Document:

PRS Asset Purchase Agreement

    

      EXECUTION
        COPY

      

      ASSET
        PURCHASE AGREEMENT dated as of August 5, 2005 among Pharmaceutical Resource
        Solutions LLC, a Pennsylvania limited liability company (“Seller”),
        the
        members of Seller listed on the signature pages hereto (each a “Member”
        and
        collectively the “Members”),
        Ventiv Health, Inc., a Delaware corporation (“Parent”);
        and
        PRS Acquisition LLC, a Delaware limited liability company (“Purchaser”).

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        Purchaser wishes to purchase from Seller, and Seller wishes to sell, assign
        and
        transfer to Purchaser, substantially all of the assets of Seller, for the
        purchase price and upon the terms and subject to the conditions hereinafter
        set
        forth;

       

      WHEREAS,
        in order to induce Seller to enter into this Agreement, Parent is executing
        a
        guaranty (the “Parent
        Guaranty”)
        of
        Purchaser’s obligations hereunder and under the Employment Agreements (as
        defined below) simultaneously with the execution of this Agreement;

       

      WHEREAS,
        in order to induce Purchaser and Parent to enter into this Agreement, the
        key
        employees of Seller listed on Schedule I (the “Key
        Employees”)
        are
        entering into employment agreements with Purchaser (each, an “Employment
        Agreement”)
        simultaneously with the execution of this Agreement;

       

      WHEREAS,
        the Members will receive substantial economic benefits from the consummation
        of
        the transactions contemplated hereby; and

       

      WHEREAS,
        certain terms used in this Agreement are defined in Section 11.1;

       

      NOW,
        THEREFORE, in consideration of the mutual covenants, representations and
        warranties made herein and other good and valuable consideration, the receipt
        and sufficiency of which hereby are acknowledged, the parties hereto agree,
        intending to be legally bounded hereby, as follows:

       

      ARTICLE
        I  

       

      

       

      PURCHASE
        AND SALE OF THE ASSETS 

       

      Section
        1.1  Assets.
        Subject
        to and upon the terms and conditions set forth in this Agreement, at the
        closing
        of the transactions contemplated hereby (the “Closing”),
        Seller shall sell, transfer, convey, assign and deliver to Purchaser, and
        Purchaser shall purchase and acquire from Seller, all right, title and interest
        of Seller in and to all properties, assets and rights of every nature, kind
        and
        description, tangible and intangible (including goodwill), whether accrued,
        contingent or otherwise (other than the Excluded Assets (as defined below)),
        that relate to or are used or held for use in the Business (collectively,
        the
“Assets”),
        including without limitation the following Assets:

       

      (a)  all
        cash
        and cash equivalents of Seller as of the date (the “Closing
        Date”)
        of the
        Closing;

       

      (b)  all
        computer hardware, furniture, furnishings, vehicles, equipment, machinery
        and
        other tangible personal property;

       

      (c)  all
        rights under the Contracts listed on Schedule II (the “Included
        Contracts”);

       

      (d)  all
        payment rights and other intangible assets (including goodwill) with respect
        to
        customer relationships that are not embodied in complete written Contracts
        (it
        being understood that an expired Contract shall not be deemed to be a complete
        written Contract for purposes of this Section 1.1(d));

       

      (e)  all
        rights in Intellectual Property now in existence or under development, including
        all licenses and rights to use or practice such Intellectual Property, and
        all
        goodwill represented thereby and pertaining thereto; 

       

      (f)  all
        credits, prepaid expenses, deferred charges, advance payments, security deposits
        and prepaid items (other than as provided in Section 1.2(c));

       

      (g)  all
        notes
        and accounts receivable (in all cases, whether or not billed) and the benefit
        of
        any security therefor;

       

      (h)  all
        Books
        and Records;

       

      (i)  to
        the
        extent their transfer is permitted by applicable Law, all Governmental
        Approvals, including all applications therefor; 

       

      (j)  all
        of
        the outstanding equity interests in Pharmaceutical Resource Solutions of
        Puerto
        Rico, Inc. (“PRS
        PR”);
        and

       

      (k)  all
        causes of action, lawsuits, claims and demands of any nature available to
        or
        being pursued by Seller with respect to the Assets or the Assumed
        Liabilities.

       

      At
        the
        Closing, the Assets shall be transferred or otherwise conveyed to Purchaser
        free
        and clear of all Liens excepting only Permitted Exceptions. 

       

      Section
        1.2  Excluded
        Assets.
        Notwithstanding Section 1.1, Seller shall retain Seller’s right, title and
        interest in and to the following assets (collectively, the “Excluded
        Assets”):

       

      (a)  except
        as
        otherwise provided in 9.2, insurance policies and causes of action, lawsuits,
        claims, demands, rights of recovery and set-off under or with respect to,
        and
        the proceeds of, insurance policies;

       

      (b)  causes
        of
        action, lawsuits, claims, demands, and rights of recovery and set-off with
        respect to any Excluded Assets or Excluded Liability; 

       

      (c)  prepaid
        Taxes and any claims for any refund, rebate or abatement with respect to
        Taxes
        for any period or portion thereof through the Closing Date; 

       

      (d)  Contracts
        other than Included Contracts, provided that in the event any Contract of
        Seller
        is discovered following the Closing that is not included on Schedule II,
        Purchaser may at its sole discretion elect to include such Contract in the
        Assets for no additional consideration; 

       

      (e)  any
        and
        all income tax returns and related workpapers used to prepare the same for
        periods ending on or prior to the Closing Date; 

       

      (f)  all
        Employee Benefit Plans, Pension Plans and assets thereunder, except those
        listed
        in Section 9.2(b) of the Seller Disclosure Schedule and assets thereunder;
        

       

      (g)  all
        personal property identified as an Excluded Asset in Section 1.2(h) of the
        Seller Disclosure Schedule; 

       

      (h)  all
        insurance policies maintained by Seller with respect to the Business;
        and

       

      (i)  the
        rights of Seller under this Agreement and the other Transaction Documents,
        including all payment rights hereunder and thereunder.

       

      Section
        1.3  Required
        Consents.
        Notwithstanding anything to the contrary in this Agreement, this Agreement
        shall
        not constitute an agreement to assign or transfer any Asset or interest therein
        as to which (i) an assignment or transfer thereof or an attempt to make such
        an
        assignment or transfer without a Consent (a “Required
        Consent”)
        would
        constitute a breach or violation thereof or of applicable Law, or would
        adversely affect the rights or obligations thereunder to be assigned or
        transferred to or for the account of Purchaser and (ii) all such Required
        Consents shall not have been obtained with respect to such Asset or interest
        therein prior to the Closing. Any transfer or assignment to Purchaser by
        Seller
        of any such Asset or interest therein (a “Delayed
        Asset”),
        and
        any assumption by Purchaser of any corresponding Assumed Liability (a
“Delayed
        Liability”),
        shall
        be made subject to all such Required Consents in respect of such Delayed
        Asset
        being obtained. If there are any Delayed Assets, Seller shall use its reasonable
        best efforts to obtain all Required Consents in respect thereof as promptly
        as
        practicable following the Closing, and shall obtain such Required Consents
        without any further cost to Purchaser or any of its Affiliates. Until all
        Required Consents with respect to each Delayed Asset have been obtained,
        (a)
        Seller shall hold the Delayed Asset on behalf of Purchaser, (b) Seller shall
        cooperate with Purchaser for no additional consideration in any lawful
        arrangement (including subleasing or subcontracting, or performance thereunder
        by Seller as Purchaser’s agent) to provide Purchaser with all of the benefits of
        or under any such Delayed Asset, (c) to the extent of any benefits received
        by
        or for the account of Purchaser under clause (b) above, Purchaser shall assume
        and perform any corresponding Delayed Liabilities and (d) Seller shall otherwise
        enforce and perform for the account of Purchaser and as directed by Purchaser
        any other rights of Seller arising from such Delayed Asset. At such time
        and on
        each occasion after the Closing Date as all Required Consents with respect
        to a
        Delayed Asset have been obtained, such Delayed Asset shall automatically
        be
        transferred and assigned by Seller to Purchaser for no additional consideration,
        and all corresponding Delayed Liabilities shall be simultaneously assumed
        by
        Purchaser, without the need for any further act on the part of any party.
        

       

      ARTICLE
        II  

       

      

       

      PURCHASE
        PRICE AND CLOSING

       

      Section
        2.1  Purchase
        Price; Allocation.
        (a)
        The
        consideration for the Assets (the “Purchase
        Price”)
        shall
        be, in the aggregate, (i) $9,100,000 in cash, payable by electronic funds
        transfer at the Closing, subject to adjustment as provided in Section 2.5
        (the
“Initial
        Cash Purchase Price”),
        (ii)
        a number of unregistered shares of the common stock, par value $0.001 per
        share,
        of Parent (“Parent
        Common Stock”)
        equal
        to the quotient of (x) $3,900,000, divided by (y) the Fair Market Value of
        one
        share of Parent Common Stock as of the date of this Agreement (the “Initial
        Shares”),
        (iii)
        the assumption by Purchaser at the Closing of the Assumed Liabilities and
        (iv)
        all amounts payable or distributable to Seller pursuant to Section 2.6 below.
        On
        the Closing Date, Purchaser shall deliver to the transfer agent for the Parent
        Common Stock irrevocable instructions to issue the Initial Shares in the
        name of
        Seller (or, at Seller’s request, the Members). Neither Purchaser nor Parent
        shall have any responsibility for the allocation among Seller and the Members
        of
        any consideration to which Seller is entitled hereunder.

       

      (b)  [***]
        shall be held in escrow until [***] pursuant to an escrow agreement dated
        as of
        the Closing Date among Purchaser, Seller, on behalf of Seller, and Bank of
        New
        York, as escrow agent (the “Escrow
        Agreement”),
        in
        substantially the form annexed hereto as Exhibit
        A.
        

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
          
            5

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      (c)  The
        Purchase Price shall be allocated by Purchaser among the Assets in the manner
        required by Section 1060 of the Code and regulations thereunder. The Purchaser
        will allocate an amount to Seller’s fixed assets equal to their depreciated book
        value unless there has been substantial appreciation of such assets. Purchaser
        shall deliver to Seller a copy of such allocation within seventy five (75)
        days
        after the Closing. The portion of the Purchase Price, if any, allocated to
        one
        or more covenants set forth in a Transaction Document shall not be offered
        by
        any party hereto as evidence, or otherwise taken into account, in connection
        with a determination of the damages arising from a breach of any such covenant.
        Purchaser and Seller shall file on a timely basis with the IRS substantially
        identical initial and supplemental IRS Forms 8594 consistent with such
        allocation and which gives effect to any adjustment of the Purchase Price
        determined in accordance with Section 2.5 hereof or any amounts payable or
        distributable to Seller pursuant to Section 2.6 below. Purchaser and Seller
        agree, for all Tax purposes, to report the transactions effected pursuant
        to the
        Transaction Documents in a manner consistent with the terms of this Agreement
        (including the Purchase Price allocation prepared by Purchaser) and neither
        of
        them shall take a position on any Tax return, before any Tax authority or
        in any
        judicial proceeding that is, in any manner, inconsistent with such allocation
        without the consent of the other or unless specifically required pursuant
        to a
        determination by an applicable Tax authority. The parties shall promptly
        advise
        one another of the existence of any Tax audit, controversy or litigation
        related
        to any allocation hereunder.

       

      Section
        2.2  Closing
        Date.
        Subject
        to the satisfaction of the conditions set forth in Sections 6.1 and 6.2 (or
        the
        waiver thereof by the party entitled to waive that condition), the Closing
        shall
        take place at the office of Parent in New York City at 10:00 a.m. on the
        date
        hereof (the “Closing
        Date”).
        At
        the Closing, the parties shall make the deliveries provided for in Section
        2.1
        and Article VII hereof. The Closing shall become effective as of 11:59 P.M.
        EST
        on the Closing Date. 

       

      Section
        2.3  Assumption
        of Liabilities .
        Subject
        to the terms and conditions set forth herein, at the Closing, Purchaser shall
        assume and agree to timely pay and discharge in full when due solely the
        following liabilities and obligations of Seller (collectively, the “Assumed
        Liabilities”):

       

      (a)  all
        liabilities and obligations of Seller under Included Contracts included in
        the
        Assets that, by the terms of such Included Contracts, arise after the Closing,
        relate to periods following the Closing and are to be observed, paid,
        discharged, or performed as the case may be, at any time after the
        Closing;

       

      (b)  all
        liabilities and obligations of Seller set forth on the Final Closing Working
        Capital Statement, other than (i) liabilities and obligations arising outside
        the ordinary course of business (it being understood that the $15,000 in
        401(k)
        expense referenced in Section 3.6 of the Seller Disclosure Schedule shall
        not be
        deemed to have arisen outside the ordinary course of business) and (ii) any
        liability to Proforma Spectrum Graphics Ltd. in excess of the sum of (A)
        the
        amount represented to be due and owing by Seller in an estoppel letter delivered
        to Purchaser at Closing (the “Estoppel
        Letter”)
        and
        (B) the amount accrued during the period from August 1, 2005 through the
        Closing
        Date; and

       

      (c)  all
        liabilities and obligations expressly assumed by Purchaser pursuant to Article
        IX. 

       

      Section
        2.4  Excluded
        Liabilities.
        Purchaser shall not be responsible for any Liabilities, obligations or
        commitments of Seller that are not specifically set forth in Section 2.3
        (collectively, the “Excluded
        Liabilities”).
        In
        addition, notwithstanding anything to the contrary in this Agreement (including
        Section 2.3), Purchaser shall not be responsible for any of the following
        (each
        of which shall also constitute Excluded Liabilities):

       

      (a)  any
        Liability, obligation or commitment (other than liabilities and obligations
        reflected on the Final Closing Working Capital Statement that are assumed
        pursuant to Section 2.3(b)), other than the $15,000 in 401(k) expense referenced
        in Section 3.6 of the Seller Disclosure Schedule, that, in accordance with
        GAAP,
        was required to have been shown as a liability on the unaudited consolidated
        balance sheet of Seller (the “Balance
        Sheet”)
        as at
        June 30, 2005 (the “Balance
        Sheet Date”)
        and
        was not so shown; 

       

      (b)  any
        Liability relating to any cause of action or judicial or administrative action,
        suit, proceeding or investigation (i) pending or threatened on or prior to
        the
        Closing Date or (ii) relating to Excluded Assets or Excluded
        Liabilities;

       

      (c)  any
        Liability relating to any failure or alleged failure to comply with, or any
        violation or alleged violation of, (i) any Law, Order or Governmental
        Approval applicable to the Business or the Assets, including without limitation
        any Tax Law or any Law relating to employment practices, or (ii) any
        Contract, in each case which failure or violation occurred or was alleged
        to
        have occurred on or prior to the Closing Date;

       

      (d)  any
        Liability, severance obligation, termination fee or other obligation or
        commitment relating to or arising out of (i) the employment by Seller of
        any of
        its employees or the engagement by Seller of any of its independent contractors
        (or any employee of an independent contractor), (ii) except as expressly
        assumed
        by Purchaser or any of their Affiliates pursuant to Article IX, any Employee
        Benefit Plan or Pension Plan, including any sponsorship, administration or
        contribution obligation of any Person under any Employee Benefit Plan or
        Pension
        Plan or the termination prior to any such assumption of any Employee Benefit
        Plan or Pension Plan or (iii) the termination by the Seller of the
        employment or engagement of any employee or independent contractor of
        Seller;

       

      (e)  any
        Liability relating to any infringement or alleged infringement of the rights
        of
        any other Person arising out of the use of any Intellectual Property in
        connection with the Business on or prior to the Closing Date;

       

      (f)  any
        Liability relating to the creation by Seller or an employee or independent
        contractor of Seller on or prior to the Closing Date of any Intellectual
        Property in connection with the performance of services for a customer of
        Seller, or any failure of Seller or any such employee or independent contractor
        to assign the rights therein to such customer; 

       

      (g)  any
        Liability for (i) any Taxes attributable to Seller, or (ii) for Taxes
        attributable to the Assets or the Business with respect to any taxable period
        (or portion thereof) ending on or prior to the Closing Date, with the exception
        of accrued payroll and sales tax reflected on the Final Closing Working Capital
        Statement;

       

      (h)  any
        Liability under or with respect to that certain Business Loan Agreement dated
        May 19, 2003 between Seller and Hudson United Bank (“Hudson”)
        or the
        Promissory Note dated May 19, 2003 by Seller to Hudson, in each case as amended,
        or any agreement or instrument relating thereto;

       

      (i)  any
        Liability relating to any Excluded Asset; 

       

      (j)  any
        legal, accounting or other transactional expenses of Seller, including the
        fee
        due to Fairmount Partners with respect to the transactions contemplated by
        the
        Transaction Documents; or

       

      (k)  any
        Liability imposed by any Environmental Law and incurred in connection with
        (i)
        conditions existing or events occurring on or prior to the Closing Date on
        Seller Property (as defined below), (ii) any real property, business
        entities or assets, whether domestic or foreign, formerly owned, leased,
        occupied or operated by or in connection with the Business or (iii) the
        transportation or disposal of any Hazardous Materials to or at any offsite
        facility or location by or in connection with the Business occurring prior
        to
        the Closing Date.

       

      For
        purposes of Section 2.4(g), in the case of any taxable period that begins
        before
        and ends after the Closing Date (a “Straddle Period”), the amount of any Tax for
        the portion of such taxable period ending on the Closing Date shall be deemed
        to
        be the amount of such Tax for the entire taxable period multiplied by a fraction
        the numerator of which is the number of days in the taxable period through
        the
        Closing Date and the denominator of which is the number of days in such Straddle
        Period. 

       

      Section
        2.5  Working
        Capital Adjustment.
        (a) (i)
        The Purchase Price shall be increased dollar-for-dollar to the extent the
        Working Capital (as defined below) as of the Closing Date (the “Closing
        Working Capital Amount”)
        exceeds $[***] (the “Target
        Working Capital Amount”)
        and
        shall be decreased dollar-for-dollar to the extent the Target Working Capital
        Amount exceeds the Closing Working Capital Amount. Seller will prepare and
        deliver to Purchaser, no later than two business days prior to the Closing
        Date,
        an estimate of the Closing Working Capital Amount (as defined below) as of
        the
        Closing Date (the “Estimated
        Closing Working Capital Amount”),
        which
        estimate shall be subject to review and approval by Purchaser. If the Estimated
        Closing Working Capital Amount is less than the Target Working Capital Amount,
        then the Purchase Price (and the Initial Cash Purchase Price) will be reduced
        by
        the amount of such deficiency. If the Estimated Closing Working Capital Amount
        is greater than the Target Working Capital Amount, then the Purchase Price
        (and
        the Initial Cash Purchase Price) will be increased by the amount of such
        difference.For
        purposes of this Agreement, “Working
        Capital”
        shall
        mean the current assets of the Business as of the Closing Date (including
        accounts receivable (net of allowance for doubtful accounts), unbilled
        receivables and other current assets, but excluding the Excluded Assets and
        restricted cash) less the sum of (a) the current liabilities of the Business
        as
        of the Closing Date (including accounts payable and accrued expenses (including
        all accrued and unused vacation benefits (including as set forth in Section
        9.2(d) of the Seller Disclosure Schedule), whether or not traditionally
        reflected on Seller’s consolidated balance sheet as a current liability) and all
        other current liabilities) and (b) without duplication, all other Assumed
        Liabilities accrued through the Closing Date, but excluding the Excluded
        Assets
        and the Excluded Liabilities (including any legal, accounting or other
        transactional expenses of Seller, including the fee due to Fairmount Partners
        with respect to the transactions contemplated by the Transaction Documents,
        all
        of which shall be satisfied by Seller and the Members from the Initial Cash
        Purchase Price), and shall be calculated in accordance with GAAP. 

       

      (ii)
        Within 90 days after the Closing Date, Purchaser shall prepare and deliver
        to
        Seller a statement (the “Closing
        Working Capital Statement”)
        calculating the Closing Working Capital Amount. Purchaser shall provide Seller
        and a single accounting firm for Seller reasonable access to all (i) work
        papers
        and written procedures used to prepare the Closing Working Capital Statement
        and
        (ii) Books and Records and personnel to the extent reasonably necessary to
        enable Seller and such accounting firm to conduct a sufficient review of
        the
        Closing Working Capital Statement and verify the calculation of the Closing
        Working Capital Amount. If Seller disputes the Closing Working Capital Amount
        as
        shown on the Closing Working Capital Statement prepared by Purchaser, Seller
        shall deliver to Purchaser within 30 days after receipt of the Closing Working
        Capital Statement a statement (the “Dispute
        Notice”)
        setting forth Seller’s calculation of the Closing Working Capital Amount and
        describing in reasonable detail the basis for the determination of such
        different Closing Working Capital Amount. The 

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      parties
        shall use reasonable efforts to resolve such differences regarding the
        determination of the Closing Working Capital Amount within a period of 30
        days
        after Seller has given the Dispute Notice. If the parties resolve such
        differences, the Closing Working Capital Amount agreed to by the parties
        shall
        be deemed to be the “Final
        Closing Working Capital Amount”
        and the
        Closing Working Capital Statement agreed to by the Parties shall be deemed
        to be
        the “Final
        Closing Working Capital Statement.”

       

      
            (b)
          If
          Purchaser and Seller do not reach a final resolution on the Closing Working
          Capital Amount within 30 days after Seller has given the Dispute Notice,
          unless
          Purchaser and Seller mutually agree to continue their efforts to resolve
          such
          differences, the Neutral Accountant shall resolve such differences, pursuant
          to
          an engagement agreement among Purchaser, Seller and the Neutral Accountant
          (which Purchaser and Seller agree to execute promptly), in the manner provided
          below. Purchaser and Seller shall each be entitled to make a presentation
          to the
          Neutral Accountant, pursuant to procedures to be agreed to among Purchaser,
          Seller and the Neutral Accountant (or, if they cannot agree on such procedures,
          pursuant to procedures determined by the Neutral Accountant), regarding
          such
          party’s calculation of the Closing Working Capital Amount; and the Neutral
          Accountant shall be required to resolve the differences between Purchaser
          and
          Seller and determine the Closing Working Capital Amount within 20 days
          after the
          engagement of the Neutral Accountant. The Closing Working Capital Amount
          determined by the Neutral Accountant shall be deemed to be the Final Closing
          Working Capital Amount and the Closing Working Capital Statement, as adjusted
          to
          reflect such determination, shall be deemed to be the Final Closing Working
          Capital Statement. Such determination by the Neutral Accountant shall be
          conclusive and binding upon the parties, absent fraud or manifest error.
          In the
          event either Purchaser or Seller believes the determination of the Neutral
          Accountant reflects a manifest error, Purchaser or Seller, as the case
          may be,
          shall be entitled to specify the error to the Neutral Accountant in writing,
          in
          reasonable detail (with a copy to the other) within five business days
          of the
          date of delivery to the parties of the Neutral Accountant’s determination, and
          any correction made by the Neutral Accountant (which the Neutral Accountant
          shall be requested to make within ten business days after such date of
          delivery)
          shall supersede the Neutral Accountant’s initial determination. Nothing in this
          Section 2.5(b) shall be construed to authorize or permit the Neutral Accountant
          to:

      

       

      (i)  determine
        any questions or matters whatsoever under or in connection with this Agreement
        except for the resolution of differences between Purchaser and Seller regarding
        the determination of the Closing Working Capital Amount; or

       

      (ii)  resolve
        any such differences by making an adjustment to the Closing Working Capital
        Statement that is outside of the range defined by amounts as finally proposed
        by
        Purchaser and Seller.

       

      Purchaser,
        on the one hand, and Seller, on the other hand, shall each pay one half of
        the
        fees and expenses of the Neutral Accountant.

      

      (c)
        If
        the Final Closing Working Capital Amount is less than the Estimated Closing
        Working Capital Amount, then Seller shall pay to Purchaser an amount equal
        to
        the difference between the Estimated Closing Working Capital Amount and the
        Final Closing Working Capital Amount and the Purchase Price shall be reduced
        by
        the amount of such difference. If the Final Closing Working Capital Amount
        is
        more than the Estimated Closing Working Capital Amount, then Purchaser shall
        pay
        to Seller an amount equal to the difference between the Final Closing Working
        Capital Amount and the Estimated Closing Working Capital Amount and the Purchase
        Price shall be increased by the amount of such difference . Any payment pursuant
        to this Section 2.5(c) shall be made in cash by wire transfer of immediately
        available funds into one or more accounts designated in writing by Seller
        or
        Purchaser, as the case may be, within five business days after the date on
        which
        the Final Closing Working Capital Amount is determined. 

       

      Section
        2.6  Earnout.
        (a)
        Seller
        shall be entitled to additional consideration from Purchaser (any such
        additional consideration, an “Earnout
        Amount”)
        as
        follows: [***]

       

      The
        parties hereto agree that, except as hereinafter provided, no interest shall
        accrue on, or be due and payable with respect to, any Earnout Amount. Purchaser
        shall deliver any Earnout Amount for any Earnout Period (as defined below)
        to
        Seller within five business days after the Final Earnout Amount Determination
        Date for such period. At Purchaser’s option, up to [***] of each Earnout Amount
        may be satisfied by the issuance to Seller of unregistered shares of Parent
        Common Stock having a Fair Market Value equal to such portion of such Earnout
        Amount. Shares of Parent Common Stock issued in satisfaction of any portion
        of
        an Earnout Amount are referred to as “Earnout
        Shares”
        and,
        together with the Initial Shares, as the “Shares”.
        [***]
        In no event will any Shares be issued hereunder if the issuance of such Shares
        would cause the total number of Shares issued pursuant to this Agreement
        to
        exceed 19.9% of the number of shares of Parent Common Stock outstanding on
        the
        Closing Date. Any Earnout Amount that would otherwise be satisfied by the
        issuance of Earnout Shares in excess of such amount, and any other portion
        of an
        Earnout Amount that is not satisfied through the issuance of Earnout Shares,
        will be paid in cash by wire transfer of immediately available funds in
        accordance with written instructions delivered to Purchaser by Seller. Seller
        acknowledges and agrees that neither Purchaser nor any other Person makes
        any
        guarantee or representation to Seller that any Earnout Amount will be realized.
        Any Earnout Amount that is paid in cash or Earnout Shares to Seller or its
        designees shall be treated as a component of the Purchase Price.

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Purchaser
        shall at its expense deliver to Seller within 75 days after the end of calendar
        year 2005 and calendar year 2006 (each, an “Earnout
        Period”)
        its
        calculation of [***] for such period [***] and the Earnout Amount, if any,
        payable under Section 2.6(a) in respect thereof. Purchaser shall provide
        Seller and Seller’s accounting firm with reasonable access to all books and
        records and working papers to the extent reasonably necessary to enable Seller
        and such accounting firm to verify such calculations after the delivery thereof.
        Such calculations shall be binding on the parties, absent fraud or manifest
        error, unless Seller, within 15 days after the delivery of the calculations
        by
        Purchaser to Seller, notifies Purchaser in writing that it objects to any
        item
        or computation in connection with the calculations and specify in reasonable
        detail the basis for such objection. If Purchaser and Seller are unable to
        agree
        upon the calculations within 20 days after any notice of objection has been
        given by Seller to Purchaser, then at the election of either Seller or
        Purchaser, the dispute shall be submitted to the Neutral Accountant for a
        final
        determination in accordance with the procedures set forth in Section 2.5(b),
        which determination shall be final and binding upon the parties, absent fraud
        or
        manifest error. Purchaser and Seller shall each bear one-half of the fees,
        costs
        and expenses of the Neutral Accountant in the event such an election is made.
        For purposes of this Agreement, with respect to any Earnout Period, (i) [***]
        for such period shall mean the [***] for such period, or such other amount
        as
        shall have been agreed to by Seller and Purchaser following a timely notice
        of
        objection as contemplated under this Section 2.6 (b), or such other
        amount
        as determined by the Neutral Accountant and (ii) the “Final
        Earnout Amount Determination Date”
        for
        such period shall mean: (x) the date that is 31 days after the delivery of
        Purchaser’s calculation of the [***] for such period to Seller, (y) such earlier
        date on which Seller delivers an irrevocable notice to Purchaser in writing
        that
        it agrees with Purchaser’s calculation of such [***], or (z) if Seller timely
        objects to such [***], such date on which the [***] in respect thereof is
        otherwise determined. 

      
         

      

      (b)  Purchaser
        shall deliver any Earnout Amount to or as directed by Seller within five
        business days after such Earnout Amount has been determined to have been
        earned,
        and the amount thereof has been determined, in accordance with this Section
        2.6,
        provided that (x) the portion of an Earnout Amount that is satisfied by the
        issuance of shares of Parent Common Stock shall be deemed to have been delivered
        at the time irrevocable instructions are given by Parent to its transfer
        agent
        to issue shares of Parent Common Stock to Seller and (y) Parent shall not
        be
        required to give such instructions until the fifth business day after Seller
        has
        notified Purchaser in writing of the address to which such shares of Parent
        Common Stock are to be delivered. Any portion of an Earnout Amount that is
        not
        paid within five business days of the applicable Final Earnout Amount
        Determination Date shall bear interest from and after such fifth business
        day at
        a rate of 5% per annum until paid.

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Purchaser
        shall be controlled by a Board of Directors, elected or appointed, directly
        or
        indirectly, by Parent, of the sole member of Purchaser or by such other managing
        or supervisory body as is provided for in the organizational documents of
        Purchaser (the “Board”)
        and
        the operation of the Business shall be subject to the control of the Board,
        and
        ultimate authority for all decisions affecting the Business shall rest with
        the
        Board or its designees.

       

      (c)  During
        the period from the Closing Date through December 31, 2006, (i) Purchaser
        will
        be operated in good faith as a going concern [***]. 

       

      (d)  In
        the
        event of a merger, consolidation or other transaction (a “Conversion
        Transaction”)
        as a
        result of which substantially all of the outstanding shares of Parent Common
        Stock are converted into the right to receive, in whole or in part, equity
        securities, if such equity securities are traded on the New York Stock Exchange,
        the American Stock Exchange, The Nasdaq Stock Market or another securities
        exchange or interdealer quotation system reasonably acceptable to Seller
        (“Listed
        Equity Securities”),
        (i)
        any issued Shares, including shares held pursuant to the Escrow Agreement,
        shall
        be eligible to participate in any Conversion Transaction on the same basis
        as
        other outstanding shares of Parent Common Stock and (ii) any portion of an
        Earnout Amount that would otherwise be permitted to be satisfied through
        the
        issuance of Parent Common Stock shall thereafter be permitted to be satisfied
        through the issuance of such Listed Equity Securities. For such purpose,
        such
        Listed Equity Securities shall be valued at their aggregate Fair Market Value
        as
        of the applicable Value Date. In the event that, in any Conversion Transaction,
        substantially all of the outstanding shares of Parent Common Stock are converted
        into the right to receive equity securities that are not Listed Equity
        Securities (or are converted into the right to receive a combination of such
        equity securities and cash), then, until such equity securities constitute
        Listed Equity Securities, any Earnout Amount that thereafter becomes due
        shall
        be required to be satisfied entirely in cash. In the event of a merger,
        consolidation or other transaction as a result of which substantially all
        of the
        outstanding shares of Parent Common Stock are converted into the right to
        receive only cash, any Earnout Amount that thereafter becomes due shall be
        required to be satisfied entirely in cash, provided that if the surviving
        or
        transferee entity in such transaction (or an Affiliate thereof) has a class
        of
        Listed Equity Securities, any portion of an Earnout Amount that would otherwise
        be permitted to be satisfied through the issuance of Parent Common Stock
        shall
        thereafter be permitted to be satisfied through the issuance of such Listed
        Equity Securities, valued at their aggregate Fair Market Value as of the
        applicable Value Date. 

       

      Section
        2.7  Lock-Up
        Agreement.
        Neither
        Seller nor any Member shall sell, pledge or otherwise dispose of any economic
        interest in any Shares during the applicable Restricted Period except (a)
        for
        distributions from Seller to the Members, (b) 

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      pursuant
        to and in accordance with the terms of a Conversion Transaction, in which
        event
        the restrictions contained in this Section 2.7 shall apply to any Listed
        Equity
        Securities issued in exchange for Shares or (c) [***]. “Restricted
        Period”
        means
        (i) with respect to the Initial Shares, the period ending on the first
        anniversary of the Closing Date, and (ii) with respect to any Earnout Shares,
        the period ending on the first anniversary of the Value Date with respect
        to
        such Earnout Shares. 

       

      Section
        2.8  Transferability;
        Legending of Shares.
        (a)
        Seller and each Member acknowledges that the Shares are being acquired pursuant
        to an exemption from registration under the Securities Act of 1933, as amended
        (the “Securities
        Act”)
        and
        that the Shares may be transferred only pursuant to an effective registration
        statement or an exemption from registration under the Securities Act. Seller
        and
        each Member represents that it is familiar with Rule 144 under the Securities
        Act. Neither Seller nor any Member shall be permitted to transfer any Shares
        in
        the absence of an effective registration statement unless Seller or such
        Member
        has furnished Parent with an opinion of counsel, reasonably satisfactory
        to
        Parent (it being understood that an opinion of the law firm of Buchanan
        Ingersoll PC, shall be satisfactory for this purpose), that such disposition
        does not require registration of such Shares under the Securities Act. It
        is
        agreed that Parent will not require opinions of counsel for transfers made
        pursuant to Rule 144 if Parent is provided with any certificates or other
        evidence of compliance with Rule 144 reasonably required by it in connection
        with such transfer (including without limitation a copy of the relevant Form
        144).

       

      (b)
        It is
        understood that the certificates evidencing the Shares may bear a legend
        to the
        following effect:

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED,
        HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
        STATEMENT WITH RESPECT THERETO OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
        REQUIREMENTES OF SUCH ACT.

       

      The
        certificates evidencing the Shares may also bear any legends required by
        applicable blue sky laws.

      

      Section
        2.9  Receivables
        Guaranty.
        In the
        event that any account receivable or unbilled receivable reflected on the
        Final
        Working Capital Statement has not been collected in full through the
        commercially reasonable efforts of Purchaser (which need not include the
        institution of any legal proceedings) by the six-month 

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      anniversary
        of the Closing, Seller agrees, within five business days of notice from
        Purchaser to Seller given at any time thereafter, to purchase such account
        receivable or unbilled receivable from Purchaser at its face amount. Purchaser
        shall not, during such six-month period, compromise or settle the liability
        of
        an account debtor with respect to a receivable shown on the Final Working
        Capital Statement without the consent of Seller, such consent not to be
        unreasonably withheld. All accounts receivable and unbilled receivables
        purchased by Seller (each, a “Seller
        Receivable”)
        shall
        continue to be billed and collected by Purchaser in the ordinary course and
        consistent with procedures employed in Seller’s recent historical practice. In
        the event Purchaser receives funds, not designated as being in payment of
        a
        specific account receivable, from a customer that is an account debtor with
        respect to both Seller Receivables and accounts receivable that continue
        to be
        owned by Purchaser, such funds shall be allocated to the oldest balance
        (excluding any balance that is in dispute with the account debtor). Subject
        to
        compliance with the preceding sentence, Purchaser shall have no liability
        to
        Seller for the collection of any Seller Receivable. 

          

       

      ARTICLE
        III  

       

      

       

      REPRESENTATIONS
        AND WARRANTIES OF SELLER AND THE MEMBERS

       

      Seller
        and the Members represent and warrant to Purchaser jointly and severally
        that,
        except as set forth in the Seller Disclosure Schedule attached hereto, the
        following statements are correct and complete as of the date hereof. The
        Seller
        Disclosure Schedule makes explicit reference to the particular representation
        or
        warranty as to which exception is taken, which in each case shall constitute
        the
        sole representation and warranty as to which such exception shall apply,
        provided that the disclosures in the Seller Disclosure Schedule that are
        set
        forth expressly therein with particularity will apply to all representations
        and
        warranties. 

       

      Section
        3.1  Organization
        and Good Standing.
        Seller
        is a limited liability company duly organized, validly existing and in good
        standing under the laws of the Commonwealth of Pennsylvania and has all
        requisite limited liability company power and authority to own, lease and
        operate its properties and to carry on its business. Seller is duly qualified
        or
        authorized to do business as a foreign limited liability company and is in
        good
        standing under the laws of each jurisdiction in which it owns or leases real
        property and each other jurisdiction in which the conduct of its business
        or the
        ownership of its properties requires such qualification or authorization,
        except
        where the failure to be so qualified or authorized would not have a Seller
        Material Adverse Effect. Section 3.1 of the Seller Disclosure Schedule sets
        forth a true, correct and complete list of each jurisdiction in which Seller
        is
        qualified or authorized to do business as a foreign limited liability
        company.

       

      Section
        3.2  Authorization
        and Enforceability.
        (a)
        Seller has all requisite power and authority to execute and deliver this
        Agreement and each of the other Transaction Documents and to consummate the
        transactions contemplated hereby and thereby. The execution, delivery and
        performance by Seller of each of the Transaction Documents to which it is
        a
        party have been duly authorized by all necessary limited liability company
        action on the part of Seller. This Agreement and the other Transaction Documents
        have been duly and validly executed and delivered by Seller and constitute
        legal, valid and binding obligations of Seller, enforceable against Seller
        in
        accordance with their respective terms 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).

       

      (b)
        The
        Transaction Documents to which any Member is a party have been duly and validly
        executed and delivered by each Member party thereto and constitute legal,
        valid
        and binding obligations of such Member, enforceable against such Member in
        accordance with their respective terms 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). 

       

      Section
        3.3  Ownership;
        Subsidiaries.
        (a)
        Section 3.3 of the Seller Disclosure Schedule sets forth (i) the record and
        beneficial ownership of all outstanding interests in Seller and (ii) a true
        and
        complete list of all partnerships, joint venture arrangements or other Persons
        in which Seller owns a direct or indirect equity interest, together with
        the
        jurisdiction of organization thereof and each record and beneficial owner
        of
        equity interests in such partnership, joint venture or other
        Person.

       

      (b)
        PRS
        PR has
        not
        conducted any material operations to date and has no material assets or
        Liabilities

       

      Section
        3.4  Seller’s
        Records.

       

      (a)  The
        minute books of Seller previously made available to Purchaser contain (i)
        all
        existing records of meetings and other limited liability company action of
        the
        members of Seller and (ii) complete and accurate records of all meetings
        and all
        other action of the members of Seller, in each case since inception.

       

      (b)  The
        books, records and accounts of Seller accurately and fairly present in all
        material respects the financial condition, results of operations, members’
        equity and cash flows of Seller. Seller has not engaged in any material
        transaction with respect to its business, maintained any bank account for
        its
        business or used any of its funds, except for transactions, bank accounts
        and
        funds which have been and are reflected in the normally maintained books,
        records and accounts of Seller. Seller is not aware that any fraud, whether
        or
        not material, has occurred that involves or involved management or other
        employees who have a significant role in Seller’s system of internal accounting
        control.

       

      Section
        3.5  Conflicts;
        Consents of Third Parties.

       

      (a)
        None
        of the execution and delivery by Seller of this Agreement and the other
        Transaction Documents to which it is a party, the consummation of the
        transactions contemplated hereby or thereby, or compliance by Seller with
        any of
        the provisions hereof or thereof will (i) conflict with, or result in the
        breach
        of, any provision of Seller’s certificate of organization or operating
        agreement or comparable organizational documents (collectively, “Organizational
        Documents”)
        of
        Seller; (ii) conflict with, violate, result in the breach or termination
        of, or constitute a default under any Contract to which Seller is a party
        or by
        which Seller or its properties or assets is bound, or require a consent or
        waiver by any Person in order to avoid any such conflict, violation, breach,
        termination or default; (iii) violate in any material respect any Law or
        any
        Order by which Seller is bound; or (iv) result in the creation of any Lien
        upon
        the properties or assets of Seller. No governmental franchise, easement,
        permit, right, application, filing, registration, license or other authorization
        (each a “Permit”),
        Order, waiver, declaration or filing with, or notification to any Person,
        including without limitation any Governmental Body, is required on the part
        of
        Seller in connection with the execution, delivery and performance of this
        Agreement or the other Transaction Documents to which it is a party, or the
        compliance by Seller with any of the provisions hereof or thereof.

       

      (b)
        None
        of the execution and delivery by any Member of this Agreement and the other
        Transaction Documents to which such Member is a party, the consummation of
        the
        transactions contemplated hereby or thereby, or compliance by such Member
        with
        any of the provisions hereof or thereof will (i) conflict with, violate,
        result
        in the breach or termination of, or constitute a default under any Contract
        to
        which such Member is a party or by which such Member or its properties or
        assets
        is bound, or require a consent or waiver by any Person in order to avoid
        any
        such conflict, violation, breach, termination or default; (ii) violate any
        Law
        or any Order by which such Member is bound; or (iii) result in the creation
        of
        any Lien upon the properties or assets of such Member. No Permit,
        Order,
        waiver, declaration or filing with, or notification to any Person, including
        without limitation any Governmental Body, is required on the part of such
        Member
        in connection with the execution, delivery and performance of this Agreement
        or
        the other Transaction Documents to which it is a party, or the compliance
        by
        such Member with any of the provisions hereof or thereof.

       

      Section
        3.6  Financial
        Statements.
        Included in Section 3.6 of the Seller Disclosure Schedule are (i) the
        unaudited balance sheets of the Seller as at December 31, 2003 and 2004 and
        the
        related unaudited statement of income of the Seller for the years then ended
        and
        (ii) the Balance Sheet and the related unaudited statement of income
        of the
        Seller for the six-month period ending on the Balance Sheet Date (such
        statements described in clauses (i) and (ii), including the related notes
        and
        schedules thereto, if any, are referred to herein as the “Financial
        Statements”).
        The
        Financial Statements have been prepared from the books and records of the
        Seller
        and fairly present in all material respects the financial position and results
        of operations and members’ equity of the Seller as at the dates and for the
        periods reflected thereon in accordance with GAAP applied on a consistent
        basis
        throughout the periods indicated. The financial forecasts for the Seller
        for the
        fiscal years 2005 and 2006 included in Section 3.6 of the Seller Disclosure
        Schedule were prepared based upon assumptions that are reasonable (as of
        the
        date hereof) and reflect management’s good faith assumptions stated therein and
        management’s good faith estimates (as of the date hereof) of the projected
        operating performance of the Seller for such periods. Purchaser acknowledges
        and
        agrees that (i) Seller and the Members make no guarantee or representation
        that
        the results estimated in such financial forecasts will be realized, (ii)
        the
        factors upon which the assumptions and estimate were based may change from
        the
        date hereof and (iii) the results estimated in such financial forecasts may
        differ materially from actual results.

       

      Section
        3.7  No
        Undisclosed Liabilities.
        Seller
        has no indebtedness or any other material obligation or Liability of any
        kind,
        including any Liability as guarantor, surety or otherwise, other than (i)
        obligations and Liabilities that are fully reflected in, reserved against
        or
        otherwise described in the Balance Sheet, (ii) obligations and Liabilities
        that
        have been incurred in the ordinary course of business consistent with past
        practice since the Balance Sheet Date and (iii) obligations and Liabilities
        for
        the future performance of the Contracts disclosed in the Seller Disclosure
        Schedule.

       

      Section
        3.8  Absence
        of Certain Developments.
        Since
        the Balance Sheet Date (and, with respect to clauses (a), (e), (f) and (p),
        the
        date that is 12 months prior to the Balance Sheet Date):

       

      (a)  there
        has
        not been any Seller Material Adverse Change nor has there occurred any event
        which is reasonably likely to result in a Seller Material Adverse
        Change;

       

      (b)  there
        has
        not been any damage, destruction or loss, whether or not covered by insurance,
        with respect to the property and assets of Seller having a replacement cost
        of
        more than $5,000 for any single loss or $10,000 for all such
        losses;

       

      (c)  Seller
        has not made any change in the rate of compensation, commission, bonus or
        other
        direct or indirect remuneration payable, or paid or agreed or orally promised
        to
        pay, conditionally or otherwise, any bonus, incentive, retention or other
        compensation, retirement, welfare, fringe or severance benefit or vacation
        pay,
        to or in respect of any director, officer, employee, distributor or agent
        of
        Seller, other than increases in the ordinary course of business consistent
        with
        past practice in the base salaries of employees of Seller other than officers
        or
        senior managers;

       

      (d)  Seller
        has not entered into any employment, deferred compensation, severance or
        similar
        agreement (nor amended any such agreement);

       

      (e)  there
        has
        not been any change by Seller in accounting or Tax reporting principles,
        methods
        or policies;

       

      (f)  Seller
        has not conducted its business other than in the ordinary course consistent
        with
        past practice;

       

      (g)  Seller
        has not entered into (1) any Contract that is not an Included Contract or
        (2)
        any other material transaction;

       

      (h)  Seller
        has not hired employees or engaged independent contractors to provide services
        for clients of Seller other than in the ordinary course of business consistent
        with, and at a level consistent with, past practice;

       

      (i)  Seller
        has not materially breached any Included Contract or materially amended any
        Included Contract;

       

      (j)  Seller
        has not failed to promptly pay and discharge current Liabilities except where
        disputed in good faith in an appropriate manner;

       

      (k)  Seller
        has not made any loans, advances or capital contributions to, or investments
        in,
        any Person or paid any fees or expenses to any Affiliate of Seller other
        than
        intercompany transactions in the ordinary course of business consistent with
        past practice;

       

      (l)  Seller
        has not mortgaged, pledged or subjected to any Lien any of its assets, or
        acquired any assets or sold, assigned, transferred, conveyed, leased or
        otherwise disposed of any assets of Seller except for assets acquired or
        sold,
        assigned, transferred, conveyed, leased or otherwise disposed of in the ordinary
        course of business consistent with past practice;

       

      (m)  Seller
        has not discharged or satisfied any Lien, or paid any obligation or Liability,
        except in the ordinary course of business consistent with past practice and
        which, in the aggregate, are not material to Seller;

       

      (n)  Seller
        has not canceled or compromised any debt or claim or amended, canceled,
        terminated, relinquished, waived or released any Contract or right except
        in the
        ordinary course of business consistent with past practice and which, in the
        aggregate, are not material to the Company;

       

      (o)  Seller
        has not made or committed to make any capital expenditures or capital additions
        or improvements in excess of $5,000 individually or $10,000 in the aggregate,
        except as set forth in the Seller Disclosure Schedule, or otherwise in the
        ordinary course of business consistent with past practices;

       

      (p)  Seller
        has not entered into any prepaid services transactions with any of its customers
        or otherwise accelerated revenue recognition or the sales of its services
        for
        periods prior to any Closing hereunder; 

       

      (q)  Seller
        has not amended any of its Organizational Documents;

       

      (r)  Seller
        has not issued any membership interests or any security exercisable or
        exchangeable for or convertible into membership interests of Seller;
        and

       

      (s)  Seller
        has not entered into any agreements to do or perform in the future any actions
        referred to in this Section 3.8 which have not been consummated as of the
        date
        hereof.

       

      Section
        3.9  Taxes.

       

      Seller
        has duly and timely filed all Tax Returns with respect to Taxes required
        to be
        filed on or before the Closing Date. All such Tax Returns are true, complete
        and
        correct in all material respects. All Taxes owed by Seller (whether or not
        shown
        on any Tax Return) or for which Seller is responsible have been duly and
        timely
        paid. Seller has not waived any statute of limitations in respect of Taxes
        or
        agreed to any extension of time with respect to a Tax assessment or deficiency.
        Seller is not currently the beneficiary of any extension of time within which
        to
        file any Tax Return. Seller has withheld all required amounts in respect
        of
        Taxes from its employees, agents, contractors and nonresidents and, to the
        extent required, has remitted such amounts to the proper agencies. Seller
        is not
        a “foreign person” within the meaning of Section 1445(b)(2) of the Code. Seller
        (a) has not been a member of an affiliated group filing a consolidated income
        Tax Return and (b) does not have any liability for the Taxes of any person
        under
        Treasury Regulations section 1.1502-6(a) (or any analogous or similar provision
        of any state, local or foreign Law), as a transferee or successor, by contract,
        or otherwise. Seller is, and since the date of its formation has been, treated
        as a partnership for federal, state and local income tax purposes and neither
        Seller nor any of its owners, nor any taxing authority has taken any position
        inconsistent with such treatment, including, without limitation, filing an
        election to be treated as an association taxable as a corporation under Treasury
        Regulation Section 301.7701-3(c). There
        are
        no liens for taxes (other than Taxes not yet due and payable) on any of the
        Assets. No deficiency or proposed adjustment for any amount of Tax has been
        proposed, asserted or assessed by any taxing authority against Seller that
        has
        not been paid, settled or otherwise resolved. There is no action, suit, claim,
        examination, investigation, proceeding or audit now pending, proposed or,
        to the
        Knowledge of Seller, threatened against Seller with respect to Taxes. None
        of
        the Assumed Liabilities is an obligation to make a payment that is not
        deductible under Code section 280G. No claim has ever been made by any taxing
        authority in a jurisdiction where Seller did not file Tax Returns that Seller
        may be subject to taxation by that jurisdiction. Seller will not be required
        under applicable Law to report on any return for a period commencing on or
        after
        the Closing Date income realized prior to the Closing Date. 

       

      Section
        3.10  Real
        Property.

       

      (a)  Seller
        does not own in fee any real property or interest in real property. Section
        3.10
        of the Seller Disclosure Schedule sets forth a complete list of all real
        property and interests in real property leased by Seller (individually, a
        “Real
        Property Lease”
        and the
        real properties specified in such leases being referred to herein individually
        as a “Seller
        Property”
        and
        collectively as the “Company
        Properties”)
        as
        lessee. The Seller Property constitutes all interests in real property currently
        used or currently held for use in connection with the Business or which are
        necessary for the continued operation of the Business as the Business is
        currently conducted and proposed to be conducted. Seller has a valid and
        enforceable leasehold interest under each of the Real Property Leases, 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
        received any written notice of any default or event that with notice or lapse
        of
        time, or both, would constitute a default under any of the Real Property
        Leases
        and Seller and, to Seller’s Knowledge, each other party thereto is in compliance
        in all material respects with all obligations of such party thereunder. All
        of
        the Seller Property, buildings, fixtures and improvements thereon owned or
        leased by Seller are in good operating condition and repair (subject to normal
        wear and tear). Seller has delivered or otherwise made available to Purchaser
        true, correct and complete copies of the Real Property Leases, together with
        all
        amendments, modifications or supplements, if any, thereto.

       

      (b)  Seller
        has all material certificates of occupancy and Permits of any Governmental
        Body
        necessary or useful for the current use and operation of each Seller Property,
        and Seller has complied with all material conditions of the Permits applicable
        to it. No default or violation, or event that with the lapse of time or giving
        of notice or both would become a default or violation, has occurred in the
        due
        observance of any Permit.

       

      (c)  To
        the
        Knowledge of Seller, there does not exist any actual or threatened or
        contemplated condemnation or eminent domain proceeding that affects Seller
        Property or any part thereof, and Seller has not received any notice, oral
        or
        written, of the intention of any Governmental Body or other Person to take
        or
        use all or any part thereof.

       

      Section
        3.11  Tangible
        Personal Property; Title; Sufficiency of Assets.

       

      (a)  Section
        3.11 of the Seller Disclosure Schedule lists all leases of personal property
        (“Personal
        Property Leases”)
        involving annual payments in excess of $5,000 relating to personal property
        used
        in the Business or to which Seller is a party or by which the properties
        of
        Seller are bound. Seller has delivered or otherwise made available to Purchaser
        true, correct and complete copies of the Personal Property Leases, together
        with
        all amendments, modifications or supplements thereto.

       

      (b)  Seller
        has a valid leasehold interest under each of the Personal Property Leases
        under
        which it is a lessee, 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), and there is no default under any Personal Property Lease by Seller
        or,
        to the Knowledge of Seller, by any other party thereto, and no event has
        occurred that with the lapse of time or the giving of notice or both would
        constitute a default thereunder, and Seller and, to the Knowledge of Seller,
        each other party thereto is in compliance in all material respects with all
        obligations of Seller or such other party, as the case may be, thereunder.
        

       

      (c)  Seller
        has good and marketable title to the Assets used in the Business as of the
        date
        hereof (which include, without limitation, all of the items of tangible personal
        property reflected in the Balance Sheet), free and clear of any and all Liens
        other than the Permitted Exceptions. All tangible personal property included
        in
        the Assets, and all of the items of tangible personal property used by Seller
        under the Personal Property Leases, are in good condition and in a state
        of good
        maintenance and repair (ordinary wear and tear excepted) and are in all material
        respects suitable for the purposes used. The Assets include all assets, rights
        and interests reasonably required for the continued conduct of the Business
        by
        Purchaser as now being conducted and proposed to be conducted. 

       

      Section
        3.12  Intellectual
        Property.

       

      (a)  Seller
        owns, free and clear from all Liens (other than Permitted Exceptions) or
        otherwise possesses legally enforceable rights to use all of the Intellectual
        Property reasonably necessary to conduct the Business as currently conducted
        and
        proposed to be conducted. The Intellectual Property owned by Seller
        (“Owned
        Intellectual Property”)
        and
        the Intellectual Property licensed to Seller comprise all of the Intellectual
        Property that is reasonably necessary to conduct the Business as currently
        conducted and currently proposed to be conducted.

       

      (b)  Section
        3.12(b)(i) of the Seller Disclosure Schedule sets forth a true, complete
        and
        correct list of all Owned Intellectual Property for which a registration
        or
        application has been filed with a Governmental Body, including patents,
        trademarks, service marks and copyrights, issued by or registered with, or
        for
        which any application for issuance or registration thereof has been filed
        with,
        any Governmental Body. Section 3.12(b)(ii) of the Seller Disclosure Schedule
        sets forth a complete and correct list of all trademarks, service marks and
        other trade designations that are Owned Intellectual Property and not otherwise
        identified in Section 3.12(b)(i) of the Seller Disclosure Schedule. Section
        3.12(b)(iii) of the Seller Disclosure Schedule also sets forth a complete
        and
        correct list of all material written or oral licenses and arrangements (other
        than confidentiality agreements and ordinary course licenses of commercially
        available software), (A) pursuant to which the use by any Person of
        Intellectual Property is permitted by Seller or (B) pursuant to which
        the
        use by Seller of Intellectual Property is permitted by any Person (collectively,
        the “Intellectual
        Property Licenses”).
        The
        Intellectual Property Licenses are in full force and effect. 

       

      (c)  Nothing
        will interfere with, infringe upon, misappropriate, or otherwise come into
        conflict with, any Intellectual Property rights of third parties as a result
        of
        the continued operation of the Business as presently conducted or reasonably
        expected to be conducted. 

       

      (d)  To
        the
        Knowledge of Seller, no Intellectual Property that is Owned Intellectual
        Property or subject to any Intellectual Property License is being infringed
        by
        third parties. There is no claim or demand of any Person pertaining to, or
        any
        proceeding which is pending or, to the Knowledge of Seller, threatened, that
        challenges the rights of Seller in respect of any Owned Intellectual Property,
        or claims that any default exists under any Intellectual Property
        License.

       

      (e)  Seller
        has no Liability relating to (i) the creation by Seller or an employee or
        independent contractor of Seller of Intellectual Property in connection with
        the
        performance of services for a customer of Seller or (ii) any failure of Seller
        or any such employee or independent contractor to assign rights therein to
        such
        customer. 

       

      Section
        3.13  Contracts.
        Section
        3.13 of the Seller Disclosure Schedule sets forth all of the Contracts to
        which
        Seller is a party or by which it is bound and categorizes such Contracts
        by the
        types described below: (i) Contracts with any current officer, director,
        employee or member of Seller, or any Affiliate of Seller or any such Person;
        (ii) Contracts with any employee or labor union or association representing
        any
        employee; (iii)  Contracts for the sale of any Assets other than in
        the
        ordinary course of business; (iv) joint venture or partnership agreements;
        (v)
        Contracts containing covenants not to compete in any line of business or
        with
        any person in any geographical area or covenants of any other person not
        to
        compete with Seller in any line of business or in any geographical area,
        or
        otherwise concerning confidentiality or non-competition (other than ordinary
        course customer contracts that would otherwise be included solely because
        they
        contain confidentiality provisions); (vi) Contracts entered into within the
        last
        five years relating to the acquisition of any operating business or the capital
        stock or equity interests of any other Person; (vii) Contracts relating to
        the
        borrowing of money from or by Seller or the extension of any credit by Seller
        to
        any customer, employee or other Person; (viii) all customer Contracts, (ix)
        Real
        Property Leases, (x) any other Contracts, other than Real Property Leases
        and
        customer contracts, with respect to which the amount to be paid or received
        thereunder in the future could reasonably be expected to exceed $25,000 in
        any
        calendar year or $50,000 in the aggregate and (xi) all other Contracts. There
        have been made available to Purchaser true, correct and complete copies of
        all
        of the Contracts. All of the Contracts are in full force and effect. Neither
        Seller nor, to the Knowledge of Seller, any other party to any Contract in
        default thereunder or has otherwise failed to comply in all material respects
        with its obligations thereunder. No Contract has been modified or amended
        except
        as described in Section 3.13 of the Seller Disclosure Schedule. Seller has
        not
        received any notice or communication from any party to a Contract or other
        material customer or supplier (whether or not a party to a Contract) relating
        to
        such party’s intent to modify, terminate or fail to renew the arrangements and
        relationships set forth therein. From and after each Closing, Seller will
        continue to enjoy all of the benefits of each of the Contracts without the
        necessity of any consent, authorization or agreement from or with any Person.
        There are no outstanding powers of attorney executed on behalf of Seller.
        The
        consummation of the transactions contemplated hereby will not affect any
        of the
        Contracts in a manner that could reasonably be expected to have a Seller
        Material Adverse Effect.

       

      Section
        3.14  Employee
        Benefits.
        

       

      (a)  Section
        3.14 of the Seller Disclosure Schedule sets forth a complete and correct
        list of
        (i) all “employee benefit plans,” as defined in Section 3(3) of the Employee
        Retirement Income Security Act of 1974, as amended (“ERISA”),
        and
        any other pension plans or employee benefit agreements, arrangements, programs
        or payroll practices (including without limitation severance pay, other
        termination benefits or compensation, vacation pay, company awards, salary
        continuation for disability, sick leave, retirement, deferred compensation,
        bonus or other incentive compensation, stock purchase arrangements or policies,
        hospitalization, medical insurance, life insurance and scholarship programs)
        that is currently in effect or was maintained, sponsored or contributed to
        by
        Seller within the last six years to which Seller contributes or is obligated
        to
        contribute thereunder with respect to employees of Seller, or that has been
        approved before the date hereof but is not yet effective (“Employee
        Benefit Plans”)
        and
        (ii) all “employee pension plans,” as defined in Section 3(2) of ERISA,
        maintained by Seller or any trade or business (whether or not incorporated)
        which are under control, or which are treated as a single employer, with
        Seller
        under Section 414(b), (c), (m) or (o) of the (“ERISA
        Affiliate”)
        or to
        which Seller or any ERISA Affiliate contributed or is obligated to contribute
        thereunder (“Pension
        Plans”)
        within
        the last six years. Section 3.14 of the Seller Disclosure Schedule identifies,
        in separate categories, Employee Benefit Plans or Pension Plans that are
        (i) subject to Section 4063 and 4064 of ERISA (“Multiple
        Employer Plans”),
        (ii)
        multiemployer plans (as defined in Section 4001(a)(3) of ERISA) (“Multiemployer
        Plans”)
        or
        (iii) “benefit plans”, within the meaning of Section 5000(b)(1) of the Code
        providing continuing benefits after the termination of employment (other
        than as
        required by Section 4980B of the Code or Part 6 of Title I of ERISA and at
        the
        former employee’s or his beneficiary’s sole expense).

       

      (b)  Neither
        Seller nor any ERISA Affiliate maintains, sponsors, or contributes, or has,
        within the past six years, maintained, sponsored or had any obligation to
        contribute to, for the benefit of current or former employees a defined benefit
        plan subject to Title IV of ERISA, (ii) any Multiemployer Plan or (iii) any
        Multiple Employer Plan.

       

      (c)  Each
        of
        the Employee Benefit Plans and Pension Plans intended to qualify under Section
        401 of the Code (“Qualified
        Plans”)
        qualifies in all material respects with the qualification requirements of
        Section 401 of the Code and the rules and regulations thereunder and nothing
        has
        occurred or is expected to occur with respect to the operation of any such
        plan
        which caused or would cause the loss of such qualification or exemption or
        the
        imposition of any liability, penalty or tax under ERISA or the
        Code.

       

      (d)  All
        contributions and premiums required by Law or by the terms of any Employee
        Benefit Plan or Pension Plan or any agreement relating thereto have been
        timely
        made (without regard to any waivers granted with respect thereto) to any
        funds
        or trusts established thereunder or in connection therewith, and no accumulated
        funding deficiencies exist in any of such plans.

       

      (e)  There
        has
        been no material violation of or failure to comply with ERISA or the Code
        with
        respect to the filing of applicable returns, reports, documents and notices
        regarding any of the Employee Benefit Plans or Pension Plans with the DOL,
        the
        IRS, the PBGC or any other Governmental Body or the furnishing of such notices
        or documents to the participants or beneficiaries of the Employee Benefit
        Plans
        or Pension Plans.

       

      (f)  True,
        correct and complete copies of the following documents, with respect
        to
        each of the Employee Benefit Plans and Pension Plans currently or previously
        maintained by Seller or an ERISA Affiliate, have been delivered to Purchaser:
        (A) any plans and related trust documents (all amendments thereto), investment
        management agreements, administrative service contracts, group annuity
        contracts, insurance contracts, collective bargaining agreements and employee
        handbooks, (B) the most recent Forms 5500 for the past three years and schedules
        thereto, (C) the most recent financial statements and actuarial valuations
        for
        the past three years, (D) the most recent IRS determination letter, (E) the
        most
        recent summary plan descriptions (including letters or other documents updating
        such descriptions) and (F) written descriptions of all non-written agreements
        relating to the Employee Benefit Plans and Pension Plans.

       

      (g)  There
        are
        no pending Legal Proceedings which have been asserted or instituted or, to
        the
        Knowledge of Seller, threatened against any of the Employee Benefit Plans
        or
        Pension Plans, the assets of any such plans or of any related trust or Seller,
        the plan administrator or any fiduciary of the Employee Benefit Plans or
        Pension
        Plans with respect to the operation of such plans (other than routine,
        uncontested benefit claims), and there are no facts or circumstances which
        could
        form the basis for any such Legal Proceeding. No Employee Benefit Plan or
        Pension Plan is under audit or investigation by the IRS, DOL, or any other
        Government Body and no such completed audit, if any, has resulted in the
        imposition of Tax, interest, or penalty.

       

      (h)  Each
        of
        the Employee Benefit Plans and Pension Plans materially complies with and
        has
        been maintained, in all material respects, in accordance with its terms and
        all
        provisions of applicable Law, including ERISA and the Code, and all material
        reporting and disclosure requirements have been satisfied on a timely
        basis.

       

      (i)  Seller
        and any ERISA Affiliate which maintains a “group health plan” within the meaning
        of Section 5000(b)(1) of the Code and each plan sponsor or administrator
        has
        complied in all material respects with the COBRA reporting, disclosure, notice,
        election, and other benefit continuation and coverage requirements of Section
        4980B of the Code or Part 6 of Title I of ERISA and the applicable regulations
        thereunder and any comparable state laws, and has not incurred any direct
        or
        indirect liability, and is not subject to any loss, assessment or excise
        tax,
        penalty, loss of federal income tax deduction or other sanction arising on
        account of or in respect of any direct or indirect failure at any time to
        comply
        with any such federal or state benefit continuation coverage requirements.
        Schedule 3.14(i) sets forth a complete list of individuals who have elected
        continuation coverage under COBRA and those individuals who are currently
        eligible to elect continuation coverage under COBRA.

       

      (j)  Neither
        Seller nor a “party in interest” or “disqualified person” with respect to the
        Employee Benefit Plans or Pension Plans has engaged in a “prohibited
        transaction” within the meaning of Section 4975 of the Code or Section 406 of
        ERISA which has subjected or could subject Seller, any ERISA Affiliates,
        Purchaser, Parent or any trustee, administrator or other fiduciary to a tax
        penalty on prohibited transaction or any other liabilities with respect
        thereto.

       

      (k)  Neither
        the execution and delivery of this Agreement nor the consummation of the
        transactions contemplated hereby will (i) result in any payment becoming
        due to
        any employee; (ii) increase any benefits otherwise payable under any Employee
        Benefit Plan or Pension Plan; or (iii) result in the acceleration of the
        time of
        payment or vesting of any such benefits.

       

      (l)  No
        membership interest or other security issued by Seller forms or has formed
        a
        material part of the assets of any Employee Benefit Plan or Pension
        Plan.

       

      (m)  The
        consummation of the transactions contemplated by this Agreement will not
        give
        rise to any liability for termination of any agreements related to any Employee
        Benefit Plan or Pension Plan.

       

      (n)  No
        amounts payable under any Employee Benefit Plan and Pension Plan will fail
        to be
        deductible for federal income tax purposes by virtue of Section 280G of the
        Code.

       

      (o)  Each
        Employee Benefit Plan or Pension Plan that purports to provide benefits which
        qualify for tax-favored treatment under Sections 79, 105, 106, 117, 120,
        125,
        127, 129, and 132 of the Code satisfies in all material respects the
        requirements of said Section(s).

       

      (p)  To
        Seller’s Knowledge, except as set forth on Section 3.14(p) of the Disclosure
        Schedule, Seller is not party to any contract, agreement or arrangement that
        is
        a “nonqualified deferred compensation plan” subject to Section 409A of the
        Code.

       

      (q)  Each
        Employee Benefit Plan, or Pension Plan, its related trust and insurance
        agreement may be unilaterally amended or terminated on no more than 90 days
        notice.

       

      Section
        3.15  Labor.

       

      (a)  Seller
        is
        not a party to any labor or collective bargaining agreement and there are
        no
        labor or collective bargaining agreements which pertain to employees of
        Seller.

       

      (b)  No
        employees of Seller are represented by any labor organization. No labor
        organization or group of employees of Seller has made a pending demand for
        recognition, and there are no representation proceedings or petitions seeking
        a
        representation proceeding presently pending or, to the Knowledge of Seller,
        threatened to be brought or filed, with the National Labor Relations Board
        or
        other labor relations tribunal. There is no organizing activity involving
        Seller
        pending or, to the Knowledge of Seller, threatened by any labor organization
        or
        group of employees of Seller.

       

      (c)  There
        are
        no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or (ii)
        material grievances or other labor disputes pending or, to the Knowledge
        of
        Seller, threatened against or involving Seller. There are no unfair labor
        practice charges, grievances or complaints pending or, to the Knowledge of
        Seller, threatened by or on behalf of any employee or group of employees
        of
        Seller.

       

      (d)  There
        are
        no complaints, charges or claims against Seller pending or, to the Knowledge
        of
        Seller, threatened which could be brought or filed, with any public or
        Governmental Body based on, arising out of, in connection with, or otherwise
        relating to the employment or termination of employment by Seller, of any
        individual.

       

      (e)  Seller
        is
        in compliance in all material respects with all Laws and Orders relating
        to the
        employment of labor, including all such Laws and orders relating to wages,
        hours, the Worker Adjustment and Retraining Notification Act and any similar
        state, local or foreign “plant closing” Law (“WARN”),
        collective bargaining, discrimination, civil rights, safety and health, worker’s
        compensation, payment of overtime wages and the collection and payment of
        withholding and/or social security taxes and any similar tax.

       

      (f)  There
        has
        been no “mass layoff” or “plant closing” as defined by WARN with respect to
        Seller within the six (6) months prior to making this
        representation.

       

      (g)  To
        the
        Knowledge of Seller, no executive, key employee, or group of employees currently
        has any plans to terminate employment with Seller independently of or as
        a
        result of this Agreement.

       

      Section
        3.16  Litigation.
        There
        is not, since the inception of Seller there has not been, any suit, action,
        proceeding, investigation, claim or order pending or, to the Knowledge of
        Seller
        and the Members, threatened by or against Seller or Member, or to the Knowledge
        of Seller and the Members, pending or threatened, against any of the other
        officers, directors, employees or independent contractors (or employees of
        independent contractors) of Seller with respect to their business activities
        on
        behalf of Seller, or to which Seller or any such officer, director, employee,
        independent contractor or employee of an independent contractor, with respect
        thereto, is otherwise a party, before any court, or before any governmental
        department, commission, board, agency, or instrumentality; nor to the Knowledge
        of Seller and the Members is there any reasonable basis for any such action,
        proceeding, or investigation. Seller is not subject to any Order of any
        Governmental Body.

       

      Section
        3.17  Compliance
        with Laws; Permits.
        Seller
        is in compliance in all material respects with all Laws applicable to it
        or to
        the conduct of the businesses or operations of Seller. Seller has all material
        Permits from Governmental Bodies which are required for Seller or Seller
        to
        operate its businesses.

       

      Section
        3.18  Environmental
        Matters.
        

       

      (a)  To
        the
        best of Seller’s and the Members’ Knowledge, the operations of Seller are in
        compliance with all applicable Environmental Laws and all Permits issued
        pursuant to Environmental Laws or otherwise (“Environmental
        Permits”);

       

      (b)  To
        the
        best of Seller’s and the Members’ Knowledge, Seller has obtained and currently
        maintains all Environmental Permits required under all applicable Environmental
        Laws necessary to operate its business;

       

      (c)  Seller
        is
        not the subject of any outstanding written Order or Contract with any
        Governmental Body or other Person respecting (i) Environmental Laws,
        (ii) Remedial Action or (iii) any Release or threatened Release
        of a
        Hazardous Material;

       

      (d)  Seller
        has not received any written communication alleging either that Seller may
        be in
        violation of any Environmental Law or Environmental Permit or that Seller
        may
        have any liability under any Environmental Law;

       

      (e)  Seller
        has not incurred, assumed or undertaken any current contingent liability
        in
        connection with any Release of any Hazardous Materials into the indoor or
        outdoor environment (whether on-site or off-site) and there are no facts,
        circumstances or conditions relating to, arising out of or attributable to
        Seller that could give rise to liability under Environmental Laws;

       

      (f)  there
        are
        no judicial or administrative proceedings pending or, to the Knowledge of
        Seller, threatened against Seller that allege a violation of, or seek to
        impose
        liability pursuant to, Environmental Laws or Environmental Permits and, to
        Seller’s Knowledge, there are no investigations of the business, operations, or
        currently or previously owned, operated or leased property of Seller pending
        or
        threatened which could result in Seller incurring any liability pursuant
        to any
        Environmental Law;

       

      (g)  there
        is
        not located at any of the properties of Seller any (i) underground storage
        tanks, (ii) asbestos-containing material or (iii) equipment containing
        polychlorinated biphenyls; and

       

      (h)  Seller
        has provided to Purchaser all environmentally related audits, studies, reports,
        analyses, and results of investigations that have been performed with respect
        to
        the currently or previously owned, leased or operated properties of
        Seller.

       

      Section
        3.19  Insurance.
        Section
        3.19 of the Seller Disclosure Schedule sets forth a complete and accurate
        list
        of all policies of insurance of any kind or nature covering Seller or any
        of
        Seller’s employees, properties or assets. All such policies are in full force
        and effect, and, to Seller’s Knowledge, Seller is not in default of any
        provision thereof. Section 3.19 of the Seller Disclosure Schedule describes
        all
        self-insurance arrangements affecting Seller.

       

      Section
        3.20  Receivables;
        Payables.

       

      (a)  All
        accounts receivable and unbilled receivables of Seller have arisen from bona
        fide transactions in the ordinary course of business consistent with past
        practice. All accounts receivable and unbilled receivables of Seller reflected
        on the Balance Sheet are good and believed to be collectible at the aggregate
        recorded amounts thereof, subject to no setoffs (including without limitation
        reductions in respect of customer advances or deposits) or counterclaims.
        All
        accounts receivable and unbilled receivables of Seller arising after the
        Balance
        Sheet Date are believed to be good and collectible at the aggregate recorded
        amounts thereof and subject to no setoffs (including without limitation
        reductions in respect of customer advances or deposits) or
        counterclaims.

       

      (b)  All
        accounts payable of Seller reflected on the Balance Sheet or arising after
        the
        Balance Sheet Date are the result of bona fide transactions in the ordinary
        course of business and have been paid or are not yet due and payable, except
        for
        accounts payable that are being disputed in good faith in an appropriate
        manner.

       

      Section
        3.21  Related
        Party Transactions.
        Except
        as described in Section 3.21 of the Seller Disclosure Schedule, (i) Seller
        (A)
        has not loaned or borrowed any amounts from or (B) has outstanding any
        indebtedness or other similar obligations to or owing from any Affiliate
        of
        Seller. Neither Seller nor any Affiliate of Seller nor any officer or employee
        of any of them (i) owns any direct or indirect interest of any kind in, or
        controls or is a director, officer, employee or partner of, or consultant
        to, or
        lender to or borrower from or has the right to participate in the profits
        of,
        any Person which is (A) a competitor, supplier, customer, landlord, tenant,
        creditor or debtor of Seller, (B) engaged in a business related to the business
        of Seller, or (C) a participant in any transaction to which Seller is a party
        or
        (ii) is a party to any Contract with Seller. Seller does not have any Contract
        or understanding with any officer, director or manager of Seller, or any
        Affiliate of any such Person, with respect to the subject matter of this
        Agreement, the consideration payable hereunder or any other material matter.
        

       

      Section
        3.22  Relationships
        with Customers.
        (a)
        The
        relationships of Seller with its existing customers is sound and Seller has
        no
        Knowledge, and there is no reasonable basis to believe, that any current
        customer of Seller which accounted for over three percent (3)% of total net
        sales of Seller for its most recently completed fiscal year will materially
        and
        adversely change the manner in which such customer currently conducts business
        with Seller, either as a result of the transactions contemplated by this
        Agreement or otherwise. No such material and adverse change (including any
        termination or material reduction in its business with Seller) has occurred
        since the Balance Sheet Date.

       

      (b)  The
        names
        and addresses of all customers of Seller during fiscal years 2004 and 2005
        through the Closing Date and all customers Known as of the Closing Date who
        will
        become customers during the remainder of 2005 are listed in Section 3.22(b)
        of
        the Seller Disclosure Schedule. All contracts and agreements with such customers
        that are in existence as of the date hereof are valid, effective and
        enforceable. No customer has an account balance that is in excess of 60 days
        past due.

       

      (c)  Seller
        does not have Knowledge of any written or oral communication, fact, event
        or
        action which would indicate that any current supplier to Seller of items
        essential to the conduct of the business, which items cannot be replaced
        at
        comparable cost and the loss of which could reasonably be expected to have
        an
        adverse effect on Seller, shall terminate or materially reduce its business
        with
        Seller. No such termination or material reduction has occurred since the
        Balance
        Sheet Date.

       

      Section
        3.23  No
        Misrepresentation.
        No
        representation or warranty of Seller contained in this Agreement or in any
        Schedule hereto or in any certificate or other instrument furnished by Seller
        to
        Purchaser pursuant to the terms hereof, contains any untrue statement of
        a
        material fact or omits to state a material fact necessary to make the statements
        contained herein or therein not misleading.

       

      Section
        3.24  Financial
        Advisors.
        Seller
        has no Liability or obligation to pay any fees or commissions to any broker,
        finder or agent with respect to the transactions contemplated by this Agreement,
        other than any fees to be paid to Fairmount Partners, which will be paid
        exclusively by Seller.

       

      Section
        3.25  Private
        Placement.
        Seller
        and each Member is an “accredited investor” within the meaning of Rule 501 under
        the Securities Act and Seller was not organized for the specific purpose
        of
        acquiring the Shares. Seller and each Member has sufficient knowledge and
        experience in investing in companies similar to Parent in terms of Parent's
        market capitalization and other relevant factors so as to be able to evaluate
        the risks and merits of its investment in Parent and it is able financially
        to
        bear the risks thereof. Seller and each Member has had an opportunity to
        discuss
        the terms of the offering and sale of the Shares and Parent's business,
        management and financial affairs with Parent's management and to obtain any
        additional information regarding the foregoing which Parent possesses or
        can
        acquire without unreasonable effort or expense. The Shares are being acquired
        for the Seller’s (and, to the extent the Shares are transferred by Seller to any
        Member, such Member’s) own accounts and not with a view to, or the intention of,
        any distribution in violation of the Securities Act or any applicable state
        securities laws. Seller and each Member understands that (i)
        the
        Shares have not been registered under the Securities Act by reason of the
        issuance of the Shares in a transaction exempt from the registration
        requirements of the Securities Act pursuant to Section 4(2) thereof or Rule
        505
        or 506 promulgated under the Securities Act, (ii)
        the
        Shares must be held indefinitely unless a subsequent disposition thereof
        is
        registered under the Securities Act or is exempt from such registration,
        (iii)
        the
        Shares will bear a legend to such effect and (iv)
        Parent
        will issue stop transfer instructions to its transfer agent to such effect.
        

       

      ARTICLE
        IV  

       

      

       

      REPRESENTATIONS
        AND WARRANTIES OF PURCHASER

       

      Purchaser
        represents and warrants to Seller and the Members that the following statements
        are correct and complete as of the date hereof.

       

      Section
        4.1  Organization.
        (a)
        Purchaser is a limited liability company duly organized, validly existing
        and in
        good standing under the laws of the State of Delaware. Purchaser is duly
        qualified or authorized to do business as a foreign limited liability company
        and is in good standing under the laws of each jurisdiction in which it owns
        or
        leases real property and each other jurisdiction in which the conduct of
        its
        business or the ownership of its properties requires such qualification or
        authorization, except where the failure to be so qualified or authorized
        would
        not have a material adverse effect on the business or assets of
        Purchaser.

       

      (b) Purchaser
        is an indirect wholly-owned subsidiary of Parent. All of the issued ownership
        interests in Purchaser have been duly and validly authorized and issued,
        are
        fully paid and non-assessable and are owned directly or indirectly by Parent.
        Purchaser has conducted no material operations.

       

      Section
        4.2  Authorization
        of Transaction.
        The
        execution, delivery and performance of the Transaction Documents to which
        Purchaser is a party have been duly authorized by all necessary action by
        or on
        behalf of Purchaser. Purchaser has full power and authority to execute and
        deliver this Agreement and each other Transaction Document to which it is
        a
        party, and to perform its obligations hereunder and thereunder. This Agreement
        and each Transaction Document to which Purchaser is or will be a party has
        been
        or will be duly and validly executed and delivered and constitutes the valid
        and
        legally binding obligation of Purchaser, enforceable against Purchaser in
        accordance with its terms, 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). Purchaser is not required to give any notice to, make any filing
        with,
        or obtain any authorization, consent, or approval of any Governmental Body
        in
        order to consummate the transactions contemplated by this Agreement and each
        such Transaction Document.

       

      Section
        4.3  Noncontravention.
        Neither
        the execution and the delivery by Purchaser of this Agreement and the other
        Transaction Documents to which it is a party, nor the consummation of the
        transactions contemplated hereby and thereby on the part of Purchaser, will
        (i) violate any Law or any Order by which Purchaser is bound or any
        provision of its organizational documents or (ii) result in a breach of,
        constitute a default under, result in the acceleration of, create in any
        party
        the right to accelerate, terminate, modify, or cancel, or require any notice
        under any Contract to which Purchaser is a party or by which Purchaser is
        bound
        or to which any of its assets is subject. No Order, Permit or waiver, or
        declaration or filing with any Governmental Body is required on the part
        of
        Purchaser in connection with the execution, delivery and performance of this
        Agreement or the other Transaction Documents to which it is a party, or the
        compliance by Purchaser with any of the provisions hereof or
        thereof.

       

      Section
        4.4  Brokers’
        Fees.
        Purchaser has no Liability or obligation to pay any fees or commissions to
        any
        broker, finder or agent with respect to the transactions contemplated by
        this
        Agreement for which Seller shall have any Liability. 

       

      ARTICLE
        V  

       

      

       

      REPRESENTATIONS
        AND WARRANTIES OF PARENT

       

      Parent
        represents and warrants to Seller and the Members that the following statements
        are correct and complete as of the date hereof. 

       

      Section
        5.1  Organization.
        Parent
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of Delaware. Parent is duly qualified or authorized to
        do
        business as a foreign corporation and is in good standing under the laws
        of each
        jurisdiction in which it owns or leases real property and each other
        jurisdiction in which the conduct of its business or the ownership of its
        properties requires such qualification or authorization, except where the
        failure to be so qualified or authorized would not have a material adverse
        effect on the business or assets of Parent.

       

      Section
        5.2  Authorization
        of Transaction.
        The
        execution, delivery and performance of the Transaction Documents to which
        Parent
        is a party have been duly authorized by all necessary action by Parent. Parent
        has full power and authority to execute and deliver this Agreement and each
        other Transaction Document to which it is a party, and to perform its
        obligations hereunder and thereunder. This Agreement and each Transaction
        Document to which Parent is a party has been or will be duly and validly
        executed and delivered and constitutes the valid and legally binding obligation
        of Parent, enforceable against Parent in accordance with its terms, 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). Parent is not
        required to give any notice to, make any filing with, or obtain any
        authorization, consent, or approval of any Governmental Body in order to
        consummate the transactions contemplated by this Agreement and each other
        Transaction Document.

       

      Section
        5.3  Noncontravention.
        Neither
        the execution and the delivery by Parent of this Agreement and each other
        Transaction Document to which it is or will be a party, nor the consummation
        of
        the transactions contemplated hereby and thereby on the part of Parent, will
        (i) violate any Law or any Order by which Parent is bound or any provision
        of its organizational documents or (ii) result in a breach of, constitute
        a
        default under, result in the acceleration of, create in any party the right
        to
        accelerate, terminate, modify, or cancel, or require any notice under any
        Contract to which Parent is a party or by which Parent is bound or to which
        any
        of its assets is subject. No Order, Permit or waiver, or declaration or filing
        with any Governmental Body is required on the part of Parent in connection
        with
        the execution, delivery and performance of this Agreement or the other
        Transaction Documents to which it is a party, or the compliance by Parent
        with
        any of the provisions hereof or thereof.

       

      Section
        5.4  Status
        of the Shares.
        The
        Shares have been duly authorized and, when issued upon in accordance with
        the
        terms of this Agreement, will be validly issued, fully paid and nonassessable
        shares of Parent Common Stock and
        will
        be free and clear of all Liens created by or through Parent. The issuance
        and
        delivery of the Shares is not subject to any preemptive right of shareholders
        of
        Parent that has not been waived or to any right of first refusal or other
        right
        in favor of any person that has not been waived. 

       

      Section
        5.5  SEC
        Documents.
        Since
        August 1, 2004, Parent has filed all required reports, schedules, forms,
        statements and other documents with the SEC (such documents being referred
        to
        herein collectively as the “Parent
        SEC Documents”).
        As of
        their respective dates, the Parent SEC Documents complied in all material
        respects with the requirements of the Securities Act, or the Securities Exchange
        Act of 1934, as amended (the “Exchange
        Act”),
        as
        the case may be, and the rules and regulations of the SEC promulgated thereunder
        applicable to the Parent SEC Documents, and none of the Parent SEC Documents
        contained any untrue statement of a material fact or omitted to state a material
        fact required to be stated therein or necessary in order to make the statements
        therein, in light of the circumstances under which they were made, not
        misleading. The financial statements of Parent included in the Parent SEC
        Documents, as of their respective dates, complied in all material respects
        with
        applicable accounting requirements and the published rules and regulations
        of
        the SEC with respect thereto, were prepared in accordance with GAAP (except,
        in
        the case of unaudited statements, as permitted by Form 10 Q of the SEC) applied
        on a consistent basis during the periods involved (except as may be indicated
        in
        the notes thereto) and fairly present the financial position of Parent and
        its
        consolidated subsidiaries as of the dates thereof and the results of its
        operations and cash flows for the periods then ended (subject, in the case
        of
        unaudited statements, to normal year end audit adjustments and other adjustments
        described therein). No Parent Material Adverse Change has occurred subsequent
        to
        May 10, 2005 and prior to the date of this Agreement. 

      

      Section
        5.6  Brokers’
        Fees.
        Parent
        has no Liability or obligation to pay any fees or commissions to any broker,
        finder or agent with respect to the transactions contemplated by this Agreement
        for which Seller shall have any Liability.

       

      Section
        5.7  Litigation.
        There
        is no suit, action, proceeding, investigation, claim or order pending or,
        to the
        Knowledge of Parent, threatened against Parent or any of its subsidiaries
        which,
        if determined adversely to Parent or such subsidiary, as the case may be,
        would
        cause a Parent Material Adverse Change.

       

      Section
        5.8  Exempt
        Issuance.
        Assuming the accuracy, as of the date of each issuance of Shares hereunder,
        of
        the representations of Seller and the Members in Section 3.25, the issuance
        of
        the Shares in the manner contemplated by this Agreement will be exempt from
        the
        registration requirements of the Securities Act and of Pennsylvania and New
        Jersey “blue sky” laws, in each case as in effect on the date
        hereof.

       

      ARTICLE
        VI  

       

      

       

      CONDITIONS
        TO CLOSING

       

      Section
        6.1  Conditions
        Precedent to Obligations of Purchaser at the Closing.
        The
        obligation of Parent and Purchaser to consummate the transactions contemplated
        by this Agreement is subject to the fulfillment, on or prior to the Closing
        Date, of each of the following conditions (any or all of which may be waived
        by
        Parent and Purchaser in whole or in part to the extent permitted by applicable
        Law):

       

      (a)  all
        representations and warranties of Seller and the Members contained in the
        Transaction Documents shall be true and correct on and as of the Closing
        Date,
        except to the extent expressly made as of an earlier date;

       

      (b)  Seller
        and each Member shall have performed and complied in all material respects
        with
        all obligations and covenants required by this Agreement to be performed
        or
        complied with by Seller or such Member on or prior to the Closing
        Date;

       

      (c)  there
        shall not have been or occurred any Seller Material Adverse Change since
        the
        Balance Sheet Date;

       

      (d)  no
        Legal
        Proceedings shall have been instituted or threatened or claim or demand made
        against Seller, any Member, Parent or Purchaser seeking to restrain or prohibit
        or to obtain substantial damages with respect to the consummation of the
        transactions contemplated hereby;

       

      (e)  there
        shall not be in effect any Order by a Governmental Body of competent
        jurisdiction restraining, enjoining or otherwise prohibiting the consummation
        of
        the transactions contemplated hereby;

       

      (f)  Purchaser
        shall have received letters in form and substance satisfactory to Purchaser
        from
        Hudson and all other holders of indebtedness of Seller that would be reflected
        on Seller’s consolidated balance sheet as of the Closing Date or disclosed in
        the footnotes thereto (other than any such indebtedness that is an Assumed
        Liability) or that is secured by any of the Assets confirming the full payment
        and satisfaction of such indebtedness (by way of application of a portion
        of the
        Purchase Price for such purpose or otherwise), the release of all related
        Liens
        and the authority of Purchaser and its representatives to file appropriate
        UCC
        termination statements with respect thereto (the “Payoff
        Letters”);
        

       

      (g)  Purchaser
        shall have received confirmation that any all indebtedness owing from directors,
        officers, employees or stockholders of Seller has been fully repaid as of
        the
        time of the Closing (by way of application of a portion of the Purchase Price
        for such purpose or otherwise); and

       

      (h)  The
        Key
        Employees and all other employees listed on Schedule III shall have become
        Transferred Employees (as defined below).

       

      Section
        6.2  Conditions
        Precedent to Obligations of Seller at the Closing.
        The
        obligations of Seller to consummate the transactions contemplated by this
        Agreement are subject to the fulfillment, prior to or on the Closing Date,
        of
        each of the following conditions (any or all of which may be waived by Seller,
        on behalf of the Seller, in whole or in part to the extent permitted by
        applicable Law):

       

      (a)  all
        representations and warranties of Purchaser and Parent contained in the
        Transaction Documents shall be true and correct on and as of the Closing
        Date;

       

      (b)  Purchaser
        and Parent shall have performed and complied in all material respects with
        all
        obligations and covenants required by this Agreement to be performed or complied
        with by Purchaser or Parent, as applicable, on or prior to the Closing Date;
        

       

      (c)  there
        shall not be in effect any Order by a Governmental Body of competent
        jurisdiction restraining, enjoining or otherwise prohibiting the consummation
        of
        the transactions contemplated hereby; and

       

      (d)  any
        waiting period under the HSR Act applicable to the transactions contemplated
        by
        this Agreement shall have expired or been terminated.

       

      ARTICLE
        VII  

       

      

       

      DOCUMENTS
        TO BE DELIVERED

       

      Section
        7.1  Deliveries
        by Seller to Purchaser and Parent at the Closing.
        At the
        Closing, Seller shall deliver, or shall cause to be delivered, to Purchaser
        and
        Parent the following:

       

      (a)  a
        duly
        executed bill of sale, assignment and assumption agreement in the form of
        Exhibit
        B

       

      (b)  a
        duly
        executed assignment of lease and estoppel certificate, dated the Closing
        Date,
        with respect to each Real Property Lease in form and substance satisfactory
        to
        Purchaser and its counsel;

       

      (c)  all
        consents and waivers that are listed on Schedule IV, each in form and substance
        satisfactory to Purchaser (collectively, the “Closing
        Consents”);

       

      (d)  certificates
        of title to all motor vehicles included in the Assets (if any), duly endorsed
        for transfer to Purchaser as of the Closing Date;

       

      (e)  a
        certificate (dated the Closing Date and in form and substance reasonably
        satisfactory to Purchaser) executed by Seller certifying as to the fulfillment
        of the conditions specified in Sections 6.1(a), 6.1(b), 6.1(c), 6.1(d), 6.1(e)
        and 6.1(g) hereof;

       

      (f)  the
        Escrow Agreement, duly executed by Seller;

       

      (g)  an
        opinion of Buchanan Ingersoll PC, counsel for Seller, dated the Closing Date,
        substantially in the form attached hereto as Exhibit
        C;

       

      (h)  a
        duly
        executed copy of each Payoff Letter;

       

      (i)  a
        duly
        executed copy of the Estoppel Letter;

       

      (j)  a
        receipt
        for the cash portion of the purchase price paid at the Closing and, if then
        issued, for the Initial Shares;

       

      (k)  a
        certificate of a Member certifying to (A) Seller’s attached Organizational
        Documents, (B) the adoption of resolutions of the Members and (C) the incumbency
        of the officers signing the Transaction Documents on behalf of Seller (together
        with their specimen signatures);

       

      (l)  a
        written
        consent, executed by each Member, to the execution by the Seller of the
        Transaction Documents to which Seller is a party and the consummation of
        the
        transactions contemplated thereby;

       

      (m)  a
        certificate of subsistence with respect to Seller issued by the Secretary
        of
        State of the Commonwealth of Pennsylvania and for each state in which Seller
        is
        qualified to do business as a foreign limited liability company dated as
        soon as
        practicable prior to the Closing Date; 

       

      (n)  a
        copy of
        IRS Form W-9 duly and properly executed by Seller; and

       

      (o)  a
        certificate of non-foreign person status in the form prescribed by United
        States
        Treasury Regulation § 1.1445-2(b)(2)(iii) with respect to Seller in form
        and substance acceptable to Purchaser; and

       

      (p)  such
        other documents, instruments or certificates as shall be reasonably requested
        by
        Purchaser or Parent or their counsel.

       

      Section
        7.2  Deliveries
        by Purchaser to Seller.
        At the
        Closing, Purchaser shall deliver to Seller the following:

       

      (a)  the
        cash
        portion of the purchase price payable at the Closing; 

       

      (b)  irrevocable
        instructions to the transfer agent for the Parent Common Stock to issue the
        Initial Shares in accordance with Section 2.1 and the Escrow Agreement;

       

      (c)  the
        Escrow Agreement, duly executed by Purchaser and the Escrow Agent; 

       

      (d)  an
        opinion of the Law Office of Kenneth G. Alberstadt PLLC, counsel for Parent
        and
        Purchaser, dated the Closing Date, substantially in the form attached hereto
        as
Exhibit
        D;

       

      (e)  a
        duly
        executed bill of sale, assignment and assumption agreement in the form of
        Exhibit
        B;

       

      (f)  an
        assignment of lease, dated the Closing Date, with respect to each Real Property
        Lease in form and substance reasonably satisfactory to Seller and its counsel
        duly executed by Purchaser; 

       

      (g)  a
        certificate dated the Closing Date and in form and substance reasonably
        satisfactory to Seller executed by an authorized officer of Purchaser certifying
        as to the fulfillment of the conditions specified in Sections 6.2(a), 6.2(b)
        and
        6.2(c) hereof;

       

      (h)  a
        certificate dated the Closing Date and in form and substance reasonably
        satisfactory to Seller executed by an authorized officer of Parent certifying
        as
        to the fulfillment of the conditions specified in Sections 6.2(a), 6.2(b)
        and
        6.2(c) hereof; 

       

      (i)  a
        certificate of the secretary of Purchaser certifying to (A) Purchaser’s attached
        Organizational Documents, (B) the adoption of attached resolutions of the
        Board
        of Directors of Parent approving the execution by Purchaser of the Transaction
        Documents to which Purchaser is a party and the consummation of the transactions
        contemplated thereby and (C) the incumbency of the officers signing the
        Transaction Documents on behalf of Seller (together with their specimen
        signatures);

       

      (j)  a
        certificate of the secretary of Parent certifying to (A) the adoption of
        attached resolutions of the Board of Directors of Parent approving the execution
        by Parent of the Transaction Documents to which Parent is a party and the
        consummation of the transactions contemplated thereby and (B) the incumbency
        of
        the officers signing the Transaction Documents on behalf of Seller (together
        with their specimen signatures);

       

      (k)  certificates
        of good standing with respect to Parent and Purchaser issued by the Secretary
        of
        State of its jurisdiction of incorporation; and

       

      (l)  such
        other documents, instruments or certificates as shall be reasonably requested
        by
        Seller or its counsel.

       

      ARTICLE
        VIII  

       

      POST-CLOSING
        COVENANTS

       

      The
        parties agree as follows with respect to the period following the
        Closing:

       

      Section
        8.1  General.
        In the
        event that at any time after the Closing any further action is necessary
        or
        desirable to carry out the purposes of this Agreement, each of the parties
        will
        take such further action (including the execution and delivery of such further
        instruments and documents) as any other party reasonably may request.

       

      Section
        8.2  Litigation
        Support.
        In the
        event and for so long as any party actively is contesting or defending against
        any action, suit, proceeding, hearing, investigation, charge, complaint,
        claim,
        or demand in connection with (i) any transaction contemplated under this
        Agreement or (ii) any fact, situation, circumstances, status, condition,
        activity, practice, plan, occurrence, event, incident, action, failure to
        act,
        or transaction on or prior to the Closing Date involving Seller, each of
        the
        other parties will cooperate reasonably with such party and such party’s counsel
        in the contest or defense, make available their personnel, and provide such
        testimony and access to their books and records as shall be necessary in
        connection with the contest or defense, all at the sole cost and expense
        of the
        contesting or defending Party (unless the contesting or defending Party is
        entitled to indemnification therefor hereunder).

       

      Section
        8.3  Confidentiality.
        From
        and after the date hereof (unless this Agreement is terminated in accordance
        with its terms), Seller and the Members will, and will cause their Affiliates
        to, hold in strict confidence, and will not, and will cause their Affiliates
        not
        to, disclose to any third party or use for any purpose, any and all information
        with respect to Seller, the Business, the Transaction Documents or the
        transactions contemplated thereby, provided that Seller and the Members may
        disclose such information to their legal and financial advisors who are bound
        by
        a professional duty to maintain the same in confidence or who have agreed
        in
        writing to do so. Notwithstanding the foregoing, Seller and the Members may,
        and
        may permit their Affiliates to, disclose such information (i) if compelled
        to
        disclose the same by judicial or administrative process or by other requirements
        of Law (but subject to the following provisions of this Section), (ii) if
        the
        same hereafter is in the public domain through no fault of Seller or any
        Member,
        (iii) if the same is later acquired by Seller or a Member from another source
        that is not under an obligation to another Person to keep such information
        confidential or (iv) in accordance with the terms of an order entered in
        accordance with the last sentence of this Section 8.3 in connection with
        a
        lawsuit or other claim to enforce their rights and obligations hereunder
        or
        under any other Transaction Document. If Seller or any Member or any of their
        respective Affiliates is requested or required (by oral questions,
        interrogatories, requests for information or documents in legal proceedings,
        subpoena, civil investigative demand or other similar process) to disclose
        any
        such information, Seller or such Member, as the case may be, shall provide
        Purchaser with prompt written notice of any such request or requirement so
        that
        Purchaser may seek a protective order or other appropriate remedy and/or
        waive
        compliance with the provisions of this Section. If, in the absence of a
        protective order or other remedy or the receipt of a waiver by Purchaser,
        Seller
        or such Member or such Affiliate, as the case may be, nonetheless, based
        on the
        written advice of outside counsel, is required to disclose such information
        to
        any tribunal or in accordance with applicable Law, Seller or such Member
        or such
        Affiliate, without liability hereunder, may disclose that portion of such
        information which such counsel advises Seller or such Member or such Affiliate
        it is legally required to disclose. Seller and the Members acknowledge and
        agree
        that money damages would not be an adequate remedy for any breach of their
        agreements contained in this Section 8.3 and that in addition to any
        other
        remedies available to Purchaser, Purchaser shall be entitled to the remedies
        of
        injunction, specific performance and other equitable relief for any threatened
        or actual breach of this Section 8.3. If a lawsuit or other claim
        for the
        enforcement of this Agreement or any other Transaction Document is commenced
        and
        Seller or any Member is a party thereto, Seller or such Member, as the case
        may
        be, and Parent (or its designee(s)) shall negotiate in good faith the terms
        of a
        stipulated protective order or other appropriate order governing the use
        and
        disclosure of information subject to this Section 8.3 in connection with
        such
        lawsuit or claim, including without limitation in connection with related
        discovery proceedings.

       

      Section
        8.4  Non-Competition.
        As a
        material inducement to Parent and Purchaser to enter into this Agreement,
        each
        of Seller and each Member agrees as follows:

       

      (a)  During
        the Non-Competition Period, neither Seller nor any Member will, and Seller
        and
        each Member will cause its Affiliates not to, engage or participate, directly
        or
        indirectly, as principal, agent, executive, director, proprietor, joint
        venturer, trustee, employee, employer, consultant, stockholder, partner or
        in
        any other capacity whatsoever, in the conduct or management of, or own any
        stock
        or any other equity investment in or debt of, (1) any business that is
        competitive with any business conducted or proposed to be conducted by Seller
        as
        of the Closing Date (a “Competitive
        Business”),
        including any business involving the provision of pharmaceutical marketing
        support and compliance services (including, among other things, sample
        management and accountability; audit, security and regulatory compliance;
        web-based reporting; training, education and product launch support; sample
        fulfillment; database warehouse and management; tele-detailing; call center
        support; and contract sales (each, a “Specified
        Service”))
        but
        excluding passive investments of up to 2% of the common stock of any publicly
        traded company or (2) any Person that is a customer or client of Purchaser
        at
        any time during the Non-Competition Period or that has been a customer or
        client
        of Seller at any time during the two years prior to the date of this Agreement
        but excluding, subject to compliance with applicable Law and, with respect
        to
        any Person who is an employee of Purchaser, the ethics policies and procedures
        (including prohibitions on the use of material nonpublic information) adopted
        from time to time by Parent, passive investments of up to 2% of the common
        stock
        of any publicly traded company, provided that it shall not be a violation
        of
        this Section 8.4 for any Member, following the termination of any employment
        or
        consulting relationship with Purchaser or any of its Affiliates (including
        Parent), to (x) be employed or engaged as an independent contractor by a
        fully
        integrated pharmaceutical or biotechnology company (i.e., one that discovers,
        develops, manufactures and promotes drugs) or medical device company that
        is or
        has been a customer or client of Purchaser or Seller if such employment or
        engagement does not involve the provision to such company of any Specified
        Service or (y) provide information technology consulting, accounting or human
        resources consulting services to or with respect to any business that is
        not a
        Competitive Business.

       

      (b)  During
        the Non-Competition Period, neither Seller nor any Member will, and Seller
        and
        each Member will cause its Affiliates not to, for its or such Affiliate’s own
        benefit or for the benefit of any Person other than Purchaser, (i) solicit,
        or
        assist any person or entity to solicit, any officer, director, executive
        or
        employee of Purchaser (or, prior to the Closing Date, Seller) to leave his
        or
        her employment, (ii) hire or cause to be hired any person who is then, or
        who
        will have been at any point in time during the six months prior to the date
        of
        such hiring, an officer, a director, an executive or an employee of Purchaser
        (or, prior to the Closing Date, Seller), or (iii) engage any Person who is
        then,
        or who will have been at any point in time during the six months prior to
        the
        date of such engagement, an officer, director, executive or employee of
        Purchaser (or, prior to the Closing Date, Seller) as a partner, contractor,
        sub-contractor or consultant. It shall not be deemed a breach of clause (iii)
        of
        the preceding sentence for the Members to continue to hold passive interests
        in
        the Westpark Imports, Inc. wine importing business in which they are current
        passive investors provided that no activities prohibited by clauses (i) and
        (ii)
        of the preceding sentence are taken in connection therewith.

       

      (c)  During
        the Non-Competition Period, Seller and each Member will not, and Seller and
        each
        Member will cause its Affiliates not to, (i) solicit, or assist any person
        or
        entity other than Purchaser to solicit, any Person that is a client or customer
        of Purchaser (or, prior to the Closing Date, Seller), or has been a client
        or
        customer of Purchaser (or, prior to the Closing Date, Seller) during the
        prior
        twelve (12) months, to provide any services competitive with those provided
        by
        Purchaser (or, prior to the Closing Date, Seller) or (ii) interfere with
        any of
        the business relationships of Purchaser.

       

      (d)  Seller
        and each Member acknowledges that (i) the markets served by Seller are national
        and international in scope and are not dependent on the geographic location
        of
        the executive personnel or the businesses by which they are employed; and
        (ii)
        the above covenants are manifestly reasonable on their face, and the parties
        expressly agree that such restrictions have been designed to be reasonable
        and
        no greater than is required for the protection of Purchaser and are a
        significant element of the consideration hereunder.

       

      (e)  Seller
        and the Members acknowledge and agree that money damages would not be an
        adequate remedy for any breach of their agreements contained in this
        Section 8.4 and that in addition to any other remedies available to
        Purchaser, Purchaser shall be entitled to the remedies of injunction, specific
        performance and other equitable relief for any threatened or actual breach
        of
        this Section 8.4. If the final judgment of a court of competent
        jurisdiction declares that any term or provision of this Section 8.4 is invalid
        or unenforceable, the parties agree that the court making the determination
        of
        invalidity or unforceability shall have the power to reduce the scope, duration,
        or area of the term or provision, to delete specific words or phrases, or
        to
        replace any invalid or unenforceable term or provision with a term or provision
        that is valid and enforceable that comes closest to expressing the intention
        of
        the invalid or unenforceable term or provision, and this Agreement shall
        be
        enforceable as so modified after the expiration of the time within which
        the
        judgment may be appealed.

       

      Section
        8.5  Existence
        .
        Seller
        hereby agrees that it will (and the Members agree that they will cause Seller
        to) (i) not commence any dissolution of its existence, liquidation or winding
        up, or commence a voluntary proceeding under Title 11 of the United States
        Code,
        until at least one year from the Closing Date and (ii) timely object to the
        commencement of any involuntary proceeding filed under Title 11 of the United
        States Code or to any action seeking the appointment of a receiver or trustee
        in
        respect of it or its assets if such petition, proceeding or action is commenced
        prior to the first anniversary of the Closing Date. The distribution by Seller
        to the Members of the consideration received for the transfer of the Assets,
        other than pursuant to a plan of liquidation and winding up, shall not be
        deemed
        to violate this Section 8.5.

       

      Section
        8.6 Mail;
        Payments.
        From
        and after the Closing, Seller agrees to refer to Purchaser all customer,
        supplier, employee or other inquiries or correspondence relating to the Assets
        or the conduct of the Business after the Closing Date. Seller further agrees
        to
        promptly remit to Purchaser all payments and invoices received after the
        Closing
        Date that relate to the Assets, the Assumed Liabilities or the conduct of
        the
        Business after the Closing Date and Purchaser agrees to promptly remit to
        Seller
        all payments and invoices received after the Closing Date that relate to
        the
        Excluded Assets or the Excluded Liabilities or (other than with respect to
        the
        Assets or the Assumed Liabilities) the conduct of the Business prior to the
        Closing Date.

       

      Section
        8.7 Names
        and Logos.
        From
        and after the Closing, neither Seller nor any Member will use any names or
        logos
        incorporating “Pharmaceutical Resource Solutions” or “PRS”. The covenants
        contained in the preceding sentence shall survive the expiration of the
        Non-Competition Period. Within five business days following the Closing,
        Seller
        shall in cooperation with Purchaser amend its certificate of organization
        to
        change its name to a name not incorporating “Pharmaceutical Resource Solutions”
        or “PRS”. Seller shall file any consents or other documents required by the
        Delaware Secretary of State to permit Purchaser to change its name to
“Pharmaceutical Resource Solutions LLC” and shall cooperate with Purchaser to
        ensure that such name is made available to Purchaser upon Purchaser’s submission
        of appropriate documents amending Purchaser’s registration as a foreign limited
        liability company in the Commonwealth of Pennsylvania. 

       

      Section
        8.8 Certain
        Financial Information.
        From
        and after the Closing Date, to the extent requested by Parent, Seller shall
        and
        shall cause its Affiliates to deliver to Parent the financial information,
        management representation letters and other documents and information with
        respect to Seller required by Parent to prepare and file the financial
        statements required to be filed by Parent pursuant to the Exchange Act and
        will
        use commercially reasonable efforts to cause its independent accountants
        to
        deliver to Parent such reports and consents as may be required in connection
        therewith, all reasonably in advance of the time such filings are required
        to be
        made. Parent shall reimburse Seller for the reasonable third party accounting
        costs in preparing and delivering such information to the extent such expenses
        were not incurred by Seller prior to the Closing. 

       

      Section
        8.9 Retention
        of and Access to Records.
        (a)
        Purchaser will provide Seller with access to the Books and Records included
        in
        the Assets, upon reasonable written notice from Seller, during ordinary business
        hours and in such a manner as does not interfere with the business operations
        of
        Purchaser or any of its Affiliates, for purposes reasonably related to any
        actual or threatened Legal Proceedings relating to Seller’s operation of the
        Business or to any Tax audit or proceedings in which Seller or Member is
        involved. Purchaser’s undertaking in this Section 8.9 shall survive for six
        years following the Closing or such longer period during which Purchaser
        maintain such Books and Records in the course of its business, provided that
        Purchaser may at its option offer to deliver to Seller at any time any such
        Books and Records and if Seller shall decline to take possession of such
        Books
        and Records, Purchaser shall thereafter be free to dispose of the same.
        Purchaser may require that any Person who will obtain access to Books and
        Records pursuant to this Section 8.9 execute a confidentiality undertaking
        reasonably satisfactory to Purchaser.

       

      (b)
        To
        the extent permitted by applicable Law, Seller will provide Purchaser with
        access to the Books and Records included in the Excluded Assets, upon reasonable
        written notice from Purchaser, during ordinary business hours and in such
        a
        manner as does not interfere with the business operations of Seller or any
        of
        its Affiliates, for purposes reasonably related to any actual or threatened
        Legal Proceedings relating to Purchaser’s operation of the Business or to any
        Tax audit or proceedings in which any Purchaser or any of its Affiliates
        is
        involved. Seller’s undertaking in this Section 8.9 shall survive for six years
        following the Closing or such longer period during which Seller maintain
        such
        Books and Records in the course of its business, provided that Seller may
        at its
        option offer to deliver to Purchaser at any time any such Books and Records
        and
        if Purchaser shall decline to take possession of such Books and Records,
        Seller
        shall thereafter be free to dispose of the same. Seller may require that
        any
        Person who will obtain access to Books and Records pursuant to this Section
        8.9
        execute a confidentiality undertaking reasonably satisfactory to
        Seller.

       

      Section
        8.10 Rule
        144.
        With a
        view to making available to Seller the benefits of Rule 144 under the Securities
        Act, Parent agrees, for so long as the Parent Common Stock is registered
        under
        the Securities Exchange Act of 1934, as amended (the “Exchange
        Act”),
        to
        (i) make and keep public information available (as those terms are defined
        in
        Rule 144, including paragraph (c)(2) of such Rule); (ii) file with the SEC
        in a
        timely manner reports and other documents, if any, required of Parent under
        the
        Exchange Act; and (iii) furnish to Seller promptly upon request a written
        statement by Parent as to its compliance with the informational requirements
        of
        Rule 144 and the Exchange Act.

       

       

       

      ARTICLE
        IX  

       

      

       

      EMPLOYEES
        AND EMPLOYEE BENEFIT PLANS

       

      The
        parties agree as follows with respect to the period following the
        Closing: 

       

      Section
        9.1  General.
        Purchaser shall offer employment, effective as of the Closing Date, to all
        employees who are listed on Schedule III. Those employees who accept such
        offers
        of employment and become employees of Purchaser shall be referred to herein
        as
        the “Transferred
        Employees”.
        Neither Purchaser nor any Affiliate of Purchaser (including Parent) shall
        have
        any liability whatsoever with respect to any employee of Seller or any claim
        of
        any employee of Seller, or any Employee Benefit Plan or any claim related
        thereto, except for claims by Transferred Employees with respect to Employee
        Benefit Plans and then only to the extent expressly provided under Section
        9.2.
        Purchaser and Seller agree to use the standard procedures set forth in Revenue
        Procedure 2004-53 with respect to wage reporting. Seller shall be
        (i) responsible for the payment of all wages and other remuneration
        due to
        its employees through the Closing Date except for accrued wages set forth
        on the
        Final Closing Working Capital Statement and (ii) except as otherwise provided
        in
        Section 9.2, liable for any claims made by its employees and their beneficiaries
        under any Employee Benefit Plans or Pension Plans. 

       

      Section
        9.2  Seller
        Benefit Plans.
        

       

      (a)  Except
        as
        explicitly set forth in this Section 9.2, neither Purchaser nor any Affiliate
        of
        Purchaser (including Parent) shall assume any obligations under or liabilities
        with respect to any of the Employee Benefit Plans or Pension Plans. Effective
        as
        of the Closing Date, except as otherwise specifically provided in this
        Agreement, all Transferred Employees will become fully vested in their account,
        cease any participation in, and any benefit accrual under, each of the Employee
        Benefit Plans or Pension Plans that is not assumed as set forth in Section
        9.2(b), except as otherwise required by applicable Law or the terms of such
        plans.

       

      (b)  Purchaser
        shall or shall cause one or more of its Affiliates to assume sponsorship
        of
        Seller’s Employee Benefit Plans and Pension Plan as in effect at Closing and
        listed in Section 9.2(b) of the Seller Disclosure Schedule (the “Assumed
        Plans”), provided that Purchaser shall not assume any Liability for the employer
        contributions made by Seller with respect to its 401(k) plan for periods
        prior
        to or including the Closing Date except to the extent accrued on the Final
        Working Capital Statement. Seller and the Members shall terminate their
        participation as sponsors, plan administrators and adopting employers of
        the
        Assumed Plans and Purchaser shall assume sponsorship of the Assumed Plans,
        all
        to be effective as of the Closing, with respect to Seller, and as soon
        thereafter as is reasonably practicable, with respect to the Members. At
        the
        Closing, Seller and Purchaser shall execute and deliver, or cause to be executed
        and delivered to Seller and Purchaser, agreements for assumption of the Assumed
        Plans.

       

      (c)  To
        the
        extent that service is relevant for purposes of computing the amount of any
        vacation, sick days, severance and similar benefits under any employee benefit
        plan, program or arrangement established or maintained by Purchaser under
        which
        the Transferred Employees benefit, such plan, program or arrangement shall
        credit each such Transferred Employee for service earned by that Transferred
        Employee on and prior to the Closing Date with Seller in addition to service
        earned with Purchaser after the Closing Date but shall not, at any time,
        exceed
        twelve months for one year of service. Purchaser shall not be obligated to
        cover
        any Transferred Employee under any Employee Benefit Plan of Purchaser at
        the
        same time such Transferred Employee is covered under a corresponding plan
        assumed pursuant to Section 9.2(b).

       

      (d)  Purchaser
        shall recognize all accrued but unused vacation of each Transferred Employee
        as
        of the Closing Date, provided that in no event shall Purchaser be required
        to
        recognize accrued vacation benefits with respect to any Transferred Employee
        in
        excess of the amount (or having a value in excess of the amount) set forth
        with
        respect to such Transferred Employee in Section 9.2(d) of the Seller Disclosure
        Schedule.

       

      (e)  Seller
        shall include all employee records in the Books and Records transferred to
        Purchaser at the Closing. 

       

      Section
        9.3  Purchaser’s
        Benefit Plans.
        Effective as of the Closing and through December 31, 2006, Purchaser shall
        maintain for the benefit of the Transferred Employees that are employed by
        Purchaser during such period a package of employee benefits that is reasonably
        comparable in the aggregate to the employee benefit programs that are listed
        on
        the Seller Disclosure Schedule and that Seller maintained for the benefit
        of
        those employees immediately prior to the Closing, provided that Purchaser
        shall
        have no obligation to maintain a 3% employer annual contribution to any 401(k)
        plan maintained for the benefit of the Transferred Employees following
        termination of Seller’s 401(k) plan. 

       

      Section
        9.4  No
        Limitations.
        Nothing
        in this Article IX or elsewhere in this Agreement or any other Transaction
        Document (other than any Employment Agreement) shall limit or restrict in
        any
        way Purchaser’s right to modify the terms and conditions of any Transferred
        Employee or any other employee of Purchaser (including without limitation
        Purchaser’s right to modify or discontinue any Employee Benefit Plan assumed by
        it pursuant to Section 9.2, subject to applicable Law and the terms of such
        Employee Benefit Plan and, with respect to Transferred Employees who continue
        to
        be employed by Purchaser, subject compliance with Section 9.3) or change
        the
        nature of any at-will employment relationship between Purchaser and any
        Transferred Employee or any other employee of Purchaser.

       

      ARTICLE
        X  

       

      

       

      INDEMNIFICATION

       

      Section
        10.1  Indemnity
        Obligations of Seller.
        Seller
        and the Members (collectively, “Seller
        Indemnitors”)
        covenant and agree to defend, indemnify and hold harmless Purchaser and its
        Affiliates (including Parent) and the respective its officers, directors,
        employees, agents, advisers and representatives of the foregoing (collectively,
        the “Purchaser
        Indemnitees”),
        from
        and against, and to pay or reimburse Purchaser Indemnitees for, any and all
        claims, liabilities, obligations, losses, fines, costs, proceedings or damages
        (whether absolute, accrued, conditional or otherwise and whether or not
        resulting from third party claims), including all reasonable fees and
        disbursements of counsel incurred in the investigation or defense of any
        of the
        same or in asserting any of their respective rights hereunder (collectively,
        “Losses”),
        resulting from or arising out of:

       

      (i) any
        misrepresentation or breach of any warranty of Seller or Member contained
        in the
        Transaction Documents; provided that in determining whether any such
        misrepresentation or breach occurred, any dollar amount thresholds, materiality
        qualifiers and Seller Material Adverse Effect qualifier contained in any
        representation or warranty herein shall be disregarded;

       

      (ii) any
        failure of Seller or any Member to perform any covenant or agreement made
        or
        contained in the Transaction Documents or fulfill any obligation in respect
        thereof; or

       

      (iii) any
        and
        all Excluded Liabilities.

       

      Seller
        Indemnitors shall not be required to indemnify Purchaser Indemnitees with
        respect to any claim for indemnification (other than a claim for indemnification
        based on a breach of the representations and warranties contained in Sections
        3.9, 3.11(c) or 3.24) resulting from or arising out of matters described
        in
        clause (i) above pursuant to this Section 10.1 (and not resulting
        from or
        arising out of matters described in clause (ii) or (iii) above) unless
        and
        until the aggregate amount of all such claims against all Seller Indemnitors
        exceeds $100,000 (the “Seller
        Threshold Amount”),
        in
        which case Seller Indemnitors shall be required to indemnify Purchaser
        Indemnitees for the amount of such claims in excess of the Seller Threshold
        Amount. Claims thereafter may be asserted regardless of amount.

       

      [***]
        “Effective
        Purchase Price”
        means,
        at any time, the sum of (i) $13,000,000 (constituting the sum of the Initial
        Cash Purchase Price and the aggregate Fair Market 

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Value
        as
        of the Closing Date of the Initial Shares), as such amount shall have been
        adjusted pursuant to Section 2.5, (ii) the Assumed Liabilities accrued as
        of the
        Closing Date, (iii) the amount of cash theretofore paid pursuant to Section
        2.6
        and (iv) the aggregate Fair Market Value as of the applicable Value Date
        of any
        Earnout Shares theretofore issued pursuant to Section 2.6. 

       

      
        For
          so
          long as any Escrowed Property (as defined in the Escrow Agreement) continues
          to
          be held pursuant to the Escrow Agreement, prior to seeking recourse in
          a direct
          action against a Seller Indemnitor with respect to indemnifiable Losses,
          Purchaser shall seek recourse pursuant to the Escrow Agreement with respect
          to
          such Losses, provided that the Purchaser shall not be obligated to seek
          recourse
          pursuant to the Escrow Agreement to the extent any such Losses exceed the
          difference between (x) the amount of the Escrowed Property (valuing non-cash
          Escrowed Property in accordance with Section 2(j) of the Escrow Agreement)
          and
          (y) the Losses or estimated Losses with respect to which claims are then
          pending
          pursuant to the Escrow Agreement. 

      

       

      Section
        10.2  Indemnity
        Obligations of Purchaser.
        Purchaser covenants and agrees to defend, indemnify and hold harmless Seller
        and
        its Affiliates, their respective officers, directors, employees, agents,
        advisers and representatives and the Members (collectively, the “Seller
        Indemnitees”),
        from
        and against any and all Losses resulting from or arising out of:

       

      (i) any
        misrepresentation or breach of warranty of Purchaser or Parent contained
        in the
        Transaction Documents; provided that in determining whether any such
        misrepresentation or breach occurred, any dollar amount thresholds and
        materiality qualifiers contained in any representation or warranty herein
        shall
        be disregarded;

       

      (ii) any
        failure of any Purchaser or Parent to perform any covenant or agreement made
        or
        contained in the Transaction Documents or fulfill any other obligation in
        respect thereof; 

       

      
        	(iii)  	
                the
                  Assumed Liabilities; or

              

      

       

      
        	(iv)  	
                the
                  post-Closing operation of the
                  Business.

              

      

       

      Purchaser
        shall not be required to indemnify Seller Indemnitees with respect to any
        claim
        for indemnification (other than a claim for indemnification based on a breach
        of
        the representations and warranties contained in Section 5.4 or 5.6) resulting
        from or arising out of matters described in clause (i) above pursuant
        to
        this Section 10.2 (and not resulting from or arising out of matters described
        in
        clause (ii), (iii) or (iv) above) unless and until the aggregate amount
        of
        all claims against Purchaser exceeds $100,000 (the “Purchaser
        Threshold Amount”),
        in
        which case Purchaser shall be required to indemnify Seller Indemnitees for
        the
        full amount of such claims in excess of the Purchaser Threshold Amount. Claims
        thereafter may be asserted regardless of amount. Purchaser’s maximum liability
        to Seller Indemnitees under clause (i) above (and not resulting from or arising
        out of matters described in clause (ii), (iii) or (iv) above) shall
        not
        exceed the Cap.

       

      Section
        10.3  Indemnification
        Procedures.
        (a)
Third
        Party Claims.
        In the
        case of any claim asserted by a third party against a party entitled to
        indemnification under this Agreement (the “Indemnified
        Party”),
        notice shall be given by the Indemnified Party to the party required to provide
        indemnification (the “Indemnifying
        Party”)
        as
        soon as practicable after such Indemnified Party has actual knowledge of
        any
        claim as to which indemnity may be sought, and the Indemnified Party shall
        permit the Indemnifying Party (at the expense of such Indemnifying Party)
        to
        assume the defense of any third party claim or any litigation with a third
        party
        resulting therefrom; provided,
        however,
        that
        (a) the counsel for the Indemnifying Party who shall conduct the defense
        of
        such claim or litigation shall be subject to the approval of the Indemnified
        Party (which approval shall not be unreasonably withheld or delayed),
        (b) the Indemnified Party may participate in such defense at such
        Indemnified Party’s expense (which shall not be subject to reimbursement
        hereunder except as provided below), and (c) the failure by any Indemnified
        Party to give notice as provided herein shall not relieve the Indemnifying
        Party
        of its indemnification obligation under this Agreement except and only to
        the
        extent that such Indemnifying Party is actually and materially damaged as
        a
        result of such failure to give notice. Except with the prior written consent
        of
        the Indemnified Party, no Indemnifying Party, in the defense of any such
        claim
        or litigation, shall consent to entry of any judgment or enter into any
        settlement that provides for injunctive or other nonmonetary relief affecting
        the Indemnified Party or that does not include as an unconditional term thereof
        the giving by each claimant or plaintiff to such Indemnified Party of a general
        release from any and all liability with respect to such claim or litigation.
        If
        the Indemnified Party shall in good faith determine that the conduct of the
        defense of any claim subject to indemnification hereunder or any proposed
        settlement of any such claim by the Indemnifying Party might be expected
        to
        affect adversely the ability of the Indemnified Party to conduct its business,
        or that the Indemnified Party may have available to it one or more defenses
        or
        counterclaims that are inconsistent with one or more of those that may be
        available to the Indemnifying Party in respect of such claim or any litigation
        relating thereto, the Indemnified Party shall have the right at all times
        to
        take over and assume control over the defense, settlement, negotiations or
        litigation relating to any such claim at the sole cost of the Indemnifying
        Party; provided,
        however,
        that if
        the Indemnified Party does so take over and assume control, the Indemnified
        Party shall not settle such claim or litigation without the prior written
        consent of the Indemnifying Party, such consent not to be unreasonably withheld
        or delayed. If the Indemnifying Party does not accept the defense of any
        matter
        as above provided within thirty (30) days after receipt of the notice from
        the
        Indemnified Party described above, the Indemnified Party shall have the full
        right to defend against any such claim or demand at the sole cost of the
        Indemnifying Party and shall be entitled to settle or agree to pay in full
        such
        claim or demand. In any event, the Indemnifying Party and the Indemnified
        Party
        shall reasonably cooperate in the defense of any claim or litigation subject
        to
        this Article X and the records of each shall be reasonably available to the
        other with respect to such defense.

       

      (b)
        Non-Third
        Party Claims.
        With
        respect to any claim for indemnification hereunder which does not involve
        a
        third party claim, the Indemnified Party will give the Indemnifying Party
        written notice of such claim. The Indemnifying Party may acknowledge and
        agree
        by notice to the Indemnified Party in writing to satisfy such claim within
        twenty (20) days of receipt of notice of such claim from the Indemnified
        Party.
        If the Indemnifying Party shall dispute such claim, the Indemnifying Party
        shall
        provide written notice of such dispute to the Indemnified Party within such
        20-day period, setting forth in reasonable detail the basis of such dispute.
        Upon receipt of notice of any such dispute, the Indemnified Party and the
        Indemnifying Party shall use reasonable efforts to resolve such dispute within
        thirty (30) days of the date such notice of dispute is received. If the
        Indemnifying Party shall fail to provide written notice to the Indemnified
        Party
        within twenty (20) days of receipt of notice from the Indemnified Party that
        the
        Indemnifying Party either acknowledges and agrees to pay such claim or disputes
        such claim, the Indemnifying Party shall be deemed to have acknowledged and
        agreed to pay such claim in full and to have waived any right to dispute
        such
        claim. Once (a) the Indemnifying Party has acknowledged and agreed to pay
        any
        claim pursuant to this Section 10.3, (b) any dispute under this Section 10.3
        has
        been resolved in favor of indemnification by mutual agreement of the
        Indemnifying Party and the Indemnified Party, or (c) any dispute under this
        Section 10.3 has been finally resolved in favor of indemnification by order
        of a
        court of competent jurisdiction or other tribunal (including an arbitrator
        contemplated by this agreement) having jurisdiction over such dispute, then
        the
        Indemnifying Party shall pay the amount of such claim to the Indemnified
        Party
        within twenty (20) days of the date of acknowledgement by the Indemnifying
        Party
        or final resolution in favor of indemnification, as the case may be, to such
        account and in such manner as is designated in writing by the Indemnified
        Party.

       

      (c) A
        proportion of any indemnifiable Loss suffered by a Purchaser Indemnitee equal
        to
        (x) the aggregate Fair Market Value of the Shares issued under this Agreement
        prior to the time any liability pursuant to this Article X is determined
        and
        required to be satisfied (determined with respect to the Initial Shares as
        of
        the Closing Date and with respect to any Earnout Shares as of their Value
        Date)
        divided by (y) the Effective Purchase Price as of the time such liability
        is
        determined and required to be satisfied (the “Share
        Proportion of Loss”)
        shall
        be satisfied by the delivery to Parent for cancellation of shares of Parent
        Common Stock having an aggregate Assigned Value equal to such portion of
        such
        Loss. Notwithstanding the foregoing, if Shares held by Seller and the Members
        at
        such time have an aggregate Assigned Value that is less than the Share
        Proportion of Loss, the remainder of such Share Proportion of Loss shall
        be
        satisfied by the payment of cash in an amount equal to (A) the number of
        Shares
        that would be required to be delivered in accordance with the preceding sentence
        to satisfy the remainder of the Share Proportion of Loss multiplied by (B)
        the
        average price at which Shares have been disposed of (other than pursuant
        to this
        Article X) by Seller and the Members. “Assigned
        Value”
        means,
        with respect to each outstanding Share, as of the time any liability pursuant
        to
        this Section X is determined and required to be satisfied, (A) the sum of
        the
        aggregate Fair Market Value of the Initial Shares as of the date of this
        Agreement and the aggregate Fair Market Value of any Earnout Shares issued
        prior
        to such time as of their respective Value Dates divided by (B) the total
        number
        of Shares issued prior to such time pursuant to this Agreement.

       

      Section
        10.4  Expiration
        of Representations and Warranties.
        All
        representations and warranties contained in this Agreement shall survive
        the
        Closing until [***]; provided,
        however,
        that
        the representations and warranties stated in Sections 3.9, 3.14 and
        3.18
        shall survive the Closing for the period ending on the date that is 30 days
        after the expiration of the applicable statute of limitations period and
        (iii)
        the representations and warranties stated in Sections 3.11(c) and 3.24 shall
        survive indefinitely. The parties hereto acknowledge and agree that the only
        representations and warranties made by the parties to the Transaction Documents
        in connection with the transactions contemplated by the Transaction Documents
        are those that are set forth in the Transaction Documents.

       

      Section
        10.5  Exclusive
        Remedy.
        Absent
        fraud or criminal activity and except as provided under Sections 8.3
        and
        8.4, the indemnifications provided for in this Article X shall be
        the sole
        and exclusive post-Closing remedies available to Parent and/or Purchaser,
        on the
        one hand, against Seller and/or any Member, on the other, or by Parent and/or
        Purchaser, on the one hand, against Seller and/or any Member, on the other,
        for
        any claims under or based upon this Agreement. Seller acknowledges that the
        representations and warranties contained in the Transaction Documents shall
        not
        be deemed waived or otherwise affected by any investigation by or on behalf
        of
        Purchaser or Parent.

       

      Section
        10.6  Set
        Off.
        If
        Seller or any Member shall have any Liability to Purchaser or any other
        Purchaser Indemnitee (pursuant to this Article X or otherwise), Purchaser
        and
        Parent shall be entitled, in addition to any other right or remedy they may
        have, to exercise rights of set-off against any payments or securities payable
        or deliverable to Seller in connection with the Transaction Documents or
        otherwise, including without limitation pursuant to Section 2.6 of this
        Agreement. 

       

      Section
        10.7  Treatment
        of Indemnification Payments.
        All
        indemnification payments made under this Agreement shall be treated by the
        parties as an adjustment to the Purchase Price to the extent permitted by
        applicable Law. The parties shall make appropriate adjustments for tax benefits
        and detriments and any insurance proceeds actually received by an Indemnified
        Party (it being understood that no Indemnified Party shall have any obligation
        to seek coverage available to it) in determining Losses (taking into account
        any
        related indemnification payments) for purposes of this Article X.

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
        XI  

       

      

       

      MISCELLANEOUS

       

      Section
        11.1  Certain
        Definitions.

       

      For
        purposes of this Agreement, the following terms shall have the meanings
        specified in this Section 11.1:

       

      “Affiliate”
        means,
        with respect to any Person, any other Person directly or indirectly controlling,
        controlled by or under common control with such Person, and in the case of
        any
        natural Person shall include all relatives and family members of such Person.
        For purposes of this definition, a Person shall be deemed to control another
        Person if such first Person directly or indirectly owns or holds five percent
        (5%) or more of the ownership interests in such other Person.

       

      “Books
        and Records”
        means
        all books and records of Seller, including manuals, price lists, mailing
        lists,
        lists of customers, sales and promotional materials, purchasing materials,
        documents evidencing intangible rights or obligations, personnel records,
        accounting records and litigation files (regardless of the media in which
        stored), in each case relating to or used in the Business, excluding only
        Seller’s seal and minute book.

       

      “Business”
        means
        the business of Seller as conducted or proposed to be conducted on the date
        hereof and as of the Closing Date.

       

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

       

      “Contract”
        means
        any contract, indenture, note, bond, loan, mortgage, license, instrument,
        lease,
        commitment or other agreement.

       

      [***]
        

       

      “Environmental
        Law”
        means
        any foreign, federal, state or local statute, regulation, ordinance, or rule
        of
        common law as now or hereafter in effect in any way or any other legally
        binding
        requirement relating to the environment, natural resources or protection
        of
        human health and safety including, without limitation, the Comprehensive
        Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601
et seq.),
        the
        Hazardous Materials 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 

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      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.),
        and
        the regulations promulgated pursuant thereto.

       

      [***].

       

      “Fair
        Market Value”
        means,
        as to the Parent Common Stock, (i) the average closing bid price of the Parent
        Common Stock on quoted on NASDAQ over a period of 20 consecutive trading
        days
        the latest of which shall be the trading day immediately preceding the date
        as
        of which "Fair Market Value" is being determined.

       

      “GAAP”
        means
        United States generally accepted accounting principles as in effect from
        time to
        time.

       

      “Governmental
        Approval”
        means
        any Consent of, with or to any Governmental Body.

       

      “Governmental
        Body”
        means
        any government or governmental or regulatory authority or body thereof, or
        political subdivision thereof, whether federal, state, local or foreign,
        or any
        agency, instrumentality or authority thereof, or any court or arbitrator
        (public
        or private).

       

      “Hazardous
        Material”
        means
        any substance, material or waste which is regulated by the United States,
        the
        foreign jurisdictions in which Seller conducts business, or any state, local
        or
        foreign governmental authority including, without limitation, petroleum and
        its
        by-products, asbestos, and any material or substance which is defined as
        a
“hazardous waste,”“hazardous substance,”“hazardous material,”“restricted
        hazardous waste,”“industrial waste,”“solid
        waste,”“contaminant,”“pollutant,”“toxic waste” or “toxic substance” under any
        provision of Environmental Law.

       

      “Intellectual
        Property”
        means
        (a) all inventions (whether patentable or unpatentable and whether or not
        reduced to practice), all improvements thereto, and all patents, patent
        applications, and patent disclosures, together with all reissuances,
        continuations, continuations-in-part, revisions, extensions, and reexaminations
        thereof, (b) all trademarks, service marks, trade dress, logos, trade names,
        and
        corporate names, together with all translations, adaptations, derivations,
        and
        combinations thereof and including all goodwill associated therewith, and
        all
        applications, registrations and renewals in connection therewith, (c) all
        copyrightable works, all copyrights, and all applications, registrations
        and
        renewals in connection therewith, (d) all mask works and all applications,
        registrations and renewals in connection therewith, (e) all trade secrets
        

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      and
        confidential information (including ideas, research and development, know-how,
        formulas, compositions, manufacturing and production processes and techniques,
        technical data, designs, drawings, specifications, customer and supplier
        lists,
        pricing and cost information, and business and marketing plans and proposals),
        (f) all computer software (including data and related documentation), (g)
        all
        other proprietary rights, and (h) all copies and tangible embodiments thereof
        (in whatever form or medium).

       

      “IRS”
        means
        the United States Internal Revenue Service.

       

      “Knowledge”
        or
        words of similar effect means, (a) with respect to Seller, the actual subjective
        knowledge of each Member and each member of senior management of Seller and
        (b)
        with respect to Parent or any Purchaser, the actual subjective knowledge
        of each
        member of senior management of Parent, and in either case, matters that an
        individual in the position of such Member or member of senior management,
        as the
        case may be, in light of the relevant circumstances, reasonably would be
        expected to know upon due inquiry.

       

      “Law”
        means
        any federal, state, local or foreign law (including common law), statute,
        code,
        ordinance, rule, regulation or other requirement.

       

      “Legal
        Proceeding”
        means
        any judicial, administrative or arbitral actions, suits, proceedings (public
        or
        private), claims or governmental proceedings.

       

      “Liability”
        means
        any liability (whether known or unknown, whether asserted or unasserted,
        whether
        absolute or contingent, whether accrued or unaccrued, whether liquidated
        or
        unliquidated, and whether due or to become due), including any liability
        for
        Taxes.

       

      “Lien”
        means
        any lien, pledge, mortgage, deed of trust, security interest, claim, lease,
        charge, option, right of first refusal, easement, servitude, transfer
        restriction under any shareholder or similar agreement, encumbrance or any
        other
        restriction or limitation whatsoever.

       

      [***]

       

      “Neutral
        Accountant”
        means
        (i) Ernst & Young, or if Ernst & Young is not independent in the
        reasonable determination of Purchaser or Seller, then (ii) an independent
        auditing firm of nationally or regionally recognized standing selected by
        the
        mutual agreement of Purchaser and Seller within 15 days of the date on which
        the
        Neutral Accountant is proposed to begin serving or, if Purchaser and Seller
        are
        unable to 

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      agree
        within such period, an independent auditing firm of nationally or regionally
        recognized standing selected jointly by two other such firms, one of which
        shall
        be specified by Purchaser and one of which shall be specified by Seller,
        within
        15 days after the expiration of such period. 

       

      [***]
        

       

      “Non-Competition
        Period”
        means
        the period from the Closing Date through the fifth anniversary thereof.

       

      “Order”
        means
        any order, injunction, judgment, decree, ruling, writ, assessment or arbitration
        award.

       

      “Parent
        Material Adverse Change”
        means
        any change that is materially adverse to (i)  the business, properties,
        results of operations or condition (financial or otherwise) of Parent and
        its
        consolidated subsidiaries taken as a whole or (ii) the ability of Parent
        or
        Purchaser to perform its obligations under this Agreement.

       

      “Permitted
        Exceptions”
        means
        (i) statutory liens for current taxes, assessments or other governmental
        charges
        not yet delinquent or the amount or validity of which is being contested
        in good
        faith by appropriate proceedings, provided an appropriate reserve is established
        therefor; (ii) mechanics’, carriers’, workers’, repairers’ and similar Liens
        arising or incurred in the ordinary course of business that are not material
        to
        the business, operations and financial condition of the property so encumbered
        or Seller; (iii) zoning, entitlement and other land use and environmental
        regulations by any Governmental Body, provided that such regulations have
        not
        been violated; and (iv) such other imperfections in title, charges, easements,
        restrictions and encumbrances which do not materially detract from the value
        of
        or materially interfere with the present use of the Assets subject thereto
        or
        affected thereby.

       

      “Person”
        means
        any individual, corporation, partnership, firm, joint venture, association,
        joint-stock company, trust, unincorporated organization, Governmental Body
        or
        other entity.

       

      “Release”
        means
        any release, spill, emission, leaking, pumping, injection, deposit, disposal,
        discharge, dispersal, migration or leaching into the indoor or outdoor
        environment, or into or out of any property.

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Remedial
        Action”
        means
        all actions to (x) clean up, remove, treat or in any other way address any
        Hazardous Material; (y) prevent the Release of any Hazardous Material so
        it does
        not endanger or threaten to endanger public health or welfare or the indoor
        or
        outdoor environment; or (z) perform pre-remedial studies and investigations
        or
        post-remedial monitoring and care.

       

      [***]
        

       

      “Seller
        Material Adverse Change”
        or
“Seller
        Material Adverse Effect”
        means
        any change effect that is materially adverse to (i)  the business,
        properties, results of operations, prospects or condition (financial or
        otherwise) of Seller, (ii) the ability of Seller to perform its obligations
        under this Agreement or (iii) the ability of Purchaser to conduct
        the
        Business after the Closing Date as the Business is being conducted as of
        the
        date hereof, provided that a change or effect relating to the economy or
        financial markets in general shall not constitute a Seller Material Adverse
        Effect.

       

      [***]

       

      “Subsidiary”
        means,
        as to any Person, any other Person of which a 50% or more of the outstanding
        voting securities or other equity interests are owned, directly or indirectly,
        by such Person.

       

      “Tax”
        or
“Taxes”
        shall
        mean means any federal, state, provincial, local or foreign income, alternative
        minimum, accumulated earnings, personal holding company, franchise, capital
        stock, net worth, capital, profits, windfall profits, gross receipts, value
        added, 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 or
        any analogous or similar provision of any state, local or foreign law or
        regulation), real property, personal property, ad valorem, intangibles, rent,
        occupancy, license, occupational, employment, unemployment insurance, social
        security, disability, workers’ compensation, payroll, health care, withholding,
        estimated or other similar tax, duty or other governmental charge or assessment
        or deficiencies thereof, and including any interest, penalties or additions
        to
        tax attributable to the foregoing.

       

      “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.

       

      [***]
        Confidential treatment requested. Omitted portions have been filed separately
        with the Securities and Exchange Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Transaction
        Documents”
        means,
        with respect to any Person, this Agreement, the Employment Agreements, the
        Parent Guaranty and each other agreement, document, instrument or certificate
        contemplated by this Agreement (or by any such other agreement, document,
        instrument or certificate) to be executed by such Person in connection with
        the
        consummation of the transactions contemplated by this Agreement.

      
      

       

      Section
        11.2  Publicity .
        No
        party shall issue any press release or make any other public announcement
        relating to the subject matter of this Agreement without the prior written
        consent of Parent.

       

      Section
        11.3  Payment
        of Sales, Use or Similar Taxes; Transfer Taxes.
        Seller
        shall be responsible for and pay in a timely manner all sales, use, value
        added,
        documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
        recording, license and other similar Taxes and fees (“Transfer
        Taxes”),
        arising out of or in connection with or attributable to the transactions
        effected pursuant to the Transaction Documents. Each party hereto shall prepare
        and timely file all Tax Returns required to be filed in respect of Transfer
        Taxes that are the primary responsibility of such party under applicable
        Law;
provided,
        however,
        that
        such party’s preparation of any such Tax Returns shall be subject to the other
        party’s approval, which approval shall not be unreasonably withheld or
        delayed.

       

      Section
        11.4  Expenses.
        Except
        as otherwise provided in this Agreement, each party shall bear all costs
        and
        expenses incurred by such party in connection with the negotiation and execution
        of this Agreement and each other Transaction Document, whether or not the
        transactions contemplated hereby and thereby are consummated.

       

      Section
        11.5  Specific
        Performance.
        Seller
        acknowledges and agrees that the breach of this Agreement would cause
        irreparable damage to Purchaser and that Purchaser will not have an adequate
        remedy at law. Therefore, the obligations of Seller under this Agreement,
        including, without limitation, Seller’s obligation to sell the Assets to
        Purchaser, shall be enforceable by a decree of specific performance issued
        by
        any court of competent jurisdiction, and appropriate injunctive relief may
        be
        applied for and granted in connection therewith (without the requirement
        of the
        posting of a bond or other surety). Such remedies shall, however, be cumulative
        and not exclusive and shall be in addition to any other remedies which any
        party
        may have under this Agreement or otherwise.

       

      Section
        11.6  Submission
        to Jurisdiction; Consent to Service of Process.
        The
        parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
        of
        any federal or state court located in Wilmington, Delaware over any dispute
        arising out of or relating to this Agreement or any of the transactions
        contemplated hereby and each party hereby irrevocably agrees that all claims
        in
        respect of such dispute or any suit, action proceeding related thereto may
        be
        heard and determined in such courts. The parties hereby irrevocably waive,
        to
        the fullest extent permitted by applicable Law, any objection which they
        may now
        or hereafter have to the laying of venue of any such dispute brought in such
        court or any defense of inconvenient forum for the maintenance of such dispute.
        Each of the parties hereto agrees that a judgment in any such dispute may
        be
        enforced in other jurisdictions by suit on the judgment or in any other manner
        provided by law.

       

      Section
        11.7  Entire
        Agreement; Amendments and Waivers.
        This
        Agreement (including the schedules and exhibits hereto) represents the entire
        understanding and agreement between the parties hereto with respect to the
        subject matter hereof and can be amended, supplemented or changed, and any
        provision hereof can be waived, only by written instrument making specific
        reference to this Agreement signed by Purchaser, in the case of an amendment,
        supplement, modification or waiver sought to be enforced against Purchaser
        or
        Parent, or Seller, in the case of an amendment, supplement, modification
        or
        waiver sought to be enforced against Seller. No action taken pursuant to
        this
        Agreement, including without limitation, any investigation by or on behalf
        of
        any party, shall be deemed to constitute a waiver by the party taking such
        action of compliance with any representation, warranty, covenant or agreement
        contained herein. The waiver by any party hereto of a breach of any provision
        of
        this Agreement shall not operate or be construed as a further or continuing
        waiver of such breach or as a waiver of any other or subsequent breach. No
        failure on the part of any party to exercise, and no delay in exercising,
        any
        right, power or remedy hereunder shall operate as a waiver thereof, nor shall
        any single or partial exercise of such right, power or remedy by such party
        preclude any other or further exercise thereof or the exercise of any other
        right, power or remedy. All remedies hereunder are cumulative and are not
        exclusive of any other remedies provided by law.

       

      Section
        11.8  Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Delaware without regard to conflicts of law principles
        thereof.

       

      Section
        11.9  Table
        of Contents and Headings.
        The
        table of contents and section headings of this Agreement are for reference
        purposes only and are to be given no effect in the construction or
        interpretation of this Agreement.

       

      Section
        11.10  Notices.
        All
        notices and other communications under this Agreement shall be in writing
        and
        shall be deemed given when delivered personally or mailed by certified mail,
        return receipt requested, to the parties (and shall also be transmitted by
        facsimile to the Persons receiving copies thereof) at the following addresses
        (or to such other address as a party may have specified by notice given to
        the
        other party pursuant to this provision):

       

      If
        to
        Seller, to:

       

      Pharmaceutical
        Resource Solutions, LLC

        177
        Witmer Road

      Horsham,
        Pennsylvania 19044

      Attn:
        Robert Melillo

      Telecopier:
        215-672-5549

       

      With
        a
        copy to:

       

      Buchanan
        Ingersoll PC

      1835
        Market Street, 14th
        Floor

        Philadelphia,
        Pennsylvania 19103

      Attn:
        Steven W. Smith, Esq.

      Telecopier:
        215-665-8760

       

      If
        to a
        Member, to such Member in care of:

       

      Pharmaceutical
        Resource Solutions, LLC

        177
        Witmer Road

      Horsham,
        Pennsylvania 19044

      Attn:
        Robert Melillo

      Telecopier:
        215-672-5549

       

      With
        a
        copy to:

       

      Buchanan
        Ingersoll PC

      1835
        Market Street, 14th
        Floor

        Philadelphia,
        Pennsylvania 19103

      Attn:
        Steven W. Smith, Esq.

      Telecopier:
        215-665-8760

       

      If
        to
        Parent, to:

       

      Ventiv
        Health Inc.

      200
        Cottontail Lane

      Vantage
        Court North

      Somerset,
        New Jersey 08873

      Attention:
        Chief Executive Officer

      

      With
        a
        copy to:

       

      Kenneth
        G. Alberstadt, Esq.

      Law
        Office of Kenneth G. Alberstadt PLLC

      111
        Broadway, 18th
        Floor

      New
        York,
        New York 10006

      Telecopier:
        (212) 404-7567

       

      If
        to
        Purchaser, to:

       

      PRS
        Acquisition LLC

      in
        care
        of Ventiv Health Inc.

      200
        Cottontail Lane

      Vantage
        Court North

      Somerset,
        New Jersey 08873

      Attention:
        Chief Executive Officer

      

      With
        a
        copy to:

      Kenneth
        G. Alberstadt, Esq.

      Law
        Office of Kenneth G. Alberstadt PLLC

      111
        Broadway, 18th
        Floor

      New
        York,
        New York 10006

      Telecopier:
        (212) 404-7567

      

      Any
        such
        notice or communication shall be deemed to have been received (i) when
        delivered, if personally delivered or transmitted by electronic mail, with
        receipt acknowledgment by the recipient by return electronic mail, (ii) when
        sent, if sent by facsimile on a business day during normal business hours
        (or,
        if not sent on a business day during normal business hours, on the next business
        day after the date sent by facsimile), (iii) on the next business day after
        dispatch, if sent by nationally recognized, overnight courier guaranteeing
        next
        business day delivery, and (iv) on the 5th
        business
        day following the date on which the piece of mail containing such communication
        is posted, if sent by mail.

      

      Section
        11.11  Bulk
        Sales.
        Purchaser and Seller hereby waive compliance by the other with the provisions
        of
        the bulk sales laws of any jurisdiction, to the extent applicable to the
        transactions contemplated by this Agreement. Seller shall indemnify and hold
        harmless Purchaser and the other Purchaser Indemnitees from and against any
        and
        all Losses resulting from or arising out of any noncompliance or alleged
        noncompliance by Purchaser or Seller with such bulk sales laws.

       

      Section
        11.12  Severability.
        If any
        provision of this Agreement is invalid or unenforceable, the balance of this
        Agreement shall remain in effect.

       

      Section
        11.13  Assignment
        of Works.
        The
        Members agree that all Work Product belongs in all instances to the Company.
        To
        the extent any Member has any right, title or interest of any kind or nature
        whatsoever in any Work Product, such Member hereby assigns all such right,
        title
        and interest, effective upon the Closing, to (or as otherwise directed by)
        Purchaser. For purposes hereof, “Work
        Product”
        means
        all inventions, innovations, improvements, technical information, systems,
        software developments, methods, designs, analyses, drawings, reports, service
        marks, trademarks, trade names, logos and all similar or related information
        (whether patentable or unpatentable) which relates to any business conducted
        or
        proposed to be conducted by the Company as of the date hereof.

       

      Section
        11.14  Binding
        Effect; Assignment.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their respective successors and permitted assigns. Except as provided in
        Article
        IX, nothing in this Agreement shall create or be deemed to create any third
        party beneficiary rights in any person or entity not a party to this Agreement.
        No assignment of this Agreement or of any rights or obligations hereunder
        may be
        made by any party hereto (by operation of law or otherwise) without the prior
        written consent of the other parties hereto and any attempted assignment
        without
        the required consents shall be void, provided that no such consent shall
        be
        required for any such assignment (i) of Parent’s rights and obligations
        hereunder (a) in connection with a sale or other transfer (whether directly
        or
        indirectly, including by merger or consolidation) of substantially all of
        the
        assets of Parent and its consolidated subsidiaries, so long as the surviving
        or
        transferee entity in such transaction undertakes to comply with Parent’s
        obligations under this Agreement or (b) to an Affiliate of Parent, provided
        that
        Parent remains liable therefor, (ii) of Purchaser’s rights and obligations
        hereunder (including without limitation its rights and obligations under
        Section
        2.6) (a) in connection with a sale or other transfer (whether directly or
        indirectly, including by merger or consolidation) of the Business, provided
        that
        the Parent Guaranty remains in effect, or (b) to an Affiliate of Purchaser,
        provided that the Parent Guaranty remains in effect, or (iii) of Parent’s and
        Purchaser’s rights hereunder as security for the obligations of Parent or any
        Affiliate of Parent under a credit agreement entered into with a bank or
        other
        financial institution.

       

      Section
        11.15  Attorneys'
        Fees; Prevailing Party.
        Should
        any proceeding be commenced between the parties to this Agreement seeking
        to
        enforce any of its provisions, the prevailing party in such proceeding shall
        be
        entitled, in addition to such other relief as may be granted, to reasonable
        fees
        and disbursements of counsel incurred in connection with such proceeding
        as a
        consequence of a claim or defense asserted by the other party in bad faith.
        For
        the purposes of this provision, "prevailing party" shall include a party
        which
        dismisses an action for recovery hereunder in exchange for payment of the
        sum
        allegedly due, performance of covenants allegedly breached, or consideration
        substantially equal to the relief sought in the action or
        proceeding.

       

      Section
        11.16  Counterparts.
        This
        Agreement may be executed in one or more counterparts and by facsimile
        signature, each of which shall be deemed an original but all of which together
        will constitute one and the same instrument.

       

      Section
        11.17  Headings.
        The
        section headings contained in this Agreement are inserted for convenience
        only
        and shall not affect in any way the meaning or interpretation of this
        Agreement.

       

      *
        *
        *

       

      

      

      PHARMACEUTICAL
        RESOURCE SOLUTIONS LLC

      

      

      By       

      Name:

      Title:

      

      VENTIV
        HEALTH, INC.

      

      

      By       

      Name:

      Title:

      

      PRS
        ACQUISITION LLC

      

      

      By       

      Name:

      Title:

      

      MEMBERS:

      

      

      Robert
        Melillo

      

      

      

      Joseph
        Melillo

      

      

      
        
          
            5

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      George
        Melillo, Jr.

      

      

      Michael
        MelilloExhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is
entered into as of the 27th day of August 2005 (the “Effective Date”) by
and between Bentley Pharmaceuticals, Inc., a Delaware corporation (the “Employer”),
and John A. Sedor, (the “Employee”).

 

RECITALS

 

The Employer desires to employ the Employee, and the
Employee desires to be employed by the Employer, all upon the terms and
provisions and subject to the conditions set forth in this Agreement.

 

WITNESSETH

 

NOW THEREFORE, in consideration
of the foregoing premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to be legally bound as follows:

 

1.                                      Employment.  The Employer hereby employs the Employee, and
the Employee hereby accepts such employment, as President of the Employer upon the terms and subject to the
conditions set forth in this Agreement. 
The Employee shall perform such functions as are consistent with these
positions under the supervision of the Chief Executive Officer or the Board of
Directors of the Employer.  The Employee
shall, without any compensation in addition to that which is specifically
provided in this Agreement, serve in such further offices or positions with
Employer or any subsidiary or affiliate of Employer (collectively, the “Employer
Group”) as shall from time to time be reasonably requested by the Chief
Executive Officer or the Board of Directors of Employer.

 

2.                                      Term.  Subject to the termination provisions
hereinafter contained, the term of employment under this Agreement shall be for
an initial term commencing on the Effective Date and terminating on December 31,
2006.  This Agreement shall thereafter be
automatically renewed for successive one (1) year terms, unless the
Employee’s employment with the Employer has been terminated, as hereinafter
provided, or unless either party shall have given the other party prior notice
of termination of this Agreement effective as of the date of expiration of its
then applicable Term.  The initial term
of employment hereunder, and any extension thereof pursuant to this paragraph,
are referred to as the “Term”.

 

3.                                      Compensation,
Reimbursement, Etc.

 

a.                                       Base Salary.  Commencing
on the Effective Date, the Employer shall pay to the Employee as compensation
for all services rendered by the Employee a base salary of $37,500.00 per month (“Base Salary”), payable in
accordance with the Employer’s regular payroll practices, plus annual
bonuses on a calendar year basis as determined by the Compensation Committee of
the Board of Directors (the “Compensation Committee”), subject to Sections 3(d) and
3(e).  If an increase in

 

1

 

Base Salary is determined for a calendar year after January 1
and before April 30 of that year, the increase shall be retroactive to the
beginning of that year.  Any bonus for 2005 will be
prorated based on the portion of 2005 that the Employee is employed by the
Employer.  Annual reviews of the Employee
will be on a calendar year basis.

 

b.                                       Expense Reimbursement.  The
Employer shall reimburse the Employee on a semi-monthly basis for all
reasonable expenses incurred by the Employee in the performance of his duties
under this Agreement; provided however, that the Employee shall have previously
furnished to the Employer an itemized account, satisfactory to the Employer, in
substantiation of such expenditures.

 

c.                                       Benefits.  The
Employee shall be entitled to health and other benefits on the same terms and
conditions as the Employer has made available to other senior executives of
Employer, including participation in the Employer’s health plans.  If the Employee elects not to participate in
the Employer’s health plans, Employee shall be entitled to reimbursement for
the premiums paid for an alternate plan in amounts not to exceed the premiums
that would have been paid on behalf of the Employee for Employer’s health
plan.  The Employer shall obtain a term
life insurance and disability policy for the Employee with a value equal to at
least two year’s Base Salary payable to the estate or beneficiaries of the
Employee upon the Employee’s death or to the Employee in the event of
disability as provided in Section 7(b) hereof.

 

d.                                       Bonuses.  The Employee
shall be eligible for a bonus each year of the Term of up to 50% of his annual
Base Salary, based upon achievement of the bonus targets for the year, payable
in cash and/or common stock, as determined by the Compensation Committee,
subject to the terms of the applicable year’s bonus incentive plan approved by
the Board of Directors and/or Compensation Committee of the Employer.  The bonus target for 2005 is 50% of annual
Base Salary and shall be subject to the terms of the “Bonus Targets under the
2005 Annual Bonus Incentive Plan”, which has been approved by the Board of
Directors and/or Compensation Committee of the Employer and previously provided
to Employee.   Such annual bonus will be
prorated as provided in Section 3(a) for 2005, and the annual bonus
will be awarded for each year as soon as practicable after the Company’s annual
results of operations are publicly reported in the following year.

 

e.                                       Automobile Allowance. The employee will receive a monthly
allowance of $1,000 for an automobile of his own use.

 

f.                                         Annual Review.  The
Employee shall be reviewed by the CEO who will give recommendations to the
Compensation Committee on an annual (calendar year) basis.

 

g.                                      Equity Incentives.  Upon
commencement of employment, the Employee will be granted an award of
nonstatutory stock option (the “Initial Option”) under the

 

2

 

Employer’s
2005 Equity and Incentive Plan (the “Plan”) to purchase 150,000 shares of
common stock of the Employer, which option shall be immediately exercisable and
not subject to vesting as to 100,000 of the shares and shall become exercisable
and vested as to the remaining 50,000 shares on December 31, 2005, and
otherwise shall contain the customary terms and conditions for options granted
under the Plan to executive employees. 
Thereafter, so long as the Employee continues to be employed as an
executive officer of the Employer, the Employee will be entitled to receive:

 

(i)                                     subject
to stockholder approval of one or more increases after the date hereof totaling
at least 600,000 shares in the number of shares reserved under the Plan (which
is planned for the 2006 annual meeting of stockholders of the Employer), a
nonstatutory stock option (the “Follow-On Option Award”) under the Plan to
purchase 150,000 shares of common stock of the Employer, which option shall be
on substantially the same terms as the Initial Option except that it (A) will
be granted as of the date such increase in the reserved shares is approved by
stockholders, (B) have an exercise price determined based on the fair
market value of the common stock as of the date of grant, (C) will vest in
equal quarterly installments over five years from the date of grant, and (D) in
addition to any acceleration provided for in Section 8 hereof, will
contain a provision that if the Employee is terminated by the Company for any
reason other than “good cause” (as defined herein) after December 31, 2006
(the end of the initial term of this Agreement), on the date of such
termination such number of unvested options that would have vested under the terms
of the applicable option agreement had the Employee continued to be employed by
the Company for the six (6) month-period following the date of termination
shall immediately become vested; and

 

(ii)                                  subject
to stockholder approval from time to time of an increase of a sufficient number
of additional shares of common stock reserved under the Plan for annual grants
to all eligible employees of the Employer, annual equity awards in each of the
four years after 2005 with respect to no fewer than 50,000 shares (200,000
shares in the aggregate) (the “Annual Equity Awards”) under the Plan, and
further subject to substantially same terms and conditions (and, if more than
one type of award is granted, in the same proportions) as the annual equity
awards made generally to the other executive officers of the Employer, as
determined in good faith by the Compensation Committee, which awards shall be
made on the same date as when annual equity awards are made generally to the
other executive officers of the Employer; and

 

3

 

(iii)                               all of the foregoing
options and common stock shall be subject to equitable adjustment in light of
any stock split or stock dividend with respect to the Employer’s common stock
and to reduction in the case of substitution of full value awards under
the  Plan, such as Restricted Stock, in
place of stock option awards, in each case as determined in good faith by the
Compensation Committee.

 

4.                                      Duties.  The Employee will be engaged initially as President of the Employer.  In addition, the Employee shall have such
other duties and hold such offices as may from time to time be reasonably
assigned to him by the Chief Executive Officer or the Board of Directors of the
Employer.

 

5.                                      Extent
of Services.  During the Term, the
Employee shall devote his full time, energy and attention to the benefit and
business of the Employer and its affiliates and shall not be employed by
another entity, either directly or as a consultant to or in any other capacity,
except as approved in advance by the Employer’s Board of Directors; provided,
however, that no such approval shall be required to serve as a director,
officer or trustee of any trade association or of any civic or charitable
organization so long as such service does not significantly interfere with the
Employee’s performance of his duties at the Employer.

 

6.                                      Vacation.  The Employee may take a maximum of four weeks
of vacation each calendar year, at times to be determined in a manner most
convenient to the business of the Employer, as approved by the Chief Executive
Officer.  A maximum of one week of unused
vacation may be carried over from one calendar year to the next.

 

7.                                      Termination
Following Death or Incapacity.

 

a.                                       Death.  All rights of
the Employee under this Agreement shall terminate upon death (other than rights
accrued prior thereto).  All Plan Awards
shall vest in accordance with the Plan and shall be exercisable for a period of
time as set forth in the Plan.  The
Employer shall pay to the estate of the Employee any unpaid salary and other
benefits due as well as reimbursable expenses accrued and owing to the Employee
at the time of his death.  The Employer
agrees to maintain life insurance coverage on the Employee in an amount
equivalent to two year’s salary, which insurance will be payable to the
Employee’s estate or beneficiaries upon his death as the Employee may
designate.  The Employer shall have no
additional financial obligation under this Agreement to the Employee or his
estate beyond the term-life insurance benefit describe above.

 

b.                                       Disability.

 

i.                                          During
any period of disability, illness or incapacity during the Term which renders
the Employee at least temporarily unable to perform the services required under
this Agreement, the Employee shall receive his salary payable under Section 3
of this Agreement, less any benefits received by him under any insurance
carried by or provided by the Employer; provided however, all rights of the
Employee under this

 

4

 

Agreement (other than rights already accrued) shall
terminate as provided below upon the Employee’s permanent disability (as
defined below).

 

ii.                                       The
term “permanent disability” as used in this Agreement shall mean the inability
of the Employee, as determined by the Board of Directors of the Employer, by
reason of physical or mental disability to perform the duties required of him
under this Agreement after a period of:  (a) 120
consecutive days of such disability; or (b) disability for at least six months
during any twelve month period.  Upon
such determination, the Board of Directors may terminate the Employee’s
employment under this Agreement upon ten (10) days prior written
notice.  In the event of permanent
disability all Plan Awards shall vest in accordance with the terms of the Plan
and shall be exercisable for a period of time as set forth in the Plan.

 

iii.                                    If
any determination of the Board of Directors with respect to permanent
disability is disputed by the Employee, the parties hereto agree to abide by
the decision of a panel of three physicians. 
The Employee and Employer shall each appoint one member, and the third
member of the panel shall be appointed by the other two physicians.  If the physicians appointed by the parties
have not agreed upon the third physician within fifteen (15) days, either party
may  petition the New Hampshire Medical
Society to appoint a third physician. 
The Employee agrees to make himself available for and to submit to
reasonable examinations by such physicians as may be directed by the
Employer.  Failure to submit to any such
exam shall constitute a material breach of this Agreement.  In the event such a panel is convened, the
party whose position is not sustained will bear all the associated costs.

 

8.                                      Other
Terminations.

 

a.                                       Without Cause.

 

i.                                          Either
the Employee or the Employer may terminate the Employee’s employment hereunder
at any time upon written notice.

 

ii.                                       If
the Employee gives notice pursuant to paragraph (i) above, the Employer
shall have the right to either (a) relieve the Employee, in whole or in
part, of his duties under this Agreement or (b) to accelerate the date of
termination of employment to coincide with the date on which the written notice
is received.

 

iii.                                    Notwithstanding
any provisions hereof to the contrary, the Employer may terminate Employee’s
employment hereunder without cause at any time. 
If the Employer terminates the Employee’s Employment pursuant to the
provisions of this section 8(a), it shall pay to the Employee as a
severance benefit, in cash, an amount equal to the Employee’s annual Base
Salary

 

5

 

plus bonus (the higher of the bonus target for the current year or the bonus paid in the prior year).  Additionally, the vesting of Plan Awards
shall be accelerated on a pro rata basis determined by the number of completed
months of service during the then current annual vesting period, and all other
vesting of Plan Awards shall cease.

 

b.                                       For Cause.

 

i.                                          The
Employer may terminate the Employee’s employment hereunder without notice (a) upon
the Employee’s breach of any material provision of this Agreement, or (b) for
other “good cause” (as defined below).

 

ii.                                       The
term “good cause” as used in this Agreement shall include, but shall not be limited
to:  (a) conduct which breaches the
Employee’s fiduciary duties to the Employer; (b) a significant performance
shortcoming, which has been brought to the Employee’s attention in writing by
his supervisor, where the supervisor has provided the Employee with written
performance improvement objectives and a timeline of at least three months to
achieve these objectives and the Employee fails to remedy the shortcoming
within such period (or such extended period as the supervisor may determine
based on the employee’s progress towards achievement of the improvement plan); (c) conviction
of any crime involving moral turpitude; and (d) substantial dependence, as
determined by the Board of Directors of the Employer, on any addictive
substance, including but not limited to alcohol, amphetamines, barbiturates,
methadone, cannabis, cocaine, PCP, THC, LSD, or any other narcotic drug;
provided, however, that after a Change in Control (as defined below) “good
cause” termination shall not include termination for the cause set forth
in the preceding clause (b).  Should the
Employee dispute such a determination, the parties hereto agree to abide by the
decision of a panel of three physicians as described in Section 7(b)(iii).

 

iii.                                    If
the Employee’s employment is terminated pursuant to Section 8(b), the
Employer shall pay to the Employee any unpaid salary and other benefits and
reimbursable expenses accrued and owing to the Employee.  Such payment shall be in full and complete
discharge of any and all liabilities or obligations of the Employer to the
employee hereunder.  The Employee shall
be entitled to no further benefits under this Agreement other than extension of
health benefits as required by law, at the Employee’s expense. All Plan Awards
shall cease vesting in accordance with the terms thereof and the Plan.

 

6

 

9.                                      Termination
of Employment Upon Change in Control.

 

a.                                       For
purposes hereof, a “Change in Control” shall be deemed to have occurred if:

 

i.                                          there
has occurred a “change in control” as such term is used in Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as in
effect as of the date hereof (hereinafter referred to as the “1934 Act”);

 

ii.                                       if
there has occurred a change in “control” as the term “control” is defined in Rule 12b-2
promulgated under the 1934 Act;

 

iii.                                    when
any person (as such term is defined in Section 3(a)(9) and 13(d)(3) of
the 1934 Act, a “Person”), during the Term, becomes a beneficial owner, directly
or indirectly, of securities of the Employer representing 20% or more of the
Employer’s then outstanding securities having the right to vote on the election
of directors if such person did not have 20% or more of the Employer’s then
outstanding securities at the commencement of the Term; or if a Person having
more than 20% of the Employer’s then outstanding securities increases his or
its holdings by more than 15% of the Employer’s then outstanding securities
during the Term;

 

iv.                                   if
the stockholders of the Employer approve a plan of complete liquidation or
dissolution of the Employer, or a merger or consolidation (a) in which the
voting securities of the Employer outstanding immediately prior thereto do not
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50.1% of the combined voting
securities of the Employer or such surviving entity outstanding immediately
after such merger or consolidation or (b) in which no Person acquires 30%
or more of the combined voting power of the Employer’s then outstanding
securities; or

 

v.                                      if
during any period of twenty-four (24) consecutive months (not including any
period prior to the date of this Agreement), individuals who at the beginning
of such period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Employer to
effect a transaction described in paragraphs i, ii or iii of this section 9(a))
whose election by the Board or nomination for election by the stockholders of
the Employer was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved by the stockholders, cease for any reason to constitute a majority
thereof; provided, however, in no event shall any mere action (other than sales
or purchases of the Employer’s outstanding securities) by Michael McGovern and
the Employer be deemed to be a Change in Control.

 

7

 

b.                                       The
Employee may terminate his employment at any time within 12 months after a
Change in Control and any of the following events has occurred:

 

i.                                          an
assignment to the Employee of any duties inconsistent with the status of the
Employee’s office and/or position with the Employer as constituted immediately
prior to the Change in Control or a significant adverse change in the nature or
scope of the Employee’s authority, power, compensation, functions or duties as
constituted immediately prior to the Change in Control,

 

ii.                                       a
failure by the Employer, after having received written notice from the Employee
specifying a material breach of its obligations pursuant to this Agreement, to
cure such breach within 30 days after receipt of such notice; or

 

iii.                                    the
Employer requires Employee to move Employee’s primary place of employment to a
location more than 30 miles from Employer’s primary place of business before
the Change in Control (other than temporary relocation or business travel in
the ordinary course).

 

An election by the Employee to terminate his
employment following a Change in Control shall not be deemed a voluntary
termination of employment by the Employee for the purpose of interpreting the
provisions of this Agreement or any of the Employer’s employee benefit plans
and arrangements.  The Employee’s
continued employment with the Employer for any period of time during the Term
of this Agreement after a Change in Control shall not be considered a waiver of
any right he may have to terminate his employment to the extent permitted under
this Section 9(b).

 

If the Employer terminates the Employee without cause pursuant to Section 8(a) hereof
within 12 months after a Change in Control has occurred, such termination shall
be deemed an election by the Employee to terminate his employment pursuant to
this Section 9(b) and Employee shall have the right to the
compensation set forth in Section 9(c) instead of the compensation
set forth in Section 8(a).  In
addition, in the event of such termination, the Employee shall continue to have
the obligations provided for in Sections 11 and 12 hereof.

 

c.                                       If
the Employee’s employment with the Employer is terminated under Section 9(b) hereof,

 

i.                                          the
Employee shall be paid in a lump sum, within 30 days after termination of
employment, in cash, severance pay in an amount equal to two times (2x) the
average of his aggregate cash compensation paid during the two prior calendar
years (consisting of annual Base Salary and bonuses, if any).

 

ii.                                       If
any of the Annual Equity Awards contemplated by Section 3(g) have not
yet been granted because the Change in Control occurred before the

 

8

 

grant of the Annual Equity Award would have otherwise
occurred, the Employee shall also be paid in connection with payment of the
lump sum an amount equal to:

 

(1)                                  the
dollar amount, if any, that remains after subtracting the exercise price of the
most recent Annual Equity Award made to the Employee (or if none has occurred,
the Initial Option) from the fair market value of the Employer’s common stock
as of the date of the Change in Control (or, if the Change in Control occurs in
connection with an acquisition or other transaction in which all outstanding
Awards granted to Employer’s employees under the Plan are terminated if not
exercised pursuant to their terms, the consideration per share of the Employer’s
common stock delivered for each share of common stock underlying such
outstanding Awards, multiplied by

 

(2)                                  the
remainder of (A) 200,000 (or, if the Follow-On Option Award has not been
granted before the Change in Control, 350,000), less (C) the number of
shares of Employer’s common stock that are subject to Annual Equity Awards
granted to the Employee before the Change in Control (which amount shall be
subject to equitable adjustment for any equitable adjustments in the number of
shares subject to Annual Equity Awards previously made in accordance with Section 3(g));

 

iii.                                    all
stock options and other equity Awards under the Plan held by the Employee
immediately prior to the effective date of the Change in Control shall
immediately vest and become fully exercisable for the period of time indicated
in the option contract;

 

iv.                                   health
benefits as provided in Section 3(c) shall continue for up to two
years from the date of termination, including reimbursement of COBRA payments
to the extent no longer covered under the Employer’s plans; provided, however,
that benefits will be subject to mitigation to the extent of comparable
benefits at a new job; and

 

v.                                      life
insurance benefits may be continued for up to two years from the date of
termination at the option of the Employee and at the Employee’s expense.

 

The lump sum severance payment described in clause (i), and any
additional amount described in clause (ii) of this Section 9(c) are
hereinafter referred to collectively as the “Termination Compensation.”  The amount of the Termination Compensation
shall be determined, at the expense of the Employer, by its regular outside
certified public accountants.  If a
Change in Control has occurred before the Follow-On Option Award and all of the
Annual Equity Awards provided in Section 3(g) have been granted to
the Employee, the Employer’s obligation to make any such award or awards shall
be satisfied in full by payment of the amount to be paid in lieu thereof
pursuant to Section 9(c)(ii).  Upon
payment of

 

9

 

the Termination Compensation and any other accrued compensation, this
Agreement shall terminate (except for the Employee’s obligations pursuant to
Sections 10, 11, 12, 13 and 14 hereof and the continuing obligations to provide
the benefits set forth in clauses (ii) – (v) of this Section 9(c) in
accordance with the terms thereof) and be of no further force or effect.

 

d.                                       After
a Change in Control has occurred, the Employer shall honor the Employee’s
exercise of the Employee’s outstanding stock options and any other equity related
rights, in accordance with this Employment Agreement.  After a Change in Control has occurred and
the Employee’s employment is terminated as a result thereof, the Employee (or
his designated beneficiary or personal representative(s) shall also receive, except
to the extent already paid pursuant to Section 9(c)(i) hereof or
otherwise, the sums the Employee would otherwise have received (whether under
this Agreement, by law or otherwise) by reason of termination of employment as
if a Change in Control had not occurred.

 

e.                                       The
Employee shall not be required to mitigate the payment of the Termination
Compensation or other benefits or payments by seeking other employment.  To the extent that the Employee shall, after
the Term of this Agreement, receive compensation from any other employment, the
payment of Termination Compensation or other benefits or payments shall not be
adjusted (except as set forth in Section 9(c)(iii)).

 

10.                               Disclosure,
Proprietary Rights.  The Employee
agrees that during the Term of his employment by the Employer, he will disclose
only to the Employer all ideas, methods, plans, formulas, processes, trade
secrets, developments, or improvements known by him which relate directly or
indirectly to the business of the Employer, including any lines of business,
acquired by the Employee during his employment by the Employer; provided, that
nothing in this Section 10 shall be construed as requiring any such
communication where the idea, plan, method or development is lawfully protected
from disclosure, including but not limited to trade secrets of third
parties.  For purposes of the Agreement,
the term “the business of the Employer” shall include, without limitation, the
following:  the design, development,
obtaining regulatory approval, production, manufacturing, marketing, and
licensing of prescription and non-prescription drugs, medical devices, and
methods for the diagnosis, evaluation, treatment or correction of any disease,
injury, illness or other medical or health condition and such other lines of
business as the Employer shall engage in during the Term hereof.  The parties further agree that any
inventions, formulas, trade secrets, ideas, or secret processes which shall
arise from any disclosure made by the Employee pursuant to this paragraph,
whether or not patentable, shall be and remain the sole property of the
Employer.

 

11.                               Confidentiality.  The Employee agrees to keep in strict secrecy
and confidence any and all information the Employee assimilates or to which he
has access during his employment by the Employer and which has not been
publicly disclosed and is not a matter of common knowledge in the fields of
work of the Employer.  The Employee
agrees that both during and after the Term of his employment by the Employer,
he will not, without prior written consent of the Employer, disclose any such
confidential information to any third person, partnership, joint venture,
company, corporation, or other organization.

 

10

 

12.                               Non-Competition.  If the Employee is terminated for good cause
the Employee covenants that he will not engage, directly or indirectly, alone
or in conjunction with others, as an agent, employee, investor, director,
shareholder or partner in any business which provides products, information
and/or services to the public which are competitive with those provided by the
Employer Group; provided, however, that the ownership by the Employee of 5% or less of the issued and outstanding shares of any class
of securities which is traded on a national securities exchange or, in the over
the counter market shall not constitute a breach of the provisions of this
section.  The Employee will not on his
own behalf or on behalf of any other business enterprise, directly or
indirectly, solicit or induce any creditor, customer, client, supplier,
officer, employee or agent of the Employer Group to sever his/her or its
relationship with or leave the employ of the Employer Group.  The covenants in this Section 12 shall
continue in full force and effect throughout the Term hereof and for a one year
period subsequent to the termination hereof.

 

13.                               Conflict
of Interest.  The employee shall
devote his full time, energy and attention to the benefit and business of the
employer and its affiliates and shall not be employed by another entity, except
as permitted in Section 5.  It is
understood by and between the parties hereto that the foregoing restrictive
covenants set forth in Sections 10, 11, 12, 13 and 14 are essential elements of
this Agreement, and that but for the agreement of the Employee to comply with
such covenants, the Employer would not have entered into this Agreement.  Notwithstanding anything to the contrary in
this Agreement, the terms and provisions of Sections 11, 12, 13 and 14 of this
Agreement, together with any definitions used in such terms and provisions,
shall survive the termination or expiration of this Agreement.  The existence of any claim or cause of action
of the Employee against the Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Employer of
such covenants.

 

14.                               Specific
Performance.  The Employee agrees
that damages at law will be insufficient remedy to the Employer if the employee
violates the terms of Sections 10, 11, 12 or 13 of this Agreement and that the
Employer shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief to enforce the provisions of such
Sections, which injunctive or other equitable relief shall be in addition to
any other rights or remedies available to the Employer, and the Employee agrees
that he will not raise and hereby waives any objection or defense that there is
an adequate remedy at law.

 

15.                               Compliance
with Other Agreements.  The Employee
represents and warrants that the execution of this Agreement by him and his
performance of his obligation hereunder will not conflict with, result in the
breach of any provision of, terminate, or constitute a default under any
agreement to which the Employee is or may be bound.

 

16.                               Waiver
of Breach.  The waiver by the
Employer of a breach of any of the provisions of this Agreement by the Employee
shall not be construed as a waiver of any subsequent breach by the
Employee.  The waiver by the Employee of a
breach of any of the provisions of this Agreement by the Employer shall not be
construed as a waiver of any subsequent breach by the Employer.

 

17.                               D&O
Insurance; Indemnification.  The
Employer hereby agrees to maintain in full force and effect for the duration of
this Agreement, Director’s and Officer’s Liability Insurance

 

11

 

of at least
$5,000,000 and to indemnify and hold harmless to the full extent permitted by
law, the Employee for acts performed by him in carrying out his duties and
responsibilities in accordance with this Agreement.

 

18.                               Binding
Effect, Assignment.  The rights and
obligations of the Employer under this Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of the Employer.  This Agreement is a personal employment
contract and the rights, obligations and interests of the Employee hereunder
may not be sold or assigned or hypothecated. 
Whenever in this Agreement reference is made to any party, such reference
shall be deemed to include the successors, assigns, heirs, and legal
representatives of such party, and without limiting the generality of the
foregoing, all representations, warranties, covenants and other agreements made
by or on behalf of the Employee in this Agreement shall inure to the benefit of
the successors and assigns of the Employer; provided, however, that
nothing herein shall be deemed to authorize or permit the Employee to assign
any of his rights or obligations under this Agreement to any other person
(whether or not a family member or other affiliate of the Employee, other than
as specifically provided in this Agreement), and the Employee covenants and
agrees that he shall not make any such assignments.

 

19.                               Modification,
Amendment, Etc.  Each and every
modification and amendment of this Agreement shall be in writing and signed by
all of the parties hereto, and each and every waiver of, or consent to any
departure from, any representation, warranty, covenant or other term or
provision of this Agreement shall be in writing and signed by each affected
party hereto.

 

20.                               Notice.  Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing and if sent by certified
or registered mail, first class, return receipt requested, to the Employer, at
its executive offices as set forth in its filings with the Securities and
Exchange Commission and, to the Employee, at his address as set forth on the
current employment records of the Employer.

 

21.                               Severability.  It is agreed by the Employer and Employee
that if any portion of the provisions set forth in this Agreement are held to
be unreasonable, arbitrary or against public policy, then that portion of such
covenants shall be considered divisible both as to time and geographical
area.  The Employer and Employee agree
that if any court of competent jurisdiction determines the specific time period
or the specified geographical area applicable to this Agreement to be unreasonable,
arbitrary or against public policy, then a lesser time period or geographical
area which is determined to be reasonable, non-arbitrary and not against public
policy may be enforced against the Employee. 
The Employer and Employee agree that the foregoing covenants are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.

 

22.                               Entire
Agreement.  This Agreement contains
the entire agreement between the Employer and the Employee and supersedes all
prior agreements and understandings, oral or written, with respect to the
subject matter hereof.

 

23.                               Headings.  The headings contained in this agreement are
for reference purposes only and shall not affect the meaning or interpretation
of the Agreement.

 

12

 

24.                               Governing
Law; Forum.  This Agreement shall be
construed and enforced in accordance with the laws of the State of New
Hampshire.  Any action brought pursuant
to this Agreement or in relation to its breach may be heard by any court of
competent jurisdiction having jurisdiction thereof.

 

25.                               Counterparts.  This Agreement may be executed in two
counterpart copies of the entire document or of signature pages to the
document, each of which may be executed by one or more of the parties hereto,
but all of which when taken together, shall constitute a single agreement
binding upon all of the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement effective as of the day and year first written above.

 

	
  Employer:

  	
  Employee:

  
	
  BENTLEY PHARMACEUTICALS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ James R.
  Murphy

  	
   

  	
  By: 

  	
  /s/ John A.
  Sedor

  	
   

  
	
   

  	
  James R. Murphy

  Chairman and CEO

  	
   

  	
   John A. Sedor

  
						

 

13

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