Document:

ex10_5.htm

    
      
         

      

      
         

        
          

        

      

      
         

        
          EXHIBIT
10.5

          

          EXECUTION
COPY

        

      

    

    AMENDMENT
No. 2

     

    Dated
as of September 26, 2008

     

    to

     

     PURCHASE
AND CONTRIBUTION AGREEMENT

     

    Dated
as of June 26, 1998

     

    This
AMENDMENT NO. 2 (this “Amendment”) dated as
of September 26, 2008 is entered into among PILGRIM’S PRIDE FUNDING CORPORATION
(the “Company”)
and PILGRIM’S PRIDE CORPORATION (“Pilgrim’s
Pride”).

     

    RECITALS

     

    WHEREAS,
the parties hereto have entered into a certain Purchase and Contribution
Agreement dated as of June 26, 1998 (as amended through the date hereof, the
“Agreement”);

     

    WHEREAS,
the parties desire to amend the Agreement as hereinafter set forth;

     

    NOW,
THEREFORE, in consideration of the promises and the mutual agreements contained
herein and in the Agreement, the parties hereto agree as follows:

     

    SECTION
1. Definitions.  All
capitalized terms used, but not otherwise defined, herein shall  have
the respective meanings for such terms set forth in Exhibit I to the
Receivables Purchase Agreement (as defined in the Agreement).

     

    SECTION
2. Amendments to the
Agreement.  The Agreement is hereby amended as
follows:

     

    2.1 The
second paragraph of the Agreement titled “Definitions” is
hereby amended and restated in its entirety as follows:

     

    Unless
otherwise indicated, certain terms that are capitalized and used throughout this
Agreement are defined in Exhibit I to the
Amended and Restated Receivables Purchase Agreement dated as of September 26,
2008 (as amended, supplemented, restated or otherwise modified from time to
time, the “Receivables
Purchase Agreement”) by and among the Company, Pilgrim’s Pride, as
initial Servicer, the Purchasers and Purchaser Agents from time to time parties
thereto and BMO Capital Markets Corp., as administrator for each Purchaser Group
(together with its successors and assigns, the “Administrator”).

     

    2.2 The
second parenthetical set forth in clause (e) of Section 4.1 of the
Agreement is hereby amended and restated in its entirety as
follows:

     

    (and the
Administrator on behalf of the Purchasers as assignee of the
Company)

     

    2.3 Clause (i) of Section 4.1 of the
Agreement is hereby amended and restated in its entirety as
follows:

     

    (i)           A
certificate from an officer of Originator to the effect that Servicer and
Originator have placed on the most recent, and have taken all steps reasonably
necessary to ensure that there shall be placed on subsequent, summary master
control data processing reports the following legend (or the substantive
equivalent thereof):  “THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD
TO PILGRIM’S PRIDE FUNDING CORPORATION PURSUANT TO A PURCHASE AND CONTRIBUTION
AGREEMENT, DATED AS OF JUNE 26, 1998, AMONG PILGRIM’S PRIDE CORPORATION AND
PILGRIM’S PRIDE FUNDING CORPORATION; AND AN INTEREST IN THE RECEIVABLES
DESCRIBED HEREIN HAS BEEN GRANTED TO BMO CAPITAL MARKETS CORP. (ON BEHALF OF THE
PURCHASERS) PURSUANT TO AN AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT,
DATED AS OF SEPTEMBER 26, 2008, AMONG PILGRIM’S PRIDE FUNDING CORPORATION,
PILGRIM’S PRIDE CORPORATION, THE PURCHASERS AND PURCHASER AGENTS FROM TIME TO
TIME PARTIES THERETO AND BMO CAPITAL MARKETS CORP., AS
ADMINISTRATOR.”

     

    2.4 Clause (b) of Section 5.11 of the
Agreement is hereby amended and restated in its entirety as
follows:

     

    (b)           No
effective financing statement or other instrument similar in effect covering any
Receivable generated by Originator (or acquired by it from any Transferor
pursuant to a Purchase Agreement) or any right related to any such Receivable is
on file in any recording office except such as may be filed in favor of the
Company or the Originator, as the case may be, in accordance with this Agreement
or such Purchase Agreement or in favor of the Administrator on behalf of the
Purchasers in accordance with the Receivables Purchase Agreement.

     

    2.5 Article V of the
Agreement is hereby amended by inserting, in the appropriate order, the
following new Section
5.21:

     

    5.21.                      Ordinary Course of
Business.  Each remittance of Collections by or on behalf of
Originator or pursuant to the Transaction Documents and any related accounts of
amounts owing hereunder will have been (i) in payment of a debt incurred by
Originator in the ordinary course of business or financial affairs of Originator
or (ii) made in the ordinary course of business or financial affairs of
Originator.

     

    2.6 Section 6.1(j) of the
Agreement is hereby deleted in its entirety.

     

    2.7 The
second parenthetical set forth in clause (d) of Section 6.3 of the
Agreement is hereby amended and restated in its entirety as
follows:

     

    (which in
turn shall deliver the same to the Administrator on behalf of the
Purchasers)

     

    2.8 The
Agreement is hereby amended by deleting each reference to the term “Agent”
therein and substituting the term “Administrator” therefor.

     

    2.9 The
Agreement is hereby amended by deleting each reference to the term “Purchaser”
therein and substituting the term “Purchasers” therefor.

     

    SECTION
3. Representations and
Warranties.  The Originator hereby represents and warrants to
the Company, the Purchasers and the Administrator that the representations and
warranties of such Originator contained in Article V of the
Agreement are true and correct as of the date hereof (unless stated to relate
solely to an earlier date, in which case such representations and warranties
were true and correct as of such earlier date), and that as of the date hereof,
no Purchase and Sale Termination Event or event which, with the giving of notice
or the lapse of time, or both, would constitute a Purchase and Sale Termination
Event has occurred and is continuing or will result from this
Amendment.

     

    SECTION
4. Effect of
Amendment.  (a) All provisions of the Agreement, as expressly
amended and modified by this Amendment, shall remain in full force and effect
and are hereby ratified and confirmed in all respects.  After this
Amendment becomes effective, all references in the Agreement (or in any other
Transaction Document) to “this Agreement”, “hereof”, “herein” or words of
similar effect referring to the Agreement shall be deemed to be references to
the Agreement as amended by this Amendment.  This Amendment shall not
be deemed, either expressly or impliedly, to waive, amend or supplement any
provision of the Agreement other than as set forth herein.

     

    (b) Notwithstanding
anything in the Agreement or the other Transaction Documents to the contrary,
each of the parties hereto, hereby consents and agrees to the amendments
contemplated hereby and that all of the provisions in the Agreement, the
Receivables Purchase Agreement, each Purchase Agreement and the other
Transaction Documents shall be interpreted so as to give effect to the intent of
the parties hereto as set forth in this Amendment.

     

    SECTION
5. Effectiveness.  This
Amendment shall become effective as of the date hereof upon receipt by the Agent
and the Company of the following (each, in form and substance satisfactory to
the Agent and the Company):

     

    (a) Counterparts
of this Amendment (whether by facsimile or otherwise) executed by each of the
parties hereto; and

     

    (b) Such
other documents, resolutions, certificates, agreements and opinions as the
Company or the Agent may reasonably request in connection herewith.

     

    SECTION
6. Counterparts.  This
Amendment may be executed in any number of counterparts and by different parties
on separate counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute but one and
the same instrument.

     

    SECTION
7. Governing
Law.  This Amendment, including the rights and duties of the
parties hereto, shall be governed by, and construed in accordance with, the laws
of the State of Texas (without giving effect to the conflict of laws principles
thereof).

     

    SECTION
8. Section
Headings.  The various headings of this Amendment are included
for convenience only and shall not affect the meaning or interpretation of this
Amendment, the Agreement or any provision hereof or thereof.

     

    (continued
on following page)

    

    

    
      
        
          
            	
                    1428451
      98442494

                  	 
      	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the date first above
written.

     

    PILGRIM’S
PRIDE FUNDING CORPORATION

    

    

    By:                /s/ Richard A.
Cogdill

    Name:                Richard
A. Cogdill

    Title:                  CFO,
Secretary & Treasurer

    

    

    

    PILGRIM’S
PRIDE CORPORATION

    

    

    By:                /s/ Richard A.
Cogdill

    Name:                Richard
A. Cogdill

    Title:                  CFO,
Secretary & Treasurer

    

    

    
      
        
          
            	
                    1428451
      98442494

                  	
                    S-

                  	
                    Amendment
      No. 2 to PCA

                  

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Consented
and Agreed:

    

    BMO
CAPITAL MARKETS CORP. (f/k/a Harris Nesbitt Corp.), as
Administrator

    

    

    By:                 /s/ Brian
Zaban                                                         

    Name:                 Brian
Zaban

    Title:                 
 Managing Director

    

    

    

     

    

    
      
        
          
            	
                    1428451
      98442494

                  	
                    S-

                  	
                    Amendment
      No. 2 to PCAexv10w15

Exhibit 10.15

STOCK PURCHASE AGREEMENT

AMONG

DREW SCIENTIFIC, INC.

JAS DIAGNOSTICS, INC

AND

THE STOCKHOLDERS OF JAS DIAGNOSTICS, INC.

May 30, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 
	I	 	Representations and Warranties of the Company and Shareholders	 	1
	 
	 	1.01	 	Organization and Qualification	 	2
	 
	 	1.02	 	Authorization	 	2
	 
	 	1.03	 	Capitalization	 	2
	 
	 	1.04	 	Financial Condition	 	2
	 
	 	1.05	 	Tax Liabilities	 	3
	 
	 	1.06	 	Legal Proceedings and Compliance with Legal Requirements	 	5
	 
	 	1.07	 	Properties and Assets	 	6
	 
	 	1.08	 	Contracts	 	7
	 
	 	1.09	 	ERISA	 	9
	 
	 	1.10	 	Patents and Other Intellectual Property	 	10
	 
	 	1.11	 	Questionable Payments	 	11
	 
	 	1.12	 	Consents and Approvals	 	12
	 
	 	1.13	 	Subsidiaries and Investments	 	12
	 
	 	1.14	 	Sales	 	12
	 
	 	1.15	 	Liabilities	 	12
	 
	 	1.16	 	Insurance	 	12
	 
	 	1.17	 	Employee Relations	 	13
	 
	 	1.18	 	Warranties	 	13
	 
	 	1.19	 	Customers, Distributors and Suppliers	 	13
	 
	 	1.20	 	Finder’s Fees	 	13
	 
	 	1.21	 	Transactions with Certain Persons	 	13
	 
	 	1.22	 	INTENTIONALLY OMITTED	 	14
	 
	 	1.23	 	Accuracy of Information	 	14
	 
	 	 	 	 	 	 
	II	 	Representations and Warranties of the Stockholders	 	14
	 
	 	2.01	 	Authorization	 	14
	 
	 	2.02	 	Ownership of Company Common Stock and Related Matters	 	14
	 
	 	2.03	 	S Corporation Status	 	15
	 
	 	2.04	 	Consents and Approvals	 	15
	 
	 	 	 	 	 	 
	III	 	Representations and Warranties of the Purchaser	 	15
	 
	 	3.01	 	Organization and Qualification	 	15
	 
	 	3.02	 	Authority	 	15
	 
	 	3.03	 	Consents and Approvals	 	16
	 
	 	3.04	 	SEC Documents	 	16
	 
	 	3.05	 	INTENTIAONALLY OMMITTED	 	16
	 
	 	3.06	 	Representations of the Company and the Stockholders	 	16
	 
	 	3.07	 	Finder’s Fees	 	16
	 
	 	 	 	 	 	 
	IV	 	Purchase and Sale of the Company Common Stock	 	17
	 
	 	4.01	 	Terms of the Purchase and Sale	 	17

i

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 
	 
	 	4.02	 	The Closing	 	17
	 
	 	4.03	 	Purchase Price Adjustment	 	18
	 
	 	4.04	 	INTENTIAONALLY OMMITTED	 	19
	 
	 	 	 	 	 	 
	V	 	Conditions to Obligations of the Purchaser	 	19
	 
	 	5.01	 	Accuracy of Representations and Compliance with Conditions	 	19
	 
	 	5.02	 	Opinions of Counsel	 	20
	 
	 	5.03	 	Other Closing Documents	 	20
	 
	 	5.04	 	Legal Action	 	20
	 
	 	5.05	 	No Governmental Action	 	20
	 
	 	5.06	 	No Claims Regarding Stock Ownership or Sale Proceeds	 	20
	 
	 	5.07	 	Financing	 	20
	 
	 	5.08	 	Tangible Net Worth	 	20
	 
	 	5.09	 	Required Consents	 	20
	 
	 	5.10	 	Resignations	 	20
	 
	 	5.11	 	INTENTIONALLY OMITTED	 	21
	 
	 	5.12	 	Employment Agreement.  The Purchaser shall have received	 	 
	 
	 	 	 	at or prior to the closing from David Johnston and Vivian	 	 
	 
	 	 	 	Alvarez an Employment Agreement	 	21
	 
	 	 	 	 	 	 
	VI	 	Conditions to the Obligations of the Company and the Stockholders	 	21
	 
	 	6.01	 	Accuracy of Representations and Compliance with Conditions	 	21
	 
	 	6.02	 	No Injunction; Legal Action	 	21
	 
	 	6.03	 	Employment Agreement.  The Purchaser shall have entered	 	 
	 
	 	 	 	into and Employment Agreement with David Johnston and	 	 
	 
	 	 	 	Vivian Alvarez	 	21
	 
	 	6.04	 	INTENTIONALLY OMITTTED	 	21
	 
	 	6.05	 	Secretary’s Certificate	 	21
	 
	 	6.06	 	INTENTIONALLY OMITTED	 	22
	 
	 	 	 	 	 	 
	VII	 	Covenants and Agreements of the Company and the Stockholders	 	22
	 
	 	7.01	 	Access	 	22
	 
	 	7.02	 	Conduct of Business	 	23
	 
	 	7.03	 	Advice of Changes	 	23
	 
	 	7.04	 	Confidentiality	 	23
	 
	 	7.05	 	Public Statements	 	24
	 
	 	7.06	 	Other Proposals	 	24
	 
	 	7.07	 	Consents Without Any Condition	 	24
	 
	 	7.08	 	Release by the Stockholders	 	25
	 
	 	7.09	 	Noncompetition	 	25
	 
	 	7.10	 	Voting by the Stockholders	 	26
	 
	 	7.11	 	INTENTIONALLY OMITTED	 	26
	 
	 	7.12	 	Company Tax Returns	 	26
	 
	 	7.13	 	INTENTIONALLY OMITTED	 	26
	 
	 	7.14	 	Inventory Value Adjustment	 	27
	 
	 	7.15	 	Reasonable Efforts	 	27
	 
	 	 	 	 	 	 
	VIII	 	Covenants and Agreements of the Purchaser	 	28

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 
	 
	 	8.01	 	Financing	 	28
	 
	 	8.02	 	Employee Matters	 	28
	 
	 	8.03	 	Reasonable Efforts	 	28
	 
	 	8.04	 	INTENTIONALLY OMITTED 	 	28
	 
	 	 	 	 	 	 
	IX	 	Termination	 	29
	 
	 	9.01	 	Termination Events	 	29
	 
	 	9.02	 	Effect of Termination	 	30
	 
	 	 	 	 	 	 
	X	 	Indemnification; Remedies	 	30
	 
	 	10.01	 	Survival; Right to Indemnification Not Affected by Knowledge	 	30
	 
	 	10.02	 	Indemnification and Payment of Damages by the Stockholders for the	 	 
	 
	 	 	 	Obligations of the Company and Shareholders	 	30
	 
	 	10.03	 	Indemnification and Payment of Damages by the Stockholders	 	31
	 
	 	10.04	 	Indemnification and Payment of Damages by the Purchaser	 	31
	 
	 	10.05	 	Limitations on Amount, Time and Remedies	 	31
	 
	 	10.06	 	Limitations on Amount -- Purchaser	 	31
	 
	 	10.07	 	Procedure for Indemnification -- Third Party Claims	 	32
	 
	 	10.08	 	Procedure for Indemnification -- Other Claims	 	33
	 
	 	 	 	 	 	 
	XI	 	Miscellaneous	 	33
	 
	 	11.01	 	Further Actions	 	33
	 
	 	11.02	 	Availability of Equitable Remedies	 	33
	 
	 	11.03	 	Appointment of Agent	 	33
	 
	 	11.04	 	Modification	 	33
	 
	 	11.05	 	Notices	 	33
	 
	 	11.06	 	Expenses	 	35
	 
	 	11.07	 	Waiver	 	35
	 
	 	11.08	 	Binding Effect	 	36
	 
	 	11.09	 	No Third Party Beneficiaries	 	36
	 
	 	11.10	 	Separability	 	36
	 
	 	11.11	 	Headings	 	36
	 
	 	11.12	 	Counterparts; Governing Law	 	36
	 
	 	 	 	 	 	 
	XII	 	Definitions	 	36

iii

 

List of Exhibits:

Schedule 1 JAS Diagnostics, Inc. Stockholders

Schedule 2 Purchase Price

Schedule 3 JAS Customers and Products

Schedule 4 Company Announcement

Schedule 5 Opinion of Counsel

Schedule 6 Closing Documents

iv

 

STOCK PURCHASE AGREEMENT

     Agreement dated as of May  , 2008 among Drew Scientific, Inc., a Texas Corporation (the
“Purchaser”) and Subsidiary of Escalon Medical Corp., a Pennsylvania corporation; JAS Diagnostics,
Inc., a Florida corporation (the “Company”); and the stockholders of the Company listed on Schedule
I hereto (such persons, including Shareholders, being hereinafter sometimes referred to
individually as a “Stockholder” and collectively as the “Stockholders”).

Recitals:

     The Stockholders desire to sell to the Purchaser, and the Purchaser desires to purchase from
the Stockholders, all of the issued and outstanding capital stock of the Company for the
consideration and on the terms and conditions set forth in this Agreement and the concurrently
executed Transaction Documents expressly listed hereunder:

The Company Disclosure Schedule.

The Purchaser and Company acknowledge that Maria Sanchez and Francisco Perez did not participate in
the negotiation or execution of prior proposed agreements between Purchaser and the Company related
to this transaction and therefore, any and all such prior proposed agreements or contracts between
Purchase and the Company related to this proposed stock sale transaction shall be considered void
and unenforceable. Except for the Company Disclosure Schedule and this Stock Purchase Agreement,
Purchaser, the Company and each Stockholder hereby acknowledges and agrees that there are no valid
or enforceable documents contracts, warranties or agreements of any sort whatsoever between
Purchaser and the Company which serve to bind Purchaser or the Company to this proposed stock
purchase transaction or otherwise relates thereto, all prior alleged agreements, contracts and
writings between the Purchaser and the Company on the subject matter hereof being null and void.
This Agreement and the Company Disclosure Schedule sets forth the entire understanding of the
parties with respect to the subject matter hereof, shall supersede all existing agreements between
Purchaser and the Company concerning such subject matter and may be modified only by a written
instrument duly executed by each party hereto.

     Certain capitalized terms used herein are defined in Article XII of this Agreement.

     NOW, THEREFORE, in consideration of the premises, covenants and agreements set forth herein,
and intending to be legally bound hereby, the parties agree as follows:

I. Representations and Warranties of the Company and Shareholders

     Except to the extent set forth on the Company Disclosure Schedule entered concurrently
herewith, the Company and Shareholders to the best of their knowledge jointly and severally
represent and warrant to the Purchaser as follows:

I-1

 

     1.01 Organization and Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, and has all requisite
corporate power and authority to own or lease and operate its properties and carry on its business
as it is now being conducted, and to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby. The Company is qualified to do business as a foreign
corporation and is in good standing in the jurisdictions listed in Section 1.01 of the Company
Disclosure Schedule, which are the only jurisdictions where the Company is required to be so
qualified, except where the failure to so qualify would not have a Material Adverse Effect. The
Company has no subsidiaries.

     1.02 Authorization. The Company has the requisite power and authority to execute and deliver
the Transaction Documents to which the Company is or will be a party and to perform the
Transactions to be performed by the Company. Such execution, delivery and performance by the
Company has been duly authorized by all necessary corporate action. The Transaction Documents
executed by the Company on or before the date hereof constitute, and the Transaction Documents to
be executed unanimously by all Company Stockholders, the Company and Purchaser related to this
stock purchase transaction, after the date hereof shall constitute, the sole and exclusive valid
and binding obligations of the Company and Stockholders related to this transaction (except for any
employment or consulting agreements also entered into by Purchaser with any individual Stockholders
commencing after the successful completion of this stock purchase transaction), enforceable against
the Company in accordance with their terms, except as such enforceability may be limited by general
equitable principles and by bankruptcy, moratorium, insolvency, fraudulent conveyance or similar
laws. Any and all documents or purported agreements which may have been previously entered into
related to this stock purchase transaction but which have not been unanimously signed by all
Stockholders are hereby acknowledged to be void and unenforceable.

     1.03 Capitalization. The authorized capital stock of the Company consists of 2,500 shares of
common stock, par value $1.00 per share (the “Company Common Stock”). The shares of Company Common
Stock shown on Schedule I hereto constitute all of the issued and outstanding shares of capital
stock of the Company. All shares of Company stock are subject to the sale restrictions contained
under the January 25, 2001 Shareholder Agreement entered into between the Stockholders and the
Company, as a result whereof the unanimous approval of all Stockholders is hereby required to enter
into, as well as to permit any and all amendments of this Stock Purchase Agreement with Purchaser.
Each outstanding share of Company Common Stock is validly authorized, and was validly issued to the
Stockholders listed in Schedule I hereto and fully paid and nonassessable, has not been issued and
is not owned or held in violation of any preemptive right of stockholders, and is owned of record
by the Stockholders as shown on Schedule I hereto. There is no commitment, plan or arrangement to
issue, and no outstanding option, warrant or other right calling for the issuance of, any share of
capital stock of the Company or any security or other instrument convertible into, exercisable for
or exchangeable for capital stock of the Company. There are no outstanding instruments convertible
into or exchangeable for capital stock of the Company.

     1.04 Financial Condition.

I-2

 

     (a) The Company has delivered to the Purchaser true and correct copies of the unaudited
balance sheet of the Company as of May 28, 2008 (the “Last Balance Sheet”). The Last Balance
Sheet, including any notes thereto, presents fairly the financial condition, assets, liabilities
and stockholders’ equity of the Company as of its date; each such statement of income and
consolidated statement of retained earnings presents fairly the results of operations of the
Company for the period indicated; and each such statement of cash flows presents fairly the
information purported to be shown therein, except, with respect to any unaudited statement, the
absence of footnotes, necessary interim accounting practices and procedures and year-end audit
adjustments. The financial statements referred to in this Section 1.04 have been prepared in
accordance with GAAP consistently applied throughout the periods involved and were prepared in
accordance with the books and records of the Company, except, with respect to any unaudited
statement, the absence of footnotes, necessary interim accounting practice and procedures and
year-end audit adjustments.

     (b) Except as set forth on Section 1.04 of the Company Disclosure Schedule, since the date of
the Last Balance Sheet (the “Last Balance Sheet Date”):

          (i) There has at no time been a change in the financial condition, results of operations,
business, properties, assets or liabilities of the Company that has had a Material Adverse Effect.

          (ii) The Company has not authorized, declared, paid or effected any dividend or liquidating or
other distribution in respect of its capital stock or any direct or indirect redemption, purchase
or other acquisition of any stock of the Company.

          (iii) The operations and business of the Company have been conducted only in the ordinary
course, consistent with past practices of the Company.

          (iv) There has been no accepted purchase order or quotation, arrangement or understanding for
future sale of the products or services of the Company that was outside the ordinary course of
business or not consistent with the past practices of the Company.

          (v) The Company has not suffered an extraordinary loss (whether or not covered by insurance)
or waived any right of substantial value.

     (c) Except as set forth in Section 1.04(c) of the Company Disclosure Schedule, there is no
fact known to the Company or Shareholders that materially adversely affects or in the future (as
far as the Company or Shareholders can reasonably foresee) is reasonably likely to materially
adversely affect the financial condition, results of operations, business, properties, assets,
liabilities or future prospects of the Company; provided, however, that the Company and
Shareholders express no opinion as to changes or effects relating to United States or foreign
economic conditions or financial markets in general or to the Company’s industry in general.

     1.05 Tax Liabilities. Except as otherwise set forth in Section 1.05 of the Company Disclosure
Schedule:

I-3

 

     (a) The Company has duly and timely filed all Returns that it was required to file on or prior
to the date hereof. All such Returns were true, complete and correct. All Taxes owed or
required to be remitted by the Company (whether or not shown on any Return) have been paid or
remitted, or are being contested and adequately reserved in accordance with GAAP on the financial
statements of the Company. The Company is not currently the beneficiary of any extension of time
within which to file any Return. The most recent financial statements delivered to the Purchaser
by the Company hereunder reflect an adequate reserve in accordance with GAAP for all Taxes of the
Company for all taxable periods and portions thereof through the date of such financial statements.
The Company has maintained and will continue to maintain reserves in accordance with GAAP for all
Taxes for the period from the date of the most recent financial statements through the Closing
Date.

     (b) The Company has satisfied all federal, state, local and foreign withholding tax
requirements, including but not limited to income, social security and employment tax.

     (c) None of the assets of the Company (i) is property that is required to be treated as owned
by another person pursuant to the “safe harbor lease” provisions of former Section 168(f)(8) of the
Code, (ii) is “tax-exempt use property” within the meaning of Section 168(h) of the Code or (iii)
directly or indirectly secures any debt the interest of which is tax-exempt under Section 103(a) of
the Code.

     (d) There are no liens for Taxes on any of the assets of the Company.

     (e) The Company is not a party to any tax allocation, tax sharing or tax benefit transfer
agreement. The Company (i) has not been a member of an affiliated, combined or unitary group
filing a consolidated, combined or unitary Return (other than a group the common parent of which
was the Company) and (ii) has no liability for the Taxes of any Person under regulation § 1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.

     (f) Except as set forth in Section 1.05(f) of the Company Disclosure Schedule, no claim has
ever been made by a Governmental Body in a jurisdiction where the Company does not file Returns
that the Company is or may be subject to taxation by that jurisdiction.

     (g) There is no dispute or claim now pending concerning any Tax Liability of the Company
either (i) claimed or raised by any Governmental Body in writing or (ii) as to which the Company or
Shareholders has knowledge based upon personal contact with any agent of such Governmental Body.
No Governmental Body is now asserting or, to the knowledge of the Company or Shareholders,
threatening to assert, any deficiency or assessment for additional Taxes of the Company or has
notified the Company or Shareholders of its intent to examine or audit the Company. The Company
has not (i) waived any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency or (ii) received any notice of deficiency of
assessment from any Governmental Body with respect to Liability for Taxes that has not been fully
paid or finally settled.

I-4

 

     (h) The Company has delivered to the Purchaser correct and complete copies of all federal
income tax Returns, examination reports and statements of deficiencies assessed against or agreed
to by the Company since 2001.

     (i) The Company has not filed a consent under Code Section 341(f) concerning collapsible
corporations.

     (j) For all tax periods from and after 2001 up to and including the Closing (collectively the
“S Corporation Tax Period”), the Company has elected, in compliance with all applicable legal
requirements, to be taxed under Subchapter S of the Code and corresponding provisions under Florida
State laws, and such elections are in effect for the Company. No action has been taken by the
Company or, to the knowledge of the Company or Shareholders, any Stockholder that may result in the
revocation of any such elections and, with respect to the S Corporation Tax Period, the Company has
no Liability, absolute or contingent, for the payment of any income Taxes under the Code or under
the laws of such states or localities which afford tax treatment similar to that under Subchapter S
of the Code, except as set forth in Section 1.05(j) of the Company Disclosure Schedule.

     1.06 Legal Proceedings and Compliance with Legal Requirements.

     (a) Except as disclosed in Section 1.06 of the Company Disclosure Schedule, there (i) is no
Litigation that is pending against the Company and (ii) to the knowledge of the Company and
Shareholders, there is no Litigation threatened against the Company that, in either case, relates
to or could have a Material Adverse Effect on the operations of the Company. To the knowledge of
the Company and Shareholders, there has been no Default under any Legal Requirements applicable to
the Company, including Legal Requirements relating to pollution or protection of the environment or
Legal Requirements promulgated by the FDA. There has been no Default with respect to any Court
Order applicable to the Company, except for any Defaults that would not have a Material Adverse
Effect.

     (b) Except as disclosed in Section 1.06 of the Company Disclosure Schedule, to the knowledge
of the Company and Shareholders, the Company has complied in all material respects with all Legal
Requirements and Court Orders applicable to the business of the Company and the sale of the
Company’s products. The Company has obtained and, to the knowledge of the Company and
Shareholders, is in compliance in all material respects with all federal, state, local and foreign
governmental permits, licenses, registrations, certificates of occupancy, approvals and other
authorizations (the “Governmental Permits”). All of the Governmental Permits are listed in Section
1.06 of the Company Disclosure Schedule along with their respective expiration dates, and, to the
Knowledge of the Company and Shareholders, such Governmental Permits constitute all Governmental
Permits required for the operation of the Company’s business as currently operated. All of the
Governmental Permits are currently valid and in full force, and to the knowledge of the Company and
Shareholders, no violations of a material nature are or have been recorded in respect of any of the
Governmental Permits and no revocation, cancellation or withdrawal thereof has been threatened.
The Company has filed such timely and complete renewal applications as may be required with respect
to its Governmental Permits, except as set forth in Section 1.06(b) of the Company Disclosure
Schedule.

I-5

 

     (c) Notwithstanding anything to the contrary that may be interpreted by this Section 1.06(c),
Purchaser hereby agrees and acknowledges that Maria Sanchez and Francisco Perez did not have as
part of their duties on behalf of Company any of the responsibilities related to the subject matter
of this Section 1.06(c) and thus they do not make any warranties or
representations to Purchaser related to this Section 1.06(c), other than from an extremely
limited actual knowledge perspective based upon information actually shared with them by other
Stockholders which may or may not adequately reflect the status of the subject matter hereof.
Section 1.06(c) of the Company Disclosure Schedule sets forth a list of all of the products of the
Company. Except as set forth in Section 1.06(c) of the Company Disclosure Schedule, to the best of
the actual knowledge of the Maria Sanchez and Francisco Perez or the knowledge of the Company David
Johnson and Vivian Alvarez: (1) the Company has not received any written complaints or, any other
complaints, from any customer or distributor concerning any of the Company’s products, which has
not been resolved or withdrawn, or where the failure to resolve the same would have a Material
Adverse Effect; (2) there are no defects in design, construction or manufacture of its products
that could adversely affect performance or create an usual risk of injury to persons or property;
(3) all products of the Company are and have been in all material respects in compliance with all
applicable Legal Requirements of the FDA applicable to such products; (4) There is no reasonable
basis known to the Company for the FDA, the ISO or any other Governmental Body to deny or rescind
any approval or clearance to market any of the Company’s commercially distributed products for the
purpose or indication for which they are being manufactured, assembled, marketed or sold; (5).
None of the Company’s products is or has been the subject of any replacement, field fix, retrofit,
modification or recall campaign and, no facts or conditions exist that could reasonably be expected
to result in such a recall campaign; (6) The Company’s products have been designed and
manufactured so as to meet and comply in all material respects with all applicable governmental and
regulatory standards and specifications currently in effect in North America, South America and
Europe, and have received all governmental and regulatory approvals necessary to allow their sale
and use in all jurisdictions where they are currently being sold in North America and Europe; (7)
Neither the Company nor Shareholders has any reason to believe that the Company’s products fail to
meet any standards or specifications or do not have any necessary governmental or regulatory
approval necessary for the sale or use of such products in any jurisdiction other than in North
America, South America or Europe (8) There are no outstanding notices of Defaults or warning
letters received by the Company from the FDA or the ISO nor are there outstanding good
manufacturing practice warning notices received by the Company from the FDA or the ISO; (9) The
Company has previously provided to the Purchaser access to the Company’s complete file with respect
to all FDA and other Governmental Body approvals and certifications of the Company’s products and
the facility in which they are being manufactured.

     1.07 Properties and Assets.

     (a) Except as disclosed in Section 1.07 of the Company Disclosure Schedule, the Company has
good and marketable title to all properties and assets used in its business or owned by it, free
and clear of all Encumbrances.

     (b) All accounts and notes receivable reflected on the Last Balance Sheet, or arising since
the Last Balance Sheet Date, have been collected, or are and will be good and collectible,

I-6

 

in each case at the aggregate recorded amounts thereof less any reserves therefor reflected in the Last
Balance Sheet in accordance with GAAP without right of recourse, defense, deduction, return of
goods, counterclaim, offset or set off on the part of the obligor, and, if not collected, to the
knowledge of the Company and Shareholders, can reasonably be anticipated to be paid within 120 days
of the date incurred.

     (c) Section 1.07(c) of the Company Disclosure Schedule sets forth a true and complete list of
all real property owned or leased by the Company, a list of all personal property leased by the
Company and a list of the properties and assets owned by the Company (but not including inventory
or Intellectual Property) as set forth on the Depreciation Projections dated as of February 2008
attached to Section 1.07(c) of the Company Disclosure Schedule, which contains a statement of cost,
book value and (except for land) reserve for depreciation of each item for tax purposes, and net
book value of each item for financial reporting purposes. Except as set forth in Section 1.07(c)
of the Company Disclosure Schedule, all such real and other properties and assets (including
Intellectual Property) owned by the Company are reflected on the Last Balance Sheet (except for
acquisitions and dispositions in the ordinary course of business subsequent to the Last Balance
Sheet Date and prior to the Closing or that are either disclosed in Section 1.07 of the Company
Disclosure Schedule or are approved in writing by the Purchaser).

     (d) Except as set forth in Section 1.07(d) of the Company Disclosure Schedule, to the
knowledge of the Company or Shareholders: no real property or Facility owned, leased or licensed
by the Company lies in an area which is or will be subject to zoning, use or building code
restrictions that would prohibit, and no state of facts relating to the actions or inaction of
another Person or its ownership, leasing, licensing or use of any real or personal property exists
or will exist, that would prevent the continued effective ownership, leasing, licensing or use of
such real property in the business in which the Company is now engaged.

     (e) The real and other properties and assets (including Intellectual Property) owned by the
Company or leased or licensed by the Company from a third party constitute all such properties and
assets that are necessary to the business of the Company as presently conducted or as it currently
contemplates conducting.

     (f) Except as set forth in Section 1.07(f) of the Company Disclosure Schedule, the Company has
not caused nor permitted its business, Facilities, properties or assets to be used to generate,
manufacture, refine, transport, treat, store, handle, dispose of, transfer, produce or process any
Hazardous Substance (as hereinafter defined) except in compliance with all applicable laws, rules,
regulations, orders, judgments and decrees, except where the failure to so comply could not
individually or in the aggregate have a Material Adverse Effect, and has not caused nor permitted
the Release (as hereinafter defined) of any Hazardous Substance on or off the site of any property
or Facilities of the Company that individually or in the aggregate could have a Material Adverse
Effect. The term “Hazardous Substance” shall mean any hazardous waste, as defined by 42 U.S.C.
6903(5), any hazardous substance, as defined by 42 U.S.C. 9601(14), any pollutant or contaminant,
as defined by 42 U.S.C. 9601(33), and all toxic substances, hazardous materials, or other chemical
substances regulated by any other law, rule, or regulation. The term “Release” shall have the
meaning set forth in 42 U.S.C. 9601(22).

I-7

 

     1.08 Contracts.

     (a) Section 1.08(a) of the Company Disclosure Schedule lists each Contract of the following
types to which the Company currently is a party, or by which it is bound, that relates to
or could affect the operations of the Company, except for (i) any Contract that is not
material to the Company or its business and that may be terminated by the Company on not more than
30 days’ notice without any Liability to the Company and (ii) any Contract under which the
executory obligation of the Company involves an amount less than $25,000 (such excepted Contracts
are referred to collectively as “Minor Contracts”):

          (i) Contracts with any present or former stockholder, director, officer, employee, partner or
consultant of the Company or Affiliate thereof;

          (ii) Contracts for the future purchase of, or payment for, supplies or products, or for the
lease of any asset from or the performance of services by a third party, in excess of $25,000 in
any individual case, or any Contracts for the sale of inventory or products that involve an amount
in excess of $25,000 with respect to any one supplier or other party;

          (iii) Contracts to sell or supply products or to perform services that involve an amount in
excess of $25,000 in any individual case;

          (iv) Contracts to lease to or to operate for any other party any asset that involve an amount
in excess of $25,000 in any individual case;

          (v) Any notes, debentures, bonds, conditional sale agreements, equipment trust agreements,
letter of credit agreements, guaranty and other reimbursement agreements, loan agreements or other
Contracts for the borrowing or lending of money (including loans to or from officers, directors,
partners, stockholders or Affiliates of the Company or any members of their immediate families),
agreements or arrangements for a line of credit or for a guarantee of, or other undertaking in
connection with, the indebtedness of any other Person;

          (vi) Any Contracts under which any Encumbrances exist with respect to any assets of the
Company; and

          (vii) Any other Contracts (other than Minor Contracts and those described in any of
subsections (i) through (vi) above) not made in the ordinary course of business.

     (b) Copies of all Contracts identified in Section 1.08(a) of the Company Disclosure Schedule
have been made available for inspection by the Purchaser. No outstanding purchase commitment by
the Company is in excess of its ordinary business requirements or at a price in excess of market
price at the date thereof. Except as set forth in Section 1.08(b) of the Company Disclosure
Schedule, none of such Contracts will expire or be terminated or be subject to any modification of
terms or conditions by reason of the consummation of the Transactions contemplated by this
Agreement, except where any such termination or modification will not have a Material Adverse
Effect. With respect to the Contracts described in clause (iii)

I-8

 

hereinabove, none of the agents
who is party to any such agreement has terminated, threatened to terminate or given any notice of
an intention to terminate its agreement with the Company or to substantially reduce the volume of
business placed with or through the Company, and neither the Company nor Shareholders knows of any
condition or state of facts or circumstances that would cause any such termination or reduction in
the foreseeable future. The Company is not in Default in any material respect under the terms of
any Contract nor is it in Default in the payment of any insurance premiums due to insurance
carriers nor any principal of or interest on
any indebtedness for borrowed money nor, to the knowledge of the Company or Shareholders, has
any event occurred that, with the passage of time or giving of notice or both, would constitute
such a Default by the Company and, to the knowledge of the Company and Shareholders, no other party
to any such contract is in Default in any material respect thereunder nor has any such event
occurred with respect to such party, except that no representation is made with respect to any
Contract that is not material to the Company or its business and that may be terminated by the
Company on not more than 30 days’ notice without any Liability to the Company.

     1.09 ERISA.

     (a) Section 1.09(a) of the Company Disclosure Schedule contains a complete list of all Benefit
Plans currently sponsored or maintained by the Company or under which the Company may be obligated.
The Company has made available to the Purchaser (i) accurate and complete copies of all Benefit
Plan documents and all other material documents relating thereto of the Company, including all
summary plan descriptions and summary annual reports, if any, (ii) accurate and complete summaries
of all unwritten Benefit Plans, (iii) accurate and complete copies of the most recent financial
statements and actuarial reports, if any, with respect to all Benefit Plans for which financial
statements or actuarial reports are required or have been prepared and (iv) accurate and complete
copies of all annual reports, if any, for all Benefit Plans (for which annual reports are required)
prepared within the last three years.

     (b) All Benefit Plans conform (and at all times have conformed) in all material respects to,
and are being administered and operated (and to the knowledge of the Company and Shareholders have
at all times been administered and operated) in material compliance with, the applicable
requirements of ERISA, the Code and all other applicable Legal Requirements, except where the
failure to comply would not have a Material Adverse Effect. All returns, reports and disclosure
statements required to be made under ERISA and the Code with respect to all Benefit Plans have been
timely filed or delivered. There have not been any “prohibited transactions,” as such term is
defined in Section 4975 of the Code or Section 406 of ERISA involving any of the Benefit Plans that
could subject the Company to any material penalty or tax imposed under the Code or ERISA.

     (c) None of the Benefit Plans is an employee pension benefit plan (as defined in Section 3(2)
of ERISA). The Company has no current or contingent obligation to contribute to any multiemployer
plan (as defined in Section 3(37) of ERISA).

     (d) There are no pending or, to the knowledge of the Company or Shareholders, threatened
claims by or on behalf of any Benefit Plans, or by or on behalf of any individual participants or
beneficiaries of any Benefit Plans, alleging any breach of fiduciary duty on the

I-9

 

part of the
Company or any of its stockholders, officers, directors or employees under ERISA or any other
applicable regulations, or claiming benefit payments other than those made in the ordinary
operation of such plans, nor is there, to the knowledge of the Company or Shareholders, any
reasonable basis for such claim.

     (e) Except to the extent set forth in Section 1.09(e) of the Company Disclosure Schedule, the
Company has made all required contributions under the Benefit Plans on a timely basis.

     (f) With respect to any Benefit Plan that is an employee welfare benefit plan (within the
meaning of Section 3(l) of ERISA) (a “Welfare Plan”): (i) each Welfare Plan for which contributions
are claimed as deductions under any provision of the Code is in material compliance with all
applicable requirements pertaining to such deduction, except where the failure to comply would not
have a Material Adverse Effect, (ii) with respect to any welfare benefit fund (within the meaning
of Section 419 of the Code) related to a Welfare Plan, there is no disqualified benefit (within the
meaning of Section 4976(b) of the Code) that would result in the imposition of a tax under Section
4976(a) of the Code and (iii) any Benefit Plan that is a group health plan (within the meaning of
Section 4980B(g)(2) of the Code) is in material compliance with all of the material requirements of
Section 4980B of the Code, Part 6 of Title I of ERISA and the applicable provisions of the Social
Security Act, except where the failure to comply would not have a Material Adverse Effect.

     (g) Except as set forth in Section 1.09(g) of the Company Disclosure Schedule, the Company has
no Benefit Plans or agreements that, by their terms, would create liability for severance pay to
any employee of the Company as a result of any of the Transactions.

     (h) Except as disclosed in Section 1.09(h) of the Company Disclosure Schedule, no Benefit Plan
has any liability of any material nature, accrued or contingent, including without limitation
liabilities for Taxes, other than for routine payments to be made in due course to participants and
beneficiaries.

     (i) The Company has provided the Purchaser with a true and correct summary of the names,
relationship with the Company, present rates of compensation (whether in the form of salary,
bonuses, commissions, or other supplemental compensation now or hereafter payable), and aggregate
compensation for the fiscal year ended 2007 and currently in effect for each director, officer, or
other employee of the Company. Except as set forth in Section 1.09(i) of the Company Disclosure
Schedule, since December 2007, the Company has not changed the rate of compensation of any of its
directors, officers or employees nor has any Benefit Plan or program been instituted or amended to
increase benefits thereunder.

     1.10 Patents and Other Intellectual Property.

     (a) Except as set forth in Section 1.10(a) of the Company Disclosure Schedule, the Company has
exclusive title to, owns, possesses, has the sole right to use or, where necessary, has made timely
and proper application for, all copyrights, trademarks, trade names, service marks, franchises,
certificates of public convenience and necessity, patents, patent rights, licenses, trade secrets,
information, proprietary rights and processes, intellectual property rights

I-10

 

listed on Section 1.10(a) of the Company Disclosure Schedule (the “Intellectual Property”). To the knowledge of the
Company and Shareholders, all of the Intellectual Property is owned or otherwise lawfully used by
the Company, and the Company is not infringing upon, conflicting with or unlawfully or wrongfully
using any patent, trademark, trade name, service mark, copyright, trade secret or other
intellectual property right owned or claimed by another Person.
Except as set forth in Section 1.10(a) of the Company Disclosure Schedule, the Company has not
received any notice of any claim of infringement or any other Claim or proceeding, with respect to
any such patent, trademark, trade name, service mark, copyright or trade secret which has not been
favorably resolved. No current employee of the Company and, to the knowledge of the Company and
Shareholders, no other Person, including any former employee, owns or has any proprietary,
financial or other interest, direct or indirect, in whole or in part, in any of the Intellectual
Property, or in any application therefor.

     (b) The Company has taken appropriate measures to reasonably protect and preserve the
security, confidentiality and value of its Confidential Information, which measures are described
in Section 1.10(b) of the Company Disclosure Schedule. “Confidential Information” means those
items of the Intellectual Property that are confidential and any other proprietary or confidential
information owned or obtained on a confidential basis by the Company. Except as disclosed in
Section 1.10(b) of the Company Disclosure Schedule, each of those employees and consultants of the
Company who are involved in the design, review, evaluation or development of products or
Intellectual Property and are listed in Section 1.10(b) of the Company Disclosure Schedule has
executed a nondisclosure and assignment of inventions agreement in the form provided to the
Purchaser. To the knowledge of the Company and Shareholders, all Confidential Information that
constitutes Intellectual Property is currently valid and protectible and is not part of the public
domain or knowledge, nor to the knowledge of the Company or Shareholders, has it been used,
divulged or appropriated for the benefit of any Person other than the Company or otherwise to the
detriment of the Company, except as set forth in Section 1.10(b) of the Company Disclosure
Schedule.

     (c) The Company has all right, title and interest in and to all of the Intellectual Property,
and the Company has not created or permitted any Encumbrance of any nature whatsoever. Except as
set forth in Section 1.10(c) of the Company Disclosure Schedule, the Company has not granted any
licenses to its proprietary property and is not aware of any third parties who are claiming any
right, title or interest in or to such Intellectual Property or who are infringing or violating any
of such Intellectual Property. Except as set forth in Section 1.10(c) of the Company Disclosure
Schedule, the Company is not bound by or a party to any option, license or agreement of any kind
with respect to patents, patent applications, inventions, trademarks, service marks, trade names,
licenses, franchises, copyrights, trade secrets, information and other proprietary rights and
processes or with respect to any such property and rights of any other person or entity relating to
the operation of the Company.

     (d) Except as set forth in Section 1.10(d) of the Company Disclosure Schedule, no royalties,
consulting or advisory fees or other payments are payable by the Company to any other person by
reason of the ownership or use of the Intellectual Property.

     1.11 Questionable Payments. To the knowledge of the Company and Shareholders, neither the
Company, any director, officer, agent, employee nor any other person associated with

I-11

 

or acting on behalf of the Company has: (i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; (iv) established or maintained any unlawful
or unrecorded fund of corporate monies or other assets; (v) made any false or fictitious entry
on the books or records of the Company; (vi) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment; or (vii) made any bribe, kickback or other payment of an
unlawful nature to any person or entity, private or public whether in money, property, or services,
to obtain favorable treatment in securing business or to obtain special concessions, or to pay for
favorable treatment for business secured or for special concessions already obtained.

     1.12 Consents and Approvals. The unanimous written approval of all the Company’s Stockholders
is required for entry of this Agreement, any and all modifications to this Agreement, and any and
all Transaction Documents to which the Company is or will be a party. Except for the consents
specified herein (the “Required Consents”), and except as set forth in Section 1.12 of the Company
Disclosure Schedule, neither the execution and delivery by the Company of the Transaction Documents
to which the Company is or will be a party, nor the performance of the Transactions to be performed
by the Company, will require any additional notice, filing, consent, waiver or approval or
constitute a Default under (a) any Legal Requirement or Court Order to which the Company is
subject, (b) the Charter Documents or by-laws of the Company or (c) any Contract, Governmental
Permit or other document to which the Company is a party, except any Contract that is not material
to the Company or its business and that may be terminated by the Company on not more than 30 days’
notice without any liability to the Company.

     1.13 Subsidiaries and Investments. The Company does not own, directly or indirectly, any
interest or investment (whether equity or debt) in any limited liability company, corporation,
partnership, business, trust, joint venture or other legal entity.

     1.14 Sales. The Company has provided the Purchaser with a schedule showing the revenues
generated by all products sold by the Company during each year commencing 2005.

     1.15 Liabilities. Except as specified in Section 1.15 of the Company Disclosure Schedule,
none of the assets of the Company is subject to any Liabilities, except: (a) Liabilities under any
Contracts specifically disclosed on the Company Disclosure Schedule, (b) Liabilities under Minor
Contracts and (c) Liabilities reflected in the Last Balance Sheet or incurred in the ordinary
course of business after the Last Balance Sheet Date and reflected in the books and records of the
Company.

     1.16 Insurance. The Company has provided the Purchaser with a summary of all policies or
binders of insurance held by or on behalf of the Company specifying with respect to each policy the
insurer, the amount of the coverage, the type of insurance, the risks insured, the expiration date,
the policy number and any pending claims thereunder. To the knowledge of the Company and
Shareholders, there is no Default with respect to any such policy or binder, nor has there been any
failure to give any notice or present any claim under any such policy or binder in a timely fashion
or in the manner or detail required by the policy or binder, except for any of the

I-12

 

foregoing that would not, individually or in the aggregate, have a Material Adverse Effect on the Company. There
is no notice of nonrenewal or cancellation with respect to, or disallowance of any claim under, any
such policy or binder that has been received by the Company, except for any of the foregoing that
would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

     1.17 Employee Relations. Except as disclosed in Section 1.17 of the Company Disclosure
Schedule, the Company is not (a) a party to, involved in or, to the knowledge of the Company and
Shareholders, threatened by, any labor dispute or unfair labor practice charge relating to the
Company or (b) currently negotiating any collective bargaining agreement with any employees of the
Company, and the Company has not experienced any work stoppage by any of its employees during the
three years immediately preceding the execution of this Agreement.

     1.18 Warranties. All goods sold or distributed by the Company were of merchantable quality,
and, except as set forth in Section 1.18 of the Company Disclosure Schedule, neither the Company
nor Shareholders has any knowledge that the Company has breached any express or implied warranties
in connection with the sale or distribution of such goods, except for breaches that have been
resolved without any further liability on the part of the Company and/or that, individually and in
the aggregate, would not have a Material Adverse Effect. The Company has provided the Purchaser
with a description of the Company’s warranties applicable to any goods that have been sold or
distributed by the Company.

     1.19 Customers, Distributors and Suppliers. The Company uses commercially reasonable efforts
to maintain, and currently maintains, good working relationships with its customers, distributors
and suppliers. Section 1.19 of the Company Disclosure Schedule lists any Contracts (excluding
Minor Contracts) relating to the operation of the Company with customers or distributors or former
customers or distributors of the Company that have been terminated or canceled during the two-year
period prior to the date hereof. Section 1.19 of the Company Disclosure Schedule also contains a
list of the names of each of the Major Customers and Major Distributors of the Company. Except as
disclosed in Section 1.19 of the Company Disclosure Schedule, none of such Major Customers or Major
Distributors has given the Company notice terminating, canceling or threatening to terminate or
cancel any Contract or relationship with the Company, and none of such customers or distributors
is, or has been during the two-year period immediately preceding the execution of this Agreement, a
related party to the Company. Section 1.19 of the Company Disclosure Schedule also contains a list
of the names of the Major Suppliers of components of and materials used in the manufacture of the
products of the Company. None of such Major Suppliers has given the Company written notice, or to
the knowledge of the Company or Shareholders, any other notice, terminating, canceling or
threatening to terminate or cancel any Contract or relationship with the Company.

     1.20 Finder’s Fees. No Person retained by the Company is or will be entitled to any
commission or finder’s or similar fee in connection with the Transactions.

     1.21 Transactions with Certain Persons. Except as set forth in Section 1.21 of the Company
Disclosure Schedule, no officer or director of the Company or any of its Affiliates, no employee of
the Company or any of its Affiliates and, to the knowledge of the Company and

I-13

 

Shareholders, no
member of any such person’s immediate family is presently a party to any material transaction with
the Company or any of its Affiliates relating to the businesses of the Company or any of its
Affiliates, including, without limitation, any contract, agreement or other arrangement (a)
providing for the furnishing of services by, (b) providing for the rental of real or personal
property from or (c) otherwise requiring payments to (other than for services as officers,
directors or employees of the Company or its Affiliates) any such person or corporation,
partnership, trust or other entity in which any such person has a substantial interest as a
stockholder, officer, director, trustee or partner.

     1.22 No Prior Agreements Relating to Sale. Except for this Stock Purchase Agreement and the
Company Disclosure Schedule entered concurrently herewith, Purchaser, the Company and each
Stockholder hereby acknowledges and agrees that there are no valid or enforceable documents
contracts, warranties or agreements of any sort whatsoever between Purchaser and the Company which
serve to bind Purchaser or the Company to this proposed stock purchase transaction or otherwise
relates thereto, all prior alleged agreements, contracts and writings between the Purchaser and the
Company on the subject matter hereof being null and void. This Agreement and the Company
Disclosure Schedule sets forth the entire understanding of the parties with respect to the subject
matter hereof, shall supersede all previously alleged existing agreements between Purchaser and the
Company concerning such subject matter and may be modified only by a written instrument duly
executed by each party hereto.

     1.23 Accuracy of Information. No representation or warranty by the Company or
Shareholders in any Transaction Document expressly listed in this Agreement, and no information
contained therein, is false or misleading in any material respect, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make the statements
contained herein or therein not misleading.

II. Representations and Warranties of the Stockholders.

     Each of the Stockholders, to the best of his or her knowledge, severally represents and
warrants to the Purchaser and to the other Stockholders with respect to himself/herself and the
shares of Company Common Stock set forth opposite the name of such Stockholder on Schedule I as
follows:

     2.01 Authorization. Such Stockholder has the requisite power and authority to execute and
deliver the Transaction Documents expressly listed in this Agreement to which such Stockholder is
or will be a signing party and to perform the Transactions to be performed by such Stockholder.
The Transaction Documents to be unanimously executed by all Stockholders after the date hereof will
constitute, valid and binding obligations of such Stockholder, enforceable against such Stockholder
in accordance with their respective terms, except as such enforceability may be limited by general
equitable principles and by bankruptcy, moratorium, insolvency, fraudulent conveyance or similar
laws.

     2.02 Ownership of Company Common Stock and Related Matters. Such Stockholder is the owner of
record and the sole beneficial owner of all shares of Company Common Stock set forth opposite the
name of such Stockholder on Schedule I hereto and has good and marketable title to such shares,
free and clear of all Encumbrances. No Person has any

I-14

 

right or option to purchase or acquire such
shares of Company Common Stock owned by such Stockholder, except as provided for in the January 25,
2001 Shareholder Agreement and this Agreement.

     2.03 S Corporation Status. No action has been taken by such Stockholder, or to the knowledge
of such Stockholder by any other Stockholder, that may result in the revocation of any Subchapter S
election made by the Company referred to in Section 1.05(j).

     2.04 Consents and Approvals. The unanimous written approval of all the Company’s Stockholders
is required for entry of this Agreement, any and all modifications to this Agreement, and any and
all Transaction Documents to which the Company is or will be a party. Neither the execution and
delivery by such Stockholder of the Transaction Documents expressly listed herein to which such
Stockholder will be a party, nor the performance of said Transactions to be performed by such
Stockholder, will require any additional filing, notice, consent, waiver or approval or constitute
a Default under (a) any Legal Requirement or Court Order to which such Stockholder is subject, or
(b) any Contract, Governmental Permit or other document to which such Stockholder is a party.

III. Representations and Warranties of the Purchaser.

     The Purchaser represents and warrants to the Company and the Stockholders as follows:

     3.01 Organization and Qualification. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has all requisite corporate
power and authority to carry on its business as it is now being conducted, to own the shares of
Company Common Stock and carry on the business of the Company as currently operated and to execute,
deliver and perform this Agreement and to consummate the transactions contemplated hereby. The
Company is qualified to do business as a foreign corporation and is in good standing in all
jurisdictions in which the Company is required to be so qualified, except where the failure to so
qualify would not have a Material Adverse Effect.

     3.02 Authority. The Purchaser has the requisite power and authority as well as the ready and
available closing Purchase Price proceeds to execute and deliver the Transaction Documents to which
it will be a party and to perform the Transactions to be performed by it. Such execution, delivery
and performance by the Purchaser has been duly authorized by all necessary corporate action. The
Transaction Documents to be executed unanimously by all Company Stockholders, the Company and
Purchaser related to this stock purchase transaction after the date hereof shall constitute the
sole and exclusive valid and binding obligations of the Company, Stockholders and Purchaser
related to this transaction, (except for any employment or consulting agreements also entered into
by Purchaser with any individual Stockholders commencing in term after the successful completion of
this stock purchase transaction), enforceable against it in accordance with their terms, except as
such enforceability may be limited by general equitable principles and by bankruptcy, moratorium,
insolvency, fraudulent conveyance or similar laws. Any and all documents or purported agreements
which may have been previously entered into related to this stock purchase transaction but which
have not been unanimously signed by all Stockholders are hereby acknowledged to be void and
unenforceable. Copies of the Certificate of Incorporation and the Bylaws, each as amended, of the
Purchaser

I-15

 

(collectively, the “Purchaser Charter Documents”) have been made available to the
Company. The Purchaser is not in violation of any Purchaser Charter Documents.

     3.03 Consents and Approvals. For this Agreement and the expressly listed Transaction
Documents to be valid and legally enforceable upon the Purchaser, neither the execution and
delivery by the Purchaser of the Transaction Documents to which the Purchaser will be a party, nor
the performance of the Transactions to be performed by the Purchaser, will require any additional
consent or approval from the Purchaser, notice, filing, waiver or constitute a Default under (a)
any Legal Requirement or Court Order to which the Purchaser is subject, (b) the Charter Documents
or by-laws of the Purchaser or (c) any Contract, Governmental Permit or other document to which the
Purchaser is a party.

     3.04 SEC Documents.

     (a) The Purchaser has filed all forms, reports and documents required to be filed by it with
the Securities and Exchange Commission (the “SEC”) since June 30, 1997 (collectively, the
“Purchaser Reports”). As of their respective dates, the Purchaser Reports, and any such reports,
forms and other documents filed by the Purchaser with the SEC after the date of this Agreement: (i)
complied, or will comply, as to form in all material respects with the applicable requirements of
the Securities Act, the Exchange Act, and the rules and regulations thereunder and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The representation in clause (iii) of the preceding
sentence shall not apply to any misstatement or omission in any Purchaser Report filed prior to the
date of this Agreement that was superseded by a subsequent Purchaser Report filed prior to the date
of this Agreement that specifically corrected such misstatement or omission in the applicable
Purchaser Report.

     (b) Each of the consolidated balance sheets included in or incorporated by reference into the
Purchaser Reports (including the related notes and schedules) fairly presents the consolidated
financial position of the Purchaser and its subsidiaries as of its date, and each of the
consolidated statements of income, retained earnings and cash flows included in or incorporated by
reference into the Purchaser Reports (including any related notes and schedules) fairly presents
the results of operations, retained earnings or cash flows, as the case may be, of the Purchaser
and its subsidiaries for the periods set forth therein (subject, in the case of unaudited
statements, to normal year-end audit adjustments that would not be material in amount or effect),
in each case in accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein.

     3.05 INTENTIONALLY OMITTED.

     3.06 Representations of the Company and the Stockholders. The Purchaser is not relying on any
representations or warranties of the Company or any Stockholder, except for the representations and
warranties expressly set forth herein, as modified by the Company Disclosure Schedule. Purchaser
agrees and acknowledges that this Agreement and all Transaction Documents associated therewith
shall require the unanimous execution by all Stockholders.

I-16

 

     3.07 Finder’s Fees. No Person retained by the Purchaser is or will be entitled to any
commission or finder’s or similar fee in connection with the Transactions.

     3.08 The Purchaser and Company hereby agree that they shall not contractually preclude any of
their supplier, customers or vendors from transacting business with Maria Sanchez or Fransico Perez
(either in their own name or in the name of any business employing them) in this same industry,
consistent with Section 7.09.

IV. Purchase and Sale of the Company Common Stock.

     4.01 Terms of the Purchase and Sale. On the basis of the representations, warranties,
covenants, and agreements contained in this Agreement and subject to the terms and conditions of
this Agreement:

     (a) Each Stockholder, based upon the same agreement entered hereby unanimously by all other
Company Stockholders, agrees to sell, assign, transfer and convey to the Purchaser at the Closing
all of the shares of Company Common Stock set forth opposite the name of the respective Stockholder
on Schedule I hereto. A material provision of this Agreement is that all Company stock shares are
being sold to Purchaser at closing by all Company Stockholders. Each Stockholder shall deliver to
the Purchaser at the Closing certificates representing the shares of Company Common Stock owned by
such Stockholder, duly endorsed in blank or accompanied by stock powers duly endorsed in blank, in
each case in proper form for transfer. Purchaser shall be solely responsible for payment of stock
transfer documentary stamp taxes, if any.

     (b) In consideration for the purchase of the shares of Company Common Stock referred to in
Section 4.01(a), the Purchaser agrees to pay to the Stockholders the Purchase Price for their
Company stock shares in the combined aggregate amount of TWO MILLION ONE HUDRED THOUSAND DOLLARS
($2,100,000.00) U.S., in the specific division of Purchase Price payments to each Stockholder as
expressly listed on Schedule 2. The time for payment to each Stockholder of the Stockholder’s
respective Purchase Price shall be as expressly stated in Schedule 2 hereof. The Purchase Price
shall be subject to adjustment in accordance with Section 4.03 hereof. Notwithstanding, the
preceding sentence or anything else contained in this Agreement or any other Transaction Document,
under no circumstances shall this Stock Purchase Agreement be completed and any stock transferred
by any Stockholder, unless Stockholders Maria Sanchez (“M. Sanchez”) and Francisco Perez (“F.
Perez”) receive at or prior to closing of this transaction from Purchaser the net amount of the
Purchase Price owed to M. Sanchez and F. Perez after the expresssly allowed adjustment of the
entire Purchase Price permitted under Section 4.03 hereof. The Purchase Price payment to M.
Sanchez and F. Perez shall be delivered no later than the Closing Date, in U.S. cash or via
confirmed wire transfer of immediately available funds to the bank account designated in writing by
M. Sanchez and F. Perez, along with payment to them on the Closing Date in cash or cash equivalent
of any other compensation for future services pursuant to a Consulting Agreement agreed to by
Purchaser. Time is of the essence to all of the terms of this Agreement, and particularly in
respect to the Purchase Price payment provisions and Closing Date provisions of this Agreement.

I-17

 

     4.02 The Closing Date. The closing of the transactions contemplated by Sections 4.01(a) and
4.01(b) shall take place at the offices of Jas Diagnostics Inc., local time, no later than
May 30, 2008 (the “Closing Date”). The closing of the transactions contemplated by Section
4.02 is herein called the “Closing,” and the date of the Closing is herein called the “Closing
Date.” Any and all extensions of time for the Closing Date must first be approved in writing by
each and every Company Stockholder, which approval may not be unreasonably withheld and
notwithstanding anything to the contrary contained in this Agreement, the parties hereby agree that
there shall be no extensions of the Closing Date beyond June 3, 2008.

     4.03 Purchase Price Adjustment.

     (a) Purchaser shall be obligated to close this transaction on or before the Closing Date. The
aggregate Purchase Price of $2,100,000.00 shall be subject to adjustment on the Closing Date by
reduction of the Purchase Price solely in the amount of the Company’s Unpaid Liabilities as of May
28, 2008 (as that term is expressly defined in Schedule 2, strictly limited to the accounts or
types of accounts listed under Section 1.22 of the Company Disclosure Schedule). Purchaser’s
failure to close this transaction on the Closing Date shall, at the election of the Company and/or
any individual Stockholder, serve to void this entire stock purchase transaction, this Agreement
and all Transaction Documents entered concurrently or subsequently by the parties relating hereto,
except for the confidentiality obligations contained in Section 8.04 hereof, pursuant to the terms
of Section 4.02 above.

     4.04 Indemnification of Stockholders Subsequent to Closing for Company’s Liabilities.

     The parties hereby agree and acknowledge that Purchaser will perform Purchaser’s due diligence
during the Due Diligence Period through the Closing Date and that Purchaser is a sophisticated and
knowledgeable participant in the business industry. The Purchase Price is subject to adjustment
strictly and exclusively pursuant to the terms specified in Section 4.03 above, based upon
Purchaser’s agreement that the amounts being deducted from the Purchase Price shall be the sole
payment responsibility of the Company. Purchaser and the Company hereby agree and warrant to each
Stockholder that Purchaser and the Company shall ensure full payment on the Closing Date of any and
all Company debts and liabilities which are personally guaranteed by Maria Sanchez and/or Francisco
Perez, including the Company’s Bank Atlantic $100,000.00 Line of Credit, having a balance owing in
the amount of $17,581.96 as of May 28, 2008 (the “Bank Atlantic Line of Credit Debt”). Purchaser
and Company shall provide at Closing confirmed wire transfer confirmation of the full payment of
the Bank Atlantic Line of Credit Debt and the President of Company shall deliver at the Closing via
confirmed fax delivery to the Company’s Bank Atlantic bank Officer written confirmation on behalf
of the Company requiring the immediate termination of the Bank Atlantic Line of Credit Debt and no
further debt shall be incurred on that closed account. Likewise, on the Closing Date Purchaser and
Company shall diligently proceed to obtain the full and unconditional release from any and all
guarantees, debts and liability of each Stockholder arising from the lease agreement (and all
modifications thereof) between Company and the Company’s landlord for the commercial space used by
Company (hereafter, the “Landlord’s Release”). Purchaser and Company hereby warrant that

I-18

 

they
shall deliver to each Stockholder written confirmation of the Landlord’s Release no later than 30
days from the Closing Date. All other debts and liabilities of the Company which are
not personally guaranteed by a Stockholder, shall be timely paid by the Company in the normal
course of the Company’s business. Purchaser and the Company agree and warrant that they shall
relieve and fully indemnify Francisco Perez and Maria Sacnchez of all debts and liabilities
existing for the Company’s Unpaid Liabilities. Accordingly, notwithstanding anything to the
contrary contained or which may be interpreted in any other provision to this Agreement or any
Transaction Documents entered in connection therewith, as a material portion of the consideration
being provided hereby to each Stockholder for closing this transaction, Purchaser hereby
additionally agrees and warrants to fully and completely indemnify and hold each Stockholder
harmless from any and all Company liabilities existing and unpaid by the Company as of the Closing
Date and arising at any time in the future thereafter, with the sole and exclusive exception from
this indemnification obligation of the Company and Purchaser as to each respective Stockholder for:
(1) any Company liability which was known to exist but undisclosed by the Stockholder to Purchaser;
or (2) a knowing and intentional violation of any representation or warranty made by the respective
Stockholder in this Agreement. Purchaser’s and the Company’s indemnification obligations provided
to Stockholders following the Closing Date under this Section 4.04, shall include but not be
limited to any and all claims, damages, (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable attorneys’ fees) or diminution of
value, liabilities, lawsuits, administrative proceedings, costs of defense incurred by Stockholders
for any indemnified third-party claims raised against the Stockholder (including attorneys fees and
court costs and expenses), costs, court costs, attorneys fees, pre-judgment interest at the
prevailing prime market rate, post-judgment interest and all post-judgment collection costs,
attorneys fees and expenses, through trial and all levels of appeal. The obligations under this
Section 4.04 shall survive the closing of this transaction.

INTENTIONALLY OMITTED.

INTENTIONALLY OMITTED

     4.05 INTENTIONALLY OMITTED.

V. Conditions to Obligations of the Purchaser.

     Except for the confidentiality obligations contained in Section 8.04 hereof (which
confidentiality obligations shall survive any termination of this Agreement),the obligation of the
Purchaser under this Agreement to close this transaction are subject, at the option of the
Purchaser, to the following conditions:

     5.01 Accuracy of Representations and Compliance with Conditions. All representations and
warranties of the Company and each Stockholder as contained in this Agreement shall be accurate in
all material respects when made and, in addition, unless the

I-19

 

context otherwise requires, shall be
accurate as made as of the Closing as though such representations and warranties were then made in
exactly the same language by the Company
and each respective Stockholder. As of the Closing, the Company and each of the Stockholders
shall have performed and complied in all material respects with all covenants and agreements and
satisfied all conditions required by this Agreement and the other Transaction Documents to be
performed and complied with by any of them at or before such time, all of the Transaction Documents
shall have been duly authorized, executed and delivered by the parties thereto and, upon execution
thereof by the Purchaser, shall be in full force and effect, and the Purchaser shall have received
certificates executed by the chief executive officer of the Company and by the Stockholders dated
the Closing Date, to those effects, in form and substance stated in this Section 5.01.

     5.02 Opinions of Counsel. An opinion of counsel letter on behalf of the Company shall be
provided to Purchaser on the Closing Date in the form attached hereto as Schedule 5.

     5.03 Other Closing Documents. The Stockholders shall have delivered to the Purchaser at or
prior to the Closing such other documents (including certificates of the secretary and other
officers of the Company) as contained in Schedule 6 hereof.

     5.04 Legal Action. There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of, the Transactions
contemplated by this Agreement and the other Transaction Documents, or to obtain substantial
damages with respect thereto.

     5.05 No Governmental Action. There shall not have been any action taken, or any law, rule,
regulation, order or decree proposed, promulgated, enacted, entered, enforced or applicable to the
Transactions contemplated by this Agreement and the other Transaction Documents by any Governmental
Body, including the entry of a preliminary or permanent injunction, which: (a) makes any of the
Transactions contemplated by this Agreement illegal, (b) requires the divestiture by the Purchaser
of any of the shares of the Company Common Stock to be sold pursuant to this Agreement or of a
material portion of the business of the Purchaser or of the Company or (c) otherwise prohibits or
restricts the consummation of any of the Transactions contemplated by this Agreement.

     5.06 No Claims Regarding Stock Ownership or Sale Proceeds. There shall not have been made or
threatened by any Person any Claim asserting that such Person (a) is the holder or the beneficial
owner of, or has the right to acquire or to obtain beneficial ownership of, any stock of, or any
other voting, equity or ownership interest in the Company or (b) is entitled to all or any portion
of the purchase price payable to the Stockholders hereunder.

     5.07 INTENTIONALLY OMITTED.

     5.08 Tangible Net Worth. The Company and the Stockholders shall have delivered the Closing
Balance Sheet to the Purchaser.

     5.09 Required Consents. Each of the Required Consents contained in Schedule 7 hereof shall
have been obtained and shall be in full force and effect.

I-20

 

     5.10 Resignations. All directors of the Company shall have resigned at or prior to the
Closing as directors and members of all committees of the Board of Directors in writing effective
immediately after the Closing. All officers of the Company shall have resigned at or prior to
the Closing in writing effective immediately after the Closing subject to acceptance by the
Purchaser.

     5.11 INTENTIONALLY OMITTED

     5.12 Employment and Consulting Agreements. The Purchaser shall have received at or prior to
the closing from David Johnston and Vivian Alvarez an Employment Agreement. Maria Sanchez and
Francisco Perez shall have received at or prior to the closing from Purchaser a fully executed
Consulting Agreement and payment therefore.

VI. Conditions to the Obligations of the Company and the Stockholders.

     The obligations of the Company and each Stockholder under this Agreement to close this
transaction are subject, at the option of the Company and the Stockholders, to the following
conditions:

     6.01 Accuracy of Representations and Compliance with Conditions. All representations and
warranties of the Purchaser contained in this Agreement shall be accurate in all material respects
when made and, in addition, unless the context otherwise requires, shall be accurate as of the
Closing as though such representations and warranties were then made in exactly the same language
by the Purchaser. As of the Closing, the Purchaser shall have performed and complied in all
material respects with all covenants and agreements and satisfied all conditions required by this
Agreement and the other Transaction Documents to be performed and complied with by it at or before
such time, all of the Transaction Documents shall have been duly authorized, executed and delivered
by the parties thereto and, upon the execution thereof by the Company and the Stockholders, will be
in full force and effect, and the Company and the Representative shall have received a certificate
executed by the chief executive officer of the Purchaser, dated the Closing Date, to those effects,
in form and substance reasonably satisfactory to the Company and the Representative on behalf of
the Stockholders.

     6.02 Legal Action. There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of, the Transactions
contemplated by this Agreement and the other Transaction Documents, or to obtain substantial
damages with respect thereto.

     6.04 Employment and Consulting Agreements. David Johnston and Vivian Alvarez shall have received
at or prior to the closing from Purchaser a mutually agreeable fully executed Employment Agreement.
Maria Sanchez and Francisco Perez shall have received at or prior to the closing from Purchaser a
mutually agreeable fully executed Consulting Agreement and full payment therefore. This is a
material provision to this entire Agreement.

     6.05 Other Closing Documents. The Purchaser and/or Company shall have delivered to the
Stockholders at or prior to the Closing such other documents (including but not limited to

I-21

 

confirmation of wire transfer payments required herein, confirmation of Company’s closure of the
Bank Atlantic Credit Line, correspondence to the Company’s Landlord seeking full release from
liability for all Stockholders from Company commercial lease, certificates of the secretary
and other officers of the Purchaser) as the Stockholders may reasonably request in order to
carry out the provisions of this Agreement.

     6.06 Secretary’s Certificate. The Purchaser shall have delivered to the Company at or prior
to the Closing a certificate of the secretary or assistant secretary of the Company certifying the
resolutions of the Board of Directors approving the Transactions.

     6.07 Payment by Seller. The Purchaser shall have paid all sums required from Purchaser under
Article IV (Purchase and Sale of Company Stock) of this Agreement, the Company shall have paid all
liabilities required to be paid as of Closing and closed the Bank Atlantic Line of Credit required
under Section 4.04 and the release of personal liabilities of the Stockholders to the Company’s
commercial lease has been requested in writing from the Landlord (with Purchaser and Company to
provide actual releases from the Landlord within 30 days of the Closing).

     6.08 Satisfaction of other Covenants. The covenants and obligations of the parties contained
in Sections 7.05 and 7.08 are satisfied at Closing

VII. Covenants and Agreements of the Company and the Stockholders.

     The Company and the Stockholders covenant and agree as follows:

     7.01 Access. Strictly subject to the terms of the confidentiality provisions contained herein
under Section 8.04, which provisions shall survive any termination of this Agreement, until the
earlier of the Closing Date or the termination of this Agreement pursuant to Article IX or
otherwise (the “Release Time”), the Company will afford, upon reasonable notice during normal
business hours, and Shareholders will cause the Company to afford, expressly mutually agreed to
designated officers, employees, counsel, agents, investment bankers, accountants and other
representatives of the Purchaser and lenders, investors and prospective lenders and investors free
(subject to the confidentiality provisions) and full access to the plants, properties, books and
records of the Company, will permit them to make extracts from and copies of such books and records
and will from time to time furnish the Purchaser with such additional financial and operating data
and other information as to the financial condition, results of operations, businesses, properties,
assets, liabilities or future prospects of the Company as the Purchaser from time to time may
reasonably request, subject to the terms of the confidentiality provisons under Section 8.04.
Until the Release Time, the Company and Shareholders will use all reasonable efforts to cause the
independent certified public accountants of the Company to make available to the Purchaser and its
independent certified public accountants the work papers relating to the audits of the Company
referred to in Section 1.04. HOWEVER, NOTWITHSTANDING ANYTHING TO THE CONTRARY THAT MAY BE
INTERPRETED IN THIS SECTION 7.01 OR ELSEWHERE IN THIS AGREEMENT, PURCHASER HEREBY AGREES AND
ACKNOWLEDGES THAT:

I-22

 

          (1) Maria Sanchez shall be required to be present at all times during the disclosure of any
and all Company books and records or to have actually pre-approved information being inspected by
Purchaser;

          (2) If Purchaser and Maria Sanchez disagree respecting the release of any specific Company
books and records, then Purchaser shall make written request therefore, specifically identifying
what records it seeks to review, for further consideration by all the Stockholders. Purchaser’s
sole and exclusive remedy if it is unable to obtain the unanimous written agreement of all
Stockholders as to the release of any specific information, is to terminate this transaction.
Purchaser is a sophisticated commercial actor in the subject industry and it is cable of
determining whether it possesses sufficient information to proceed with the transaction, without
complaint or reservation as to information which purchaser is provided to inspect. Purchaser
acknowledges that these reservations are intended to protect the Company’s trade secrets and
Confidential Information from disclosure, even to Purchaser.

          (3) Purchaser has already been presented lists of the Company’s accounts receivables and
accounts payable, which information shall be treated as the Company’s Confidential Information.
The Company’s trade secrets and most Confidential Information may not be further released to
Purchaser, absent CONCURRENT AND EXPRESS WRITTEN WAIVER thereof as to specific information by
Stockholders Maria Sanchez and David Johnston. Any inforation so released shall be strictly
subject to the confidentiality provisions under Section 8.04 of this Agreement. No copies
whatsoever, via electronic form, paper or otherwise, shall be made by or for Purchaser of the
Company’s product formulas or formulation process until and unless a successful closing is
completed pursuant to the terms of this Agreement. Notwithstanding anything to the contrary that
may be interpreted in this Agreement, the Company’s formulas and formulation process shall not be
disclosed to Purchaser for Purchaser’s review (without copying) until the parties are ready to
close on the Closing Date.

     7.02 Conduct of Business. Except as otherwise reasonably requested by the Purchaser in
writing, until the Release Time, the Company will, consistent with past practice, use all
reasonable efforts to preserve the business operations of the Company intact, to keep available the
services of the Company’s present personnel, to preserve in full force and effect the Contracts,
agreements, instruments, leases, Governmental Permits, arrangements and understandings of the
Company, and to preserve the good will of the Company’s suppliers, customers, employees and others
having business relations with the Company. Until the Release Time, the Company will conduct its
business and operations in all respects only in the ordinary course consistent with past practices.

     7.03 Advice of Changes. Until the Release Time, the Company and Shareholders will promptly
advise the Purchaser in a written notice of any fact or occurrence or any pending or threatened
occurrence of which any of them obtains knowledge and which (if existing and known at the date of
the execution of this Agreement) would have been required to be set forth or disclosed in or
pursuant to this Agreement or any of the Transaction Documents that (if existing and known at any
time prior to or at the Closing) would make the performance by any party of a covenant contained in
this Agreement impossible or make such performance materially more difficult than in the absence of
such fact or occurrence, or which (if existing and

I-23

 

known at the time of the Closing) would cause a condition to any party’s obligations under
this Agreement not to be fully satisfied.

     7.04 Confidentiality. Through the Closing Date, the Company and Shareholders shall take
appropriate measures, consistent with legal requirements for the protection of the Company’s trade
secrets and Confidential Information (as further defined in Section 8.04 below and the Company
Disclosure Schedule 1.23, to ensure that all Confidential Information of the Company shall not be
published, disclosed or made accessible by any of them to any other person or entity at any time or
used by any of them except in the business and for the benefit of the Company. Subsequent to the
successful completion of this stock purchase transaction on the Closing Date, the Shareholders
shall govern themselves in accordance with the terms of the Noncompetition provisions contained in
Section 7.09 below.

     7.05 Public Statements. Before the Purchaser, the Company or Shareholders shall release any
information concerning this Agreement or any of the Transaction Documents or the transactions
contemplated by this Agreement that is intended for or may result in public dissemination thereof,
they shall cooperate with each other, shall furnish drafts of all documents or proposed oral
statements to each other for comments, and shall not release any such information without the
written consent of the other, except to the extent that the other party may be obligated to do so
under law. Nothing contained herein shall prevent any party from releasing any information to any
Governmental Body if required to do so by law. However, that the party subject to such requirement
shall give the other party prompt written notice in order to allow that party to take whatever
action it deems necessary to protect its information. Notwithstanding anything that may be
interpreted to the contrary in this Section 7.05, nothing contained herein shall be interpreted as
an agreement for any party to forebear from utilizing the documents related to this Agreement for
purposes of bringing any claim in a competent court of law upon any dispute which cannot be
amicably resolved. Immediately following the Closing, the Company shall deliver on Company
letterhead correspondence to the Company’s stakeholders, including its customers, vendors and
suppliers, which notifies the stakeholders of the consummated sale and the fact that Maria Sanchez
and Francisco Perez have left the Company in order to pursue other opportunities, as stated in the
attached Schedule 4.

     7.06 Other Proposals. Until the Release Time, the Company and the Stockholders shall not, and
shall not authorize or permit any officer, director, employee, counsel, agent, investment banker,
accountant, or other representative of any of them, to: (a) initiate contact with any person or
entity in an effort to solicit any Takeover Proposal (as hereinafter defined); (b) cooperate with,
or furnish or cause to be furnished any non-public information concerning the business, properties,
or assets of the Company to, any person or entity in connection with any Takeover Proposal; (c)
negotiate with any person or entity with respect to any Takeover Proposal; or (d) enter into any
agreement or understanding with the intent to effect a Takeover Proposal. The Company and
Shareholders will promptly give written notice to the Purchaser of the details of any Takeover
Proposal of which either of them becomes aware. Failure to close this transaction by the Closing
Date shall fully relieve the Company and the Shareholders of the restraints under this Section
7.06.

     7.07 Consents Without Any Condition. Neither the Company nor Shareholders shall make any
agreement or reach any understanding that could have a Material Adverse Effect on

I-24

 

the Company or the Purchaser as a condition for obtaining any consent, authorization,
approval, order, certificate or Governmental Permit required for the consummation of the
Transactions contemplated by this Agreement, unless such agreement or understanding is approved in
writing by the Purchaser, which approval shall not be unreasonably withheld or delayed.

     7.08 Mutual General Release by the Parties. If the Closing takes place as expressed in this
Agreement, effective upon the Closing, each party hereto (each Stockholder, the Company and
Purchaser) fully and unconditionally releases and discharges all claims and causes of action which
each party has against each other party, or such other party’s heirs, personal representatives,
successors or assigns ever had, now have, or hereafter may have through the Closing Date, which
arose on or prior to the Closing Date, against the other parties to this transaction, and, when
acting as such, their respective officers, directors, employees, counsel, agents and stockholders,
in each case past, present, or as they may exist for any claims arising through the Closing Date
and each person, if any, who controls, controlled, or will control any of them within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, except
claims and causes of action arising out of, based upon, or in connection with this Agreement or any
of the other Transaction Documents.

     7.09 Noncompetition. If the Closing takes place, the Stockholders agree, in consideration
of the obligations of the Purchaser hereunder:

     (a) For a period of two years after the date of the Closing He/she will not solicit or sell to
any existing JAS customers any of the products that JAS already manufactures (“JAS Manufactured
Products”). A list of the existing customers and the JAS Manufactured Products is attached to the
Agreement as Schedule 3.

     (b)If a company that he/she chooses to work for is already selling products (which may be
similar in type or purpose to JAS Manufactured Products but which shall not be the same formulation
as JAS Manufactured Products) to JAS customers, he/she will nevertheless be free to sell such other
products for that company to any JAS customers.

     (c) He/she will only not be permitted to sell the specific JAS Manufactured Products to the
existing JAS customers. This provision takes into account the fact that competing companies in
fact already do sell similar products to JAS customers.

     (d)He/she and any company which employs them will be free to sell any and all other types of
products to anyone, including but not limited to JAS customers.

     (f) He/she will be entitled to sell even JAS Manufactured Products which he/she (or their
future employer) manufacture, without any participation of or compensation to JAS, to any customers
who are not current JAS customers.

     (g)Participate In (as hereinafter defined) any other business or organization that at any
time during the two-year period after the date of the Closing uses a name containing either the
word “JAS” or words similar to or susceptible of confusion with the word “JAS” or any combination
or abbreviation thereof;

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     (h)For a period of two years after the date of the Closing, he/she will not directly or
indirectly reveal to third parties for which the Stockholder is not employed, the name of,
interfere with already existing Company contracts, or contractually and legally preclude from doing
business with the Company any of the Company’s existing suppliers, customers or employees.
Notwithstanding the foregoing, nothing contained herein is intended to preclude Maria Sanchez or
Francisco Perez, from utilizing the Company’s suppliers and/or dealing with the Company’s customers
as part of the future business endeavors of Maria Sanchez or Fransico Perez (either in their own
name or in the name of any business employing them) in this same industry, as long as such future
business endeavors comply with the provisions contained under Section 7.09.

     (i)For a period of two years after the date of the Closing, he/she will not directly or
indirectly for any third party business which the Stockholder controls or has a controlling
interest in, employ any person who, at any time up to the date of the Closing, was an employee of
the Company , except Maria Sanchez and Francisco Perez may work together.

     7.10 The Stockholders agree that the provisions of this Section 7.09 are necessary and
reasonable to protect the Company and the Purchaser in the conduct of their businesses. If any
restriction contained in this Section 7.09 shall be deemed to be invalid, illegal or unenforceable
by reason of the extent, duration, or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration, geographical scope,
or other provisions hereof, and in its reduced form such restriction shall then be enforceable in
the manner contemplated hereby. Nothing set forth in this Section 7.09 shall prohibit activities
engaged in or services performed for the Company. None of the above restrictions survive the end of
the 2 year non-compete term.

     7.11 Voting by the Stockholders. Each Stockholder agrees that until the Release Time, such
Stockholder will vote all securities of the Company which he/she is entitled to vote against (a)
any merger, consolidation, reorganization, other business combination, or recapitalization
involving the Company, (b) any sale of assets of the Company outside the ordinary course of
business, (c) any stock split, stock dividend, or reverse stock split relating to any class or
series of the Company’s capital stock, (d) any issuance of any shares of capital stock of the
Company, any option, warrant or other right calling for the issuance of any such share of capital
stock, or any security convertible into or exchangeable for any such share of capital stock, (e)
any authorization of any other class or series of stock of the Company, or (f) the amendment of the
Charter Documents or the by-laws of the Company.

     7.12 INTENTIONALLY OMITTED.

     7.13 Company Tax Returns.

     (a) The Stockholders and the Company’s Officers and Directors, shall cause to be prepared and
timely filed all Returns required to be filed by or on behalf of the Company for taxable periods
ending on or before the Closing Date. Such returns will be prepared in a manner consistent with
past practice. The Stockholders shall deliver the originals of those returns to the

I-26

 

Purchaser for its review and approval (which shall not be unreasonably withheld). The
Purchaser shall cause each of the returns to be signed by an appropriate officer of the Company and
shall then cause the signed returns to be returned to the Company within an appropriate amount of
time so as to permit the timely filing of such returns by the Company on behalf of the remaining
Stockholders. The Stockholders shall be responsible for the payment of any Taxes due with respect
to such returns.

     (b) The Purchaser shall cause to be prepared and timely filed all Returns required to be filed
by or with respect to the Company for all taxable periods ending after the Closing Date and shall
be responsible for the payment of any Taxes due with respect to returns that begin and end after
the Closing Date. With respect to any periods that begin on or before and end after the Closing
Date, the Stockholders will be responsible for the payment of any Taxes due that relate to the
portion of the taxable period up to and including the Closing Date and the Purchaser will be
responsible for the payment of any Taxes due that relate to the portion of the taxable period after
the Closing Date.

     (c) (1) All Tax Returns of the Company described in Section 7.13(a) and (b) hereof shall be
prepared and, where applicable, filed on the basis of a taxable period ending at the Closing Date,
unless clearly otherwise required by applicable Tax law.

          (2) Any Taxes for any such period that are measured or measurable in whole or in part by
reference to net or gross income or receipts, capital expenses, or compensation expenses shall be
allocated based on the net or gross income or receipts, capital expenses, or compensation expenses
actually earned or incurred for the portion of such period before and including, and after, the
Closing Date, respectively, as determined from the books and records of the Company, as if a
taxable period ended on the Closing Date, so that (I) the portion of such Taxes so allocable to the
portion of any such period from the beginning of such period up to and including the Closing Date
shall be for the account of the Stockholders and (II) the portion of such Taxes so allocable to the
portion of such period after the Closing Date to the end of such period shall be for the account of
the Purchaser.

     (d) The Stockholders, on the one hand, and the Purchaser, on the other hand, shall provide
reasonable cooperation to each other in connection with (i) the preparation of and filing of any
Return, Tax election, Tax consent or certification, or any claim for refund, (ii) any determination
of liability for Taxes, and (iii) any audit, examination or other proceeding in respect of (A)
Taxes of the Company or (B) Taxes of the Stockholders resulting from the Subchapter S status of the
Company. The parties will preserve all information, records or documents relating to the liability
for Taxes of the Company or of a Stockholder (provided, however, as to a Stockholder, such
information, records or documents relate, in whole or in part, to the Company) until the expiration
of any applicable statute of limitations or extensions thereof.

     7.14 INTENTIONALLY OMITTED

     7.15 Inventory Value Adjustment. Promptly after the completion of the observation of the
Company’s inventory the Company, Shareholders and the Purchaser shall mutually agree

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on a value of the inventory as of the Closing Date and such amount shall be reflected on the
Closing Balance Sheet as prepared in accordance with Section 4.03(a) of this Agreement.

     7.16 Reasonable Efforts. Between the date of this Agreement and the Closing Date, the Company
and each of the Stockholders shall use all reasonable efforts to cause the conditions in Articles V
and VII hereof to be satisfied.

VIII. Covenants and Agreements of the Purchaser.

     The Purchaser covenants and agrees as follows:

     8.01 Financing. The Purchaser has sufficient funds necessary to consummate the transactions
contemplated hereby in the aggregate amount of $2,100,000 at the Closing, for the Closing Date.

     8.02 Employee Matters. The Purchaser agrees that it shall provide at Closing to David
Johnston and Vivian Alvarez fully executed mutually agreeable Employment Agreements and Purchaser
shall provide at Closing to Maria Sanchez and Francisco Perez, mutually agreeable fully executed
Consulting Agreements that shall be paid by the Company in full at the Closing.

     8.03 Reasonable Efforts. Between the date of this Agreement and the Closing Date, the
Purchaser will use all reasonable efforts to cause the conditions in Articles VI and VIII hereof to
be satisfied.

     8.04 Confidentiality Obligations of Purchaser. Purchaser, on behalf of itself, all parent
and subsidiary companies and affiliates of Purchaser and all officers, employees, shareholders,
owners, partners, counsel, agents, investment bankers, accountants and other representatives of the
Purchaser and lenders, investors and prospective lenders and investors (hereafter, “Affiliated
Parties”), hereby warrants and covenants to Company and to each Stockholder that SOLELY AND
EXCLUSIVELY WITH THE EXCEPTION OF PURCHASER’S CONDUCTING PURCHASER’S DUE DILIGENCE PURSUANT TO THE
CONFIDENTIALITY TERMS CONTAINED IN THIS AGREEMENT, Purchaser and its Affiliated Parties shall not
NOW OR EVER utilize or disclose or permit to be utilized or disclosed for any purpose whatsoever
(financial gain or otherwise) any portion of the Company’s trade secrets and/or Confidential
Information, unless and until this stock purchase transaction is successful closed and the
Stockholders are paid pursuant to the payment terms contained in Section 4 and Schedule 2 hereof.
Purchaser shall be contractually bound to the Company and each Stockholder for purposes of
Purchaser’s obligations to maintain the confidentiality of and to not in any wise ever profit from
the Company’s trade secrets and Confidential Information, unless and until this stock purchase
transaction is successful completed. Notwithstanding anything to the contrary that may be stated
in any other portion of this Agreement, any Transaction Documents or in any other writing, all of
the Purchaser’s confidentiality and indemnification obligations pursuant to this Section 8.04 shall
forever survive the termination of this Agreement, without any respect to any reason or basis for
the termination of this Agreement, with the exclusive exceptions that: (1) through no act or
failure to act on the part of Purchaser (including by not limited to any officers, employees,
counsel, agents, investment bankers, accountants and other representatives of the

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Purchaser and lenders, investors and prospective lenders and investors in any way affiliated
therewith [hereafter, “Affiliated Persons”]), the subject Confidential Information becomes a part
of the public domain; or (2) there exists conclusive evidence beyond a reasonable doubt that the
subject Confidential Information was completely independently developed by Purchaser, without
knowledge of or reference to the Company’s Confidential Information . Upon any termination of this
Agreement for any reason whatsoever, Purchaser hereby covenants that it shall immediately return to
the Company or ensure the complete destruction of all documents and files (electronic or otherwise)
of each and every copy of any and all Company trade secrets and Confidential Information. The
Company’s trade secrets and Confidential Information shall conclusively and irrebutably include,
but not necessarily be limited to those items listed or identified in the Company Disclosure
Schedule 1.23. The Company’s Confidential Information shall also include any and all information,
documents, compilations of information, formulas, product formulations know-how and/or knowledge
provided to Purchaser and/or Purchaser’s Affiliated Parties pursuant to Section 7.01 hereof or
otherwise by Company and/or any Company Stockholder, employee or agent, either before the date of
this Agreement and/or during Purchaser’s due diligence period and/or through the Closing Date or
Release Date for this transaction. Purchaser hereby additionally agrees and warrants to fully
and completely indemnify, hold each Stockholder harmless and to fully recompense Company and
Stockholders from any and all damages suffered by Company and/or Stockholders directly or
indirectly as a result of Purchaser’s violation of its obligations contained in this Section 8.04,
whether or not the closing occurs, which damages shall include but not be limited to any and all
claims, lost profits, damages, (including incidental and consequential damages), expense (including
costs of investigation and defense and reasonable attorneys’ fees) or diminution of value,
liabilities, lawsuits, administrative proceedings, costs of prosecution/defense incurred by Company
and/or Stockholders (including attorneys fees and court costs and expenses), costs, court costs,
attorneys fees, pre-judgment interest at the prevailing prime market rate, post-judgment interest
and all post-judgment collection costs, attorneys fees and expenses, through trial and all levels
of appeal. The parites hereby acknowledge that irreparable harm may well result from a breach of
these confidentiality provisions and so they agree to the waiver of the posting of any bond upon
the filing of a claim seeking temporary and/or permanent injunctive relief arising from a violation
of this Section 8.04.

IX. Termination.

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

     (a) by either the Purchaser, the Company or any Stockholder upon written notice if a material
Breach of any provision of this Agreement has been committed by the other party and such Breach has
not been waived or cured within five business days after receipt of notice of such Breach, which
notice shall specify the nature of the Breach;

     (b) by (i) the Purchaser if any material conditions in Article V has not been satisfied by the
Closing Date or (ii) strictly at the option of the Company or any Stockholder if any material
condition in Article VI, VII or VIII hereof has not been satisfied by May 30, 2008 or

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Purchaser fails to pay to Stockholders on the Closing Date the full amount of the Purchase
Price required on said date according to the terms of Article IV hereof; or

     (c) by mutual consent of the Purchaser, the Company and unanimous approval of the Stockholders
at any time.

     9.02 Effect of Termination. Each party’s right of termination under Section 9.01 is in
addition to any other rights such party may have under this Agreement or otherwise, and the
exercise of a right of termination shall not be an election of remedies. If this Agreement is
terminated pursuant to Section 9.01, all further obligations of the parties under this Agreement
shall terminate, except that the obligations in Section 8.04 and Section 11.06 shall survive;
provided, however, that if this Agreement is terminated by a party because of the material breach
of the Agreement by the other party or because one or more of the conditions to the terminating
party’s obligations under this Agreement is not satisfied as a result of the other party’s failure
to comply with its own obligations under this Agreement, the terminating party’s right to pursue
all legal remedies shall survive such termination unimpaired.

X. Indemnification; Remedies.

     10.01 Survival; Right to Indemnification. All representations and warranties in this
Agreement, the Transaction Documents, the Company Disclosure Schedule and any other certificate or
document delivered pursuant to this Agreement which is signed or expressly approved by all
Stockholders shall survive the Closing for a period of two years, except that: (a) the
representations and warranties set forth in Sections 1.03, 1.07(a) and 2.02 shall survive the
Closing for an indefinite period of time; (b) the representations and warranties set forth in
Section 1.05, solely as they relate to federal, state and local income taxes, shall survive the
Closing until the expiration of the applicable statutes of limitation relating thereto,
respectively; (c) the covenants and warranties under Section 4.04 shall survive forever; and (d)
the covenants and warranties under Section 8.04 shall survive forever. The right to
indemnification, payment of Damages or other remedy based on such representations, warranties,
covenants and obligations shall be affected by the actual knowledge of the respective parties
derived as the result of disclosure or failure to disclose to said parties of relevant material
information concerning such representations, warranties, covenants and obligations at any time,
whether before or after the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty,
covenant or obligation. The written waiver, by the authorized parties required for consent and
approval of this Agreement, of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or obligation, shall certainly
affect the right to any indemnification or other remedy provided for in this Agreement.

     10.02 Mutual Indemnification and Payment of Damages by Each Respective Party to this
Agreement for that Respective Party’s Obligations Hereunder. Subject to Section 10.05 hereof, each
respective party to this Agreement shall indemnify and hold harmless the other parties to this
Agreement (collectively, the “Indemnified Persons”) for, and shall pay to the Indemnified Persons
the amount of, any loss, liability, claim, damage (including incidental and consequential damages),
expense (including costs of investigation and defense and reasonable attorneys’ fees) or diminution
of value, whether or not involving a third party claim (collectively

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“Damages”), arising, directly or indirectly, from or in connection with: (a) any material
Breach of any representation or warranty made by the respective party in this Agreement, any other
Transaction Document subsequently approved by all parties, the Company Disclosure Schedule or any
other certificate or document delivered by the respective party pursuant to this Agreement; (b) any
material Breach by the respective party of any covenant or obligation of the respective party in
this Agreement or any other Transaction Document; (c) INTENTIONALLY OMITED; or (d) any claim by any
Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement
or understanding alleged to have been made by any such Person with the respective party (or any
Person acting on behalf of either of them) in connection with any of the Transactions.

     10.02 Indemnification and Payment of Damages by the Purchaser. The Purchaser shall indemnify
and hold harmless the Stockholders, and shall pay to the Stockholders the amount of any Damages
arising, directly or indirectly, from or in connection with: (a) any Breach of any representation
or warranty made by the Purchaser in this Agreement, any other Transaction Document or in any
certificate delivered by the Purchaser pursuant to this Agreement, (b) any Breach by the Purchaser
of any covenant or obligation of the Purchaser in this Agreement or in any other Transaction
Document, or (c) any claim by any Person for brokerage or finder’s fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by such Person with
the Purchaser (or any Person acting on its behalf) in connection with any of the Transactions.

     10.03 Limitations on Amount, Time and Remedies. Notwithstanding anything to the contrary set
forth in this Agreement or any of the other Transaction Documents, the Stockholders shall have no
liability (for indemnification or otherwise) with respect to the matters described in Section 10.02
hereof until the total of all Damages with respect to such matters exceeds $25,000, and then only
for the amount by which such Damages exceed $25,000. In addition, except with respect to breaches
of representations and warranties set forth in Sections 1.03, 1.05 (solely as such representations
and warranties relate to federal, state and local income taxes), 1.07(a) and 2.02, with respect to
which no limits shall apply; (a) the maximum amount of Damages for which the Stockholders shall be
obligated to indemnify the Indemnified Persons pursuant to Section 10.02 hereof shall not exceed
the net purchase price received by that Stockholder for his/her sale of stock to Pruchaser, (b)
the Stockholders shall have no obligations or liability to indemnify any of the Indemnified Persons
including the Purchaser for any Damages or Claims for which an Indemnification Notice shall not
have been delivered to the party from whom indemnification is sought at or prior to the second
anniversary date of the Closing Date, and (c) the right of any of the Indemnified Persons including
the Purchaser to indemnification pursuant to Section 10.02 or to seek the equitable remedies of
rescission, injunctive relief or specific performance shall be the sole and exclusive remedies for
any Damages or Claims arising under or in connection with this Agreement or any of the Transaction
Documents, and the sole and exclusive remedies of the Indemnified Persons including the Purchaser
in respect thereof shall be to assert a claim and seek the equitable remedies of rescission,
injunctive relief or specific performance.

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     10.03 Limitations on Amount — Purchaser. The Purchaser shall have no liability (for
indemnification or otherwise) with respect to the matters described in clause (a) or (b) of Section
10.04 until the total of all Damages with respect to such matters exceeds $25,000, and then only
for the amount by which such Damages exceed $25,000; however, the limitations set forth in this
Section 10.06 shall not apply to any Breach of any of the Purchaser’s representations and
warranties of which the Purchaser had knowledge at any time prior to the date on which such
representation and warranty is made or any intentional Breach by the Purchaser of any covenant or
obligation, and the Purchaser shall be liable for all Damages with respect to such Breaches.

     10.04 Procedure for Indemnification — Third Party Claims.

     (a) Promptly after receipt by an indemnified party under any indemnification provision
contained in this Agreement of notice of the commencement of any Litigation or other Claim against
it, such indemnified party shall, if a Claim is to be made against an indemnifying party under such
section, give notice (an “Indemnification Notice”) to the indemnifying party of the commencement of
such Claim, but the failure to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party, except: (a) to the extent that
the indemnifying party demonstrates that the defense of such action is prejudiced by the
indemnifying party’s failure to give such notice; or (b) pursuant to the terms of Section 10.03 (b)
above, relating to the obligation to deliver to Stockholders an Indemnification Notice prior to the
second anniversary date of the Closing Date.

     (b) If any Litigation or other Claim referred to in Section 10.04(a) is brought against an
indemnified party and the indemnified party gives notice to the indemnifying party of the
commencement of such Litigation or Claim, the indemnifying party shall be entitled to participate
in such Litigation or Claim and, to the extent that it wishes (unless (i) the indemnifying party is
also a party to such Litigation or Claim and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial capacity to defend such Litigation
or Claim and provide indemnification with respect to such Litigation or Claim), to assume the
defense of such Litigation or Claim with counsel reasonably satisfactory to the indemnified party
and, after notice from the indemnifying party to the indemnified party of its election to assume
the defense of such Litigation or Claim, the indemnifying party will not, as long as it diligently
conducts such defense, be liable to the indemnified party under this Article X for any fees of
other counsel or any other expenses with respect to the defense of such Litigation or Claim, in
each case subsequently incurred by the indemnified party in connection with the defense of such
Litigation or Claim, other than reasonable costs of investigation. If the indemnifying party
assumes the defense of any Litigation or Claim, no compromise or settlement of such Claims may be
effected by the indemnifying party without the indemnified party’s consent, which shall not be
unreasonably withheld. If notice is given to an indemnifying party of the commencement of any
Litigation or Claim and the indemnifying party does not, within 15 business days after the
indemnified party’s notice is given, give notice to the indemnified party of its election to assume
the defense of such Litigation or Claim, the indemnifying party will be bound by any determination
made in such Litigation or Claim or any compromise or settlement effected by the indemnified party.

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

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

XI. Miscellaneous.

     11.01 Further Actions. At any time and from time to time, each party agrees, at its or his
expense, to furnish such information, to take such actions and to execute and deliver such
documents as any other party may reasonably request to effectuate the purposes and intent of this
Agreement, but any and all such documents, if they affect the rights of the Stockholders, must be
signed according to the same consent and authorization requirements contained in this Agreement for
the unanimous written approval of all Stockholders.

     11.02 Availability of Equitable Remedies. Because a material Breach of the provisions of this
Agreement could not adequately be compensated by money damages, any party shall be entitled, either
before or after the Closing, in addition to any other right or remedy available to it, to an
injunction restraining such Breach or a threatened Breach and to specific performance of any such
provision of this Agreement, and in either case no bond or other security shall be required in
connection therewith, and the parties hereby consent to the issuance of such an injunction and to
the ordering of specific performance.

     11.03 INTENTIONALLY OMITTED.

     11.04 Modification. This Agreement and the Company Disclosure Schedule executed concurrently
herewith sets forth the entire understanding of the parties with respect to the subject matter
hereof, constitute the sole and exclusive Transaction Documents relative to this transaction, shall
supersede all existing agreements among the Purchaser and the Company concerning such subject
matter, and may be modified only by a written instrument duly executed by each party, except that,
notwithstanding anything to the contrary set forth in this Agreement, the confidentiality
provisions under Section 8.04 of this Agreement shall survive the termination of this Agreement and
remain in full force and effect.

     11.05 Notices. Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be mailed by certified mail, return receipt requested or by overnight
delivery or courier service or delivered in person or by telecopy against receipt to the party to
whom it is to be given at the address of such party set forth below (or to such other address as
the party shall have furnished in writing in accordance with the provisions of this Section 11.05)
with a copy to each of the other parties hereto.

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If to the Purchaser:

Drew Scientific, Inc.

Escalon Medical Corp.

435 Devon Park Drive, Building 100

Wayne, PA 19087

Attention: Richard J. DePiano,

Chief Executive Officer

Telecopy: (610) 688-3641

with a copy to:

Duane Morris LLP

30 South 17th Street

Philadelphia, PA 19103-4196

Attention: Kathleen M. Shay, Esquire

Telecopy: (215) 979-1020

If to the Company:

JAS Diagnostics, Inc

7220 NW 58th Street

Miami, FL 33166

Attention: David H. Johnston

President

Telecopy: 305 418-2321

And an identical, concurrently delivered copy to:

JAS Diagnostics, Inc

7220 NW 58th Street

Miami, FL 33166

Attention: Maria Sanchez, Vice President

Telecopy: 305 418-2321

If to David Johnston

14120 Leaning Pine Drive

Miami Lakes, FL 33014

If to Vivian Alvarez

4824 N.W. 58th MNR

Coconut Creek, FL 33073

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If to Marc Andler

21 Northstone Road

Swampscott, MA 01907

If to Maria Sanchez or Francisco Perez:

13140 Coronado Ter

North Miami, FL 33181

With a copy to:

Manuel A. Avila, Esq.

VERNIS & BOWLING OF MIAMI, P.A.

1680 NE 135th Street

North Miami, FL 33181

Telepone (305) 895-3035 /FAX (305) 892-1260

Notice to the estate of any Stockholder shall be sufficient if addressed to the party as provided
in this Section 11.05. Any notice or other communication given by certified mail shall be deemed
given at the time of certification thereof, except for a notice changing a party’s address, which
will be deemed given at the time of receipt thereof. Any notice given by other means permitted by
this Section 11.05 shall be deemed given at the time of receipt thereof.

     11.06 Expenses, Prevailing Party Attorneys Fees and Costs. The Purchaser and the Stockholders
shall pay its or their own expenses (including, without limitation, legal and accounting fees and
expenses) incident to the negotiation and preparation of this Agreement and the other Transaction
Documents and to such party’s performance and compliance with the Transactions. Notwithstanding
the foregoing, the prevailing party to any dispute arising out of the terms of this Agreement or
the subject matter hereof, shall, consistent with the provisions of this Agreement, be entitled to
recover from the breaching party or parties payment for all damages, reasonable attorneys fees,
court costs and collection fees and costs, prejudgment and postjudgment interest, through trial
and all appellate levels.

     11.07 Waiver. Any waiver by any party of a Breach of any term of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that term or of any Breach of any
other term of this Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions will not be considered a waiver or deprive that party of
the right thereafter to insist upon strict adherence to that term or any other

I-35

 

term of this Agreement. Any waiver must be in writing and, in the case of a corporate party,
be authorized by an officer of the waiving party.

     11.08 Binding Effect. The provisions of this Agreement shall be binding upon and inure to the
benefit of the Company and the Purchaser and their respective successors and permitted assigns and
each Stockholder and his/her respective assigns, heirs and personal representatives, and shall
inure to the benefit of each Indemnified Person and its successors and assigns (if not a natural
person) and his assigns, heirs and personal representatives (if a natural person). The Purchaser
may not assign this Agreement to any Person other than a wholly owned subsidiary of the Purchaser
without the prior written consent of the other parties hereto; provided, however, that upon any
allowed assignment, the assignee and the Purchaser shall also remain fully liable for the
performance of all obligations, covenants and warranties of the Purchaser hereunder.

     11.09 No Third Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this Agreement (except
as provided in Section 11.08).

     11.10 Separability. If any provision of this Agreement is invalid, illegal or unenforceable,
the balance of this Agreement shall remain in effect, and if any provision is inapplicable to any
person or circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.

     11.11 Headings. The headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this Agreement.

     11.12 Counterparts; Governing Law. This Agreement may be executed in any number of
counterparts, by facsimile or otherwise, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be governed by and construed
in accordance with the laws of the State of Florida and venue for any dispute related thereto shall
be in a court of competent jurisdiction situated in Miami-Dade County, Florida.

XII. Definitions.

     For purposes of this Agreement:

     “Affiliate” means, with respect to a particular party, a Person controlling, controlled by or
under common control with that party, including but not limited to any officer, director and
majority-owned entity of that party and of that party’s other Affiliates.

     “Agreement” means this Agreement and the exhibits and schedules hereto executed by all parties
to this Agreement.

     “Benefit Plans” means all employee benefit plans of the Company within the meaning of Section
3(3) of ERISA and any related or separate Contracts, plans, trusts, programs, policies,
arrangements, practices, customs and understandings, in each case whether formal or informal,

I-36

 

that
provide benefits of economic value to any present or former employee, officer or director of
the Company, or present or former beneficiary, dependent or assignee of any such employee,
officer or director or former employee, officer or director.

     “Breach” means, with respect to any material: representation, warranty, covenant, obligation
or other provision of this Agreement or any Transaction Document, any material inaccuracy in or
breach of, or any failure to perform or comply with, such representation, warranty, covenant,
obligation, or other provision.

     “Charter Documents” means an entity’s certificate or articles of incorporation, certificate
defining the rights and preferences of securities, articles of organization, bylaws, general or
limited partnership agreement, certificate of limited partnership, operating agreement, joint
venture agreement or similar document governing the entity.

     “Claim” means any allegation, claim, action, cause of action, lawsuit or other legal
proceeding, whether at law, in equity or before any Governmental Body, for damages, costs, losses
or expenses incurred by any Person as a result of any actions or failure to act by any party, or
its officers, directors, employees or authorized agents.

     “Closing” means the closing on the Transactions.

     “Closing Balance Sheet” is defined in Section 4.03.

     “Closing Date” is defined in Section 4.02.

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

     “Company Common Stock” is defined in Section 1.03.

     “Company Disclosure Schedule” means the disclosure schedule provided by the Company in
connection with this Agreement.

     “Confidential Information” is defined in Section 1.10(b) and Section 8.04.

     “Contract” means any written or oral contract, agreement, lease, instrument or other
commitment that is binding on any Person or its property under applicable law.

     “Court Order” means any judgment, decree, injunction, order or ruling of any federal, state,
local or foreign court or governmental or regulatory body or authority that is binding on any
Person or its property under applicable law.

     “Damages” is defined in Section 10.02.

     “Default” means (i) a material breach, default or violation or (ii) the occurrence of an event
that with the passage of time or the giving of notice, or both, would constitute a material breach,
default or violation.

I-37

 

     “Encumbrances” means any lien, mortgage, security interest, pledge, restriction on
transferability, defect of title or other Claim, charge or Encumbrance of any nature whatsoever on
any property or property interest.

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

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

     “Facilities” means any real property, leaseholds or other interests currently owned or
operated by the Company and any buildings, plants, structures or equipment (including motor
vehicles, tank cars and rolling stock) currently owned or operated by the Company.

     “GAAP” means generally accepted accounting principles.

     “Governmental Body” means any federal, state, local or foreign government entity or any court,
administrative or regulatory agency or commission or other governmental authority or agency.

     “Governmental Permits” is defined in Section 1.06(b).

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

     “Hazardous Substances” is defined in Section 1.07(g).

     “Indemnified Persons” is defined in Section 10.02.

     “Indemnification Notice” is defined in Section 10.04.

     “Intellectual Property” is defined in Section 1.10(a).

     “Last Balance Sheet” is defined in Section 1.04.

     “Last Balance Sheet Date” is defined in Section 1.04.

     “Legal Requirement” means any applicable statute, law, ordinance, regulation, order or rule of
any federal, state, local, foreign or other governmental agency or body or of any other type of
regulatory body, including those covering medical devices, food and drug, manufacturing processes,
environmental, energy, safety, health, transportation, consumer protection, bribery, recordkeeping,
zoning, warranties, anti-discrimination, antitrust, employment and price and wage control matters.

I-38

 

     “Liability” means any direct or indirect liability, indebtedness, obligation, expense, Claim,
loss, damage, deficiency, guaranty or endorsement of or by any Person, absolute or contingent,
accrued or unaccrued, due or to become due, liquidated or unliquidated.

     “Litigation” means any lawsuit, action, arbitration, audit, administrative or other
proceeding, prosecution or investigation or inquiry, whether civil, criminal, administrative,
investigative or informal, commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental Body, arbitrator, mediator or other disparate resolution forum.

     “Major Customer” and “Major Distributor” means a customer or distributor that has accounted
for 10% or more of the Company’s revenue during its 2008 fiscal year or during the twelve calendar
months preceding the date of this Agreement.

     “Major Supplier” means a supplier that has provided goods to the Company having a purchase
price of $25,000 or more in the aggregate during the Company’s 2008 fiscal year or during the
twelve calendar months preceding the date of this Agreement.

     “Material Adverse Effect” means a material adverse effect on the financial condition, results
of operations, products, customers or operations of the Company; provided, however, that in
determining whether a Material Adverse Effect has occurred, changes or effects relating to United
States or foreign economic conditions or financial markets in general or to the Company’s industry
in general shall not be considered.

     “Minor Contracts” is defined in Section 1.08(a).

     “Participate In” means directly or indirectly, for a Stockholder’s own benefit or for, with or
through any other person or entity, own, manage, operate, control, loan money to, or participate in
the ownership, management, operation, or control of, or be connected as a director, officer,
employee, partner, consultant, agent, independent contractor, or otherwise with, or acquiesce in
the use of his name in. Notwithstanding the foregoing, the term “Participate In” shall not include
participation in social activities or charitable or non-profit or community endeavors and/or owning
not more than 1% of the outstanding shares of stock of any public company.

     “Person” means any natural person, corporation, partnership, limited liability company,
proprietorship, association, trust or other legal entity.

     “Purchaser Charter Documents” is defined in Section 3.02.

     “Release” is defined in Section 1.07(f).

     “Release Time” is defined in Section 7.01.

     “Required Consents” is defined in Section 1.12.

     “Returns” means all returns, reports, forms, declarations, claims for refunds or other
information required to be filed or supplied to any Person in connection with Taxes (including

I-39

 

without limitation information returns and declarations of estimated Tax). (Any reference to
“filed” or “file” with respect to Taxes shall also be deemed to include “supplied” or “supply.”)

     “S Corporation Tax Period” is defined in Section 1.05(k).

     “Securities Act” means the Securities Act of 1933, as amended.

     “Takeover Proposal” means any proposal, other than as contemplated by this Agreement, (i) for
a merger, consolidation, reorganization, other business combination, or recapitalization involving
the Company, for the acquisition of a 5% or greater interest in the equity or in any class or
series of capital stock of the Company, for the acquisition of the right to cast 5% or more of the
votes on any matter with respect to the Company, or for the acquisition of a substantial portion of
any of its assets other than in the ordinary course its business or (ii) the effect of which may be
to prohibit or restrict the consummation of any of the transactions contemplated by this Agreement
or materially impair the contemplated benefits to the Purchaser of any of the transactions
contemplated by this Agreement.

     “Tax” means all U.S. federal, state, local and non-U.S. income taxes plus all charges, fees,
levies or other assessments whether federal, state, local or non-U.S. based upon or measured by
income, capital, net worth or gain and any other tax including but not limited to all net income,
gross income, advance corporate tax, gross receipts, value-added, sales, use ad valorem, transfer,
franchise, profits, withholding, payroll, employment, social security, unemployment, FICA, FUTA,
excise, occupation, property or other taxes, customs, duties, fees, assessments or charges of any
kind whatsoever including all interest and penalties thereon, and additions to tax or additional
amounts imposed by any Governmental Body.

     “Transactions” means the transactions contemplated by the Transaction Documents.

     “Transaction Documents” means this Agreement and the other agreements and documents
contemplated hereby which are expressly listed under the “Recitals” Section on page 1 of this
Agreement and no other documents or alleged agreements whatsoever.

     “Welfare Plan” is defined in Section 1.09(f).

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

	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	Drew Scientific, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	By:
	 	/s/	 	 
	 

Secretary

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:	 	 	 	JAS Diagnostics, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	By:
	 	/s/ David Johnston	 	 
	 

Secretary

	 	 
	 	 	 	 

David Johnston, President
	 	 

I-40

 

	 	 	 	 	 	 	 	 	 
	Witness:

	 	/s/
	 	 
	 	/s/ Maria Del R. Sanchez	 	 
	 

	 	 

	 	 
	 	 

Maria Del R. Sanchez
	 	 
	 
	 	 	 	 	 	 	 	 
	Witness:

	 	/s/
	 	 
	 	/s/ Francisco Jose Perez	 	 
	 

	 	 

	 	 
	 	 

Francisco Jose Perez
	 	 
	 
	 	 	 	 	 	 	 	 
	Witness:

	 	/s/
	 	 
	 	/s/ David Johnston	 	 
	 

	 	 

	 	 
	 	 

David Johnston
	 	 
	 
	 	 	 	 	 	 	 	 
	Witness:

	 	/s/
	 	 
	 	/s/ Vivian Alvarez	 	 
	 

	 	 

	 	 
	 	 

Vivian Alvarez
	 	 
	 
	 	 	 	 	 	 	 	 
	Witness:

	 	/s/
	 	 
	 	/s/ Marc Andler	 	 
	 

	 	 

	 	 
	 	 

Marc Andler
	 	 

I-41

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