployer Plan) defined in ERISA in which
      the
      Borrower or any Subsidiary is, or has been at any time during the preceding
      two
      (2) years, an “employer” or a “substantial employer” as such terms are defined
      in ERISA.

    

    “Potential
      Default” means any condition, action, or failure to act which, with the passage
      of time, service of notice, or both, will constitute an Event of Default under
      this Agreement.

    

    “Quarters”
      or “Quarterly” means calendar quarters, being each of the three (3) calendar
      month periods ending 3/31, 6/30, 9/30 and 12/31 of each calendar
      year.

    

    “Related
      Expenses” means any and all costs, liabilities, and expenses (including, without
      limitation, losses, damages, penalties, claims, actions, reasonable attorney’s
      fees, legal expenses, judgments, suits and disbursements) reasonably incurred
      by, or imposed upon, or asserted against, Lender in any attempt by
      Lender:

    

    (a) to
      obtain, preserve, perfect, or enforce any security interest evidenced by (i)
      this Agreement, or (ii) any other pledge agreement, mortgage, deed of trust,
      hypothecation agreement, guaranty, security agreement, assignment, or security
      instrument executed or given by Borrower to or in favor of Lender;

    

    (b) to
      obtain
      payment, performance, and observance of any and all of the
      Obligations;

    

    (c) to
      maintain, insure, audit, inspect, collect, preserve, repossess, and dispose
      of
      any of the Collateral, including, without limitation, costs and expenses for
      appraisals, assessments, and audits of Borrower or the Collateral;
      or

    

    (d) incidental
      or related to (a) through (c) above, including, without limitation, interest
      thereupon from the date incurred, imposed, or asserted until paid at the rate
      payable as set forth in the Note, but in no event greater than the highest
      rate
      permitted by law.

    

    “Related
      Person” means any Person who (i) now or hereafter owns an equity interest in
      Borrower or Guarantor or (ii) has warrants, debentures, or similar rights to
      own
      any equity interest in Borrower or Guarantor, whether or not the same has vested
      or been delivered or (iii) is owned, in whole or in part, by Borrower or
      Guarantor. 

    

    “Reportable
      Event” shall mean a reportable event as that term is defined in Title IV of
      ERISA, except actions of general applicability by the Secretary of Labor under
      Section 110 of such Act.

    

    “Revolving
      Credit” means the Revolving Credit Facility described in Section 2.2 hereof,
      which Revolving Credit shall be payable in accordance with the terms of such
      Revolving Credit Facility and this Agreement.

    

    “Security
      Instrument(s)” means the written document(s) listed in Exhibit A attached
      hereto, signed and delivered from time to time to the Lender in connection
      with
      Indebtedness owed by Borrower to the Lender.

    

    “Subsidiary”
      means any Person of which more than fifty percent (50%) of the following is,
      at
      the time, owned or controlled, directly or indirectly, by Borrower or one or
      more other Subsidiaries: (i) the voting stock or units entitling the holders
      thereof to elect a majority of the board of directors, managers, or trustees
      thereof, or (ii) the interest in the capital or profits of such
      Person.

    

    “Term
      Loan” or “Term Loans” means the amounts advanced by the Lender to the Borrower
      pursuant to the provisions, terms and conditions of Section 2.1
      hereof.

    

    The
      foregoing definitions shall be applicable to the singulars and plurals of the
      foregoing defined terms.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    2.
      CREDIT FACILITIES

    

    2.1.
       Term
      Loan Facility.
      The
      Lender hereby agrees to extend a Term Loan on the date of this Agreement to
      Borrower, subject to the terms and conditions of this Agreement and the Term
      Note of even date herewith in the principal amount of $__N/A____.
      

    

    2.2.
       Revolving
      Credit Facility.
      The
      Lender hereby agrees to extend a Revolving Credit to Borrower, subject to the
      terms and conditions of this Agreement and the Revolving Credit Note of even
      date herewith in the initial principal amount of $ 50,000,000.00. On August
      1,
      2009 and on each August 1 thereafter through July 31, 2013 the principal amount
      of the Revolving Credit shall be reduced by $10,000,000.00. As used herein,
      the
      term “Available
      Credit”
shall
      mean the principal amount of Revolving Credit then in effect.

    

    2.3. Fees.
      The
      Borrower shall pay the Lender the following fees: a non-usage fee for each
      calendar quarter based upon the average daily unused Available Credit during
      such quarter. The amount of the non-usage fee shall be the average daily unused
      Available Credit multiplied by the applicable basis points from the chart set
      forth below under the column headed “Non-Usage Fee”. For purposes hereof,
“EBITDA” means the net earnings of the Borrower plus the aggregate amounts
      deducted in determining such net income in respect of interest expenses, taxes,
      depreciation, amortization, and other non-cash charges (including non-cash
      expenses related to equity based compensation); but not, however, giving effect
      to extraordinary losses or gains in calculating net income, calculated on a
      trailing twelve month basis. Any outstanding principal balance in excess of
      the
      Available Credit then in effect on the testing date shall be included in Current
      Portion of Long Term Debt (“CPLTD”), which shall otherwise be determined in
      accordance with GAAP.

    

    
      	
              EBITDA/CPLTD
                + Interest

            	
              Margin
                for Revolver Balances

            	
              Non-Usage
                Fee

            
	
              >2.0
                to 1

            	
              N/A

            	
              20
                bps

            
	
              >1.75
                to 2.0

            	
              N/A

            	
              25
                bps

            
	
              >1.50
                to 1.75

            	
              N/A

            	
              35
                bps

            
	
              1.50
                or less (default)

            	
              N/A

            	
              NA

            

    

     

    3.
      WARRANTIES.

    

    Borrower
      represents and warrants to the Lender (which representations and warranties
      will
      survive the delivery of the Notes and the making of the Loans)
      that:

    

    3.1.
       Existence and Legal Authority.
      Borrower
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of New York and has all requisite power and authority to
      own
      its property and to carry on its business as now being conducted, to enter
      into
      the Loan Documents to which it is a party and the other agreements referred
      to
      herein and transactions contemplated thereby, and to carry out the provisions
      and conditions of such Loan Documents to which it is a party. Borrower is duly
      qualified to do business and is in good standing in every jurisdiction where
      the
      failure to so qualify would have a material adverse effect.

    

    3.2.
       Due Execution and Delivery.
      Borrower
      has full power, authority and legal right to incur the obligations provided
      for
      in, and to execute and deliver and to perform and observe the terms and
      provisions of, the Loan Documents to which it is a party, and each of them
      has
      been duly executed and delivered by Borrower and has been authorized by all
      required action, and Borrower has obtained all requisite consents to the
      transactions contemplated thereby under any instrument to which it is a party,
      and the Loan Documents constitute the legal, valid and binding obligations
      of
      Borrower enforceable against Borrower in accordance with their respective terms,
      except as the enforceability thereof may be limited by applicable bankruptcy,
      insolvency or other similar laws affecting creditors' rights
      generally.

    

    3.3.
       No Breach of Other Instruments.
      Neither
      the execution and delivery of the Loan Documents, nor the compliance by Borrower
      with the terms and conditions of the Loan Documents, nor the consummation of
      the
      transactions contemplated thereby, will conflict with or result in a breach
      of
      the Articles of Incorporation or Code of Regulations, as applicable, or other
      governing documents of Borrower, or any of the terms, conditions or provisions
      of any agreement or instrument or any charter or other corporate restriction
      or
      law, regulation, rule or order of any governmental body or agency to which
      Borrower is now a party or is subject, or imposition of a lien, charge or
      encumbrance of any nature whatsoever upon any of the property or assets of
      Borrower pursuant to the terms of any such agreement or instrument.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    3.4.
       Government Authorization.
      No
      consent, approval, authorization or order of any court or governmental agency
      or
      body is required for the consummation by Borrower of the transactions
      contemplated by the Loan Documents.

    

    3.5.
       Ownership
      of Property.
      Except
      for Permitted Encumbrances or as otherwise permitted in the Security Instruments
      or this Agreement, Borrower has and will have good and marketable fee title
      to,
      or valid leasehold interests in, its real properties in accordance with the
      laws
      of the jurisdiction where located, and good and marketable title to
      substantially all its other property and assets, subject, however, in the case
      of real property, to title defects and restrictions which do not materially
      interfere with the operations conducted thereon by Borrower. Except for
      Permitted Encumbrances, the real property and all other property and assets
      of
      the Borrower is free from any liens or encumbrance securing Indebtedness and
      from any other liens, encumbrances, charges or security interests of any kind.
      Each lease, if any, to which Borrower is a party is in full force and effect,
      and no material default on the part of Borrower or, to its knowledge, any other
      party thereto exists.

    

    3.6.
       Absence of Defaults, etc.
      The
      Borrower is not (i) in material default under any indenture or contract or
      agreement to which it is a party or by which it is bound, (ii) in violation
      of
      its articles of incorporation or code of regulations, as applicable, or any
      other governing document, (iii) in default with respect to any order, writ,
      injunction or decree of any court, or (iv) in default under any order or license
      of any federal or state governmental department. There exists no condition,
      event or act which constitutes, or after notice or lapse of time or both would
      constitute, an Event of Default.

    

    3.7.
       Indebtedness of Borrower.
      Borrower
      does not have outstanding on the date hereof, any Indebtedness for borrowed
      money, except for such Indebtedness identified in the financial assumptions
      referred to in Section 3.8 hereof.

    

    3.8.
       Financial
      Condition.
      The
      Borrower has furnished to the Lender financial assumptions which, in the opinion
      of Borrower, fairly and accurately reflect the financial assumptions for the
      operations of Borrower, and there has been no material adverse change in the
      Borrower’s financial prospects since that date which would require revision of
      the same. 

    

    3.9.
       No Adverse Change.
      Subsequent
      to the date of the financial assumptions referred to in Section 3.8 hereof,
      Borrower has not incurred or agreed to incur any material liabilities or
      obligations, direct or contingent, and there has not been any material increase
      in the anticipated aggregate amount of debt of Borrower, or any Material Adverse
      Change in the business, properties, prospects or condition, financial or
      otherwise, of Borrower.

    

    3.10.
       Taxes.
      Borrower
      has filed all tax returns which are to be filed and has paid, or has made
      adequate provision for the payment of, all taxes which have or may become due
      pursuant to said returns or to assessments received by them. The provisions
      for
      taxes reflected in the financial projections referred to in Section 3.8 are
      believed adequate to cover any and all accrued and unpaid taxes for which
      Borrower is liable for the period ended on the date of such balance sheet and
      all prior periods. Borrower knows of no deficiency assessment or proposed
      deficiency assessment of taxes for which Borrower may be liable, except as
      may
      be otherwise disclosed in writing to the Lender prior to the date
      hereof.

    

    3.11.
       Litigation.
      Prior
      to
      the date hereof, there are no actions, suits or proceedings pending, or to
      the
      actual knowledge of Borrower, threatened against or affecting Borrower or its
      respective property in any court, or before or by any federal, state or
      municipal or other governmental department, commission, board, bureau, agency
      or
      other instrumentality, domestic or foreign, except for actions, suits or
      proceedings of a character normally incident to the kind of business conducted
      by Borrower, none of which, either individually or in the aggregate, if
      adversely determined, would reasonably be expected to result in a Material
      Adverse Change.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    3.12.
       Environmental Matters.
      Borrower
      is in compliance with all Environmental Laws and all applicable federal, state
      and local health and safety laws, regulations, ordinances or rules.

    

    3.13.
       Subsidiaries
      and Affiliates.
      Borrower
      does not have any Subsidiaries other than those listed on Exhibit B attached
      hereto. If Borrower has any Subsidiary or any other Affiliate at any time
      subsequent to the date of execution hereof, the term “Borrower” as used in
      Sections 5 and 6 shall include in its meaning Borrower and its Subsidiaries,
      for
      such period or periods that Borrower has any Subsidiaries, unless the context
      clearly requires otherwise. For any period during which Borrower has any
      Subsidiaries, all financial statements, accounts and reports submitted by the
      Borrower and all calculations hereunder based on same shall be consolidated
      and/or on a consolidating basis or combined and/or on a combining basis with
      such Subsidiaries, as the context required.

    

    3.14.
       ERISA.
      No
      Reportable Event or Prohibited Transaction which could create a liability in
      excess of One Hundred Thousand Dollars ($100,000.00) or cause a material adverse
      change has occurred and is continuing with respect to any Plan of Borrower,
      and
      Borrower has not incurred an “accumulated funding deficiency” (as that term is
      defined by ERISA) since the effective date of ERISA.

    

    3.15.
       Solvency.
      The
      Borrower is not insolvent as defined in any applicable state or federal statute,
      nor will Borrower be rendered insolvent by the execution and delivery of this
      Agreement or any of the Loan Documents to Lender. The Borrower is not engaged
      or
      about to engage in any business or transaction for which the assets retained
      by
      it shall constitute an unreasonably small capital, taking into consideration
      the
      obligations to Lender incurred hereunder. Borrower does not intend to, nor
      does
      it believe that it will, incur debts beyond its ability to pay them as they
      mature.

    

    3.16.
       No
      Burdensome Restrictions.
      Borrower
      is not a party to any instrument or agreement or subject to any charter or
      other
      corporate restriction which would cause a Material Adverse Change.

    

    3.17.
       Federal
      Reserve Regulations; Use of Loan Proceeds.
      Borrower is not engaged principally, or as one of its important activities,
      in
      the business of extending credit for the purpose of purchasing or carrying
      any
      Margin Stock. No part of the proceeds of the Loans will be used, directly or
      indirectly, for a purpose which violates any law, rule or regulation of any
      governmental body, including without limitation the provisions of Regulations
      G,
      U, or X of the Board of Governors of the Federal Reserve System, as amended.
      No
      part of the proceeds of the Loans will be used, directly or indirectly, to
      purchase or carry any Margin Stock or to extend credit to others for the purpose
      of purchasing or carrying any Margin Stock. 

    

    3.18. OFAC/USA
      PATRIOT Act Restrictions.
      Neither
      Borrower nor any Guarantor is (or will be) a person with whom Lender is
      restricted from doing business under regulations of the Office of Foreign Asset
      Control (“OFAC”) of the Department of the Treasury of the United States of
      America (“Treasury”) or under any list of known or suspected terrorists or
      terrorist organizations issued by any federal government agency and designated
      as such by Treasury in consultation with the federal functional regulators,
      or
      under any statute, executive order, or other governmental action, and neither
      Borrower nor any Guarantor is engaging, or shall engage, in any dealings or
      transactions or shall otherwise be associated with such persons. In addition,
      Borrower hereby agrees to provide to the Lender with any additional information
      that the Lender deems necessary from to time in order to ensure compliance
      with
      all applicable laws concerning money laundering and similar
      activities.

    

    4.
      CONDITIONS OF LENDING

    

    4.1.
       Loan
      Funding.
      The
      obligation of the Lender to close the transactions contemplated by this
      Agreement shall be subject to satisfaction of the following conditions, unless
      waived in writing by the Lender: (a) all legal matters and Loan Documents
      incident to the transactions contemplated hereby shall be reasonably
      satisfactory, in form and substance, to Lender's counsel; (b) the Lender shall
      have received (i) certificates by an authorized officer or representative of
      Borrower upon which the Lender may conclusively rely until superseded by similar
      certificates delivered to the Lender, certifying that (1) all requisite action
      taken in connection with the transactions contemplated hereby has been duly
      authorized and (2) the names, signatures, and authority of Borrower’s authorized
      signers executing the Loan Documents, and (ii) such other documents as the
      Lender may reasonably require to be executed by, or delivered on behalf of,
      Borrower; (c) the Lender shall have received the Notes with all blanks
      appropriately completed, executed by an authorized signer for Borrower; (d)
      the
      Borrower shall have paid to the Lender the fee(s) then due and payable under
      this Agreement and the other Loan Documents; (e) Borrower and Guarantor shall
      each have maintained their respective financial condition in a manner
      satisfactory to the Lender, and no material adverse change shall have occurred
      in Borrower’s or Guarantor’s financial condition or prospects; (f) the Lender
      shall have received the written opinion(s) of legal counsel for the Borrower
      selected by the Borrower and satisfactory to the Lender, dated the date of
      this
      Agreement and covering the Loan Documents and such other matter(s) as the Lender
      may reasonably require; (g) the Lender shall have received written instructions
      by the Borrower with respect to disbursement of the proceeds of the Loan; and
      (h) the Lender shall have received all Security Instruments duly executed by
      all
      parties thereto.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    4.2.
       Security.
      No Loan
      shall be made hereunder unless and until Borrower shall have supplied to Lender:
      (a) Uniform Commercial Code searches from each applicable filing office on
      Borrower and each Guarantor showing no effective UCC-1 filings, and (b) as
      security for repayment of any and all Loans made hereunder the Security
      Instruments listed on Exhibit A hereto, in form and substance reasonably
      acceptable to Lender.

    

    4.3.
       Each
      Loan.
      The
      obligation of the Lender to make any Loan shall be subject to initial compliance
      with Sections 4.1 and 4.2 herein and also subject to satisfaction of the
      following conditions that at the date of making such Loan, and after giving
      effect thereto: (a) no Event of Default shall have occurred and continue to
      exist, and (b) each representation and warranty set forth in Section 3 above
      is
      true and correct as if then made.

    

    5.
      COVENANTS

    

    As
      long
      as credit is available hereunder or until all principal of and interest on
      the
      Notes have been paid, the Borrower covenants and agrees that it will comply
      with
      the following provisions:

    

    5.1.
       Accounting;
      Financial Statements and Other Information.
      Borrower shall maintain a standard system of accounting, established and
      administered in accordance with GAAP consistently followed throughout the
      periods involved, and will set aside on its books for each fiscal quarter and
      fiscal year, the proper amounts or accruals for depreciation, obsolescence,
      amortization, bad debts, current and deferred taxes, prepaid expenses, and
      for
      other purposes as shall be required by GAAP. Borrower will deliver or cause
      to
      be delivered to the Lender:

    

    (a) As
      soon
      as practicable after the end of each fiscal quarter in each fiscal year, and
      in
      any event within 45 days thereafter, internally prepared consolidated and
      consolidating financial statements, including income statement, balance sheet,
      statement of condition of the Borrower as of the end of such fiscal quarter,
      and
      statements of cash flow, changes in financial position, and common shareholder’s
      equity for such fiscal quarter, certified as complete and correct by the
      principal financial officer of Borrower, subject to changes resulting from
      year-end adjustments;

    

    (b) As
      soon
      as practicable after the end of each fiscal year, and in any event within 120
      days thereafter, financial statements, including income statement, balance
      sheet, statement of condition of the Borrower as of the end of such year, and
      statement of cash flow and changes in financial position of the Borrower for
      such year, setting forth in each case in comparative form the figures for the
      previous fiscal year, all in reasonable detail and prepared by an independent
      certified public accountant, accompanied by a report and unqualified opinion
      of
      an independent certified public accountant of recognized standing,
      selected
      by Borrower and satisfactory to the Lender, and prepared in accordance with
      generally accepted audit standards;

    

    (c) Together
      with each set of financial statements required by subparagraphs (a) and (b)
      above, a certificate by the chief financial officer or other authorized officer
      of Borrower stating that the representations and warranties contained in this
      Agreement are true and correct as of the date of the certificate, and whether
      or
      not there exists any Event of Default or Potential Default, specifying the
      nature and period of existence thereof and what action, if any, the Borrower
      is
      taking or proposes to take with respect thereto;

    

    (d) Promptly
      and in any event within ten (10) days after the occurrence of a Reportable
      Event
      with respect to a Plan, a copy of any materials required to be filed with the
      PBGC with respect to such Reportable Event or those that would have been
      required to be filed if the thirty (30) day notice requirement to PBGC were
      not
      waived;

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    (e) Promptly
      upon receipt, and in no event more than two (2) Business Days after receipt,
      of
      a notice by Borrower or any ERISA Affiliate or any administrator of any Plan
      or
      Multiemployer Plan that the PBGC has instituted proceedings to terminate such
      Plan or to appoint a trustee to administer such Plan, a copy of such notice;
      and

    

    (f) Promptly
      upon receipt thereof, copies of all written reports submitted to the Borrower
      by
      independent accountants in connection with any annual or interim compilation
      and/or review the books of Borrower.

    

    5.2.
       Additional
      Financial Reports.
      Borrower shall, upon request of Lender, deliver to the Lender its annual
      federal, state and local tax returns and such other financial information as
      Lender may reasonably request. 

    

    5.3.
       Insurance;
      Maintenance of Properties.
      Borrower shall: (a) maintain with financially sound and reputable insurers,
      insurance with coverage and limits as may be required by law and of such
      character and amounts as are usually maintained by companies engaged in like
      business, including without limitation products liability insurance; (b) furnish
      to Lender upon the execution of this Agreement and at the beginning of each
      fiscal year, copies of policies and a statement of the insurance coverage;
      and
      (c) obtain other or additional insurance promptly, upon the reasonable request
      of Lender, to the extent that such insurance may be available. The policies
      shall provide that no cancellation shall occur without thirty (30) days prior
      written notice to Lender. Borrower shall provide to Lender notice that such
      policies have been renewed and are paid in accordance with the terms of such
      policies at least fifteen (15) days prior to the date of expiration. Borrower
      will at least annually and upon any change, or more often upon the occurrence
      of
      an Event of Default, upon request of Lender, furnish to the Lender a schedule
      of
      all insurance carried by Borrower, setting forth in detail the amount and type
      of such insurance. Except as otherwise permitted in this Agreement, Borrower
      will maintain, in good repair, working order, and condition, all properties
      used
      in the business of the Borrower, subject to ordinary wear and tear.

    

    5.4.
       Existence;
      Business.
      Borrower shall cause to be done all things necessary to preserve and keep in
      full force and effect its existence and rights, to conduct its business in
      a
      prudent manner, to maintain in full force and effect, and renew from time to
      time, its franchises, permits, licenses, patents, and trademarks that are
      necessary to operate its business. Borrower will comply in all material respects
      with all valid laws and regulations now in effect or hereafter promulgated
      by
      any properly constituted governmental authority having jurisdiction; provided,
      however, that Borrower shall not be required to comply with any law or
      regulation which it is contesting in good faith by appropriate proceedings
      as
      long as either the effect of such law or regulation is stayed pending the
      resolution of such proceedings or the effect of not complying with such law
      or
      regulation would not reasonably be expected to result in a Material Adverse
      Change.

    

    5.5.
       Payment
      of Taxes.
      Borrower shall pay all taxes, assessments, and other governmental charges levied
      upon any of its properties or assets or in respect of its franchises, business,
      income, or profits before the same become delinquent, except that no such taxes,
      assessments, or other charges need be paid if contested in good faith and by
      appropriate proceedings promptly initiated and diligently conducted and if
      proper amounts, determined in accordance with GAAP, have been set aside for
      the
      payment of all such taxes, charges, and assessments.

    

    5.6.
       Adverse
      Changes.
      Borrower shall promptly notify the Lender in writing of (a) the occurrence
      of
      any event which, if it had existed on the date of this Agreement, would have
      required qualification of the representations and warranties set forth in
      Section 3 hereof and (b) any Material Adverse Change.

    

    5.7.
       Notice
      of Default.
      Borrower shall promptly notify (but in no event more than five (5) days after
      the occurrence thereof) the Lender of any Event of Default or Potential Default
      hereunder and any demands made upon the Borrower by any Person for the
      acceleration and immediate payment of any Indebtedness owed to such Person,
      if
      the amount of such Indebtedness exceeds $250,000.

    

    5.8.
       Inspection.
      Borrower shall make available for inspection by duly authorized representatives
      of the Lender, or its designated agent, Borrower’s books, records, and
      properties when reasonably requested to do so, and will furnish the Lender
      such
      information regarding its business affairs and financial condition within a
      reasonable time after written request therefor. 

    

    5.9.
       Environmental
      Matters.
      Borrower:

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    (a) Shall
      comply in all respects with all Environmental Laws where a failure to comply
      could result in a Material Adverse Change;

    

    (b) Shall
      deliver promptly to Lender (i) copies of any significant documents received
      from
      the United States Environmental Protection Agency or any state, county, foreign,
      provincial or municipal environmental or health agency, and (ii) copies of
      any
      significant documents submitted by Borrower or any of its Subsidiaries to the
      United States Environmental Protection Agency or any state, county, foreign,
      provincial or municipal environmental or health agency concerning its
      operations; and

    

    (c) Shall
      promptly undertake and diligently pursue to completion all action recommended
      by
      any environmental audit report(s) issued and all action(s) necessary to correct
      any environmental problem or defect identified in any environmental audit
      report(s).

    

    5.10.
       Health
      and Safety.
      Borrower shall be in compliance with all requirements of applicable federal,
      state, foreign, provincial and local environmental, health and safety laws,
      regulations, ordinances or rules which would, in the aggregate, if not complied
      with, result in a Material Adverse Change.

    

    5.11.
       Extraordinary
      Services.
      In
      the
      event extraordinary services are required by Lender for inspections, appraisals,
      or for securing estimates of costs which, in the Lender’s reasonable judgment
      are not regular or routine, Lender may deduct the reasonable expense of such
      extraordinary services from any moneys due to Borrower hereunder or from any
      account maintained by Borrower with Lender or any Lender Affiliate.

    

    5.12.
       Commercial
      Operating Account.
      So long
      as credit is available hereunder or until all principal of and interest on
      the
      Notes have been paid in full, the Borrower shall maintain with Lender and/or
      a
      Lender Affiliate, as its primary financial institution, corporate deposit,
      cash
      management and loan accounts, where applicable. At the option of Lender, all
      Loan payments and fees will automatically be debited from the Borrower’s primary
      operating account and all disbursements of Loan proceeds shall be made by the
      Lender’s or Lender Affiliate’s crediting of such disbursements directly into the
      appropriate Borrower’s account. 

    

    5.13.
       Additional
      Assurance.
      Borrower shall upon request of Lender promptly take such action and promptly
      make, execute, and deliver all such additional and further items, deeds,
      assurances, and instruments as Lender may reasonably require, so as to
      completely vest in and ensure to Lender its rights hereunder and in or to the
      Collateral, including, but not limited to, additional subordination agreements
      for all future shareholder loans and/or undistributed earnings.

    

    5.14.
        Sale,
      Purchase of Assets.
      Borrower shall not, directly or indirectly, (a) purchase, lease, or otherwise
      acquire any assets except: (i) in the ordinary course of business; (ii) Borrower
      may purchase or acquire more than a 50% equity interest in or all or
      substantially all of the assets of operating businesses; or (iii) as otherwise
      expressly permitted under this Agreement), or (b) sell, lease, transfer, or
      otherwise dispose of any assets except for (i) assets sold, leased, transferred
      or subject to other disposition for full and adequate consideration in the
      reasonable judgment of Borrower which Borrower has determined to be worn out
      or
      obsolete or not useful in the ordinary course of its business, and (ii) assets
      sold, leased, transferred or subject to other disposition in the ordinary course
      of business provided that Borrower receives full and adequate consideration
      in
      the reasonable judgment of Borrower in exchange for such assets sold, leased,
      transferred or otherwise subject to disposition. 

    

    5.15.
       Mortgages,
      Security Interests, and Liens.
      Borrower
      shall not, directly or indirectly, create, incur, assume, or permit to exist
      any
      Lien with respect to non-real estate assets of Borrower or any Subsidiary,
      whether now owned or hereafter acquired other than:

     

    (a) Liens
      for
      taxes, assessments, or governmental charges or levies the payment of which
      is
      not at the time required by Section 5.5 hereof;

     

    (b) Liens
      imposed by law, such as Liens of landlords, carriers, warehousemen, mechanics,
      and materialmen arising in the ordinary course of business for sums not yet
      due
      or being contested by appropriate proceedings promptly initiated and diligently
      conducted, provided other appropriate provision, if any, as shall be required
      by
      GAAP shall have been made therefor;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    (c) Liens
      incurred or deposits made in the ordinary course of business in connection
      with
      workers' compensation, unemployment insurance, and other types of social
      security, or to secure the performance of tenders, statutory obligations, and
      surety and appeal bonds, or to secure the performance and return of money bonds
      and other similar obligations, excluding obligations for the payment of borrowed
      money;

     

    (d) Any
      judgment Lien, provided that the judgment it secures shall, within thirty (30)
      days after the entry thereof, have been discharged or execution therefor stayed
      pending appeal, or shall have been discharged within thirty (30) days after
      the
      expiration of any such stay;

     

    (e) Liens
      that secure the repayment of Indebtedness of Borrower to the Lender or any
      Lender Affiliate; or

     

    (f) Liens
      evidenced by or permitted under the terms of Security Instruments only, and
      any
      other Permitted Encumbrances.

     

    5.16.
       Negative
      Pledge.
      Borrower shall not (a) enter
      into any agreement, promissory note, or document of any kind relating to a
      loan
      to Borrower by a lender other than Lender which contains a provision that
      Borrower will not mortgage, assign, pledge, grant a security interest in, or
      encumber any of Borrower’s non-real estate assets,
      (b)
      except as allowed as a Permitted Encumbrance, sell, transfer, mortgage, assign,
      pledge, lease, grant a security interest in, or encumber any of Borrower’s
      non-real estate assets, or (c) sell with recourse any of Borrower’s accounts,
      except to Lender. 

    

    5.17.
       Assumptions;
      Guaranties.
      Borrower shall not assume, guarantee, endorse, or otherwise become directly
      or
      contingently liable for (including, without limitation, liable by way of
      agreement, contingent or otherwise, to purchase, to provide funds for payment,
      to supply funds to, or otherwise invest in any debtor or otherwise to assure
      the
      creditor against loss) any obligation or Indebtedness of any other Person,
      except (i) guaranties by endorsement of negotiable instruments for deposit,
      collection, or similar transactions in the ordinary course of business, and
      (ii)
      Indebtedness of Borrower to the Lender or any Lender Affiliate.

     

    5.18.
       Mergers;
      Consolidation; Sale of Borrower.
      Borrower
      shall not merge or consolidate with any Person, dissolve, wind up its affairs,
      or sell, assign, lease, or otherwise dispose of (whether in one transaction
      or
      in a series of transactions), all or substantially all of its assets (whether
      now owned or hereafter acquired) to any Person, except where such Person is
      or
      becomes a Borrower hereunder as of the date of such transaction and such further
      assurances with respect to any such transaction satisfactory to the Lender
      are
      delivered on or before the effective date of such transaction. Borrower will
      not
      permit a transfer or sale, directly or indirectly, whether in one transaction
      or
      in a series of transactions, of any of its shares of stock, other than between
      and among current owners of such shares.

     

    5.19.
       Investments;
      Loans.
      Borrower shall not, directly or indirectly, (a) purchase or otherwise acquire
      or
      own any stock or other securities of any other Person (other than as permitted
      under this Agreement) or (b) make or permit to be outstanding any loan or
      advance (other than trade advances in the ordinary course of business or as
      otherwise permitted under this Agreement) or enter into any arrangement to
      provide funds or credit, to any other Person, except that (i) it may purchase
      or
      otherwise acquire and own marketable U.S. Treasury and Agency obligations,
      and
      certificates of deposit and bankers acceptances issued or created by any
      domestic commercial bank, and the stock of any Subsidiaries identified in
      Section 3.13, and (ii) it may make loans or advances as permitted pursuant
      to Section 5.15 above.

    

    5.20.
       Payment
      of Subordinated Debt.
      Borrower
      shall not make any payment upon any outstanding indebtedness which is
      subordinated to the Lender.

    

    5.21.
       Financial
      Covenants.

    

    (a) Debt
      Service Coverage Ratio.
      Borrower shall maintain a Debt Service Coverage Ratio greater than 1.50:1 tested
      as of the end of each fiscal quarter on a trailing twelve month basis. For
      purposes hereof, “Debt
      Service Coverage Ratio”
is
      defined as EBITDA divided by the Current Portion of Long Term Debt and the
      current portion of Capital Leases due during the 12-month period plus Interest
      Expense for the same period. “EBITDA”
means
      the net earnings of the Borrower plus the aggregate amounts deducted in
      determining such net income in respect of interest expenses, taxes,
      depreciation, amortization, and other non-cash charges (including non-cash
      expenses related to equity based compensation); but not, however, giving effect
      to extraordinary losses or gains in calculating net income. Any outstanding
      principal balance in excess of the Available Credit then in effect on the
      testing date shall be included in Current Portion of Long Term Debt, which
      shall
      otherwise be determined in accordance with GAAP.

     

    
      
         

      

      
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    (b) Liquid
      Assets.
      Borrower shall maintain a minimum of $20,000,000.00 in cash plus marketable
      securities as of the end of each fiscal quarter.

     

    (c) Total
      Funded Debt to EBITDA Ratio.
      Borrower shall maintain a ratio of Total Funded Debt to EBITDA of less than
      2.5:1 tested as of the end of each fiscal quarter on a trailing twelve month
      basis. “Total
      Funded Debt”
means
      the sum without duplication for a Borrower and/or any of its Subsidiaries of
      (1)
      all indebtedness for borrowed money, whether maturing in less than or more
      than
      one year, plus (2) all bonds, notes, debentures or similar debt instruments
      plus
      (3) all capitalized lease obligations plus (4) the present value of all basic
      rental obligations under any synthetic lease. “EBITDA”
      has the
      meaning set forth in Section 5.21(a) above.

     

    (d) Other
      Loan Agreements.
      Borrower shall not, without Lender’s prior written consent, enter into any
      agreement, promissory note, or document of any kind relating to a loan to
      Borrower containing a term similar to 5.21(a), (b), or (c) above which is more
      restrictive than such term herein.

     

    (e) Special
      Provision: Frimley, England Sublease.
      Borrower’s lease expense under its present sublease of a building located in
      Frimley, England shall be excluded solely for the calculations relating to
      compliance with Sections 5.21(a), (c), and (d) above. For purposes of clarity,
      but without changing a broad application of the specific exclusion contained
      in
      the immediately preceding sentence, such exclusion shall not apply to the
      calculation of the interest payable on Loans made pursuant to this
      Agreement.

     

    (f) Assets
      of China Subsidiary.
      Except
      with Lender’s prior written consent, which consent shall not be unreasonably
      withheld, Borrower shall not, directly or indirectly, permit the assets of
      its
      China Subsidiary, Anaren Communications Suzhou Company, Ltd., to be more than
      15% of the consolidated assets of Borrower and all its
      Subsidiaries.

    

    6.
      EVENTS OF DEFAULT

    

    The
      occurrence of any one or more of the following events shall constitute an Event
      of Default under this Agreement:

    

    6.1.
       Payments.
      If
      (a) the interest on any Note or any commitment or other fee shall not be
      paid in full punctually when due and payable, or (b) the principal of any
      Note shall not be paid in full punctually when due and payable.

    

    6.2. Covenants.
      If
      Borrower or any Obligor fails to perform or observe any covenant or agreement
      (other than as referred to in Section 6.1 hereof) contained in this Agreement
      or
      in any other of the Loan Documents, and such failure remains unremedied for
      thirty (30) days after the Lender gives notice thereof to such Borrower or
      Obligor.

    

    6.3. Representations
      and Warranties.
      If any
      representation, warranty or statement made in or pursuant to this Agreement
      or
      any Loan Document or any other material information furnished by Borrower or
      any
      Obligor to Lender or any other holder of any Note, shall be false or
      erroneous.

    

    6.4. Validity
      Of Loan Documents.
      If (a)
      any material provision, in the sole opinion of Lender, of any Loan Document
      shall at any time for any reason cease to be valid, binding and enforceable
      against Borrower or any Obligor; (b) the validity, binding effect or
      enforceability of any Loan Document against Borrower or any Obligor shall be
      contested by Borrower or any Obligor; (c) Borrower or any Obligor shall deny
      that it has any or further liability or obligation thereunder; or (d) any Loan
      Document shall be terminated, invalidated or set aside, or be declared
      ineffective or inoperative or in any way cease to give or provide to Lender
      the
      benefits purported to be created thereby.

    

    
      
         

      

      
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    6.5. Loan
      Document Default.
      If
      any
      event of default or default shall occur under any other Loan Document, or if
      under any Loan Document any payment is required to be made by Borrower or any
      Obligor on demand of Lender, and such demand is made. 

    

    6.6. Cross
      Default.
      If
      Borrower shall default in the payment of principal or interest due and owing
      upon any other obligation for borrowed money, beyond any period of grace
      provided with respect thereto or in the performance or observance of any other
      agreement, term or condition contained in any agreement under which such
      obligation is created, if the effect of such default is to allow the
      acceleration of the maturity of such Indebtedness or to permit the holder
      thereof to cause such Indebtedness to become due prior to its stated
      maturity.

    

    6.7. ERISA
      Default.
      The
      occurrence of one or more ERISA Events that (a) Lender determines could have
      a
      material adverse effect, or (b) results in a Lien on any of the assets of
      Borrower. 

    

    6.8. Money
      Judgment.
      A
      final
      judgment or order for the payment of money in an amount in excess of $250,000.00
      shall be rendered against Borrower or any Obligor by a court of competent
      jurisdiction, that remains unpaid or unstayed and undischarged for a period
      (during which execution shall not be effectively stayed) of thirty (30) days
      after the date on which the right to appeal has expired.

    

    6.9.
       Material
      Adverse Change.
      There
      shall have occurred any Material Adverse Change.

    

    6.10 Insecurity.
      If
      Lender, for any reason in good faith and supported with reasonable
      documentation, deems itself insecure with respect to repayment of any
      Obligation.

    

    6.11
       Solvency.
      If
      Borrower or any Obligor shall (a)  die or discontinue business,
      (b) generally not pay its debts as such debts become due, (c) make a
      general assignment for the benefit of creditors, (d) apply for or consent
      to the appointment of a receiver, a custodian, a trustee, an interim trustee
      or
      liquidator of all or a substantial part of its assets, (e) be adjudicated a
      debtor or have entered against it an order for relief under Title 11 of the
      United States Code, as the same may be amended from time to time, (f) file
      a voluntary petition in bankruptcy or file a petition or an answer seeking
      reorganization or an arrangement with creditors or seeking to take advantage
      of
      any other law (whether federal or state) relating to relief of debtors, or
      admit
      (by answer, by default or otherwise) the material allegations of a petition
      filed against it in any bankruptcy, reorganization, insolvency or other
      proceeding (whether federal or state) relating to relief of debtors,
      (g) suffer or permit to continue unstayed and in effect for thirty (30)
      consecutive days any judgment, decree or order entered by a court of competent
      jurisdiction, that approves a petition seeking its reorganization or appoints
      a
      receiver, custodian, trustee, interim trustee or liquidator of all or a
      substantial part of its assets, or (h) take any action in order thereby to
      effect any of the foregoing, or omit to take, any action in order to prevent
      any
      of the foregoing.

    

    7.
      REMEDIES UPON DEFAULT

    

    7.1.
       Rights
      of Lender.
      If any
      Event of Default shall occur, Lender may, at its election, and without demand
      or
      notice of any kind, do any one or more of the following:

    

    (a)
       Declare
      all of the Borrower’s Obligations to Lender to be immediately due and payable,
      whereupon all unpaid principal, interest and fees in respect of such
      Obligations, together with all of Lender’s costs, expenses and attorneys’ fees
      related thereto, under the terms of the Loan Documents or otherwise, shall
      be
      immediately due and payable; 

    

    (b) Terminate
      any commitment to make any additional advances under any Loan;

    

    (c) Exercise
      any and all rights and remedies available to Lender under any applicable
      law;

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

       

    

    (d) Exercise
      any and all rights and remedies granted to Lender under the terms of this
      Agreement or any of the other Loan Documents; and/or

    

    (e) Set
      off
      the unpaid balance of the Obligations against any debt owing to Borrower by
      the
      Lender or by any Lender Affiliate, including, without limitation, any obligation
      under a repurchase agreement or any funds held at any time by the Lender or
      any
      Lender Affiliate, whether collected or in the process of collection, or in
      any
      time or demand deposit account maintained by Borrower at, or evidenced by any
      certificate of deposit issued by, the Lender or any Lender Affiliate. Borrower
      agrees, to the fullest extent it may effectively do so under applicable law,
      that any holder of a participation in the Notes may exercise rights of set-off
      or counterclaim and other rights with respect to such participation as fully
      as
      if such holder of a participation were a direct creditor of Borrower pursuant
      to
      this Agreement in the amount of such participation.

    

    7.2.
       No
      Waiver.
      The
      remedies in this Section 7 are in addition to, not in limitation of, any other
      right, power, privilege, or remedy, either in law, in equity, or otherwise,
      to
      which the Lender may be entitled. No failure or delay on the part of the Lender
      in exercising any right, power, or remedy will operate as a waiver thereof,
      nor
      will any single or partial exercise thereof preclude any other or further
      exercise thereof or the exercise of any other right hereunder. The remedies
      in
      this Agreement are in addition to, not in limitation of, any other right, power,
      privilege, or remedy, either in law, in equity, or otherwise, to which the
      Lender may be entitled. All Lender’s rights and remedies, whether evidenced by
      this Agreement or by any other agreement, instrument or document shall be
      cumulative and may be exercised singularly or concurrently. 

    

    8.
      MISCELLANEOUS

    

    8.1.
       Remedies;
      Waiver; Amendments.
      No
      waiver of any provision of this Agreement or the Notes, or consent to departure
      therefrom, is effective unless in writing and signed by the Lender. No such
      consent or waiver extends beyond the particular case and purpose involved.
      No
      amendment to this Agreement is effective unless in writing and signed by the
      Borrower and the Lender. If at any time or times, by assignment or otherwise,
      Lender transfers any of the Obligations or any part of the Collateral to another
      person, such transfer shall carry with it Lender’s powers and rights under this
      Agreement with respect to the Obligation or Collateral so transferred and the
      transferee shall have said powers and rights, whether or not they are
      specifically referred to in the transfer. To the extent that Lender retains
      any
      other of the Obligations or any part of the Collateral, Lender will continue
      to
      have the rights and powers with respect to the Obligations and the Collateral
      as
      set forth in this Agreement.

    

    8.2. Expenses,
      Costs and Taxes.
      The
      Borrower shall pay on demand all reasonable costs and expenses of Lender, and
      all Related Expenses, including but not limited to, (a) administration, travel
      and out-of-pocket expenses, including but not limited to reasonable attorneys’
fees and expenses, of Lender in connection with the preparation, negotiation
      and
      closing of the Loan Documents and the administration of the Loan Documents,
      the
      collection and disbursement of all funds hereunder and the other instruments
      and
      documents to be delivered hereunder, (b) reasonable extraordinary expenses
      of
      Lender in connection with the administration of this Agreement, the Notes and
      the other instruments and documents to be delivered hereunder, (c) the
      reasonable fees and out-of-pocket expenses of special counsel for Lender, with
      respect to the foregoing, and of local counsel, if any, who may be retained
      by
      said special counsel with respect thereto, (d) all fees due hereunder or in
      any
      other Loan Documents, and (e) all costs and expenses, including reasonable
      attorneys’ fees, in connection with the determination of Lender’s lien priority
      in any collateral securing the Note, or the restructuring or enforcement of
      the
      Note or any other Loan Document. In addition, Borrower shall pay any and all
      stamp and other taxes and fees payable or determined to be payable in connection
      with the execution and delivery of any Loan Document, and the other instruments
      and documents to be delivered hereunder, and agrees to hold Lender harmless
      from
      and against any and all liabilities with respect to or resulting from any delay
      in paying or omission to pay such taxes or fees. Borrower authorizes Lender
      to
      debit such expenses, costs and taxes directly to Borrower’s Loan accounts or any
      account Borrower maintains with Lender or Lender Affiliate.

    

    8.3.
       Indemnification.
      The
      Borrower shall indemnify and hold the Lender harmless against any and all
      liabilities, losses, damages, costs, and expenses of any kind (including,
      without limitation, the reasonable fees and disbursements of counsel in
      connection with any investigative, administrative or judicial proceeding,
      whether or not the Lender shall be designated a party thereto) which may be
      incurred by the Lender relating to or arising out of this Agreement or any
      actual or proposed use of proceeds of any Loan hereunder; provided, that the
      Lender shall have no right to be indemnified hereunder for its own gross
      negligence or willful misconduct as determined by a court of competent
      jurisdiction. A certificate as to any such loss or expense shall be promptly
      submitted by the Lender to the Borrower and shall, in the absence of manifest
      error, be conclusive and binding as to the amount thereof.

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

       

    

    8.4.
       Construction.
      The
      provisions of this Agreement and the respective rights and duties of Borrower
      and Lender hereunder shall be governed by and construed in accordance with
      New
      York law and any applicable federal laws. Borrower hereby irrevocably submits
      to
      the non-exclusive jurisdiction of any New York state or federal court sitting
      in
      Onondaga County, over any action or proceeding arising out of or relating to
      this Agreement, or any document related to the Obligations, and Borrower hereby
      irrevocably agrees that all claims in respect of such action or proceeding
      may
      be heard and determined in such New York state or federal court. The Borrower
      hereby waives any objection that it may now or hereafter have to the venue
      of
      any such suit or any such court or that such suit is brought in an inconvenient
      court. The several captions to different Sections of this Agreement are inserted
      for convenience only and shall be ignored in interpreting the provisions hereof.
      Time is of the essence in the performance of the obligations under this
      Agreement. All grace periods in this Agreement and all other Loan Documents
      shall run concurrently. 

    

    8.5.
       Extension
      of Time.
      If any
      payment comes due on a day that is not a Business Day, Borrower may make the
      payment on the first Business Day following the payment date and pay the
      additional interest accrued to the date of payment. 

    

    8.6.
       Notices.
      All
      notices, requests, demands or other communications provided for hereunder shall
      be in writing and, if to Borrower, mailed or delivered to it, addressed to
      it at
      the address specified on the signature pages of this Agreement, or if to
Lender,
      mailed or delivered to it, addressed to the address of Lender specified on
      the
      signature pages of this Agreement. All notices,
      statements, requests, demands and other communications provided for hereunder
      shall be deemed to be given or made when delivered or forty-eight (48) hours
      after being deposited in the mails with postage prepaid by registered or
      certified mail, addressed as aforesaid, or sent by facsimile with telephonic
      confirmation of receipt, except that notices from Borrower to Lender pursuant
      to
      any of the provisions hereof shall not be effective until received by Lender.
      

    

    8.7. Capital
      Adequacy.
      If
      Lender shall have determined, after the closing of the Loans, that the adoption
      of any applicable law, rule, regulation or guideline regarding capital adequacy,
      or any change therein, or any change in the interpretation or administration
      thereof by any governmental authority, central bank or comparable agency charged
      with the interpretation or administration thereof, or compliance by Lender
      (or
      its lending office) with any request or directive regarding capital adequacy
      (whether or not having the force of law) of any such authority, central bank
      or
      comparable agency, has or would have the effect of reducing the rate of return
      on Lender’s capital (or the capital of its holding company) as a consequence of
      its obligations hereunder to a level below that which Lender (or its holding
      company) could have achieved but for such adoption, change or compliance (taking
      into consideration Lender’s policies or the policies of its holding company with
      respect to capital adequacy) by an amount deemed by Lender to be material,
      then
      from time to time, within fifteen (15) days after demand by Lender, Borrower
      shall pay to Lender such additional amount or amounts as will compensate Lender
      (or its holding company) for such reduction. Lender shall designate a different
      lending office if such designation will avoid the need for, or reduce the amount
      of, such compensation and will not, in the judgment of Lender, be otherwise
      disadvantageous to Lender. A certificate of Lender claiming compensation under
      this Section and setting forth the additional amount or amounts to be paid
      to it
      hereunder shall be conclusive in the absence of manifest error. In determining
      such amount, Lender may use any reasonable averaging and attribution methods.
      Failure on the part of Lender to demand compensation for any reduction in return
      on capital with respect to any period shall not constitute a waiver of Lender’s
      rights to demand compensation for any reduction in return on capital in such
      period or in any other period. The protection of this Section shall be available
      to Lender regardless of any possible contention of the invalidity or
      inapplicability of the law, regulation or other condition that shall have been
      imposed.

    

    8.8
      Survival
      of Agreements; Relationship.
      All
      agreements, representations, and warranties made in this Agreement will survive
      the making of the extension of credit hereunder, and will bind and inure to
      the
      benefit of the Borrower and the Lender, and their respective successors and
      assigns; provided, that no subsequent holder of the Notes shall by reason of
      acquiring that Note or Notes become obligated to make any Loan hereunder and
      no
      successor to or assignee of the Borrower may borrow hereunder without the
      Lender’s written assent. The Lender may transfer and assign this Agreement, and
      the Loans hereunder, and deliver the Collateral to the assignee, who shall
      thereupon have all of the rights of the Lender. Borrower may not assign this
      Agreement or the right to receive any disbursements hereunder or any interest
      herein. The rights and powers given in this Agreement to the Lender are in
      addition to those otherwise created or existing in the same Collateral by virtue
      of other agreements or writings. The relationship between the Borrower and
      the
      Lender with respect to this Agreement, the Notes and any other Loan Document
      is
      and shall be solely that of debtor and creditor, respectively, and the Lender
      has no fiduciary obligation toward the Borrower with respect to any such
      document or the transactions contemplated thereby.

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

       

    

    8.9.
      Severability.
      If any
      provision of this Agreement or the Notes, or any action taken hereunder, or
      any
      application thereof, is for any reason held to be illegal or invalid, such
      illegality or invalidity shall not affect any other provision of this Agreement
      or the Notes, each of which shall be construed and enforced without reference
      to
      such illegal or invalid portion and shall be deemed to be effective or taken
      in
      the manner and to the full extent permitted by law.

    

    8.10.
      Entire
      Agreement.
      This
      Agreement, the Notes, the Security Instruments and any other Loan Document
      executed in connection herewith integrate all the terms and conditions mentioned
      herein or incidental hereto and supersede all oral representations and
      negotiations and supersede, amend and restate prior writings with respect to
      the
      subject matter hereof. In this Agreement unless the context otherwise requires,
      words in the singular number include the plural, and in the plural number
      include the singular.

    

    8.11.
      Participation/Syndication.
      Borrower
      acknowledges that the Lender reserves the right to syndicate and/or participate
      its interest in the Loans and Borrower agrees to, at Lender’s request, execute
      such additional promissory notes and other instruments as may be appropriate
      to
      evidence its obligation under the Loans to such syndicate Lenders as may commit,
      in the future, to fund a portion of the Loans according to the terms of this
      Agreement.

    

    8.12.  
      JURY
      TRIAL WAIVER.
      BORROWER AND LENDER EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
      ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN LENDER
      AND
      BORROWER ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
      RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
      ANY
      NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
      CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. 

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Borrower and the Lender have each caused this Agreement
      to
      be executed by their duly authorized officers on the date first set forth
      above.

     

    
      	 	 	 
	Address:	Borrower:
	6635 Kirkville Road	ANAREN, INC.
	E.
              Syracuse, NY 13057
 	 
 	 
 
	 	By:  	s/s
              Lawrence A.
              Sala
	 	Name: 
              Lawrence A. Sala
	 	Title:
              President, CEO & Chairman 

 

       

      	 	 	 
	Address:	Lender:
	Mailcode: NY3421-0440	KEYBANK NATIONAL ASSOCIATION
	201
              S.
              Warren Street
Syracuse, NY 13202	 
 	 
 
	 	By:  	s/s
              Stephen
              Markley
	 	Name: Stephen
              Markley 
	 	Title:
              Vice President - Relationship
              Manager

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    Exhibit
      A

    Security
      Instruments

    

    Security
      Agreement dated on even date herewith between

    Anaren,
      Inc. and KeyBank National Association

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    Exhibit
      B

    Subsidiaries

    

    Anaren
      Microwave, Inc.

    Anaren
      Ceramics, Inc.

    Anaren
      Properties, LLC

    Anaren
      Communications Suzhou Company, Ltd.

    

    
      
         

      

      
        19

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