Document:

exv10w1

	 	 	 	 	 

Exhibit 10.1

March 14, 2011

Luther E. Proper

Chief Executive Officer

The Killbuck Savings Bank Company

165 North Main Street

Killbuck, Ohio 44637

In re: Transitional Employment

Dear Luther:

This letter is to memorialize the terms of your part time employment which will follow your
retirement as Chief Executive Officer on March 21, 2011. The purpose of the employment is to
assist Craig Lawhead in his capacity as Chief Executive Officer with consultation, support and
assisting with special projects.

The arrangement will be for you to work on a half time basis, and this will generally mean Monday
and Tuesday and until noon on Wednesday; however, your schedule may be flexible so long as it is
clearly communicated to Craig in advance.

Your compensation will be one half of the compensation you are receiving as of March 21, 2011. In
addition, you will be entitled to participate in the same employee benefits as a regular employee.

All authority and responsibility of the chief executive officer will move to Craig on March 22,
2011. You will hold the title of Senior Vice President — Administration during the period of this
employment. You will report only to Craig, although you will of course work with other members of
management. It is anticipated that your focus will be in the following areas:

	 	1.	 	Investment portfolio
	 
	 	2.	 	SEC filings and related matters
	 
	 	3.	 	Tax and accounting issues; audit issues
	 
	 	4.	 	Employee compensation, insurance and benefits
	 
	 	5.	 	Expansion and acquisition issues
	 
	 	6.	 	Branch profitability

Since the purpose of your employment is to aid in Craig’s transition to CEO, you will also assist
in other areas Craig might desire.

 

 

Luther E. Proper

March 14, 2011

Page two

It is anticipated that you will remain on the Board of Directors, and during your continued
employment, you will of course continue to be considered an inside director.

This part time employment will commence March 22, 2011. It will be at will employment in that
either party may terminate it at any time for any legal reason or no reason. Nonetheless, the
expected time frame is approximately six months to not more than twelve months, depending on
the needs of Craig and the Bank. As the purpose of the employment is to facilitate Craig’s
transition into his role as Chief Executive Officer, it is believed that one or both of you will
realize when this goal has been sufficiently met.

The Bank appreciates your willingness to assist in this capacity, and of course very much
appreciates your many years of dedicated service to the Bank.

	 	 	 	 	 
	 	Very truly yours,

THE KILLBUCK SAVINGS BANK COMPANY

 	 
	 	/s/  Allan Mast

 	 
	 	Allan Mast 	 
	 	Chairman, Board of Directors 	 

Accepted:

	 	 	 	 	 
	 	 
	/s/  Luther E. Proper
 	 
	Luther E. Proper 	 
	 	 	 
	 
	March 14, 2011

	
DateExhibit 10.1

Exhibit 10.1

ASSET PURCHASE AGREEMENT

by and among

VITARICH LABORATORIES, INC.,

as Seller

and

NBTY FLORIDA, INC.

as Purchaser

and

ARGAN, INC.

(solely for purposes of Sections 2.5 & 10.9)

DATED MARCH 11, 2011

 

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1 DEFINITIONS; CONSTRUCTION	 	 	1	 
	 	1.1	 	 	Certain Definitions
	 	 	1	 
	 	1.2	 	 	Certain Matters of Construction
	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 2 PURCHASE AND SALE OF ASSETS	 	 	6	 
	 	2.1	 	 	Purchase and Sale of Acquired Assets
	 	 	6	 
	 	2.2	 	 	Excluded Assets
	 	 	7	 
	 	2.3	 	 	Assumption of Liabilities
	 	 	8	 
	 	2.4	 	 	Excluded Liabilities
	 	 	9	 
	 	2.5	 	 	Discharge of Excluded Liabilities
	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 3 CLOSING AND DELIVERABLES	 	 	10	 
	 	3.1	 	 	Closing 
	 	 	10	 
	 	3.2	 	 	Conditions Precedent to Closing
	 	 	11	 
	 	3.3	 	 	Payment of Initial Closing Payment
	 	 	15	 
	 	3.4	 	 	Holdback Amount
	 	 	15	 
	 	3.5	 	 	Sales and Transfer Taxes
	 	 	15	 
	 	3.6	 	 	Bulk Sales
	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 4 PURCHASE PRICE	 	 	16	 
	 	4.1	 	 	Purchase Price
	 	 	16	 
	 	4.2	 	 	Closing Statement
	 	 	16	 
	 	4.3	 	 	Post-Closing Payments of Purchase Price
	 	 	16	 
	 	4.4	 	 	Allocation of Purchase Price
	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER	 	 	17	 
	 	5.1	 	 	Organization
	 	 	17	 
	 	5.2	 	 	Authority; Enforceability
	 	 	17	 
	 	5.3	 	 	Non-contravention; Consents
	 	 	18	 
	 	5.4	 	 	Subsidiaries
	 	 	18	 
	 	5.5	 	 	Financial Statements
	 	 	18	 
	 	5.6	 	 	Undisclosed Liabilities
	 	 	19	 
	 	5.7	 	 	Absence of Certain Changes or Events
	 	 	19	 
	 	5.8	 	 	Tax Matters
	 	 	20	 
	 	5.9	 	 	Title to Properties
	 	 	21	 
	 	5.10	 	 	Assumed Real Property Leases; Properties
	 	 	22	 
	 	5.11	 	 	Intellectual Property
	 	 	23	 
	 	5.12	 	 	Compliance with Laws
	 	 	24	 
	 	5.13	 	 	Permits; Regulatory Matters
	 	 	24	 
	 	5.14	 	 	Legal Proceedings
	 	 	25	 
	 	5.15	 	 	Employee Plans
	 	 	25	 
	 	5.16	 	 	Employment Matters
	 	 	28	 
	 	5.17	 	 	Environmental Matters
	 	 	29	 
	 	5.18	 	 	Vitarich Contracts
	 	 	31	 

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	5.19	 	 	Inventory
	 	 	33	 
	 	5.20	 	 	Accounts Receivable; Accounts Payable
	 	 	33	 
	 	5.21	 	 	Insurance
	 	 	34	 
	 	5.22	 	 	No Broker’s and Finder’s Fees
	 	 	34	 
	 	5.23	 	 	Customers & Suppliers
	 	 	34	 
	 	5.24	 	 	Vehicles, Equipment & Machinery
	 	 	35	 
	 	5.25	 	 	Products
	 	 	35	 
	 	5.26	 	 	Product Liability 
	 	 	35	 
	 	5.27	 	 	No Guarantees
	 	 	35	 
	 	5.28	 	 	Books and Records
	 	 	35	 
	 	5.29	 	 	Affiliate Transactions
	 	 	35	 
	 	5.30	 	 	Advertising Materials
	 	 	36	 
	 	5.31	 	 	No Management Reports
	 	 	36	 
	 	5.32	 	 	Disclosure
	 	 	36	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE BUYER	 	 	36	 
	 	6.1	 	 	Organization
	 	 	36	 
	 	6.2	 	 	Authority; Enforceability 
	 	 	36	 
	 	6.3	 	 	Non-Contravention; Consents
	 	 	37	 
	 	6.4	 	 	Legal Proceedings
	 	 	37	 
	 	6.5	 	 	No Broker’s and Finder’s Fees
	 	 	37	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 7 TAX MATTERS	 	 	37	 
	 	7.1	 	 	Straddle Period Taxes
	 	 	37	 
	 	7.2	 	 	Preparation of Straddle Period Tax Returns
	 	 	38	 
	 	7.3	 	 	Tax Obligations Generally
	 	 	38	 
	 	7.4	 	 	Cooperation
	 	 	38	 
	 	7.5	 	 	Tax Indemnity
	 	 	38	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 8 ADDITIONAL AGREEMENTS	 	 	39	 
	 	8.1	 	 	Further Assurances; Post-Closing Cooperation
	 	 	39	 
	 	8.2	 	 	Public Announcements
	 	 	39	 
	 	8.3	 	 	Confidentiality
	 	 	40	 
	 	8.4	 	 	Product Returns
	 	 	40	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 9 INDEMNIFICATION	 	 	40	 
	 	9.1	 	 	Survival
	 	 	40	 
	 	9.2	 	 	Indemnification by the Buyer
	 	 	41	 
	 	9.3	 	 	Indemnification by Seller
	 	 	41	 
	 	9.4	 	 	Claims for Indemnification
	 	 	42	 
	 	9.5	 	 	Third Party Claims Procedures
	 	 	43	 
	 	9.6	 	 	Exclusive Remedy
	 	 	43	 
	 	 	 	 	 
	 	 	 	 

 

ii 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 10 MISCELLANEOUS	 	 	44	 
	 	10.1	 	 	Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL
	 	 	44	 
	 	10.2	 	 	Notices
	 	 	44	 
	 	10.3	 	 	Entire Agreement; Third-Party Beneficiaries
	 	 	45	 
	 	10.4	 	 	Amendments and Waivers
	 	 	45	 
	 	10.5	 	 	Severability
	 	 	45	 
	 	10.6	 	 	Rules of Construction
	 	 	46	 
	 	10.7	 	 	Assignment
	 	 	46	 
	 	10.8	 	 	Expenses
	 	 	46	 
	 	10.9	 	 	Argan Guaranty 
	 	 	46	 
	 	10.10	 	 	Counterparts; Facsimile
	 	 	46	 

 

iii 

 

Terms & Definitions not set forth in Section 1.1 hereof

	 	 	 
	Term	 	Definition
	Acquired A/R
	 	2.1.8
	Acquired Assets
	 	2.1
	Acquired Inventory
	 	2.1.4
	Acquired Intangible Personal Property
	 	2.1.1
	Acquired Tangible Personal Property
	 	2.1.2
	Affiliate Transactions
	 	5.29
	Agreement
	 	Preamble
	Annual Balance Sheets
	 	5.5
	Annual Financial Statements
	 	5.5
	Argan
	 	Preamble
	Assumed A/P
	 	2.3.2
	Assumed Business Contracts
	 	2.1.9
	Assumed Equipment Leases
	 	2.1.6
	Assumed Liabilities
	 	2.3
	Assumed Orders
	 	2.1.10
	Assumed Real Property Leases
	 	2.1.5
	Business Employee Plan
	 	5.15.1(b)
	Buyer
	 	Preamble
	Buyer Indemnified Persons
	 	9.3.1
	CERCLA
	 	5.17.1(a)
	CERCLIS
	 	5.17.1(b)
	Claim Notice
	 	9.4.1
	Closing
	 	3.1
	Closing Date
	 	3.1
	Closing Statement
	 	4.2
	COBRA
	 	5.15.1(a)
	Credit Agreement
	 	3.2.1(m)
	Damages
	 	9.2.1
	Defined Benefit Plan
	 	5.15.1(c)
	Disclosure Schedule
	 	ARTICLE 5
	Environmental Claims
	 	5.17.1(c)
	Environmental Law
	 	5.17.1(d)
	ERISA
	 	5.15.1(d)
	ERISA Affiliate
	 	5.15.1(e)
	Escrow Agent
	 	3.4
	Excluded Assets
	 	2.2
	Excluded Liabilities
	 	2.4
	Final Purchase Price
	 	4.1

 

iv 

 

	 	 	 
	Term	 	Definition
	Financial Statements
	 	5.5
	Guaranty
	 	10.9
	Hazardous Materials
	 	5.17.1(e)
	Holdback Account
	 	3.4
	IFN
	 	3.2.1(j)
	Indemnified Person
	 	9.4.1
	Indemnifying Person
	 	9.4.1
	Initial Closing Payment
	 	3.3
	Interim Balance Sheet
	 	5.5
	Inventory Value
	 	4.2
	IP License Contract
	 	5.11.1
	IRS
	 	5.15.1(f)
	Leased Property and Leased Properties
	 	2.1.5
	Multiemployer Plan
	 	5.15.1(g)
	NPL
	 	5.17.1(f)
	Obligations
	 	10.9
	OFAC
	 	5.13.6
	Pension Plan
	 	5.15.1(i)
	Post Closing Statement
	 	4.3
	Post-Closing Tax Period
	 	7.1
	Pre-Closing Tax Period
	 	7.1
	Prepaid Expenses
	 	2.1.11
	Qualified Plan
	 	5.15.1(h)
	Release
	 	5.17.1(g)
	Required Consents
	 	5.3
	Security Deposits
	 	2.1.7
	Seller
	 	Preamble
	Seller Indemnified Persons
	 	9.2.1
	Straddle Period
	 	7.1
	Straddle Period Taxes
	 	7.1
	Third Party Claim
	 	9.5
	Transfer Taxes
	 	3.5
	Vehicles
	 	2.1.3
	Vitarich Contracts
	 	5.18.1

 

v 

 

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of March
11, 2011, by and among VITARICH LABORATORIES, INC., a Delaware corporation (“Seller”), NBTY
FLORIDA, INC., a Delaware corporation (the “Buyer”), and solely for purposes of Sections
2.5 and 10.9 hereof, ARGAN, INC., a Delaware corporation (“Argan”).

WHEREAS, the Buyer wishes to purchase the Acquired Assets (as defined below) from the Seller
and to assume only the Assumed Liabilities from Seller, and the Seller wishes to sell the Acquired
Assets and to transfer only the Assumed Liabilities to the Buyer;

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

ARTICLE 1

DEFINITIONS; CONSTRUCTION

1.1 Certain Definitions. As used herein, the following terms have the following
meanings:

1.1.1 “Accounts Receivable” means with respect to the Business, all trade
accounts receivable and all notes, bonds and other evidences of Indebtedness of and rights to
receive payments arising out of sales occurring in the conduct of the Business and the Security
Agreements related thereto, including any rights of Seller with respect to any third party
collection procedures or any other Legal Proceedings which have been commenced in connection
therewith.

1.1.2 “Affiliate” means, with respect to any Person, any Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such Person. For purposes
of this definition, “control,” “controlled by” and “under common control
with” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of 10% or more
of the voting securities, by contract or otherwise.

1.1.3 “Books and Records” of any Person means all files, documents, instruments,
papers, books and records relating to the business, operations, conditions of (financial or other),
results of operations and assets and properties of such Person, including without limitation
financial statements, Tax Returns and related workpapers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and
books, stock transfer ledgers, Contracts and other agreements, Permits, customer lists, computer
files and programs, electronic data, emails, retrieval programs, operating data and plans and
environmental studies and plans.

 

 

 

1.1.4 “Buildings” means the buildings, properties and premises located at 4365, 4327,
4405, 4206 and 4344 Arnold Avenue, Naples, Florida which are currently subject to existing leases
between Seller and the landlords thereunder.

1.1.5 “Bulk Sales Laws” means the Legal Provisions of any jurisdiction or any Tax
Authority relating to bulk sales.

1.1.6 “Business” means (a) the Liquid Vitamins Business, and (b) the powder and
tablet/capsule Business, in each case, consisting of the related assets and businesses owned,
operated and conducted by the Seller during the period of time ending on the date hereof. When
used herein, unless the text clearly provides otherwise, the reference to the term Business shall
mean the Business taken as a whole on a consolidated basis.

1.1.7 “Business Day” means any day other than Saturday, Sunday or a day on which banks
are permitted or required to close in State of New York or Florida.

1.1.8 “Business Employee” shall mean any current or former employee, officer or
director of Seller that is employed in the Business.

1.1.9 “Business Intellectual Property Rights” means all intellectual property rights
owned or licensed by Seller and used or held for use in the Business, including: (i) all
trademarks, service marks, trade names, slogans, logos, trade dress, internet domain names, uniform
resource identifiers, rights in design, brand names, and other similar designations of source or
origin, together with all goodwill, registrations and applications related to the foregoing, as
fully listed on Part 1.1.9 of the Disclosure Schedule (collectively, “Marks”); (ii)
patents, utility, models and industrial design registrations or applications (including without
limitation any continuations, divisionals, continuations-in-part, provisionals, renewals, reissues,
re-examinations and applications for any of the foregoing, as fully listed on Part 1.1.9 of the
Disclosure Schedule (collectively, “Patents”); (iii) all copyrights and copyrightable
subject matter, database rights and moral rights in both published works and unpublished works,
whether registered or unregistered, and all registrations or applications for registration thereof,
as fully listed on Part 1.1.9 of the Disclosure Schedule (collectively,
“Copyrights”); (iv) mask works rights and trade secrets and other confidential or
proprietary business information (including manufacturing and production processes and techniques,
research and development information, technology, drawings, specifications, designs, plans,
proposals, technical data, financial, marketing and business data, pricing and cost information,
business and marketing plans, customer and supplier lists and information, all know-how, details of
client or consultant contracts, pricing policies, marketing plans or strategies, product
development techniques or plans, business acquisition plans, designs and design projects,
inventions and research projects), proprietary processes, formulae, algorithms, models, and
methodologies (collectively, “Secret Information”); (v) computer software, computer
programs, and databases (whether in source code, object code or other form) and all URLs, websites
or domain names and telephone numbers, in each case used in, usable in, or held for use in or
otherwise necessary for the conduct of the Business, as fully listed on Part 1.1.9 of the
Disclosure Schedule; and (vi) all names that Seller is known by in the Business,
including without limitation, Vitarich.

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

 

2

 

1.1.11 “Contract” means any contract, agreement, option, undertaking, understanding,
license, sublicense, lease, consent, note, bond, debenture, mortgage or other commitment, in each
case with all amendments thereto, whether or not reduced to writing.

1.1.12 “Encumbrance” means any mortgage, pledge, hypothecation, assessment, security
interest, lease, lien, option, right of first refusal, easement, adverse claim, levy, charge, or
other encumbrance or lien of any kind, or any conditional sale Contract, title retention Contract,
or other Contract to give any of the foregoing.

1.1.13 “FDA” means the United States Food and Drug Administration.

1.1.14 “Formulations” means the formulations for each Product as of the date hereof.

1.1.15 “GAAP” means generally accepted accounting principles in the U.S., consistently
applied throughout the specified period.

1.1.16 “Governmental Entity” means any Federal, state, provincial, territorial,
municipal or local, domestic or foreign, government or any court, administrative agency or
commission or other governmental or regulatory authority or agency, domestic or foreign, including
without limitation, the FDA and the Occupational Safety and Health Administration.

1.1.17 “Holdback Amount” shall mean $2,300,000.

1.1.18 “Indebtedness” of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, debentures, bonds or other similar instruments, (iii) for
deferred purchase price for goods or services (other than trade payables or accruals incurred in
the Ordinary Course of Business), (iv) under capital leases and (v) in the nature of a guarantee of
the obligations described in clauses (i) through (iv) above of any other Person.

1.1.19 “Inventory” means all inventory of raw materials, work-in-process, finished
goods, products under research and development, demonstration equipment, office and other supplies,
parts, packaging materials and other accessories related thereto which are held at, or are in
transit from or to, the locations at which the Business is conducted, or located at customers’
premises on consignment, in each case, which are used or held for use by Seller or its Affiliates
in the conduct of the Business, including any of the foregoing purchased subject to any conditional
sales or title retention agreement in favor of any other Person, together with the rights of Seller
against suppliers of such inventories, excluding any Excluded Assets.

1.1.20 “Knowledge”, as pertaining to the Seller, means the knowledge of any officer,
director or manager of Seller or executive officer of Argan.

1.1.21 “Legal Proceeding” means any claim, suit, action, arbitration, hearing,
complaint or criminal or civil prosecution, whether at law or at equity, before or by any court or
Governmental Entity, any arbitrator or other tribunal.

1.1.22 “Legal Provision” means any statute, law, ordinance, rule, regulation,
judgment, order or decree of any Governmental Entity.

 

3

 

1.1.23 “Liquid Vitamins Business” shall mean the research, development, manufacture
and sale of premium liquid vitamins and minerals, whole-food dietary supplements and products and
activities incidental thereto, as conducted by the Seller during the period of time ending on the
date hereof, anywhere in the world.

1.1.24 “Loss” and “Losses” means any and all out-of-pocket damages, fines,
fees, penalties, deficiencies, losses and expenses (including without limitation interest,
penalties, court costs, fees of attorneys, accountants and other experts or other expenses of any
Legal Proceeding or of any claim, default, or assessment).

1.1.25 “Material Adverse Effect” means, with respect to any Person, any state of
facts, change, effect, condition, development, event or occurrence that has been, is or would
reasonably be likely to be material and adverse to the financial condition, business, assets,
liabilities, or results of operations or prospects of such Person and its subsidiaries, taken as a
whole, or the ability of such Person and its subsidiaries to consummate the transactions
contemplated by this Agreement, except, in each case, to the extent that such change or effect
results from or arises out of (i) general economic, industry or political conditions, that does not
disproportionately affect such Person or such Person’s Business, or (ii) the performance by such
Person of its obligations under the terms of this Agreement. Any failure of a Person to meet any
particular revenue or earnings forecast or estimate, shall not, in and of itself, constitute a
Material Adverse Effect.

1.1.26 “Order” means any judgment, order, decision, consent decree, writ, injunction,
ruling or decree of, or any settlement under the jurisdiction of, any court or Governmental Entity.

1.1.27 “Ordinary Course of Business” means the ordinary course of conduct of the
Business, consistent with the Seller’s and the Affiliates’ past practice.

1.1.28 “Permits” means all permits, certificates of occupancy, licenses, variances,
exemptions, and other Orders and approvals from Governmental Entities that are necessary or useful
for the operation of the Business or the Acquired Assets.

1.1.29 “Permitted Encumbrances” means (i) statutory liens for Taxes not yet due and
payable or being contested in good faith by appropriate proceedings, for which adequate reserves
have been established in accordance with GAAP, (ii) any statutory or common law lien arising in the
Ordinary Course of Business by operation of any Legal Provision with respect to a liability that is
not yet due or delinquent, and (iii) statutory liens, such as carriers’ and warehousemen’s liens
incurred in the Ordinary Course of Business.

1.1.30 “Person” means any individual, corporation, association, partnership, limited
liability company, proprietorship, firm, joint venture, joint stock company, estate, trust,
unincorporated organization, Governmental Entity and any other entity or organization.

1.1.31 “Processing Instructions” means the processing instructions for each Product as
of the date hereof.

 

4

 

1.1.32 “Products” means any and all products produced, marketed, or sold by or on
behalf of the Seller in connection with the Business.

1.1.33 “Properties” means the Leased Properties and Buildings.

1.1.34 “Security Agreements” means any security arrangement and collateral securing
the repayment or other satisfaction of the Accounts Receivable.

1.1.35 “Specifications” means the raw materials, manufacturing, packaging, labeling
and quality assurance specifications for each Product, as of the date hereof.

1.1.36 “Tangible Personal Property” means all furniture, fixtures, racking, equipment,
machinery and other tangible personal property (other than Inventory and Vehicles) used or held for
use in the conduct of the Business at the locations at which the Business is conducted or at
customers’ premises on consignment, or otherwise used or held for use by Seller or its Affiliates
in the conduct of the Business, including any of the foregoing purchased subject to any conditional
sales or title retention agreement in favor of any other Person.

1.1.37 “Tax” or “Taxes” means any federal, state, local, or non-U.S. income,
alternative or add-on minimum, gross receipts, sales, use, transfer, registration, value added,
estimated, gains, ad valorem, franchise, profits, license, withholding, payroll,
direct placement, employment, excise, severance, stamp, procurement, occupation, premium, property,
escheat, environmental or windfall profit tax, custom, duty, capital stock, social security,
unemployment, disability, real property, personal property, or any other tax of any kind
whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any
other manner, together with any interest, additions or penalties with respect thereto, whether
disputed or not, and including any obligation to indemnify or otherwise assume or succeed to the
Tax liability of any other Person.

1.1.38 “Tax Authority” means a Governmental Entity responsible for the imposition of
Taxes.

1.1.39 “Tax Return” means any return, declaration, report, claim for refund, or
information return or statement with respect to any Taxes filed or required to be filed with a Tax
Authority, including any schedule or attachment thereto, and including any amendment thereof.

1.1.40 “Transaction Documents” means all agreements, instruments, certificates and
documents delivered by the parties hereto pursuant to this Agreement, as each may be amended,
modified or supplemented from time to time in accordance with its terms.

1.1.41 “Vehicle” means all motor vehicles, owned or leased by Seller and used or held
for use in the conduct of the Business including, but not limited to, the vehicles in Part
2.1.3 of the Disclosure Schedule.

1.2 Certain Matters of ConstructionA reference to an Article, Section, Exhibit or Schedule
shall mean an Article of, a Section in, or Exhibit or Schedule to, this Agreement unless otherwise
expressly stated. The titles and
headings herein are for reference purposes only and shall not in any manner limit the
construction of this Agreement which shall be considered as a whole. The words “include,”
“includes” and “including” when used herein shall be deemed in each case to be followed by the
words “without limitation.”

 

5

 

ARTICLE 2

PURCHASE AND SALE OF ASSETS

2.1 Purchase and Sale of Acquired Assets. Subject to Buyer’s satisfactory review of complete
and accurate due diligence materials to be provided by Seller, and on the terms and subject to the
conditions of this Agreement, at the Closing, the Seller shall sell, transfer and assign to the
Buyer, and the Buyer shall purchase and acquire from Seller, free and clear of any Encumbrances
(other than Permitted Encumbrances and the Assumed Liabilities), all of Seller’s right, title and
interest in and to all of the following assets and rights, that, in each case, are owned, leased or
used or held for use by Seller or its Affiliates in connection with Seller’s conduct of the
Business, other than Excluded Assets, in each case as the same shall exist on the Closing Date
(collectively, the “Acquired Assets”):

2.1.1 The intangible property and rights (including the Business Intellectual Property Rights)
of the Business, including but not limited to those identified on Part 2.1.1 of the Disclosure
Schedule, the goodwill and going concern value relating thereto, and all rights, privileges,
claims, causes of action, options income, royalties, damages and payments relating to any of the
foregoing or to the Business or the Acquired Assets, including, without limitation, the name
Vitarich (the “Acquired Intangible Personal Property”);

2.1.2 The furniture, fixtures, machinery, equipment, racking and other Tangible Personal
Property of the Business, including but not limited to those identified on Part 2.1.2 of the
Disclosure Schedule (the “Acquired Tangible Personal Property”);

2.1.3 All vehicles of the Business, including but not limited to those listed on Part
2.1.3 of the Disclosure Schedule (the “Vehicles”);

2.1.4 The Inventory of the Business, as reflected on the Closing Statement and as updated
through the Closing Date (the “Acquired Inventory”);

2.1.5 The rights under the real property leases identified on Part 2.1.5 of the Disclosure
Schedule (the “Assumed Real Property Leases”) and all other rights, privileges given to
Seller in connection with such leases, including, but not limited to the use of all fixtures,
machinery, equipment, racking and other items of personal property owned by Seller at the leased
premises (each of the leased premises being a “Leased Property” and collectively referred
to herein as the “Leased Properties”), all governmental permits, licenses, approvals, and
certificates relating to any Property; and all guaranties and warranties owned by Seller in
connection with any Property;

2.1.6 The rights under the personal property leases identified on Part 2.1.6 of the
Disclosure Schedule (the “Assumed Equipment Leases”);

2.1.7 All security deposits deposited by or on behalf of the Seller as lessee or sublessee
under the Assumed Real Property Leases or Assumed Equipment Leases or otherwise (the “Security
Deposits”);

 

6

 

2.1.8 The Accounts Receivable of the Business, as reflected on the Closing Statement and as
updated through the Closing Date (the “Acquired A/R”);

2.1.9 The rights under the Contracts of the Business identified on Part 2.1.9 of the
Disclosure Schedule (collectively with the Assumed Real Property Leases and the Assumed
Equipment Leases, the “Assumed Business Contracts”);

2.1.10 All rights under the unfilled, standing or open supplier and customer purchase orders
in connection with the Business, incurred in the Ordinary Course of Business (the “Assumed
Orders”);

2.1.11 All prepaid expenses relating to the Business, including but not limited to the items
listed on Part 2.1.11 of the Disclosure Schedule (the “Prepaid Expenses”);

2.1.12 The Books and Records of Seller that relate to the conduct of the Business;

2.1.13 The Permits held by Seller that relate to the conduct of the Business;

2.1.14 The website and domain names identified on Part 2.1.14 of the Disclosure
Schedule;

2.1.15 All customer lists, supplier lists and sales information;

2.1.16 All Formulations, Specifications and Processing Instructions for each Product;

2.1.17 All applications systems and software, including all computer software, programs and
source disks, and related program documentation, tapes, manuals, forms, guides and other materials,
computer hardware and other systems hardware and networking and communication assets, including
servers, databases, backup, and peripherals;

2.1.18 All documents including marketing materials, Product literature, printed advertising
and promotional materials, training materials, and advertising materials;

2.1.19 Rights, claims, credits, causes of action or rights of setoff against third parties
under vendors’ or manufacturers’ warranties, indemnities and guaranties;

2.1.20 All Legal Proceedings where Seller is a plaintiff; and

2.1.21 All other assets, properties and rights of any kind, nature and description, real,
personal and mixed, tangible and intangible, wherever located, owned, leased, licensed, or used or
held for use in the Business.

2.2 Excluded Assets. Notwithstanding anything herein to the contrary, the following assets
and rights of the Seller are the only excluded items from the purchase and sale of assets of the
Business hereunder, and are not included in the definition of Acquired Assets (collectively, the
“Excluded Assets”):

 

7

 

2.2.1 all cash, commercial paper, certificates of deposit, treasury bills, cash equivalents
and bank accounts;

2.2.2 all Books and Records, accounts, ledgers, files, documents, correspondence, studies,
reports and other printed or written material related to any Excluded Assets or Excluded
Liabilities;

2.2.3 all employee benefit plans and arrangements, including all Business Employee Plans, and
any trusts, insurance arrangements or other assets held pursuant to, or set aside to fund the
obligations of Seller or Argan under, any such Business Employee Plans or benefit arrangements;

2.2.4 all rights to insurance claims, related refunds and proceeds arising from or related to
the Excluded Assets or Excluded Liabilities;

2.2.5 all rights relating to refunds or recoupment of Taxes paid by Seller which can not be
assigned by law;

2.2.6 all rights of the Seller under this Agreement and the Transaction Documents;

2.2.7 all rights of the Seller in and to the Inventory relating in any way to or known as the
Adaptogen inventory or materials (“Adaptogen”), including, without limitation, (i) the raw
materials known as Russian Herbal Adaptogen Extract Blend and Eleutherococcus, (ii) any knowledge,
trade secrets, or written works relating to Adaptogen, or (iii) the Adaptogen pilot clinical study.

2.2.8 any shares of capital stock or other securities of any corporation, limited liability
company, or any other Person;

2.2.9 all Legal Proceedings arising before, on or after the Closing relating to any Excluded
Asset or to any Excluded Liabilities; and

2.2.10 the items listed on Part 2.2.10 of the Disclosure Schedule.

2.3 Assumption of Liabilities. Subject to Buyer’s satisfactory review of complete and
accurate due diligence materials to be provided by Seller, and on the terms and subject to the
conditions of this Agreement, at the Closing, the Buyer shall assume and hereby agrees to fully and
timely perform and discharge, only the following liabilities and obligations of the Seller
(collectively, the “Assumed Liabilities”), and no other liabilities, obligations or
commitments:

2.3.1 All liabilities and obligations arising under the Assumed Business Contracts and the
Assumed Orders arising and to be performed after the Closing Date and excluding any such liability
and obligation arising or to be performed on or prior to the Closing Date;

2.3.2 All accounts payable and accrued expenses of Seller in connection with the Business, not
to exceed $685,000 in the aggregate (collectively, the “Assumed A/P”);

 

8

 

2.3.3 Fifty percent (50%) of the liabilities and obligations relating to retention bonuses of
certain Business Employees as identified in, and in such amounts as described in,
Part 2.3.3 of the Disclosure Schedule, but only in amounts not to exceed $48,500, in the aggregate; and

2.3.4 All obligations to pay the auction fees to Harry Davis & Co., but only in amounts not to
exceed $50,000, in the aggregate, provided that if such fees have been paid by Seller prior to
Closing, Buyer shall reimburse Seller for such amounts.

2.4 Excluded Liabilities. The Seller and Buyer acknowledge that the Assumed Liabilities shall
include only those liabilities set forth in Section 2.3 hereof. The Buyer shall not assume, or in
any way be liable for the payment, performance or discharge of, without limitation, the following
liabilities or obligations of the Seller or any of its Affiliates (collectively, the “Excluded
Liabilities”):

2.4.1 All liabilities to the extent arising out of or otherwise relating to the Excluded
Assets;

2.4.2 All liabilities, obligations and commitments for any Taxes, including those arising on
or prior to or relating to any period on or prior to the Closing Date, including any liabilities,
obligations or commitments for income, transfer, sales, use or other Taxes arising in connection
with the consummation of the transactions contemplated hereby (including any income Taxes arising
from the sale of the Acquired Assets);

2.4.3 Any liabilities with respect to Products produced, shipped or sold on or prior to the
Closing Date, including without limitation, product warranty liabilities;

2.4.4 Any liabilities or obligations for customer returns of Products that were sold on or
prior to the Closing Date;

2.4.5 Except as set forth in Section 2.3.3 hereof, any liabilities to present or former
employees, consultants or agents, whether for liabilities relating to Business Employee Benefits or
otherwise, including any liabilities to Dennis Madden under the severance arrangements identified
on Parts 5.16.1 and 5.18.1 of the Disclosure Schedule;

2.4.6 Any liabilities for injury to or death of persons or damages to or destruction of
property (including, without limitations, any products liability claim or worker’s compensation
claim), regardless of when said claim or liability is asserted, including, without limitation, any
claim for consequential damages in connection with the foregoing;

2.4.7 Any liabilities arising out of infringement of the rights of any Persons;

2.4.8 All liabilities arising out of violations of any Legal Provision;

2.4.9 All liabilities, obligations and commitments arising out of all pending or threatened
Legal Proceedings (whether asserted or commenced before or after the Closing Date);

 

9

 

2.4.10 Any and all liabilities or obligations under any Assumed Business Contract or any
Assumed Order arising or to be performed on or before the Closing Date;

2.4.11 All liabilities, obligations and commitments for trade and consumer promotions
occurring on or prior to Closing Date, including those that were commenced prior to but concluded
on or after the Closing Date;

2.4.12 Any and all liabilities or obligations under this Agreement, the Transaction Documents,
and the transactions contemplated by this Agreement, the Transaction Documents and such other
agreements and instruments;

2.4.13 All accounts payable and accrued expenses in support of the production (including
payrolls and related expenses) of Seller in connection with the Business in excess of $685,000;

2.4.14 All liabilities, obligations and commitments under any Business Employee Plan
sponsored by Seller or any Affiliates or to which any of such entities may have any liability or
obligation;

2.4.15 All liabilities in connection with the Assumed Real Property Leases, the Assumed
Equipment Lease or the other leases which arose on or prior to the Closing Date; and

2.4.16 Without limitation by the specific enumeration of the foregoing, all other liabilities,
obligations and commitments of the Seller or any Affiliates, except the Assumed Liabilities,
pursuant to the provisions of Section 2.3.

2.5 Discharge of Excluded Liabilities. The Seller and Argan shall pay and discharge when due
all Excluded Liabilities, including, without limitation, all of those liabilities of the Seller
which Buyer has not specifically agreed to assume pursuant to the provisions of Section 2.3.
Notwithstanding the foregoing, Seller and Argan shall not be required to pay or discharge any
liability owing from Seller to Argan or from Argan to Seller provided that Argan and Seller deliver
to Buyer at Closing a general release with respect to such liabilities in accordance with Section
3.2.1(k).

ARTICLE 3

CLOSING AND DELIVERABLES

3.1 Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place at the offices of Farrell Fritz, P.C., 1320 RXR Plaza, Uniondale, NY
11556, simultaneously with the execution and delivery of this Agreement (the date on which the
Closing occurs, the “Closing Date”). The Closing shall be deemed to have occurred at 11:59 p.m.
Eastern Standard Time on the Closing Date.

 

10

 

3.2 Conditions Precedent to Closing.

3.2.1 Conditions Precedent to the Obligations of Buyer to Complete the Closing. The
obligations of Buyer to enter into this Agreement and to complete the Closing are subject to the
fulfillment on or prior to the Closing Date of the following conditions, any one of which may be
waived by Buyer and, in the event the Closing has occurred, shall be deemed to have been waived by
Buyer:

(a) Seller shall have performed and complied with each agreement,
covenant, and obligation required to be performed or complied with under this
Agreement at or prior to the Closing, and Buyer shall have received a certificate of
an executive officer of the Seller certifying to the same;

(b) All corporate proceedings of the Seller and Argan that are
required in connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to Buyer and its counsel and Buyer and its counsel
shall have received evidence of such proceedings, certified by the Secretary of Seller
and Argan, as applicable;

(c) Seller shall have delivered to Buyer (i) a copy of Seller’s
articles of incorporation, including all amendments thereto, (ii) a certificate from
the Secretary of State of the State of Delaware that the Seller is in good standing
and attesting to its payment of all franchise or similar Taxes, and (iii) a
certificate from the Secretary of State in each jurisdiction in which the Seller is
qualified to do business to the effect that the Seller is duly qualified and in good
standing in such jurisdiction as of the Closing Date;

(d) Seller shall have delivered to Buyer (i) a copy of Argan’s
articles of incorporation, including all amendments thereto, (ii) a certificate from
the Secretary of State of the State of Delaware that Argan is in good standing and
attesting to Argan’s payment of all franchise or similar Taxes, and (iii) a
certificate from the Secretary of State in each jurisdiction in which Argan is
qualified to do business to the effect that Argan is duly qualified and in good
standing in such jurisdiction as of the Closing Date;

(e) Seller shall have executed and delivered to Buyer good and
sufficient instruments of transfer transferring to the Buyer all right, title and
interest in and to all of the Acquired Assets sold by Seller hereunder, including one
or more lease assignments, bills of sale, and patent, copyright and trademark
assignments in recordable forms. All such instruments of transfer (x) shall be in the
form which is usual and customary for transferring the type of property involved under
the Legal Provisions of the jurisdictions applicable to such transfers, and (y) shall
be in form and substance reasonably satisfactory to the Buyer;

(f) Buyer shall have received the Formulations, Specifications and
Processing Instructions corresponding to each Product, in each case in a form
reasonably acceptable to Buyer;

(g) Buyer shall have received the Closing Statement, certified by the
President or the Chief Executive Officer of the Seller, certifying the Acquired A/R
and Assumed A/P as of the Closing Date;

 

11

 

(h) Buyer shall have received evidence that as of immediately prior
to the Closing, the Seller has no (i) outstanding Indebtedness owed by it to another
Person, (ii) liabilities in connection with pension obligations to Business Employees,
or (iii) contingent liabilities, including those that would result from the
consummation of this Agreement, with the exception of any of the foregoing resulting
from an Affiliate Transaction by and between Argan and Seller (all of which exceptions
are set forth on Part 5.29 of the Disclosure Schedule), the sufficiency of
such evidence being reasonably satisfactory to Buyer.

(i) Seller shall have executed and delivered to Buyer an affidavit
stating that under the penalties of perjury the Seller’s United States taxpayer
identification number and that the Seller is not a foreign Person pursuant to Section
1445 of the Code;

(j) Seller shall have delivered the Properties free of all tenancies
and occupants other than the personnel of the Seller and the sub-tenant, International
Food & Nutrition Research LLC (“IFN”), with respect to the building known as
4206 Arnold Avenue, Naples, Florida; provided that (x) IFN shall have entered into an
assignment and amendment of their agreement with Seller on terms, conditions and in
form acceptable to Buyer and (y) IFN shall have provided an estoppel certificate to
Buyer in form and content satisfactory to Buyer;

(k) Seller shall have executed and delivered to Buyer a general
release releasing Buyer from any and all liabilities owing from Seller to Argan or
from Argan to Seller, in form and substance reasonably satisfactory to Buyer;

(l) All Required Consents shall have occurred, been filed or been
obtained, as the case may be;

(m) Buyer shall have received evidence of the release of Seller from
any and all obligations to Bank of America under the Second Amended and Restated
Financing and Security Agreement dated December 11, 2006 by and among Argan, Southern
Maryland Cable, Inc., Seller, Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power
Systems California, Gemma Power Hartford, LLC and Bank of America, N.A, as amended to
the date hereof (the “Credit Agreement”);

(n) Buyer shall have received evidence that all Encumbrances on the
Acquired Assets (including those pursuant to the Credit Agreement and other than
Permitted Encumbrances) shall have been released, in each case in a form and substance
satisfactory to Buyer;

(o) There shall not be in effect any Order or Legal Provision
restraining, enjoining or otherwise prohibiting or making illegal the consummation
of any of the transactions contemplated in this Agreement or which could
reasonably be expected to otherwise result in a material diminution of the benefits to
Buyer of the transactions contemplated in this Agreement, and there shall not be
pending or threatened any Legal Proceeding or any other action in, before or by any
Governmental Entity which could reasonably be expected to result in the issuance of
any such Order or the enactment or promulgation of any such Legal Provision;

 

12

 

(p) Buyer shall have received the opinion of Robinson & Cole LLP,
counsel to Seller, dated the Closing Date, in form and substance reasonably
satisfactory to Buyer and Buyer’s counsel;

(q) Buyer shall have received from Seller a certificate signed on
behalf of Seller by an authorized officer certifying that the representations and
warranties of Seller contained in this Agreement, any Transaction Document and the
Disclosure Schedule are true and correct in all material respects on and as of the
Closing Date, and any representation or warranty made as of a specified date earlier
than the Closing Date is true and correct in all material respects on and as of such
earlier date;

(r) Buyer shall have received originals or facsimiles of all
documents or instruments pertaining to the Assumed Real Property Leases, including
without limitation all licenses and Permits and Books and Records of Seller, to the
extent such documents or instruments are in the possession of Seller;

(s) Buyer shall have received a Landlord’s estoppel certificate for
each Assumed Real Property Lease executed and delivered by each respective Landlord,
in form and content reasonably acceptable to Buyer, including confirmation by each
such landlord that (i) all rent has been paid in full through March 31, 2011, (ii)
Buyer’s first rent payment will be due on April 1, 2011 and (iii) there has been no
default by Seller under such Assumed Real Property Lease through the Closing Date;

(t) Buyer shall have entered into direct leases with the landlords of
the following Buildings: 4365, 4327 and 4405 Arnold Avenue, Naples, Florida, on terms
and conditions and in form and content acceptable to Buyer, and the existing lease for
such Buildings between Seller and each of the respective landlords shall be terminated
by Seller and the respective Landlords prior to Closing. With respect to each existing
lease for such Buildings, Seller shall deliver prior to Closing copies of each
termination agreement executed by Seller and each of the respective landlords which
shall be in a form and content acceptable to Buyer;

(u) Seller shall have provided to Buyer evidence of the Florida
Department of Agriculture that the violation dated November 25, 2008 has been removed
and no fines or penalties are outstanding with respect to such violation;

(v) Seller shall have provided from the appropriate Governmental
Entities “zoning compliance letters” setting forth the current and specific use at
each of the Buildings is in compliance with all zoning codes and/or regulations,
in form and content reasonably acceptable to Buyer;

 

13

 

(w) Buyer shall have received the original leases executed by Seller
in connection with each Assumed Real Property Lease, and any and all amendments
thereto; as well as all other original documents or instruments referred to herein,
including without limitation all licenses and Permits and Books and Records pertaining
to each Assumed Real Property Lease;

(x) Buyer shall have received copies of all certificates of occupancy
that are required for each of the Buildings; and

(y) Buyer shall have received the original plans and specifications
for the improvements being leased in connection with each Assumed Real Property Lease,
as well as all documentation and instruments used in connection with the operation of
the property, including, but not limited to all licenses, Permits, warranties,
security and access codes, combinations and keys, in each case to the extent such
plans, specifications, documentation and instruments are in the possession of Seller.

3.2.2 Conditions Precedent to Seller’s Obligation to Close. The obligations of Seller
to enter into and complete the Closing are subject to the fulfillment on or prior to the Closing
Date of the following conditions, any one of which may be waived by Seller:

(a) Buyer shall have delivered the Initial Closing Payment and the
Holdback Amount, in accordance with Sections 3.3 and 3.4 herein;

(b) Buyer shall have delivered to Seller good and sufficient
instruments of assumption, pursuant to which the Buyer shall assume and agree to fully
and timely perform and discharge the Assumed Liabilities. All such instruments of
assumption (i) shall be in the form which is usual and customary for assuming the type
of liabilities and obligations being assumed under the Legal Provisions of the
jurisdiction applicable to such assumption, and (ii) shall be in form and substance
reasonably satisfactory to Seller;

(c) Buyer shall have delivered to Seller (i) proof of payment of the
auction fees to Harry Davis & Co. or (ii) an amount equal to the auction fee paid by
Seller to Harry Davis & Co., in each case not to exceed $50,000;

(d) Buyer shall have delivered to Seller an amount equal to the
pro-rated amount of 2011 rent payments for each Leased Property and for the Buildings
at 4365 and 4327 Arnold Avenue, Naples, Florida, in each case from the Business Day
immediately following the Closing Date until March 31, 2011. The Seller and Buyer agree
that there shall be no adjustments for security deposits with respect to any of the
Buildings;

(e) With respect to the Building at 4405 Arnold Avenue, Naples, Florida, Buyer
shall deliver to Seller an amount equal to the prorated amount of
2011 rent payments from the Business Day immediately following the Closing Date
until March 31, 2011; provided that Seller shall have obtained and delivered to Buyer a
letter from the owner of the Building certifying that the March 2011 rent payment has
been made in full and such rent will be attributed to the Buyer.

 

14

 

(f) There shall not be in effect any Order or Legal Provision which has the effect
of making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions; and

(g) Seller shall have received from Buyer a certificate signed on behalf of Buyer
by an authorized officer certifying that the representations and warranties of Buyer
contained in this Agreement shall be true and correct in all material respects on and
as of the Closing Date.

3.3 Payment of Initial Closing Payment. The “Initial Closing Payment” shall
be $800,000, payable at Closing by wire transfer of immediately available funds to the bank
account designated by Seller in writing at least 2 Business Days prior to the date hereof.

3.4 Holdback Amount. The Holdback Amount shall be placed in a segregated account under the
control of Farrell Fritz, P.C. (the “Holdback Account”). The Holdback Amount shall be
retained by Farrell Fritz, P.C. (the “Escrow Agent”) in the Holdback Account for a period
of nine months following the Closing to fund the post-Closing payments of Purchase Price pursuant
to Section 4.3 and (b) to satisfy claims by Buyer for indemnification by Seller pursuant to ARTICLE
9 herein. The Holdback Amount shall be held by the Escrow Agent pursuant to the terms of an Escrow
Agreement to be entered among the parties hereto.

3.5 Sales and Transfer Taxes. Seller will pay all sales, use, value-added, business, goods and
services, transfer, documentary, conveyancing or similar taxes or expenses that may be imposed as a
result of the sale and transfer of the Acquired Assets (including any stamp duty, any realty
transfer tax, any mansion Tax, or other tax chargeable in respect of any instrument transferring
property and any taxes, including income taxes, payable in connection with the sale and transfer of
the Acquired Assets), together with any and all penalties, interest and additions to tax with
respect thereto (“Transfer Taxes”). Seller and Buyer will cooperate in timely making all
filings, returns, reports and forms as may be required to be made by Buyer and Seller respectively,
to comply with the provisions of such Tax Legal Provisions.

3.6 Bulk Sales. Each of the parties hereby waives compliance with the notification and all
other requirements of the Bulk Sales Laws in force in the jurisdiction in which such laws are
applicable to the Business or the Acquired Assets or the transactions contemplated by this
Agreement. Seller shall indemnify Buyer and its officers, directors, employees, agents and
Affiliates in respect of, and hold each of them harmless from and against, any and all Damages
suffered, occurred or sustained by any of them or to which any of them may be subject, resulting
from, arising out of, or relating to the failure of the Buyer or Seller to comply with the terms of
any Bulk Sales Laws.

 

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ARTICLE 4

PURCHASE PRICE

4.1 Purchase Price. The aggregate purchase price for the Acquired Assets will be up to
THREE MILLION ONE HUNDRED THOUSAND DOLLARS ($3,100,000) and will be finally determined in
accordance with the provisions of this ARTICLE 4 (the “Final Purchase Price”).

4.2 Closing Statement. Not fewer than two (2) Business Days before the Closing
Date, Seller shall prepare and deliver to the Buyer a statement (the “Closing Statement”)
setting forth Seller’s good faith estimate of (a) the value of the Acquired Inventory (the
“Inventory Value”), (b) the Acquired A/R, and (c) the Assumed A/P, in each case as of the
Closing. For purposes of calculating the Inventory Value, Seller and Buyer have conducted a
physical taking of the Inventory not more than five (5) Business Days prior to the Closing and have
prepared an itemized list of the Acquired Inventory and Seller’s cost basis for each item of
Acquired Inventory. The Inventory Value shall be equal to Seller’s actual cost basis for each item
of Acquired Inventory. The Inventory Value, the Acquired A/R, and the Assumed A/P set forth on the
Closing Statement shall (i) be derived from and be in accordance with the Books and Records of the
Business, (ii) be prepared in accordance with GAAP and past practices of the Business, and (iii)
fairly present in all material respects the Inventory Value, the Acquired A/R and the Assumed A/P,
in each case as of the Closing Date.

4.3 Post-Closing Payments of Purchase Price. For a period of nine (9) months following the
Closing, the Buyer shall prepare and deliver to Seller, within 15 days following the end of each
calendar quarter following the Closing, a statement (each a “Post Closing Statement”)
setting forth, in reasonable detail and with supporting evidence, (if requested by Seller) (a) the
Inventory Value of the Acquired Inventory that has been sold, used or consumed, in each case as
determined by reference to Seller’s cost basis in accordance with Section 4.2 hereof, by Buyer
during the immediately preceding period, (b) the amount of Acquired A/R that has been collected by
Buyer during such period and (c) the amount of Assumed A/P that had been paid by Buyer during such
period. Simultaneously with delivery of each Post Closing Statement, (i) Buyer shall pay to Seller
from the Holdback Amount an amount equal to the Inventory Value of the Acquired Inventory sold and
Acquired A/R collected and (ii) Buyer may deduct from the Holdback Amount any amount by which the
aggregate Assumed A/P paid by the Buyer from and after the Closing Date exceeds $685,000, in each
case as reflected on such Post Closing Statement. After the second full calendar quarter
immediately following the Closing, any of the Acquired A/R that is uncollected shall be conveyed to
Seller for no consideration. If after the nine (9) month anniversary of the Closing any Acquired
Inventory remains unsold, unused or unconsumed, Buyer shall have no further obligation to pay to
Seller any amounts for such Acquired Inventory or any of the Acquired Assets hereunder. Any amounts
remaining in the Holdback Account after the nine (9) month anniversary of the Closing that are not
payable to Seller pursuant to this Section 4.3 shall be released to Buyer.

 

16

 

4.4 Allocation of Purchase Price. Buyer shall prepare an allocation of the Purchase Price and
the Assumed Liabilities (and all other capitalized costs) among the Acquired Assets in accordance
with Section 1060 of the Code and the Treasury regulations thereunder (and any similar Legal
Provision, as appropriate), which allocation shall be subject to review and approval by Seller.
Upon such approval, such allocation shall become binding upon all parties. Buyer
shall deliver such allocation to Seller within 90 days after the Closing, and the Seller will
respond within 30 days thereof (it being understood and agreed that no written objection by Seller
within such 30-day period shall be deemed approval by Seller of the allocation prepared by Buyer).
Each of the parties and their respective Affiliates shall report, act and file Tax Returns
(including, but not limited to, Internal Revenue Service Form 8594) in all respects and for all
purposes consistent with the allocation agreed to by Seller and the Buyer pursuant to this Section.
Each of the parties agrees that the allocation provided for under this Section may subsequently be
adjusted by Buyer in accordance with Section 1060 of the Code and the Treasury regulations
thereunder to reflect the payments of Final Purchase Price pursuant to ARTICLE 4, which adjustment
shall be subject to review and approval by Seller, which approval shall not be unreasonably
withheld, conditioned or delayed.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to the Buyer as of the date hereof as set forth in this ARTICLE
5, subject to any exceptions stated in the disclosure schedule delivered by Seller to the Buyer
dated as of the date hereof (the “Disclosure Schedule”). The Disclosure Schedule is
arranged in parts corresponding to the numbered and lettered sections and paragraphs contained in
this ARTICLE 5. The Disclosure Schedule is intended to be construed as an integrated document,
however, and each section or paragraph thereof should be read in conjunction with the all other
sections and paragraphs thereof.

5.1 Organization. Each of the Seller and Argan (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its respective organization; (b) has the legal
power and authority to own, lease and operate its assets and properties used in, and to carry on,
the Business as now being conducted; and (c) is duly qualified or licensed to do business in each
jurisdiction where the character of the properties owned, leased or operated by Seller or Argan, as
the case may be, or the nature of its respective activities makes such qualification or licensing
necessary. The jurisdictions in which each of the Seller and Argan is so qualified is set forth on
Part 5.1 of the Disclosure Schedule.

5.2 Authority; Enforceability. The Seller and Argan have the requisite corporate power and
authority and legal capacity to execute and deliver this Agreement and each Transaction Document
contemplated hereunder to be executed and delivered by Seller and/or Argan, as the case may be, on
or before the Closing Date, and to consummate the transactions contemplated hereby and to comply
with the provisions hereof and thereof. The execution, delivery and performance by Seller and/or
Argan, as the case may be, of this Agreement and the Transaction Documents contemplated hereunder
to be executed and delivered by Seller and/or Argan, as the case may be, on or before the Closing
Date, the consummation by Seller and/or Argan, as the case may be, of the transactions contemplated
hereby and thereby, and the compliance by Seller and/or Argan, as the case may be, with the
provisions hereof and thereof, have been duly authorized by all necessary corporate action on the
part of Seller and/or Argan, as the case may be, and no other corporate action on the part of
Seller or Argan is necessary to authorize this Agreement and such Transaction Documents or to
consummate the transactions contemplated hereby and thereby. This Agreement has been, and each
Transaction Document contemplated hereunder to be executed and delivered by Seller and/or Argan, as
the case may be,
on or before the Closing Date will have been, duly executed and delivered by Seller and/or
Argan, as the case may be, and, assuming the due authorization, execution and delivery by the
Buyer, constitutes or will constitute upon such execution and delivery a valid and binding
obligation of Seller and/or Argan, as the case may be, enforceable against Seller and/or Argan, as
the case may be, in accordance with its terms.

 

17

 

5.3 Non-contravention; Consents. The execution and delivery by Seller and/or Argan, as the
case may be, of this Agreement and the Transaction Documents contemplated hereunder to be executed
and delivered by Seller and/or Argan, as the case may be, on or before the Closing Date, the
consummation by Seller and/or Argan, as the case may be, of the transactions contemplated hereby
and thereby (alone or in combination with any other event), and the compliance by Seller and/or
Argan, as the case may be, with the provisions hereof and thereof, do not and will not conflict
with, or result in any violation or breach of, or default under, or give rise to a right of, or
result in, termination, cancellation or acceleration of any obligation or to a loss of a benefit
under, or result in the creation of any Encumbrance in or upon any of the Acquired Assets under, or
give rise to any increased, additional, accelerated or guaranteed rights or entitlements under, any
provision of (a) the certificate of incorporation or bylaws of Seller or Argan, (b) any Contract to
which Seller or Argan is a party or by which they or any of their properties or assets may be bound
or affected, or (c) any Legal Provision or Order applicable to the Business or to the Seller or
Argan. Except as set forth on Part 5.3 of the Disclosure Schedule, no consent, approval,
Order or authorization of, or registration, declaration or filing with, any Governmental Entity or
any other Person (including landlords under the Assumed Real Property Leases), is required by or
with respect to the Seller or Argan in connection with the execution and delivery of this Agreement
or the Transaction Documents, the consummation of the transactions contemplated hereby or thereby
(alone or in combination with any other event), or the compliance with the provisions hereof or
thereof (collectively, the “Required Consents”).

5.4 Subsidiaries. The Seller has no subsidiaries.

5.5 Financial Statements. Seller has made available to the Buyer complete and accurate copies
of (a) the unaudited balance sheets of the Business as of January 31, 2010 (the “Annual Balance
Sheet”), and the related unaudited statement of operations of the Business for the fiscal year
ended January 31, 2010 (collectively, the “Annual Financial Statements”) and (b) the
unaudited balance sheet of the Business as of December 31, 2010 (the “Interim Balance
Sheet”), and the related unaudited statement of operations of the Business for the eleven month
period ended December 31, 2010 (collectively, the “Financial Statements”). The Financial
Statements (i) were derived from and are in accordance with the Books and Records of the Business,
regularly maintained by management and used to prepare the financial statements of Seller in
accordance with the principles stated therein, (ii) were prepared consistent with the past practice
of the Business and (iii) fairly present in all material respects the income, expenses, assets and
liabilities of the Business as of the dates thereof and the respective periods covered thereby.
Notwithstanding the foregoing, it is agreed and understood that Financial Statements prepared for
interim periods which are not fiscal quarter and fiscal year ends are not updated for accruals
associated with legal expenses and for inventory overstocks and obsolescence. All other
adjustments necessary to fairly present in all material respects the income, expenses, assets and
liabilities of the Business for and as of such interim periods have been made.

 

18

 

5.6 Undisclosed Liabilities. The Business does not have any direct or indirect Indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate
or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or
otherwise of a kind required by GAAP to be set forth on a Financial Statement that is not fully and
adequately reflected or reserved against on the Interim Balance Sheet other than as disclosed on
Part 5.6 of the Disclosure Schedule. The Business has not incurred any of the foregoing
since the date of the Interim Balance Sheet which individually or in the aggregate would be
material to the Business or the operations or condition (financial or otherwise) of the Acquired
Assets or Assumed Liabilities.

5.7 Absence of Certain Changes or Events. Except as set forth on Part 5.7 of the
Disclosure Schedule, since December 31, 2010, the Business has been conducted in the Ordinary
Course of Business, and there has not been:

5.7.1 any material damage, destruction or other casualty loss (whether or not covered by
insurance) affecting the tangible Acquired Assets or tangible assets of the Seller which losses in
the aggregate exceed $50,000;

5.7.2 any acquisition, sale, lease or other disposition of any material asset of the Business
with an original purchase price, when acquired, in excess of $50,000, except for the disposition of
Inventory in the Ordinary Course of Business and the disposition of obsolete or immaterial or
worthless assets not necessary for the conduct of the Business;

5.7.3 any incurrence, assumption or guarantee by Seller of any Indebtedness for borrowed money
that would be binding upon Buyer;

5.7.4 any creation or other incurrence of any Encumbrance (other than Permitted Encumbrances)
on any Acquired Asset;

5.7.5 any entering into, amendment, modification, termination (partial or complete) or
granting of a waiver under or giving any consent with respect to any Assumed Business Contract;

5.7.6 capital expenditures or commitments for additions to property, plant or equipment used
or held for use in the conduct of the Business constituting capital assets in an aggregate amount
exceeding $50,000;

5.7.7 in connection with the Business, any transaction with any officer, director, or
Affiliate of the Seller or any relative, beneficiary, spouse or Affiliate of such officer, director
or Affiliate (i) outside the Ordinary Course of Business consistent with past practice, (ii) other
than on an arm’s length basis, (iii) other than with respect to Adaptogen, or (iv) other than with
respect to transactions between Seller and Argan which are disclosed on Part 5.29 of the
Disclosure Schedule;

5.7.8 any distribution or dividend authorized or made by Seller, nor any redemption,
repurchase, defeasance or acquisition of any equity interest in Seller;

 

19

 

5.7.9 any Contract with regard to the acquisition or disposition of any Business
Intellectual Property Rights;

5.7.10 any grant by Seller to any current or former Business Employee of any severance, change
in control, termination or similar compensation or benefits;

5.7.11 any entry by Seller into, any amendment of or modification to or Contract to amend or
modify (or announcement of an intention to amend or modify) or any termination of (A) any
employment, deferred compensation, severance, change in control, termination, employee benefit,
loan, indemnification, retention, stock repurchase, stock option, stock appreciation right,
performance unit, stock-based award, consulting or similar Contract between Seller and any Business
Employee, or (B) any Contract between Seller and any Business Employee, the benefits of which are
contingent, or the terms of which are altered, upon the occurrence of a transaction involving the
Seller of the nature contemplated by this Agreement or any Transaction Document (alone or in
combination with any other event);

5.7.12 any entering into of a contract or agreement to do or engage in any of the foregoing
after the date hereof; or

5.7.13 any other transaction involving or development affecting the Business or the Acquired
Assets outside the Ordinary Course of Business.

5.8 Tax Matters.

5.8.1 The Seller:

(a) has timely filed or caused to be filed, with all appropriate
Governmental Authorities, all Tax Returns that it was required to file, including for
each taxable period in which the Seller was a member of a consolidated group. All such
Tax Returns were correct and complete in all respects and were prepared in substantial
compliance with all applicable Legal Provisions; and

(b) has timely paid all Taxes owed by the Seller (whether or not
shown or required to be shown on any Tax Return) to the appropriate taxing
authorities.

5.8.2 There are no Encumbrances for Taxes upon the Acquired Assets or any other assets,
tangible or intangible, of Seller or the Business. There is no examination or proceeding pending
or threatened by any Governmental Entity or agency relating to the assessment or collection of, or
any delinquencies in filing relating to, any Taxes from Seller, nor does any basis exist for any
such assessment. Seller is a United States Person within the meaning of the Code. No power of
attorney has been executed on behalf of Seller or the Business with respect to any matter relating
to Taxes which is currently in force.

5.8.3 Seller has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid to any employee, independent contractor, creditors,
stockholder or other third party with respect to Seller and the Business, and all Forms W-2
and 1099 required with respect thereto have been properly completed and timely filed.

 

20

 

5.8.4 Seller is not a party to any agreement, contract, arrangement or plan that has resulted
or could result, separately or in the aggregate, in the payment of (i) any “excess parachute
payment” within the meaning of Section 280G of the Code (or any corresponding provision of state,
local or foreign Tax Legal Provision) and (ii) any amount that will not be fully deductible as a
result of Section 162(m) of the Code (or any corresponding provision of state, local or foreign Tax
Legal Provision). Seller is not and has never been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(l)(A)(ii) of the Code.

5.8.5 Seller has not participated in nor has any liability or obligation with respect to any
“reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4.

5.8.6 The unpaid Taxes of Seller (i) did not, as of the most recent fiscal month-end, exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the most recent balance
sheet (rather than in any notes thereto), and (ii) do not exceed the reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and practice of Seller
in filing its Tax Returns.

5.8.7 Seller is not a party to any Tax allocation or sharing agreement with any party whose
financial information is not included in the consolidated financial statements of Argan. Seller
(i) has not ever been a member of an Affiliated group filing a consolidated federal income Tax
Return (other than a group the common parent of which was Argan), or (ii) has no liability for
Taxes of any Person under Regulation Section 1.1502-6 (or any similar provision of state, local or
non-U.S. law) as a transferee or successor, by contract or otherwise.

5.9 Title to Properties.

5.9.1 Part 5.9.1 of the Disclosure Schedule lists all real property leased by Seller
and used in the Business, and each lease agreement to which Seller is a party with respect to such
leased real property that is in effect as of the date of this Agreement (including the Assumed Real
Property Leases). All such current leases are in full force and effect, are valid and effective in
accordance with their respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or both, would constitute
a default) that would reasonably be expected to give rise to a claim against the Seller. Seller
does not own any real property.

5.9.2 Seller has good and marketable title to, or, in the case of leased properties and
assets, valid leasehold interests in, all of the Acquired Assets sold by Seller under this
Agreement, free and clear of any Encumbrances, except for Permitted Encumbrances and the Assumed
Liabilities.

5.9.3 Seller intended to sell all of the Acquired Assets at an auction to be conducted by
Harry Davis & Co. Seller terminated the contemplated auction because the
Purchase Price provided in Article 4 is significantly in excess of the auction price
guaranteed by Harry Davis & Co.

 

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5.10 Assumed Real Property Leases; Properties.

5.10.1 Seller has delivered to Buyer a true, correct and complete copy of the Assumed Real
Property Leases (including amendments and modifications). After the date hereof, the Assumed Real
Property Leases shall not be amended except as agreed to by Buyer. Except as specifically set
forth in the Assumed Real Property Leases, Seller has no obligations under the Assumed Real
Property Leases. Except as set forth on Part 5.10.1 of the Disclosure Schedule, Seller has
not received any written notice from the landlord claiming that the tenant is in default of the
Assumed Real Property Leases. A copy of any notice of default received or delivered by or to
Seller after the date hereof shall be delivered to Buyer. Seller has not furnished landlord with
notice of a default under the Assumed Real Property Leases. From and after the date hereof, Seller
shall deliver a copy of any such notice to Buyer.

5.10.2 All work, alterations, improvements or repairs required to be made as of the date
hereof or required to be made prior to the Closing Date, in connection with the Assumed Real
Property Leases have in all respects been (or will be) carried out, performed and complied with,
and other than as specifically set forth in the Assumed Real Property Leases, there is no agreement
with the landlord for the performance of any work to be done in the future or any payment to be
made by the tenant to the landlord under the Assumed Real Property Leases. Unless otherwise
specifically agreed to herein, all bills and claims for labor performed and materials furnished to
or for the benefit of the Properties will be paid in full on the Closing Date.

5.10.3 Seller has not assigned or otherwise Encumbered their interest in the Assumed Real
Property Leases.

5.10.4 There are no outstanding written requirements or written recommendations received by
Seller specifically with reference to the Properties from (i) the insurance company(s) currently
insuring the respective properties; (ii) any board of fire underwriters or other body exercising
similar functions, or (iii) the holder of any mortgage encumbering any of the Properties, which
require or recommend any repairs or work to be done the Properties. In the event Seller receives
such a notice, Seller shall deliver a copy of the same to Buyer.

5.10.5 Seller has received no written notice and has no Knowledge of (i) any pending or
contemplated annexation or condemnation proceedings, or private purchase in lieu thereof, affecting
or which may affect the Properties, or any part thereof. Seller agrees to furnish Buyer with a
copy of any such notice received within five (5) Business Days after receipt.

5.10.6 Except as set forth on Part 5.10.6 of the Disclosure Schedule, the certificates
of occupancy for the Properties reflect the use of the Properties as manufacturing. All Permits for
the operations of each of the Properties are in full force and effect and have been delivered to
Seller. There are no additional permits required in connection with the operation or the use and
occupancy of either of the properties. Seller has not received any written notice of violation of
any permit material to the operation of any Property that remains uncured.

 

22

 

5.10.7 Seller shall deliver to Buyer copies of all of the Permits and licenses in Seller’s
possession with respect to the Properties. Seller is current in the payment of any fees required
to be paid for the Permits and licenses. All Permits and licenses delivered to Buyer are and shall
be in full force and effect, are transferable with the respective Property and shall be transferred
to Buyer by Seller at the Closing.

5.10.8 Except as set forth on Part 5.10.8 of the Disclosure Schedule, to Seller’s
Knowledge, Seller has not received any notice of violation of building, fire, sanitary, or
environmental regulations against the Properties. In the event Seller receives notice of a
violation, Seller shall have the same removed prior to the Closing, with no liability to Buyer.

5.10.9 Seller has not received any written notice from any Governmental Entity regarding (a)
any actual, alleged, possible or potential violation of, or failure to comply with, any Legal
Provision with respect to any Property that remains uncured, or (b) any actual, possible or
potential obligation on the part of Seller to undertake, or to bear all or any portion of the cost
of, any action to correct a violation of, or failure to comply with, any Legal Provision.

5.11 Intellectual Property.

5.11.1 Part 5.11.1 of the Disclosure Schedule sets forth a true, complete and correct
list of (i) all Business Intellectual Property Rights used or useful in connection with the
Business that is registered or subject to an application for registration or that is otherwise
material to the Business, and (ii) all agreements to which Seller is a party or by which any of
them is bound that relate to Business Intellectual Property Rights (the “IP License
Contracts”), including: (A) licenses of Business Intellectual Property Rights to Seller by any
other Person except for off-the-shelf software and licenses implied in the sale of such software,
(B) licenses of Business Intellectual Property Rights to any other Person by Seller; (C)
agreements otherwise granting or restricting the right to use Business Intellectual Property
Rights; and (D) agreements transferring, assigning, indemnifying with respect to or otherwise
relating to Business Intellectual Property Rights. No other Intellectual Property is used or
necessary in the conduct of the Business.

5.11.2 Except as disclosed on Part 5.11.2 of the Disclosure Schedule, Seller: (i)
owns all right, title and interest in and to the Business Intellectual Property Rights, free and
clear of all Encumbrances, other than Permitted Encumbrances, or (ii) is licensed to use, or
otherwise possess legally valid and enforceable rights to use, the Business Intellectual Property
Rights that they do not so own.

5.11.3 To the Knowledge of Seller, there are no restrictions on the direct or indirect
transfer of any agreements, instruments and documents, or any interest therein, held by Seller in
respect of such Business Intellectual Property Right;

5.11.4 To the Knowledge of Seller, the Seller is not, nor has it received any notice that it
is, in default (or with the giving of notice or lapse of time or both, would be in default) under
any IP License Contract.

 

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5.11.5 Except as disclosed on Part 5.11.5 of the Disclosure Schedule, neither the
Business Intellectual Property Rights owned or purported to be owned by the Seller nor any of
the Products of the Business infringe any intellectual property rights of any Person, and no
claim in pending or has been made to such effect. There are no pending, threatened actions, causes
of action, claims, suits, proceedings, Orders, writs, injunctions, or decrees which involve a claim
of infringement, unauthorized use, or violation of the Business Intellectual Property Rights by any
Person against Seller, or challenging Seller’s ownership or use, validity or enforceability of, any
Business Intellectual Property Right. The Seller has not received notice of any such threatened
claim of infringement, unauthorized use, or violation from or on behalf of any such Person against
the Seller, or challenging the ownership, use, validity or enforceability of any Business
Intellectual Property Right.

5.11.6 No Business Intellectual Property Right owned or leased by the Business is subject to
any outstanding Order or Legal Proceeding (other than pending proceedings pertaining to
applications for patent or trademark or copyright registration as set forth on Part 5.11.6 of
the Disclosure Schedule) or stipulation that has been served upon or filed against, the Seller
that restricts or is reasonably likely to restrict in any manner the ownership, licensing or use
thereof in connection with the Business.

5.12 Compliance with Laws

5.12.1 Seller has not received any notice that it is in conflict with or in default or
violation of any Legal Provision or Order applicable to it in connection with the Business, nor
does Seller have any outstanding liabilities relating to any of the foregoing, including without
limitation, any notices of violation of law or municipal ordinances, orders or requirements of the
Departments of Housing and Buildings, Fire, Labor, Health or other state or municipal departments
having jurisdiction against or affecting the real property used by Seller in conducting the
Business. No investigation or review by any Governmental Entity is pending or, to the Knowledge of
Seller, threatened in writing against Seller or Argan in connection with the Business. Except as
disclosed on Part 5.12.1 of the Disclosure Schedule, there is no Contract or Order binding
upon Seller which has, or is reasonably expected to have, the effect of prohibiting or impairing
the Business, any acquisition of material property used in the Business or the conduct of Business
as conducted by the Seller on the date hereof.

5.13 Permits; Regulatory Matters.

5.13.1 Seller and, to the extent required, each officer and employee of the Seller, holds all
Permits necessary for the operation of the Business and the Acquired Assets as conducted as of the
date hereof or the Acquired Assets. Part 5.13.1 of the Disclosure Schedule sets forth a
list of the Permits, including without limitation Permits issued or granted to Seller by any
Governmental Entity regulating food businesses, products, or services authorizing Seller in
connection with the operation of the Business or the Acquired Assets.

5.13.2 Such Permits shall continue to be in full force and effect and in good standing
immediately following the consummation of the transactions contemplated by this Agreement.

5.13.3 The Seller has not received any notice or communication from any Governmental Entity
alleging noncompliance of the Business with any FDA/OSHA Law. There
are no Legal Proceedings pending or, to Knowledge of the Seller, threatened against Seller or
any of its directors, officers or employees, that involves any violation of any FDA/OSHA Law with
respect to the Business.

 

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5.13.4 With respect to the Business, neither the Seller nor any of its respective directors,
officers or employees, is or has been: (i) convicted of, charged with, or under investigation for
or related to any criminal offense in respect of any FDA/OSHA Law, (ii) debarred or disqualified
from participation in regulated activities for any violation or alleged violation of any FDA/OSHA
Law, or (iii) assessed a civil money penalty 21 U.S.C. §§ 333 or 307 or any Legal Provisions
promulgated thereunder. Neither the Seller nor any of its respective directors, officers or
employees, has received any written requests for information or subpoenas claiming or raising
concerns with respect to violations or potential violations of any FDA/OSHA Law with respect to the
Business.

5.13.5 With respect to the Business, the Seller is in compliance with all applicable FDA/OSHA
Law governing advertising, marketing or promotional activities.

5.13.6 Seller is not, and shall not become, a Person or entity with whom Buyer is restricted
from doing business with under regulations of the Office of Foreign Asset Control (“OFAC”)
of the Department of the Treasury (including, but not limited to, those named on OFAC’s Specially
Designated and Blocked Persons list) or under any statute, executive order (including, but not
limited to, Executive Order 13224 Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and
shall not engage in any dealings or transactions or be otherwise associated with such Persons or
entities.

5.14 Legal Proceedings. Except as set forth on Part 5.14 of the Disclosure Schedule,
there is no Legal Proceeding pending against the Seller, or, to the Knowledge of Seller, threatened
against the Seller or Argan with respect to the Business or the Acquired Assets. There is no Legal
Proceeding pending against the Seller or Argan, or, to the Knowledge of the Seller, threatened
against the Seller or Argan, that questions or challenges (a) the validity of this Agreement or any
Transaction Document or (b) any action taken or to be taken by the Seller pursuant to this
Agreement or any Transaction Document or in connection with the transactions contemplated hereby
and thereby. There are no facts or circumstances in existence on the Closing Date that could
reasonably be expected to give rise to any actions, suits, claims or legal, administrative or
arbitration proceedings, hearings, inquiries, subpoenas, or governmental investigations.

5.15 Employee Plans.

5.15.1 For purposes of this Agreement, the following terms shall have the meanings set forth
below:

(a) “COBRA” shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;

 

25

 

(b) “Business Employee Plan” shall mean each “employee
benefit plan” as such term is defined in Section 3(3) of ERISA and all stock
purchase, stock option, severance, employment, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation, employee loan and all
other employee benefit plans, agreements, programs, policies or other arrangements,
whether or not subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transaction contemplated by this
Agreement or otherwise), under which any current or former employee, director or
consultant of Seller has any present or future right to benefits or
which has ever or are contributed to, sponsored by or maintained
by Seller for current or former employee, director or consultant.

(c) “Defined Benefit Plan” shall mean each Business Employee Plan
which is subject to Part 3 of Title I of ERISA, Section 412 of the Code of Title IV of
ERISA;

(d) “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended;

(e) “ERISA Affiliate” shall mean any other Person or entity
under common control with Seller within the meaning of Sections 414(b), (c), (m) or
(o) of the Code and the regulations issued thereunder;

(f) “IRS” shall mean the Internal Revenue Service;

(g) “Multiemployer Plan” shall mean any “Pension Plan” (as
defined below) which is a “multiemployer plan,” as defined in Section 3(37) of ERISA;

(h) “Qualified Plan” shall mean each Business Employee Plan
which is intended to qualify under Section 401 of the Code; and

(i) “Pension Plan” shall mean each Business Employee Plan
which is an “employee pension benefit plan,” within the meaning of Section 3(2) of
ERISA.

5.15.2 Part 5.15.2 of the Disclosure Schedule sets forth (i) a true and complete list
and description of each Business Employee Plan maintained or to which contributions are made by the
Seller or to which the Seller has any obligation to contribute or to which Seller has any
liability, (ii) identifies each Business Employee Plan that is a Qualified Plan, (iii) identifies
each Business Employee Plan which at any time during the five-year period preceding the date of
this Agreement was a Defined Benefit Plan, and (iv) lists, describes and identifies each other plan
maintained, established, sponsored or contributed to by an ERISA Affiliate, or any predecessor
thereof, which, during the five-year period preceding the date of this Agreement, was at any time a
Defined Benefit Plan. The Seller has furnished to the Buyer true, correct, and complete copies of
the plan documents and summary plan descriptions for each plan, the most recent determination
letter received from the IRS, the two most recent years annual reports (Form 5500 with all
applicable attachments) for each plan, and all related trust agreements, insurance contracts and
other funding arrangements that implement each such Business Employee Plan. The Seller has no
liability with respect to the plans that have not been accrued
on the Financial Statements. The Buyer shall assume no liability with respect to any such
Business Employee Plan. Prior to the Closing Date, the Seller shall terminate any and all such
plans in accordance with all Legal Provisions, as such Legal Provisions apply to Business Employees
terminated prior to Closing. The Seller shall indemnify defend and hold harmless the Buyer with
respect to any liability associated with any such Business Employee Plan.

 

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5.15.3 Each Business Employee Plan (and each related trust, insurance contract or fund) has
been maintained, funded and administered in accordance with its terms, and complies in form and in
operation with the applicable requirements of ERISA, the Code and other applicable laws, rules and
regulations. Each Business Employee Plan intended to meet the requirements of a “qualified plan”
under Section 401(a) of the Code has received a favorable determination letter or opinion letter
from the IRS with respect to such Plan’s qualified status under the Code, and nothing has occurred,
whether by action or failure to act, that could reasonably be expected to cause the loss of such
qualification. All such Business Employee Plans have been timely amended for all such requirements
and have been submitted to the IRS for a favorable determination letter within the latest
applicable remedial amendment period. No event has occurred and no condition exists that would
subject any Acquired Asset, the Seller, or the Business or to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or other applicable laws, rules and regulations. The Seller
has not incurred any current or projected liability or will incur as a result of the consummation
of the transaction contemplated herein in respect of a severance or post-employment or
post-retirement health, medical or life insurance benefits for current, former or retired employees
of the Business, except as required to avoid an excise tax under Section 4980B of the Code or
otherwise except as may be required pursuant to any other applicable law.

5.15.4 All contributions (including all employer contributions and employee salary reduction
contributions) that are due with respect to any of the Business Employee Plans have been made as
required under ERISA and the Code, and all contributions for any period ending on or before the
Closing Date that are not yet due have been made or accrued, in compliance with ERISA and the Code,
and in accordance with past custom and practice of Seller.

5.15.5 Neither Seller nor any ERISA Affiliate of Seller has ever maintained, established,
sponsored, participated in, or contributed to, or has or had any liability to or any obligation to
contribute to, any Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code.
No asset of Seller is subject to any Encumbrance under ERISA or the Code.

5.15.6 Neither Seller nor any ERISA Affiliate of a Seller has ever contributed to or been
required to contribute, or has any liability (including withdrawal liability as defined in ERISA
Section 4201) to any Multiemployer Plan.

5.15.7 No securities or real property owned by the Seller is included in the assets of any
Business Employee Plan.

5.15.8 There are no prohibited transactions with respect to any Business Employee Plan. No
fiduciary of any Business Employee Plan has any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration or the investment of assets of any
Business Employee Plan. No action, suit, proceeding, hearing, or investigation
with respect to the administration or the investment of the assets of any such Business
Employee Plan (other than routine claims for benefits) is pending or threatened. There is no basis
for any such action, suit, proceeding, hearing or investigation.

 

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5.15.9 All required reports and descriptions (including Form 5500 annual reports, summary
annual reports, and summary plan descriptions) have been timely filed and/or distributed in
accordance with the applicable requirements of ERISA and the Code with respect to each Business
Employee Plan. The requirements of COBRA have been met with respect to each Business Employee Plan
subject to COBRA.

5.15.10 Part 5.15.10 of the Disclosure Schedule lists each agreement, contract, plan,
or other arrangement, whether or not written and whether or not a Business Employee Plan, to which
Seller is a party that is a “nonqualified deferred compensation plan” subject to Code Section 409A.
Each such plan described in the preceding sentence complies with the requirements of Code Section
409A(a)(2, (3) and (4) and any IRS guidance issued thereunder and no amounts under any such plan is
or has been, subject to the interest and additional Tax set forth under Code Section 409A(a)(1)(B).
Seller has no any actual or potential obligation to reimburse or otherwise “gross-up” any Person
for the interest and additional tax set forth under Code Section 409A(a)(1)(b).

5.16 Employment Matters.

5.16.1 The Seller: (a) has been in compliance in all material respects with all applicable
Legal Provisions respecting employment, employment practices, immigration, terms and conditions of
employment and wages and hours, in each case, with respect to Business Employees, including the
requirements of ERISA, the Code, the Age Discrimination in Employment Act, the Equal Pay Act and
Title VII of the Civil Rights Act of 1964; (b) has withheld all amounts required by law or by
agreement to be withheld from the wages, salaries and other payments to Business Employees; (c) has
properly classified independent contractors for purposes of Tax Legal Provisions and Legal
Provisions applicable to employee benefits; (d) is not liable for any arrears of wages or any Taxes
or any penalty for failure to comply with any of the foregoing; and (e) is not liable for any
material payment to any trust or other fund or to any Governmental Entity with respect to
unemployment compensation benefits, social security or other benefits or obligations for Business
Employees (other than routine payments to be made in the normal course of business and consistent
with past practice). The Seller is, with respect to the Business Employees, in compliance in all
material respects with the terms and provisions of the Immigration Reform and Control Act of 1986,
as amended, and all related regulations promulgated thereunder and each employee providing services
to the Business is either (i) a U.S. citizen or (ii) is in compliance with all U.S. immigration
laws and regulations and has fulfilled all the necessary visa and other requirements to work
legally in the United States. Except as set forth on Part 5.16.1 of the Disclosure
Schedule, there are no employment contracts or severance agreement with any Business Employee,
and all Business Employees are terminable at will.

 

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5.16.2 Except as set forth on Part 5.16.2 of the Disclosure Schedule, during the past
five years there have been no strikes, slowdowns, work stoppages, disputes, lockouts, or threats
thereof, by or with respect to any employees of Seller and there are no pending, or, to the
Knowledge of Seller, threatened or anticipated labor disputes, work stoppages, requests for
representation, pickets, work slow-downs due to labor disagreements or any actions or
arbitrations which involve the labor or employment relations of Seller or the Business. The Seller
has no Knowledge of any activities or proceedings of any labor union to organize any Business
Employees. There are no actions, suits, claims, labor disputes, grievances or other Legal
Proceeding pending or, to the Knowledge of the Seller, threatened relating to any labor, safety or
discrimination matters involving any Business Employee, including charges of unfair labor practices
or discrimination complaints. Except as set forth on Part 5.16.2 of the Disclosure
Schedule, there is no workman’s compensation liability or similar matter outstanding outside
the Ordinary Course of Business. Except as set forth on Part 5.16.2 of the Disclosure
Schedule, there is no employment-related charge, complaint, grievance, investigation, inquiry,
or obligation of any kind, pending or threatened in any forum, related to an alleged violation or
breach by Seller of any Legal Provision or Contract. With respect to the Business, the Seller has
not engaged in any unfair labor practices within the meaning of the National Labor Relations Act.
With respect to the Business, the Seller has not been a party to, or bound by, any collective
bargaining agreement or union contract with respect to Business Employees.

5.16.3 Except as set forth on Part 5.16.3 of the Disclosure Schedule, Seller has
provided notice to the Business Employees as required under the Worker Adjustment Retraining
Notification Act.

5.17 Environmental Matters.

5.17.1 For all purposes of this Agreement, the following terms shall have the following
meanings:

(a) “CERCLA” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the rules and regulations
promulgated thereunder.

(b) “CERCLIS” means the Comprehensive Environmental Response
and Liability Information System promulgated pursuant to CERCLA.

(c) “Environmental Claims” means any and all administrative,
regulatory or judicial actions, suits, Orders, demands, directives, claims,
investigations, proceedings or written notices of noncompliance or violation by or
from any Person alleging liability of any kind or nature (including liability or
responsibility for the costs of enforcement proceedings, investigations, cleanup,
governmental response, removal or remediation, natural resource damages, property
damages, personal injuries, medical monitoring, penalties, contribution,
indemnification and injunctive relief) arising out of, based on or resulting from (a)
the presence or Release of, or exposure to, any Hazardous Material at any location, or
(b) the failure to comply with any Environmental Law. The term “Environmental Claim”
shall include, without limitation, any claim by any Governmental Entity for
enforcement, clean up, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by a third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment

 

29

 

(d) “Environmental Law” means any Legal Provision or Order
issued, promulgated or entered into by or with any Governmental Entity relating to the
regulation or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or wastes.

(e) “Hazardous Materials” means any petroleum or petroleum
products, radioactive materials or wastes, asbestos in any form, polychlorinated
biphenyls and any other hazardous chemical, material, substance or waste that is
prohibited, limited or regulated under any Environmental Law.

(f) “NPL” means the National Priorities List under CERCLA.

(g) “Release” means any actual release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into or through the environment or within any building,
structure, facility or fixture.

5.17.2 Seller has obtained all Permits which are required under applicable Environmental Law
in connection with the conduct of the Business or the Acquired Assets. Each of such Permits is in
full force and effect. Seller has conducted the Business in compliance in all material respects
with the terms and conditions of all such Permits and with all applicable Environmental Law.

5.17.3 Except as set forth on Part 5.17.3 of the Disclosure Schedule, there are no
Hazardous Materials at, below or above the Properties or any Properties formerly owned, leased,
operated or used in connection with the Business, and no Order has been issued, no Environmental
Claim has been filed, no penalty has been assessed and no investigation or review is pending or
threatened by any Governmental Entity with respect to any alleged failure by Seller to have any
Permit required under applicable Environmental Laws in connection with the conduct of the Business
or with respect to any generation, treatment, storage, recycling, transportation, discharge,
disposal or Release of any Hazardous Material in connection with the Business and there are no
facts or circumstances in existence which could reasonably be expected to form the basis for any
such Order, Environmental Claim, penalty or investigation. There are no underground or above ground
storage tanks located on the Properties. There are no pending or, to the Knowledge of Seller,
threatened suits, actions or proceedings arising under or pursuant to any Environmental Laws with
respect to or affecting the Business, the Properties, or any Properties formerly owned, leased,
operated, or used in connection with the Business.

 

30

 

5.17.4 Except as disclosed on Part 5.17.4 of the Disclosure Schedule, the Seller does
not own, operate or lease a treatment storage or disposal facility on any of the real property used
in connection with the conduct of the Business that requires a Permit under any Environmental Law;
and, without limiting the foregoing, (i) no polychlorinated biphenyl is or has been present, (ii)
no asbestos or asbestos-containing material is or has been present, (iii) there are no underground
storage tanks or surface impoundments for Hazardous Materials, active or abandoned, and (iv) no
Hazardous Material has been Released in a quantity reportable under, or in violation of, any
Environmental Law or otherwise Released, in the cases of clauses (i) through (iv), at, on or under
any such site or facility during any period that Seller owned, operated, or leased such property.

5.17.5 The Seller has not transported or arranged for the transportation of any Hazardous
Material in connection with the operation of the Business to any location that is (i) listed on the
NPL under CERCLA, (ii) listed for possible inclusion on the NPL by the Environmental Protection
Agency in CERCLIS or on any similar state or local list or (iii) the subject of enforcement actions
by federal, state or local Governmental Authorities that may lead to Environmental Claims against
Seller.

5.17.6 No Hazardous Material generated in connection with the operation of the Business has
been recycled, treated, stored, disposed of or Released by Seller at any location.

5.17.7 No oral or written notification of a Release of a Hazardous Material in connection with
the operation of the Business has been filed by or on behalf of Seller and no site or facility now
or previously owned, operated or leased by Seller on any of the real property is listed or proposed
for listing on the NPL, CERCLIS or any similar state or local list of sites requiring investigation
or clean-up.

5.17.8 No Encumbrances have arisen under or pursuant to any Environmental Law on any site or
facility owned, operated or leased by Seller on any of the real property used in the conduct of the
Business, and no federal, state or local Government Entity action has been taken or is in process
that could subject any such site or facility to such Encumbrance, and Seller would be required to
place any notice or restriction relating to the presence of Hazardous Materials at any such site or
facility in any deed to the real property on which such site or facility is located.

5.17.9 There have been no environmental investigations, studies, audits, tests, reviews or
other analyses conducted by or that are in the possession of Seller in relation to any site or
facility now or previously owned, operated or leased by Seller and used in the conduct of the
Business which have not been delivered to Buyer prior to the execution of this Agreement.

5.18 Vitarich Contracts.

5.18.1 Part 5.18.1 of the Disclosure Schedule sets forth each of the following
Contracts in excess of $50,000 (i) which applies to the Business or to the Acquired Assets, (ii) to
which the Seller is a party, or by which the Seller is bound, or to which Seller’s respective
properties or assets related to the Business are subject, and (iii) for which Seller or the other
party to such Contract has current or future rights or obligations (collectively, the
“Vitarich Contracts”):

(a) each Contract made outside the Ordinary Course of Business or
inconsistent with past practice;

 

31

 

(b) each employment, severance or similar agreement with any Business
Employee or consultant (including all standard offer letters, employee
confidentiality, non-disclosure, non-compete, non-solicitation and/or invention
assignment agreements and similar agreements);

(c) each partnership, joint venture, shareholders’ or other similar
Contract with any Person;

(d) each Contract relating to Indebtedness;

(e) each Contract with distributors, dealers, manufacturer’s
representatives, sales agencies or franchisees;

(f) each Contract relating to (A) the future disposition or
acquisition of any assets or properties, other than dispositions or acquisitions in
the Ordinary Course of Business, and (B) any business combination;

(g) all Contracts between or among Seller, on the one hand, any
officer, director, or Affiliate of Seller on the other hand;

(h) each Contract pursuant to which a Seller has agreed not to
compete with any Person or not to solicit any Person or to engage in any activity or
business, or pursuant to which any benefit is required to be given or lost as a result
of so competing or engaging; and each Contract (including consulting and services
agreements) which provides for “exclusivity” or any similar requirement in favor of
any Person other than the Seller, or under which Seller is restricted in any respect
in the distribution, licensing, marketing, purchasing, development or manufacturing of
their respective products or services in the United States or any foreign
jurisdiction;

(i) each Contract that requires consent, approval or waiver of, or
notice to, a Governmental Entity or other third party in the event of or with respect
to a transaction such as the transactions contemplated by this Agreement or any
Transaction Document, including in order to avoid termination of or loss of a benefit
under any such Contract;

(j) each Contract containing any provisions (i) prohibiting or
providing for termination upon a “change of control” or similar event with respect to
Seller, the definition of which would cover the transactions contemplated by this
Agreement, or (ii) having the effect of providing that the consummation of any of the
transactions contemplated by this Agreement or compliance by Seller with the
provisions of this Agreement (alone or in combination with any other event specified
therein) will in any material respect conflict with, result in a violation or
breach of, or constitute a default under (with or without notice or lapse of
time, or both), such Contract or give rise under such Contract to any right of, or
result in, a termination, right of first refusal, amendment, revocation, cancellation
or acceleration, or loss of a benefit, or the creation of any Encumbrance in or upon
any Acquired Asset;

 

32

 

(k) each IP License Contract; and each Contract providing for
payments of royalties, franchise fees, commissions, other license fees or other
transactional fees to third parties; and

(l) all other Contracts that (i) involve the payment or potential
payment, pursuant to the terms of any such Contract, by or to Seller or the Business
of more than $50,000 annually, (ii) during the life of the Contract, involve the
payment or potential payment, pursuant to the terms of any such Contract, by or to
Seller or the Business of more than $50,000 in the aggregate, and (iii) cannot be
terminated within 60 calendar days after giving notice of termination without
resulting in any material cost or penalty.

5.18.2 Each Vitarich Contract is in full force and effect and is a valid and binding agreement
of the Seller and of each other party thereto, enforceable against Seller and against the other
party or parties thereto, in each case, in accordance with its terms. Seller has performed all
obligations required to be performed by it under each Vitarich Contract to which it is a party and
is not (with or without notice or lapse of time or both) in breach or default thereunder, and, to
the knowledge of the Seller, no other party to any Vitarich Contract is (with or without notice or
lapse of time, or both) in breach or default thereunder. Seller has made available to the Buyer
complete and correct copies of all Seller Contracts.

5.19 Inventory. Part 5.19 of the Disclosure Schedule sets forth a breakdown of all
Inventory of the Business, based on the Business’s established cycle-counting processes as of the
date which is within three Business Days immediately prior to the date hereof. All items included
in the Inventory of the Business are the property of Seller, free and clear of any Encumbrance
other than Permitted Encumbrances, have not been pledged as collateral, and are not held by Seller
on consignment from others.

5.20 Accounts Receivable; Accounts Payable.

5.20.1 All Acquired A/R represent (i) bona fide claims against debtors for sales and other
charges and are not subject to discount except for trade discounts made in the Ordinary Course of
Business and for the reserves for doubtful accounts and allowances set forth in the Closing
Statement and (ii) valid and binding obligations due to Seller, enforceable in accordance with
their terms. The Seller has not received written notice of any asserted or threatened setoff,
counterclaim or other defense in respect of the Acquired A/R. The amount carried for doubtful
accounts and allowances disclosed in the Closing Statement was calculated in a manner consistent
with prior accounting periods.

5.20.2 All Assumed A/P represent bona fide claims by creditors against the Business for sales
and other charges incurred in the Ordinary Course of Business. Since
December 31, 2010, with respect to the Business, the Seller has not altered its ordinary
practices, including by delaying payment, with respect to accounts payable, and accounts payable
have been paid in the ordinary course. None of the Assumed A/P are the result of an Affiliate
Transaction.

 

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5.21 Insurance. Part 5.21 of the Disclosure Schedule contains a true and complete
list (including names and addresses of the insurers, the names of the Persons to whom such policies
have been issued, the expiration dates thereof, the annual premiums and payment terms thereof and a
brief description of the interests insured thereby) of all liability, property, workers’
compensation, directors’ and officers’ liability and other insurance policies in effect as of the
date hereof that insure any Acquired Assets, the Seller (including its assets and properties), the
Business or any Product. Seller or Argan, on Seller’s behalf, has continuously maintained insurance
coverage on an “occurrence” basis for the Acquired Assets, the Business and Products, including all
of their operations, personnel and assets for the Business. The insurance policies listed on
Part 5.21 of the Disclosure Schedule will not terminate or lapse by reason of the
transactions contemplated by this Agreement. Each policy listed on Part 5.21 of the Disclosure
Schedule is valid and binding and in full force and effect, no premiums due thereunder have not
been paid and the Seller (i) is not in default or breach with respect to any provision contained in
any such insurance policies, nor has it failed to give any notice or to present any claim
thereunder in due and timely fashion or (ii) has received any notice of cancellation or termination
in respect of any such policy or that the insurer under any such policy is denying liability with
respect to a claim thereunder or defending under a reservation of rights clause. There are no
pending insurance claims relating to the Business. The insurance policies listed on Part 5.21
of the Disclosure Schedule are placed with financially sound and reputable insurers, and, in
the light of the Acquired Assets, the Seller, the Business and the Products, are in amounts and
have coverages that are reasonable and customary for Persons engaged in such businesses and
operations and having such assets and properties.

5.22 No Broker’s and Finder’s Fees. Except as disclosed in Part 5.22 of the Disclosure
Schedule, no broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of
expenses, in connection with the transactions contemplated by this Agreement based upon
arrangements made by, on behalf of, or in connection with, the Seller.

5.23 Customers & Suppliers.

(a) Part 5.23(a) of the Disclosure Schedule sets forth a true
and complete list of (a) the names and addresses of the twenty (20) largest customers
that ordered Products from the Seller during the twelve-month period ended January 31,
2011 and (b) the amount of purchases by each such customer during such period. Except
as set forth on Part 5.23(a) of the Disclosure Schedule, Seller has not
received any notice that any customer listed on Part 5.23(a) of the Disclosure
Schedule (i) has ceased, or will cease, to purchase the Products, (ii) has
materially reduced or will materially reduce, its purchase of the Products, or (iii)
has sought to reduce the price it will pay for the Products.

 

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(b) Part 5.23(b) of the Disclosure Schedule sets forth a true
and complete list of (a) the names and addresses of the twenty (20) largest suppliers
(including any Affiliates) from which Seller ordered raw materials, supplies or other
Products or services in connection with the Business during the twelve-month period
ended January 31, 2011 and (b) the amount of purchases from each such supplier during
such period. Except as set forth on Part 5.23(b) of the Disclosure Schedule,
 Seller has not received any notice that (i) there has been any material adverse change
in the price of such raw materials, supplies or other products or services or (ii) any
such supplier will not sell raw materials, supplies and other products and services to
the Business at any time after the Closing Date on terms and conditions similar to
those used in its current sales to the Seller.

5.24 Vehicles, Equipment & Machinery. The Vehicles, equipment and machinery listed on Part
5.24 of the Disclosure Schedule accurately describes the Vehicles, machinery, equipment,
furniture, furnishings, fixtures, tools, and other tangible personal property used by Seller in
connection with Seller’s conduct of the Business. All Vehicles, equipment and machinery listed on
Part 5.24 of the Disclosure Schedule are to be acquired by the Buyer at the Closing.

5.25 Products. Part 5.25 of the Disclosure Schedule lists all of the Products sold by
the Seller in the Ordinary Course of Business in connection with the Business.

5.26 Product Liability. There are no pending or threatened actions, causes of action, claims,
suits, proceedings, or injunctions which involve a claim relating to a harm allegedly caused by the
ownership, possession, advertising or use of any Product manufactured, sold, leased, or delivered
by the Seller in connection with the conduct of the Business, including without limitation, the
Products. Seller has not received written notice of any such actual or threatened claim relating
to a harm allegedly caused by any such Products by any attorney for any Person against Seller.

5.27 No Guarantees. All obligations of the Business that are guaranteed by Seller or Argan
are set forth on Part 5.27 of the Disclosure Schedule. None of the liabilities of the
Business or of the Seller incurred in connection with the conduct of the Business is guaranteed by
or subject to a similar contingent obligation of any other Person, nor has Seller guaranteed or
become subject to a similar contingent obligation in respect of the liabilities of any customer,
supplier, or other Person to whom the Seller sells goods or provides services in the conduct of the
Business or with whom Seller otherwise have significant business relationships in the conduct of
the Business.

5.28 Books and Records. Each of the Books and Records (or copies thereof) and instruments
furnished by the Seller to the Buyer prior to the Closing Date or concurrently therewith (whether
under separate delivery or by way of attached to any Schedule hereto), are genuine and authentic
originals or true and correct duplicate copies of such items.

5.29 Affiliate Transactions. Except as set forth on Part 5.29 of the Disclosure
Schedule, no officer, director, Affiliate of Seller nor any relative, beneficiary, spouse or
Affiliate of the foregoing provides or causes to be provided any assets, guarantees, services or
facilities used or held for use in connection with the Business, and the Business does not provide or cause to be
provided any assets, guarantees, services or facilities to any of the foregoing (each, an
“Affiliate Transaction”).

 

35

 

5.30 Advertising Materials. Seller has delivered to Buyer true and correct copies of all
marketing materials, Product literature, printed advertising and promotional materials, training
materials and advertising materials used since January 1, 2008 in connection with the Products.

5.31 No Management Reports. Since January 1, 2006, there have been no written management
reports to the board of directors of Seller.

5.32 Disclosure. All material facts relating to the condition of the Business and Acquired
Assets have been disclosed to Buyer in or in connection with this Agreement. No representation or
warranty contained in this Agreement, and no statement contained in the Disclosure Schedule or in
any certificate, list or other writing furnished to Buyer pursuant to any provision of this
Agreement, contains any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements herein or therein, in the light of the circumstances
under which they were made, not misleading.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller as set forth in this ARTICLE 6.

6.1 Organization. The Buyer (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the legal power and authority to
own, lease and operate its assets and property and to carry on its business as now being conducted,
and (c) is duly qualified or licensed to do business in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its activities makes such
qualification or licensing necessary.

6.2 Authority; Enforceability. The Buyer has the requisite corporate power and authority and
legal capacity to execute and deliver this Agreement and each Transaction Document contemplated
hereunder to be executed and delivered by the Buyer on or before the Closing Date, and to
consummate the transactions contemplated hereby and to comply with the provisions hereof and
thereof. The execution, delivery and performance by the Buyer of this Agreement and the
Transaction Documents contemplated hereunder to be executed and delivered by the Buyer on or before
the Closing Date, the consummation by the Buyer of the transactions contemplated hereby and
thereby, and the compliance by the Buyer with the provisions hereof and thereof, have been duly
authorized by all necessary corporate action on the part of the Buyer, and no other corporate
action on the part of the Buyer are necessary to authorize this Agreement and such Transaction
Documents or to consummate the transactions contemplated hereby and thereby. This Agreement has
been, and each Transaction Document contemplated hereunder to be executed and delivered by the
Buyer on or before the Closing Date will have been, duly executed and delivered by Seller and,
assuming the due authorization, execution and delivery by the Buyer, constitutes or will constitute
upon such execution and delivery a valid and binding obligation of the Buyer enforceable against
the Buyer in accordance with its terms.

 

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6.3 Non-Contravention; Consents. The execution and delivery of this Agreement and the
Transaction Documents contemplated hereunder to be executed and delivered by the Buyer on or before
the Closing Date, the consummation of the transactions contemplated hereby and thereby (alone or in
combination with any other event), and the compliance by the Buyer with the provisions hereof and
thereof, do not and will not conflict with, or result in any violation or breach of, or default
under, or give rise to a right of, or result in, termination, cancellation or acceleration of any
obligation or to a loss of a benefit under, or result in the creation of any Encumbrance in or upon
any of the properties or assets of the Buyer under, or give rise to any increased, additional,
accelerated or guaranteed rights or entitlements under, any provision of (a) the Buyer’s
certificate of incorporation, bylaws, operating agreement or other organizational documents, (b)
any Contract to which Buyer is a party or by which it or any of its properties or assets may be
bound or affected, or (c) subject to the governmental filings and other matters referred to in the
immediately succeeding sentence, any Legal Provision or Order applicable to the Buyer or Seller or
any of their respective properties or assets. No consent, approval, Order or authorization of, or
registration, declaration or filing with, any Governmental Entity, is required by or with respect
to the Buyer in connection with the execution and delivery of this Agreement or the Transaction
Documents, the consummation of the transactions contemplated hereby or thereby (alone or in
combination with any other event), or the compliance with the provisions hereof or thereof.

6.4 Legal Proceedings. There is no Legal Proceeding pending against the Buyer, or, to the
knowledge of the Buyer, threatened in writing against the Buyer, that questions or challenges (a)
the validity of this Agreement or any Transaction Document or (b) any action taken or to be taken
by the Buyer pursuant to this Agreement or any Transaction Document or in connection with the
transactions contemplated hereby.

6.5 No Broker’s and Finder’s Fees. No broker, investment banker, financial advisor or other
Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission, or the reimbursement of expenses, in connection with the transactions contemplated by
this Agreement based upon arrangements made by, on behalf of, or in connection with, the Buyer.

ARTICLE 7

TAX MATTERS

7.1 Straddle Period Taxes. For the purposes of this Agreement, “Straddle Period
Taxes” means any Taxes levied with respect to the assets of the Business attributable to a
taxable period relating to such Taxes that begins before and ends after the Closing Date (a
“Straddle Period”). For the purposes of this Agreement, a “Pre-Closing Tax Period”
means the portion of a Straddle Period ending on or before the Closing Date, and a
“Post-Closing Tax Period” means the portion of a Straddle Period beginning after the
Closing Date. The portion of any Straddle Period Taxes allocable to a Pre-Closing Tax Period shall
be deemed equal to the amount of such Taxes for the entire Straddle Period multiplied by a fraction
the numerator of which is the number of calendar days in the Pre-Closing Tax Period and the
denominator of which is the number of calendar days in the Straddle Period. Any remaining Straddle
Period Taxes for such Straddle Period shall be allocable to the Post-Closing Tax Period.

 

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7.2 Preparation of Straddle Period Tax Returns.

7.2.1 Seller shall prepare and timely file or shall cause to be prepared and timely filed all
Straddle Period Tax Returns required to be filed pursuant to any Legal Provision (and only to the
extent so required) that are due on or before the Closing Date, if any. Seller shall make or cause
to be made all Tax payments required with respect to any such Tax Returns. The Buyer shall
promptly reimburse Seller for the amount of any such Taxes paid by Seller or any Affiliate thereof
to the extent such Straddle Period Taxes are allocable to a Post-Closing Tax Period of the Business
(as determined under Section 7.1).

7.2.2 The Buyer shall prepare and timely file or shall cause to be prepared and timely filed
all Straddle Period Tax Returns required to be filed pursuant to any Legal Provision (and only to
the extent so required) that are due after the Closing Date, if any. The Buyer shall make all Tax
payments required with respect to any such Tax Returns. Seller or an Affiliate thereof shall
promptly reimburse the Buyer for the amount of any such Taxes paid by the Buyer to the extent such
Straddle Period Taxes are allocable to a Pre-Closing Tax Period (as determined under Section 7.1).

7.3 Tax Obligations Generally.

7.3.1 Seller shall prepare and timely file or shall cause to be prepared and timely filed all
Tax Returns that relate solely to periods ending on or before the Closing Date. Seller shall make
or cause to be made all Tax payments required with respect to any such Tax Returns.

7.3.2 The Buyer shall prepare and timely file or shall cause to be prepared and timely filed
all Tax Returns that relate solely to periods commencing after the Closing Date. The Buyer shall
make all Tax payments required with respect to any such Tax Returns.

7.4 Cooperation. The Buyer and Seller shall reasonably cooperate, and shall cause their
respective Affiliates, officers, employees, agents, auditors and other representatives to
reasonably cooperate, in preparing and filing all Tax Returns and in resolving all disputes and
audits with respect to all taxable periods relating to Taxes, including by retaining, maintaining
and making available to each other all records reasonably necessary in connection with Taxes and
making employees reasonably available on a mutually convenient basis to provide additional
information or explanation or to testify at proceedings relating to Taxes.

7.5 Tax Indemnity. Seller shall be obligated to indemnify, defend and hold harmless Buyer from
and against the entirety of any Damages Buyer may suffer resulting from, arising out of, relating
to, in the nature of, or caused by any liability of Seller for unpaid Taxes with respect to any Tax
year or portion thereof ending on or before the Closing Date (or any Tax year beginning before and
ending after the Closing Date to the extent allocable to the portion of such period beginning
before and ending on the Closing Date).

 

38

 

ARTICLE 8

ADDITIONAL AGREEMENTS

8.1 Further Assurances; Post-Closing Cooperation

8.1.1 From time to time after the Closing, each party shall, at the request of the other
parties and without additional consideration, execute and deliver any further instruments or
documents and take any such further action as such parties may reasonably request in order to
consummate the transactions contemplated by this Agreement and the Transaction Documents,
including executing, acknowledging and delivering, or cause to be done, executed, acknowledged or
delivered, all such further acts, deeds, assignments, assumptions, transfers, conveyances, powers
of attorney or assurances as may be reasonably required for (a) the transferring, assigning,
conveying, granting, assuring and confirming to the Buyer, or for aiding and assisting in the
collection of or reducing to possession by the Buyer, any of the Acquired Assets or to vest in the
Buyer all of the Seller’s right, title and interest in and to the Acquired Assets, or (b)
assignment by the Seller, and assumption by the Buyer, of the Assumed Contracts, Assumed Orders
and Assumed Liabilities.

8.1.2 Following the Closing, each party will provide the other party, its counsel and its
accountants, with hard copies or, at the Buyer’s option, electronic copies of Books and Records
relating to the Business in its possession with respect to periods prior to the Closing to the
extent that such Books and Records and other data may be reasonably required by the requesting
party in connection with (i) the preparation of Tax Returns, (ii) the determination or enforcement
of rights and obligations under this Agreement, (iii) compliance with the requirements of, or
pursuant to any investigation by, any Governmental Entity, stock exchange, or other entity having
jurisdiction over the requesting party, (iv) the determination or enforcement of the rights and
obligations of any Indemnified Person, (v) in connection with any actual or threatened Legal
Proceeding, or (vi) an audit by any Tax Authority or in connection with any audit of financial
statements or other financial information. Further each party agrees for a period extending six
(6) years after the Closing Date not to destroy or otherwise dispose of any such Books and
Records. The requesting party shall bear all reasonable costs and expenses relating to retrieving
and copying any such Books and Records. The providing party shall deliver such Books and Records
to the requesting party within a reasonable period of time and will not unreasonably withhold or
delay the provision of such Books and Records to the requesting party.

8.2 Public Announcements. Except as required by applicable Legal Provision or the rules and
regulations of the Securities and Exchange Commission, as applicable, the Seller, on the one hand,
and the Buyer on the other hand, will not make and will cause their respective Affiliates to not
make, any public announcements or disclosures of any kind whatsoever regarding this Agreement or
the transactions contemplated hereby unless they have first obtained the consent of (a) Seller, in
the case of announcement by the Buyer, and (b) the Buyer in the case of announcement by Seller,
which consent shall not be unreasonably withheld. If a party believes that a disclosure is
required by Legal Provision or by a rule or regulation as set out above, such party shall use
reasonable efforts to consult with (i) Seller, in the case of the Buyer, and (ii) the Buyer, in the
case of Seller, and obtain consent for a mutually worded disclosure, such consent not to be
unreasonably withheld, conditioned or delayed. Seller and Buyer will also obtain the other party’s
prior approval of any press release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement.

 

39

 

8.3 Confidentiality. Each party hereto will hold, and will use its best efforts to cause its
Affiliates, and their respective Affiliates to hold, in strict confidence from any Person (other
than any such Affiliate or representative), unless (i) compelled to disclose by judicial or
administrative process (including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of Governmental or Regulatory
Authorities) or by other requirements of any applicable Legal Provision or (ii) disclosed in a
Legal Proceeding brought by a party hereto in pursuit of its rights or in the exercise of its
remedies hereunder, all documents and information concerning the other party or any of its
Affiliates furnished to it by the other party or such other party’s representatives in connection
with this Agreement or the transactions contemplated hereby, except to the extent that such
documents or information can be shown to have been (a) previously known by the party receiving such
documents or information, (b) in the public domain (either prior to or after the furnishing of such
documents or information hereunder) through no fault of such receiving party or (c) later acquired
by the receiving party from another source if the receiving party is not aware that such source is
under an obligation to another party hereto to keep such documents and information confidential;
provided that following the Closing the foregoing restrictions will not apply to Buyer’s
use of documents and information concerning the Business, the Acquired Assets or the Assumed
Liabilities furnished by Seller hereunder. In the event the transactions contemplated hereby are
consummated, upon the request of Buyer, Seller will, and will cause its Affiliates and their
respective representatives to, promptly deliver or cause to be delivered all copies of documents
and information with respect to Seller, the Acquired Assets or the Business and destroy or cause to
be destroyed all notes, memoranda, summaries, analyses, compilations and other writings related
thereto or based thereon.

8.4 Product Returns.

8.4.1 From and after the Closing Date, Seller shall reimburse the Buyer periodically for any
and all charges incurred by the Buyer during the period ending one (1) year from the Closing Date
in connection with returns of Products sold prior to the Closing Date that occur after the Closing
Date. Buyer shall invoice Seller on a monthly basis for all such charges incurred by Buyer. Each
invoice shall be submitted along with a copy of the applicable remittance summary and customer
debit note, if any. Seller shall pay to Buyer all of such invoices within thirty (30) days of
receipt. In the event Seller fails to make any such payment, Buyer may deduct amounts equal to the
amount set forth in the respective invoice from the Holdback Amount.

ARTICLE 9

INDEMNIFICATION

9.1 Survival. All representations and warranties made by a party in this Agreement, any other
Transaction Documents, or in any Schedule, certificate or agreement executed and delivered by such
Party pursuant to this Agreement or any Transaction Document shall survive the Closing, and
continue in full force and effect until the first anniversary of the Closing Date, except that the
representations and warranties contained in Section 5.8 (Tax Matters), Section 5.9 (Title), Section
5.15 (Employee Plans) and Section 5.17 (Environmental Matters) shall continue indefinitely (subject
to any application statutes of limitations). Each of the agreements and
covenants of the parties to this Agreement that are intended to survive the Closing, shall
survive the Closing and continue in full force and effect until fully performed.

 

40

 

9.2 Indemnification by the Buyer.

9.2.1 Subject to the provisions of this ARTICLE 9, from and after the Closing, the Buyer
hereby agrees to indemnify, defend and hold harmless Seller and each of its members, managers,
officers, employees, Affiliates, agents, successors, and permitted transferors and assignees
(collectively, the “Seller Indemnified Persons”) from and against and in respect of any and
all claims, Losses, damages, costs, expenses, obligations, liabilities, charges, actions, suits,
proceedings, deficiencies, interest, penalties and fines (including costs of collection, attorney’s
fees and other costs of defense, costs of enforcing indemnification provisions, and expenses of
investigation) in each case to the extent resulting in out-of-pocket costs (collectively,
“Damages”) imposed on, sustained, incurred or suffered by or asserted against them,
directly or indirectly, but only in respect of the following and without duplication:

(a) any inaccuracy in any of the Buyer’s representations and
warranties when made or deemed made in this Agreement, any other Transaction
Documents, or in any Schedule, Exhibit, certificate, agreement, instrument or document
delivered by the Buyer pursuant to or in connection with this Agreement or any
Transaction Document;

(b) the Buyer’s failure to perform or otherwise fulfill any of its
agreements, covenants, obligations or undertakings under this Agreement or under any
other Transaction Document;

(c) the Assumed Liabilities; and

(d) the Buyer’s or its Affiliate’s ownership, operation or use of the
Acquired Assets or the conduct of the Business by the Buyer and its Affiliates after
the Closing Date.

9.2.2 With respect to any Seller Indemnified Person, the Buyer acknowledges and agrees that
Seller is contracting on its own behalf and for such Seller Indemnified Persons and Seller shall
have the right to obtain and hold the rights and benefits provided for in this Section ý9.2 and on
behalf of such Seller Indemnified Persons.

9.3 Indemnification by Seller.

9.3.1 Subject to the provisions of this ARTICLE 9, from and after the Closing, the Seller
hereby agrees to indemnify, defend and hold harmless the Buyer and each of its Affiliates and each
of their respective directors, officers, employees, agents, advisors, representatives managers,
stockholders, members, successors, and permitted transferors and assignees (collectively, the
“Buyer Indemnified Persons”), from and against and in respect of any and all Damages
imposed on, sustained, incurred or suffered by or asserted against them, directly or indirectly,
but only in respect of the following and without duplication (in each case resulting in Damages):

(a) any inaccuracy in Seller’s representations and warranties when
made or deemed made in this Agreement, any other Transaction Documents, or in any
Schedule, Exhibit, certificate, agreement, instrument or document delivered by Seller
pursuant to or in connection with this Agreement or any Transaction Document;

 

41

 

(b) the Seller’s breach or failure to perform or otherwise fulfill
any of their agreements, covenants, obligations or undertakings under this Agreement
or under any other Transaction Document;

(c) any Excluded Assets or Excluded Liabilities, including without
limitation, the Legal Proceeding set forth on Part 5.14 of the Disclosure
Schedule;

(d) the Seller’s ownership, operation or use of the Acquired Assets
or the conduct of the Business by the Seller on or before the Closing Date; and

(e) the Seller’s failure to deliver any of the Required Consents set
forth on Part 5.3 of the Disclosure Schedule on or before the Closing Date.

9.3.2 With respect to any Buyer Indemnified Person, Seller acknowledges and agrees that the
Buyer is contracting on its own behalf and for such Buyer Indemnified Persons and the Buyer shall
have the right to obtain and hold the rights and benefits provided for in this Section 9.3 for and
on behalf of such Buyer Indemnified Persons.

9.4 Claims for Indemnification.

9.4.1 If any claim for indemnification hereunder arises, the Person seeking indemnification
(the “Indemnified Person”), shall promptly notify in writing the party from whom
indemnification is sought (the “Indemnifying Person”) of the claim (“Claim Notice”)
and, when known, the facts constituting the basis for such claim and the amount or an estimate of
the amount of the liability arising therefrom. The failure of the Indemnified Person to give the
Indemnifying Person prompt notice as provided herein shall not relieve the Indemnifying Person of
any of its obligations under this ARTICLE 9, except to the extent that the Indemnifying Person is
irreparably prejudiced by such failure.

9.4.2 If the Claim Notice does not involve a third party claim, and if the Indemnifying Person
objects in writing within 20 Business Days of its receipt of the Claim Notice to any indemnity in
respect of any such Claim Notice, then the Indemnifying Person and the Indemnified Person
delivering such Claim Notice shall attempt in good faith to agree upon the rights of the respective
parties with respect to each claim. If the Indemnifying Person and the Indemnified Person so
agree, the Indemnifying Person shall promptly make the agreed-upon payment. If no such agreement
can be reached after good faith negotiation, then such dispute shall be resolved in accordance with
the terms of Section 9.5.

 

42

 

9.5 Third Party Claims Procedures. If a claim or demand in respect of which an Indemnified
Person might seek indemnity is asserted against or sought to be collected
from such Indemnified Person by a Person other than Seller or any Affiliate of Seller, Buyer
or any Affiliate of Buyer (a “Third Party Claim”), such Indemnified Person shall promptly
(and in any event within two Business Days) notify the Indemnifying Person in writing of such claim
or demand setting forth such claims in reasonable detail. The failure of the Indemnified Person to
give the Indemnifying Person prompt notice as provided herein shall not relieve the
 Indemnifying
Person of any of its obligations under this ARTICLE 9, except to the extent that the Indemnifying
Person is irreparably prejudiced by such failure. The Indemnifying Person shall have 30 days after
receipt of such notice to undertake, conduct and control, through counsel of its own choosing (but
reasonably satisfactory to the Indemnified Person) and at its own expense, the settlement or
defense thereof, and the Indemnified Person shall cooperate with the Indemnifying Person in
connection therewith; provided, however, that the Indemnified Person may
participate in such settlement or defense through counsel chosen by such Indemnified Person and the
fees and expenses of such counsel shall be borne by such Indemnified Person unless (i) the
employment thereof has been specifically authorized by the Indemnifying Person in writing, or (ii)
the Indemnifying Person has after a reasonable time failed to employ counsel and to assume or to
diligently continue to maintain such defense, in each of which events the Indemnified Person may
retain counsel which shall be reasonably satisfactory to the Indemnifying Person, and the
Indemnifying Person shall pay the reasonable fees and expenses of such counsel for the Indemnified
Person (but in no event shall the Indemnifying Person be obligated to pay the fees and expenses of
more than one firm for all Indemnified Parties). So long as the Indemnifying Person is reasonably
contesting any such claim in good faith, the Indemnified Person shall not pay or settle any such
claim without the prior written consent of the Indemnifying Person. If the Indemnifying Person
does not notify the Indemnified Person within 30 days after the receipt of the Indemnified Person’s
notice of a claim of indemnity hereunder that it elects to undertake the defense thereof (or does
not fulfill its commitment to undertake such defense), the Indemnified Person shall have the right
to contest, settle or compromise the claim but shall not thereby waive any right to indemnity
therefor pursuant to this Agreement. The Indemnifying Person shall not, except with the prior
written consent of the Indemnified Person, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by the Person
asserting such claim to all Indemnified Parties (i.e., Seller Indemnified Persons or Buyer
Indemnified Persons, as the case may be) an unconditional release from all liability with respect
to such claim.

9.6 Exclusive Remedy. Except in case of fraud, intentional misrepresentation or omission or
intentional misconduct by any party, the rights and remedies of the parties to assert
indemnification claims and receive indemnification payments pursuant to this ARTICLE 9 shall be the
parties’ exclusive right and remedy for monetary damages with respect to any breach by any party of
any representation, warranty, covenant or agreement (including with respect to Excluded Liabilities
and Assumed Liabilities) set forth in this Agreement or any Transaction Document, or in connection
with the transactions contemplated by this Agreement or any Transaction Document. Notwithstanding
the foregoing, each party shall be entitled to seek equitable relief, including specific
performance, with respect to any breach by any party of any covenants or agreements set forth in
this Agreement.

43

 

ARTICLE 10

MISCELLANEOUS

10.1 Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. This Agreement and
the transactions contemplated hereby shall be governed by and construed in accordance with the laws
of the State of New York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof. In any action or proceeding between any of the parties
arising out of or relating to this Agreement or any of the transactions contemplated
 by this
Agreement, each of the parties hereto: (a) irrevocably and unconditionally consents and submits,
for itself and its property, to the exclusive jurisdiction and venue of any New York court; (b)
agrees that all claims in respect of such action or proceeding must be commenced, and may be heard
and determined, exclusively in such New York court (or, if applicable, such Federal court); (c)
waives, to the fullest extent it may legally and effectively do so, any objection which it may now
or hereafter have to the laying of venue of any such action or proceeding in such New York court
(and, if applicable, such Federal court); and (d) waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or proceeding in such New
York court (or, if applicable, such Federal court). Each of the parties hereto agrees that a final
judgment in any such action or proceeding may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in Section 10.1. Nothing in this
Agreement shall affect the right of any party to this Agreement to serve process in any other
manner permitted by applicable law. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND
CERTIFICATIONS IN THIS SECTION 110.1.

10.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered by hand, sent by facsimile transmission with
confirmation of receipt, sent via a reputable courier service with confirmation of receipt
requested, to the parties at the following addresses (or at such other address for a party as shall
be specified by like notice):

To Seller:

Vitarich Laboratories, Inc.

c/o Argan, Inc.

One Church Street, Suite 201

Rockville, Maryland 20850

Facsimile No.: (301) 315-0064

Attention: Chairman and Chief Executive Officer

with a copy to:

Robinson & Cole LLP

1055 Washington Boulevard

Stamford, CT 06901

Facsimile: (203) 462-7599

Attention: Richard A. Krantz, Esq.

 

44

 

To the Buyer:

NBTY, Inc.

2100 Smithtown Avenue

Ronkonkoma, New York 11779

Facsimile No.: (631) 218-7341

Attention: General Counsel

with a copy to:

Farrell Fritz, P.C.

1320 RXR Plaza

Uniondale, New York 11556

Facsimile No.: (516) 336-2205

Attention: Robert C. Creighton, Esq.

10.3 Entire Agreement; Third-Party Beneficiaries. This Agreement, the Exhibits and
Schedules, the Transaction Documents, and the agreements, instruments and documents among the
parties hereto as contemplated by or referred to herein, including the Disclosure Schedule
constitute the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and contain the sole and entire agreement between the parties
hereto with respect to the subject matter hereof. Nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement other than as specifically provided in ARTICLE 7 or
ARTICLE 9.

10.4 Amendments and Waivers. This Agreement may be amended or modified only with
a written instrument executed by Seller and the Buyer. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), shall constitute a continuing waiver unless otherwise expressly provided nor shall be
effective unless in writing and executed (a) by Seller in the case of a waiver by Seller, (b) by
the Buyer in the case of a waiver by the Buyer. No waiver by any party of any breach or violation
or, default under or inaccuracy in any representation, warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent breach, violation, default
of, or inaccuracy in, any such representation, warranty or covenant hereunder or affect in any way
any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on
the part of any party in exercising any right, power or remedy under this Agreement will operate as
a waiver thereof.

10.5 Severability. In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to use their
commercially reasonable efforts to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.

 

45

 

10.6 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement and, therefore, waive
the application of any law, regulation, holding or rule of construction providing that ambiguities
in an agreement or other document will be construed against the party drafting such agreement or
document.

10.7 Assignment. No party may assign (including whether by operation of law or
otherwise) either this Agreement or any of its rights, interests, or obligations hereunder without
the prior written consent of the other party, provided, however, Buyer may assign
this Agreement or any of its rights, interests or obligations hereunder to one or more of its
Affiliates without the prior written consent of the Seller. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Any purported assignment in violation of this Section
10.7 shall be void.

10.8 Expenses. Except as otherwise expressly provided in this Agreement, each
party will pay its own costs and expenses, incurred in connection with the negotiation, execution
and closing of this Agreement and the Transaction Documents and the transactions contemplated
hereby and thereby.

10.9 Argan Guaranty. Argan hereby unconditionally and irrevocably guarantees the
full payment and performance of any and all of Seller’s obligations under this Agreement and the
ancillary documents hereto, including without limitation, all of Seller’s obligations to indemnify
Buyer hereunder (the “Obligations”) if, as, when and to the extent that such Obligations
are required to be performed pursuant to this Agreement (the “Guaranty”). Argan hereby
waives all rights and defenses of a surety under applicable law, including without limitation, any
right to require the pursuit of any remedies against Seller, including commencement of a suit,
before enforcing the Guaranty. The Guaranty is a guarantee of both payment and collection.

10.10 Counterparts; Facsimile. This Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart. This Agreement may be executed and delivered by
facsimile or electronic mail.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

46

 

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

	 	 	 	 	 
	VITARICH LABORATORIES, INC.	 	NBTY FLORIDA, INC.	 	 
	 
	 	 	 	 
	By:

	 	By:	 	 
	 

	 	 

	 	 
	Name:

	 	Name:	 	 
	 

	 	 

	 
	 
	 	 	 	 
	Title:

	 	Title:	 	 
	 
	 	 
	 
	 
	 	 	 	 

ARGAN, INC. (solely for purposes of Sections 2.5 and 10.9)

	 	 	 	 	 

	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	Name:
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 
	 	 

 

47

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