Document:

Exhibit
10.1

 

ASSET PURCHASE AGREEMENT

 

 

by
and between

 

ENRANGE
LLC

W.
CHRISTOPHER DULIN

WILLIAM
GIBSON

DAVID
ASHBURN

 

and

 

MAGNETEK, INC.

 

 

dated
as of

 

February 4,
2008

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 1

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  Terms Defined in Agreement

  	
  7

  
	
   

  	
   

  	
   

  
	
  Article 2

  	
  SALE AND PURCHASE OF ASSETS

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Sale and Purchase of Assets

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Excluded Assets

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Liabilities

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Purchase Price

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Net Working Capital Adjustment

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  Closing

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Closing Deliveries by Seller

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  Closing Deliveries by Buyer

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  Payoff of Creditors

  	
  15

  
	
   

  	
   

  	
   

  
	
  Article 3

  	
  REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLER MEMBERS

  	
  16

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Organization and Authority of Seller

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Authorization of Agreement

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  No Conflicts

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Notices and Consents

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Seller and Seller Members

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  Financial Statements

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.7

  	
  Books and Records

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.8

  	
  No Undisclosed Liabilities

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.9

  	
  Title to Purchased Assets; Encumbrances

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.10

  	
  Sufficiency of Assets

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.11

  	
  Condition of Equipment

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.12

  	
  Inventories

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.13

  	
  Real Property

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.14

  	
  Accounts Receivable

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.15

  	
  Accounts Payable

  	
  20

  

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.16

  	
  Intellectual Property

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.17

  	
  Agreements, Contracts and Commitments

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.18

  	
  Material Customers and Suppliers

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.19

  	
  Insurance

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.20

  	
  Proceedings

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.21

  	
  Employees

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.22

  	
  Labor Disputes; Compliance

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.23

  	
  Employee Benefit Matters

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.24

  	
  Taxes

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.25

  	
  Compliance with Laws

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.26

  	
  Environmental Matters

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.27

  	
  No Material Adverse Effect

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.28

  	
  Absence of Certain Changes or Events

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.29

  	
  Brokers or Finders

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.30

  	
  Information Furnished

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.31

  	
  Accuracy of Representations and Warranties

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4

  	
  REPRESENTATIONS AND WARRANTIES OF BUYER

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Organization and Good Standing

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Authorization of Agreement

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  No Conflicts

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Notices and Consents

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.5

  	
  Proceedings

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.6

  	
  Brokers

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 5

  	
  COVENANTS OF THE PARTIES

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Transfer of Permits and Agreements

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Further Assurances

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Announcements

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Confidentiality

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Non-Competition; Non-Solicitation

  	
  34

  

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Protected Term and Protected Territory Defined

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Amendment of Provisions to Comply with Law

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.8

  	
  Injunctive Relief

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.9

  	
  Employees

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.10

  	
  Change of Seller’s Name

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.11

  	
  Seller’s Handling of Accounts Receivable

  	
  37

  
	
   

  	
   

  	
   

  
	
  Article 6

  	
  TAX MATTERS

  	
  37

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Allocation of Purchase Price

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Cooperation With Tax Returns

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Straddle Period Taxes

  	
  38

  
	
   

  	
   

  	
   

  
	
  Article 7

  	
  SURVIVAL AND INDEMNIFICATION

  	
  38

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Survival

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Indemnification By Seller and the Seller Members

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Indemnification by Buyer

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  Timing of Indemnification Claims

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5

  	
  Third Party Claim Procedures

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.6

  	
  Other Claims

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.7

  	
  Limitation on Indemnity Obligations

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.8

  	
  Insurance Policies

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.9

  	
  Right of Set-Off

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.10

  	
  Exclusive Remedy

  	
  43

  
	
   

  	
   

  	
   

  
	
  Article 8

  	
  MISCELLANEOUS

  	
  43

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Expenses

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Entire Agreement; Modification

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Severability

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Notices

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Governing Law

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Forum for Disputes

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Headings; Interpretation

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  Assignments; Successors; No Third-Party Rights

  	
  46

  

 

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  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  Waiver; Remedies Cumulative

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Joint Preparation

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.11

  	
  Dates and Times

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.12

  	
  Execution of Agreement

  	
  47

  

 

iv

 

ASSET
PURCHASE AGREEMENT

 

THIS ASSET PURCHASE
AGREEMENT, dated as of February 4, 2008, is made by and between Enrange LLC, a Pennsylvania limited liability
company (“Seller”), W. Christopher Dulin, an individual residing in the
State of Pennsylvania, William Gibson, an individual residing in the State of
West Virginia, and David Ashburn, an individual residing in the State of West
Virginia (collectively, the “Seller Members”), and Magnetek, Inc.,
a Delaware corporation (“Buyer”). 
Seller, the Seller Members and Buyer are sometimes referred to herein
collectively as the “Parties” and each individually as a “Party”.

 

RECITALS

 

A.            Seller is in the business of developing,
designing, manufacturing, marketing and selling wireless radio remote controls
for the material handling, industrial, hydraulic, and rock mining industries (the “Business”).

 

B.            Seller wishes to sell, and Buyer wishes to
purchase, the Business and the assets of Seller used in the conduct of the
Business, and Buyer is prepared to assume certain specified operating
liabilities with respect to the Business, in each case for the consideration
and on the terms and conditions set forth in this Agreement.

 

C.            The Seller Members are the holders of all of
the outstanding equity interests in Seller and will benefit from the
sale of the Business and substantially all of Seller’s assets.

 

NOW THEREFORE, in
consideration of the premises and the mutual covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1           Definitions.  Except as otherwise expressly
provided in this Agreement, or unless the context otherwise requires, whenever
used in this Agreement (including in the Schedules attached hereto), the
following terms shall have the respective meanings indicated below.

 

“Accounts Receivable” means all trade
and other accounts receivable and other rights to payment from past or present
customers and other account debtors of Seller arising or accruing exclusively
in connection with the Business, and the full benefit of all security for such
accounts or rights to payment, including all trade, vendor and other accounts
receivable representing amounts receivable in respect of goods sold or services
rendered to customers of the Business or in respect of amounts refundable or
otherwise due to Seller from vendors, suppliers or other Persons exclusively in
connection with the Business.

 

“Advanced
Radiotech Corporation Marketing and Sales Agreement” means the Marketing
and Sales Agreement by and between Seller and Advanced Radiotech Corporation,
dated as of June 20, 2007.

 

1

 

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

 

“Agreement” means this Asset Purchase Agreement,
including the Schedules and Exhibits attached hereto, as may be amended from
time to time in accordance with the provisions hereof.

 

“Applicable Law” means, with respect to any Person, any
constitution, treaty, statute, law (including common law), rule, regulation,
ordinance, code, or any Permit, order, decision, injunction, judgment, award,
decree or agreement of or with any Governmental Authority, in any such case to
the extent applicable to such Person or any of its Affiliates or any of their
respective assets and/or businesses.

 

“Benefit Plan” means
any employee benefit plan
within the meaning of Section 3(3) of ERISA, and each other bonus,
deferred compensation, incentive compensation, stock purchase, stock option,
stock appreciation right or other equity-based incentive, severance,
termination, change in control, retention, employment, hospitalization or other
medical, life or other insurance, disability, sick leave, salary continuation,
workers’ compensation, welfare, supplemental unemployment, profit-sharing,
pension or retirement plan, program, agreement or arrangement that is
sponsored, maintained or contributed to by Seller or an ERISA Affiliate or
under which Seller or an ERISA Affiliate has any liability.  For the purposes of this definition, an “ERISA
Affiliate” means an incorporated or unincorporated trade or business that
together with Seller is treated as a single employer under Section 414 of
the Code.

 

“Business Day” means any day other than a Saturday, Sunday
or other day on which banks in Menomonee Falls, Wisconsin or Canonsburg,
Pennsylvania are permitted or required by Applicable Law to close.

 

“Centra Line of
Credit” means the Line of Credit by and between Seller and Centra Bank,
dated July 25, 2007.

 

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

 

“Copyrights” the meaning given in the
definition of Intellectual Property.

 

“Consent” means any consent, approval, authorization,
waiver, Permit, grant, franchise, concession, agreement, license, exemption or
order of, registration, certificate, declaration or filing with any Person.

 

“Contemplated Transactions” means the
transactions contemplated under this Agreement to occur at Closing.

 

2

 

“Contract” means any contract,
agreement, purchase or sale order, invoice, indenture, note, bond, loan,
instrument, lease, commitment or other arrangement or agreement, whether
written or oral.

 

“Effective Time”
means 11:59 p.m. on the date immediately preceding the Closing Date.

 

“Employee”
means any full-time or part-time employee of Seller (including any member of
management) who is employed primarily in connection with the conduct of the
Business.

 

“Encumbrance” means any mortgage, pledge, lien, charge,
hypothecation, security interest, encumbrance, adverse right, interest or
claim, lease, sublease, license, easement, covenant, encroachment, title
defect, option, right of first refusal or other restriction or limitation of
any nature whatsoever.

 

“Environment” means soil, land surface or subsurface strata,
surface waters, groundwaters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life and any other environmental
medium or natural resource.

 

“Environmental, Health and Safety
Liabilities” means any and all claims, costs, damages, expenses,
Liabilities and/or other responsibility or potential responsibility arising
from or under any Environmental Law or Occupational Safety and Health Law
(including compliance therewith).

 

“Environmental
Laws” mean all
Applicable Laws, regulations, standards, requirements, ordinances, policies,
guidelines, orders, approvals, notices, permits or directives, or parts
thereof, pertaining to environmental or occupational health and safety matters,
in effect as at the date hereof, including laws and regulations relating to
releases or threatened releases of Hazardous Substances, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, including the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9601 et seq.), the Hazardous Substances Transportation Act
(49 U.S.C. App. § 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C.
§ 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.)
the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), and
the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), as each
has been or may be amended and the regulations promulgated pursuant thereto.

 

“Equipment” means all vehicles,
machinery, equipment, tools, furniture, office equipment, computer hardware
(including peripherals), fixtures, leasehold improvements, dies, tooling,
appliances, spare parts, supplies, materials and other items of tangible personal
property (other than Inventories) of every kind owned or leased by Seller for
use in the conduct of the Business.

 

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

 

3

 

“GAAP” means generally accepted accounting
principles as in effect in the United States of America as determined by the
Financial Accounting Standards Board from time to time applied on a consistent
basis as of the date of any application thereof.

 

“Governmental
Authority” means any
nation or government, any state, county, municipality or other political
subdivision thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including any government authority, agency, department, board, commission or
instrumentality of the United States, any State of the United States or any
political subdivision thereof, or of any foreign country, or any court,
tribunal or arbitrator(s) of competent jurisdiction, any self-regulatory
organization or any Indian tribal authority.

 

“Hazardous Activity” means the distribution, generation,
handling, importing, management, manufacturing, processing, production,
refinement, Release, storage, transfer, transportation, treatment or use
(including any withdrawal or other use of groundwater) of any Hazardous
Substance in, on, under, about or from any facility (including any Leased Real
Property) or other real property owned, leased, operated or otherwise used by
Seller, whether or not in connection with the conduct of the Business, or from
any other asset of Seller, into the Environment, beyond what is authorized by
applicable Environmental Laws.

 

“Hazardous
Substance” means any
substance that: (i) is or contains asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum or petroleum-derived
substances or wastes, radon gas or related materials, (ii) requires
investigation, removal or remediation or for which there are restrictions
pursuant to any Environmental Law regarding its use or disposal, under any
Environmental Law, or is defined, listed or identified as a “hazardous waste,” “toxic
substance,” “toxic material,” “pollutant,” or “hazardous substance” thereunder,
or (iii) is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated
by any Governmental Authority or Environmental Law.

 

“Intellectual Property” means
all intellectual property owned, licensed (as licensee) or otherwise used by
Seller arising from or in respect of the following, whether protected, created
or arising under the laws of the United States or any other jurisdiction:  (i) all patents and applications
therefor, including continuations, divisionals, continuations-in-part, or
reissues of patent applications and patents issuing thereon (collectively, “Patents”),
(ii) all trademarks, service marks, trade names, service names, brand
names, trade dress rights, logos, Internet URL addresses, corporate names and general
intangibles of a like nature, together with the goodwill associated with any of
the foregoing, and all applications, registrations and renewals thereof
(collectively, “Marks”), (iii) all copyrights and registrations and
applications therefor, works of authorship and mask work rights (collectively, “Copyrights”),
(iv) all discoveries, concepts, ideas, research and development, know-how,
formulae, inventions, compositions, manufacturing and production processes and
techniques, technical data, procedures, designs, drawings, specifications,
databases, and other proprietary and confidential information, including
customer lists, supplier lists, pricing and cost information, and 

 

4

 

business and marketing plans and proposals of Seller, in each case
excluding any rights in respect of any of the foregoing that comprise or are
protected by Copyrights or Patents (collectively, “Trade Secrets”), (v) all
Software; and (vi) all other Technology.

 

“Inventories” means all product
inventories of Seller, including finished goods, supplies, scrap, work in
process and raw materials to be used or consumed by Seller in the production of
finished goods.

 

“IRS” means the Internal Revenue Service.

 

“Knowledge” means:

 

(a)           when used
to qualify a representation, warranty or other statement of Seller or the
Seller Members in this Agreement, (i) the knowledge that any Seller Member
actually has with respect to the particular fact or matter that is the subject
of such representation, warranty or other statement, and (ii) the
knowledge that any Seller Member could reasonably be expected to have as a
prudent and responsible manager of Seller and the Business after having
conducted a reasonably comprehensive inquiry or investigation with respect to
the fact or matter that is the subject of such representation, warranty or
other statement; and

 

(b)           when used
to qualify a representation, warranty or other statement of Buyer in this
Agreement, (i) the knowledge that any of David P. Reiland, Marty Schwenner
or Jolene Shellman actually has with respect to the particular fact or matter
that is the subject of such representation, warranty or other statement, and (ii) the
knowledge that any David P. Reiland, Marty Schwenner or Jolene Shellman could
reasonably be expected to have as a prudent and responsible manager of Buyer
after having conducted a reasonably comprehensive inquiry or investigation with
respect to the fact or matter that is the subject of such representation,
warranty or other statement.

 

“Liability” means, with respect to any
Person, any liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise, and whether or not the same
is required to be accrued on the financial statements of such Person.

 

“Marks” has the meaning given in the
definition of Intellectual Property.

 

“Material
Adverse Effect” means a material adverse effect on the Business
and assets of Seller, taken as a whole, that is so substantial and adverse as
to fundamentally impair the value to Buyer of the Business and the Purchased
Assets (taken as a whole); provided, however, that the following shall not be
considered when determining whether a Material Adverse Effect has
occurred:  (i) any general
social, political or economic condition or event, the effects of which
are not specific or unique to the Business or the industry in which it operates, including stock market fluctuations, acts of
war or terrorism or the consequences of any of the foregoing; (ii) the
general conditions of the industry in

 

5

 

which
the Business operates, including any change in such conditions; (iii) any
change in currency exchange rates or interest rates; or (iv) any change in any Applicable Law.

 

“Net Working Capital” means, as of the
Effective Time, the amount by which the current assets of Seller included in
the Purchased Assets exceeds the current liabilities of Seller included in the
Assumed Liabilities (as the terms “current assets” and “current liabilities”
are defined under GAAP).

 

“Occupational Safety and Health Law” means
any Applicable Law designed to provide safe and healthful working conditions
and to reduce occupational safety and health hazards, including the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), and any
Applicable Law designed to provide safe and healthful working conditions.

 

“Order” means any order, injunction, judgment, decision,
finding, decree, ruling, assessment or arbitration award of any Governmental
Authority or arbitrator.

 

“Patents” has the meaning given in the
definition of Intellectual Property.

 

“Permit”
means, with respect to any Person, any license, permit, registration, Consent, certificate, order, approval or
other authorization required by any Governmental Authority for such Person to
lawfully (i) own, lease or use a particular asset, (ii) occupy,
access or use particular real property, or (iii) conduct a particular
business or other activity.

 

“Permitted Encumbrance” means (i) any
statutory Encumbrance for Taxes not yet due or delinquent or being contested in
good faith by appropriate proceedings; (ii) any zoning, planning or other
similar limitation or restriction, including rights of any Governmental
Authority, to regulate any property or asset owned, leased or otherwise used by
Seller, or (iii) any matter of public record or matter disclosed or
disclosable by a survey.

 

“Person” means any natural person, firm,
partnership, association, corporation, company, limited liability company,
trust, business trust, Governmental Authority, or other unincorporated entity
or organization.

 

“Proceeding” means any action,
arbitration, audit, hearing, investigation, litigation or lawsuit (whether
civil, criminal, administrative, judicial or investigative, whether formal or
informal, and whether public or private) commenced, brought, conducted or heard
by or before, or otherwise involving, any Governmental Authority, mediator or
arbitrator.

 

“Release” means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment or into or out of any
property.

 

“Representative” means with respect to
a particular Person, any director, officer, member, manager, employee, agent,
consultant, advisor, accountant, financial advisor, legal counsel or other
representative of that Person.

 

6

 

“Target Net Working Capital” means
$768,136.

 

“Tax” means any federal, state, county, local,
foreign or other income, alternative, minimum, accumulated earnings, personal
holding company, franchise, capital stock, net worth, capital, profits,
windfall profits, gross receipts, value added, privilege, sales, use, goods and
services, excise, customs duties, transfer, conveyance, mortgage, registration,
stamp, documentary, recording, premium, severance, environmental (including
taxes under Section 59A of the Code), real property, personal property,
transfer, ad valorem, intangibles, rent, occupancy, license, occupational,
employment, unemployment insurance, social security, disability, workers’
compensation, payroll, health care, registration, withholding, estimated or
other similar tax, duty or other governmental charge or assessment or
deficiencies thereof (including all interest and penalties thereon and additions
thereto whether disputed or not).

 

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

 

“Technology” means,
collectively, all designs, formulae, algorithms, procedures, methods,
techniques, ideas, know-how, research and development, technical data,
programs, subroutines, tools, materials, specifications, processes, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
apparatus, creations, improvements, works of authorship and other similar
materials, and all recordings, graphs, drawings, reports, analyses, and other
writings, and other tangible embodiments of the foregoing, in any form whether
or not specifically listed herein, and all related technology, that are used
in, incorporated in, embodied in, displayed by or relate to, or are used by
Seller or any Seller Member in connection with the Business.

 

“Third Party” means a Person that is
not a Party or an Affiliate of a Party, and is not acting in the capacity as
agent for a Party or any of its Affiliates.

 

“Third Party Claim” means any claim
against any Indemnitee by a Third Party, whether or not involving a Proceeding.

 

“Trade Secrets” the meaning given in
the definition of Intellectual Property.

 

“Treasury Regulations” means the
Treasury Regulations promulgated under the Code, and the term “Treasury
Regulation” followed by a particular § number reference means that particular
section or subsection of the Treasury Regulations.

 

1.2           Terms Defined in Agreement.  For
purposes of this Agreement, the following terms have meanings set forth in the
Sections or paragraphs of this Agreement indicated alongside such terms:

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Assigned Contracts

  	
   

  	
  2.1(e)

  
	
  Assignment and Assumption Agreement

  	
   

  	
  2.7(d)

  

 

7

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Assumed Liabilities

  	
   

  	
  2.3(a)

  
	
  Assumed Payables

  	
   

  	
  2.3(a)(i)

  
	
  Bill of Sale

  	
   

  	
  2.7(c)

  
	
  Buyer

  	
   

  	
  Introductory Paragraph of Agreement

  
	
  Buyer Closing Documents

  	
   

  	
  4.2

  
	
  Buyer Indemnitees

  	
   

  	
  7.2

  
	
  Claims Cap

  	
   

  	
  7.7(a)

  
	
  Claims Period

  	
   

  	
  7.4

  
	
  Closing

  	
   

  	
  2.6

  
	
  Closing Date

  	
   

  	
  2.6

  
	
  Closing Payment

  	
   

  	
  2.4(a)

  
	
  Closing Statement

  	
   

  	
  2.5(b)

  
	
  Confidential Information

  	
   

  	
  5.4(a)

  
	
  Earnout Payments

  	
   

  	
  2.4(c)

  
	
  Employment Agreement

  	
   

  	
  5.9(a)

  
	
  Encumbered Assets

  	
   

  	
  2.9

  
	
  Excluded Assets

  	
   

  	
  2.2

  
	
  Financial Statements

  	
   

  	
  3.6

  
	
  Indemnitee

  	
   

  	
  7.5(a)

  
	
  Indemnitor

  	
   

  	
  7.5(a)

  
	
  IRS

  	
   

  	
  3.23(b)(ii)

  
	
  Lease Assignment

  	
   

  	
  2.7(g)

  
	
  Leased Real Property

  	
   

  	
  3.13(b)

  
	
  Losses

  	
   

  	
  7.2

  
	
  Independent Accountants

  	
   

  	
  2.5(c)

  
	
  Paying Party

  	
   

  	
  6.3

  
	
  Party and Parties

  	
   

  	
  Introductory Paragraph of Agreement

  
	
  Promissory Note

  	
   

  	
  2.4(b)

  
	
  Protected Term

  	
   

  	
  5.6(a)

  
	
  Protected Territory

  	
   

  	
  5.6(b)

  
	
  Purchased Assets

  	
   

  	
  2.1

  
	
  Purchase Price

  	
   

  	
  2.4

  
	
  Non-Paying Party

  	
   

  	
  6.3

  
	
  Real Property Lease

  	
   

  	
  3.13(c)

  
	
  Retained Liabilities

  	
   

  	
  2.3(b)

  
	
  Seller

  	
   

  	
  Introductory Paragraph of Agreement

  
	
  Seller Indemnitees

  	
   

  	
  7.3

  
	
  Seller Closing Documents

  	
   

  	
  3.2

  
	
  Straddle Period Tax

  	
   

  	
  6.3

  
	
  Transferred Employees

  	
   

  	
  5.9(b)

  

 

8

 

ARTICLE 2

SALE AND PURCHASE OF ASSETS

 

2.1           Sale and Purchase
of Assets.  Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, but effective as of the Effective
Time, Seller shall sell, convey, assign, transfer and deliver to Buyer, and
Buyer shall purchase and acquire from Seller, free and clear of any Encumbrance
other than the Permitted Encumbrances, all legal and beneficial right, title
and interest in and to the real and personal property and assets owned by Seller
and used or otherwise arising in connection with the conduct of the Business
(collectively, the “Purchased Assets”), including the following, but
excluding in all cases the Excluded Assets:

 

(a)           all Equipment, including the Equipment described on Schedule 2.1(a);

 

(b)           all Inventories;

 

(c)           all Accounts Receivable;

 

(d)           all prepaid expenses, deposits, credits with, and refunds due from,
vendors or suppliers to the Business, to the extent relating to any Assigned
Contract;

 

(e)           all of Seller’s rights under the Contracts listed on Schedule 2.1(e)
(collectively, the “Assigned Contracts”);

 

(f)            all Permits of Seller exclusively relating to
the Business or any of the Purchased Assets, in each case to the extent
transferable to Buyer by their terms or otherwise under Applicable Law;

 

(g)           the telephone and facsimile numbers of Seller listed on Schedule
2.1(g);

 

(h)           all guarantees, warranties, warranty rights, indemnities, claims and
similar rights of Seller relating to the Purchased Assets or the Business,
whether choate or inchoate, known or unknown, contingent or non-contingent, and
all related claims, credits, rights of recovery and set off;

 

(i)            all Intellectual Property, including the
items listed on Schedule 2.1(i);

 

(j)            all other intangible rights and property of
Seller relating to the Business, including going concern value and goodwill;
and

 

(k)           originals or copies of
all data and records related to the operation of the Business or the ownership
or use of the Purchased Assets, including applicable customer records, research
and development reports and records, production reports and records, service
and warranty records, equipment logs, operating guides and manuals, accounting
records, promotional materials, correspondence and other similar documents and
records and, subject to Applicable Law, copies of all personnel records for the
Employees hired by Buyer pursuant to Section 5.9(a), but excluding the
corporate records of Seller specified in Section 2.2(g).

 

9

 

2.2           Excluded Assets. 
Notwithstanding anything to the contrary contained in Section
2.1 or elsewhere in this Agreement,
the following property and assets of Seller (collectively, the “Excluded
Assets”) are not part of the sale and purchase contemplated hereunder, are
excluded from the Purchased Assets and shall remain the property of Seller
after the Closing:

 

(a)           all cash and cash equivalents, investments, securities, rights to
offset and other similar financial assets of Seller, whether or not relating to
the Business;

 

(b)           any claim by Seller for any refund of Taxes in connection with the
Business or any of the Purchased Assets with respect to any period ending on or
before the Closing Date, and the proceeds of any such claim;

 

(c)           Seller’s rights under this Agreement and any ancillary document or
agreement contemplated hereby to which Seller is a party or under which Seller
has any right;

 

(d)           Seller’s rights under any Contract that is not an Assigned Contract;

 

(e)           all insurance policies of Seller and the rights thereunder, whether or
not maintained for the Business or the Purchased Assets;

 

(f)            any Benefit Plan of Seller, and any assets
underlying, payable or distributable under any such Benefit Plan;

 

(g)           the Certificate of Incorporation, Bylaws, minute books and other
corporate records of Seller; and

 

(h)           the other specified property and assets (if any) listed on Schedule 2.2(h).

 

2.3           Liabilities.

 

(a)           Assumed Liabilities.  At
the Closing, but effective as of the Effective Time, Buyer shall assume and take
exclusive responsibility for, and hereby agrees to satisfy and discharge in
accordance with their respective terms, the following Liabilities of Seller
that exclusively relate to the Purchased Assets or the Business (such
Liabilities being the “Assumed Liabilities”):

 

(i)            Seller’s trade and vendor accounts payable
incurred in the ordinary course of the Business and unpaid as of the
Effective Time (the “Assumed
Payables”), it being understood and agreed that such Assumed
Payables shall not include any of Seller’s or any Seller Member’s costs
incurred in connection with the negotiation of this Agreement or with the
consummation of the Contemplated Transactions, including fees and expenses of
legal and other professional advisors;

 

(ii)           Seller’s ongoing payment
and performance obligations under the Assigned Contracts, but only to the
extent that such obligations first accrue, arise or exist after the Effective
Time and are not based on or do not relate to any

 

10

 

breach by or outstanding obligation of Seller arising,
occurring or existing before the Effective Time; and

 

(iii)          to the extent Seller
makes payment towards or pays off the Centra Line of Credit on the Business Day
immediately preceding the Closing Date, Buyer shall reimburse Seller for such
amount at the Closing.

 

(b)           Retained Liabilities.  The
Retained Liabilities shall remain the exclusive responsibility of, and shall be
retained, paid, performed and discharged exclusively by, Seller in accordance
with their respective terms. 
Notwithstanding anything to the contrary contained in Section 2.3(a)
or elsewhere in this Agreement, “Retained Liabilities” shall mean,
collectively, every Liability of Seller other than the Assumed
Liabilities.  Without limiting the
generality of the foregoing, the Retained Liabilities shall include:

 

(i)            any Liability under
any Assigned Contract that arises, accrues or exists after the Effective Time
out of or relating to (A) any breach of Seller that occurred before the
Effective Time, or (B) any outstanding obligation of Seller that was
required to have been satisfied or performed by Seller before the Effective
Time (except for accounts payable obligations assumed by Buyer pursuant to Section
2.3(a)(i));

 

(ii)           any Liability under any
contract or agreement not included in the Assigned Contracts;

 

(iii)          except as provided in Section
2.3(a)(iii), any Liability of Seller under any note, loan, borrowing
arrangement, debt financing, credit facility, capital lease (except as included
in the Assigned Contracts), financial or performance guaranty, surety,
indemnity or bond, or any security interest related to any of the foregoing;

 

(iv)          any Liability of Seller
for any Tax relating to or arising in connection with the operation of the Business
or ownership of the Purchased Assets by Seller before the Effective Time;

 

(v)           any Environmental,
Health and Safety Liability arising out of or relating to the operation of the
Business prior to the Effective Time or the leasing, ownership or operation of
any asset (including any real property) by Seller, whether or not included in
the Purchased Assets;

 

(vi)          any Liability arising
out of or relating to any Employee grievance or claim against Seller (including
any director, officer or other Employee thereof), any Seller Member or any
prior member of Seller, whether or not the Employee involved with such
grievance or claim is hired by Buyer;

 

(vii)         any Liability relating to
any Benefit Plan of Seller or any payroll, sick leave or pay, workers’
compensation, unemployment benefits, or other 

 

11

 

benefits or compensation of any kind for Seller’s
directors, former directors, officers, managers, Employees or former Employees;

 

(viii)        any Liability under any
employment, severance, retention or termination agreement with any present or
past director, officer, manager, member or Employee of Seller;

 

(ix)           any Liability of Seller
to defend, indemnify, hold harmless or reimburse any Person, including any
present or former director, officer, manager, member, Employee or agent of
Seller, except to the extent such Liability is expressly included in an
Assigned Contract (and then only to the extent that such Liability arises in
connection with acts, omissions, facts, events or circumstances first existing,
accruing or arising after the Effective Time);

 

(x)            any Liability of
Seller to any Affiliate or to any Seller Member or any prior member of Seller,
including any and all debt amounts payable by Seller to any Affiliate or any
Seller Member;

 

(xi)           any Liability of Seller
to distribute to any Person (including any Seller Member or any prior member of
Seller) or otherwise apply all or any part of the Purchase Price received by
Seller hereunder;

 

(xii)          any Liability of Seller
arising out of (A) any past Proceeding or any Proceeding underway or
pending as of the Effective Time by or against Seller, any Seller Member or any
prior member of Seller, or any Affiliate thereof, or (B) any Proceeding
commenced after the Effective Time that relates to any act, omission,
occurrence or event happening, or any fact or circumstance existing, before the
Effective Time;

 

(xiii)         any Liability of Seller
arising out of or resulting from non-compliance with any Applicable Law or
Order by Seller, any Seller Member or any prior member of Seller;

 

(xiv)        any Liability of Seller
under this Agreement or under any Seller Closing Document, Buyer Closing
Document or other document or agreement contemplated thereby; and

 

(xv)         any Liability of Seller
based upon or arising from the acts or omissions of Seller or any Seller Member
occurring after the Effective Time.

 

2.4           Purchase Price.  In
consideration for the Purchased Assets and Seller’s and the Seller Members’
covenants under Section 5.3,
in addition to Buyer’s assumption of the Assumed Liabilities, Buyer shall pay
to Seller the sum of $2,500,000, plus the aggregate amount of Earnout
Payments (as defined below), minus the amount, if any, by which
the Net Working Capital as determined pursuant to Section 2.5 is less
than the Target Net Working Capital (collectively, the “Purchase Price”).
 Buyer shall pay the Purchase Price to Seller
in the following manner:

 

12

 

(a)           At the Closing, Buyer shall pay to or for the account of Seller by wire
transfer of immediately available funds $1,750,000.00 (the “Closing Payment”).

 

(b)           At the Closing, Buyer shall deliver to Seller a Promissory Note, in the
form attached hereto as Exhibit A (the “Promissory Note”),
for the principal amount of $750,000, which shall be payable in full by Buyer
on the first anniversary of the Closing Date, subject to  Section 7.9.

 

(c)           Subject to Section 7.9, Buyer shall pay to or for the account of Seller, within ninety (90)
days after the end of each Fiscal Year (as defined below), through and
including the Fiscal Year ending June 28, 2010, in immediately available
funds (by wire transfer to a bank account designated by the Seller), the amount
determined in accordance with the Earnout Schedule attached hereto as Exhibit B
(each, an “Earnout Payment”).  “Fiscal Year” shall mean the fifty-two
(52) or fifty-three (53) week period commencing on the Monday following the
Sunday that is nearest to June 30th and ending on the Sunday
that is nearest June 30th of each year.  The first Fiscal Year is the 2008 Fiscal
Year, ending June 29, 2008.

 

2.5           Net Working Capital Adjustment.  For
purposes of Section 2.4,
the Target Net Working Capital and Net Working Capital shall be determined as
follows:

 

(a)           Exhibit C
attached hereto sets forth pro forma balance sheets of Seller as of the
Effective Time and the methodology for calculating the Net Working Capital
based thereon.

 

(b)           Within ninety (90) days following the Closing Date, Buyer shall deliver
to Seller a statement (the “Closing Statement”) setting forth Buyer’s
determination of the Net Working Capital based on the financial and other
records of the Business, which determination shall be made in a manner
consistent with the calculation set forth on Exhibit C.  Seller shall have thirty (30) days from the
date of its receipt of the Closing Statement to review Buyer’s determination of
the Net Working Capital set forth in the Closing Statement.  Buyer shall provide Seller with reasonable
access to Buyer’s books and records to the extent relevant to verifying Buyer’s
determination of the Net Working Capital. 
Upon completion of its review (and in any event within the required
thirty (30)-day period), Seller shall deliver to Buyer written notice of Seller’s
acceptance or rejection of Buyer’s determination of the Net Working Capital,
including, in the case of any such rejection, an explanation of the reason for
such rejection.  If Seller fails to
deliver any such written notice to Buyer within such thirty (30)-day period,
Seller shall be deemed to have accepted Buyer’s determination of the Net
Working Capital, in which event Buyer’s determination of the Net Working
Capital shall be final, binding and conclusive on the Parties.

 

(c)           If Seller delivers written notice to Buyer under Section 2.5(b)
of Seller’s rejection of Buyer’s determination of the Net Working Capital as
set forth in the Closing Statement (which notice of rejection must contain
reasonable details as to the basis of such rejection), Seller and Buyer shall
promptly (and in any event within ten (10) Business Days) cause their
respective Representatives to confer with each other with a view to resolving
such matter.  If such Representatives are
unable to resolve such matter 

 

13

 

within thirty (30) days
after the date of delivery of Seller’s notice of rejection to Buyer, Seller and
Buyer shall refer the dispute to a mutually acceptable firm of independent
public accountants (the “Independent Accountants”) for review and final
determination of the Net Working Capital. 
The Independent Accountants may request of Seller and Buyer such
documents and information as may be necessary or appropriate for proper
determination of the matter, and Seller and Buyer shall cooperate reasonably to
promptly satisfy any such request.  The
determination by the Independent Accountants of the Net Working Capital, shall
be final, binding and conclusive on Seller and Buyer.  The costs of the Independent Accountants in
undertaking such review and determination shall be shared equally by Seller and
Buyer.

 

(d)           Within five (5) Business Days after the Net Working Capital is
finally determined:

 

(i)            if the Net Working Capital is less than the
Target Net Working Capital, the Purchase Price shall be deemed to be adjusted
downwards on a dollar-for-dollar basis by the amount of such shortfall, and
Seller shall (and the Seller Members shall cause Seller to) forthwith pay the
amount of such shortfall to Buyer by wire transfer of immediately available
funds; and

 

(ii)           if the Net Working Capital exceeds the Target Net Working Capital, the
Purchase Price shall not be adjusted.

 

2.6           Closing.  The
consummation of the Contemplated Transactions (the “Closing”) shall take
place at the offices of Buyer at N49 W 13650 Campbell Drive, Menomonee Falls,
Wisconsin 53051, commencing at 10:00 a.m. (local time) on February 4,
2008 (the “Closing Date”), or at such other time and place as Seller and
Buyer may agree.

 

2.7           Closing Deliveries by Seller.  At
the Closing, Seller shall deliver or cause to be delivered to Buyer the
following:

 

(a)           a certificate of good standing of Seller dated not more than ninety
(90) days before the Closing Date issued by the Secretary of State of
Pennsylvania;

 

(b)           a copy, certified by an
executive officer of Seller, of the resolutions of the Seller Members
authorizing and approving (i) Seller’s execution and delivery of this
Agreement and the other agreements contemplated hereby and the consummation of
the Contemplated Transactions, and (ii) the change of Seller’s name in
accordance with the provisions of Section 5.10;

 

(c)           a general bill of sale for all of the Equipment, Inventories and other
tangible personal property included in the Purchased Assets, in form and
substance reasonably acceptable to Buyer (the “Bill of Sale”), duly
executed by Seller;

 

(d)           an assignment of the Accounts Receivable, Assigned Contracts, Permits
(to the extent transferable to Buyer by their terms or under Applicable Law),
Intellectual Property and other intangible personal property included in the
Purchased Assets, in form and substance reasonably acceptable to Buyer, which
assignment shall also contain 

 

14

 

Buyer’s assumption of the
Assumed Liabilities (the “Assignment and Assumption Agreement”), duly
executed by Seller;

 

(e)           intentionally left blank;

 

(f)            intentionally left blank;

 

(g)           an assignment of Seller’s rights under the Real Property Lease, in form
and substance reasonably acceptable to Buyer, which assignment shall also
contain Buyer’s assumption of Seller’s obligations under the Real Property
Lease (the “Lease Assignment”), duly executed by Seller and the landlord
under the Real Property Lease;

 

(h)           written consents of all Third Parties necessary for the assignment and
assumption of the agreements listed on Schedule 2.7(h);

 

(i)            the Employment Agreement, duly executed by W.
Christopher Dulin;

 

(j)            the documents and records related to the
Business and the Purchased Assets referred to in Section 2.1(k);
and

 

(k)           such other documents and instruments as Buyer may reasonably require to
further and give effect to the Contemplated Transactions.

 

2.8           Closing Deliveries by Buyer.  At
the Closing, Buyer shall deliver or cause to be delivered to Seller the
following:

 

(a)           a copy, certified by an officer of Buyer, of resolutions of the
directors of Buyer authorizing and approving the execution and delivery of this
Agreement and the consummation of the Contemplated Transactions;

 

(b)           the Assignment and Assumption Agreement, duly executed by Buyer;

 

(c)           the Lease Assignment, duly executed by Buyer;

 

(d)           the Closing Payment, subject to the provisions of Section 2.9;

 

(e)           the Employment Agreement, duly executed by Buyer; and

 

(f)            such other documents and instruments as
Seller may reasonably require to further and give effect to the Contemplated
Transactions.

 

2.9           Payoff
of Creditors.  Except for the Assumed
Liabilities, including but not limited to any equipment leases included in the
Assigned Contracts, and except for any other Permitted Encumbrance, Seller
shall be required, at or before the Closing, at its sole cost, to buy out,
settle and discharge any equipment lease, lease purchase contract, installment
sale contract, loan agreement or other agreement or arrangement that creates,
provides for or gives rise to any Encumbrance on any of the Purchased Assets
(the “Encumbered Assets”) so that Seller is able to convey clear title
to the Encumbered Assets to Buyer at the Closing, free and clear of any further

 

15

 

payment obligations or
other Encumbrances.  At least three (3) Business
Days before the Closing Date, Seller shall obtain from all applicable lessors
or creditors, and deliver to Buyer, payout statements for all amounts owing by
Seller in respect of the Encumbered Assets as of the Closing Date.  At the Closing, Buyer shall be entitled, and
Seller hereby authorizes and directs Buyer, to pay applicable portions of the
Closing Payment directly to such lessors or creditors on Seller’s behalf so as
to fully buy out, settle and discharge all amounts owing to such lessors or
creditors in respect of the Encumbered Assets.  Any
payments by Buyer to such lessors or creditors of Seller shall be deemed to
constitute payments by Buyer to Seller for purposes of satisfaction of Buyer’s
payment obligations under Section 2.4(a).

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER AND
SELLER MEMBERS

 

Seller and the Seller
Members acknowledge that Buyer is relying on the accuracy of the
representations and warranties contained in this Article 3 and that
such representations and warranties are given in order to induce Buyer to enter
into this Agreement and consummate the Contemplated Transactions.  Accordingly, as between Seller and the Seller
Members, collectively, both jointly and severally represent and warrant to
Buyer, and, as among the Seller Members, each severally represents and warrants
to Buyer, as follows:

 

3.1           Organization and Authority of Seller. 
Seller is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Pennsylvania, with full
limited liability company power and authority to own its properties and to
carry on its business as now being conducted and as presently intended to be
conducted.  Seller is not registered to
do business as a foreign limited liability company in any state or other
jurisdiction, as neither the ownership or use of the properties owned or used
by it, nor the nature of the activities conducted by it, requires such
registration.

 

3.2           Authorization of Agreement.  The
execution and delivery by Seller of this Agreement and each other agreement or
instrument to be executed and delivered by Seller at Closing and the
performance of the Contemplated Transactions by Seller have been duly authorized
by all necessary limited liability company action by Seller, and no other
action on the part of Seller is necessary to authorize this Agreement or any
such other agreement or instrument or to consummate the Contemplated
Transactions.  This Agreement has been
duly and validly executed and delivered by Seller and the Seller Members and
constitutes a valid and binding obligation of Seller and the Seller Members,
enforceable against Seller and the Seller Members in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors generally and
by the availability of equitable remedies. 
Upon their execution and delivery at Closing by Seller, the Bill of
Sale, Assignment and Assumption Agreement, Lease Assignment and other
agreements and instruments to be executed and delivered by Seller at Closing
pursuant to this Agreement (collectively, the “Seller Closing Documents”)
shall constitute valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors generally and by the availability of equitable
remedies.

 

16

 

3.3           No Conflicts.  Neither
the execution and delivery by Seller of this Agreement or any of the Seller
Closing Documents nor the consummation or performance of any of the Contemplated
Transactions does or shall, directly or indirectly (with or without notice or
lapse of time):

 

(a)           violate any provision
of the certificate of organization, operating agreement or other governing
documents of Seller, or contravene any resolution adopted by the members of
Seller;

 

(b)           breach any Applicable
Law or Order to which Seller, any Seller Member, the Business or any of the
Purchased Assets is subject or give any Governmental Authority or other Person
the right to challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under any Applicable Law or any Order to which
Seller, any Seller Member, the Business or any of the Purchased Assets is
subject;

 

(c)           contravene, conflict
with or result in a breach of any of the terms or requirements of, or give any
Governmental Authority the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Permit that is held by or on behalf of Seller and that
relates to the Business or any of the Purchased Assets;

 

(d)           cause Buyer (or any
Affiliate thereof) to become subject to, or to become liable for the payment
of, any Tax that is not contemplated by this Agreement or that would not be the
reasonably contemplated result of the Contemplated Transactions;

 

(e)           breach any provision
of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or payment under, or to
cancel, terminate or modify, any Contract to which Seller or any Seller Member
is a party or by which Seller or any Seller Member is bound (including any
Assigned Contract); or

 

(f)            result in the
imposition or creation of any Encumbrance (other than a Permitted Encumbrance)
on any of the Purchased Assets.

 

3.4           Notices and Consents.  Except as set forth under on Schedule 3.4,
Seller is not required to give any notice to, or obtain any consent from, any
Person in connection with the execution and delivery of this Agreement or the
consummation of the Contemplated Transactions.

 

3.5           Seller
and Seller Members.  The Seller
Members are the only members of Seller. 
Seller has delivered to Buyer a complete copy of the certificate of
organization and there is no operating agreement of Seller.

 

3.6           Financial Statements. 
Seller has provided to Buyer correct and complete copies of the
unaudited financial statements of Seller as of and for the fiscal years ended December 31,
2006 and 2005 and copies of the
unaudited, monthly consolidated financial statements of Seller as of and for
each completed monthly period ended after December 31, 2006, including in
each case a balance sheet, a statement of income and retained earnings, a
statement of changes in shareholders’ equity and a statement of cash flows (the
“Financial Statements”).  The
Financial 

 

17

 

Statements have been
prepared from and are in accordance in all material respects with the
accounting records of Seller, and fairly present in all material respects the
financial condition and results of operations of Seller and the
Business as of the respective dates of and for the periods referred to
therein.

 

3.7           Books and Records.  The
financial, business and other records of Seller, all of which have been made
available to Buyer, are complete and correct in all material respects and have
been maintained in accordance with sound business practices.

 

3.8           No Undisclosed Liabilities. 
Except for the Assumed Liabilities and the Retained Liabilities, Seller
does not have any obligation or liability (whether accrued, absolute,
contingent, liquidated, unliquidated, or otherwise, whether due or to become
due and regardless of when asserted) except for (i) liabilities reflected
in the Financial Statements or Seller’s current financial records (copies of
all of which have been made available to Buyer), (ii) ongoing performance
obligations under Contracts that are not required by GAAP to be reflected in
the Financial Statements, (iii) current liabilities incurred in the
ordinary course of business of Seller since the date of the most recent balance
sheet included in the Financial Statements, and (iv) Liabilities set forth
on Schedule 3.8.

 

3.9           Title to Purchased Assets; Encumbrances.  Except
for (i) the Encumbrances listed under Part 1 of Schedule 3.9,
all of which shall be discharged by Seller before or in connection with the
Closing, and (ii) any other Permitted Encumbrance, Seller has good and
marketable title (or a valid leasehold interest with respect to leased assets)
to all of its assets and properties free and clear of any Encumbrance.  Except for assets or property leased by
Seller under written lease agreements, Seller is not in possession of any
property or asset that is owned by any other Person, and no such property or
asset is included in the Purchased Assets. 
Except as listed under Part 2 of Schedule 3.9, and except
for Inventories in transit to or from customers or suppliers, no Third Party is
in possession of any asset or property of the Seller.

 

3.10         Sufficiency of Assets. 
Except for the Excluded Assets, the Purchased Assets constitute all of
the property and assets, tangible and intangible, of any nature whatsoever,
necessary to operate the Business in the manner presently operated by Seller.

 

3.11         Condition of Equipment.  Each
item of Equipment owned or leased by Seller is in good repair and good
operating condition, ordinary wear and tear excepted, is suitable for immediate
use in the ordinary course of business, is free from apparent defects and is
being operated and maintained in all material respects in accordance with
prescribed operating instructions necessary to ensure the effectiveness of
Equipment warranties and/or service plans, and (ii) no item of Equipment
owned or leased by Seller is in need of repair or replacement other than as
part of routine maintenance in the ordinary course of business.  All Equipment owned or leased by Seller is,
and immediately before the Closing shall be, in the possession or under the
control of Seller.

 

3.12         Inventories.  Except as set forth on Schedule
3.12, all items included in the Inventories consist of a quality and
quantity usable or saleable in the ordinary course of business of Seller,
except for obsolete items and items of below-standard quality, all of which
have been written off or written down to net realizable value in the Financial
Statements.  All of the 

 

18

 

Inventories
have been valued at the lower of cost or net realizable value.  Inventories now on hand that were purchased
after the date of the most recent balance sheet included in the Financial
Statements were purchased in the ordinary course of business of Seller at a
cost not exceeding market prices prevailing at the time of purchase.  Seller has provided Buyer with a complete and
accurate list of Inventories current to within five (5) days of the date
of this Agreement.

 

3.13         Real
Property.

 

(a)           Seller does not own any interest in real property.

 

(b)           The real property described on Schedule 3.13(b) (the “Leased
Real Property”) constitutes the only real property leased by Seller as
tenant or otherwise occupied or used by Seller in the conduct of the
Business.  The Leased Real Property,
including buildings, fixtures and other improvements thereon, are in good
operating condition and repair, ordinary wear and tear excepted, and is not in
need of repair other than as part of routine maintenance in the ordinary course
of business.  To the Knowledge of Seller
and the Seller Members, all buildings, structures, improvements and fixtures on
the Leased Real Property are in material compliance with all Applicable Laws,
including Occupational Safety and Health Laws.

 

(c)           Seller has provided Buyer with a complete copy of the real property
lease for the Leased Real Property, including all amendments and supplements
thereto (the “Real Property Lease”). 
Seller has not entered into any agreement, arrangement or understanding
with any landlord (including any predecessor landlord) under the Real Property
Lease, written or oral, that in any way alters or affects the express terms and
conditions of such Real Property Lease. 
The legal and other descriptions of Leased Real Property contained in
each Real Property Lease are accurate and complete.

 

(d)           Seller has a valid and enforceable leasehold interest under the Real
Property Lease, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a Proceeding at law or in equity).  Seller has not granted to any Person any
sublease, license, easement or other right to use or access any part of the
Leased Real Property, nor has Seller suffered to exist any unauthorized use or
occupancy of any part of the Leased Real Property by any Person.  The Real Property Lease is in full force and
effect, and Seller is not in default thereunder, and no condition exists that
with notice or lapse of time, or both, would constitute a default by Seller
under the Real Property Lease.  To the
Knowledge of Seller and the Seller Members, no other party to the Real Property
Lease is in default thereunder or has exercised any termination right with
respect thereto.  No notice of default or
notice of termination has been received by Seller with respect to the Real
Property Lease that has not been withdrawn or canceled.

 

(e)           To the Knowledge of Seller and the Seller Members, there does not exist
any actual, threatened or contemplated condemnation or eminent domain
Proceeding that affects or could be reasonably expected to affect the Leased
Real Property or any part 

 

19

 

thereof, and Seller has not
received any written notice of the intention of any Governmental Authority to
undertake any such Proceeding.

 

(f)            Seller has not made any alteration or caused
any damage to the Leased Real Property, ordinary wear and tear excepted, that
was not consented to by the applicable landlord and that has resulted in or
could reasonably be expected to result in any claim by such landlord against
Seller or, following the Closing, Buyer for repair, replacement, remediation,
reimbursement or other remedies available to such landlord under the Real
Property Lease or under Applicable Law. 
Seller does not currently have, nor has it had within the past twelve
(12) months, any ongoing dispute or disagreement with any landlord in respect
of any obligation of Seller, or such landlord under the Real Property Lease
where such dispute has not been fully resolved and settled as of the date
hereof.

 

3.14         Accounts Receivable.  All
Accounts Receivable that are reflected in the Financial Statements or in the
accounting records of Seller as of the date hereof represent valid obligations
arising from sales actually made or services actually performed by Seller in
the ordinary course of business.  Except
to the extent paid before the Closing Date, and except as set forth on Schedule
3.14, such Accounts Receivable are or shall be as of the Closing Date
current and collectible net of the respective reserves shown on the most
current balance sheet included in the Financial Statements (which reserves are
adequate).  Except as disclosed on Schedule
3.14, there is no contest, claim, defense or right of setoff, other than
returns in the ordinary course of business of Seller, with any account debtor
of an Account Receivable relating to the amount or validity of such Account
Receivable.  Seller has provided Buyer
with a complete and accurate list of the Accounts Receivable current to within
five (5) days of the date of this Agreement.

 

3.15         Accounts Payable. 
Since December 31, 2006, Seller has satisfied, paid and discharged
all of its accounts payable and other current liabilities in a timely manner
and in accordance with their respective terms of payment, except (i) for
current accounts payable which are not yet delinquent and are properly
accounted for in the Financial Statements or Seller’s financial records, and (ii) accounts
payable that are the subject of any bona fide  dispute.  Any and all such bona fide disputes that are
currently unresolved are described on Schedule 3.15.  Seller has provided Buyer with a complete and
accurate list of the accounts payable of Seller current to within five (5) days
of the date of this Agreement.

 

3.16         Intellectual
Property.

 

(a)           Schedule 3.16(a) contains a complete and accurate list of all
Intellectual Property that is owned or licensed (as licensee) by Seller.

 

(b)           Except as disclosed on Schedule 3.16(b), (i) all items of
Intellectual Property referred to in Section 3.16(a) are in
material compliance with formal legal requirements (including, to the extent
applicable, payment of filing, examination and maintenance fees, proofs of
working or use, timely post-registration filing of affidavits of use and
incontestability and renewal applications), and are valid and enforceable, (ii) to
the Knowledge of Seller and the Seller Members, no item of Intellectual
Property is currently being infringed or overtly challenged or threatened in
any way by any Person, 

 

20

 

(iii) to the Knowledge
of Seller and the Seller Members, none of the products or services sold or
Trade Secrets used by Seller infringes or has been alleged to infringe any
intellectual property right of any other Person, (iv) no Mark of Seller
has been or is now involved in any opposition, invalidation or cancellation
Proceeding and, to the Knowledge of Seller and the Seller Members, no such
action is threatened with respect to any of the Marks, and (v) to the
Knowledge of Seller and the Seller Members, there is no potentially interfering
trademark, trademark application or trade name of any other Person in use or
pending.

 

(c)           With respect to Trade Secrets of Seller, the documentation relating to
such Trade Secrets is current, accurate and sufficient in detail and content to
identify and explain it and to allow its full and proper use without reliance
on the knowledge or memory of any individual. 
Seller has taken reasonable precautions to protect the secrecy,
confidentiality and value of all Trade Secrets. 
Seller has good title to and an absolute right to use the Trade
Secrets.  The Trade Secrets are not part
of the public knowledge or literature and, to the Knowledge of Seller and the
Seller Members, have not been used, divulged or appropriated either for the
benefit of any Person (other than Seller) or to the detriment of Seller.

 

(d)           Schedule 3.16(d) contains a complete and accurate list of all
material licenses, sublicenses, consents and other Contracts (whether written
or otherwise) (i) pertaining to any Intellectual Property (other than
commercially available, off-the-shelf software products (e.g., Microsoft
Office, Adobe Acrobat)), and (ii) by which Seller licenses or otherwise
authorizes a Third Party to use any Intellectual Property.  Neither Seller nor, to the Knowledge of
Seller and the Seller Members, any other Person is in breach of or default
under any such license or other agreement, and each such license or other
agreement is now and immediately following the Closing shall be valid and in
full force and effect.  Except with
respect to licenses of commercially available, off-the-shelf software products
(e.g., Microsoft Office, Adobe Acrobat), Seller is not required or obligated to
make any payment by way of royalties, fees or otherwise to any owner, licensor
of, or other claimant to any Intellectual Property, or other Third Party, with
respect to the use thereof or in connection with the conduct of the Business as
currently conducted.

 

(e)           No Seller Member and no present or former Employee has any right,
title, or interest, directly or indirectly, in whole or in part, in or to any
Intellectual Property owned or used by Seller. 
To the Knowledge of Seller and the Seller Members, no Employee,
consultant or independent contractor of Seller is, as a result of or in the
course of such Employee’s, consultant’s or independent contractor’s engagement
by Seller, in default or breach of any material term of any employment
agreement, non-disclosure agreement, invention assignment agreement or similar
agreement.

 

(f)            The consummation of the Contemplated
Transactions will not result in the loss or impairment of Buyer’s right to own
or use any of the Intellectual Property.

 

(g)           The information technology systems owned, licensed, leased, operated on
behalf of, or otherwise held for use by Seller, including all computer
hardware, Software, 

 

21

 

firmware and
telecommunications systems, perform reliably and in material conformance with
the appropriate specifications or documentation for such systems.

 

3.17         Agreements,
Contracts and Commitments.

 

(a)           Schedule 3.17(a) contains an accurate and complete list, and
Seller has delivered to Buyer accurate and complete copies, of the following
outstanding contracts (including all amendments and supplements thereto) to
which Seller is a party or by which Seller is bound (the “Material Contracts”):

 

(i)            each Contract for the sale of goods or
performance of services by Seller having an actual or anticipated value to
Seller of at least $50,000 in any twelve (12)-month period, including
individual purchase orders;

 

(ii)           each Equipment lease, lease-purchase agreement, installment sale
Contract or other similar Contract;

 

(iii)          each maintenance Contract, service plan, warranty or other Contract
relating to any of the owned or leased Equipment or to the maintenance of the
Leased Real Property where such Contract has a value or cost to Seller of at
least $25,000 in any twelve (12)-month period;

 

(iv)          each Contract with Third Party consultants or other service providers
of Seller, other than Seller’s legal, financial and accounting advisors, where
such Contract has a value or cost to Seller of at least $25,000 in any twelve
(12)-month period;

 

(v)           each Contract, other than Seller’s operating agreement, involving a
sharing of profits, losses, costs or liabilities by Seller with any other
Person, including any joint venture agreement;

 

(vi)          each Contract containing covenants that in any way purport to restrict
Seller’s business activity or limit the freedom of Seller to engage in any line
of business, to compete with any Person or to solicit any Person for business,
employment or other purposes;

 

(vii)         each Contract or instrument that creates, gives rise to or otherwise
contemplates any Encumbrance over or in respect of any Purchased Asset;

 

(viii)        each Contract with any dealer, distributor, marketer or sales
representative; and

 

(ix)           each Contract with any Governmental Authority.

 

(b)           Except as set forth on Schedule 3.17(b):

 

(i)            each Material Contract is in full force and
effect and is valid and enforceable in accordance with its terms, subject to
applicable bankruptcy, 

 

22

 

insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a Proceeding at law or in equity);

 

(ii)           Seller is in material compliance with all applicable terms and
requirements of each Material Contract, and to the Knowledge of Seller and the
Seller Members, each other Person that is a party to or bound by any Material
Contract is in material compliance with all applicable terms and requirements
thereof;

 

(iii)          no event has occurred or circumstance exists under or by virtue of any
Material Contract that (with or without notice or lapse of time) would cause
the creation of any Encumbrance, other than a Permitted Encumbrance, affecting
any of the Purchased Assets;

 

(iv)          Since December 31, 2006, Seller has not given to or received from
any other Person any written notice regarding any actual or alleged breach of
any Material Contract or any notice announcing, contemplating or threatening
termination or cancellation of any Material Contract; and

 

(v)           there are presently no renegotiations of, attempts to renegotiate or
outstanding rights of any Person to renegotiate any material provision
(including fees or other payment amounts) under any Material Contract and no
such Person has made any written demand to Seller or any representative thereof
for such renegotiation.

 

3.18         Material
Customers and Suppliers.

 

(a)           Schedule 3.18(a) sets forth a list of the ten (10) largest
customers and the ten (10) largest suppliers of Seller, taken as a whole,
as measured by the dollar amount of purchases thereby or therefrom, during each
of the fiscal years ended December 31, 2006 and 2005 and year-to-date in
respect of the fiscal year ending December 31, 2007, showing the
approximate total sales by Seller to each such customer and the approximate
total purchases by Seller from each such supplier, during such period.

 

(b)           Except as otherwise set forth on Schedule 3.18(b), since December 31,
2006, (i) no customer or supplier listed or required to be listed on Schedule
3.18(a) has terminated its relationship with Seller or materially reduced
or changed the pricing or other terms of its business with Seller, and (ii) no
customer or supplier listed or required to be listed on Schedule 3.18(a)
has notified Seller that it intends to terminate or materially reduce or change
the pricing or other terms of its business with Seller.

 

3.19         Insurance.  Set forth on Schedule
3.19 is an accurate and complete list and description of all policies of
insurance currently held by or on behalf of Seller relating (in whole or in
part) to the Business or any of the Purchased Assets.  For all applicable periods dating back to January 1,
2004, there has not been any loss experience under any such policy of insurance
or any prior policy of insurance, nor any loss experience during such period
that were self-insured 

 

23

 

by Seller.  Since January 1, 2004, Seller has not
received any notice of refusal of insurance coverage that was applied for by or
on behalf of Seller relating (in whole or in part) to the Business or any of
its properties or assets, any notice of rejection of a claim submitted to
Seller’s insurer in connection with the operation of the Business or the
ownership of any of Seller’s properties or assets, or any notice of
cancellation of any policy of insurance previously issued to Seller relating
(in whole or in part) to the Business or any of Seller’s properties or assets.

 

3.20         Proceedings.  There are no Proceedings
pending or, to the Knowledge of Seller and the Seller Members, threatened by or
against or affecting Seller, the Business or any of the Purchased Assets.  Neither Seller, the Business nor any Purchased
Asset is subject to any Order.  There are
no Proceedings pending against or, to the Knowledge of Seller and the Seller
Members, threatened in writing against, Seller that questions the validity or
legality of this Agreement or any action taken or to be taken by Seller in
connection herewith.  To the Knowledge of
Seller and the Seller Members, no event has occurred or circumstance exists
that is reasonably likely to give rise to or serve as a basis for, the commencement
of any Proceeding referred to in this Section 3.20.

 

3.21         Employees.

 

(a)           Schedule 3.21(a) sets forth complete and accurate information
regarding the Employees of Seller, including for each such Employee
his/her:  (i) name; (ii) title
and/or job description; (iii) part-time or full-time status; (iv) annual
base salary or hourly wage; (vi) available bonus or other contingent
compensation; (vii) accrued and unused vacation days; (viii) accrued
and unused sick days; and (ix) if on leave, the status of such leave
(including reason for leave and expected return date).  Each Employee is lawfully employed by
Seller on the basis of such Employee being a United States citizen, a
documented resident alien (i.e., “green card” holder) or a holder of a validly
issued work visa or other applicable Permit.

 

(b)           Since December 31, 2006, with respect to the Employees, there has
not been, there is not presently pending or existing, and, to the Knowledge of
Seller and the Seller Members, there is not overtly threatened any material
charge, grievance Proceeding or other claim against or affecting Seller (or any
director, officer, manager or Employee thereof) relating to the actual or
alleged violation of any Applicable Law pertaining to labor relations or
employment matters, including any charge or complaint filed by any employee,
union or other employee or labor organization with the National Labor Relations
Board, the Equal Employment Opportunity Commission or any comparable
Governmental Authority.

 

(c)           All salaries, wages, commissions and other compensation and benefits
payable to each employee of Seller have been accrued and paid by Seller when
due for all periods through the date hereof, and, as of the Closing Date, shall
have been paid by Seller when due for all periods through the Closing Date,
including any stub period payroll obligations resulting from the Closing Date
occurring between normal paydays, which payroll obligations are properly
accounted for in Seller’s financial records in accordance with GAAP.

 

24

 

3.22         Labor
Disputes; Compliance.

 

(a)           Seller has complied, and is currently complying, in all material
respects with all Applicable Laws relating to employment practices, terms and
conditions of employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, payment of social security and similar
Taxes and occupational safety and health.

 

(b)           Seller has not been, and is not now, a party to any collective
bargaining agreement or other labor Contract. 
Since December 31, 2006, there has not been, there is not presently
pending or existing, and to the Knowledge of Seller and the Seller Members,
there is not threatened, any strike, slowdown, picketing, work stoppage or
employee grievance process involving Seller. 
To the Knowledge of Seller and the Seller Members, no event has occurred
or circumstance exists that could provide the basis for any work stoppage or
other labor dispute in respect of Seller. 
To the Knowledge of Seller and the Seller Members, there is no
organizational activity or other labor dispute against or affecting Seller, and
no application or petition for an election of or for certification of a
collective bargaining agent is pending. 
There is not now nor has there been since December 31, 2006 any
lock-out by Seller of any Employee (or group thereof), and no such action is
currently contemplated by Seller.

 

3.23         Employee
Benefit Matters.

 

(a)           Schedule 3.23
contains a complete and accurate list of each Benefit Plan.

 

(b)           With respect to each
Benefit Plan:

 

(i)            Except for ordinary
and usual claims for benefits by participants and beneficiaries, there are no
pending or, to the Knowledge of Seller and the Seller Members, threatened
claims and no pending or, to the Knowledge of Seller and the Seller Members,
threatened litigation with respect to any Benefit Plan sponsored, maintained or
contributed to by Seller that could have an effect on the transactions
contemplated by this Agreement.  No audit
or investigation by a Governmental Authority with respect to any Benefit Plan
that could affect the Contemplated Transactions, result in any Liability of
Buyer or result in the imposition of an Encumbrance or other claim against any
of the Purchased Assets is pending, nor has Seller received formal notice of
any such audit or investigation.  Seller
does not have any announced plan or legally binding commitment to create any
additional Benefit Plan or to modify any existing Benefit Plan except as
otherwise required by Applicable Law that could have an effect on the Contemplated
Transactions.

 

(ii)           Seller’s 401(k) Benefit
Plan has received one or more favorable determination letters from the Internal
Revenue Service (“IRS”) as to its Tax qualified status under Sections
401(a) and 501(a) of the Code, and to the Knowledge of Seller and the
Seller Members, nothing has occurred that would materially impact such Tax
qualified status.  Seller has delivered
to Buyer a true

 

25

 

and complete copy of the most recent IRS determination
letter with respect to Seller’s 401(k) Benefit Plan.

 

(iii)          Seller has delivered to
Buyer true, correct, and complete copies of all of the currently effective
governing documents for the Benefit Plans, including trust agreements,
amendments to Benefit Plan documents or trust agreements, summary plan
descriptions, summaries of material modifications, any material written
interpretations or descriptions given to participants or others, and any other
descriptive material delivered to participants. 
Seller also has delivered to Buyer a complete written description of any
Benefit Plan that is not in writing. 
Seller has delivered to Buyer true, correct and complete copies of all
actuarial reports, if applicable, for each Benefit Plan for the most recent
Plan Year, as defined in each Benefit Plan.

 

(iv)          There are no
Liabilities, breaches, violations or defaults under any Benefit Plan which
would subject the Purchased Assets, Buyer or any of Buyer’s employee benefit
plans to any Taxes, penalties or other liabilities.  Seller has never maintained, contributed to,
or had any Liability for any employee pension benefit plan (as defined in Section 3(2) of
ERISA) that is or has been subject to Title IV of ERISA.  Seller has paid and discharged promptly when
due all liabilities and obligations arising under ERISA or the Code of a
character which if unpaid or unperformed could result in the imposition of an
encumbrance against any of the Purchased Assets.

 

(v)           Neither the acquisition
by Buyer of the Purchased Assets nor the employment by Buyer of any Employees
of Seller will, directly or indirectly, give rise to any withdrawal Liability
or potential withdrawal Liability on the part of Buyer with respect to any
Benefit Plan or to which Seller has or has had any obligation to contribute for
the benefit of any employees that is a “multiemployer plan” as that term is
defined in Section 3(37)(A) of ERISA.

 

3.24         Taxes.  Except as disclosed on Schedule 3.24:

 

(a)           Seller has filed all Tax Returns it was required to file prior to the
date hereof and paid all Taxes currently due and owing as of the date
hereof.  All such Tax Returns were
correct and complete in all material respects. 
All Taxes accrued but unpaid as of the date hereof are adequately
reserved for and properly reflected in the applicable Financial Statements.

 

(b)           There are no deficiencies proposed as a result of any Tax-related audit
of Seller.  There is no Proceeding
pending or, to Seller’s Knowledge, threatened by or against Seller relating to
Taxes payable or refundable (or alleged to be payable or refundable) by (or to)
Seller, and Seller has not received any written notice of any proposed
deficiency or Proceeding relating to Taxes or any Tax Return that has not been
fully settled or otherwise resolved. 
There are no outstanding agreements extending or waiving the statute of
limitations applicable to any claim for the collection or assessment or
reassessment of Taxes due from Seller.

 

26

 

(c)           With respect to each taxable period for Seller ending prior to the date
hereof:

 

(i)            Seller has not consented to extend the time
in which any Taxes payable by or attributable to any Tax Return item of Seller
may be assessed or collected by any Taxing Authority, and Seller has not
requested or been granted an extension of the time for filing any Tax Return
with respect to Taxes payable by or attributable to Seller;

 

(ii)           there are no Encumbrances on any of the Purchased Assets relating or
attributable to Taxes, other than Permitted Encumbrances; and

 

(iii)          Seller complied with all applicable requirements relating to the
withholding of Taxes (including withholding and reporting requirements under
Code Sections 1441 - 1464, 3401 - 3406, 6041 and 6049) and has within the times
and in the manner prescribed by law paid over such amounts to the proper taxing
authorities in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other Third Party, and all
Forms W-2 and 1099 (and state law counterparts thereof) required with respect
thereto have been properly completed and timely filed.

 

3.25         Compliance with Laws.

 

(a)           Seller has at all times been in compliance in all material respects
with all Applicable Laws related to  the
conduct of the Business and the ownership and operation of Seller’s property
and assets, and has filed with the proper Governmental Authorities all
statements and reports required by the Applicable Laws to which Seller or any
of its properties or operations are subject. 
No claim has been made by any Governmental Authority (and, to the
Knowledge of Seller and the Seller Members, no such claim is anticipated) to
the effect that the Business or any property or asset owned or used by Seller
fails to comply, in any material respect, with any Applicable Law.

 

(b)           Schedule 3.25(b) contains a complete and accurate list of all
Permits (identified by document title or name, issuing authority, identifying
number and expiration date, if any) held by or on behalf of Seller that relates
in any way to Seller, the Business or any of Seller’s assets.  Such Permits collectively constitute all of
the Permits necessary to permit Seller to lawfully operate the Business in the
manner in which it is currently operated and to own and use its property and
assets in the manner in which they are currently owned and used.  Each Permit listed or required to be listed
on Schedule 3.25(b) is valid and in full force and effect.  Seller has not received at any time since December 31,
2006 any written notice from any Governmental Authority or any other Person
regarding (i) any actual or alleged breach of any term or requirement of
any Permit relating to Seller, or (ii) any actual, proposed or potential
revocation, withdrawal, suspension, cancellation, termination of or
modification to any such Permit.  All
applications required to have been filed as of the date hereof for the renewal
of any Permit listed or required to be listed on Schedule 3.25(b) have
been duly filed on a timely basis with the appropriate Governmental
Authorities, and all other filings required to 

 

27

 

have been made as of the
date hereof with respect to such Governmental Authorizations have been duly
made on a timely basis with the appropriate Governmental Authorities.

 

3.26         Environmental
Matters.  Prior to the date of this Agreement, Seller
has delivered to Buyer true and complete copies and results of any and all
reports, studies, analyses, tests or monitoring results possessed by or
reasonably available to Seller pertaining to Hazardous Substances in, on, or
under the Leased Real Property, or relating to any of Seller’s other properties
and assets, or concerning compliance by Seller with applicable Environmental
Laws.  Except as set forth on Schedule
3.26:

 

(a)           Seller has at all times conducted the Business and operated its assets
(including the Leased Real Property, and including off site storage or disposal
of any Hazardous Substances from the Leased Real Property), and is currently
conducting the Business and operating its assets (including the Leased Real
Property, and including off site storage or disposal of any Hazardous
Substances from the Leased Real Property) in material compliance with all
Environmental Laws;

 

(b)           Seller has not received any citation, directive, inquiry, notice,
order, summons, warning or other written communication alleging any actual or
potential violation or failure to comply with any Environmental Law, or of any
alleged, actual, or potential obligation to undertake or bear the cost of any
remedial action with respect to the Leased Real Property or any other
properties or assets of Seller, or with respect to any other property or
facility to or from which Hazardous Substances generated, manufactured,
refined, transferred, imported, used or processed by Seller or any other Person
for whose conduct Seller is responsible have been transported, treated, stored,
handled, transferred, disposed, recycled or received;

 

(c)           to the Knowledge of Seller and the Seller Members, there are no
Hazardous Substances present on, in, under or about the Environment at the
Leased Real Property or at any geologically or hydrologically adjoining
property, including any Hazardous Substances contained in barrels, aboveground
or underground storage tanks, landfills, land deposits, dumps, Equipment
(whether movable or fixed) or other containers, either temporary or permanent,
and deposited or located in land, water, sumps, or any other part of the Leased
Real Property or such adjoining property, or incorporated into any structure
therein or thereon; and

 

(d)           neither Seller, nor any other Person for whose conduct Seller is
responsible, has permitted or conducted any Hazardous Activity on or with respect
to the Leased Real Property except in material compliance with all applicable
Environmental Laws.

 

3.27         No Material Adverse Effect. 
Since December 31, 2006, except as expressly disclosed in the
Financial Statements, in this Agreement or in any other written communication
by Seller to Buyer prior to the date hereof, no event has occurred or
circumstance arisen that has had a Material Adverse Effect or that could
reasonably be expected to have a Material Adverse Effect.

 

28

 

3.28         Absence of Certain Changes or Events. 
Except as set forth on Schedule 3.28 or as disclosed in the
Financial Statements, since December 31, 2006, there has not been any
transaction or occurrence in which Seller has:

 

(a)           disposed of or permitted to lapse any rights to the use of any
Intellectual Property or application therefor;

 

(b)           made any change in its accounting methods, principles or practices;

 

(c)           increased or newly granted any bonus, salary or other compensation to
any officer or employee, or entered into any employment, severance or similar
Contract with any officer or employee, other than in the ordinary course of
business consistent with past practice;

 

(d)           sold, leased or otherwise disposed of any property or asset having a
value of at least $50,000, other than sales of Inventories in the ordinary
course of business;

 

(e)           cancelled or waived any claim or right of Seller having a value to
Seller of more than $50,000; or

 

(f)            received any indication by any customer or supplier
of Seller of an intention to discontinue or materially change the terms of its
relationship with Seller where such relationship has had a value to Seller of
more than $50,000 in revenues to Seller or $50,000 in purchases by Seller (as
applicable) in either of the two (2) most recently completed fiscal years.

 

3.29         Brokers or Finders. 
Neither Seller nor any Seller Member has incurred any obligation,
contingent or otherwise, to pay any compensation to any broker, finder or agent
with respect to, arising out of, or in any way related to the Contemplated
Transactions for which the Buyer would become directly or indirectly liable.

 

3.30         Information Furnished. 
Seller has made available to Buyer complete and correct copies of all
agreements, documents, and other items listed on the Schedules to this
Agreement and all books and records of Seller. 
All documents, books and records provided to Buyer in connection with
its due diligence investigation of Seller are true, accurate and complete in
all material respects and do not omit any material information necessary to
make the information provided in such documents and records not misleading.

 

3.31         Accuracy
of Representations and Warranties. 
No representation, warranty, statement, Schedule or information furnished
by Seller and the Seller Members to Buyer in this Agreement or to be furnished
in any Seller Closing Document contains (or will contain) any untrue statement
of material fact or omits (or will omit) to state any material fact necessary
to make the statements contained herein or therein not misleading.

 

 

 

29

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer acknowledges that
Seller and the Seller Members are relying on the accuracy of the representations
and warranties contained in this Article 4 and that such
representations and warranties are given order to induce Seller and the Seller
Members to enter into this Agreement and consummate the Contemplated
Transactions.  Accordingly, Buyer
represents and warrants to Seller and the Seller Members as follows:

 

4.1           Organization and Good Standing. 
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.  Buyer has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the Contemplated Transactions to be consummated by it.

 

4.2           Authorization of Agreement.  The
execution and delivery of this Agreement by Buyer and the performance of the
Contemplated Transactions by Buyer have been duly authorized by all necessary
corporate action by Buyer, and no other corporate action on the part of Buyer
is necessary to authorize this Agreement or to consummate the Contemplated
Transactions.  This Agreement has been
duly and validly executed and delivered by Buyer and constitutes a valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors generally and
by the availability of equitable remedies. 
Upon their execution and delivery at Closing by Buyer, the Assignment
and Assumption Agreement, Lease Assignment and other agreements and instruments
to be executed and delivered by Buyer at Closing (the “Buyer Closing
Documents”) shall constitute valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms, in each
case except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors generally and
by the availability of equitable remedies.

 

4.3           No Conflicts.  Neither
the execution and delivery by Buyer of this Agreement or any of the Buyer
Closing Documents nor the consummation or performance of any of the
Contemplated Transactions does or shall, directly or indirectly (with or
without notice or lapse of time):

 

(a)           violate any provision
of the articles of incorporation, bylaws or other governing documents of Buyer,
or contravene any resolution adopted by the directors or shareholders of Buyer;

 

(b)           breach any Applicable
Law or Order to which Buyer is subject or give any Governmental Authority or
other Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under any Applicable Law or any Order
to which Buyer is subject; or

 

(c)           breach any provision
of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or 

 

30

 

payment under, or to cancel, terminate or modify, any
Contract to which Buyer is a party or by which Buyer is bound.

 

4.4           Notices and Consents.  Buyer is not required to give any notice to,
or obtain any consent from, any Person in connection with the execution and
delivery of this Agreement or the consummation of the Contemplated Transactions
(it being understood between the Parties that Seller (and not Buyer) shall be
required to obtain any Consent required in order to preserve and maintain the
rights of Seller (and, following the Closing, the rights of Buyer) under the
Assigned Contracts and the Real Property Lease and under the Permits referred
to on Schedule 3.25(b)).

 

4.5           Proceedings.  There is no pending Proceeding
that has been commenced against and served upon Buyer that challenges, or may
have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the Contemplated Transactions.  To Buyer’s actual Knowledge, no such
Proceeding has been threatened.

 

4.6           Brokers.  Buyer has not paid or become
obligated to pay any fee or commission to any broker, finder or intermediary in
connection with the Contemplated Transactions for which Seller or any Seller
Member shall have any liability following the Closing.

 

ARTICLE 5

COVENANTS OF THE PARTIES

 

5.1           Transfer of Permits and Agreements. 
Seller will use its commercially reasonable efforts to assist Buyer to
effect the assignment to Buyer of the Permits and Assigned Contracts.  However, the Assigned Contracts or Permits
will not be deemed transferred or assigned to Buyer if the attempted transfer
or assignment thereof would be ineffective or would constitute a breach of such
contracts or rights.  To the extent any
required consent or approval has not been obtained prior to Closing, Seller
will use reasonable commercial efforts to obtain such approvals or consents, or
new grants thereof, in favor of Buyer following the Closing.  For so long as an assignment is ineffective
or in the event a new grant cannot be obtained, Seller hereby grants to Buyer,
as of the Effective Time, an exclusive sublease or sublicense or other rights,
as appropriate, under such Assigned Contracts and Permits as may be necessary
or appropriate for Buyer to continue to conduct the Business as heretofore
conducted.  Specifically with respect to
the post-Closing assignment of the FCC licenses held by Seller, Buyer will be
responsible for and will reimburse Seller for all filing fees and other
reasonable out-of-pocket expenses related thereto, exclusive of legal fees,
incurred by Seller to effect such assignment, including the cost of obtaining
one or more new FCC licenses in the event the FCC refuses to allow such
assignment, up to $2,000 in the aggregate; thereafter, all costs associated
with obtaining such assignments or new licenses shall be borne by Seller.

 

5.2           Further Assurances. 
Seller and Buyer shall cooperate reasonably with each other and with
each other’s Representatives in connection with any steps required to be taken
as part of their respective obligations under this Agreement, and shall (i) furnish
upon request to each other such further information, (ii) execute and
deliver to each other such other documents, and (iii) do such other acts
and things, as may be reasonably necessary or appropriate to carry out the
intent of this Agreement and the Contemplated Transactions.  Notwithstanding the foregoing, no Party 

 

31

 

shall
be required to pay or incur any cost or expense of any other Party not
otherwise required by this Agreement in order to comply with the foregoing.

 

5.3           Announcements. 
Seller and Buyer shall keep the existence of this Agreement, the terms
and conditions hereof and the Contemplated Transactions confidential, and
neither such Party shall, nor shall it permit any Affiliate or Representative
to, make any public announcement in respect of this Agreement or the Contemplated
Transactions without the prior written consent of the other Party, which
consent shall not be unreasonably withheld or delayed; provided, however that
the foregoing confidentiality and non-disclosure obligations shall not apply to
any Party to the extent that (i) disclosure of such information is
reasonably necessary to consummate the Contemplated Transactions, (ii) disclosure
of such information is required pursuant to Applicable Law (including the
Securities Exchange Act of 1934 and the rules and policies of the New York
Stock Exchange) or an order of any court of competent jurisdiction, (iii) disclosure
of such information is reasonably necessary for such Party to enforce its
rights under this Agreement or any other agreement or instrument delivered by
or to such Party pursuant to this Agreement, or (iv) such information is
already in the public domain other than as a result of a breach of this Section 5.3
or any other confidentiality or non-disclosure obligation owed to any Party by
any Person (including any other Party). 
To the extent that any public announcement of this Agreement, any of the
provisions hereof or the Contemplated Transactions is required of any Party or
any of such Party’s Affiliates by Applicable Law, Seller and Buyer shall
cooperate reasonably with respect to reaching agreement on the contents and
timing of such announcement.  However,
such requirement for cooperation shall not serve to delay any Party from making
any such required public announcement within any specific time period mandated
by Applicable Law or otherwise on a timely basis.

 

5.4           Confidentiality.

 

(a)           Seller and the Seller
Members hereby acknowledge and agree that, through their ownership and/or
management of the Purchased Assets and the Business, they have occupied positions
of trust and confidence with respect to the Business and have had access to and
become familiar with confidential and proprietary information relating to the
Purchased Assets and the Business, including the following documents, materials
and information (collectively the “Confidential Information”): (i) customer
and supplier lists, target customer information, current and anticipated
customer requirements, price lists, market studies and business plans; (ii) research
and development plans, activities and results; (iii) Trade Secrets,
Technology and other non-public Intellectual Property; (iv) historical and
projected sales data, financial data and projections, capital spending budgets
and operating budgets; (v) employee training techniques and materials and
personnel files; and (vi) environmental studies, reports, and analyses,
and any related regulatory filings or submissions, including summaries,
memoranda, reports, compilations or other derivations thereof.

 

(b)           Seller and the Seller
Members hereby acknowledge and agree that the protection of the Confidential
Information is necessary to protect and preserve the value of the Purchased
Assets and the Business, and that without such protection, Buyer would not have
entered into this Agreement and consummated the Contemplated Transactions.  Accordingly, subject to the provisions of Section 5.4(c),
each of Seller and each Seller 

 

32

 

Member hereby covenants and agrees, for itself/himself
and its/his Affiliates and Representatives and its/his and their successors and
permitted assigns, that, following the Closing, without the prior written
consent of Buyer (which consent shall be at Buyer’s absolute discretion to give
or withhold), Seller or such Seller Member shall not, nor shall it/he cause or
permit any of its/his Affiliates or Representatives to, directly or indirectly,
disclose to any Person or use for its/his own account or benefit or for the
account or benefit of any other Person any Confidential Information.

 

(c)           The provisions of Section 5.4(b)
shall not apply to (i) information that Seller or a Seller Member can
demonstrate with reasonable evidence is generally known to, and available for
use by, the public other than as a result of the breach of this Agreement or
any other agreement by Seller, any Seller Member or any other Person pursuant
to which Seller, such Seller Member or such other Person owes any duty of
confidentiality to Buyer or previously owed any duty of confidentiality to
Buyer, (ii) information that is required to be disclosed pursuant to
Applicable Law or an Order, or (iii) disclosure by Seller or a Seller
Member that is reasonably necessary for Seller or such Seller Member to
exercise its rights or satisfy and perform its covenants and obligations under
this Agreement or any of the Seller Closing Documents.  If Seller or a Seller Member becomes
compelled by Applicable Law or any Order to disclose any Confidential
Information, Seller or such Seller Member shall provide Buyer with prompt
written notice of such requirement so that Buyer may seek a protective order or
other remedy in respect of such compelled disclosure.  If such a protective order or other remedy is
not obtained by or is not available to Buyer, then Seller or such Seller Member
shall use commercially reasonable efforts to ensure that only the minimum
portion of such Confidential Information that is legally required to be
disclosed is so disclosed, and Seller or such Seller Member shall use
commercially reasonable efforts to obtain assurances that confidential
treatment shall be given to such Confidential Information.

 

(d)           The foregoing
provisions of this Section 5.4 shall cease to apply if (i) Buyer
is in material breach of this Agreement or the Promissory Note (including any
payment provision hereof or thereof), as determined by a final, non-appealable
judgment of a court of competent jurisdiction, and Buyer does not cure such
breach within ten (10) days after such final determination is made, or (ii) Buyer
files a petition in bankruptcy or is otherwise declared bankrupt by a court of
competition jurisdiction and, in connection therewith, Buyer (or its estate in
bankruptcy) elects not to perform or is declared unable to perform Buyer’s
material obligations (including payment obligations) under this Agreement or
the Promissory Note.  Further, the
foregoing provisions of this Section 5.4 shall cease to apply to
Chris Dulin (and only Chris Dulin) if (i) Buyer is in material breach of
the Employment Agreement (including any payment provision hereof), as
determined by a final, non-appealable judgment of a court of competent
jurisdiction, and Buyer does not cure such breach within ten (10) days
after such final determination is made, or (ii) Buyer files a petition in
bankruptcy or is otherwise declared bankrupt by a court of competition
jurisdiction and, in connection therewith, Buyer (or its estate in bankruptcy)
elects not to perform or is declared unable to perform Buyer’s material
obligations (including payment obligations) under the Employment Agreement.

 

33

 

5.5           Non-Competition; Non-Solicitation.  Seller and each Seller Member hereby
covenants and agrees that, during the Protected Term, unless expressly
permitted in writing by Buyer (which permission shall be at Buyer’s absolute
discretion to give or withhold), none of Seller or any Seller Member shall, nor
shall it/he cause, induce or encourage any Affiliate to, directly or
indirectly, whether or not through the use of any interposed Person (excluding
the ownership of less than two percent (2%) of the outstanding voting stock of
any corporation whose common stock is listed on any national securities
exchange or automated dealer quotation system, and then only if such ownership
does not coincide with any board of directors, management, employment or
consulting position with, or any other relationship affecting the operation or
management of, such corporation):

 

(a)           own, invest in,
finance, manage, control, operate, conduct, support, provide services, advice
or other support to, participate in, enter into any partnership or joint
venture with, engage in or be employed by or with, any Person, business or
activity that competes with the Business (or any part thereof) anywhere in the
Protected Territory;

 

(b)           call on or solicit any
customer of the Business in the Protected Territory for purposes of diverting
such customer to a competing business in the Protected Territory, or induce or
encourage (or attempt to induce or encourage) any customer, vendor, supplier,
licensor, licensee or other Person to cease conducting business with Buyer in
the Protected Territory, or in any way interfere with the relationship between
any such customer, supplier, licensee or other Person and Buyer; or

 

(c)           (i) induce or
encourage (or attempt to induce or encourage) any employee of Buyer or any of
its Affiliates (including any Employee) to leave the employ of Buyer, whether
for purposes of employing or contracting any such employee in a competing
business in the Protected Territory or for any other reason, or (ii) interfere
in any way with the relationship between Buyer or any of its Affiliates and any
such employee; provided, however, that the provisions of this Section 5.5(c)
shall not apply to general solicitations or advertisements for employment made
to the general public through newspapers, trade publications, radio or
television broadcasts or internet postings.

 

5.6           Protected
Term and Protected Territory Defined. 
For purposes of this Agreement:

 

(a)           “Protected Term”
means the term commencing on the Closing Date and terminating on the third
(3rd) anniversary of the Closing Date, except that the Protected Term shall
immediately terminate in the event Buyer materially breaches, or otherwise
fails to materially perform in accordance with the terms of this Agreement, the
Promissory Note or, solely with respect to W. Christopher Dulin’s covenants
hereunder (and not the covenants hereunder of the other Seller Members), the
Employment Agreement, and Buyer fails to cure such breach or fails to perform
within thirty (30) days after its receipt of notice thereof from the affected
party, whether it be Seller or a Seller Member, which notice shall state with
specificity the nature of the claim for breach or failure to perform; and

 

(b)           “Protected Territory”
means the United States of America.

 

34

 

5.7           Amendment of
Provisions to Comply with Law. 
Seller and the Seller Members hereby acknowledge and agree that the
provisions of Sections 5.5 and 5.6 are reasonable with respect to
duration, geographic area and scope of restriction.  In such regard, Seller and each of the Seller
Members hereby covenants that it/he shall not, directly or indirectly,
initiate, encourage or participate in any Proceeding or otherwise do or cause
to be done any act or thing to cause any such provision to be terminated,
cancelled, voided, nullified, reduced in scope or effect or otherwise declared unenforceable, provided that Buyer is not
in material default of or otherwise fails to materially perform in accordance
with its terms, this Agreement, the Employment Agreement (as to W. Christopher
Dulin only) or the Promissory Note.  If,
however, any provision of this Agreement is finally determined or declared by a
Governmental Authority or arbitrator to be illegal, unenforceable, invalid,
contrary to public policy, void or voidable under any Applicable Law, the
applicable court or arbitrator shall have the authority to make an equitable
adjustment to the provisions of Section 5.5 or 5.6 (as applicable) with the view
to effecting, to the greatest extent possible, the original purpose and intent
of the provisions of such Section, including, without limitation, the maximum
durational, geographic restricted activity scope and other limitations
permitted by Applicable Law.  In any
event, the validity and enforceability of the remaining provisions of Sections
5.5 and 5.6 shall not
be affected by any amendment contemplated by or made pursuant to this Section 5.7.

 

5.8           Injunctive
Relief.  Seller and the Seller
Members acknowledge and agree that (i) the provisions of Sections 5.3
through 5.6 are
reasonable and necessary to protect the legitimate business interests of Buyer,
(ii) any Breach by Seller or any Seller Member of any of its covenants
contained in any of Sections 5.3 through 5.5 would result in irreparable injury to Buyer, the exact
amount of which may be difficult, if not impossible, to ascertain or estimate,
and (iii) the remedies at law for any such breach would not be reasonable
or adequate compensation to Buyer for such Breach.  Accordingly, notwithstanding any other
provision of this Agreement, if Seller or any Seller Member, directly or
indirectly, breaches any of its covenants or obligations under any of Sections
5.3 through 5.5,
then, in addition to any other remedy which may be available to Buyer at law or
in equity, Buyer shall be entitled to injunctive relief against the breaching
Party, without posting bond or other security, and without the necessity of
proving actual or threatened damage or harm.  Buyer specifically
acknowledges that Seller and/or the Seller Members shall not be bound by the
terms of Section 5.5 in the event Buyer shall materially breach, or fail
to materially perform in accordance with its terms, this Agreement, the
Employment Agreement (as to W. Christopher Dulin only) or the Promissory Note.

 

5.9           Employees.

 

(a)           At the Closing, W.
Christopher Dulin and Buyer shall enter into a three (3)-year employment
agreement (the “Employment Agreement”), providing for Mr. Dulin to
serve as the Wireless Products Development and Product Manager and, as long as
the Business’ facility remains located in Pittsburgh, Pennsylvania, the
Facilities Manager for the Business of Buyer. 
The Employment Agreement shall contain customary provisions that are
mutually acceptable to Buyer and Mr. Dulin.  Mr. Dulin’s employment shall be subject
to his completion and passage of a drug test to the satisfaction of Buyer.

 

35

 

(b)           Subject to Buyer’s
satisfaction with its due diligence review of the Employees, at or before the
Closing, Buyer shall offer employment to all other Employees of Seller who
complete and pass a drug test to the satisfaction of Buyer, and Seller shall terminate
the employment of those who accept such employment by Buyer (the “Transferred
Employees”).  Seller’s termination of
its employment of such Employees shall be effective as of the Effective Time
and Buyer’s commencement of its employment of such Employees shall be effective
as of the Closing Date.  All such offers
of employment by Buyer shall be at base salary or wage rates substantially
equivalent to such Transferred Employees’ respective rates of pay in effect
with Seller immediately before the Closing Date.  Buyer’s provision to each Transferred
Employee of employee benefits, including, without limitation, bonuses,
commissions, health care, 401(k) or other benefit plans, shall be
commensurate with the benefits received by other employees of Buyer who are at
the same or substantially similar level as such Transferred Employee, subject
to changes that Buyer may make to its employee benefits plans from time to
time.  Buyer shall use commercially
reasonable efforts to credit all Transferred Employees with service with the
Buyer for purposes of (i) vesting under 401(k) benefit plans of Buyer
under which such Transferred Employees may be eligible to participate, and (ii) eligibility
and vesting for vacation under benefit plans of Buyer under which the Transferred
Employees may be eligible to participate. 
Additionally, Buyer shall use commercially reasonable efforts to waive
all limitations as to preexisting condition exclusions and waiting periods with
respect to participation and coverage requirements applicable to the
Transferred Employees under any welfare benefit plans of Buyer that such
Transferred Employees are eligible to participate in after the Closing Date.

 

(c)           Seller shall be
responsible for any pension, profit sharing, severance and/or other benefits or
payments or benefits, including accrued vacation and sick time, sick pay, and
other compensation, benefits, and perquisites of any Employees, incurred in
connection with the termination of any Employees by Seller on or about the
Closing Date or arising anytime on or before the Closing Date under any plan,
arrangement, covenant or understanding of Seller.  Without limiting the generality of the
foregoing, if Buyer does not offer employment to any Employee or if Buyer
offers such employment but any Employee refuses to be employed by Buyer, Seller
shall be solely liable for all costs of termination of such Employee’s
employment, except as required by Applicable Law.

 

(d)           Seller shall take such
action as is necessary to initiate termination of its 401(k) Benefit Plan
pursuant to the provisions of such plan prior to Closing.  Buyer shall not sponsor or assume any
Liability under any Benefit Plan of Seller. 
Seller shall bear all responsibility for its Benefit Plans (except that
Buyer shall assume responsibility for any group health plan continuation
coverage or conversion coverage required under Section 601 of ERISA or Section 4980B
of the Code or state or local Applicable Laws). 
Seller shall take all necessary or reasonable steps to provide that all
amounts accumulated in Seller’s 401(k) Benefit Plan are fully vested as of
the Closing Date.  In accordance with the
elections made pursuant to Section 401(a)(31) of the Code by the
Transferred Employees and to the extent permissible under Applicable Law, Seller
shall facilitate the rollover of assets held in the respective accounts of
Transferred Employees from Sellers’ 401(k) Benefit Plan to Buyer’s 401(k) plan.

 

36

 

(e)           Seller and Buyer shall
cooperate reasonably with each other to provide an orderly administrative
transition to Buyer of the Transferred Employees following Closing, including
the provision by Seller to Buyer of all necessary or appropriate documents,
records, materials, accounting files and Tax information with respect to each
such Transferred Employee.  Seller and
Buyer agree to utilize the standard procedure set forth in IRS Revenue
Procedure 2004-53 with respect to wage reporting, such that Seller shall be
responsible for all reporting of wages and other compensation paid by it to
Employees on or before the Closing Date (including furnishing and filing of
Forms W-2 and W-3).

 

5.10         Change of Seller’s
Name.  On or before the Closing Date,
the Seller Members shall take all applicable limited liability company actions
and shall cause Seller to file articles of amendment with the Pennsylvania
Secretary of State to change Seller’s name to a name that does not include the
words “Enrange” or any derivative or similar words, and, once received by the Seller
Members, shall promptly deliver to Buyer evidence of the effective filing of
such articles of amendment.  Following
the Closing, neither Seller nor any Seller Member, nor any Affiliate thereof,
shall conduct any business under the name “Enrange” or any confusingly similar
name.

 

5.11         Seller’s Handling of
Accounts Receivable.  To the extent that Seller receives any
payment after the Effective Time in respect of any Account Receivable, Seller
shall hold such payment for the account of Buyer and shall promptly forward
such payment to Buyer together with details of the Account Receivable to which
such payment applies.

 

ARTICLE 6

TAX MATTERS

 

6.1           Allocation of
Purchase Price.  The Purchase Price
shall be allocated among the Purchased Assets and the Assumed Liabilities in
the manner set forth on Schedule 6.1. 
Each of Seller, the Seller Members and Buyer (as applicable) hereby
agrees to file their respective applicable Tax Returns, reports, and forms,
including IRS Form 8594, in a manner consistent with such allocation,
which shall be in accordance with Section 1060 of the Code, and neither
Seller nor Buyer nor any Seller Member shall (i) take any position in any
Tax Return, report, or form, including any amendment thereto, or (ii) reach
any settlement or agreement in respect of any audit which is inconsistent with
such allocation unless such inconsistency is mandated by Applicable Law.  If such inconsistency is mandated by
Applicable Law, the Party taking such position shall provide prompt written
notice to each other Party of such inconsistency and its effect on the Parties’
agreed upon allocation of the Purchase Price.

 

6.2           Cooperation With Tax
Returns.  To the extent relevant to
the Business or the Purchased Assets, each Party shall (i) provide the
other with such reasonable assistance as may be required in connection with the
preparation of any Tax Return and the conduct of any audit or other examination
by any Governmental Authority or in connection with judicial or administrative
proceedings relating to any Liability for Taxes, and (ii) retain and
provide the other with all records or other information that may be relevant to
the preparation of any Tax Returns, or the conduct of any audit or examination,
or other proceeding relating to Taxes. 
Notwithstanding the foregoing, no Party shall be required to pay or
incur any cost or expense not otherwise required by this Agreement in order to
comply with the foregoing.

 

37

 

6.3           Straddle Period
Taxes.  In the case of any real or
personal property Taxes or any similar ad valorem Taxes attributable to the
Purchased Assets for which Taxes are reported on a Tax Return covering a period
commencing before the Closing Date and ending thereafter (a “Straddle Period
Tax”), any such Straddle Period Taxes shall be prorated between Seller and
Buyer on a per diem basis, with Seller being liable for any period up to and
including the Closing Date and Buyer being liable for any period commencing
after the Closing Date.  The Party required
by Applicable Law to pay any such Straddle Period Tax (the “Paying Party”),
to the extent such payment exceeds the obligation of the Paying Party
hereunder, shall provide the other Party (the “Non-Paying Party”) with
notice of payment, and within ten (10) days’ of receipt of such notice of
payment, the Non-Paying Party shall reimburse the Paying Party for the
Non-Paying Party’s share of such Straddle Period Taxes.  The Party required by Applicable Law to file
a Tax Return with respect to Straddle Period Taxes shall do so within the time
period prescribed by Applicable Law.

 

ARTICLE 7

SURVIVAL AND INDEMNIFICATION

 

7.1           Survival.  All representations,
warranties, covenants and obligations of Seller, the Seller Members and Buyer
contained in this Agreement and in the agreements, instruments and other
documents delivered pursuant to this Agreement shall survive the Closing and
the consummation of the Contemplated Transactions, subject to the provisions of
Section 7.4.  The
right of any Buyer Indemnified Person to indemnification by Seller and the
Seller Members under this Article 7
for breach of representation, warranty or covenant by Seller and the Seller
Members or for any other matter in respect of which indemnification is to be
provided by Seller or any Seller Member under this Article 7 shall not
be affected by any investigation (including any environmental investigation or
assessment) conducted by Buyer or any of its Representatives, or any knowledge
acquired (or capable of being acquired) by Buyer at any time, whether before or
after the Closing Date, with respect to the accuracy or inaccuracy of or
compliance with any such representation, warranty, covenant, obligation or any
other matter.

 

7.2           Indemnification By
Seller and the Seller Members.  Seller, including its successors or assigns,
and each Seller Member, including (i) his successors and assigns,
whether trusts, partnerships, other estate planning entities or individuals, to
whom the Shareholder transfers a substantial portion of his assets during his
lifetime, and (ii) his estate or
any trust, partnership or other entity formed to hold his or his estate’s
assets upon death, as applicable,
hereby covenant and agree that, to the fullest extent permitted by Applicable
Law, they shall defend, indemnify and hold harmless Buyer, its Affiliates and
its and their respective officers, directors, employees and agents
(collectively, the “Buyer Indemnitees”) for, from and against any and
all claims, Liabilities, obligations, losses, fines, penalties, costs, interest,
amounts paid in settlement of claims, Proceedings, deficiencies or damages
(whether absolute, accrued, conditional, or otherwise) including any
out-of-pocket expenses and reasonable attorneys’ fees and expenses incurred in
the investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, “Losses”), whether or not
involving a Third Party Claim against any Buyer Indemnitee, resulting from or
arising out of the items listed below in subsections (a) - (e).  As between Seller and the Seller Members,
collectively, such indemnity obligations shall be joint and several, and, as
among the Seller Members, such indemnity obligations shall be several, with
each Seller Member being liable for that portion of any 

 

38

 

indemnification
claim equal to such Seller Member’s percentage ownership of Seller immediately
prior to the Closing:

 

(a)           any breach of any representation or warranty made by Seller and/or the
Seller Members in this Agreement or any Seller Closing Document;

 

(b)           any breach by Seller or any Seller Member of any of its covenants or
obligations hereunder or under any Seller Closing Document;

 

(c)           any customer warranty or product liability claim in respect of products
manufactured and/or sold by the Business before the Effective Time, including
products included in the Inventories;

 

(d)           any failure by Seller to discharge the Retained Liabilities; and/or

 

(e)           any claim by any Person for any brokerage or finder’s fee, commission
or similar payment based upon any agreement or understanding made, or alleged
to have been made, by any Person with Seller in connection with this Agreement
or any of the Contemplated Transactions.

 

7.3           Indemnification by
Buyer.  Buyer hereby covenants and agrees that, to
the fullest extent permitted by Applicable Law, it shall defend, indemnify and
hold harmless Seller and the Seller Members and their respective managers,
officers, directors, employees and agents (collectively, the “Seller
Indemnitees”) for, from and against, and to pay or reimburse the Seller
Indemnitees for, any and all Losses, whether or not involving a Third Party
Claim against any Seller Indemnitee, resulting from or arising out of:

 

(a)           any breach of any representation or warranty made by Buyer in this
Agreement or any Buyer Closing Document;

 

(b)           any breach by Buyer of any of its covenants or obligations hereunder or
under any Buyer Closing Document; and/or;

 

(c)           Buyer’s failure to discharge the Assumed Liabilities arising after the
Closing Date; and/or

 

(d)           any claim by any Person for any brokerage or finder’s fee, commission
or similar payment based upon any agreement or understanding made, or alleged
to have been made, by any Person with Buyer in connection with this Agreement
or any of the Contemplated Transactions.

 

7.4           Timing of
Indemnification Claims.  No Buyer Indemnitee shall be entitled to
recover under an indemnification claim against Seller pursuant to Section 7.2(a),
and no Seller Indemnitee shall be entitled to recover under an indemnification
claim against Buyer pursuant to Section 7.3(a), unless such
claiming Person has delivered to the applicable indemnifying Party written
notice of such claim for indemnification within the following applicable claims
period (each, a “Claims Period”):

 

39

 

(a)           with respect to any indemnification claim arising out of (i) the
breach by Seller and the Seller Members or Buyer of any representation or
warranty relating to such Party’s authority and/or ability to enter into this
Agreement and consummate the Contemplated Transactions, (ii) the breach by
Seller and the Seller Members of any representation or warranty regarding
Seller’s title to the Purchased Assets and its ability to transfer the same to
Buyer, free and clear of all Encumbrances, other than Permitted Encumbrances, (iii) the
breach by Seller and the Seller Members or Buyer of any representation or
warranty regarding Tax matters, or (iv) any fraudulent act or willful
misrepresentation by Seller, any of the Seller Members or Buyer with respect to
this Agreement and/or the Contemplated Transactions, the Claims Period shall
commence on the date of this Agreement and continue until the expiration of the
limitation period applicable thereto under the applicable statute of
limitations; and

 

(b)           with respect to any indemnification claim arising out of the breach by
Seller or Buyer of any other representation, warranty, covenant or agreement in
this Agreement or in any agreement, instrument or other document executed and
delivered pursuant hereto, the Claims Period shall commence on the date of this
Agreement and continue until the second (2nd) anniversary of the Closing Date.

 

Notwithstanding
the foregoing, if prior to 5:00 p.m. (Wisconsin time) on the last day of
the applicable Claims Period, the Party against which an indemnification claim
has been made hereunder has been properly notified in writing of such claim for
indemnity hereunder and such claim has not been finally resolved or disposed of
as of such date, then such claim shall continue to survive and shall remain a
basis for indemnity hereunder until such claim is finally resolved or disposed
of in accordance with the terms of this Agreement.

 

7.5           Third Party Claim Procedures.

 

(a)           Promptly after receipt by a Seller Indemnitee or a
Buyer Indemnitee, as the case may be (an “Indemnitee”), of notice of the
assertion of a Third-Party Claim against it, such Indemnitee shall give prompt
notice to the Party obligated to indemnify such Indemnitee under Section 7.2
or 7.3, as the case may be (each, an “Indemnitor”) of the
assertion of such Third-Party Claim, provided that the failure to so notify the
Indemnitor shall not relieve the Indemnitor of any Liability that it may have
to such Indemnitee, except to the extent that the defense of such Third-Party
Claim was prejudiced by the Indemnitee’s failure to give such prompt notice.

 

(b)           If an Indemnitee gives notice to an Indemnitor
pursuant to Section 7.5(a) of the assertion of a Third-Party Claim,
the Indemnitor shall be entitled to participate in the defense of such
Third-Party Claim (at its sole cost) and, subject to Section 7.5(c),
to assume control of the defense of such Third-Party Claim with counsel
reasonably satisfactory to the Indemnitee. 
After notice from the Indemnitor to the Indemnitee of its election to
assume the defense of such Third-Party Claim, the Indemnitor shall not, so long
as it diligently conducts such defense, be liable to the Indemnitee under Section 7.2
or 7.3 (as applicable) for any fees of other counsel or any other
expenses with respect to the defense of such Third-Party Claim, in each case
subsequently incurred by the Indemnitee in connection with the defense of such
Third-Party Claim, other than 

 

40

 

reasonable
costs of investigation.  If the
Indemnitor assumes the defense of a Third-Party Claim, no compromise or
settlement of such Third-Party Claims may be effected by the Indemnitor or
shall be binding on the Indemnitee without the Indemnitee’s prior written
consent (not to be unreasonably withheld), unless (A) there is no finding
or admission of any violation of Applicable Law or of the rights of any Person,
and (B) the sole relief provided is monetary damages that are paid in full
by the Indemnitor.  If notice is given by
an Indemnitee to an Indemnitor of the assertion of any Third-Party Claim and
the Indemnitor does not, within ten (10) Business Days after the
Indemnitee’s notice is given, give notice to the Indemnitee of its election to
assume the defense of such Third-Party Claim, the Indemnitee shall be entitled,
to the Indemnitor’s exclusion and at the Indemnitor’s cost, to fully assume the
defense of such Third Party Claim, and the Indemnitor shall be bound by any
determination made in such Third-Party Claim or any compromise or settlement
effected by the Indemnitee in respect thereof, subject, in the case of any such
compromise or settlement, to the Indemnitor’s consent thereto, which shall not
be unreasonably withheld.

 

(c)           Notwithstanding the foregoing provisions of this Section 7.5,
the Indemnitee may require that the Indemnitor not assume or maintain control
of, or actively participate in (in which case, the Indemnitor shall not assume,
maintain control of or actively participate in) the defense of, a Third Party
Claim against the Indemnitee if (i) the Indemnitor is also a Person
against whom the Third-Party Claim is made and the Indemnitee determines in
good faith that joint representation of the Indemnitor and Indemnitee would
give rise to an actual or threatened conflict of interests, (ii) the
Indemnitee requests, and the Indemnitor fails to provide, reasonable assurance
to the Indemnitee of the Indemnitor’s financial capacity to defend such Third-Party
Claim and to provide indemnification with respect thereto, or (iii) the
Indemnitee determines in good faith that there is a reasonable probability that
the Third-Party Claim may adversely affect it or its Affiliates other than as a
result of monetary damages for which it would be entitled to indemnification
under this Agreement.  In any of these
events, the Indemnitee may, by written notice to the Indemnitor, assume the
exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnitor shall not be bound by any compromise or settlement of such
Third-Party Claim for the purposes of this Agreement without its prior written
consent (not to be unreasonably withheld) to such compromise or settlement.

 

(d)           With respect to any Third-Party Claim subject to
indemnification under Section 7.2 or 7.3, (i) the
Indemnitee(s) and the Indemnitor(s), as the case may be, shall keep the
other(s) fully informed of the status of such Third-Party Claim and any
related Proceedings at all stages thereof, and (ii) Seller and Buyer agree (each at its own expense) to render to each other such assistance as
they may reasonably require of each other and to cooperate in good faith with
each other in order to ensure the proper and adequate defense of any Third-Party
Claim.

 

(e)           With respect to any Third-Party Claim subject to
indemnification under Section 7.2 or 7.3, Seller, the Seller Members and Buyer agree to cooperate in such a manner as to preserve
to the greatest extent possible the confidentiality of all confidential and
proprietary information of Seller, the Seller Members and Buyer and the attorney-client

 

41

 

and
work-product privileges as between Seller, the Seller Members and Buyer
and their respective legal advisors.  In
connection therewith, each of Seller, the Seller Members and Buyer agrees that (i) such Party shall use reasonable
efforts in respect of any Third-Party Claim in which it assumes or participates
in the defense to avoid production of confidential and proprietary information
(consistent with Applicable Law and rules of procedure), and (ii) all
communications between each such Party and counsel responsible for or
participating in the defense of any Third-Party Claim shall, to the greatest
extent possible, be made so as to preserve any applicable attorney-client or
work-product privilege.

 

7.6           Other Claims.  A claim for indemnification for any matter
not involving a Third-Party Claim may be asserted by written notice to the
Indemnitor, which notice shall set forth in reasonable detail the subject
matter of the Third-Party Claim, the amount of the Third-Party Claim in
question (to the extent known or estimable by the Indemnitee) and any other
material or pertinent facts regarding the Third-Party Claim (to the extent
known by the Indemnitee), and shall be paid promptly by the Indemnitor after
such notice, together with satisfactory proof of Losses or other documents
evidencing the basis of the Losses sought, are received by the Indemnitor.

 

7.7           Limitation on
Indemnity Obligations.

 

(a)           Neither Seller nor any Seller Member shall be liable to any Buyer
Indemnitee under Section 7.2(a) or 7.2(c) unless the aggregate
amount of Losses with respect to all indemnification claims asserted against
Seller and/or any Seller Member under such Sections exceeds $25,000 in the
aggregate, in which case Seller and/or the Seller Members shall be liable to
such Buyer Indemnitee(s) for all such amounts, including such initial
$25,000, subject to the limitations set forth herein.

 

(b)           Notwithstanding any
other provision of this Article 7, Seller and the Seller Members shall
have no Liability with respect to indemnification claims by Buyer Indemnitees
under Section 7.2(a) or 7.2(c) after Seller and the Seller Members have
made payments to or on behalf of Buyer Indemnitees in respect of any and all
indemnification claims under Sections 7.2(a) and 7.2(c) that, in the
aggregate, are equal to the Purchase Price actually paid by Buyer and received
by Seller (the “Claims Cap”); provided, however, that no Seller Member
shall have any liability with respect to any indemnification claim by Buyer
Indemnitees under such Sections after such Seller Member shall have made
payments to or on behalf of Buyer Indemnitees in respect of any and all such
indemnification claims that, in the aggregate, are equal to that portion of the
Purchase Price actually paid by Buyer to Seller and received by such Seller
Member; provided, further, that such limitations shall not apply to (i) any
claim made under Section 7.2(a) in respect of any breach of
representation or warranty by Seller and the Seller Members under any of Section
3.1 (Organization and Authority of Seller), Section 3.2
(Authorization of Agreement), Section 3.3 (No Conflicts), Section 3.9
(Title to Purchased Assets; Encumbrances), Section 3.24 (Taxes), Section
3.26 (Environmental Matters), or Section 3.29 (Brokers and Finders),
or (ii) any claim made under Section 7.2(a) based on willful
misrepresentation or fraud by Seller or any Seller Member.

 

42

 

(c)           Notwithstanding any
other provision of this Article 7, Buyer shall have no Liability with
respect to indemnification claims by Seller Indemnitees under Section 7.3(a)
after Buyer has made payments to or on behalf of Seller Indemnitees in respect
of any and all indemnification claims under Section 7.3(a) that, in the
aggregate, are equal to the Claims Cap; provided, however that such limitation
shall not apply to (i) any claim made under Section 7.3(a) in respect of
any breach of representation or warranty by Buyer under any of Section 4.1
(Organization and Good Standing), Section 4.2 (Authorization of
Agreement), Section 4.3 (No Conflicts), or Section 4.6 (Brokers and
Finders), or (ii) any claim made under Section 7.3(a) based on willful
misrepresentation or fraud by Buyer.

 

7.8           Insurance Policies.  In
keeping with Seller’s and the Seller Members’ indemnification obligations under
Section 7.2(c) regarding product warranty and product liability claims,
each of Seller and Buyer shall have the right to obtain, and the other Party
shall cooperate reasonably in obtaining, commercial general liability insurance
for any warranty or product liability claims related to Seller’s products
manufactured or sold on or before the Closing Date, with coverage of at least
$1,000,000 aggregate and with no deductible or self-insured retention.  Buyer, on the one hand, and Seller and the
Seller Members, on the other hand, shall split the cost of the insurance
premiums for both such insurance policies.

 

7.9           Right of Set-Off.  If and to the extent an indemnification claim
is made by a Buyer Indemnitee, in addition to any other remedies available to
such Buyer Indemnitee at law or in equity, Buyer may set off the amount of any
Losses covered by such claim against the Earnout Payments and payment on the
Promissory Note.  To the extent Seller
disputes any indemnification claim by a Buyer Indemnitee for which Buyer
intends to exercise such set-off right, Buyer may withhold the applicable
portion of such Earnout Payment or payment on the Promissory Note until such
indemnification claim is settled by the Parties or otherwise definitely
resolved by a court of competent jurisdiction.

 

7.10         Exclusive Remedy.  Except for equitable remedies expressly
contemplated by this Agreement or in any action for common law fraud, the
remedies provided in this Article 7 constitute the sole and exclusive
remedies for recovery against an Indemnitor based upon this Agreement.

 

ARTICLE 8

MISCELLANEOUS

 

8.1           Expenses.  Except as otherwise provided
in this Agreement, each Party shall bear its own fees and expenses incurred in
connection with the preparation, negotiation, execution and performance of this
Agreement, including all fees and expenses of its Representatives.

 

8.2           Entire Agreement;
Modification.  This Agreement (including the Schedules
hereto) constitutes the entire and complete agreement among the Parties with
respect to the subject matter hereof and supersedes and replaces all prior
agreements, commitments, communications, representations and understandings,
both written and oral, among the Parties (or between any of them) with respect
to the subject matter hereof.  This
Agreement may not be 

 

43

 

amended,
supplemented, or otherwise modified except by a written agreement executed by
each of the Parties.

 

8.3           Severability.  If
any provision of this Agreement, or the application of any such provision to
any Person or circumstance, is held to be unenforceable or invalid by any
Governmental Authority or arbitrator or under any Applicable Law, the Parties
shall negotiate an equitable adjustment to the provisions of this Agreement
with the view to effecting, to the greatest extent possible, the original purpose
and intent of this Agreement, and in any event, the validity and enforceability
of the remaining provisions of this Agreement shall not be affected thereby.

 

8.4           Notices.  All
notices, requests, demands, claims and other communications required or permitted
to be given or made hereunder must be in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given and received (i) if
personally delivered, when so delivered, (ii) if mailed, three (3) Business
Days after having been sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below, (iii) if sent through an overnight delivery service in
circumstances to which such service guarantees next day delivery, the next
Business Day following being so sent, and (iv) if sent by electronic
facsimile, once such notice or other communication is transmitted to the fax
number specified below and the appropriate printed confirmation of transmission
is received, provided that such notice or other communication is promptly
thereafter mailed in accordance with the provisions of clause (ii) above
or sent by overnight delivery service in accordance with clause (iii) above:

 

(a)           If to Seller or the Seller Members, addressed
to:

 

Enrange LLC

#5
Four Coins Drive

Canonsburg,
PA 15317

Attn:  W. Christopher Dulin, President

Fax:  (724) 746-3379

 

with
a copy (which shall not constitute valid delivery to Seller or the Seller
Members) to:

 

Brenlove & Fuller, LLC

P.O. Box 36

401 Washington Avenue

Bridgeville, Pennsylvania 15017

Attn:  Todd A. Fuller

Fax:  (412) 257-8040

 

44

 

(b)           If to Buyer, addressed to:

 

Magnetek, Inc.

N49
W 13650 Campbell Drive

Menomonee
Falls, WI 53051

Attn:  Jolene L. Shellman

Fax:  (262) 783-3509

 

with
a copy (which shall not constitute valid delivery to Buyer) to:

 

Snell & Wilmer
L.L.P.

One Arizona Center

400 E. Van Buren

Phoenix, Arizona 85004-2202

Fax:  (602) 382-6070

Attn: 
Garth D. Stevens

 

Any
Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including, without limitation, electronic
mail), but no such notice, request, demand, claim or other communication shall
be deemed to have been duly given or received unless and until it actually is
received by the Party for which it is intended and the notifying Party can
provide evidence of such actual receipt. 
Any Party may change its address or fax number for the receipt of
notices, requests, demands, claims and other communications hereunder by giving
each other Party notice of such change in the manner herein set forth.

 

8.5           Governing Law.  This
Agreement shall be governed in all respects, including as to validity,
interpretation and effect, by the internal laws of the State of Wisconsin  without regard to conflicts-of-laws principles that would
require the application of any other law.

 

8.6           Forum for Disputes.  Each
Party hereby agrees to the exclusive
jurisdiction of the state or federals courts within Waukesha County, Wisconsin
with respect to any claim or cause of action arising under or relating to this
Agreement, and waives personal service of any and all process upon it, and
consents that all services of process be made by registered or certified mail,
return receipt requested, directed to it at its address as set forth in Section 8.4,
and service so made shall be deemed to be completed when received.  Each Party hereby waives any objection based
on forum non conveniens and
waives any objection to venue of any action instituted hereunder.  Nothing in this Section 8.6 shall
affect the right of any Party to serve legal process in any other manner
permitted by Applicable Law.  THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE.  THE PARTIES AGREE
THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION 8.6 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT
AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY PROCEEDING
WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE 

 

45

 

CONTEMPLATED
TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

 

8.7           Headings;
Interpretation.  The headings contained in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.  Unless
otherwise expressly indicated, any reference in this Agreement (including any
Schedule hereto) to an “Article,” “Section,” “subsection,” “paragraph” or “subparagraph”
followed by a number or letter or combination of the two shall be a reference
to the particular Article, Section, subsection, paragraph or subparagraph of
this Agreement bearing such number, letter or combination thereof.  The terms “hereof,” “herein,” “hereunder” and
comparable terms refer, unless otherwise expressly indicated, to this Agreement
as a whole and not to any particular Article, Section, subsection, paragraph,
subparagraph or other subdivision hereof or any Schedule, Exhibit or other
attachment hereto. The terms “include,” “includes” and “including” shall be
deemed to be followed by the words “without limitation.”  Whenever the context so requires, the
singular number shall include the plural and the plural shall include the
singular, and the gender of any pronoun shall include the other gender or
neuter, as applicable.  Any reference in
this Agreement to a particular statute, regulation or code (including any
specific provision thereof) includes all regulations and rules thereunder,
all amendments thereto in force from time to time (including amendments to
provision references) and every Applicable Law in effect that supplements,
replaces or supersedes such statute, regulation or code.

 

8.8           Assignments; Successors; No Third-Party
Rights.  No Party may assign any of its rights or
delegate or cause to be assumed any of its obligations under this Agreement
without the prior written consent of each other Party.  Subject to the preceding sentence, this
Agreement shall apply to, be binding in all respects upon and inure to the
benefit of the successors and permitted assigns of the Parties.  Nothing expressed or referred to in this
Agreement shall be construed to give any Person other than the Parties any
legal or equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement, except (i) as provided under
Article 7 with respect to the indemnification of Indemnitees, and (ii) such
rights as shall inure to a successor or permitted assign pursuant to this Section 8.8.

 

8.9           Waiver; Remedies Cumulative.  The
rights and remedies of the Parties hereunder are cumulative and not
alternative.  Neither any failure nor any
delay by any Party in exercising any right, power or privilege under this
Agreement or any of the documents referred to in this Agreement shall operate
as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege shall preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege.  To the
maximum extent permitted by Applicable Law, (i) no claim or right arising
out of this Agreement or any of the documents referred to in this Agreement can
be discharged by one Party, in whole or in part, by a waiver or renunciation of
the claim or right unless made in writing and signed by each other Party, (ii) no
waiver that may be given by a Party shall be applicable except in the specific
instance for which it is given, and (iii) no notice to or demand on one
Party shall be deemed to be a waiver of any obligation of that Party or of the
right of the Party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in
this Agreement.

 

46

 

8.10         Joint Preparation.  This
Agreement and each agreement or instrument entered into by the Parties pursuant
to the provisions hereof shall be considered for all purposes as having been
prepared through the joint efforts of the Parties.  No presumption shall apply in favor of any
Party in the interpretation of this Agreement or any such other agreement or
instrument or in the resolution of any ambiguity of any provision hereof or
thereof based on the preparation, substitution, submission or other event of
negotiation, drafting or execution hereof or thereof.

 

8.11         Dates and Times. 
Dates and times set forth in this Agreement for the performance of the
Parties’ respective obligations hereunder or for the exercise of their rights
hereunder shall be strictly construed, time being of the essence of this
Agreement.  All provisions in this
Agreement which specify or provide a method to compute a number of days for the
performance, delivery, completion or observance by any Party of any action,
covenant, agreement, obligation or notice hereunder shall mean and refer to
calendar days, unless otherwise expressly provided.  Except as expressly provided herein, the time
for performance of any obligation or taking any action under this Agreement
shall be deemed to expire at 5:00 p.m. (Wisconsin time) on the last day of
the applicable time period provided for herein. 
If the date specified or computed under this Agreement for the
performance, delivery, completion or observance of a covenant, agreement,
obligation or notice by any Party, or for the occurrence of any event provided
for herein, is a day other than a Business Day, then the date for such
performance, delivery, completion, observance or occurrence shall automatically
be extended to the next Business Day following such date.

 

8.12         Execution of Agreement.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original copy and all of which, when taken together, shall be
deemed to constitute one and the same agreement.  The exchange of copies of this Agreement and
of signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the Parties and may be used in
lieu of the original Agreement for all purposes.  Signatures of the Parties transmitted by
facsimile shall be deemed to be their original signatures for all purposes.

 

REMAINDER OF PAGE LEFT BLANK

SIGNATURE PAGE FOLLOWS

 

47

 

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

 

 

	
  Seller:

  	
   

  	
  Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ENRANGE LLC, a Pennsylvania

  	
   

  	
  MAGNETEK, INC., a Delaware

  
	
  limited liability company

  	
   

  	
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  W. Christopher Dulin

  	
   

  	
   

  	
  By:

  	
  /s/
  Peter M. McCormick

  	
   

  
	
  Name:
  W. Christopher Dulin

  	
   

  	
   

  	
  Peter
  M. McCormick

  
	
  Its:

  	
  President

  	
   

  	
   

  	
  Executive
  Vice President and

  
	
   

  	
   

  	
   

  	
  Chief
  Operating Officer

  
	
   

  	
   

  	
   

  
	
  Seller Members:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  W. Christopher Dulin

  	
   

  	
   

  	
   

  
	
  W.
  CHRISTOPHER DULIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  William Gibson

  	
   

  	
   

  	
   

  
	
  WILLIAM
  GIBSON

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David Ashburn

  	
   

  	
   

  	
   

  
	
  DAVID
  ASHBURN

  	
   

  	
   

  
											

 

48exhibit10_1.htm

     

                                               Exhibit
10.1

     

     

                                                                       January 31, 2008

     

     BY
FACSIMILE 

    [HOLDER]

    [ADDRESS]

     

     

    Re:     
 Amendment to
Unsecured Convertible Debentures of Millennium Cell Inc. 

     

    Ladies and
Gentlemen:

     

    Reference is made
to the Convertible Debentures of Millennium Cell Inc. (the “Company”), as
amended, with an Original Issue Date of February 16, 2007 in the aggregate
outstanding principal amount, as of the date hereof, of $5,283,789 (the “Convertible
Debentures”).

     

    In consideration of
the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
and the Company hereby agree as follows:

     

    1.                 
Effective upon
execution and delivery to the Company by holders of Convertible Debentures
constituting Majority Holders (as such term is defined in the Convertible
Debentures) of signed counterparts to letter agreements identical to this letter
agreement (the “  Amendment
Effective Time ”), each Convertible Debenture shall be amended as
follows:

     

    (a)               
In Section 1, the definition of “Closing
Price” is hereby modified by:

     

                                                                  
i.      in clause (a),
inserting the words “, other then the OTC Bulletin Board (or any successor
thereto)” immediately after the words “Eligible Market”; 

                                                                 
ii.      in clause (b),
deleting the words “if the Common Stock is not then listed or quoted on an
Eligible Market and”;

                                                                
iii.      in clause (c),
deleting the words “or the OTC Bulletin Board”.

     

    (b)              
On the first
page, the current principal amount listed shall be deleted and replaced with a
principal amount as provided under the heading “Revised Currently Outstanding
Principal Amount” in  Exhibit
A attached hereto.

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (c)               
In Section 1,
the definition of “Eligible
Market” is hereby modified by deleting the word “or” and inserting the
words “, or the OTC Bulletin Board” immediately after the words “The NASDAQ
Global Select Market”. 

     

    (d)              
In Section 1,
the definition of “Equity
Condition” is hereby modified by, in clause (iii), inserting the words
“if such delisting or suspension would result in the Common Stock not being
listed on an Eligible Market” immediately after the words “within 90 days”.

     

    (e)               
In Section 1,
the definition of “Maturity
Date” is hereby modified by deleting clauses (1) and (2) and the words
“in each case” and  inserting the words “February 16, 2010” immediately
before the words “as may be extended”.

     

    (f)                
Section 7(f)
shall be amended so that the first sentence thereof is deleted in its entirety
and replaced with the following:

     

    “During the period
commencing on July 1, 2008 and ending on the date on which this Debenture is no longer outstanding, the Company shall maintain a Cash to
Unsecured Indebtedness Ratio of at least 0.25 to 1.0 (the “Cash
and Unsecured Indebtedness Ratio Test”).”

     

    2.                 
As amended
hereby, the Convertible Debentures shall remain in full force and
effect.

     

    3.                 
The
Conversion Schedule (as such term is used in the Convertible Debentures)
maintained by the Company and Holder shall be revised by the parties to reflect
the currently outstanding principal amount of Convertible Debentures held by
each holder thereof as provided under the heading “Revised Currently Outstanding
Principal Amount” in  Exhibit
A attached hereto.

     

    4.                 
Each of the
Company and the undersigned hereby represents and warrants to the other that its
execution and delivery of this letter agreement and its consummation of the
transactions contemplated hereby have been duly and validly authorized on its
behalf and that this letter agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium, or
similar laws from time to time in effect which affect creditors’ rights
generally and by legal and equitable limitations on the enforceability of
specific remedies. Each of the Company and the undersigned shall cooperate with
the other and execute and deliver, or cause to be executed and delivered, all
such other instruments and to take all such other actions as may be reasonably
requested by the other from time to time, consistent with the terms of this
letter agreement, to effectuate the purposes and provisions of this letter
agreement.

     

    5.                 
For the
avoidance of doubt, it is the intent of the Company and the undersigned that (i)
as of the Amendment Effective Time, this letter agreement will be a valid and
binding amendment to each Convertible Debenture and (ii) if and to the extent
that the amendments to the Convertible Debentures contemplated by this letter
agreement are deemed to constitute an offer and sale of securities by the
Company to the undersigned, such offer and sale is intended to be exempt from
registration under the Securities Act by virtue of Section 3(a)(9)
thereof.

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    6.                 
This letter
agreement may be executed in one or more counterparts, each of which, when
executed and delivered, shall be deemed to be an original, but all of which when
taken together shall constitute one and the same instrument. This letter
agreement may be executed by facsimile, which shall be binding to the same
extent as an original signature page. 

     

    7.                 
 All
questions concerning the construction, validity, enforcement and interpretation
of this letter agreement shall be governed by the internal laws of the State of
New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this letter agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. If any provision of this letter agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this letter agreement
in that jurisdiction or the validity or enforceability of any provision of this
letter agreement in any other jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS LETTER AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

                                                                                                                                         Very truly yours,

     

    
       

                                                           MILLENNIUM CELL INC.

       

       

                                                           By: /s/John D.
Giolli

                                                                                                                                                                  
Name: John D. Giolli, CPA

                                                                                                                                                                  
Title: Chief Financial Officer

       

    ACKNOWLEDGED
AND AGREED TO:

     

     

    [HOLDER]

     

     

    By:
________________________

          Name: 

          Title:  

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

                                      Exhibit A

     

    
      	
              Convertible Debenture
      Holder

            	
              Revised Currently
      Outstanding Principal Amount

               

            
	
              Portside Growth &
      Opportunity Fund

               

            	
              $1,800,000

               

            
	
              Mainfield
      Enterprises, Inc.

               

            	
              $1,800,000

               

            
	
              Gemini Master Fund,
      Ltd.

               

            	
              $1,140,000

               

            
	
              Iroquois Master Fund
      Ltd.

               

            	
              $914,532

               

            
	
              JGB Capital
      L.P.

               

            	
              $77,413

               

            
	
              JGB Capital Offshore,
      Ltd.

               

            	
              $25,805

               

            
	
              Solomon Strategic
      Holdings, Inc.

               

            	
              $90,000

               

            
	
              The Tail Wind Fund
      Ltd.

               

            	
              $510,000

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