Document:

ASSET
      PURCHASE AGREEMENT

     

    between

     

    ANSWER
      CONNECTICUT, INC.

     

    as
      Seller,

     

    and

     

    THOMAS
      M.
      GELBACH

     

    as
      Stockholder

     

    and

     

    ANSWER
      CONNECTICUT ACQUISITION CORP.

     

    as
      Buyer

     

    _______________________

     

    December
      9, 2005

    ______________________

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        TABLE
          OF CONTENTS

        

        Page

      

    

    
      
        	 	 	 
	 	
                SECTION
                  1.

              	
                SALE
                  AND PURCHASE OF ASSETS

              	
                 

              	
                1

              	
                 

              
	
                1.1

              	
                Sale
                  and Purchase

              	
                 

              	
                1

              	
                 

              
	
                1.2

              	
                No
                  Assumption of Liabilities

              	
                 

              	
                3

              	
                 

              
	
                1.3

              	
                Purchase
                  Price

              	
                 

              	
                3

              	
                 

              
	
                1.4

              	
                Seller's
                  and Stockholder's Closing Deliveries

              	
                 

              	
                4

              	
                 

              
	
                1.5

              	
                Adjustments
                  for Payables

              	
                 

              	
                6

              	
                 

              
	
                1.6

              	
                Adjustment
                  for Receivables

              	
                 

              	
                6

              	
                 

              
	
                1.7

              	
                Contingent
                  Additional Good Will Payment

              	
                 

              	
                6

              	
                 

              
	
                1.8

              	
                Additional
                  Adjustment

              	
                 

              	
                8

              	
                 

              
	 	
                SECTION
                  2.

              	
                REPRESENTATIONS
                  AND WARRANTIES OF SELLER AND THE STOCKHOLDER

              	
                 

              	
                8

              	
                 

              
	
                2.1

              	
                Organization

              	
                 

              	
                8

              	
                 

              
	
                2.2

              	
                Title
                  to Purchased Assets; Ownership of Stock

              	
                 

              	
                8

              	
                 

              
	
                2.3

              	
                Authorization;
                  Validity of Agreement, Etc

              	
                 

              	
                9

              	
                 

              
	
                2.4

              	
                Consents
                  and Approvals; No Violation

              	
                 

              	
                9

              	
                 

              
	
                2.5

              	
                Condition
                  of Purchased Assets

              	
                 

              	
                10

              	
                 

              
	
                2.6

              	
                Receivables

              	
                 

              	
                10

              	
                 

              
	
                2.7

              	
                Taxes

              	
                 

              	
                10

              	
                 

              
	
                2.8

              	
                Real
                  Property

              	
                 

              	
                12

              	
                 

              
	
                2.9

              	
                Intellectual
                  Property

              	
                 

              	
                12

              	
                 

              
	
                2.10

              	
                Material
                  Contracts

              	
                 

              	
                12

              	
                 

              
	
                2.11

              	
                Customers,
                  Suppliers and Distributors

              	
                 

              	
                13

              	
                 

              
	
                2.12
                  

              	
                Litigation;
                  Compliance with Laws; Licenses and Permits

              	
                 

              	
                13

              	
                 

              
	
                2.13
                  

              	
                Product
                  or Service Claims

              	
                 

              	
                14

              	
                 

              
	
                2.14
                  

              	
                No
                  Brokers

              	
                 

              	
                14

              	
                 

              
	
                2.15
                  

              	
                Assets
                  Utilized in the Business

              	
                 

              	
                14

              	
                 

              
	
                2.16
                  

              	
                Related
                  Party Transactions

              	
                 

              	
                14

              	
                 

              
	
                2.17
                  

              	
                Insurance

              	
                 

              	
                14

              	
                 

              
	
                2.18
                  

              	
                No
                  Misstatements or Omissions

              	
                 

              	
                15

              	
                 

              
	
                2.19
                  

              	
                Labor
                  Matters and Employment Matters

              	
                 

              	
                15

              	
                 

              

      

       

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

         

        
          TABLE
            OF CONTENTS

          (continued)

          Page

           

        

      

      
        
          	
                  2.20
                    

                	
                  Environmental
                    Matters

                	
                   

                	
                  17

                	
                   

                
	
                  2.21
                    

                	
                  No
                    Material Adverse Change

                	
                   

                	
                  19

                	
                   

                
	
                  2.22
                    

                	
                  No
                    Undisclosed Liabilities

                	
                   

                	
                  19

                	
                   

                
	
                  2.23
                    

                	
                  Solvency

                	
                   

                	
                  19

                	
                   

                
	
                  2.24
                    

                	
                  Employee
                    Benefits

                	
                   

                	
                  19

                	
                   

                
	
                  2.25
                    

                	
                  Investment
                    Representations

                	
                   

                	
                  22

                	
                   

                
	 	
                  SECTION
                    3.

                	
                  REPRESENTATIONS
                    AND WARRANTIES OF BUYER

                	
                   

                	
                  22

                	
                   

                
	
                  3.1

                	
                  Organization

                	
                   

                	
                  22

                	
                   

                
	
                  3.2

                	
                  Authorization;
                    Validity of Agreement

                	
                   

                	
                  23

                	
                   

                
	
                  3.3

                	
                  Consents
                    and Approvals; No Violation

                	
                   

                	
                  23

                	
                   

                
	 	
                  SECTION
                    4.

                	
                  COVENANTS
                    OF THE PARTIES

                	
                   

                	
                  23

                	
                   

                
	
                  4.1

                	
                  Employee
                    Matters

                	
                   

                	
                  23

                	
                   

                
	
                  4.2

                	
                  Non-disclosure
                    of Confidential Information

                	
                   

                	
                  26

                	
                   

                
	
                  4.3

                	
                  Non-solicitation
                    of Employees

                	
                   

                	
                  27

                	
                   

                
	
                  4.4

                	
                  Non-Competition

                	
                   

                	
                  27

                	
                   

                
	
                  4.5

                	
                  Public
                    Statements

                	
                   

                	
                  27

                	
                   

                
	
                  4.6

                	
                  Use
                    of Name

                	
                   

                	
                  28

                	
                   

                
	
                  4.7

                	
                  Purchase
                    Price Allocation

                	
                   

                	
                  28

                	
                   

                
	
                  4.8

                	
                  Other
                    Actions

                	
                   

                	
                  28

                	
                   

                
	
                  4.9

                	
                  Payment
                    of Payables

                	
                   

                	
                  28

                	
                   

                
	
                  4.10
                    

                	
                  Financial
                    Statements

                	
                   

                	
                  28

                	
                   

                
	
                  4.11
                    

                	
                  Discharge
                    of Liabilities

                	
                   

                	
                  29

                	
                   

                
	 	
                  SECTION
                    5.

                	
                  SURVIVAL
                    OF REPRESENTATIONS AND WARRANTIES

                	
                   

                	
                  29

                	
                   

                
	
                  5.1

                	
                  Survival
                    of Representations and Warranties of Seller and
                    Stockholder

                	
                   

                	
                  29

                	
                   

                
	
                  5.2

                	
                  Survival
                    of Representations and Warranties of Buyer

                	
                   

                	
                  29

                	
                   

                
	 	
                  SECTION
                    6.

                	
                  INDEMNIFICATION

                	
                   

                	
                  29

                	
                   

                
	
                  6.1

                	
                  Indemnification
                    by Seller and Stockholder

                	
                   

                	
                  29

                	
                   

                
	
                  6.2

                	
                  Indemnification
                    by Buyer

                	
                   

                	
                  30

                	
                   

                
	
                  6.3

                	
                  Indemnification
                    Procedures

                	
                   

                	
                  30

                	
                   

                
	
                  6.4

                	
                  Right
                    to Set-Off

                	
                   

                	
                  31

                	
                   

                

        

         

         

        
          
            
            

          

          
            -ii-

            
              

            

          

          
            
            

          

        

         

        
          TABLE
            OF CONTENTS

          (continued)

          Page

        

        
           

        

        
          	 	
                  SECTION
                    7.

                	
                  MISCELLANEOUS

                	
                   

                	
                  32

                	
                   

                
	
                  7.1

                	
                  Transaction
                    Fees and Expenses

                	
                   

                	
                  32

                	
                   

                
	
                  7.2

                	
                  Notices

                	
                   

                	
                  32

                	
                   

                
	
                  7.3

                	
                  Amendment

                	
                   

                	
                  33

                	
                   

                
	
                  7.4

                	
                  Waiver

                	
                   

                	
                  33

                	
                   

                
	
                  7.5

                	
                  Governing
                    Law

                	
                   

                	
                  33

                	
                   

                
	
                  7.6

                	
                  Jurisdiction

                	
                   

                	
                  33

                	
                   

                
	
                  7.7

                	
                  Remedies

                	
                   

                	
                  33

                	
                   

                
	
                  7.8

                	
                  Severability

                	
                   

                	
                  34

                	
                   

                
	
                  7.9

                	
                  Further
                    Assurances

                	
                   

                	
                  34

                	
                   

                
	
                  7.10
                    

                	
                  Assignment

                	
                   

                	
                  34

                	
                   

                
	
                  7.11
                    

                	
                  No
                    Third Party Beneficiaries

                	
                   

                	
                  34

                	
                   

                
	
                  7.12
                    

                	
                  Entire
                    Agreement

                	
                   

                	
                  34

                	
                   

                
	
                  7.13
                    

                	
                  Headings

                	
                   

                	
                  34

                	
                   

                
	
                  7.14
                    

                	
                  Counterparts

                	
                   

                	
                  34

                	
                   

                

        

      

    

    

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

    
      List
        of Exhibits

      

      Page

    

    
Exhibit
      A     Seller’s
      Secretary’s Certificate

    

    Exhibit
      B     Bill
      of
      Sale and Assignment Agreement

    

    Exhibit
      C     Legal
      Opinion of Counsel to Seller and Stockholder

    

    Exhibit
      D     Management
      Employment Agreement

    

    Exhibit
      E     Wire
      Transfer Instructions

    

    Exhibit
      F     Lease

    

     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

     

    ASSET
      PURCHASE AGREEMENT

     

    ASSET
      PURCHASE AGREEMENT, dated December 9, 2005 (together with all Schedules hereto,
      this "Agreement"),
      among
      Answer Connecticut Acquisition Corp., a New York corporation,
      with offices at 3265 Lawson Boulevard, Oceanside, New York 11572 ("Buyer"),
      on
      the one hand, and Answer Connecticut, Inc., a Connecticut corporation doing
      business as ACT Teleservices and having offices at 365 Willard Avenue, Suite
      2A,
      Newington, CT 06111 ("Seller"),
      and
      Thomas M. Gelbach, an individual and the sole stockholder of Seller, residing
      at
      100 Fiddlehead Farms, Canton, CT 06019 (the "Stockholder").

     

    RECITALS

     

    A.
      Seller
      is
      in the business of providing telephone answering services, message services,
      faxing services, paging services and other ancillary office services
      (collectively, the "Business").

     

    B.
      Buyer
      desires to purchase from Seller, and Seller desires to sell to Buyer, certain
      of
      Seller's assets and properties relating to the Business, on the terms and
      subject to the conditions set forth herein.

     

    C.
      The
      parties have drafted a disclosure schedule (the "Disclosure Schedule")
      corresponding to various provisions of this Agreement, in order to record
      various disclosures made pursuant to the various provisions hereof.

     

    

    AGREEMENT

     

    In
      consideration of the mutual covenants and agreements herein contained, and
      other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    Section
      1. Sale
      and
      Purchase of Assets.

     

    1.1
      Sale
      and Purchase.
      Upon
      the terms and subject to the conditions contained in this Agreement, Seller,
      as
      of the date hereof (the “Closing
      Date”),
      hereby sells, assigns, transfers and delivers to Buyer, and Buyer, as of the
      Closing Date, purchases and accepts from Seller, all of the assets and rights
      of
      every nature, kind and description, tangible and intangible, wherever located,
      that are owned, used or held for use by Seller in or for the Business, as the
      same exists on the Closing Date (collectively, the "Purchased
      Assets"),
      free
      and clear of any and all liens, charges, claims, pledges, security interests
      or
      other encumbrances of any kind whatsoever ("Liens"),
      other
      than (i) cash, except for cash relating to Accounts Receivable belonging to
      Buyer as set forth in Section 1.6, (ii) all assets and rights in connection
      with
      the Employee Plans (as defined in Section 2.24 of this Agreement), except for
      those listed in Section 4.1(i) of the Disclosure Schedule, and (iii) all assets
      listed in Section 1.1 of the Disclosure Schedule hereto (collectively, the
      "Excluded
      Assets").
      The
      Purchased Assets shall include, without limitation, the following: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a) customer
      accounts (both actual and prospective), including barter accounts, if
      any;

     

    (b) all
      accounts receivable, subject, however, to the provisions of Section 1.6
      hereof;

     

    (c) deposits
      or expenses prepaid by the Company, and deposits made by customers;

     

    (d) customer
      and supplier lists, mailing lists, telephone numbers, DID numbers, catalogs,
      yellow pages advertising, brochures, promotional materials and handbooks
      relating to the Business;

     

    (e) other
      books, records, files, contracts, plans, notebooks, production and sales data
      and other data of Seller relating to the Business, including but not limited
      to
      book keeping records and ledgers, whether or not in tangible form or in the
      form
      of intangible computer storage media such as optical disks, magnetic disks,
      tapes and all similar storage media;

     

    (f) machinery,
      computers, file servers, networking hardware, software licensing and other
      data
      processing hardware (and all software related thereto or used therewith) and
      other tangible personal property of similar nature, including but not limited
      to
      all items set forth on Seller's fixed asset ledger attached to this Agreement
      on
      Section 2.5 of the Disclosure Schedule, and all telephony hardware and
      peripherals, including, but not limited to, telephony chasis, expansion cards,
      monitors, spare equipment, operator audio boxes, amplifiers and
      headsets;

     

    (g) office
      furniture, office equipment, fixtures and other tangible personal property
      of
      similar nature, as set forth in Section 2.5 of the Disclosure Schedule, and
      all
      other such items located in the premises identified in the Lease (as hereinafter
      defined), whether or not set forth in Section 2.5 of the Disclosure
      Schedule;

     

    (h) all
      inventory including, but not limited to, any pagers;

     

    (i) interests
      to the extent owned by Seller in any patent, copyright, trademark, trade name,
      brand name, service mark, service name, assumed name, domain name, website,
      logo, symbol, trade dress, design or representation or expression of any
      thereof, or registration or application for registration thereof, or any other
      invention, trade secret, technical information, know-how, proprietary right
      or
      intellectual property, technologies, methods, designs, drawings, software
      (including documentation and source code listings), processes and other
      proprietary properties or information (collectively, the "Intellectual
      Property");

     

    (j) real
      property interests described in Section 2.8 of the Disclosure Schedule to this
      Agreement together with all licenses, leases, rights, privileges and
      appurtenances thereto including, without limitation, all leases, agreements
      and
      other rights to use, occupy or possess, or otherwise with respect to, real
      property or machinery, equipment, vehicles, and other tangible personal property
      of similar nature to which Seller is a party, and all rights arising under
      or
      pursuant to such leases, agreements and rights;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (k) to
      the
      extent not included above, all rights under contracts, agreements, options,
      commitments, understandings, licenses, leases, permits and instruments relating
      to the Business including, without limitation, customer and supplier contracts,
      sales representative and distributor contracts and commission contracts with
      respect thereto, all as listed (the "Assigned
      Contracts")
      on
      Schedule 1.1(k) of the Disclosure Schedule, but no Liabilities (as defined
      below) associated with any of the Assigned Contracts, except as set forth in
      Section 1.2 below;

     

    (l) the
      names
      "Answer Connecticut", "ACT Teleservices", “Crossroads Services”, “Liberty
      Telecommunications”, “Back Acres Answering Service” and “Answer 1” and all
      variations thereof and all similar names and the goodwill associated therewith
      and with the Purchased Assets, together with all trademarks, service marks
      and
      trade names of Seller related to the Business, if any;

     

    (m) third
      party warranties and guarantees and other similar contractual rights as to
      third
      parties held by or in favor of Seller, and arising out of, resulting from or
      relating to the Business or the Purchased Assets, to the extent not included
      as
      part of the Assigned Contracts;

     

    (n) rights
      to
      insurance and condemnation proceeds relating to any damage, destruction, taking
      or other similar impairment of any of the Purchased Assets; and

     

    (o) cash
      related to Accounts Receivable belonging to Buyer as set forth in Section
      1.6.

     

    1.2
      No
      Assumption of Liabilities.
      Except
      as
      provided herein, Buyer is not assuming any of Seller’s direct or indirect
      liabilities, obligations, undertakings, indebtedness, obligations under
      guaranties, endorsements, adverse claims, losses, damages, deficiencies, costs,
      expenses or responsibilities of any kind, fixed or unfixed, known or unknown,
      asserted or unasserted, due or undue, liquidated or unliquidated, secured or
      unsecured, accrued or unaccrued, contingent or non-contingent, subordinated
      or
      non-subordinated (collectively, "Liabilities").
      Buyer
      will assume all Liabilities relating to the Purchased Assets and the Business
      to
      the extent arising from activity of Buyer relating to periods after the Closing
      Date (the "Assumed
      Liabilities").

     

    1.3
      Purchase
      Price.
      The
      aggregate purchase price for the Purchased Assets is Three Million Eighty Eight
      Thousand Nine Hundred Twenty Two and 60/100 ($3,088,922.60) Dollars (the
      "Purchase
      Price").
      The
      Purchase Price shall be payable as set forth below:

     

    (a) Two
      Million Three Hundred Sixteen Thousand Six Hundred Ninety One and 95/100
      ($2,316,691.95) Dollars, payable to Seller by wire transfer on the Closing
      Date
      (the "Closing
      Cash Purchase Price")
      ; 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b) One
      Hundred Fifty Four Thousand Four Hundred Forty Six and 13/100 ($154,446.13)
      Dollars, payable to Seller by wire transfer upon receipt by Buyer of evidence
      of
      the filing in the applicable office of the UCC-3 termination statement
      identified on Section 1.3(b) of the Disclosure Schedule; provided,
      however,
      that in
      the event that such termination statement is not so filed by the close of
      business on January 9, 2005, Buyer, in its sole discretion, may use any amounts
      due hereunder to satisfy directly any obligations of Seller which are required
      to be satisfied prior to the filing of any such termination statement, and
      the
      balance of any amounts remaining pursuant to this Section 1.3(b) after such
      satisfaction shall be paid to Seller upon the filing of such termination
      statement.

     

    (c) Twenty
      Five Thousand Nine Hundred Fourteen (25,914) shares of American Medical Alert
      Corp. ("AMAC"), the Buyer's indirect parent, common stock (the "Shares");
      and

     

    (d) Four
      Hundred Sixty Three Thousand Three Hundred Thirty Eight and 39/100 ($463,338.39)
      Dollars, plus interest thereon at the rate of 5% per annum from the Closing
      Date
      until the date paid, payable to Seller upon the one year anniversary of the
      Closing Date; provided,
      however,
      that to
      the extent any such amounts are not paid because of a properly asserted claim
      pursuant to Section 1.8 or Section 6.4 hereof, such amounts shall not be deemed
      to be an amount payable under this Section 1.3(d); 

     

    (e) As
      additional consideration, the Buyer shall pay the Seller the amounts set forth
      in Section 1.7 hereof (the "Contingent
      Additional Good Will Payment"),
      to
      the extent so payable.

     

    1.4
      Seller's
      and Stockholder’s Closing Deliveries.
      (a) On
      or
      prior to the Closing Date, Seller and Stockholder, will have delivered to Buyer
      each of the following documents (collectively, the "Seller's
      Closing Documents"):

     

    (i)
      Certificate of Secretary. A certificate of the Secretary of Seller in the form
      of Exhibit A, setting forth a copy of the resolutions adopted by its board
      and
      the Stockholder approving the execution and delivery of this Agreement,
      ratifying all past corporate action, and the other documents and instruments
      contemplated hereby to which it is a party (this Agreement and all other
      documents and instruments to which Buyer, Seller or the Stockholder is a party
      in connection herewith being sometimes collectively referred to herein as the
      "Purchase Documents") and the consummation of the transactions contemplated
      hereby; 

     

    (ii)
      Instruments
      of Transfer.
      A Bill
      of Sale and Assignment Agreement, in the form of Exhibit
      B
      attached
      hereto (the "Bill
      of Sale"),
      duly
      executed by Seller and the Stockholder, that, among other things, conveys,
      transfers and sells to Buyer all right, title and interest of Seller in and
      to
      the Purchased Assets.

     

    (iii)
      Legal
      Opinion of Counsel to Seller and Stockholder.
      An
      opinion, in the form of Exhibit
      C
      attached
      hereto, from Halloran & Sage LLP, counsel to Seller and the
      Stockholder.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (iv)
      Wire
      Transfer Instructions.
      Wire
      transfer instructions for the payment of the Closing Purchase Price in the
      form
      attached hereto as Exhibit
      E.

     

    (v)
      Schedule
      of Receivables.
      A
      schedule of all receivables due to Seller as of the close of business on the
      Closing Date.

     

    (vi)
      Customer
      List.
      A
      complete and unrestricted list of all customers of the Seller, as set forth
      in
      Schedule 2.11, including the name, address, telephone number and contact for
      each such customer.

     

    (vii)
      Schedule
      of Payables.
      A
      schedule of all accounts payable of Seller as of the close of business on the
      Closing Date ("Payables")
      as
      Schedule 1.4(vii) of the Disclosure Schedule.

     

    (viii)
      Management
      Employment Agreement.
      Employment agreement between the Buyer and the Stockholder in the form of
Exhibit
      D
      attached
      hereto (the "Management
      Employment Agreement"),
      duly
      executed by the Stockholder. 

     

    (ix)
      Books
      and Records.
      All
      books and records relating to the Business.

     

    (x)
      Lease.
      A lease
      for the premises at 365 Willard Avenue, Suite 2A, Newington, CT 06111 (the
      "Building")
      between Buyer and Answer USA, LLC (the "LLC")
      in the
      form of Exhibit
      F
      attached
      hereto (the "Lease"),
      duly
      executed by the LLC. In addition, evidence satisfactory to the Buyer of the
      termination of that certain lease between the Seller and the LLC for the
      premises located at 365 Williard Avenue, Suite 2A, Newington, CT
      06111.

     

    (xi) the
      documents listed in Section 1.4(xi) of the Disclosure Schedule.

     

    1.4A.
      Deliveries
      of Buyer.
      On or
      prior to the Closing Date, Buyer will have delivered to Seller each of the
      following documents and payments (collectively "Buyer's
      Closing Documents"):

     

    (i)
      Certificate
      of Secretary.
      A
      certificate of the Secretary of Buyer setting forth a copy of the resolutions
      adopted by its Board of Directors approving the execution and delivery of this
      Agreement and the other Purchase Documents and the consummation of transactions
      contemplated hereby and thereby.

     

    (ii)
      Closing
      Purchase Price.
      Buyer
      hereby delivers or causes to the Closing Cash Purchase Price in immediately
      available funds.

     

    (iii)
      Shares.
      Irrevocable instructions to AMAC's transfer agent for the issuance of the
      Shares, as well as an opinion by AMAC's counsel relating to such
      issuance.

     

    (iv)
      Management
      Employment Agreement.
      The
      Management Employment Agreement, duly executed by the Buyer.

     

    (v)
      Lease.
      The
      Lease, duly executed by the Buyer.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    1.5
      Adjustments
      for Payables.
      Within
      90 days after the Closing Date, Buyer will prepare an accrual based statement
      of
      accounts payable (including the Payables) as of the Closing Date. Any such
      accounts payable which relate to any period prior to the Closing Date and which
      are paid by Buyer, shall be a credit in Buyer’s favor. Any amounts paid by
      Seller prior to the Closing Date that relate to periods after the Closing Date
      shall also be scheduled and shall act as a credit in favor of Seller. The net
      amount shall be paid by the Buyer or Seller, as the case may be, to the other
      within 30 days of the determination thereof. If Seller fails to timely pay
      any
      amounts due to Buyer pursuant to this Section, then such amounts may be debited
      from any amounts due to Seller or Stockholder pursuant to this
      Agreement.

     

    1.6
      Adjustment
      for Receivables.
      All
      accounts receivable resulting from invoices after the close of business on
      the
      Closing Date shall belong to the Buyer. All accounts receivable outstanding
      as
      of the close of business on the Closing Date, shall be payable as follows upon
      collection: 20% to the Buyer and 80% to the Seller. Attached hereto as Schedule
      2.6 is a list of all outstanding accounts receivable as of the date
      hereof.

     

    1.7
      Contingent
      Additional Good Will Payment.
      (a) If:
      (i) the Buyer’s total accrual based revenues ("Gross
      Revenues")
      for
      the 12 month period ended on December 31, 2006 equal to or exceed an
      amount
      equal to 112.5% of the Seller's Gross Revenues for the 12 month period ending
      on
      December 31, 2005 (“Seller’s
      Gross Revenues”),
      and
      (ii) the Buyer's earnings before deduction of interest, taxes (including Federal
      and State taxes), depreciation and amortization ("EBITDA")
      for
      the 12 month period ending on December 31, 2006 equal to or exceed Twenty (20%)
      percent of the Gross Revenues of the Buyer for such one (1) year period, then
      Buyer shall pay to Seller an amount equal to 0.5 of the Average Monthly Revenue
      (as defined below) as measured as of December 31, 2006, and an additional amount
      equal to 0.25 of such Average Monthly Revenue for each 5% increment by which
      EBIDTA exceeds 20% of the Gross Revenues for the applicable period.

     

    For
      example, assuming (i) Seller’s Gross Revenues equals to $1,000,000, (ii) Buyer's
      Gross Revenues for the 12 month period ending on December 31, 2006,
      equals
      to $1,200,000, and (iii) Buyer’s EBIDTA for such period is equal to $325,000,
      then Buyer shall pay Seller an amount equal to 0.75 x the Average Monthly
      Revenue as measured as of December 31, 2006 (0.5 x the Average
      Monthly
      Revenue for meeting the Gross Revenue (1,200,000/1,000,000 = 120%) and EBIDTA
      (325,000/1,200,000 = 27%) thresholds, plus an additional 0.25 x the Average
      Monthly Revenue based on EBIDTA exceeding 25% (i.e., a single 5% increment
      above
      20%) of Buyer's Gross Revenues for the applicable period).

     

    (b)
      If:
      (i) the Buyer’s Gross Revenues for the 12 month period ending on December 31,
      2007 equal to or exceed an amount equal to 125% of the Seller's Gross Revenues,
      and (ii) the Buyer's EBITDA for the 12 month period ending on December 31,
      2007 equal to or exceed Twenty (20%) percent of the Gross Revenues of the Buyer
      for the 12 month period, then Buyer shall pay to Seller an amount equal to
      0.75
      of the Average Monthly Revenue as measured as of December 31, 2007,
      and an
      additional amount equal to 0.25 of such Average Monthly Revenue for each 5%
      increment by which EBIDTA exceeds 20% of the Gross Revenues for the applicable
      period.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    For
      example, assuming (i) Seller’s Gross Revenues equals to $1,000,000, (ii) Buyer's
      Gross Revenues for the 12 month period ending on December 31, 2007 equals to
      $1,300,000, and (iii) Buyer’s EBIDTA for such period is equal to $400,000, then
      Buyer shall pay Seller an amount equal to 1.25 x the Average Monthly Revenue
      as
      measured as of December 31, 2007. (0.75 x the Average Monthly Revenue
      for
      meeting the Gross Revenue (1,300,000/1,000,000 = 130%) and EBIDTA
      (400,000/1,300,000 = 30.7%) thresholds, plus an additional 0.5 x the Average
      Monthly Revenue based on EBIDTA exceeding 30% (i.e., two 5% increments above
      20%) of Buyer's Gross Revenues for the applicable period).

     

    (c)
      If:
      (i) the Buyer’s Gross Revenues for the 12 month period ending on December 31,
      2008 equal to or exceed an amount equal to 135% of the Seller's Gross Revenues,
      and (ii) the Buyer's EBITDA for the 12 month period ended on December 31,
      2008 equal to or exceed Twenty (20%) percent of the Gross Revenues of the Buyer
      for such one (1) year period, then Buyer shall pay to Seller an amount equal
      to
      0.75 of the Average Monthly Revenue as measured as of December 31, 2008, and
      an
      additional amount equal to 0.25 of such Average Monthly Revenue for each 5%
      increment by which EBIDTA exceeds 20% of the Gross Revenues for the applicable
      period.

     

    For
      example, assuming (i) Seller’s Gross Revenues equals to $1,000,000, (ii) Buyer's
      Gross Revenues for the 12 month period ending on December 31, 2008 equals
      to $1,400,000, and (iii) Buyer’s EBIDTA for such period is equal to $500,000,
      then Buyer shall pay Seller an amount equal to 1.50 x the Average Monthly
      Revenue as measured as of December 31, 2008. (0.75 x the Average
      Monthly Revenue for meeting the Gross Revenue (1,400,000/1,000,000 = 140%)
      and
      EBIDTA (500,000/1,400,000 = 35.7%) thresholds, plus an additional 0.75 x the
      Average Monthly Revenue based on EBIDTA exceeding 35% (i.e., three 5% increments
      above 20%) of Buyer's Gross Revenues for the applicable period).

     

    (d)
      The
      term "Average
      Monthly Revenue"
      shall
      mean an amount equal to the sum of (i) the 28 Day Cycle Average Monthly Billings
      (as defined below), plus (ii) the Average Monthly Billings (as defined below).
      The "28
      Day
      Cycle Average Monthly Billings"
      shall
      mean an amount calculated by adding the amounts of the last three (3) 28 day
      cycle bills of each customer (as applicable), prior to the applicable measuring
      date, divided by three (3), multiplied by thirteen (13) and divided by twelve
      (12). The "Average
      Monthly Billings"
      shall
      mean an amount calculated by adding the last three (3) monthly bills of each
      customer (as applicable), prior to the applicable measuring date, divided by
      three (3). Any amounts attributable to sales tax and non-recurring revenue
      shall
      be excluded from the calculation.

     

    (e)
      The
      calculation of any Contingent Additional Good Will Payment shall be made by
      Buyer and preliminarily delivered in writing to the Seller within 45 days after
      the end of the fiscal quarter in which the applicable period referenced above
      ends. The preliminary calculation shall be subject to adjustment in connection
      with the year end audit of Buyer's financials, and Buyer shall deliver a final
      calculation within 90 days after the end of the fiscal quarter in which the
      applicable period referenced above ends. Seller shall have five (5) business
      days to object to such final calculation in writing. If Seller does not object
      within such five (5) day period, Buyer shall promptly pay to Seller the
      Contingent Additional Good Will Payment amount as determined above. Any dispute
      relating to this calculation shall be adjudicated pursuant to Sections 7.5
      and
      7.6.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    1.8
      Additional
      Adjustment.
      In the
      event that the customer identified in Section 1.8 of the Disclosure Schedule
      ceases to be a customer of the Buyer at any time within the 12 month period
      beginning January 1, 2006, then Seller shall pay to Buyer $10,000 for each
      month
      of such 12 month period during which such customer is no longer a customer
      of
      the Buyer. Any amount which becomes payable pursuant to this Section 1.8, shall
      be set-off against the payment due, if any, to Seller pursuant to Section
      1.3(c).

     

    Section
      2. Representations
      and Warranties of Seller and the Stockholder.
      The
      Seller and the Stockholder, jointly and severally, represent and warrant to
      Buyer that each of the following statements is true and correct as of the date
      hereof, and with respect to representations and warranties that speak as of
      a
      subsequent date, such representations and warranties will also be true and
      correct as of such date:

     

    2.1
      Organization.
      Seller
      is a Connecticut corporation duly organized, validly existing and in good
      standing under the laws of its jurisdiction of incorporation, with full
      corporate power and authority to conduct its business and to own and operate
      its
      assets and properties as presently conducted and operated. The LLC is a
      Connecticut limited liability company duly formed, validly existing and in
      good
      standing under the laws of its jurisdiction of formation, with full corporate
      power and authority to conduct its business and to own its assets and properties
      as presently conducted and operated. Seller is duly qualified to do business
      in
      Massachusetts. Seller does not do business in any other jurisdiction in any
      manner which would require it to become qualified or licensed as a foreign
      entity. Seller has delivered to Buyer, as Section 2.1 of the Disclosure
      Schedule, true, correct and complete copies of Seller's certificate of
      incorporation (the "Certificate
      of Incorporation")
      and by
      laws (the "By
      Laws"),
      as
      currently in effect.

     

    2.2
      Title
      to Purchased Assets; Ownership of Stock.

     

    (a) Seller
      has good and marketable title to the Purchased Assets including, without
      limitation, all assets set forth on Seller's fixed asset ledger attached to
      this
      Agreement on Section 2.5 of the Disclosure Schedule, free and clear of all
      Liens, other than (i) Liens, if any, for personal property taxes and assessments
      not yet due and payable and (ii) Liens disclosed on Section 2.2 of the
      Disclosure Schedule. The LLC is the sole owner of the Building. Upon
      consummation of the transactions contemplated by this Agreement, Buyer will
      acquire all of Seller's right, title and interest in and to the Purchased
      Assets, free and clear of all Liens. 

     

    (b) The
      Stockholder is the sole record and beneficial owner of 100 shares of the
      Seller's common stock, no par value, which constitute all of the outstanding
      capital stock of Seller. No Person has any right, interest or claim to any
      of
      the Seller’s capital stock (other than Stockholder) or the Purchased Assets.
      There are no subscriptions, warrants, options, convertible securities or other
      rights (contingent or other) to purchase or acquire any shares of any class
      of
      capital stock of the company, issued or outstanding, and there is no commitment
      of the Seller to issue any shares, warrants, options or other such rights or
      to
      distribute to holders of any class of its capital stock any evidences of
      indebtedness or assets. The Stockholder is the owner of all of the membership
      interests in, and Stockholder is the sole manager of, the LLC.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    2.3
      Authorization;
      Validity of Agreement, Etc.
      The
      Stockholder has the requisite capacity, and Seller has the full right, power
      and
      authority, to execute and deliver this Agreement and the other Purchase
      Documents to which, as applicable, it or he are a party and to consummate the
      transactions contemplated hereby and thereby, and to make the representations
      set forth herein and therein. LLC has the full right, power and authority,
      to
      execute and deliver the Lease and to consummate the transactions contemplated
      thereby. The execution and delivery of this Agreement and the other Purchase
      Documents to which it is a party and the consummation of the transactions
      contemplated hereby and thereby have been duly and validly authorized by Seller
      and no other proceedings on the part of Seller are necessary to authorize the
      execution and delivery of this Agreement and the other Purchase Documents to
      which Seller is a party or the consummation of the transactions contemplated
      hereby and thereby by Seller and the Stockholder. The execution and delivery
      of
      the Lease and the consummation of the transactions contemplated thereby have
      been duly and validly authorized by the LLC and no other proceedings on the
      part
      of the LLC are necessary to authorize the execution and delivery of the Lease.
      Each of this Agreement and the other Purchase Documents to which Seller is
      a
      party have been duly and validly executed by Seller and constitute the valid
      and
      binding agreement of Seller, enforceable against Seller in accordance with
      its
      respective terms. Each of this Agreement and the other Purchase Documents to
      which the Stockholder is a party have been duly and validly executed by the
      Stockholder and constitute the valid and binding obligation of the Stockholder,
      enforceable against the Stockholder in accordance with its respective terms.
      The
      Lease has been duly and validly executed by the LLC and constitutes the valid
      and binding obligation of the LLC, enforceable against the LLC in accordance
      with its respective terms.

     

    2.4
      Consents
      and Approvals; No Violation.
      Except
      as set forth in Section 2.4 of the Disclosure Schedule, the execution,
      performance and delivery by Seller and the Stockholder of this Agreement and
      each of the other Purchase Documents to which it or he is a party, as
      applicable, and the consummation by Seller and the Stockholder of the
      transactions contemplated hereby and thereby, respectively, and the compliance
      by Seller and the Stockholder with the provisions hereof and thereof will not:
      (a) conflict with or breach any provision of the Certificate of Incorporation
      or
      Bylaws of Seller; (b) violate or breach in any respect any provision of, or
      constitute a default (or an event which, with notice or lapse of time or both
      would constitute a default) under, any of the terms, covenants, conditions
      or
      provisions of, or give rise to a right to terminate or accelerate or increase
      the amount of payment due under, any note, bond, mortgage, indenture, deed
      of
      trust, license, franchise, permit, lease, contract, agreement or other
      instrument, commitment or obligation to which Seller or the Stockholder is
      a
      party (collectively, "Contracts"),
      or by
      which Seller or the Stockholder or any of its or his properties or assets,
      as
      applicable, may be bound or affected; (c) require Seller or the Stockholder
      to
      make any filing or registration with, or obtain any other permit, authorization,
      consent or approval of, any Person (as hereinafter defined) or Governmental
      Entity (as hereinafter defined); (d) result in the creation of any Lien on
      or
      affecting the Purchased Assets; (e) violate any order, writ, injunction, decree,
      judgment, or ruling of any court or governmental authority, applicable to Seller
      or the Stockholder or any of their respective properties or assets; or (f)
      violate any statute, law, rule or regulation applicable to Seller or any of
      its
      properties or assets. "Person"
      shall
      mean any individual, partnership, corporation, joint venture, limited liability
      company, trust, organization or any other entity. "Governmental
      Entity"
      shall
      mean any foreign, provincial, United States federal, state, county, municipal
      or
      other local jurisdiction, political entity, body, organization, subdivision
      or
      branch, legislative or executive agency or department or other regulatory
      service, authority or agency.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    2.5
      Condition
      of Purchased Assets. All
      items
      of machinery, equipment, tooling and other tangible personal property owned
      or
      leased by Seller and used in the conduct of the Business (other than items
      of
      inventory) are listed in the detailed fixed assets ledger of Seller attached
      to
      Section 2.5 of the Disclosure Schedule (collectively, the "Personal
      Property").
      Although it may not be specifically identified in Section 2.5 of the Disclosure
      Schedule, the term "Personal Property" includes all of the telephony equipment
      hardware and peripherals, including, but not limited to, telephony chasis,
      expansion cards, monitors, spare equipment, operator audio boxes, amplifiers,
      headsets, and all computers, furniture, fixtures and machinery, in each case
      located in the premises identified in the Lease. The Personal Property conforms
      in all respects to all requirements of applicable laws. 

     

    2.6
      Receivables.
      All
      accounts receivable of Seller as of the Closing Date, are reflected on Section
      2.6 of the Disclosure Schedule and represent valid obligations arising from
      bona
      fide transactions in the ordinary course of Seller's business consistent with
      past practice and established in the ordinary course of Seller's business.
      To
      the best knowledge of Seller and Stockholder, the accounts receivable of Seller
      are collectible, and there is no contest, claim, or right of set off, under
      any
      contract with any obligor of an accounts receivable relating to the amount
      or
      validity of such accounts receivable.

     

    2.7
      Taxes.
      

     

    (a) Except
      as
      set forth in Section 2.7(a) of the Disclosure Schedule:

     

    (i) Seller
      has (A) duly and timely filed or caused to be filed with the Internal Revenue
      Service or other applicable Governmental Entity (collectively, "Taxing
      Authorities")
      all
      Tax Returns (as defined below) that are required to be filed by or on behalf
      of
      Seller and that include or relate to the Purchased Assets or the Business,
      which
      Tax Returns are true, correct and complete, and (B) duly and timely paid in
      full
      or caused to be paid in full, or recorded a provision for such payment on the
      books and records of Seller in accordance with GAAP for the payment of, all
      Taxes that are due and payable and any Taxes that could result in a Lien on
      any
      Purchased Asset or the Business. Seller has adequate reserves for the payment
      of
      all Taxes that are not due and payable;

     

    (ii) Seller
      has duly and timely complied with all applicable Laws relating to the collection
      or withholding of Taxes, and the reporting and remittance thereof to the
      applicable Taxing Authorities;

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (iii) no
      audit,
      examination, investigation, reassessment or other administrative or court
      proceeding (collectively, a "Tax
      Proceeding")
      is
      pending, proposed, or threatened, with regard to any Tax or Tax Return referred
      to in clause (i) above;

     

    (iv) there
      is
      no Lien for any Tax upon any of the Purchased Assets or the
      Business;

     

    (v) there
      is
      no outstanding request for a ruling from any Taxing Authority, closing agreement
      (within the meaning of Section 7121 of the Code or any analogous provision
      of
      applicable Law) relating to any Tax for which Seller is or may be liable or
      with
      respect to Seller's income, assets or business, power of attorney relating
      to,
      or in connection with, any Tax that could result in a Lien on any Purchased
      Asset or the Business; 

     

    (vi) none
      of
      the Purchased Assets is "tax-exempt bond financed property" or "tax-exempt
      use
      property" within the meaning of Section 168(g) or (h), respectively, of the
      Code
      or any similar provision of applicable Law;

     

    (vii) none
      of
      the Purchased Assets is required to be treated as being owned by any other
      person pursuant to the "safe harbor" leasing provisions of Section 168(f)(8)
      of
      the Internal Revenue Code of 1954 as in effect prior to the repeal of those
      "safe harbor" leasing provisions or any similar provision of applicable
      Law;

     

    (viii) no
      claim
      has ever been made by a Taxing Authority in a jurisdiction where Seller or
      the
      Stockholder has not paid any Tax or filed Tax Returns relating to the Business
      or any Purchased Asset asserting that Seller or the Stockholder is or may be
      subject to Tax in such jurisdiction.

     

    (ix) Seller
      is, and has always been an "S-Corp" for all Tax purposes.

     

    (b) Seller
      has provided to Buyer true, complete and correct copies of (i) all Federal
      and
      Corporate Income Tax Returns relating to, and (ii) all audit reports relating
      to, each proposed adjustment, if any, made by any Taxing Authority with respect
      to any taxable period ending after December 31, 2001 and any and all Taxes
      with
      respect to which a Lien may be imposed on any Purchased Asset or the
      Business.

     

    (c) As
      used
      herein, (i) "Tax
      Return"
      means
      any return, declaration, report, information return or statement, and any
      amendment thereto, including without limitation any consolidated, combined
      or
      unitary return or other document (including any related or supporting
      information), filed or required to be filed with any Taxing Authority in
      connection with the determination, assessment, collection, payment, refund
      or
      credit of any federal, state, local or foreign Tax or the administration of
      any
      Laws relating to any Tax or ERISA, and (ii) "Tax" or "Taxes" means any and
      all
      taxes, charges, fees, levies, deficiencies or other assessments of whatever
      kind
      or nature including, without limitation, all net income, gross income, profits,
      gross receipts, excise, real or personal property, sales, ad
      valorem,
      withholding, social security, retirement, excise, employment, unemployment,
      minimum, estimated, severance, stamp, property, occupation, environmental,
      windfall profits, use, service, net worth, payroll, franchise, license, gains,
      customs, transfer, recording and other taxes, customs duty, fees assessments
      or
      charges of any kind whatsoever, imposed by any Taxing Authority, including
      any
      liability therefor as a transferee (including without limitation under Section
      6901 of the Code or any similar provision of applicable Law), as a result of
      Treasury Regulation §1.1502-6 or any similar provision of applicable Law, or as
      a result of any Tax sharing or similar agreement, together with any interest,
      penalties or additions to tax relating thereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    2.7A
      Accuracy
      of Ledgers.
      Seller’s revenues and expenses ledgers delivered to Buyer are true and accurate
      in all material respects.

     

    2.7B
      Financial
      Statements.
      Attached to Section 2.7B of the Disclosure Schedules are the (i) audited balance
      sheets of Seller as of December 31, 2002, 2003 and 2004, respectively, the
      audited statement of income and accumulated deficit and audited statement of
      cash flows of Seller, in each case, for the 12 month period ended December
      31,
      2002, 2003 and 2004, respectively, and (ii) the unaudited balance sheet
      of
      Seller as of September 30, 2005 (the "Balance
      Sheet")
      and
      the unaudited statement of profits and losses for the 9 months ended September
      30, 2005 (collectively, the "Financial
      Statements").
      The
      Financial Statements, (i) except with respect to the unaudited financial
      statements described above, have been prepared in accordance with U.S. generally
      accepted accounting principles, (ii) are derived from, and agree with, the
      books
      and records of the Seller, and (iii) fairly present the financial condition
      of
      Seller as of the date thereof and the results of operations of the Seller for
      the periods set forth therein. 

     

    2.8
      Real
      Property.
      Except
      as set forth in Section 2.8 of the Disclosure Schedule, Seller does not own
      any
      real property and is neither a landlord, sublandlord or licensor nor a tenant,
      subtenant or licensee under any lease, sublease, license or occupancy agreement
      with respect to real property.

     

    2.9
      Intellectual
      Property.
      Section
      2.9 of the Disclosure Schedule lists all Intellectual Property that is owned
      by
      Seller or any other Person and used by Seller in the operations of the Business,
      and there are no pending or, to the best knowledge of each of Seller and the
      Stockholder, threatened claims by any Person relating to Seller's use of any
      Intellectual Property. With respect to such Intellectual Property, Seller has,
      free and clear of all Liens, such rights of ownership or such rights of license,
      lease or other agreement to use the Intellectual Property as are necessary
      to
      permit Seller to conduct its business and, except as set forth on Section 2.9
      of
      the Disclosure Schedule, Seller is not obligated to pay any royalty or similar
      fee to any Person in connection with Seller's use or license of any of the
      Intellectual Property.

     

    2.10
      Material
      Contracts.
      Section
      2.10 of the Disclosure Schedule sets forth a true, complete and correct list
      of
      every Contract that: (i) provides for aggregate future payments by Seller or
      to
      Seller of more than $1,000 (excluding purchase orders and invoices arising
      in
      the ordinary course of business); (ii) was entered into by Seller with the
      Stockholder, or an officer, director or significant employee of Seller; (iii)
      is
      a collective bargaining or similar agreement; (iv) guarantees or indemnifies
      or
      otherwise causes Seller to be liable or otherwise responsible for the
      Liabilities of another or provides for a charitable contribution by Seller;
      (v)
      involves an agreement with any bank, finance company or similar organization;
      (vi) restricts Seller or the Stockholder or the Business from engaging in any
      business or activity anywhere in the world; (vii) is an employment agreement,
      consulting agreement or similar arrangement with any employee of Seller; (viii)
      involves an agreement or any other Contract providing for payments from Seller
      to any other Person, or by any Person to Seller, based on sales, purchases
      or
      profits, other than direct payments for goods; or (ix) any other Contract that
      is material to the rights, properties, assets, business or operations of Seller
      or the Business (the foregoing, collectively, "Material
      Contracts").
      Seller has heretofore provided true, complete and correct copies of all Material
      Contracts to Buyer.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    There
      is
      not, and to the best knowledge of each of Seller and the Stockholder, there
      has
      not been claimed or alleged by any Person with respect to any Material Contract,
      any existing default, or event that with notice or lapse of time or both would
      constitute a default or event of default, on the part of Seller or, to the
      best
      knowledge of Seller and the Stockholder, on the part of any other party thereto,
      and no consent, approval, authorization or waiver from, or notice to, any
      Governmental Entity or other Person is required in order to maintain in full
      force and effect any of the Material Contracts, other than such consents and
      waivers that have been obtained and are unconditional and in full force and
      effect and such notices that have been duly given and copies of such consents,
      waivers and notices have been delivered to Buyer.

     

    2.11
      Customers,
      Suppliers and Distributors.
      Section
      2.11 of the Disclosure Schedule sets forth (i) a list of all of Seller's
      customers, (ii) the sales of Seller for the 12 month period ended November
      30,
      2005, and (iii) the suppliers and distributors of Seller during such period.
      There has not been any adverse change in the business relationship of Seller
      with any such customer, supplier or distributor, and Seller is not aware of
      any
      threatened loss of any such customer, supplier or distributor. 

     

    Attached
      to Section 2.11 of the Disclosure Schedule are the two most recent forms of
      Seller's standard customer agreement.

     

    2.12
      Litigation;
      Compliance with Laws; Licenses and Permits.
      

     

    (a) Except
      as
      set forth in Section 2.12 of the Disclosure Schedule, there is no claim, suit,
      action or proceeding ("Proceeding")
      pending, nor, to the best knowledge of Seller or the Stockholder, is there
      any
      investigation or Proceeding threatened, that involves or affects Seller or
      the
      Business, by or before any Governmental Entity, court, arbitration panel or
      any
      other Person.

     

    (b) Except
      as
      set forth in Section 2.12 of the Disclosure Schedule, Seller and the Business
      have complied with all applicable federal, state, county, municipal or other
      local criminal, civil or common laws, statutes, ordinances, orders, codes,
      rules, regulations, permits, policies, guidance documents, judgments, decrees,
      injunctions, or agreements of any Governmental Entity (collectively,
      "Laws"),
      including but not limited to Laws relating to zoning, building codes, antitrust,
      occupational safety and health, industrial hygiene, environmental protection,
      water, ground or air pollution, consumer product safety, product liability,
      hiring, wages, hours, employee benefit plans and programs, collective bargaining
      and the payment of withholding and social security taxes. Since January 1,
      2001,
      Seller has not received any notice of any violation of any Law.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c) Except
      as
      set forth in Section 2.12 of the Disclosure Schedule, each of Seller and the
      Business has every license, permit, certification, qualification or franchise
      issued by any Governmental Entity (each, a "License")
      and
      every approval, authorization, waiver, variance, exemption, consent or
      ratification by or on behalf of any Person that is not a party to this Agreement
      (each, a "Permit")
      required for it to conduct its business as presently conducted. All such
      Licenses and Permits are specified on Schedule 2.12. All such Licenses and
      Permits are in full force and effect and neither Seller nor the Stockholder
      has
      received notice of any pending cancellation or suspension of any thereof nor,
      to
      the best knowledge of Seller or the Stockholder, is any cancellation or
      suspension thereof threatened. The applicability and validity of each such
      License and Consent will not be adversely affected by the consummation of the
      transactions contemplated by this Agreement. Each such License or Permit is
      set
      forth in Section 2.12 of the Disclosure Schedule.

     

    2.13
      Product
      or Service Claims.
      No
      product or service liability claim or a claim with respect to the conduct of
      the
      Business is pending, or to the best knowledge of each of Seller and the
      Stockholder threatened, against Seller or against any other party with respect
      to the products or services of the Business. Section 2.13 of the Disclosure
      Schedule lists all service and product liability claims asserted against Seller
      with respect to the products or services of the Business or Seller during the
      last five (5) years.

     

    2.14
      No
      Brokers.
      Neither
      Seller nor the Stockholder has employed, or otherwise engaged, any broker or
      finder or incurred any liability for any brokerage or investment banking fees,
      commissions, finders' fees or other similar fees in connection with the
      transactions contemplated by this Agreement. 

     

    2.15
      Assets
      Utilized in the Business.
      Except
      as set forth in Section 2.15 of the Disclosure Schedule, the assets, properties
      and rights owned, leased or licensed by Seller or used in connection with the
      Business and that are owned, leased or licensed by Seller as of the date hereof,
      and all the agreements to which Seller is a party, constitute all of the
      properties, assets and agreements necessary to Seller in connection with the
      operation and conduct by Seller of the Business as presently and as proposed
      to
      be conducted.

     

    2.16
      Related
      Party Transactions.
      Section
      2.16 of the Disclosure Schedule sets forth all services provided by the
      Stockholder to Seller and all other arrangements or agreements involving the
      Stockholder and Seller for the last 5 years.

     

    2.17
      Insurance.
      Section
      2.17 of the Disclosure Schedule contains a complete and correct list of all
      policies of insurance of any kind or nature covering Seller, including policies
      of life, fire, theft, casualty, product liability, workmen's compensation,
      business interruption, employee fidelity and other casualty and liability
      insurance, indicating the type of coverage, name of insured, the insurer, the
      expiration date of each policy, the amount of coverage and whether on an
      "occurrence" or "claims made" basis. All such policies are: (i) with insurance
      companies that are financially sound and reputable and are in full force and
      effect; (ii) sufficient for compliance with all material requirements of law
      and
      of all applicable material agreements; and (iii) valid, outstanding and
      enforceable policies. Complete and correct copies of such policies have been
      furnished to Buyer. All such insurance policies or comparable coverage shall
      continue in full force and effect through the Closing Date. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    2.18
      No
      Misstatements or Omissions.
      No
      representation or warranty by Seller or the Stockholder contained in this
      Agreement and no statement contained in any certificate, list, Schedule, Exhibit
      or other instrument specified or referred to in this Agreement, whether
      heretofore furnished to Buyer or hereafter furnished to Buyer pursuant to this
      Agreement, contains or will contain any untrue statement of a material fact
      or
      omits or will omit any material fact necessary to make the statements contained
      therein, in light of the circumstances under which it was made, not
      misleading.

     

    2.19
      Labor
      Matters and Employment Matters.

     

    (a) Set
      forth
      on Section 2.19(a) of the Disclosure Schedule is a list of all employees of
      Seller as of the date hereof and their respective positions, hire dates and,
      stated separately, their base wage rates and the nature and amount of any other
      compensation.

     

    (b) Set
      forth
      on Section 2.19(b) of the Disclosure Schedule is a list of (i) each oral or
      written employment agreement, contract or severance protection agreement
      existing as of the date hereof, individually or collectively, with Seller’s
      employees (collectively, the "Employment
      Agreements"),
      and
      (ii) the name of each employee of Seller with whom Seller has entered into
      an
      agreement or contract as of the date hereof providing for retention payments
      (collectively, the "Retention
      Agreements").
      Seller has furnished to the Buyer all Employment Agreements and Retention
      Agreements.

     

    (c) (i)
      Seller is not party to or bound by any collective bargaining agreement or
      similar agreement with any labor organization, or work rules or practices agreed
      to with any labor organization or employee association applicable to Seller’s
      employees, (ii) none of Seller’s employees are represented by any labor
      organization, and there are no organizational campaigns, demands, petitions
      or
      proceedings pending or, to the knowledge of Seller or the Stockholder,
      threatened by any labor organization or group of employees seeking recognition
      or certification as collective bargaining representative of any group of
      Seller’s employees, (iii) to the knowledge of Seller or the Stockholder, there
      are no union claims to represent the employees of Seller, (iv) there are no
      strikes, controversies, slowdowns, work stoppages, lockouts or labor disputes
      pending or, to the knowledge of the Seller or the Stockholder, threatened
      against or affecting Seller, and there has not been any such action during
      the
      past five (5) years, and (v) no unfair labor practice charges, jurisdictional
      disputes, or other matters within the jurisdiction of the National Labor
      Relations Board has occurred, is pending or, to the knowledge of Seller or
      the
      Stockholder, is threatened before the National Labor Relations Board or other
      governmental entity. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (d) Seller
      is, and has, at all times during at least the last three (3) years, been in
      compliance with all applicable laws, regulations and ordinances respecting
      immigration, employment and employment practices, and the terms and conditions
      of employment, including, without limitation, employment standards, equal
      employment opportunity, family and medical leave, wages, hours of work and
      occupational health and safety. 

     

    (e) (i)
      There
      are no pending, or to the knowledge of Seller or the Stockholder, threatened
      Equal Employment Opportunity Commission or analogous state or local agency
      charges, complaints or other claims of employment discrimination against Seller
      by any employee or independent contractor of Seller; (ii) there are no pending,
      or to the knowledge of Seller or the Stockholder, threatened wage complaints,
      investigations, reviews or audits with respect to any of Seller’s employees by
      the Department of Labor or analogous state or local governmental entities,
      and
      Seller has not received notice of the intent of the Department of Labor or
      any
      other government entity to conduct any such investigation, review or audit;
      (iii) there are no pending, or to the knowledge of Seller or the Stockholder,
      threatened occupational safety and health complaints, investigations or reviews
      with respect to any of Seller’s employees by the Occupational Safety and Health
      Administration or analogous state or local government entities, and Seller
      has
      not received notice of the intent of the Occupational Safety and Health
      Administration or any other government entity to conduct any such investigation
      or review; and (iv) Seller has not received notice of the intent of any
      government entity responsible for the enforcement of labor and employment laws
      to conduct any investigation, audit or review and, to the knowledge of Seller
      or
      the Stockholder, no such investigation is in progress with respect to
      Seller.

     

    (f) Since
      January 1, 2004 Seller has not effected (i) a "plant closing" as defined in
      the
      Worker Adjustment and Retraining Notification Act of 1988 ("WARN") affecting
      any
      site of employment or one or more facilities or operating units within any
      site
      of employment or facility of Seller, or (ii) a "mass layoff" as defined in
      WARN
      affecting any site of employment or facility of Seller; nor has Seller been
      affected by any transaction or engaged in layoffs or employment terminations
      sufficient in number to trigger application of any similar state or local law.
      None of Seller’s employees has suffered an "employment loss" as defined in WARN
      since January 1, 2004. Buyer shall not incur any liability or other obligation
      with respect to WARN or any state or local plant closing or mass layoff statute
      in connection with or as a result of the transactions contemplated by this
      Agreement. Seller shall be solely and exclusively liable to provide such WARN
      or
      other plant closing or mass layoff notices as may be necessary in connection
      with any loss of employment by any employee of Seller through and including
      the
      Closing Date.

     

    (g) The
      consummation of the transaction contemplated hereunder will not accelerate
      the
      time of payment of any compensation due to any employee of Seller or result
      in
      an excess parachute payment to any employee of Seller within the meaning of
      Code
      Section 280G.

     

    (h) Set
      forth
      on Section 2.19(h)(A) of the Disclosure Schedule is a complete list of Seller’s
      current foreign national employees on whose behalf Seller has submitted
      applications and petitions to the U.S. Department of Labor, U.S. Immigration
      and
      Naturalization Service, and U.S. Department of State for immigration employment
      and visa benefits; and Seller has provided the Buyer with copies of all such
      applications and petitions and all government notices regarding adjudications
      of
      such notices and petitions. Section 2.19(h)(B) of the Disclosure Schedule
      identifies and describes any pending or, to the knowledge of Seller or the
      Stockholder, threatened actions against Seller for violations under the
      Immigration Reform and Control Act of 1986 respecting such employees of
      Seller.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (i) Set
      forth
      on Section 2.19(i) of the Disclosure Schedule is a complete list of all business
      of Seller involving federal contracts giving rise to any reporting or filing
      obligations with the Office of Federal Contract Compliance Programs ("OFCCP"),
      and Seller has complied in all material respects with all hiring and employment
      obligations applicable under OFCCP rules and regulations.

     

    2.20
      Environmental
      Matters.
      To the
      best knowledge of each of Seller and the Stockholder:

     

    (a) Seller
      is
      in compliance with, and the Business has been conducted in material compliance
      with, all Environmental Laws (as defined below) and Environmental Permits (as
      defined below);

     

    (b) no
      Site
      (as defined below) is a treatment, storage or disposal facility, as defined
      in
      and regulated under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901
      et seq., is on or ever was listed or is proposed for listing on the National
      Priorities List pursuant to the Comprehensive Environmental Response,
      Compensation and Liability Act, 42 U.S.C. § 9601 et seq., or on any similar
      state list of sites requiring investigation or cleanup;

     

    (c) Neither
      Seller nor the Stockholder has received any notice that remains pending or
      outstanding with respect to its business or any Site from any governmental
      entity or person alleging that Seller is not in material compliance with any
      Environmental Law;

     

    (d) there
      has
      been no release of a Hazardous Substance (as defined below) at, from, in, to,
      on
      or under any Site and no Hazardous Substances are present in, on, about or
      migrating to or from any Site that could give rise to an Environmental Claim
      (as
      defined below) against Seller;

     

    (e) there
      are
      no pending or outstanding corrective actions requested, required or being
      conducted by any governmental entity for the investigation, remediation or
      cleanup of any Site, and there have been no such corrective actions, whether
      still pending or otherwise;

     

    (f) the
      Business has obtained and holds all necessary environmental permits, and those
      environmental permits will remain in full force and effect after the
      consummation of the transactions contemplated hereby;

     

    (g) there
      are
      no past or pending, or to the knowledge of each of Seller and the Stockholder
      threatened, Environmental Claims against Seller or, with respect to the
      Business, Seller or the Purchased Assets, the Stockholder, and neither Seller
      nor the Stockholder is aware of any facts or circumstances which could be
      expected to form the basis for any Environmental Claim against the
      Business;

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (h) neither
      Seller, any predecessor of Seller, nor any entity previously owned by Seller,
      has transported or arranged for the treatment, storage, handling, disposal,
      or
      transportation of any Hazardous Substance to any off-Site location that could
      result in an Environmental Claim against Seller;

     

    (i) there
      are
      no (i) underground storage tanks, active or abandoned, (ii) polychlorinated
      biphenyl containing equipment, or (iii) asbestos containing material at any
      Site; and

     

    (j) there
      have been no environmental investigations, studies, audits, tests, reviews
      or
      other analyses (which have been reduced to writing) conducted by, on behalf
      of,
      or that are in the possession of Seller with respect to any Site or any
      transportation, handling or disposal of any Hazardous Substance that has not
      been delivered to Buyer prior to execution of this Agreement.

     

    As
      used
      herein, (i) "Environment"
      means
      all air, surface water, groundwater, or land, including land surface or
      subsurface, including all fish, wildlife, biota and all other natural resources;
      (ii) "Environmental
      Claim"
      means
      any and all administrative or judicial actions, suits, orders, claims, liens,
      notices, notices of violations, investigations, complaints, requests for
      information, proceedings or other communications (written or oral), whether
      criminal or civil, (collectively, "Claims")
      pursuant to or relating to any applicable Environmental Law by any person
      (including, but not limited to, any governmental entity, person and citizens'
      group) based upon, alleging, asserting, or claiming any actual or potential
      (x)
      violation of or liability under any Environmental Law, (y) violation of any
      environmental permit, or (z) liability for investigatory costs, cleanup costs,
      removal costs, remedial costs, response costs, natural resource damages,
      property damage, personal injury, fines, or penalties arising out of, based
      on,
      resulting from, or related to the presence, release, or threatened release
      into
      the Environment, of any Hazardous Substances at any location, including, but
      not
      limited to, any off-Site location to which Hazardous Substances or materials
      containing Hazardous Substances were sent for handling, storage, treatment,
      or
      disposal; (iii) "Environmental
      Law"
      means
      any and all Laws relating to the protection of health and the Environment,
      worker health and safety, and/or governing the handling, use, generation,
      treatment, storage, transportation, disposal, manufacture, distribution,
      formulation, packaging, labeling, or release of Hazardous Substances, whether
      now existing or subsequently amended or enacted, and the state analogies
      thereto, all as amended or superseded from time to time; and any common law
      doctrine, including, but not limited to, negligence, nuisance, trespass,
      personal injury, or property damage related to or arising out of the presence,
      Release, or exposure to a Hazardous Substance; (iv) "Hazardous
      Substance"
      means
      petroleum, petroleum hydrocarbons or petroleum products, petroleum by-products,
      radioactive materials, asbestos or asbestos-containing materials, gasoline,
      diesel fuel, pesticides, radon, urea formaldehyde, lead or lead-containing
      materials, polychlorinated biphenyls; and any other chemicals, materials,
      substances or wastes in any amount or concentration which are now included
      in
      the definition of "hazardous substances," "hazardous materials," "hazardous
      wastes," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
      substances," "toxic pollutants," "pollutants," "regulated substances," "solid
      wastes," or "contaminants" or words of similar import, under any Environmental
      Law; and (v) "Site"
      means
      any of the real properties currently or previously owned, leased, used or
      operated by Seller, any predecessors of Seller or any entities previously owned
      by Seller, including all soil, subsoil, surface waters and groundwater
      thereat.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    2.21
      No
      Material Adverse Change.
      Except
      as disclosed in Section 2.21 of the Disclosure Schedule, since December 31,
      2004, (a) no event, condition or circumstance has occurred that could, or could
      be reasonably likely to, have a material adverse effect on the Business or
      the
      Purchased Assets, or on the condition (financial or otherwise), results of
      operations or prospects of Seller or the Business; and (b) the Business has
      been
      conducted in the ordinary course and consistent with past practice.

     

    2.22
      No
      Undisclosed Liabilities.
      

     

    (a) Seller
      does not have any Liabilities other than those that are set forth in the Balance
      Sheet, each of which was incurred in the ordinary course of business and none
      of
      which, individually or in the aggregate, is material to the business,
      operations, condition or prospects of the Business or the Purchased
      Assets.

     

    (b) The
      accounts payable of Seller set forth in Schedule 1.4(viii) of the Disclosure
      Statement or are the result of bona fide transactions in the ordinary course
      of
      business and are not yet due and payable as at the date hereof, in accordance
      with the respective invoices relating thereto. 

     

    2.23
      Solvency.
      Immediately prior to and upon consummation of the transactions contemplated
      under this Agreement, Seller will be solvent, will have assets having a fair
      value in excess of the amount required to pay its Liabilities as they become
      due
      and will have access to adequate capital for the conduct of its business and
      the
      ability to pay its debts and such Liabilities as they mature.

     

    2.24
      Employee
      Benefits.
      i) Disclosure
      of All Plans.
      Except
      as set forth in Section 2.24 of the Disclosure Schedule, neither the Seller
      nor
      any other company or entity, which
      together with the Seller has at any time constituted a member of the Seller’s
      "controlled group" or "affiliated service group" (within the meaning of Sections
      4001(a)(14) and/or (b) of the Employee Retirement Income Security Act of 1974,
      as amended ("ERISA")
      and/or
      Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
      amended (the "Code")
      (such
      group or groups and each member thereof hereinafter referred to individually
      and
      collectively as the "Group")),
      has
      at any time adopted, sponsored or maintained, has any liability for or is a
      fiduciary with respect to, or has any present or future obligation to contribute
      to or make payment under, or has or is making contributions or payments under,
      (i) any employee benefit plan (as defined in Section 3(3) of ERISA) regardless
      of whether such plan is actually covered by ERISA (including any Employee
      Welfare Benefit Plan or Employee Pension Plan, as defined in ERISA), or (ii)
      any
      other benefit plan, program, policy, practice, contract or arrangement of any
      kind whatsoever (whether for the benefit of present, former, retired or future
      employees, officers, directors, consultants or independent contractors of the
      Seller or any member of the Group, or for the benefit of any other person or
      persons) including, without limitation, with respect to disability, relocation,
      child care, educational assistance, deferred compensation, pension, retirement,
      profit sharing, thrift, savings, stock ownership, stock bonus, restricted stock,
      health, dental, medical, life, hospitalization, stock purchase, stock option,
      incentive, bonus, sabbatical leave, vacation, severance, cafeteria, performance
      award, stock or stock-related awards, fringe benefits or other contribution,
      benefit or payment of any kind, whether formal or informal, oral or written,
      funded or unfunded and whether or not legally binding, or (iii) any employment,
      consulting, service or other contract or agreement of any kind whatsoever
      (collectively, "Employee
      Plans").
      Neither the Seller nor any member of the Group has any plan or commitment,
      whether legally binding or not, to establish any new Employee Plan, to modify
      any Employee Plan, or to enter into any Employee Plan, nor do they have any
      intention or commitment to do any of the foregoing.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (b) Documentation.
      The
      Seller and all members of the Group have provided to Buyer (i) correct and
      complete copies of all documents embodying or relating to each Employee Plan
      including all amendments thereto and copies of all forms of agreement and
      enrollment used therewith, and all trusts, group annuity contracts, insurance
      policies or other funding media in connection with these Employee Plans; (ii)
      the most recent annual reports (Series 5500 and all schedules thereto), if
      any,
      required under ERISA or the Code in connection with each Employee Plan or
      related trust; and (iii) the most recent Internal Revenue Service ("IRS")
      determination letter, opinion letter and rulings relating to each Employee
      Plan.
      Except as required to comply with applicable law or as otherwise required by
      this Agreement, no plan amendments have been adopted, no changes to the
      documents have been made, and no such amendments or changes shall be adopted
      or
      made prior to the Closing Date and since the date such documents were supplied
      to the Buyer.

     

    (c) Qualified
      Status and Current Determination Letter.
      Each
      Employee Plan which is intended to qualify under Section401(a) of the Code
      and
      each trust intended to qualify under Section 501(a) of the Code has received
      a
      favorable determination letter from the IRS with respect to each such Employee
      Plan as to its qualified status under the Code, including all amendments to
      the
      Code effected by the Tax Reform Act of 1986 and subsequent legislation enacted
      through 2001, and neither the Seller nor any member of the Group knows or has
      reason to know why each such Employee Plan or trust should not continue to
      be so
      qualified.

     

    (d) Employee
      Plan Compliance.
      Except
      as set forth in Section 2.24 of the Disclosure Schedule, (i) each Employee
      Plan
      has been established and maintained in all material respects in accordance
      with
      its terms and in compliance with all applicable laws, statutes, orders, rules
      and regulations including, without limitation, ERISA and the Code, and no
      communication has been received from a governmental authority asserting that
      an
      Employee Plan is not in compliance with applicable laws, statutes, orders,
      rules
      and regulations; (ii) no prohibited transaction (within the meaning of Section
      4975 of the Code or Section 406 of ERISA) has occurred with respect to any
      Employee Plan; (iii) there are no actions, suits, claims, or governmental agency
      action or investigation pending or threatened (other than routine claims for
      benefits) against any Employee Plan or against the assets of any Employee Plan,
      and neither the Seller nor any member of the Group have any reason to expect
      such an action, suit, claim, or governmental agency action or investigation
      to
      arise; (iv) each Employee Plan can be amended, terminated or otherwise
      discontinued before or after the Closing Date in accordance with its terms,
      without liability to the Seller, any member of the Group or the Buyer (other
      than ordinary administration expenses or Liabilities typically incurred in
      a
      termination event); (v) there are no audits, inquiries or proceedings pending
      or
      threatened by the IRS or Department of Labor ("DOL") with respect to any
      Employee Plan; (vi)neither the Seller nor any member of the Group is subject
      to
      any penalty or tax with respect to any Employee Plan under Section 402(i) of
      ERISA or Sections 4975 through 4980 of the Code; and (vii) neither the Seller
      nor any member of the Group has engaged in a transaction that could be subject
      to Section 4069 or 4212(c) of ERISA. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (e) No
      Pension Plans.
      The
      Seller and all members of the Group have not ever maintained, established,
      sponsored, participated in or contributed to any employee pension benefit plan
      (as defined Section 3(2) of ERISA) which was, or is, subject to Part 3 of
      Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code,
      and neither the Seller nor any member of the Group has incurred, or expects
      to
      incur, any liability under Title IV of ERISA. 

     

    (f) No
      Multiemployer Plans.
      At no
      time has the Seller or any member of the Group sponsored, maintained,
      contributed to, had any obligation to contribute to, or incurred, or expects
      to
      incur, any liability regarding any multiemployer plan (as defined in Section
      3(37) or Section 4001(a)(2) of ERISA).

     

    (g) No
      Retiree Benefits.
      Neither
      the Seller nor any member of the Group maintains, sponsors, contributes to,
      or
      has any obligation to any retired or former employee of the Seller with respect
      to the provision of any disability (long or short term), hospitalization,
      medical, dental or life insurance benefits, whether insured or self-insured,
      or
      coverage under any employee welfare benefit plan (within the meaning of Section
      3(1) of ERISA) or any similar benefit plan maintained by the Seller or any
      member of the Group, other than as required under Section 4980B of the Code
      or
      Part 6 of Title I of ERISA or any similar state law. Neither Seller nor any
      member of the Group have represented, promised or contracted (whether in oral
      or
      written form) to an employee (either individually or to employees as a group)
      that such employee(s) would be provided with life insurance, medical or other
      employee benefits upon their retirement or termination of employment, except
      to
      the extent required by statute. 

     

    (h) Compliance
      with COBRA.
      The
      Seller and all member of the Group have complied with all notice and
      continuation of health care coverage requirements under Section 4980B of the
      Code and Part 6 of Title I of ERISA or any applicable state law. 

     

    (i) No
      Foreign Plans.
      Neither
      the Seller nor any member of the Group maintains, sponsors, has any obligation
      or liability to or provides or otherwise makes available retirement or deferred
      benefits of any kind whatsoever under any benefit plan or Employee Plan
      established or maintained outside of the United States.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (j) Effect
      of Transaction.
      The
      execution of this Agreement and the consummation of the transactions
      contemplated hereby and thereby will not (either alone or upon the occurrence
      of
      any additional or subsequent events) constitute an event under any Employee
      Plan, trust or loan that will or may result in any payment (whether of severance
      pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
      distribution, increase in benefits or obligation to fund benefits with respect
      to any Employee Benefit Plan. No payment or benefit which will or may be made
      by
      the Seller, any member of the Group or the Buyer as a result of the execution
      of
      this Agreement and consummation of the transactions contemplated hereby will
      be
      characterized as a parachute payment (within the meaning of Section 280G of
      the
      Code).

     

    2.25
      Investment
      Representations.
      (a)
      Stockholder is an "Accredited Investor", as that term is defined under Section
      501(a) of Regulation D under the Securities Act of 1933, as amended (the "Act").
      Stockholder is not a broker or dealer registered with the Securities and
      Exchange Commission under the Securities Exchange Act of 1934, or an entity
      engaged in a business that would require it to be so registered. 

     

    (b)
      Prior
      to the date hereof and the Closing Date, Stockholder has had full opportunity
      to
      ask questions of and receive answers from AMAC and its officers and authorized
      representatives regarding the terms and conditions of the Shares. Stockholder
      confirms that it does not desire to receive any further information. Stockholder
      has sufficient knowledge and experience in financial and business matters so
      as
      to be able to evaluate the merits and risks of acquiring the
      Shares.

     

    (c)
      Stockholder acknowledges that the Shares have not been registered under the
      Act
      or the securities laws of any state, are exempt from such registration and
      are
      being issued in reliance on Section 4(2) of the Act, specifically Rule 506
      promulgated under Regulation D, and in reliance on Stockholder's representations
      and warranties contained herein. Stockholder has not received any general
      solicitation or general advertising regarding the acquisition of the Shares.
      Stockholder acknowledges that the Shares cannot be resold unless they are
      registered under the Act or exemption from registration is
      available.

     

    (d)
      Stockholder represents and warrants that the Shares are being acquired by
      Stockholder for his own account, for investment purposes and not with a view
      to
      distribution or resale, nor with the intention of sale, transfer or other
      disposition, in whole or any part for any particular price, or at any particular
      time, or upon the happening of any particular event or circumstance. Stockholder
      agrees to hold the Shares indefinitely unless they are subsequently registered
      under the Act, or an exemption from such registration is available, and
      acknowledges that AMAC will require an opinion of counsel, as a condition of
      any
      sale or transfer, that registration is not required under the Act or applicable
      state securities laws. Certificates to be issued will bear a legend indicating
      that the Shares have not been registered under the Act and are subject to
      restrictions on transferability.

     

    Section
      3. Representations
      and Warranties of Buyer.
      Buyer
      represents and warrants to Seller and the Stockholder that each of the following
      statements is true and correct as of the date hereof:

     

    3.1
      Organization.
      Buyer
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of its jurisdiction of organization, with full power and authority to
      conduct its business and to own and operate its assets and properties as
      presently conducted and operated.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    3.2
      Authorization;
      Validity of Agreement.
      Buyer
      has the right, power and authority to execute and deliver this Agreement and
      each of the other Purchase Documents to which it is a party (the "Buyer
      Purchase Documents")
      and to
      consummate the transactions contemplated hereby and thereby and to make the
      representations set forth herein and therein. The execution and delivery of
      the
      Buyer Purchase Documents and the consummation of the transactions contemplated
      hereby and thereby have been duly and validly authorized by Buyer and no other
      proceedings on the part of Buyer are necessary to authorize the Buyer Purchase
      Documents or the consummation of the transactions contemplated hereby and
      thereby. Each of the Buyer Purchase Documents have been duly and validly
      executed by Buyer and constitute the valid and binding agreement of Buyer,
      enforceable against Buyer in accordance with its terms, except as such
      enforceability may be subject to or limited by applicable bankruptcy,
      insolvency, reorganization, or other similar laws, now or hereafter in effect,
      affecting the enforcement of creditors' rights generally.

     

    3.3
      Consents
      and Approvals; No Violation.
      The
      execution, performance and delivery by Buyer of the Buyer Purchase Documents
      and
      the consummation by Buyer of the transactions contemplated hereby and thereby,
      and compliance by Buyer with the provisions hereto and thereto do not and will
      not: (a) conflict with or breach any provision of the Certificate of
      Incorporation of Buyer; (b) violate or breach in any respect any provision
      of,
      or constitute a default (or an event which, with notice or lapse of time or
      both
      would constitute a default) under, any of the terms, covenants, conditions
      or
      provisions of, or give rise to a right to terminate or accelerate or increase
      the amount of payment due under, any note, bond, mortgage, indenture, deed
      of
      trust, license, franchise, permit, lease, contract, agreement or other
      instrument, commitment or obligation to which Buyer is a party, or by which
      Buyer or any of its properties or assets may be bound; (c) require Buyer to
      make
      any filing or registration with, or obtain any other permit, authorization,
      consent or approval of, any governmental or regulatory authority; (d) violate
      any order, writ, injunction, decree, judgment, or ruling of any court or
      governmental authority applicable to Buyer or any of its assets; or (e) violate
      any statute, law, rule or regulation applicable to Buyer.

     

    Section
      4. Covenants
      of the Parties.

     

    4.1
      Employee
      Matters.

     

    (a) Nothing
      in this Agreement shall confer upon any employee of Seller the right to
      employment with Buyer after the Closing Date. Buyer shall offer employment
      to
      all of Seller’s current employees as listed on Schedule 2.19(a) hereto (all such
      employees accepting such offer are hereinafter referred to as the "Transferred
      Employees"),
      on
      terms to be established by Buyer in its sole discretion. Buyer shall have no
      Liabilities with respect to Seller’s employees or independent contractors for
      periods prior to any such person becoming employees of, or independent
      contractors to, Buyer, including, but not limited to, Liabilities for wages,
      bonuses, vacation pay and employee benefits of any kind, and Seller shall be
      solely liable for the payment of any such Liabilities.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (b) Except
      to
      the extent specifically set forth in Section 4.1 of the Disclosure Schedule
      hereto, Buyer is not assuming and Seller shall remain liable for all Liabilities
      arising out of or in any way related to (i) all amounts required to be paid
      pursuant to any Employment Agreements, Retention Agreements and any other
      similar agreements between Seller and any of Seller’s employees, subject to and
      in accordance with the terms and conditions set forth in such agreements; (ii)
      any and all severance or termination costs that arise with respect to employees
      of Seller terminated from employment with Seller on or before the Closing Date
      (or whose notice of termination was delivered prior to such date); (iii) any
      claims by any employee of Seller relating to a termination or deemed termination
      on or prior to the Closing Date as a result of the transactions contemplated
      by
      this Agreement; (iv) any claims by any of Seller’s employees who refuse Buyer’s
      offer of employment; (v) any workers’ compensation claims by any Transferred
      Employee for injuries or illnesses incurred, sustained or resulting from
      work-related exposures or conditions prior to such Transferred Employee’s
      employment date with Buyer, if any (regardless of whether the claim related
      thereto is filed before or after the Closing Date); (vi) claims for any benefits
      accruing, or with respect to occurrences commencing, on or before the Closing
      Date under any of Seller’s benefit plans, including, but not limited to, (A)
      hospital benefits or any confinements that commenced on or before the Closing
      Date, including any covered charges of health care professionals relating to
      such confinements, (B) short-term and long-term disability benefits, if any,
      for
      disabilities that commenced on or before the Closing Date for the period that
      each of such affected individuals remain disabled, (C) life and survivor income
      benefits, if any, for deaths that occur on or prior to the Closing Date, (D)
      all
      benefits that are being, or may be, paid to, or with respect to, any of such
      employees who are on long-term or short-term disability or medical, family,
      personal or other leaves of absence as of the Closing Date, or who go on
      short-term, long-term, medical, family, personal or other leaves of absence
      after the Closing Date as a result of any injury, illness or other factor
      occurring on or prior to the Closing Date pursuant to the terms of such Seller
      benefit plans as in effect immediately prior to the Closing Date (including
      any
      subsequent benefit increases); (E) benefits under any "spending account" or
      similar arrangement under any "cafeteria plan" (as defined in Section 125 of
      the
      Internal Revenue Code of 1986, as amended) with respect to salary reduction
      elections made prior to the Closing Date, (F) benefits under all other benefit
      plans of Seller which accrue on or before the Closing Date; (vii) any
      independent contractor agreement or relationship to or involving Seller entered
      into prior to the Closing Date; (viii) other acts or omissions occurring or
      otherwise attributable to the period on or before the Closing Date with respect
      to the employment of, termination of employment of, provision of benefits to,
      and/or compensation of any of Seller’s employees, including, but not limited to,
      any personal injury, discrimination, wage/hour, family and medical leave, mass
      layoff, plant closing, harassment, wrongful discharge, or other wrongful
      employment practice, unfair labor practice, claims for benefits (including
      claims arising under ERISA or workers’ compensation laws), or other violation
      of, or obligations under, any labor, employment or benefits law; and (ix) all
      wages and salaries of Seller’s employees for work performed or services rendered
      by such employees on or prior to the Closing Date. The parties hereto
      acknowledge and agree that, except with respect to those benefit plans listed
      on
      Section 4.1 of the Disclosure Schedule (the “Assumed
      Plans”),
      as of
      the Closing Date, the Transferred Employees will cease accruing benefits under
      and shall cease participation in all of Seller’s benefit plans. Buyer shall not
      have any liability or obligations of any nature, whether known or unknown,
      absolute, accrued, contingent or otherwise, and whether due or to become due,
      arising out of relating to Seller being, or being deemed to be, a joint employer
      or part of a single employer group.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (c) The
      Buyer
      shall not adopt, assume or otherwise become responsible for, either primarily
      or
      as a successor employer, any assets or Liabilities of any Employee Plans,
      employee benefit plans, arrangements, commitments or policies currently provided
      by the Seller or by any member of the Group and Seller shall remain solely
      liable for, and shall indemnify Buyer from, any Liability related to Employee
      Plans or other employee benefit plans, arrangements, commitments or policies,
      except that Buyer shall assume all obligations under the Assumed Plans for
      periods beginning after the Closing Date; and if and to the extent that the
      Buyer is deemed by law or otherwise to be liable as a successor employer for
      such purposes, the Seller and the Stockholder shall jointly and severally
      indemnify the Buyer for the full and complete costs, fees and other Liabilities
      which result. Seller shall honor and be solely responsible for all Liabilities
      under Seller’s benefit plans.

     

    (d) Seller
      shall not take any action, including, but not limited to, offering employment
      with Seller, to induce Transferred Employees not to accept employment with
      Buyer.

     

    (e) To
      the
      extent permitted by law, as soon as reasonably practicable after the date
      hereof, Seller will provide to Buyer the necessary employee data, including
      personnel and benefits information, maintained with respect to the Transferred
      Employees by Seller or by its independent contractors, such as insurance
      companies and actuaries, in order to facilitate benefit and payroll transition
      for the Transferred Employees. After the date hereof, Seller shall cooperate
      and
      provide Buyer with reasonable assistance in connection with the establishment
      of
      any applicable employee benefit plans and programs and shall cooperate with
      the
      Buyer in assisting the Transferred Employees in rolling over amounts
      attributable to their participation in Seller’s defined contribution plan(s)
      into any comparable defined contribution retirement plan that may be established
      by the Buyer.

     

    (f) Notwithstanding
      anything to the contrary contained in Section 6 hereof, Seller and Stockholder
      shall pay and shall assume, indemnify, defend, and hold harmless Buyer from
      and
      against and in respect of any and all losses, damages, claims for benefits,
      Liabilities, taxes, and sanctions that arise under the Section 4980B of the
      Code, or Part 6 of Title I of ERISA or any similar state law (individually
      and
      collectively "COBRA"),
      interest and penalties, costs, and expenses (including, without limitation,
      disbursements and reasonable legal fees incurred in connection with any action,
      suit, proceeding, claim, appeal, demand, assessment, or judgment) imposed upon,
      incurred by, or assessed against Buyer and any of its employees arising by
      reason of or relating to any failure of Seller to comply with the continuation
      health care coverage provisions of COBRA which failure occurred with respect
      to
      any current or prior employee of Seller or any qualified beneficiary of such
      employee (as defined in COBRA) prior to the Closing Date or as otherwise
      required as a result of Seller’s dissolution and/or termination of its group
      health plan or plans or any other transactions or matters contemplated by this
      Agreement. In particular, if and to the extent that the Buyer is deemed by
      law
      or otherwise to be liable as a successor employer for such COBRA purposes,
      the
      Seller and the Stockholder shall jointly and severally indemnify the Buyer
      for
      the full and complete costs, fees and other Liabilities which
      result.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (g) In
      respect of grievances or Labor Claims of Transferred Employees to the extent
      relating to their employment by Seller including, without limitation, any such
      grievances or Labor Claims filed before state or local authorities for which
      payment has not been made prior to the Closing Date, Seller shall retain
      responsibility and liability for all amounts due with respect thereto including,
      without limitation, the payment of any amounts in the nature of back pay or
      employee compensation, and any state or federal taxes in connection with such
      back pay or employee compensation. Handling of such grievances and Labor Claims
      shall be at Seller’s cost and expense. Buyer shall have sole responsibility and
      liability for any Labor Claims of Transferred Employees that relate to their
      employment with Buyer.

     

    (h) Nothing
      in this Section 4.1 shall limit the at will nature of the employment of the
      Transferred Employees or the right of Buyer to alter or terminate any employee
      benefit plan, program or arrangement.

     

    (i) The
      Seller and all members of the Group shall each terminate, effective as of the
      day immediately preceding the Closing Date, any and all Employee Plans, except
      for the Assumed Plans. Buyer shall receive from Seller evidence that all tax
      qualified Employee Plans (other than those which are Assumed Plans) have been
      terminated by the Seller and all members of the Group pursuant to resolutions
      of
      each such entity’s Board of Directors (the form and substance of such
      resolutions being subject to the review and approval of Buyer), effective as
      of
      the day immediately preceding the Closing Date. The Seller and each member
      of
      the Group shall submit, or have submitted on its behalf, to the Internal Revenue
      Service an application for determination of the tax-qualified status upon its
      termination of each Employee Plan which is intended to qualify under Section
      401(a) of the Code and each trust intended to qualify under Section 501(a)
      of
      the Code. Each such application shall be (i) submitted as soon as
      administratively possible following the Closing Date, and (ii) paid for
      (including all related legal, administrative and other costs and expenses)
      solely by the Seller. The Seller shall periodically notify Buyer of the status
      of each such submission and shall provide Buyer with a copy of each
      determination letter, if and when received. The Seller and all members of the
      Group shall operate and maintain the Employee Plans in all respects in
      accordance with its terms and in compliance with all applicable laws, statutes,
      orders, rules and regulations including, without limitation, ERISA and the
      Code,
      until all amounts are distributed from such Employee Plan.

     

    4.2
      Non-disclosure
      of Confidential Information.
      Neither
      Seller, Stockholder, nor any affiliate thereof, shall divulge, communicate,
      or
      use to the detriment of the Buyer or for the benefit of any other Person, or
      misuse in any way, any confidential information pertaining to the Business
      or
      the Purchased Assets. For purposes hereof, "confidential information" means
      information, including but not limited to, technical or non technical data,
      a
      formula, pattern, compilation, program, device, method, technique, drawing,
      process, marketing methods or data, financial data, or list of actual or
      potential customers or suppliers, that: (i) is sufficiently secret to derive
      economic value, actual or potential, from not being generally known to other
      persons who can obtain economic value from its disclosure or use; and (ii)
      is
      the subject of efforts that are reasonable under the circumstance to maintain
      its secrecy or confidentiality.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    4.3
      Non-solicitation
      of Employees.
      Until
      the fifth anniversary of the Closing Date (the "Non-Solicitation
      Period"),
      neither Seller,
      Stockholder nor
      any
      affiliate thereof, shall, directly or indirectly, for itself or for any other
      person, firm, corporation, partnership, association or other entity, (i) attempt
      to employ or enter into any contractual arrangement with any employee or former
      employee of Seller, unless such employee or former employee has not been
      employed by Buyer for a period in excess of one year, or (ii) solicit business
      from any person or entity that was a customer of Seller at any time prior to
      the
      Closing Date or was a customer of Buyer at any time after the Closing Date;
      provided,
      however,
      that if
      the Buyer terminates Stockholder's employment under the Management Employment
      Agreement without Cause (as defined therein), then the Non-Solicitation Period
      shall end eighteen (18) months following the date of such
      termination.

     

    4.4
      Non-Competition. Until
      the
      fifth anniversary of the Closing Date (the "Non-Compete
      Period"),
      neither Seller, Stockholder nor any affiliate thereof, shall directly or
      indirectly, engage in, have any interest in or engage in any transaction with,
      any sole proprietorship, partnership, corporation or business or any other
      person or entity (whether as an employee, officer, director, partner agent,
      security holder, creditor, consultant or otherwise) that directly or indirectly
      engages in the business of providing telephone answering services, message
      services, faxing services, paging services, or other ancillary office services
      or any aspect thereof in the states of Connecticut, Massachusetts, New Jersey,
      Pennsylvania or New York; provided, however,
      that
      nothing contained herein shall be deemed to prevent or restrict Seller,
      Stockholder or their affiliates, from owning up to 1% of the shares of any
      class
      of capital stock of any corporation whose shares are listed on a national
      securities exchange or are regularly traded in the over-the-counter market
      so
      long as neither Seller or its affiliates actively participate or engage in
      the
      conduct of the business of any such other corporation; provided,
      however,
      that if
      the Buyer terminates Stockholder's employment under the Management Employment
      Agreement without Cause (as defined therein), then the Non-Compete Period shall
      end twelve (12) months following the date of such termination, and the
      restrictions set forth in this Section 4.4 shall apply to any territory (in
      addition to those listed above) in which the Buyer or any of its affiliates
      begins conducting a telephone answering services business during the period
      that
      Stockholder was employed by the Buyer.

     

    Seller
      and Stockholder acknowledge that the provisions of Sections 4.3 and 4.4, and
      the
      period of time, geographic area and scope and type of restrictions on its
      activities set forth in Section 4.3 and 4.4, are reasonable and necessary for
      the protection of Buyer and are an essential inducement to Buyer's entering
      into
      the transaction documents to which it is a party and consummating the
      transactions contemplated thereby. If, at the time of enforcement of Sections
      4.3 or 4.4, a court shall hold that the period of time, geographic area or
      scope
      or type of restrictions set forth in Sections 4.3 or 4.4 are unreasonable under
      circumstances then existing, the parties hereto agree that the maximum period
      of
      time, geographic area or scope or type of restrictions deemed reasonable under
      such circumstances by such court shall be substituted for the stated period
      of
      time, geographic area or scope or type of restrictions set forth in Sections
      4.3
      and 4.4.

     

    4.5
      Public
      Statements.
      From
      and after the date hereof neither Buyer, on the one hand, or Seller or
      Stockholder, on the other hand, shall, or permit any affiliate thereof to,
      either make, issue or release any press release or any oral or written public
      announcement or statement concerning or with respect to, or acknowledgment
      of
      the existence of, or reveal the terms, conditions and status of the transactions
      contemplated hereby, without the prior written consent of the other party or
      parties hereto, as the case may be (which consent shall not be unreasonably
      withheld or delayed), unless such announcement is required by law or a
      governmental authority, in which case the other parties shall be given notice
      of
      such requirement prior to such announcement and the parties shall consult with
      each other as to the scope and substance of such disclosure. Notwithstanding
      the
      foregoing, Seller and Stockholder understand and agree that Buyer's parent
      company will file a Form 8-K with the U.S. Securities and Exchange Commission
      in
      connection with the transactions contemplated hereby.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    4.6
      Use
      of
      Name.
      As of
      the Closing Date, Seller shall cease using the names "Answer Connecticut",
      "ACT
      Teleservices", “Crossroads Answering Service”, “Liberty Telecommunications”,
“Back Acres Answering Service” and “Answer 1” or words similar thereto; Seller
      shall (i) file an amendment to its certificate of incorporation within two
      business days of the Closing Date, changing its name to Militia Hill
      Incorporated, and (ii) terminate any and all of its "ACT Teleservices" assumed
      name filings.

     

    4.7 Purchase
      Price Allocation.
      For tax
      reporting purposes, the Purchase Price shall be allocated among the Purchased
      Assets and the goodwill of the Business in accordance with the mutual agreement
      of the parties, such allocation to be set forth in writing prior to the Closing
      Date. For tax reporting purposes, Buyer and Seller agree to report the
      transactions contemplated under this Agreement in a manner consistent with
      the
      terms of this Agreement (including, without limitation, the agreed upon purchase
      price allocation) and neither will take any position inconsistent herewith
      in
      any tax related (i) return, (ii) refund claim, or (iii) litigation.

     

    4.8 Other
      Actions.
      Each of
      the parties hereto hereby agree that from and after the date hereof they shall
      use all reasonable efforts to: (i) take, or cause to be taken, all actions,
      (ii)
      do, or cause to be done, all things, and (iii) execute and deliver all such
      documents, instruments and other papers, as in each case may be necessary,
      proper or advisable under applicable laws, or reasonably required in order
      to
      carry out the terms and provisions of this Agreement and to consummate and
      make
      effective the transactions contemplated hereby, and to vest in Buyer title
      to
      the Purchased Assets, free and clear of all Liens. In addition, Seller and
      Stockholder will cooperate with Buyer and use their best efforts to cause the
      conditions to Buyer's obligation to close the transaction contemplated hereunder
      to be satisfied (including, without limitation, the execution and delivery
      of
      all agreements contemplated hereunder to be executed and delivered) on or prior
      to the Closing Date.

     

    4.9 Payment
      of Payables.
      Following the Closing Date, Seller will promptly pay any outstanding Payables,
      but in no event later than 15 days from the Closing Date.

     

    4.10
      Financial
      Statements.
      As soon
      as reasonably practicable, but no later than 45 days from the Closing Date,
      Seller and Stockholder shall provide to Buyer with an audited balance sheet
      of
      Seller as of September 30, 2005, an audited statement of income and accumulated
      deficit and audited statement of cash flows of Seller, in each case, for the
      9
      month period ended September 30, 2005 and footnotes thereto (the "September
      30, 2005 Audited Financial Statements"),
      all
      prepared in accordance with U.S. generally accepted accounting principles.
      Seller and Stockholder shall cooperate fully with the Company's designated
      registered independent accounting firm in connection with the review of the
      September 30, 2005 Financial Statements, and shall cooperate fully with the
      Company in connection with the preparation of other financial information
      required by the Company in connection with any of the Company's filings with
      the
      United States Securities and Exchange Commission.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    4.11
      Discharge
      of Liabilities.
      Other
      than the Assumed Liabilities, Seller shall, and Stockholder shall cause Seller
      to, perform and discharge all Liabilities relating to the Business or the
      Purchased Assets, as required under the terms and conditions with respect to
      such Liabilities.

     

    Section
      5. Survival
      of Representations and Warranties.
      

     

    5.1
      Survival
      of Representations and Warranties of Seller and Stockholder.
      Notwithstanding any right of Buyer fully to investigate the affairs of Seller
      and notwithstanding any knowledge of facts determined or determinable by Buyer
      pursuant to such investigation or right of investigation, Buyer has the right
      to
      rely fully upon the representations and warranties of Seller and Stockholder
      contained in this Agreement or in any other Purchase Document. All such
      representations and warranties shall survive the execution and delivery of
      this
      Agreement until the third anniversary hereof. Covenants shall be binding and
      shall survive in accordance with their respective terms.

     

    5.2 Survival
      of Representations and Warranties of Buyer.
      Notwithstanding any right of Seller and Stockholder fully to investigate the
      affairs of Buyer and notwithstanding any knowledge of facts determined or
      determinable by Seller or Stockholder pursuant to such investigation or right
      of
      investigation, Seller and Stockholder have the right to rely fully upon the
      representations and warranties of Buyer contained in this Agreement or in any
      other Purchase Document. All such representations and warranties shall survive
      the execution and delivery of this Agreement until the third anniversary of
      the
      Closing Date. Covenants shall be binding and shall survive in accordance with
      their respective terms.

     

    Section
      6. Indemnification.
      

     

    6.1
      Indemnification
      by Seller and Stockholder.
      Seller
      and the Stockholder shall, jointly and severally, indemnify and defend Buyer
      and
      each of its officers, directors, employees, shareholders, agents, advisors
      or
      representatives (each, a "Buyer
      Indemnitee")
      against, and hold each Buyer Indemnitee harmless from, any loss, liability,
      obligation, deficiency, damage or expense including, without limitation,
      interest, penalties, reasonable attorneys' and consultants' fees and
      disbursements (collectively, "Damages"),
      that
      any Buyer Indemnitee may suffer or incur based upon, arising out of, relating
      to
      or in connection with any of the following (whether or not in connection with
      any third party claim):

     

    (a) any
      breach of any representation or warranty made by Seller or the Stockholder
      contained in this Agreement or in any other Purchase Document or in respect
      of
      any third party claim made based upon facts alleged which, if true, would
      constitute any such breach;

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (b) Seller's
      or the Stockholder’s failure to perform or to comply with any covenant or
      condition required to be performed or complied with by Seller or the Stockholder
      contained in this Agreement or in any other Purchase Document;

     

    (c) the
      ownership or operation of the Business or the Purchased Assets prior to the
      Closing Date; or

     

    (d) the
      ownership or operation of the Excluded Assets.

     

    6.2
      Indemnification
      by Buyer.
      Buyer
      shall indemnify and defend Seller and each of Seller's officers, managers,
      employees, members, agents, advisors or representatives (each, a "Seller
      Indemnitee")
      against, and hold each Seller Indemnitee harmless from, any Damages that such
      Seller Indemnitee may suffer or incur arising from, related to or in connection
      with any of the following:

     

    (a) any
      breach of any representation or warranty made by Buyer contained in this
      Agreement or in any other Purchase Document or in respect of any third party
      claim made based upon facts alleged which, if true, would constitute any such
      breach;

     

    (b) Buyer's
      failure to perform or to comply with any covenant or condition required to
      be
      performed or complied with by Buyer contained in this Agreement or in any other
      Purchase Document; or

     

    (c) the
      ownership or operation of the Business or the Purchased assets, to extent
      relating to activities of the Buyer after the Closing Date.

     

    6.3
      Indemnification
      Procedures.
      

     

    (a) Promptly
      after notice to an indemnified party of any claim or the commencement of any
      action or proceeding, including any actions or proceedings by a third party
      (hereafter referred to as "Proceeding"
      or
      "Proceedings"),
      involving any Damage referred to in sections 6.1 and 6.2, such indemnified
      party
      shall, if a claim for indemnification in respect thereof is to be made against
      an indemnifying party pursuant to this Section 6, give written notice to the
      indemnifying party, setting forth in reasonable detail the nature thereof and
      the basis upon which such party seeks indemnification hereunder; provided,
      however,
      that
      the failure of any indemnified party to give such notice shall not relieve
      the
      indemnifying party of its obligations hereunder, except to the extent that
      the
      indemnifying party is actually prejudiced by the failure to give such
      notice.

     

    (b) In
      the
      case of any Proceeding by a third party against an indemnified party, the
      indemnifying party shall, upon notice as provided above, assume the defense
      thereof, with counsel reasonably satisfactory to the indemnified party, and,
      after notice from the indemnifying party to the indemnified party of its
      assumption of the defense thereof, the indemnifying party shall not be liable
      to
      such indemnified party for any legal or other expenses subsequently incurred
      by
      the indemnified party in connection with the defense thereof (but the
      indemnified party shall have the right, but not the obligation, to participate
      at its own cost and expense in such defense by counsel of its own choice) or
      for
      any amounts paid or foregone by the indemnified party as a result of any
      settlement or compromise thereof that is effected by the indemnified party
      (without the written consent of the indemnifying party).

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    (c) Anything
      in this Section 6 notwithstanding, if both the indemnifying party and the
      indemnified party are named as parties or subject to such Proceeding and the
      indemnified party determines with advice of counsel that there may be one or
      more legal defenses available to it that are different from or additional to
      those available to the indemnifying party or that a material conflict of
      interest between such parties may exist in respect of such Proceeding, then
      upon
      written notice by the indemnified party of such determination, the indemnifying
      party shall not assume the defense on behalf of the indemnified party, and
      after
      notice to such effect is duly given hereunder to the indemnifying party, the
      indemnifying party shall be relieved of its obligation to assume the defense
      on
      behalf of the indemnified party, but shall be required to pay any legal or
      other
      expenses including, without limitation, reasonable attorneys' fees and
      disbursements, incurred by the indemnified party in such defense. In all events,
      the indemnifying party will pay all amounts specified under Sections 6.1 or
      6.2,
      as the case may be.

     

    (d) If
      the
      indemnifying party assumes the defense of any such Proceeding, the indemnified
      party shall cooperate fully with the indemnifying party and shall appear and
      give testimony, produce documents and other tangible evidence, allow the
      indemnifying party access to the books and records of the indemnified party
      and
      otherwise assist the indemnifying party in conducting such defense. No
      indemnifying party shall, without the consent of the indemnified party, consent
      to entry of any judgment or enter into any settlement or compromise which does
      not include as an unconditional term thereof the giving by the claimant or
      plaintiff to such indemnified party of a release from all liability in respect
      of such claim or Proceeding. Provided that proper notice is duly given, if
      the
      indemnifying party shall fail promptly and diligently to assume the defense
      thereof, then the indemnified party may respond to, contest and defend against
      such Proceeding and may make in good faith any compromise or settlement with
      respect thereto, and recover from the indemnifying party the entire cost and
      expense thereof including, without limitation, reasonable attorneys' fees and
      disbursements and all amounts paid or foregone as a result of such Proceeding,
      or the settlement or compromise thereof. The indemnification required hereunder
      shall be made by periodic payments of the amount thereof during the course
      of
      the investigation or defense, as and when bills or invoices are received or
      loss, liability, obligation, damage or expense is actually suffered or
      incurred.

     

    6.4   Right
      to Set-Off.
      Buyer
      shall have the right, but not the obligation, to set-off (i) the amount of
      any
      and all Damages for which Seller or Stockholder may
      become liable to Buyer under any provisions of this Agreement, against any
      sums
      otherwise payable to Seller or Stockholder hereunder, or under any other
      document or instrument executed and delivered pursuant to this Agreement or
      contemplated hereby including, without limitation, any amounts payable to Seller
      or Stockholder pursuant to Section 1.3(d), Section 1.6, Section 1.7 or the
      Management Employment Agreement.  Buyer
      will not exercise any right to set-off until it has given Seller and Stockholder
      not less than five (5) days notice within which period Seller and Stockholder
      shall have the right to pay the amount of the Damages proposed by Buyer in
      cash.
      The remedies provided herein shall be cumulative and shall not preclude
      assertion by any party hereto of any other rights or the seeking of any other
      remedies against any other party hereto. No assertion of the right of set-off
      shall impair Buyer’s title in the Purchased Assets or any other of Buyer’s
      rights under this Agreement.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    Section
      7. Miscellaneous.
      

     

    7.1
      Transaction
      Fees and Expenses.
      Each
      party hereto shall bear such costs, fees and expenses as may be incurred by
      it
      in connection with this Agreement and the transactions contemplated hereby,
      including each party’s respective attorney's costs and fees.

     

    7.2
      Notices.
      Any
      notice, demand, request or other communication which is required, called for
      or
      contemplated to be given or made hereunder to or upon any party hereto shall
      be
      deemed to have been duly given or made for all purposes: if (a) in writing
      and
      sent by (i) messenger or a recognized national overnight courier service for
      next day delivery with receipt therefor, or (ii) certified or registered mail,
      postage paid, return receipt requested, or (b) sent by facsimile transmission
      with a written copy thereof sent on the same day by postage paid first-class
      mail or (c) by personal delivery to such party at the following
      address:

     

    To
      Buyer:

     

    c/o
      American Medical Alert Corp.

    3265
      Lawson Boulevard

    Oceanside,
      New York 111572

    Attention:
      Mr. Jack Rhian

    Facsimile
      No.: (516) 536-5276

     

    with
      a
      copy to:

     

    Moses
      & Singer LLP 

    The
      Chrysler Building

    405
      Lexington Avenue

    New
      York,
      New York 10174

    Attention:
      James Alterbaum

    Facsimile
      No.: (212) 554-7700

     

    To
      Seller
      or Stockholder at:

     

    100
      Fiddlehead Farms 

    Canton,
      CT 06019

    Attention:
      Thomas M. Gelbach 

    Facsimile
      No.: [__________________________] 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    with
      respect to each of Seller and the Stockholder, with a copy to:

     

    Duncan
      J.
      Forsyth 

    Halloran
      & Sage LLP

    225
      Asylum Street

    Hartford,
      Connecticut 06103

    Facsimile
      No.: (860) 548-0006

     

     

    or
      such
      other address as either party hereto may at any time, or from time to time,
      direct by notice given to the other party in accordance with this section.
      The
      date of giving or making of any such notice or demand shall be, in the case
      of
      clause (a)(i), the date of the receipt, in the case of clause (a)(ii), five
      business days after such notice or demand is sent, and, in the case of clause
      (b), the business day next following the date such notice or demand is sent,
      and
      in the case of clause (c), upon delivery. A copy of any notice to the
      Stockholder shall be sent concurrently to Seller and a copy of any notice to
      Seller shall be sent concurrently to the Stockholder.

     

    7.3 Amendment.
      Except
      as otherwise provided herein, no amendment of this Agreement shall be valid
      or
      effective unless in writing and signed by or on behalf of all parties
      hereto.

     

    7.4 Waiver.
      No
      course of dealing of any party hereto, no omission, failure or delay on the
      part
      of any party hereto in asserting or exercising any right hereunder, and no
      partial or single exercise of any right hereunder by any party hereto shall
      constitute or operate as a waiver of any such right or any other right
      hereunder. No waiver of any provision hereof shall be effective unless in
      writing and signed by or on behalf of the party to be charged therewith. No
      waiver of any provision hereof shall be deemed or construed as a continuing
      waiver, as a waiver in respect of any other or subsequent breach or default
      of
      such provision, or as a waiver of any other provision hereof unless expressly
      so
      stated in writing and signed by or on behalf of the party to be charged
      therewith. Buyer's receipt of information contained herein shall not be deemed
      to waive any of Buyer's rights under the indemnification provisions of Section
      6.

     

    7.5 Governing
      Law.
      This
      Agreement shall be governed by, and interpreted and enforced in accordance
      with,
      the internal laws of the State of Connecticut, other than those which would
      defer to the substantive laws of another jurisdiction.

     

    7.6 Jurisdiction.
      Each of
      the parties hereto hereby irrevocably consents and submits to the exclusive
      jurisdiction of the Federal Court - District of Connecticut and the State Court
      - Judicial District of Hartford in connection with any claim or dispute arising
      out of or relating to this Agreement or the transactions contemplated hereby,
      waives any objection to venue in such courts and agrees that service of any
      summons, complaint, notice or other process relating to such claim or dispute
      may be effected in the manner provided by Section 7.2. 

     

    7.7 Remedies.
      In the
      event of any actual or prospective breach or default by any party hereto, the
      other parties shall be entitled to equitable relief, including remedies in
      the
      nature of rescission, injunction and specific performance. All remedies
      hereunder are cumulative and not exclusive. Nothing contained herein and no
      election of any particular remedy shall be deemed to prohibit or limit any
      party
      from pursuing, or be deemed a waiver of the right to pursue, any other remedy
      or
      relief available now or hereafter existing at law or in equity (whether by
      statute or otherwise) for such actual or prospective breach or default,
      including the recovery of damages.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    7.8
      Severability.
      The
      provisions hereof are severable and if any provision of this Agreement shall
      be
      determined to be legally invalid, inoperative or unenforceable in any respect
      by
      a court of competent jurisdiction, then the remaining provisions hereof shall
      not be affected, but shall, subject to the discretion of such court, remain
      in
      full force and effect, and any such invalid, inoperative or unenforceable
      provision shall be deemed, without any further action on the part of the parties
      hereto, amended and limited to the extent necessary to render such provision
      valid, operative and enforceable.

     

    7.9 Further
      Assurances.
      Each
      party hereto covenants and agrees promptly to execute, deliver, file or record
      such agreements, instruments, certificates and other documents and to perform
      such other and further acts as the other party hereto may reasonably request
      or
      as may otherwise be necessary or proper to consummate and perfect the
      transactions contemplated hereby. 

     

    7.10
      Assignment.
      This
      Agreement and all of the provisions hereof shall be binding upon and inure
      to
      the benefit of the parties hereto, their heirs and their respective successors
      and assignees; provided,
      however,
      that
      Seller and Stockholder shall not assign any of its or their respective rights
      or
      delegate any duties hereunder without the prior written consent of
      Buyer.

     

    7.11 No
      Third Party Beneficiaries.
      Nothing
      contained in this Agreement, whether express or implied, is intended, or shall
      be deemed, to create or confer any right, interest or remedy for the benefit
      of
      any Person other than as otherwise provided in this Agreement.

     

    7.12 Entire
      Agreement.
      This
      Agreement (including all the schedules and exhibits hereto), together with
      the
      Exhibits, Schedules, certificates and other documentation referred to herein
      or
      required to be delivered pursuant to the terms hereof, contains the terms of
      the
      entire agreement among the parties with respect to the subject matter hereof
      and
      supersedes any and all prior agreements, commitments, understandings,
      discussions, negotiations or arrangements of any nature relating
      thereto.

     

    7.13 Headings.
      The
      headings contained in this Agreement are included for convenience and reference
      purposes only and shall be given no effect in the construction or interpretation
      of this Agreement.

     

    7.14 Counterparts.
      This
      Agreement may be executed in any number of counterparts and delivered by
      facsimile, each of which shall be deemed an original, but all of which together
      shall constitute one and the same instrument.

     

    

    [Rest
      of page intentionally left blank]

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	 	 
	
               Seller:

            	ANSWER
              CONNECTICUT, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
              M. Gelbach
	 	
              
Name:
              Thomas M. Gelbach
	 	Title:
              President

    

     

    
      	 	 	 
	 
 	 
 	 
 
	
              Stockholder:

            	 	/s/ Thomas
              M. Gelbach
	 	
              
Thomas
              M. Gelbach

    

     

    
      	 	 	 
	
              Buyer:

            	ANSWER
              CONNECTICUT ACQUISITION CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Jack
              Rhian
	 	
              
Name: Jack
              Rhian
	 	Title: President

    

     

     

     

    
      
        
        

      

      
        35AMENDMENT
        NO. 4 AND WAIVER TO CREDIT AGREEMENT

      

      AMENDMENT
        NO. 4 AND WAIVER, dated
        as
        of December 9, 2005 (this “Amendment and Waiver”), with respect to the Credit
        Agreement, dated as of May 20, 2002 (as same has been and may be further
        amended, restated, supplemented or modified, from time to time, the “Credit
        Agreement”), by and between AMERICAN
        MEDICAL ALERT CORP., a
        New
        York corporation (the “Company”) and THE
        BANK OF NEW YORK,
        a New
        York banking corporation (the “Lender”).

      

      RECITALS

      

      The
        Company has requested, and the Lender has agreed subject to the terms and
        conditions of this Amendment and Waiver, to increase the Term Loan and to
        amend
        and waive certain provisions of the Credit Agreement as herein set
        forth.

      

      Accordingly,
        in consideration of the premises and of the mutual covenants and agreements
        hereinafter set forth, the parties hereto agree as follows:

      

      
        
          1.
            Amendments.
            

        

      

      

      (a) The
        following definitions in Section 1.01 of the Credit Agreement are hereby
        amended
        and restated in their entirety to provide as follows:

      

      “Consolidated
        Fixed Charge Coverage Ratio” shall mean, on the date of determination, the ratio
        of (a) Consolidated EBITDA to (b) the sum of (i) the Consolidated Current
        Portion of Long Term Debt as of the date of calculation, plus (ii) Consolidated
        Interest Expense (excluding Subordinated Debt) for the four fiscal quarters
        then
        ending, plus (iii) Consolidated Dividends for the four fiscal quarters then
        ending, plus (iv) Consolidated Capital Expenditures which are not financed
        with
        the proceeds from any Indebtedness (other than any Revolving Credit Loans)
        for
        the four fiscal quarters then ending, plus (v) cash taxes paid during the
        four
        fiscal quarters then ending. 

      

      “Maturity
        Date” shall mean December 1,
        2010.

      

      “Term
        Loan Commitment” shall mean the Lender’s obligation to make the Term Loan to the
        Company (a) on the Closing Date, in the amount of $1,500,000 (of which $450,000
        remains outstanding as of the Effective Date) and (b) on the Effective Date,
        in
        the amount of $2,550,000, for a total of $3,000,000, as of the Effective
        Date.

      

      “Total
        Commitment” shall mean, at any time, the aggregate of the Commitments in effect
        at such time which shall be $4,500,000.

      

      (b) The
        following definition is hereby added to Section 1.01 of the Loan Agreement,
        in its appropriate alphabetical order:

      

      “Effective
        Date” shall mean December 9, 2005.

      

      (c) Section
        2.03 of the Credit Agreement is hereby amended and restated in its entirety
        to
        provide as follows:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “(a)
        Subject to the terms and conditions hereof, and relying on the representations
        and warranties set forth herein, the Lender agrees to make a term loan (the
        “Term Loan”) to the Company on
        the
        Closing Date, in the original principal amount of $1,500,000 (of which $450,000
        is outstanding as of the Effective Date), plus the $2,550,000 increase in
        the
        Term Loan made by the Lender to the Company as of the Effective Date, resulting
        in an aggregate Term Loan of $3,000,000 as of the Effective Date.
        The
        Company shall give the Lender irrevocable written notice (or telephonic notice
        promptly confirmed in writing) not later than 11:00 a.m. New York, New York
        time
        three Business Days prior to the Closing Date and the Effective Date, as
        applicable, specifying the amount to be borrowed, which shall not result
        in the
        aggregate principal amount of the Term Loan exceeding $3,000,000. The Term
        Loan
        may be (i) an Adjusted Libor Loan, (ii) an Alternate Base Rate Loan or (iii)
        a
        combination thereof. The Term Loan Commitment shall terminate upon funding
        of
        the Term Loan on the Closing Date and the Effective Date.”

      

      (d) The
        fourth sentence of Section 2.04 of the Credit Agreement is hereby amended
        and
        restated in its entirety to provide as follows:

      

      “The
        Term
        Note shall (a) be dated the Effective Date, (b) be stated to mature on the
        Maturity Date and (c) be payable as to principal in sixty (60) consecutive
        monthly principal installments of $50,000 each, commencing January 1,
        2006,
        and on the first day of each month thereafter, provided
        that the
        final installment on the Maturity Date shall be in an amount equal to the
        remaining principal amount then outstanding Date.”

      

      (e) Section
        7.02(g) of the Credit Agreement is hereby amended and restated in its entirety
        to provide as follows: 

      

      “(g)
         Indebtedness
        incurred in connection with any Permitted Acquisition (but not including
        any
        Indebtedness consisting of earn out payments to be made by the Company or
        any
        Corporate Guarantor in a Permitted Acquisition), provided that such Indebtedness
        is unsecured and does not exceed $1,325,000, in the aggregate, without the
        prior
        written consent of the Lender.”

      

      (f) Section
        7.13(a) of the Credit Agreement is hereby amended and restated in its entirety
        to provide as follows:

      

      “(a)
         Consolidated
        Fixed Charge Coverage Ratio.
        Permit
        the Consolidated Fixed Charge Coverage Ratio at
        the
        end of each fiscal quarter of the Company, to be less than the ratio set
        forth
        below opposite the relevant period:

      

      
        	 Fiscal Quarter Ending	 Ratio
	 December 31, 2005	 1.05:1.00
	 March 31, 2006	 1.05:1.00
	 June 30, 2006	 1.05:1.00
	 September 30, 2006	 1.10:1.00
	 December 31, 2006 and
                thereafter	 1.20:1.00”

      

       

      (g)
        The
        first
        sentence of Section 3.02 of the Credit Agreement is hereby amended and restated
        in its entirety to provide as follows:

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      “The
        proceeds of the Term Loan shall be used by the Company solely to pay a portion
        of the Existing Indebtedness on the Closing Date, and to fund the Company’s
        acquisition of Answer Connecticut, Inc. on the Effective Date and for other
        general corporate purposes.”

      

      (h) Exhibit
        B
        attached to the Credit Agreement is hereby amended and replaced with Exhibit
        B
        attached to this Amendment and Waiver.

      

      (i)  Schedules
        I, II, III, V and VI attached to the Credit Agreement are hereby amended
        and
        replaced with Schedules I, II, III, V and VI attached to this Amendment and
        Waiver.

      

      2.
        Waiver. Compliance
        by the Company with (i) the requirements of a “Permitted Acquisition”, as
        described in the Credit Agreement and (ii) the provisions of Sections 4.18,
        7.01
        and 8.01(m) of the Credit Agreement (including, provisions in the other Loan
        Documents which supplement such Sections or are related thereto), are hereby
        waived solely in order to permit the acquisition by Answer
        Connecticut Acquisition Corp., a wholly-owned Subsidiary of the Company
        (“Acquisition
        Corp.”) of Answer Connecticut, Inc., a Connecticut corporation (“Answer CT”),
        subject to the pre-existing liens on the assets of Answer CT acquired by
        Acquisition Corp. as described in Schedule 1 attached hereto (the “Existing
        Liens”), provided
        such
        waiver shall be conditioned upon receipt by the Lender of evidence that all
        Existing Liens have been released on or before January 13, 2006. Notwithstanding
        the foregoing, the Acquisition shall be considered a “Permitted Acquisition” for
        all purposes in determining compliance with the Credit Agreement. 

      

      3. Conditions
        of Effectiveness.
        This
        Amendment and Waiver shall become effective upon receipt by the Lender of
        (a)
        this Amendment and Waiver, duly executed by the Company and each Guarantor,
        (b)
        a certificate of the Secretary or Assistant Secretary of the Company, dated
        as
        of the date hereof, in the form of Exhibit
        1
        hereto,
        (c) an amendment fee of $4,500 and (d) a copy of the executed Asset Purchase
        Agreement among Answer CT, Thomas M. Gelbach and Acquisition Corp., along
        with
        all Schedules and Exhibits thereto, the related Bill of Sale and the Settlement
        Agreement. The Company acknowledges and agrees that it is required to deliver
        to
        the Lender, within 10 days of the date hereof, a Joinder Agreement from
        Acquisition Corp., along with an Opinion of Counsel and Secretary’s Certificate
        of Acquisition Corp. (with Certificate of Incorporation, By-laws, Resolutions
        and Good Standing Certificate), all satisfactory to the Lender, and such
        other documents, instruments and agreements that the Lender shall reasonably
        require with respect thereto. 

      

      4.
        Miscellaneous.

      

      (a)
        This
        Amendment and Waiver shall be governed by and construed in accordance with
        the
        laws of the State of New York.

      

      (b) All
        terms
        used herein shall have the same meaning as in the Credit Agreement, as amended
        hereby, unless specifically defined herein.

      

      (c) This
        Amendment and Waiver shall constitute a Loan Document.

      

      (d) Except
        as
        expressly amended and waived hereby, the Credit Agreement remains in full
        force
        and effect in accordance with the terms thereof. The Credit Agreement and
        the
        Loan Documents are each ratified and confirmed in all respects by the Company.
        The amendments and waiver herein are limited specifically to the matters
        set
        forth above and for the specific instance and purpose for which given and
        do not
        constitute directly or by implication an amendment or waiver of any other
        provisions of the Credit Agreement or a waiver of any Default or Event of
        Default which may occur or may have occurred under the Credit Agreement or
        any
        other Loan Document.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (e)
        Upon
        the
        effectiveness of this Amendment and Waiver, each reference in the Credit
        Agreement and the other Loan Documents to “this Agreement”, “hereunder”,
“hereof”, “herein” or words of like import shall mean and be a reference to the
        Credit Agreement, as amended hereby.

      

      (f) The
        Company hereby represents and warrants that, (i) except with respect to the
        matters described in the Press Release (as defined in Amendment No. 2 to
        Credit
        Agreement, dated as of of March 28, 2005 between the Company and the Lender),
        the representations and warranties by the Company pursuant to the Credit
        Agreement and each other Loan Document, as updated by the Schedules attached
        hereto, are true and correct, in all material respects, on the date hereof,
        and
        (ii) no Default or Event of Default exists under the Credit Agreement or
        any
        other Loan Document; provided that, the Lender hereby acknowledges and agrees
        that the representations and warranties of the Company contained in the Credit
        Agreement and those covenants set forth in Sections 6.05, 6.06, 6.07, and
        6.12
        of the Credit Agreement shall not be deemed (prior to, at or after this date
        of
        this Amendment and Waiver) to be breached as a result of the matters described
        in the Press Release, provided that such matter or matters do not now or
        shall
        not hereafter cause a Material Adverse Effect or cause the occurrence of
        any
        other Event of Default, it being agreed and understood that the $1,500,000
        charge described in the Press Release, in itself, will not be deemed to
        constitute a Material Adverse Effect.

      

      (g)
        The
        Company hereby: (a) acknowledges and confirms that, notwithstanding the
        consummation of the transactions contemplated by this Amendment and Waiver,
        (i)
        all terms and provisions contained in the Security Documents are, and shall
        remain, in full force and effect in accordance with their respective terms
        and
        (ii) the liens heretofore granted, pledged and/or assigned to the Lender
        as
        security for the Company’s obligations under the Notes, the Credit Agreement and
        the other Loan Documents shall not be impaired, limited or affected in any
        manner whatsoever by reason of this Amendment and Waiver; and (b) represents,
        warrants and confirms the non-existence of any offsets, defenses, or
        counterclaims to its obligations under the Credit Agreement or any Loan
        Document. 

      

      (h)
        This
        Amendment and Waiver may be executed in one or more counterparts, each of
        which
        shall constitute an original, but all of which, when taken together, shall
        constitute but one Amendment and Waiver.

      

      [next
        page is signature page]

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        the
        Company and the Lender have caused this Amendment and Waiver to be duly executed
        by their duly authorized officers as of the day and year first above
        written.

      
        
          	 	 	 
	 	AMERICAN
                  MEDICAL ALERT CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Jack
                  Rhian
	 	
                  
Name:
                  Jack Rhian
	 	Title:
                  President

        

        
          	 	 	 
	 	THE
                  BANK OF NEW YORK
	 
 	 
 	 
 
	 	By:  	/s/ Edward
                  P. Nallan, Jr.
	 	
                  
Name:
                  Edward P. Nallan, Jr.
	 	Title:
                  Vice President

        

      

      The
        undersigned, not parties to the Credit Agreement but as Guarantors under
        their
        respective Guaranties executed in favor of the Lender, dated as of May 20,
        2002,
        each hereby (a) accept and agree to the terms of the foregoing Amendment
        and
        Waiver; and (b) acknowledge and confirm that all terms and provisions contained
        in their respective Guaranty are, and shall remain, in full force and effect
        in
        accordance with their respective terms and that its obligations thereunder
        include obligations of the Company owing to the Lender pursuant to the Term
        Loan, as same has been increased as set forth above.

       

      
        	 	 	 	 
	HCI ACQUISITION CORP.
                	 	 	SAFE COM INC.
	 	 	 	 
	By:
                /s/ Jack Rhian	 	 	By:
                /s/ Jack Rhian
	
                
Name:
                Jack Rhian	 	 	
                
Name:
                Jack Rhian
	Title:
                President	 	 	Title:
                President

      

      
        	 	 	 	 
	 	 	 	 
	LIVE MESSAGE AMERICA ACQUSITION
                CORP. 	 	 	NORTH SHORE ANSWERING SERVICE,
                INC.
	 	 	 	 
	By:
                /s/ Jack Rhian	 	 	By:
                /s/ Jack Rhian
	
                
Name:
                Jack Rhian	 	 	
                
Name:
                Jack Rhian
	Title:
                President	 	 	Title:
                President

      

      
        
          
          

        

        
          5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]