Document:

Exhibit 10.15

 Exhibit 10.15 
  
 CACI INTERNATIONAL INC 
 CACI, INC. - FEDERAL 
 CACI
PREMIER TECHNOLOGY, INC. 
 PREMIER TECHNOLOGY
GROUP, INC. 
  
 ASSET
PURCHASE AGREEMENT 
  
 TABLE OF CONTENTS 
  

	 Article 1 Definitions
	  	1
	 	  	1.1	  	 Certain Matters of Construction
	  	1
	 	  	1.2	  	 Cross References
	  	2
	 	  	1.3	  	 Certain Definitions
	  	3
		
	 Article 2 The Purchase And Sale of Assets
	  	6
	 	  	2.1	  	 Purchase and Sale of Assets
	  	6
	 	  	2.2	  	 Excluded Assets
	  	8
	 	  	2.3	  	 Assumption of Specified Obligations
	  	8
	 	  	2.4	  	 Purchase Price.
	  	9
	 	  	 	  	 2.4.1
	  	 The Aggregate Purchase Price
	  	9
	 	  	 	  	 2.4.2
	  	 The Purchase Price Paid at the Closing
	  	9
	 	  	 	  	 2.4.3
	  	 The Escrowed Portion of the Purchase Price
	  	9
	 	  	 	  	 2.4.4
	  	 The Earn-Out
	  	10
	 	  	2.5	  	 Closing
	  	11
	 	  	2.6	  	 Instruments of Transfer
	  	11
	 	  	2.7	  	 Additional Actions
	  	11
	 	  	2.8	  	 Adjustment to Purchase Price.
	  	11
	 	  	 	  	 2.8.1
	  	 Preparation of Estimated Closing Balance Sheet
	  	11
	 	  	 	  	 2.8.2
	  	 Preparation of Closing Balance Sheet
	  	12
	 	  	 	  	 2.8.3
	  	 Review of Closing Balance Sheet
	  	12
	 	  	 	  	 2.8.4
	  	 Disputes
	  	12
	 	  	 	  	 2.8.5
	  	 Final Closing Balance Sheet
	  	13
	 	  	 	  	 2.8.6
	  	 Adjustments to the Purchase Price
	  	13
		
	 Article 3 Representations And Warranties Of Premier and Bajwa
	  	13
	 	  	3.1	  	 Corporate Status of Premier
	  	13
	 	  	3.2	  	 Capital Stock.
	  	14
	 	  	 	  	 3.2.1
	  	 Authorized Stock of Premier
	  	14
	 	  	 	  	 3.2.2
	  	 Options and Convertible Securities of Premier
	  	14
	 	  	3.3	  	 Subsidiaries
	  	14
	 	  	3.4	  	 Authority for Agreement; Noncontravention.
	  	14
	 	  	 	  	 3.4.1
	  	 Authority
	  	14
	 	  	 	  	 3.4.2
	  	 No Conflict
	  	15
	 	  	3.5	  	 Financial Statements
	  	15
	 	  	3.6	  	 Absence of Material Adverse Changes
	  	15
	 	  	3.7	  	 Absence of Undisclosed Liabilities
	  	15
	 	  	3.8	  	 Compliance with Applicable Law, Charter and By-Laws
	  	16

	 	  	 3.9
	  	 Litigation and Audits
	  	16
	 	  	 3.10
	  	 Tax Matters.
	  	16
	 	  	 	  	 3.10.1
	  	 Filing of Returns
	  	16
	 	  	 	  	 3.10.2
	  	 Payment of Taxes
	  	17
	 	  	 	  	 3.10.3
	  	 Premier Business Affiliates
	  	17
	 	  	 3.11
	  	 Employee Benefit Plans.
	  	17
	 	  	 	  	 3.11.1
	  	 List of Plans
	  	17
	 	  	 	  	 3.11.2
	  	 ERISA
	  	17
	 	  	 3.12
	  	 Employment-Related Matters.
	  	18
	 	  	 	  	 3.12.1
	  	 Labor Relations
	  	18
	 	  	 	  	 3.12.2
	  	 Employee List
	  	18
	 	  	 3.13
	  	 Environmental Matters.
	  	18
	 	  	 	  	 3.13.1
	  	 Environmental Laws
	  	18
	 	  	 	  	 3.13.2
	  	 Environmental Claims
	  	19
	 	  	 	  	 3.13.3
	  	 No Basis for Claims
	  	19
	 	  	 	  	 3.13.4
	  	 Disclosure of Information
	  	19
	 	  	 	  	 3.13.5
	  	 Liens
	  	19
	 	  	 3.14
	  	 No Broker’s or Finder’s Fees
	  	19
	 	  	 3.15
	  	 Assets Other Than Real Property.
	  	19
	 	  	 	  	 3.15.1
	  	 Title
	  	19
	 	  	 	  	 3.15.2
	  	 Accounts Receivable
	  	20
	 	  	 	  	 3.15.3
	  	 Condition
	  	20
	 	  	 3.16
	  	 Real Property.
	  	20
	 	  	 	  	 3.16.1
	  	 Premier Real Property
	  	20
	 	  	 	  	 3.16.2
	  	 Premier Leases
	  	20
	 	  	 	  	 3.16.3
	  	 Condition
	  	20
	 	  	 3.17
	  	 Agreements, Contracts and Commitments.
	  	21
	 	  	 	  	 3.17.1
	  	 Premier Agreements
	  	21
	 	  	 	  	 3.17.2
	  	 Validity
	  	22
	 	  	 	  	 3.17.3
	  	 Third-Party Consents
	  	23
	 	  	 3.18
	  	 Intellectual Property.
	  	23
	 	  	 	  	 3.18.1
	  	 Right to Intellectual Property
	  	23
	 	  	 	  	 3.18.2
	  	 No Conflict
	  	23
	 	  	 	  	 3.18.3
	  	 Employee Agreements
	  	24
	 	  	 3.19
	  	 Insurance Contracts
	  	24
	 	  	 3.20
	  	 Banking Relationships
	  	25
	 	  	 3.21
	  	 Intentionally Left Blank
	  	25
	 	  	 3.22
	  	 Absence of Certain Relationships
	  	25
	 	  	 3.23
	  	 Foreign Corrupt Practices
	  	25
		
	 Article 4 Representations And Warranties Of Parent, Federal and Acquisition Sub
	  	25
	 	  	 4.1
	  	 Corporate Status of Parent, Federal and Acquisition Sub
	  	25
	 	  	 4.2
	  	 Authority for Agreement; Noncontravention.
	  	25
	 	  	 	  	 4.2.1
	  	 Authority
	  	25
	 	  	 	  	 4.2.2
	  	 No Conflict
	  	26
	 	  	 4.3
	  	 SEC Statements, Reports and Documents
	  	26
	 	  	 4.4
	  	 Absence of Material Adverse Changes
	  	27

  

 ii 

	 	  	4.5	  	 Litigation and Audits
	  	27
	 	  	4.6	  	 No Broker’s or Finder’s Fees
	  	27
	 	  	4.7	  	 Acquisition and Opportunity to Investigate
	  	27
	 	  	4.8	  	 No Outside Reliance
	  	27
	 	  	4.9	  	 Financing
	  	28
		
	 Article 5 Conduct Prior To The Closing Date
	  	28
	 	  	5.1	  	 Conduct of Business of Premier
	  	28
	 	  	5.2	  	 Conduct of Business of Parent
	  	30
		
	 Article 6 Additional Agreements
	  	31
	 	  	6.1	  	 Exclusivity
	  	31
	 	  	6.2	  	 Expenses.
	  	31
	 	  	 	  	 6.2.1
	  	 General
	  	31
	 	  	 	  	 6.2.2
	  	 Broker Fees
	  	31
	 	  	 	  	 6.2.3
	  	 Attorney Fees
	  	32
	 	  	 	  	 6.2.4
	  	 Accountant Fees
	  	32
	 	  	6.3	  	 Indemnification.
	  	32
	 	  	 	  	 6.3.1
	  	 Claims for Indemnification
	  	32
	 	  	 	  	 6.3.2
	  	 Defense by Indemnifying Party
	  	33
	 	  	 	  	 6.3.3
	  	 Limitation on Liability for Indemnity.
	  	33
	 	  	 	  	 6.3.4
	  	 Claims Period
	  	34
	 	  	 	  	 6.3.5
	  	 Subrogation
	  	34
	 	  	 	  	 6.3.6
	  	 Exclusive Remedies
	  	34
	 	  	 	  	 6.3.7
	  	 No Double Recovery
	  	34
	 	  	 	  	 6.3.8
	  	 Treatment of Indemnity Payments Between the Parties
	  	34
	 	  	 	  	 6.3.9
	  	 Duty to Mitigate
	  	34
	 	  	6.4	  	 Access and Information
	  	34
	 	  	6.5	  	 Public Disclosure
	  	35
	 	  	6.6	  	 Further Assurances.
	  	35
	 	  	 	  	 6.6.1
	  	 Generally
	  	35
	 	  	 	  	 6.6.2
	  	 Novation of Contracts
	  	35
	 	  	6.7	  	 Tax Matters.
	  	36
	 	  	 	  	 6.7.1
	  	 Allocation of Purchase Price
	  	36
	 	  	 	  	 6.7.2
	  	 Cooperation on Tax Matters.
	  	36
	 	  	 	  	 6.7.3
	  	 Certain Taxes
	  	36
	 	  	6.8	  	 Notification
	  	37
	 	  	6.9	  	 Accounts Receivable
	  	37
	 	  	6.10	  	 Change of Name
	  	38
	 	  	6.11	  	 Preservation of Goodwill
	  	38
	 	  	6.12	  	 Employees
	  	38
	 	  	6.13	  	 Earn Out Payments
	  	39
		
	 Article 7 Conditions Precedent
	  	39
	 	  	7.1	  	 Conditions Precedent to the Obligations of Each Party
	  	39
	 	  	 	  	 7.1.1
	  	 No Illegality
	  	40

  

 iii 

	 	  	 	  	 7.1.2
	  	 No Injunction
	  	40
	 	  	 	  	 7.1.3
	  	 Escrow Agreement
	  	40
	 	  	 	  	 7.1.4
	  	 Subcontract Agreement
	  	40
	 	  	7.2	  	Conditions Precedent to Obligation of Parent, Federal and Acquisition Sub to Consummate the Transaction	  	40
	 	  	 	  	 7.2.1
	  	 Representations and Warranties
	  	40
	 	  	 	  	 7.2.2
	  	 Agreements and Covenants
	  	40
	 	  	 	  	 7.2.3
	  	 Legal Opinion
	  	40
	 	  	 	  	 7.2.4
	  	 Closing Documents
	  	41
	 	  	 	  	 7.2.5
	  	 Third Party Consents
	  	41
	 	  	 	  	 7.2.6
	  	 Diligence Review
	  	41
	 	  	 	  	 7.2.7
	  	 Non-Compete, Non-Solicitation and Non-Disturbance Agreements
	  	41
	 	  	 	  	 7.2.8
	  	 Employment Agreements
	  	41
	 	  	 	  	 7.2.9
	  	 Review of Contracts in Place
	  	41
	 	  	 	  	 7.2.10
	  	 Material Adverse Effect
	  	42
	 	  	7.3	  	 Conditions to Obligations of Premier and Bajwa to Consummate the Transaction
	  	42
	 	  	 	  	 7.3.1
	  	 Representations and Warranties
	  	42
	 	  	 	  	 7.3.2
	  	 Agreements and Covenants
	  	42
	 	  	 	  	 7.3.3
	  	 Legal Opinion
	  	42
	 	  	 	  	 7.3.4
	  	 Closing Documents
	  	42
	 	  	 	  	 7.3.5
	  	 Material Adverse Effect
	  	42
	 	  	 	  	 7.3.6
	  	 Payment of Purchase Price
	  	43
	 	  	 	  	 7.3.7
	  	 Payment of Premier Credit Facilities
	  	43
		
	 Article 8 Survival of Representations
	  	43
	 	  	8.1	  	 Premier’s Representations
	  	43
	 	  	8.2	  	 Parent’s Representations
	  	43
		
	 Article 9 Other Provisions
	  	43
	 	  	9.1	  	 Termination Events
	  	43
	 	  	9.2	  	 Notices
	  	45
	 	  	9.3	  	 Entire Agreement
	  	46
	 	  	9.4	  	 Assignability
	  	46
	 	  	9.5	  	 Validity
	  	46
	 	  	9.6	  	 Specific Performance
	  	46
	 	  	9.7	  	 Governing Law
	  	47
	 	  	9.8	  	 Counterparts
	  	47

  

 iv 

 ASSET PURCHASE AGREEMENT 
  
 ASSET PURCHASE AGREEMENT, dated as of April 23, 2003 (the
“Agreement”), by and among CACI International Inc, a Delaware corporation (“Parent”), CACI, INC. - FEDERAL, a Delaware corporation and wholly-owned subsidiary of Parent (“Federal”),
CACI Premier Technology, Inc. (“Acquisition Sub”), a Delaware corporation and wholly-owned subsidiary of Federal, Premier Technology Group, Inc., a Virginia corporation (“Premier”) and Rajiv Bajwa, a
stockholder of Premier (“Bajwa”). 
  
 W I T N E S S E T H 
  
 WHEREAS, Premier has heretofore conducted a federal government information technology consulting business (the “Business”); 
  
 WHEREAS, Acquisition Sub wishes to purchase certain assets and assume certain liabilities related to the Business, and Premier wishes to sell such assets
and assign such liabilities to Acquisition Sub; and 
  
 WHEREAS,
to induce Acquisition Sub to enter into this Agreement and to consummate the transactions contemplated hereby, Premier and Bajwa are agreeing to make certain representations and warranties, perform certain covenants and provide certain indemnities
in connection herewith; 
  
 NOW, THEREFORE, in consideration of
the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 
  
 Article 1 
 DEFINITIONS 
  
 1.1 Certain
Matters of Construction. A reference to an article, section, exhibit or schedule shall mean an Article of, a Section in, or Exhibit or Schedule to, this Agreement unless otherwise expressly stated. The titles and headings herein are for
reference purposes only and shall not in any manner limit the construction of this Agreement which shall be considered as a whole. The words “include,” “includes” and “including” when used herein shall be deemed in each
case to be followed by the words “without limitation.” All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Any agreement, instrument, law or regulation
defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or law or regulation as from time to time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of laws and regulations) by succession of comparable successor laws or regulations and references to all attachments thereto and instruments incorporated therein. References to a Person are also to
its permitted successors and assigns. 

 1.2 Cross References. The following terms defined elsewhere in this Agreement in the Sections set
forth below shall have the respective meanings therein defined: 
  

	 Term

	  	Definition

	 Acquisition Proposals
	  	Section 6.1
	 Acquisition Sub
	  	Preamble
	 Agreement
	  	Preamble
	 Auditor
	  	Section 2.8.4
	 Bajwa
	  	Preamble
	 Broker
	  	Section 2.4.2
	 Business
	  	Recitals
	 Closing
	  	Section 2.5
	 Closing Balance Sheet
	  	Section 2.8.1
	 Closing Date
	  	Section 2.5
	 Direct Payment
	  	Section 2.4.2
	 Escrow
	  	Section 2.4.3
	 Escrow Agent
	  	Section 2.4.3
	 Escrow Agreement
	  	Section 2.4.3
	 Escrow Payment
	  	Section 2.4.3
	 Employee List
	  	Section 3.12.2
	 Encumbrances
	  	Section 3.15.1
	 Estimated Closing Balance Sheet
	  	Section 2.8.1
	 Excluded Assets
	  	Section 2.2
	 Expenses
	  	Section 6.2.1
	 Federal
	  	Preamble
	 Final Closing Balance Sheet
	  	Section 2.8.5
	 First Payment
	  	Section 2.4.2
	 GAAP
	  	Section 2.8.1
	 Governmental Entity
	  	Section 3.4.2
	 Indemnification Claim
	  	Section 6.3.1
	 Indemnified Party
	  	Section 6.3.1
	 Indemnifying Party
	  	Section 6.3.1
	 Indemnity Deductible
	  	Section 6.3.3
	 Initial Balance Sheet
	  	Section 2.8.1
	 Notice of Claim
	  	Section 6.3.1
	 Objection
	  	Section 2.8.3
	 Parent
	  	Preamble
	 Parent Balance Sheet
	  	Section 4.3
	 Parent Demand Notice
	  	Section 6.1
	 Parent Indemnified Parties
	  	Section 6.3
	 Parent Indemnifying Group
	  	Section 6.3
	 Parent Indemnity Deductible
	  	Section 6.3(b)
	 Parent Reports
	  	Section 4.3
	 Permits
	  	Section 3.8
	 Premier
	  	Preamble
	 Premier Assets
	  	Section 2.1
	 Premier Balance Sheet
	  	Section 3.5

  

 2 

	 Premier Contracts
	  	Section 2.1.3
	 Premier Common Stock
	  	Section 3.2.1
	 Premier Demand Notice
	  	Section 6.1
	 Premier Engagements
	  	Section 2.1.2
	 Premier Financial Statements
	  	Section 3.5
	 Premier Indemnified Parties
	  	Section 6.3
	 Premier Indemnifying Group
	  	Section 6.3
	 Premier Indemnity Deductible
	  	Section 6.3(c)
	 Premier Insurance Contracts
	  	Section 3.19
	 Premier Inventory
	  	Section 2.1.11
	 Premier Licensed Rights
	  	Section 3.18.1
	 Premier Obligations
	  	Section 2.3
	 Premier Proprietary Rights
	  	Section 3.18.1
	 Premier Plans
	  	Section 3.11.1
	 Premier Receivables
	  	Section 2.1.8
	 Premier Work-In-Process
	  	Section 2.1.8
	 Premier’s Accountant
	  	Section 2.4.2
	 Premier’s Counsel
	  	Section 2.4.2
	 Purchase Price
	  	Section 2.4
	 Selling Group
	  	Section 6.7
	 Shares
	  	Recitals
	 Third Party Claim
	  	Section 6.3.2
	 Transaction
	  	Recitals
	 Welfare Plan
	  	Section 3.11.1

  
 1.3 Certain
Definitions. As used herein, the following terms shall have the following meanings: 
  
 Affiliate: with respect to any Person, any Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person. 
  
 Affiliated Group: any affiliated group within the meaning of Code
section 1504(a). 
  
 COBRA: the provisions of
Section 4980B of the Code and Part 6 of Title I of ERISA. 
  
 Code: the United States Internal Revenue Code of 1986, as amended from time to time. 
  
 Commercial Software: packaged commercial software programs generally available to the public through authorized dealers or directly from the
manufacturer which have been licensed to Premier and which are used in Premier’s business but are in no way a component of or incorporated in Premier Proprietary Rights. 
  
 Control: (including with correlative meaning, controlled by and under common control with): as used with respect to
any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. 
  

 3 

 Environmental Claim: any actual notice alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs, response or remediation costs, natural resources damages, property damages, personal injuries, fines or penalties) arising out of, based on or resulting from (a) the presence,
or release of any Material of Environmental Concern at any location, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. 
  
 Environmental Laws: any and all Federal, state, local or foreign statutes, regulations and ordinances relating to the
protection of public health, safety or the environment in effect on the Closing Date and that are binding on Premier. 
  
 ERISA: the Employee Retirement Income Security Act of 1974, as amended. 
  
 ERISA Affiliate: with respect to a party, any member (other than that party) of a controlled group of corporations,
group of trades or businesses under common control or affiliated service group that includes that party (as defined for purposes of Section 414(b), (c) and (m) of the Code). 
  
 Exchange Act: the Securities Exchange Act of 1934, as amended. 
  
 Knowledge of Premier: shall mean the actual, current knowledge of
Bajwa (with respect to all matters regarding Premier set forth in this Agreement), Bruce E. Jesson (with respect to the matters regarding Premier set forth in Articles 3, 5, 6 of this Agreement), Glenn Birch (with respect to the financial matters
regarding Premier set forth in Articles 2 – 6 of this Agreement), Chuck Mudd (with respect to the operational matters regarding Premier set forth in Articles 3, 5, 6 of this Agreement), Harry Thornsvard (with respect to the matters regarding
Premier set forth in Section(s) Articles 3, 5, 6 of this Agreement), John Davis (with respect to the operational matters regarding Premier set forth in Section(s) Articles 3, 5, 6 of this Agreement) and William “Norm” Benninghoff (with
respect to the operational matters regarding Premier set forth in Articles 3, 5, 6 of this Agreement).  
  
 Letter of Intent: the letter dated December 19, 2002 from J.P. London, Chairman of the Board, President and Chief Executive Officer of Parent, to
Bajwa, President and CEO of Premier, expressing the companies’ intention to effect the purchase and related transactions, subject to execution of this Agreement and other matters, as such letter has been amended from time to time. 

 
 Liability: any liability or obligation, known or unknown, asserted
or unasserted, accrued or unaccrued, absolute or contingent, liquidated or unliquidated, or otherwise, and whether due or to become due, including any liability for Taxes. 
  
 Losses: the amount of any actual damages, liabilities, obligations, deficiencies, losses (including without
limitation any actual diminution in value), expenditures, costs or expenses (including without limitation reasonable attorneys’ fees and disbursements). For purposes of determining the amount of any Loss, the amount of any Loss shall be reduced
by any insurance proceeds received in respect thereof (in each case net of costs of recovery). 
  

 4 

 Materials of Environmental Concern: petroleum and its by-products and any and all other substances
or constituents to the extent that they are regulated by, or form the basis of liability under, any Environmental Law. 
  
 Net Assets: The Premier Assets less the Premier Obligations as of the Closing Date, each as determined in accordance with GAAP. 
  
 Parent Material Adverse Effect: any change in or effect on the
financial condition, business, operations, assets, properties, results of operations of Parent and its Subsidiaries considered on a consolidated basis that might reasonably be expected to impair the ability of Parent to provide funds for payment of
the entire Purchase Price in accordance with the terms of this Agreement. 
  
 Permitted Encumbrances: (a) liens for current taxes, water and sewer charges and other statutory liens and trusts not yet due and payable or that are being contested in good faith, (b) liens incurred in the
ordinary course of business, such as carriers’, warehousemen’s, landlords’ and mechanics’ liens and other similar liens arising in the ordinary course of business, (c) liens on personal property leased under operating leases, (d)
liens, pledges or deposits incurred or made in connection with workmen’s compensation, unemployment insurance and other social security benefits, or securing the performance of bids, tenders, leases, contracts (other than for the repayment of
borrowed money), statutory obligations, progress payments, surety and appeal bonds and other obligations of like nature, in each case incurred in the ordinary course of business, (e) pledges of or liens on manufactured products as security for any
drafts or bills of exchange drawn in connection with the importation of such manufactured products in the ordinary course of business, (f) liens under Article 2 of the Uniform Commercial Code that are special property interests in goods identified
as goods to which a contract refers, (g) liens under Article 9 of the Uniform Commercial Code that are purchase money security interests, (h)those liens disclosed on Exhibit J hereto, and (i) such imperfections or minor defects of title, easements,
rights-of-way and other similar restrictions (if any) as are insubstantial in character, amount or extent, do not materially detract from the value or interfere with the present or proposed use of the properties or assets of the party subject
thereto or affected thereby, and do not otherwise adversely affect or impair the business or operations of such party. 
  
 Person: an individual, a corporation, an association, a partnership, an estate, a trust or any other entity or organization. 
  
 Premier Business Affiliates: Premier Technology International, Inc.
and/or Capital Technology, Inc. 
  
 Premier Credit
Facilities: the line of credit loan to Premier from Wachovia Bank, N.A.. 
  
 Premier Leases: each lease, sublease, license or other agreement under which Premier uses, occupies or has the right to occupy any real or personal property or interest therein. 
  
 Premier Material Adverse Effect: any materially adverse change in or
effect on Premier’s financial condition, business, operations, assets, properties, results of 

  

 5 

 
operations or prospects. Changes in general industry or economic conditions, consequences of acts of war or terrorism, or adverse effects arising from the
announcement or consummation of the transactions contemplated hereby shall not be deemed to have caused a Premier Material Adverse Effect. 
  
 SEC: the United States Securities and Exchange Commission, or any Governmental Entity succeeding to its functions. 
  
 Securities Act: the Securities Act of 1933, as amended.

  
 Security Interest: any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic’s, materialman’s, and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency) and not incurred in connection with the borrowing of money. 

 
 Subsidiary: any corporation, association, or other business entity
a majority (by number of votes on the election of directors or persons holding positions with similar responsibilities) of the shares of capital stock (or other voting interests) of which is owned by Parent, Premier or their respective Subsidiaries,
as the case may be. 
  
 Subcontract Agreement: that
certain Subcontract Agreement in substantially the form attached hereto as Exhibit I. 
  
 Tax: any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code
section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. 
  
 Tax Return: any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof. 
  
 Treasury Regulation: a regulation promulgated by the United States Treasury Department under one or more provisions of the Code. 
  
 Article 2 
 THE
PURCHASE AND SALE OF ASSETS 
  
 2.1 Purchase and Sale of Assets. Upon and subject to the terms and conditions hereof, at the Closing, Premier shall sell, transfer and assign to
Acquisition Sub, and Acquisition Sub shall purchase and acquire from Premier, all right, title and interest in and to the following assets (the “Premier Assets”), in each case free and clear of all liens, charges, security
interests, 

  

 6 

 restrictions and other encumbrances except (a) Permitted Encumbrances and (b) Premier Obligations: 
  
 2.1.1 the name “Premier Technology Group, Inc.” and all goodwill
of Premier; provided, however, that Premier shall be able to retain and use the name “Premier Technology Group, Inc.” during the term of the Subcontract Agreement; 
  
 2.1.2 all contracts and other arrangements pursuant to which Premier or any Premier Business Affiliate is providing services
and all proposals, bids and offers for future such contracts and arrangements (the “Premier Engagements”), such including without limitation the Premier Engagements listed on Schedule 2.1.2; 
  
 2.1.3 all other contracts relating to the Business specifically identified on
Schedule 2.1.3 (the “Premier Contracts”), including without limitation the Premier Leases, regardless of whether Premier has obtained any necessary consents to the assignment of such Premier Contracts; 
  
 2.1.4 all prepaid expenses, deposits, advances, other prepayments and related
rights paid or obtained by Premier (other than those, if any, which constitute Excluded Assets under Section 2.2) that exist as of the Closing with respect to the Business as identified on Schedule 2.1.4; 
  
 2.1.5 all Premier Proprietary Rights and all other rights of Premier in
intellectual property; 
  
 2.1.6 all training materials, speaking
materials and sales or promotional materials; 
  
 2.1.7 all
tangible assets of Premier as of the Closing (other than those tangible assets, if any, which constitute Excluded Assets under Section 2.2), including without limitation all furniture, fixtures, machinery, office and other equipment and leasehold
improvements as listed on Schedule 2.1.7; 
  
 2.1.8 all of
Premier’s accounts receivable and unbilled accounts receivable to the extent reflected on the Final Closing Balance Sheet (the “Premier Receivables”) and work-in-process and unbilled accounts receivable to the extent reflected
on the Final Closing Balance Sheet (the “Premier Work-In-Process”) (other than accounts receivable and unbilled accounts receivable and work-in-process due to Premier from the Premier Business Affiliates) as listed on Schedule
2.1.8; 
  
 2.1.9 all books, papers, ledgers, documents and records
relating to the Premier Assets, including without limitation all records and documents relating to the Premier Engagements, the Premier Contracts, the Premier Receivables, the Premier Work-In-Process and the Premier Assumed Obligations; 

 
 2.1.10 all cash, cash equivalents and marketable securities of Premier on
hand at the time of the Closing, including but not limited to those certain Premier commercial checking 

  

 7 

 
and money market accounts (other than cash, cash equivalents or marketable securities that would cause the Net Assets of Premier to exceed $11,000,000) as
set forth Schedule 2.1.10; 
  
 2.1.11 all of Premier’s
inventory and supplies (the “Premier Inventory”) on hand at the time of the Closing; 
  
 2.1.12 all Permits; and 
  
 2.1.13 all other tangible and intangible assets of Premier (other than those which constitute Excluded Assets under Section 2.2). 
  
 2.2 Excluded Assets. Notwithstanding Section 2.2, no interest of
Premier in or to the assets listed on Schedule 2.2 (the “Excluded Assets”) is being sold, assigned or otherwise transferred to Acquisition Sub. 
  

2.3 Assumption of Specified Obligations. At the Closing, Acquisition Sub shall agree to assume and perform after the Closing when and as they
become due the following obligations of Premier directly related to the Business (the “Premier Obligations”): 
  
 2.3.1 Premier’s accounts payable, accrued expenses and advance billings to customers as set forth on Schedule 2.3.1, as increased or decreased in the
ordinary course of business, and in amounts normal and reasonable for the Business and consistent with past experience of the Business, through the Closing Date (other than accounts payable, accrued expenses and advance billings to the Premier
Business Affiliates by Premier); 
  
 2.3.2 Premier’s
obligations of payment or performance after the Closing with respect to the Premier Assets, including without limitation the Premier Engagements and the Premier Contracts; 
  
 2.3.3 Premier’s obligations of payment or performance after the Closing to the employees and consultants of Premier and
the Premier Business Affiliates who become employees and consultants of Acquisition Sub as of the Closing. 
  
 2.3.4 Premier’s obligations of payment or performance under the Premier Credit Facilities, which amounts will be paid in full, terminated and closed
concurrently with the Closing; 
  
 2.3.5 All liabilities or
obligations for Taxes arising out of or relating to the Premier Assets and/or Premier Obligations for all periods commencing after the Closing Date; and 
  
 2.3.6 All acts or omissions of Parent, Federal and/or Acquisition Sub relating to the Premier Assets and/or the Premier Obligations arising after the
Closing Date. 
  
 Except for the Premier Obligations, Acquisition
Sub is assuming no liabilities or obligations of Premier in connection with this transaction, including without limitation (a) any liability or obligation of Premier to any Premier Business Affiliate, (b) any personal liability or obligation of
Bajwa incurred in any capacity (including without limitation as a director or officer 

  

 8 

 
of Premier), (c) any liability or obligation of Premier under any contract, agreement or arrangement to which Premier is a party relating to the Business or
the conduct thereof other than the Premier Engagements or the Premier Contracts, (d) any trade or practice liabilities or obligations of Premier, (e) any liability or obligation to any current, former or deceased employee of Premier or Premier
Business Affiliates with respect to the period of time before the Closing Date, or (f) any liability or obligation for or arising under any “Employee Benefit Plan.” “Employee Benefit Plan” means any “employee pension benefit
plan” (as defined in Section 3(2) of ERISA), “employee benefit plan” (as defined in Section 3(1) of ERISA, and any other written or oral plan, agreement or arrangement involving direct or indirect compensation, including without
limitation insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation, (g)
any liability for Taxes. Without limiting the generality of the foregoing, Premier shall be solely responsible for payment and performance of all liabilities, obligations and amounts at any time owing by Premier before or after the Closing Date,
whether direct or indirect, fixed or contingent, known or unknown, other than the Premier Obligations. 
  
 2.4 Purchase Price. 
  
 2.4.1 The Aggregate Purchase Price. The aggregate purchase price (the “Purchase Price”) to be paid by Acquisition Sub for the
Premier Assets shall be $49,000,000 (Forty-Nine Million Dollars), assuming the satisfaction of the conditions set forth in Section 2.4.4 and subject to adjustment as provided below in Section 2.8. All payments of the Purchase Price under this
Section 2.4 shall be made in immediately available funds wired to one or more accounts designated by Premier, by a certified check or by such other method as may be agreed by Premier and Acquisition Sub. 
  
 2.4.2 The Purchase Price Paid at the Closing. $41,000,000 (Forty-One
Million Dollars) of the total Purchase Price (the “Direct Payment”), (i) less (a) the amount of the fees owed by Premier to Windsor (“Broker”) which will be paid by Acquisition Sub directly to Broker pursuant to
Section 6.2.2, (b) the amount of the fees owed by Premier to Holland & Knight LLP (“Premier’s Counsel”) which will be paid by Acquisition Sub directly to Premier’s Counsel pursuant to Section 6.2.3, (c) the amount of
the fees owed by Premier to Cherry, Bekart, and Holland, LLP (“Premier’s Accountant”) which will be paid by Acquisition Sub directly to Premier’s Accountant pursuant to Section 6.2.4 and (d) the amount, if any, by which
the Net Assets in the Estimated Closing Balance Sheet are less than $11,000,000 shall be paid to Premier by Acquisition Sub on the Closing Date pursuant to Section 2.8.1, and (ii) plus the amount, if any, by which the Net Assets in the Estimated
Closing Balance Sheet are greater than $11,000,000. 
  
 2.4.3 The Escrowed Portion of the Purchase Price. For the purpose of securing Premier’s obligations pursuant to Section 6.3, $3,000,000 (Three Million Dollars) of the total Purchase Price (the “Escrow Payment”)
shall be delivered to an account (the “Escrow”) to be administered by Riggs Bank NA (the “Escrow Agent”) pursuant to an escrow agreement substantially in the form of Exhibit A (the “Escrow
Agreement”). 
  

 9 

 2.4.4 The Earn-Out. Up to $5,000,000 (Five Million Dollars) in earn-out payments to be paid as
follows: 
  
 (a) DCSINT Work. $4.0 million in
earn-out payments tied to the continuation of existing efforts presently being performed under Contract No. DABT63-98-A-0009, Delivery Orders 15, 22, 44, 45, 46, 47, & 49 (the “Target Business”) for similar work for the same
customer through at least February 28, 2005, either (i) through the existing contract vehicle or (ii) through any other full and open contract vehicle awarded previously or in the future, to Parent or any of its Subsidiaries. The earn-out shall be
paid on a pro rata basis according to the number of positions associated with the Target Business that receive funding through at least February 28, 2005. The full earn-out of $4.0 million shall be earned if 100% of the current level of effort of 95
positions (as employees) is fully funded through at least February 28, 2005, and the earn-out shall be paid on a sliding scale outlined in the table below: 
  

	 	  	Earn-Out Based on Number of Positions

	 Employees

	  	0

	  	24

	  	48

	  	72

	  	95

	 	  	0%	  	25.3%	  	50.5%	  	75.8%	  	100%
	 Earn-Out Achieved ($M)
	  	$0.0	  	$1.012	  	$2.020	  	$3.032	  	$4.0

  
 Payment of the
earn-out for the Target Business shall be consistent with the timing of the funding received by the government (i.e., if the government funds various levels of positions or delivery orders in stages, then the earn-out should be paid in stages based
on the        % of Target achieved.) Parent shall pay the proportional share of the earn-out for the Target Business within 45 days of receipt of authorization of the Funding. 
  
 (b) CASCOM Work. Up to $1.0 million in earn-out payments
tied to the continuation of existing efforts presently being performed under U.S. Army Combined Arms Support Command, Contract No. DABT60-98-D-0003, either (a) through a full and open competition vehicle awarded to Parent or any of its Subsidiaries;
(b) to a subcontract or other vehicle awarded to Parent or any of its Subsidiaries; or (c) through the existing contract vehicle. The earn-out shall be based on achieving an annual gross margin (defined as recognized revenue less total direct costs
excluding all indirect elements, including, without limitation, fringe benefits, overhead and general and administrative costs and any fees to affiliates of Parent) of $1,371,000, for this contract for the twelve months ended December 31, 2003. The
earn-out shall be paid proportionately within 45 days in accordance with the example below: 
  

 10 

	 	  	 Payment Milestone
 Cumulative Gross Margin for the
 12 Months ending December 31, 2003

	 Earn-out Potential
	  	$1,000,000
	 Target Gross Margin
	  	$1,371,000
	 Actual Gross Margin (Example)
	  	$1,200,000
	 % of Target Achieved (Example)
	  	87.5%
	 Earn-Out Achieved (Example)
	  	$875,274

  
 2.5 Closing.
The closing of the purchase and sale of the Premier Assets (the “Closing”) shall take place at the offices of Parent in Arlington, Virginia, commencing at 9 a.m. local time on May 15, 2003 or on such other date as the parties may
agree after the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby (the “Closing Date”). The effective date of the transaction shall be 12:01 a.m. May 16,
2003. 
  
 2.6 Instruments of Transfer and Assumption.
Premier shall effect the transfer of the Premier Assets to Acquisition Sub at the Closing by such bills of sale, assignments and other instruments of transfer as Acquisition Sub or its counsel and Premier or its counsel mutually deem reasonably
necessary or appropriate to transfer full legal and beneficial title to the Premier Assets free and clear of all liens, charges, security interests, restrictions and other encumbrances whatsoever except the Permitted Encumbrances and the Premier
Obligations, all of which documents shall contain appropriate and customary warranties and covenants of title and shall be in form and substance reasonably acceptable to Acquisition Sub and its counsel and Premier and its counsel. Premier shall also
effect the transfer of the Premier Obligations to and assumption by Acquisition Sub at the Closing by such assignments, assumptions and other instruments of assignment, assumption and transfer as Acquisition Sub or its counsel and Premier or its
counsel mutually deem reasonably necessary or appropriate to transfer full legal and beneficial obligation with respect to the Premier Obligations, all of which documents shall contain appropriate and customary warranties and covenants and shall be
in form and substance reasonably acceptable to Acquisition Sub and its counsel and Premier and its counsel. 
  
 2.7 Additional Actions. If, at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this
Agreement or to vest, perfect or confirm in Acquisition Sub title to or ownership or possession of the Premier Assets and assumption of the Premier Obligations, Bajwa, as well as the officers and directors of Premier and Acquisition Sub, are fully
authorized in their name and in the name of their respective corporations or otherwise to take, and will use commercially reasonable efforts to take all such lawful and necessary action to so vest, perfect or confirm in Acquisition Sub title to or
ownership of the Premier Assets and assumption of the Premier Obligations, so long as such action is consistent with this Agreement. 
  
 2.8 Adjustment to Purchase Price. 
  
 2.8.1 Preparation of Estimated Closing Balance Sheet. At least three (3) days before the Closing Date, Premier’s Accountant shall prepare or
cause to be prepared and 

  

 11 

 
shall deliver to Premier and Acquisition Sub a projected Closing Balance Sheet for Premier as of the opening of business on the Closing Date (the
“Estimated Closing Balance Sheet”). The Estimated Closing Balance Sheet shall be prepared in accordance with United States generally accepted accounting principles as consistently applied by Premier if such consistent application is
properly in accordance with United States generally accepted accounting principles (collectively, “GAAP”). 
  
 2.8.2 Preparation of Closing Balance Sheet. As soon as reasonably possible after the Closing Date (but not later than 60 days thereafter),
Acquisition Sub shall prepare or cause to be prepared and shall deliver to Premier a Closing Balance Sheet for Acquisition Sub as of the opening of business on the Closing Date (the “Closing Balance Sheet”). The Closing Balance
Sheet shall be prepared in accordance with GAAP provided, however, that based upon the representation and warranty by Premier in Section 3.15.2 that all of the Premier Receivables, less any allowances for doubtful accounts reflected in the Estimated
Closing Balance Sheet, are collectible, the Closing Balance Sheet shall not in any manner increase in the Closing Balance Sheet the allowances for doubtful accounts reflected in the Estimated Closing Balance Sheet. 
  
 2.8.3 Review of Closing Balance Sheet. Premier, upon receipt of the
Closing Balance Sheet, shall (a) review the Closing Balance Sheet and (b) to the extent it may deem necessary, make reasonable inquiry of Acquisition Sub and its accountants (if any are used), relating to the preparation of the Closing Balance
Sheet. Premier and its employees and advisors shall have full access upon prior written notice and during normal business hours to the books, papers, work papers, schedules, calculations and records relating to the preparation of the Closing Balance
Sheet in connection with such inquiry and the preparation of any objections thereto. The Closing Balance Sheet shall be binding and conclusive upon, and deemed accepted by, Premier unless Premier shall have notified Acquisition Sub in writing of any
objections thereto (the “Objection”) within 30 days after receipt of the Closing Balance Sheet. 
  
 2.8.4 Disputes. In the event of the Objection, Acquisition Sub shall have 20 days to review and respond to the Objection, and Acquisition Sub and
Premier (and/or their respective employees and/or advisors) shall attempt to resolve the differences underlying the Objection within 20 days following completion of Acquisition Sub’s review of the Objection. Disputes between Acquisition Sub and
Premier which cannot be resolved by them within such 20-day period shall be referred no later than such 20th day for
decision to KPMG or such other nationally-recognized independent public accounting firm mutually selected by Premier and Acquisition Sub (which firm shall not be either of (a) the independent public accountants of Parent or (b) the independent
public accountants of Premier (the “Auditor”) who shall act as arbitrator and determine, based solely on presentations by Premier and Acquisition Sub (and/or their respective employees and/or advisors) and only with respect to the
remaining differences so submitted, whether and to what extent, if any, the Closing Balance Sheet requires adjustment. Acquisition Sub and Premier each agree to execute a reasonable engagement letter proposed by the Auditor. The Auditor shall
deliver its written determination to Acquisition Sub and Premier no later than the 30th day after the remaining
differences underlying the Objection are referred to the Auditor, or such longer period of time as the Auditor determines is necessary. The Auditor’s determination shall be conclusive and binding upon the parties. The fees and disbursements of
the Auditor shall be allocated equally between Acquisition Sub and Premier. Acquisition Sub and Premier shall make readily available to the Auditor all relevant information, books and 

  

 12 

 
records and any work papers, schedules and calculations relating to the Closing Balance Sheet and all other items reasonably requested by the Auditor and the
Auditor shall be required to maintain the confidentiality of the information and documents received by the Auditor. In no event may the Auditor’s resolution of any difference be for an amount which is outside the range of Acquisition Sub’s
and Premier’s disagreement. 
  
 2.8.5 Final Closing
Balance Sheet. The Closing Balance Sheet shall become final and binding upon the parties upon the earlier of (a) Premier’s failure to object thereto within the period permitted under Section 2.8.3, (b) the agreement between Acquisition Sub
and Premier with respect thereto and (c) the decision by the Auditor with respect to any disputes under Section 2.8.4. The Closing Balance Sheet, as adjusted pursuant to the agreement of the parties or decision of the Auditor, when final and binding
is referred to herein as the “Final Closing Balance Sheet.” 
  
 2.8.6 Adjustments to the Purchase Price. As soon as practicable (but not more than five business days) after the date on which the Final Closing Balance Sheet shall have been determined in accordance with this
Section 2.5, (a) Premier shall pay to Acquisition Sub in immediately available funds in United States dollars the amount, if any, by which the Net Assets in the Final Closing Balance Sheet are less than the Net Assets in the Estimated Closing
Balance Sheet, which shall constitute an immediate adjustment of the Purchase Price in such amount or (b) Acquisition Sub shall pay to Premier, in immediately available funds in United States Dollars the amount, if any, by which the Net Assets in
the Final Closing Balance Sheet are greater the Net Assets in the Estimated Closing Balance Sheet, which shall constitute an immediate adjustment of the Purchase Price in such amount. 
  
 Article 3 
 REPRESENTATIONS AND WARRANTIES OF PREMIER AND BAJWA 
  
 Except for those representations and warranties expressly set forth in this Article 3, neither Premier nor Bajwa makes any
representations or warranties, express or implied, at law or in equity, of any kind or nature whatsoever concerning the organization, business, assets, liabilities or operations of Premier, including by way of illustration but not limitation the
fact that neither Premier nor Bajwa makes or shall be deemed to have made any representations or warranties, express or implied, at law or in equity, of any kind or nature whatsoever concerning or as to the accuracy or completeness of any
projections, estimates, budgets, forecasts or other forward-looking information concerning the future revenue, income, profit or other financial results or consequences of Premier or any of its Affiliates, and any such other representations or
warranties are hereby expressly disclaimed in full and for all time. Premier and Bajwa jointly and severally represent and warrant to Parent, Federal and Acquisition Sub as follows: 
  
 3.1 Corporate Status of Premier. Except as set forth on Schedule 3.1 hereto, Premier is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of Virginia, with the requisite corporate power to own, operate and lease its properties and to carry on its business as now being conducted. Except as set forth on Schedule
3.1 hereto, Premier is duly qualified or licensed to do business as a foreign corporation and is in good standing in all jurisdictions in which the character of the properties owned or held under 

  

 13 

 
lease by it or the nature of the business transacted by it makes qualification necessary, except where failure to be so qualified would not have a Premier
Material Adverse Effect. All jurisdictions in which Premier is qualified to do business are set forth on Schedule 3.1 hereto. 
  
 3.2 Capital Stock. 
  
 3.2.1 Authorized Stock of Premier. The authorized capital stock of Premier consists of 1,000 shares of common stock, no par value (“Premier
Common Stock”), of which 1,000 shares are issued and outstanding and no shares are held in Treasury. All of the outstanding shares of Premier Common Stock have been duly authorized and validly issued, were not issued in violation of any
person’s preemptive rights, and are fully paid and nonassessable. Bajwa owns of record and beneficially all of the outstanding shares of Premier Common Stock. 
  
 3.2.2 Options and Convertible Securities of Premier. Except as set forth on Schedule 3.2, there are no outstanding
subscriptions, options, warrants, conversion rights or other rights, securities, agreements or commitments obligating Premier to issue, sell or otherwise dispose of shares of its capital stock, or any securities or obligations convertible into, or
exercisable or exchangeable for, any shares of its capital stock. Except as set forth on Schedule 3.2, there are no voting trusts or other agreements or understandings to which Premier or Bajwa is a party with respect to the voting of the shares of
Premier Common Stock and Premier is neither a party to, nor bound by, any outstanding restrictions, options or other obligations, agreements or commitments to sell, repurchase, redeem or acquire any outstanding shares of Premier Common Stock or any
other securities of Premier. 
  
 3.3 Subsidiaries. Premier
has no Subsidiaries. Except as set forth on Schedule 3.3, Premier has not acquired, sold, divested or liquidated any Subsidiary or line of business. 
  
 3.4 Authority for Agreement; Noncontravention. 
  
 3.4.1 Authority. Premier has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby
to the extent of its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, to the extent of Premier’s obligations hereunder, have been duly and validly authorized by
the board of directors of Premier and no other corporate proceedings on the part of Premier are necessary to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, to the extent of
Premier’s obligations hereunder. This Agreement and the other agreements contemplated hereby to be signed by Premier have been duly executed and delivered by Premier and constitute valid and binding obligations of Premier, enforceable against
Premier in accordance with their terms, subject to the qualifications that enforcement of the rights and remedies created hereby and thereby is subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws
of general application affecting the rights and remedies of creditors and (b) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 
  

 14 

 3.4.2 No Conflict. Except as set forth on Schedule 3.4 hereto, none of the execution, delivery or
performance of this Agreement and the agreements referenced herein by Premier or Bajwa, nor the consummation by Premier or Bajwa of the transactions contemplated hereby or thereby will (a) conflict with or result in a violation of any provision of
Premier’s charter documents or by-laws, (b) with or without the giving of notice or the lapse of time, or both, conflict with, or result in any violation or breach of, or constitute a default under, or result in any right to accelerate or
result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any note, mortgage, indenture, lease, instrument or other agreement, permit, concession, grant, franchise, license, judgment,
order, decree, statute, ordinance, rule or regulation to which Premier is a party or by which Premier or any of its assets or properties are bound or which is applicable to Premier or any of its assets or properties. Except as set forth on Schedule
3.4.2 and except to the extent that novation is required as further described in Section 6.6.2 below, no authorization, consent or approval of, or filing with or notice to, any United States or foreign governmental or public body or authority (each
a “Governmental Entity”) is necessary for the execution and delivery of this Agreement by Premier or Bajwa or the consummation by Premier or Bajwa of the transactions contemplated hereby, except for such consents, authorizations,
filings, approvals and registrations which if not obtained or made would not have a Premier Material Adverse Effect. 
  
 3.5 Financial Statements. Premier has previously furnished Parent with a copy of Premier’s audited balance sheet as of December 31, 2002 and
unaudited balance sheet as of February 28, 2003 which are attached as Schedule 3.5 and Premier’s statement of operations, cash flows and changes in the stockholders’ equity for the year then ended. The annual financial statements were
audited by Cherry, Bekart, and Holland, LLP, certified public accountants. Collectively, the financial statements referred to in the immediately preceding sentence are sometimes referred to herein as the “Premier Financial
Statements” and Premier’s balance sheet as of February 28, 2003 is referred to herein as the “Premier Balance Sheet.” The balance sheet included in the Premier Financial Statements (including any related notes) fairly
presents in all material respects the financial position of Premier as of its date, and the other statements included in Premier Financial Statements (including any related notes) fairly present in all material respects the results of operations,
cash flows and the stockholders’ equity, as the case may be, of Premier for the periods therein set forth, in each case in accordance with GAAP consistently applied (all except as otherwise stated therein). 
  
 3.6 Absence of Material Adverse Changes. Except as set forth on
Schedule 3.6 hereto, since the date of the Letter of Intent, Premier has not suffered any Premier Material Adverse Effect, and there has not occurred or arisen any event, condition or state of facts of any character that could reasonably be expected
to result in a Premier Material Adverse Effect. Except as set forth on Schedule 3.6 hereto and except for dividends or distributions that will not cause the Net Assets of Premier to be less than $11,000,000, since the date of the Letter of Intent,
there have been no dividends or other distributions declared or paid in respect of, or any repurchase or redemption by Premier of, any of the shares of capital stock of Premier, or any commitment relating to any of the foregoing. 
  
 3.7 Absence of Undisclosed Liabilities. Except as set forth on
Schedule 3.7, Premier has no Liabilities that are not fully reflected or provided for on, or disclosed in the notes to, the balance sheets included in the Premier Financial Statements, except (a) Liabilities 

  

 15 

 
incurred in the ordinary course of business since the date of the Premier Balance Sheet, none of which individually or in the aggregate has had or could
reasonably be expected to have a Premier Material Adverse Effect, (b) Liabilities, including but not limited to Liabilities arising under any agreement, contract, commitment or lease permitted or contemplated by this Agreement, and (c) Liabilities,
including but not limited to Liabilities arising under any agreement, contract, commitment or lease expressly disclosed on the Schedules delivered hereunder. 
  
 3.8 Compliance with Applicable Law, Charter and By-Laws. Premier has all requisite licenses, permits and certificates from all Governmental
Entities necessary to conduct its business as currently conducted, and to own, lease and operate its properties in the manner currently held and operated, except as set forth on Schedule 3.8 hereto and except for any licenses, permits and
certificates the absence of which, in the aggregate, do not and could not reasonably be expected to have a Premier Material Adverse Effect (collectively, “Permits”) or prevent or materially delay the consummation of the transactions
contemplated hereby. All of such Permits are in full force and effect. Premier is in compliance in all material respects with all the terms and conditions related to such Permits. There are no proceedings in progress, pending or, to the Knowledge of
Premier, threatened, which may result in revocation, cancellation, suspension, or any materially adverse modification of any of such Permits. To the Knowledge of Premier, the business of Premier is not being conducted in violation of any applicable
law, statute, ordinance, regulation, rule, judgment, decree, order, Permit, concession, grant or other authorization of any Governmental Entity, which violation, in the aggregate, could reasonably be expected to have a Premier Material Adverse
Effect or prevent or materially delay the consummation of the transactions contemplated hereby. Premier is not in default or violation of any provision of its charter documents or its by-laws. 
  
 3.9 Litigation and Audits. Except for any claim, action, suit or
proceeding set forth on Schedule 3.9 or Schedule 3.10 hereto, (a) Premier has received no notice that there is any investigation by any Governmental Entity with respect to Premier pending or, to the Knowledge of Premier, threatened, and no
Governmental Entity has indicated to Premier an intention to conduct the same, which, if adversely determined, either singly or in the aggregate, could reasonably be expected to have a Premier Material Adverse Effect or materially delay the
consummation of the transactions contemplated hereby; (b) there is no claim, action, suit, arbitration or proceeding pending or, to the Knowledge of Premier, threatened against or involving Premier or any of its assets or properties, at law or in
equity, or before any arbitrator or Governmental Entity, that, if adversely determined, either singly or in the aggregate, would have a Premier Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated
hereby; and (c) there are no judgments, decrees, injunctions or orders of any Governmental Entity or arbitrator outstanding against Premier. 
  
 3.10 Tax Matters. 
  
 3.10.1 Filing of Returns. Except as set forth on Schedule 3.10.1 Premier has filed all material Tax Returns that it was required to file. All such
Tax Returns were correct and complete in all material respects. All Taxes owed by Premier (as shown on any such Tax Return) have been paid or have been adequately reserved for on the Premier Balance Sheet. Premier is not currently the beneficiary of
any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where Premier does not 

  

 16 

 
file Tax Returns that it is or may be subject to taxation by that jurisdiction. Premier has not received any notice that there are any Security Interests on
any of the Premier Assets that arose in connection with any failure (or alleged failure) to pay any Tax. Schedule 3.10 lists all federal, state, local and foreign income Tax Returns filed with respect to Premier for taxable periods ended on or after
December 31, 1999, and indicates those Tax Returns that have been audited and indicates those Tax Returns that currently are the subject of audit. 
  
 3.10.2 Payment of Taxes. Except as set forth on Schedule 3.10.2 Premier has accrued, withheld and/or paid all Taxes required to have been accrued,
withheld and/or paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party. 
  
 3.10.3 Premier Business Affiliates. None of Parent, Federal or Acquisition Sub or Premier employees and Premier Business Affiliate employees will
suffer any Loss due to the imposition of any tax, charge, penalty or the like imposed by the government of the Federal Republic of Germany or any subdivision thereof in connection with the employment of persons in the Federal Republic of Germany by
Premier or any of its Affiliates prior to the Closing Date. 
  
 3.11 Employee Benefit Plans. 
  
 3.11.1 List
of Plans. Schedule 3.11.1 hereto contains a correct and complete list of all pension, profit sharing, retirement, deferred compensation, welfare, legal services, medical, dental or other employee benefit or health insurance plans, life
insurance or other death benefit plans, disability, stock option, stock purchase, stock compensation, bonus, vacation pay, severance pay and other similar plans, programs or agreements, and every material written personnel policy, relating to any
persons employed by Premier or in which any person employed by Premier is eligible to participate and which is currently maintained or that was maintained at any time by Premier or any ERISA Affiliate of Premier (collectively, the “Premier
Plans”), including without limitation any Premier Plan that is an employee welfare benefit plan (within the meaning of Section 3(1) of ERISA) (a “Welfare Plan”). 
  
 3.11.2 ERISA. Schedule 3.11.2 contains a complete list of all employee pension benefit plans (as defined in Section
3(2) of ERISA) which are intended to be qualified under Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code (the “Pension Plans”). Each Pension Plan has been determined by the Internal Revenue Service to be so
qualified, and the trust created thereunder has been determined to be exempt from tax under Section 501(a) of the Code; copies of all determination letters have been delivered to the Purchaser. Any such determination remains in effect and has not
been revoked, and nothing has occurred since the date of such determination letters which might cause the loss of such qualification or exemption. 
  
 Neither Premier not any ERISA Affiliate has incurred any liability under Title IV of ERISA which has not been paid in full prior to the Closing. There has
been no “accumulated funding deficiency” (whether or not waived) with respect to any Pension Plan ever maintained by Premier or any ERISA Affiliate and subject to Code Section 412 or ERISA Section 302. With respect to any Pension Plan
maintained by Premier or any ERISA Affiliate and subject to Title IV of ERISA, there has been no (nor will be any as a result of the transaction contemplated 

  

 17 

 
by this Agreement) (i) “reportable event,” within the meaning of ERISA Section 4043, or the regulations thereunder (for which notice the notice
requirement is not waived under 29 C.F.R. Part 2615) and (ii) no event or condition which presents a material risk of plan termination or any other event that may cause Premier or any ERISA Affiliate to incur liability or have a lien imposed on its
assets under Title IV of ERISA. No Pension Plan maintained by Premier or any ERISA Affiliate and subject to Title IV of ERISA has any “unfunded benefit liabilities” within the meaning of ERISA Section 4001(a)(18), as of the Closing Date,
and, without any additional contributions being made to such Plan, the assets of such Plan are sufficient to satisfy all obligations of the Plan if the Plan were to terminate. Neither Premier nor any ERISA Affiliate currently maintains or has ever
maintained a Multiemployer Plan. 
  
 3.12 Employment-Related
Matters. 
  
 3.12.1 Labor Relations. Except to
the extent set forth on Schedule 3.12 hereto: (a) Premier is not a party to any collective bargaining agreement or other contract or agreement with any labor organization or other representative of employees of Premier; (b) there is no labor strike,
dispute, slowdown, work stoppage or lockout that is pending or, to the Knowledge of Premier, threatened against or otherwise affecting Premier, and Premier has not experienced the same; (c) Premier has not closed any plant or facility, effectuated
any layoffs of employees or implemented any early retirement or separation program at any time, nor has Premier planned or announced any such action or program for the future with respect to which Premier has any material liability; and (d) all
salaries, wages, vacation pay, bonuses, commissions and other compensation due from Premier before the date hereof have been paid or accrued as of the date hereof. 
  
 3.12.2 Employee List. Premier has heretofore delivered to Parent a list (the “Employee List”)
dated as of April 18, 2003 containing the name of each person employed by Premier and Premier Business Affiliates and each such employee’s position, starting employment date and annual salary. This list is attached on Schedule 3.12.2. The
Employee List is correct and complete as of the date of the Employee List. No third party has asserted any claim or, to the Knowledge of Premier, has any reasonable basis to assert any claim against Premier that either the continued employment by,
or association with, Premier of any of the present officers or employees of, or consultants to, Premier contravenes any agreements or laws applicable to unfair competition, trade secrets or proprietary information. 
  
 3.13 Environmental Matters. 
  
 3.13.1 Environmental Laws. Except as set forth on Schedule
3.13 hereto, (a) Premier is and has been in compliance with all applicable Environmental Laws in effect on the date hereof; (b) Premier has not received any written communication that alleges that it is or was not in compliance with all applicable
Environmental Laws in effect on the date hereof; (c) there are no circumstances that may prevent or interfere with compliance in the future with all applicable Environmental Laws; (d) all Permits and other governmental authorizations currently held
by Premier pursuant to the Environmental Laws are in full force and effect, Premier is in compliance with all of the terms of such Permits and authorizations, and no other Permits or authorizations are required by Premier for the conduct of its
business on the date hereof; (e) such Permits will not be terminated or impaired or become terminable, in whole or in part, solely as a 

  

 18 

 
result of the transactions contemplated hereby; and (f) the management, handling, storage, transportation, treatment, and disposal by Premier of all
Materials of Environmental Concern is and has been in compliance with all applicable Environmental Laws. 
  
 3.13.2 Environmental Claims. Except as set forth on Schedule 3.13 hereto, there is no Environmental Claim pending or, to the Knowledge of
Premier, threatened, against or involving Premier or against any Person whose liability for any Environmental Claim Premier has or may have retained or assumed either contractually or by operation of law. 
  
 3.13.3 No Basis for Claims. Except as set forth on Schedule
3.13 hereto, there are no past or present actions or activities by Premier, or any circumstances, conditions, events or incidents, including the storage, treatment, release, emission, discharge, disposal or arrangement for disposal of any Material
of Environmental Concern, whether or not by Premier, that could reasonably form the basis of any Environmental Claim against Premier or against any person or entity whose liability for any Environmental Claim Premier may have retained or assumed
either contractually or by operation of law, including, without limitation, the storage, treatment, release, emission, discharge, disposal or arrangement for disposal of any Material of Environmental Concern or any other contamination or other
hazardous condition, related to the premises at any time occupied by Premier. Without limiting the generality of the foregoing, except as set forth on Schedule 3.13 hereto, Premier has not received any notices, demands, requests for information,
investigations pertaining to compliance with or liability under Environmental Law or Materials of Environmental Concern, nor, to the Knowledge of Premier, are any such notices, demands, requests for information or investigations threatened.

  
 3.13.4 Disclosure of Information. Premier has
made, and during the period between the date of this Agreement and the Closing Date will continue to make, available to Parent, Federal and Acquisition Sub all environmental investigations, studies, audits, tests, reviews and other analyses
conducted in relation to Environmental Laws or Materials of Environmental Concern pertaining to Premier or any property or facility now or previously owned, leased or operated by Premier that are in the possession, custody, or control of Premier.

  
 3.13.5 Liens. No lien imposed relating to or in
connection with any Environmental Claim, Environmental Law, or Materials of Environmental concern has been filed or has been attached to any of the property or assets which are owned, leased or operated by Premier. 
  
 3.14 No Broker’s or Finder’s Fees. Except as provided for in
Section 2.4.2, Premier has neither paid nor become obligated to pay any fee or commission to any broker, finder, financial advisor or intermediary in connection with the transactions contemplated by this Agreement. 
  
 3.15 Assets Other Than Real Property. 
  
 3.15.1 Title. Premier has good and marketable title to all of the
Premier Assets shown on the Premier Balance Sheet, and such title is in each case free and clear of any mortgage, pledge, lien, security interest, lease or other encumbrance (collectively, “Encumbrances”), except for (a) assets
disposed of since the date of the Premier Balance Sheet 

  

 19 

 
in the ordinary course of business and in a manner consistent with past practices, (b) liabilities, obligations and Encumbrances reflected in the Premier
Balance Sheet or otherwise in the Premier Financial Statements, (c) Permitted Encumbrances, and (d) liabilities, obligations and Encumbrances set forth on Schedule 3.15 hereto. 
  
 3.15.2 Accounts Receivable. Except as set forth on Schedule 3.15, all Premier Receivables, shown on the Estimated
Closing Balance Sheet as will be confirmed on the Final Closing Balance Sheet are good, valid and existing accounts and all represent an undisputed, bona fide sale and delivery of goods or services. The Premier Receivables are collectible in
the amount shown have been collected or are collectible in all material respects in the aggregate amount shown. 
  
 3.15.3 Condition. All Premier Assets are in good operating condition and repair, ordinary wear and tear excepted, and all such wear and tear taken
in the aggregate is not material to Premier and does not affect Premier’s obligations to perform under this Agreement. 
  
 3.16 Real Property. 
  
 3.16.1 Premier Real Property. Premier neither owns nor has owned any real property. 
  
 3.16.2 Premier Leases. Schedule 3.16 hereto lists all Premier Leases. Complete copies of the Premier Leases, and all
material amendments thereto (which are identified on Schedule 3.16), have been made available by Premier to Parent. The Premier Leases grant leasehold estates free and clear of all Encumbrances (except Permitted Encumbrances) and no Encumbrances
(except permitted Encumbrances) have been granted by or caused by the actions of Premier. The Premier Leases are in full force and effect and are binding and enforceable against each of the parties thereto in accordance with their respective terms
subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b) general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law). Except as set forth on Schedule 3.16, neither Premier nor, to the Knowledge of Premier, any other party to a Premier Lease, has committed a material breach or default under any Premier Lease, nor has
there occurred any event that with the passage of time or the giving of notice or both would constitute such a breach or default, nor, to the Knowledge of Premier, are there any facts or circumstances that would reasonably indicate that Premier is
likely to be in material breach or default under any Premier Lease. Schedule 3.16 correctly identifies each Premier Lease the provisions of which would be materially and adversely affected by the transactions contemplated hereby and each Premier
Lease that requires the consent of any third party in connection with the transactions contemplated hereby. No material construction, alteration or other leasehold improvement work with respect to the real property covered by any of Premier Leases
remains to be paid for or to be performed by Premier. Except as set forth on Schedule 3.16, no Premier Lease has an unexpired term which including any renewal or extensions of such term provided for in such Premier Lease could exceed ten years.

  
 3.16.3 Condition. All buildings, structures, leasehold
improvements and fixtures, or parts thereof, used by Premier in the conduct of its business are in good operating 

  

 20 

 
condition and repair, ordinary wear and tear excepted. 
  
 3.17 Agreements, Contracts and Commitments. 
  
 3.17.1 Premier Agreements. Except as set forth on Schedule 3.17 hereto or any other Schedule hereto, Premier is not a party to: 
  
 (a) any bonus, deferred compensation, pension, severance,
profit-sharing, stock option, employee stock purchase or retirement plan, contract or arrangement or other employee benefit plan or arrangement; 
  
 (b) any employment agreement with any present employee, officer, director or consultant (or former employees, officers, directors and
consultants) to the extent there remain at the date hereof obligations to be performed by Premier; 
  
 (c) any agreement for personal services or employment with a term of service or employment specified in the agreement or any agreement for
personal services; 
  
 (d) any agreement of
guarantee or indemnification in an amount that is material to Premier taken as a whole; 
  
 (e) any agreement or commitment containing a covenant limiting or purporting to limit the freedom of Premier to compete with any person in
any geographic area or to engage in any line of business; 
  
 (f) any lease other than Premier Leases under which Premier is lessee that involves, in the aggregate, payments of $25,000 or more per annum or is material to the conduct of the business of Premier; 
  
 (g) any joint venture or profit-sharing agreement (other
than with employees); 
  
 (h) except for trade
indebtedness incurred in the ordinary course of business and equipment leases entered into in the ordinary course of business, any loan or credit agreements providing for the extension of credit to Premier or any instrument evidencing or related in
any way to indebtedness incurred in the acquisition of companies or other entities or indebtedness for borrowed money by way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee, or otherwise that
individually is in the amount of $25,000 or more; 
  
 (i) any license agreement, either as licensor or licensee, involving payments (including past payments) of $25,000 in the aggregate or more, or any material distributor, dealer, reseller, franchise, manufacturer’s representative, or
sales agency or any other similar material contract or commitment; 
  
 (j) any agreement granting exclusive rights to, or providing for the sale of, all or any portion of the Premier Proprietary Rights; 
  

 21 

 (k) any agreement or arrangement providing for the payment of any commission based on
sales other than to employees of Premier; 
  
 (l)
any agreement for the sale by Premier of materials, products, services or supplies that involves future payments to Premier of more than $25,000; 
  
 (m) any agreement for the purchase by Premier of any materials, equipment, services, or supplies, that either (i) involves a binding
commitment by Premier to make future payments in excess of $25,000 and cannot be terminated by it without penalty upon less than three months’ notice or (ii) was not entered into in the ordinary course of business; 
  
 (n) any agreement or arrangement with any third party for
such third party to develop any intellectual property or other asset expected to be used or currently used or useful in the business of Premier; 
  
 (o) any agreement or commitment for the acquisition, construction or sale of fixed assets owned or to be owned by Premier that involves
future payments by it of more than $25,000; 
  
 (p) any agreement or commitment to which present or former directors, officers or Affiliates of Premier, or directors or officers of any Affiliate of any of the foregoing, are also parties; 
  
 (q) any agreement not described above (ignoring, solely for
this purpose, any dollar amount thresholds in those descriptions) involving the payment or receipt by Premier of more than $25,000, other than Premier Leases; 
  

(r) any agreement not described above that was not made in the ordinary course of business and that is material to the financial
condition, business, operations, assets, results of operations or prospects of Premier; or 
  
 (s) any agreement that provides for any continuing or future obligation of Premier, involving liability to Premier of more than $25,000,
actual or contingent, including but not limited to any continuing representation or warranty and any indemnification obligation, in connection with the disposition of any business or assets of Premier. 
  
 3.17.2 Validity. Except as set forth on Schedule 3.17, all Premier
Engagements and all Premier Contracts required to be set forth on Schedule 3.17 are valid and in full force and effect; neither Premier nor, to the Knowledge of Premier, any other party thereto, has breached any provision of, or defaulted under the
terms of any such Premier Engagements of Premier Contracts, except for any breaches or defaults that, in the aggregate, would not be expected to have a Premier Material Adverse Effect or have been cured or waived; and Premier has not received any
“notice to cure” or a similar notice from any Governmental Entity requesting performance under any Premier Engagements or Premier Contracts between Premier and such Governmental Entity. 
  

 22 

 3.17.3 Third-Party Consents. Schedule 3.17 identifies each of the Premier Engagements and Premier
Contracts that requires the consent of a third party in connection with the transactions contemplated hereby. 
  
 3.18 Intellectual Property. 
  
 3.18.1 Right to Intellectual Property. Except as set forth on Schedule 3.18 hereto, Premier (a) owns all patents, trademarks, trade names, service
marks, copyrights, and any applications therefor, maskworks, net lists, schematics, technology, know-how, computer software programs or applications (in both source code and object code form), and tangible or intangible proprietary information or
material (excluding Commercial Software) that are used in the business of Premier as currently conducted (the “Premier Proprietary Rights”), or (b) has a valid, perpetual, fully-paid, worldwide right to use any other patents,
trademarks, service marks, copyrights, and any applications therefor, maskworks, schematics, technology, know-how, computer software programs or applications (in both source code and object code form), and tangible or intangible proprietary
information or material (the “Premier Licensed Rights”), that are used in the business of Premier as currently conducted. The Commercial Software used in the business of Premier in each case has been acquired and used by Premier on
the basis of and in accordance with a valid license which, to Premier’s knowledge was acquired from the manufacturer or the dealer authorized to distribute such Commercial Software. A complete list of the Commercial Software used in the
business of Premier which costs in excess of $25,000 to license or is not generally commercially available is set forth on Schedule 3.18. Premier has not received notice that it (y) is in breach of any of the terms and conditions of any such license
or (z) has been infringing upon any rights of any third parties in connection with its acquisition or use of the Commercial Software. 
  
 3.18.2 No Conflict. Set forth on Schedule 3.18 is a complete list of all patents, trademarks, registered copyrights, trade names and service marks,
and any applications therefore, included in Premier Proprietary Rights, specifying, where applicable, the jurisdictions in which each such Premier Proprietary Right has been issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or application numbers and the names of all registered owners. Except as set forth on Schedule 3.18, no software product included in Premier Proprietary Rights currently marketed by
Premier has been registered for copyright protection with the United States Copyright Office or any foreign offices nor has Premier been requested to make any such registration. Set forth on Schedule 3.18 is a complete list of all domain names,
secure socket layer certificates and other World Wide Web certificates held in the name of Premier, which list includes all domain names used by Premier in its business. Set forth on Schedule 3.18 is a complete list of all material licenses,
sublicenses and other agreements as to which Premier is a party and pursuant to which Premier or any other person is authorized to use any Premier Proprietary Right or trade secrets material to the business of Premier; such schedule includes the
identity of all parties to such licenses, sublicenses and other agreements, a description of the nature and subject matter thereof, the applicable royalty and the term thereof. Premier is not in violation of any license, sublicense or agreement
described on such list except such violations as do not materially impair Premier’s rights under such license, sublicense or agreement. Except as disclosed in this Article 3, the execution and delivery of this Agreement by Premier, and the
consummation of the transactions contemplated hereby, will neither cause Premier to be in violation or default under any such license, sublicense 

  

 23 

 
or agreement, nor entitle any other party to any such license, sublicense or agreement to terminate or modify such license, sublicense or agreement. Except
as set forth on Schedule 3.18, Premier is the sole and exclusive owner of, with all right, title and interest in and to (free and clear of any and all liens, claims and encumbrances, other than license rights granted in the ordinary course of
business), all rights included among the Premier Proprietary Rights, and Premier has sole and exclusive rights (other than license rights granted in the ordinary course of business and is not contractually obligated to pay any compensation to any
third party in respect thereof) to the use thereof or the material covered thereby in connection with the services or products in respect of which Premier Proprietary Rights are being used. No claims with respect to Premier Proprietary Rights have
been asserted or, to the Knowledge of Premier, are threatened by any Person nor are there any valid grounds for any bona fide claims (a) to the effect that the manufacture, sale, licensing or use of any of the products of Premier as now
manufactured, sold or licensed or used or proposed for manufacture, use, sale or licensing by Premier infringes on any copyright, patent, trademark, service mark, trade secret or other proprietary right, (b) against the use by Premier of any
trademarks, service marks, trade names, trade secrets, copyrights, patents, technology, know-how or computer software programs and applications used in Premier’s business as currently conducted or as proposed to be conducted, or (c) challenging
the ownership by Premier, or the validity or effectiveness, of any of the Premier Proprietary Rights. All material registered trademarks, service marks and copyrights registered in the name of Premier are valid and subsisting in the jurisdictions in
which they have been filed. To the Knowledge of Premier, there is no material unauthorized use, infringement or misappropriation of any of Premier Proprietary Rights by any third party, including any employee or former employee of Premier. No
Premier Proprietary Right or product of Premier is subject to any outstanding decree, order, judgment, or stipulation restricting in any manner the licensing thereof by Premier. Except as set forth in Schedule 3.18, Premier has not entered into any
agreement under which Premier is restricted from selling, licensing or otherwise distributing any of its products to any class of customers, in any geographic area, during any period of time or in any segment of the market. Premier’s products,
packaging and documentation contain copyright notices sufficient to maintain copyright protection on the copyrighted portions of Premier Proprietary Rights. 
  
 3.18.3 Employee Agreements. Except as set forth on Schedule 3.18, each employee, officer and consultant of Premier has executed a confidentiality
and non-competition agreement in substantially the form attached hereto as Exhibit 3.18. To the Knowledge of Premier, no employee, officer or consultant of Premier is in violation of any term of any employment or consulting contract, proprietary
information and inventions agreement, non-competition agreement, or any other contract or agreement relating to the relationship of any such employee, officer or consultant with Premier, and Premier Business Affiliate or any previous employer.

  
 3.19 Insurance Contracts. Schedule 3.19 hereto lists
all contracts of insurance and indemnity in force at the date hereof with respect to Premier. Such contracts of insurance and indemnity and those shown in other Schedules to this Agreement (collectively, the “Premier Insurance
Contracts”) insure against such risks, and, to the Knowledge of Premier, are in such amounts as are appropriate and reasonable considering Premier’s property, business and operations. 
  

 24 

 3.20 Banking Relationships. Schedule 3.20 hereto shows the names and locations of all banks and
trust companies in which Premier has accounts, lines of credit or safety deposit boxes and, with respect to each account, line of credit or safety deposit box, the names of all persons authorized to draw thereon or to have access thereto.

  
 3.21 Intentionally Left Blank. 
  
 3.22 Absence of Certain Relationships. Except as set forth on Schedule
3.22, none of (a) Premier, (b) any executive officer of Premier, (c) Bajwa, or (d) any member of the immediate family of the persons listed in (a) through (c) of this sentence, has any financial or employment interest in any subcontractor, supplier,
or customer of Premier (other than holdings in publicly held companies of less than two percent (2%) of the outstanding capital stock of any such publicly held company). 
  
 3.23 Foreign Corrupt Practices. Neither Premier, nor any Affiliate of Premier, nor any other Person associated with
or acting for or on behalf of the any of the foregoing, has directly or indirectly taken any action which would cause Premier to be in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any rules and regulations
thereunder. Neither Premier, nor any Affiliate of Premier, nor any other Person associated with or acting for or on behalf of any of the foregoing, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment,
kick-back, or other payment to any Person, private or public, regardless of form, whether in money, property or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to
obtain special concessions or for special concessions already obtained, for or in respect of Premier or any Affiliate of Premier, or (iv) in violation of any law or regulation, or (b) established or maintained any fund or asset that has not been
recorded in the books and records of Premier. 
  
 Article 4

 REPRESENTATIONS AND WARRANTIES OF PARENT,
FEDERAL AND ACQUISITION SUB 
  
 Parent, Federal and Acquisition Sub, jointly and severally, represent and warrant to Premier as follows: 
  
 4.1 Corporate Status of Parent, Federal and Acquisition Sub. Each of Parent, Federal and Acquisition Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with the requisite corporate power to own, operate and lease its properties and to carry on its business as now being conducted. 
  
 4.2 Authority for Agreement; Noncontravention. 
  
 4.2.1 Authority. Each of Parent, Federal and Acquisition Sub
has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the boards of directors of Parent, Federal and Acquisition Sub and no other corporate proceedings on the part of Parent, Federal or Acquisition Sub are necessary to authorize the execution and delivery of 

  

 25 

 
this Agreement and the consummation of the transactions contemplated hereby. This Agreement and the other agreements contemplated hereby to be signed by
Parent, Federal or Acquisition Sub have been duly executed and delivered by Parent, Federal and/or Acquisition Sub, as the case may be, and constitute valid and binding obligations of Parent, Federal and/or Acquisition Sub, as the case may be,
enforceable against Parent, Federal and/or Acquisition Sub in accordance with their terms, subject to the qualifications that enforcement of the rights and remedies created hereby and thereby are subject to (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or
at law). 
  
 4.2.2 No Conflict. Neither execution and
delivery of this Agreement by Parent, Federal or Acquisition Sub, nor the performance by Parent, Federal or Acquisition Sub of its obligations hereunder, nor the consummation by Parent, Federal or Acquisition Sub of the transactions contemplated
hereby will (a) conflict with or result in a violation of any provision of the Certificate of Incorporation or by-laws of Parent, Federal or Acquisition Sub, or (b) with or without the giving of notice or the lapse of time, or both, conflict with,
or result in any violation or breach of, or constitute a default under, or result in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any note,
mortgage, indenture, lease, instrument or other agreement, Permit, concession, grant, franchise, license, judgment, order, decree, statute, ordinance, rule or regulation to which Parent, Federal, Acquisition Sub or any of Parent’s other
Subsidiaries is a party or by which any of them or any of their assets or properties is bound or which is applicable to any of them or any of their assets or properties. No authorization, consent or approval of, or filing with or notice to, any
Governmental Entity is necessary for the execution and delivery of this Agreement Parent, Federal or Acquisition Sub or the consummation by Parent, Federal or Acquisition Sub of the transactions contemplated hereby, except for such consents,
authorizations, filings, approvals and registrations which if not obtained or made would not have a Parent Material Adverse Effect. 
  
 4.3 SEC Statements, Reports and Documents. Parent has filed all required forms, reports, statements and documents with the SEC since July 1, 1999.
The documents so filed by Parent and available in the public records of the SEC include (a) its Annual Reports on Form 10-K for the fiscal years ended June 30, 2001 and June 30, 2002, respectively, (b) its Quarterly Report on Forms 10-Q for the
fiscal quarters ended September 30 and December 31, 2002, (c) all other forms, reports, statements and documents filed or required to be filed by it with the SEC since July 1, 1999, and (d) all amendments and supplements to all such reports and
registration statements filed by Parent with the SEC (the documents referred to in clauses (a), (b), (c) and (d) being hereinafter referred to as the “Parent Reports”). The consolidated balance sheet of Parent and its subsidiaries
at September 30, 2002 including the notes thereto, is hereinafter referred to as the “Parent Balance Sheet.” The Parent Reports and the Parent Balance Sheet are true and correct in all material respects and Premier and Bajwa are
authorized to rely on the Parent Reports and the Parent Balance Sheet in deciding to enter into this Agreement and consummate the transactions contemplated hereby. Parent shall continue to cause all required forms, reports, statements and documents
to be filed with the SEC and to cause such filings to be true and complete in all material respects, to and through the Closing. 
  

 26 

 4.4 Absence of Material Adverse Changes. Since the date of the Parent Balance Sheet, Parent has
not suffered any Parent Material Adverse Effect, nor has there occurred or arisen any event, condition or state of facts of any character that would result in a Parent Material Adverse Effect. 
  
 4.5 Litigation and Audits. Except for any claim, action, suit or
proceeding set forth on Schedule 4.5 hereto, (a) None of Parent, Federal or Acquisition Sub has received any written notice that there is any investigation by any Governmental Entity with respect to Parent, Federal or Acquisition Sub pending or, to
the knowledge of Parent, Federal or Acquisition Sub, threatened, nor has any Governmental Entity indicated to Parent, Federal or Acquisition Sub in writing an intention to conduct the same, which, if adversely determined, either singly or in the
aggregate, could reasonably be expected to prevent or materially delay the consummation of the transactions contemplated hereby; (b) None of Parent, Federal or Acquisition Sub has received any written notice that there is any claim, action, suit,
arbitration or proceeding pending or, to the knowledge of Parent, Federal or Acquisition Sub, threatened against or involving Parent, Federal or Acquisition Sub or any of their assets or properties, at law or in equity, or before any arbitrator or
Governmental Entity, that, if adversely determined, either singly or in the aggregate, could reasonably be expected to prevent or materially delay the consummation of the transactions contemplated hereby; and (c) there are no judgments, decrees,
injunctions or orders of any Governmental Entity or arbitrator outstanding against Parent, Federal or Acquisition Sub that could reasonably be expected to prevent or materially delay the consummation of the transactions contemplated hereby.

  
 4.6 No Broker’s or Finder’s Fees. None of
Parent, Federal or Acquisition Sub has either paid or become obligated to pay any fee or commission to any broker, finder, financial advisor or intermediary in connection with the transactions contemplated by this Agreement with respect to which
Premier or Bajwa will be liable. 
  
 4.7 Acquisition and
Opportunity to Investigate. Parent, Federal, and Acquisition Sub acknowledge that (a) neither Premier nor Bajwa nor any of their directors, officers, employees, affiliates, agents, advisors or representatives makes or shall be deemed to
have made any representations or warranties, express or implied, at law or in equity, of any kind or nature whatsoever concerning or as to the accuracy or completeness of any projections, estimates, budgets, forecasts or other forward-looking
information concerning the future revenue, income, profit or other financial results or consequences of Premier or any of it’s Affiliates, (b) there are uncertainties inherent in attempting to make any such projections, estimates, budgets,
forecasts or forward-looking information, (c) actual results may differ materially from any such projections, estimates, budgets, forecasts or forward-looking information and (d) Parent, Federal and Acquisition Sub shall have no claim against
Premier or Bajwa with respect thereto. Parent, Federal and Acquisition Sub also acknowledge that neither Premier nor Bajwa nor any of their directors, officers, employees, affiliates, agents, advisors or representatives makes or shall be deemed to
have made any representations or warranties, express or implied, at law or in equity, of any kind or nature whatsoever except as expressly set forth in this Agreement. 
  
 4.8 No Outside Reliance. None of Parent, Federal or Acquisition Sub has relied nor is relying upon any statement or
representation which is not made in this Agreement or the 

  

 27 

 
Exhibits or the Schedules attached hereto, any related agreement or any certificates to be delivered to them at the Closing. 
  
 4.9 Financing. Acquisition Sub has sufficient funds to permit it to
consummate the transactions contemplated hereby. 
  
 Article 5

 CONDUCT PRIOR TO THE CLOSING DATE

  
 5.1 Conduct of Business of Premier. Except as set
forth on Schedule 5.1 hereto, between the date of this Agreement and the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, Premier shall, unless otherwise required by law and except to the extent
that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld), (a) carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, pay its debts and taxes when
due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, except when subject to good faith disputes over such obligations, and use all commercially reasonable efforts consistent with past
practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business relationships with
it, to the end that Premier’s goodwill and ongoing business shall be unimpaired at the Closing Date, and (b) promptly notify Parent of any event or occurrence which will have or could reasonably be expected to have a Premier Material Adverse
Effect. In addition, between the date of this Agreement and the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, Premier shall not, unless otherwise required by law and except as set forth on
Schedule 5.1 hereto or to the extent that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld): 
  
 (a) amend its charter documents or by-laws; 
  
 (b) declare or pay any dividends or distributions on its outstanding shares of capital stock or purchase, redeem or otherwise acquire for
consideration any shares of its capital stock or other securities, except in accordance with agreements existing as of the date hereof and except as will not cause the Net Assets of Premier to be less than $11,000,000; nevertheless, should Premier
declare or pay any dividends or distributions on its outstanding shares of capital stock or purchase, redeem or otherwise acquire for consideration any shares of its capital stock or other securities, Premier promptly shall notify Acquisition Sub of
the same; 
  
 (c) issue or sell any shares of its
capital stock, effect any stock split or otherwise change its capitalization as it exists on the date hereof, or issue, grant, or sell any options, stock appreciation or purchase rights, warrants, conversion rights or other rights, securities or
commitments obligating it to issue or sell any shares of its capital stock, or any securities or obligations convertible into, or exercisable or exchangeable for, any shares of its capital stock, other than the issuance of shares of Premier Common
Stock pursuant to the conversion, exercise or exchange of securities therefore outstanding 

  

 28 

 
as of the date hereof in accordance with their terms. 
  
 (d) borrow or agree to borrow any funds or voluntarily incur, or assume or become subject to, whether directly or by way of guaranty or
otherwise, any obligation or Liability, except obligations incurred in the ordinary course of business consistent with past practices and except with respect to the borrowing of funds to be used to fund dividends or distributions permitted pursuant
to Section 5.1(b); 
  
 (e) pay, discharge or
satisfy any claim, obligation or Liability in excess of $25,000 (in any one case) or $50,000 (in the aggregate), other than the payment, discharge or satisfaction in the ordinary course of business of obligations reflected on or reserved against in
the Premier Balance Sheet, or incurred since the date of the Premier Balance Sheet in the ordinary course of business consistent with past practices or in connection with this transaction; 
  
 (f) except as required by applicable law, adopt or amend in
any material respect, any agreement or plan (including severance arrangements) for the benefit of its employees; 
  
 (g) sell, mortgage, pledge or otherwise encumber or dispose of any of its assets which are material, individually or in the aggregate, to
the business of Premier, except in the ordinary course of business consistent with past practices; 
  
 (h) acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, any business
or any corporation, partnership interest, association or other business organization or division thereof, or otherwise acquire any assets which are material, individually or in the aggregate, to the business of Premier, except in the ordinary course
of business consistent with past practices; 
  
 (i) increase the following amounts payable or to become payable: (i) the salary of any of its directors or officers, other than increases in the ordinary course of business consistent with past practices and not exceeding, in any case, five
percent (5%) of the director’s or officer’s salary on the date hereof, (ii) any other compensation of its directors or officers, including any increase in benefits under any bonus, insurance, pension or other benefit plan made for or with
any of those persons, other than increases that are provided in the ordinary course of business consistent with past practices to broad categories of employees and do not discriminate in favor of the aforementioned persons, and (iii) the
compensation of any of its other employees, consultants or agents except (A) in the ordinary course of business consistent with past practices (B) as required pursuant to the those certain retention agreements by and between Premier and certain
employees of Premier, including without limitation, Harry Thornsvard, Chuck Mudd and John Davis, copies of which have been furnished to Acquisition Sub; nevertheless, should Premier increase the compensation of any of its employees, consultants or
agents, Premier promptly shall notify Acquisition Sub of such action as will not cause the Net Assets of Premier to be less than $11,000,000 (c) as will not cause the Net Assets of Premier to be less than $11,000,000. 
  

 29 

 (j) dispose of, permit to lapse, or otherwise fail to preserve its rights to use the
Premier Proprietary Rights or enter into any settlement regarding the breach or infringement of, any Premier Proprietary Rights, or modify any existing rights with respect thereto, other than in the ordinary course of business consistent with past
practices, and other than any such disposal, lapse, failure, settlement or modification that does not have and could not reasonably be expected to have a Premier Material Adverse Effect; 
  
 (k) sell, or grant any right to exclusive use of, all or any part of the Premier Proprietary Rights;

  
 (l) enter into any contract or commitment or
take any other action that is not in the ordinary course of its business or could reasonably be expected to have an adverse impact on the transactions contemplated hereunder or that would have or could reasonably be expected to have a Premier
Material Adverse Effect; 
  
 (m) amend in any
material respect any agreement to which it is a party, the amendment of which will have or could reasonably be expected to have a Premier Material Adverse Effect; 
  
 (n) waive, release, transfer or permit to lapse any claim or right (i) that has a value, or involves payment
or receipt by it, of more than $25,000 or (ii) the waiver, release, transfer or lapse of which would have or could reasonably be expected to have a Premier Material Adverse Effect; 
  
 (o) take any action that would decrease Premier’s Net Assets below $11,000,000; nevertheless, should
Premier take and action that would materially decrease Premier’s Net Assets, Premier shall promptly notify Acquisition Sub of such action; 
  
 (p) make any change in any method of accounting or accounting practice other than changes required to be made in order that Premier’s
financial statements comply with GAAP; or 
  
 (q)
agree, whether in writing or otherwise, to take any action described in this Section 5.1. 
  
 Notwithstanding the foregoing, between the date of this Agreement and the Closing Date Premier may distribute to Bajwa the assets listed on Schedule 2.2. 
  
 5.2 Conduct of Business of Parent. Between the date of this Agreement and the Closing Date or the date, if any, on
which this Agreement is earlier terminated pursuant to its terms, none of Parent, Federal or Acquisition Sub shall, except to the extent that Premier shall otherwise consent in writing (such consent not to be unreasonably withheld), take any action
that would materially impair Acquisition Sub’s ability to pay the aggregate Purchase Price or otherwise to perform its obligations under this Agreement. Further, between the date of this Agreement and the Closing Date or the date, if any, on
which this Agreement is earlier terminated pursuant to its terms, Parent, Federal and Acquisition Sub shall, except to the extent that Premier shall otherwise consent in writing (such consent not to be unreasonably withheld) 

  

 30 

 
promptly notify Premier of any event or occurrence which will have or could reasonably be expected to have an adverse effect on the ability of Acquisition
Sub, Federal or Parent to pay the aggregate Purchase Price and otherwise to perform their respective obligations hereunder. 
  
 Article 6 
 ADDITIONAL
AGREEMENTS 
  
 6.1 Exclusivity. From and
after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with Article 9 hereof, neither Premier nor Bajwa will, directly or indirectly, through their respective affiliates, agents,
officers and directors, directly or indirectly, solicit, initiate, or participate in discussions or negotiations or otherwise cooperate in any way with, or provide any information to, any corporation, partnership, person, or other entity or group
concerning any tender offer, exchange offer, merger, business combination, sale of substantial assets, sale of shares of capital stock, or similar transaction involving Premier or any Premier Business Affiliate (all such transactions being referred
to herein as “Acquisition Proposals”). Notwithstanding the foregoing, in the event that Premier at any time from and after the date of this Agreement and before the earlier of the Closing Date or the termination of this Agreement in
accordance with Article 9 hereof, accepts an Acquisition Proposal from any person or entity other than Parent, Parent shall be entitled, providing that none of Parent, Federal and Acquisition Sub is not in a material breach of any of its obligations
hereunder, upon demand submitted in a form of a notice to Premier (the “Parent Demand Notice”) to the payment of the sum of $250,000. Premier shall make such payment within ten (10) days of its receipt of such Parent Demand Notice.
In the event that any of Parent, Federal or Acquisition Sub at any time from and after the date of this Agreement and before the earlier of the Closing Date or the termination of this Agreement in accordance with Article 9 hereof, terminates this
Agreement for any reasons other than as allowed by this Agreement, Premier shall be entitled, providing that neither Premier nor Bajwa is in a material breach of any of its obligations hereunder, upon demand submitted in a form of a notice to Parent
(the “Premier Demand Notice”) to the payment of the sum of $250,000. Parent shall make such payment within ten (10) days of its receipt of such Premier Demand Notice. The provisions in this Section 6.1 shall take precedence over any
provisions in the Letter of Intent regarding the matters set forth in this Section 6.1. 
  
 6.2 Expenses. 
  
 6.2.1 General. Except as provided in this Section 6.2, each party hereto shall be responsible for its own costs and expenses in connection with the Transaction, including fees and disbursements of consultants, brokers,
finders, investment bankers and other financial advisors, counsel and accountants (“Expenses”). 
  
 6.2.2 Broker Fees. At the Closing, Acquisition Sub shall pay to Broker an amount to be designated in writing by Premier to Acquisition Sub, which
amount shall be deducted from the Direct Payment due to Premier at the Closing. 
  

 31 

 6.2.3 Attorney Fees. At the Closing, Acquisition Sub shall pay to Premier’s Counsel an amount
to be designated in writing by Premier to Acquisition Sub, which amount shall be deducted from the Direct Payment due Premier at the Closing. 
  
 6.2.4 Accountant Fees. At the Closing, Acquisition Sub shall pay to Premier’s Accountant an amount to be designated in writing by Premier to
Acquisition Sub, which amount shall be deducted from the Direct Payment due to Premier at the Closing. 
  
 6.3 Indemnification. Subject to the terms of this Section 6.3, from and after the Closing Date, Parent, Federal and Acquisition Sub, each of their
respective Subsidiaries and Affiliates and their respective directors, officers, employees, Affiliates, representatives, successor and assigns (collectively “Parent Indemnified Parties”) shall be entitled to payment and
reimbursement from Premier, Bajwa or either of their respective successors (the “Parent Indemnifying Group”) of the amount of any Loss suffered, incurred or paid by any Parent Indemnified Party (subject to subsection 6.3.3), by
reason of, in whole or in part, any misrepresentation or inaccuracy in, or breach of, any representation or warranty made by Premier or Bajwa in this Agreement or any Exhibits or Schedules hereto or the certificates delivered pursuant to this
Agreement or the breach or nonperformance of any covenant or obligation to be performed by Premier or Bajwa hereunder or enforcing the indemnification provided for hereunder. Subject to the terms of this Section 6.3, from and after the Closing Date,
Premier, Bajwa and each of their representatives directors, officers, employees, Affiliates, successors, assigns and legal representatives (collectively the “Premier Indemnified Parties”) shall be entitled to payment and
reimbursement from Parent, Federal and Acquisition Sub and their successors (the “Premier Indemnifying Group”) of the amount of Loss suffered incurred or paid by any Premier Indemnified Party (subject to subsection 6.3.3) by reason
of, in whole or in part, any misrepresentation or inaccuracy in, or breach of any representation or warranty made by Parent, Federal or Acquisition Sub in this Agreement or any Exhibits or Schedules hereto or the certificates delivered pursuant to
this Agreement, the breach or nonperformance of any covenant or obligation to be performed by Parent, Federal or Acquisition Sub hereunder or under any agreement executed in connection herewith, any matter arising out of the business of Acquisition
Sub, any liability or obligation of, or claim against, Premier Indemnified Parties with respect to the Premier Assets or the Premier Obligations relating to any period after the Closing Date or enforcing the indemnification provided for hereunder.

  
 6.3.1 Claims for Indemnification. Upon obtaining
knowledge of any facts, claim or demand which has given rise to, or could reasonably give rise to, a claim for indemnification hereunder (referred to herein as an “Indemnification Claim”), the party seeking indemnification
hereunder, the Parent Indemnified Party or the Premier Indemnified Party, as the case may be (the “Indemnified Party”), shall promptly give written notice of such facts, claim or demand (“Notice of Claim”) to the
party from whom indemnification is sought, the Parent Indemnifying Group or the Premier Indemnifying Group, as the case may be (the “Indemnifying Party”). So long as the Notice of Claim is given by the Indemnified Party in the
Claims Period specified in Section 6.3.4, no failure or delay by the Indemnified Party in the giving of a Notice of Claim shall reduce or otherwise affect the Indemnified Party’s right to indemnification except to the extent that the
Indemnifying Party has been prejudiced thereby. 
  

 32 

 6.3.2 Defense by Indemnifying Party. In the event of a claim or demand asserted by a third party
(a “Third Party Claim”), the Indemnifying Party shall have the right, but not the obligation, exercisable by written notice to the Indemnified Party within 10 days of the date of the Notice of Claim concerning the commencement or
assertion of any Third Party Claim, to participate in the defense of such Third Party Claim. If the Indemnifying Party gives such notice of intent to defend, the Indemnifying Party shall assume the defense thereof as follows: (a) the Indemnifying
Party will defend the Indemnified Party against the matter with counsel compensated by and chosen by the Indemnifying Party, which choice of counsel shall be subject to the reasonable satisfaction of the Indemnified Party; (b) the Indemnified Party
may retain separate co-counsel at the sole cost and expense of Indemnified Party; (c) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the matter without the written consent of the
Indemnifying Party; and (d) the Indemnifying Party will not consent to the entry of any judgment with respect to the matter, or enter into any settlement that does not include a provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all liability with respect thereto, without the written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed. If, however, (y) no Indemnifying Party notifies the Indemnified Party
within 10 days after the Indemnified Party has given notice of the matter, that the Indemnifying Party is assuming the defense thereof, or (z) the maximum liability under such Third Party Claim is less than the available indemnification amount for
the Indemnifying Party (after taking into account the amount of all other claims for which the Indemnifying Party may be or may be claimed to be liable and any limitations contained in Section 6.3.3 hereof), then the Indemnified Party shall defend
against, or enter into any settlement with respect to the matter. The Indemnified Party shall not settle such Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

  
 6.3.3 Limitation on Liability for Indemnity.

  
 (b) The Parent Indemnified Parties shall not
be entitled to indemnification from the Parent Indemnifying Group pursuant to this Section 6.3 until the aggregate amount of all Losses suffered by the Parent Indemnified Parties exceeds $150,000 (including attorney’s fees and expenses incurred
in connection therewith and assuming, solely for the purpose of such calculation, the deletion of all qualifications as to materiality) (the “Parent Indemnity Deductible”) whereupon the Parent Indemnified Parties shall be entitled
to indemnification hereunder for the aggregate amount of all of such Losses suffered by the Parent Indemnified Parties or any Parent Indemnified Party, less the Parent Indemnity Deductible of $150,000. 
  
 (c) The Premier Indemnified Parties shall not be entitled to
indemnification from the Premier Indemnifying Group pursuant to this Section 6.3 until the aggregate amount of all Losses suffered by the Premier Indemnified Parties exceeds $150,000 (including attorney’s fees and expenses incurred in
connection therewith and assuming, solely for the purpose of such calculation, the deletion of all qualifications as to materiality) (the “Premier Indemnity Deductible”) whereupon the Premier Indemnified Parties shall be entitled to
indemnification hereunder for the aggregate amount of all of such Losses suffered by the Premier Indemnified Parties or any Premier Indemnified Party, less the Premier Indemnity Deductible of $150,000. 
  

 33 

 (d) The aggregate liability of the Parent Indemnifying Group for indemnification under
this Section 6.3 shall not exceed $5,000,000. The Premier Indemnifying Group’s aggregate liability for indemnification under this Section 6.3 shall not exceed $5,000,000. Provided that Parent, Federal and Acquisition Sub are not otherwise in
default of their obligations under Section 2.4 above, then to the extent that the amount then held in the Escrow is sufficient, the amount that a Parent Indemnified Party is entitled receive in indemnification hereunder, or such lesser amount as is
then held in the Escrow, shall be released from the Escrow and paid to such Parent Indemnified Party in partial (if the amount then held in the Escrow is less than the amount such Parent Indemnified Party is entitled receive in indemnification
hereunder) or full satisfaction of the Premier Indemnifying Group’s obligation hereunder, as the case may be. 
  
 6.3.4 Claims Period. Any claim for indemnification under this Section 6.3 must be asserted by written notice on or before the date that is 18
months after the Closing Date. 
  
 6.3.5
Subrogation. Upon making an indemnity payment pursuant to this Agreement, the Indemnifying Party will, to the extent of such payment, be subrogated to all rights of the Indemnified Party against any third party in respect of the damages to
which the payment is related. Without limiting the generality of any other provision hereof, each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above
described subrogation rights. 
  
 6.3.6 Exclusive Remedies.
The remedies provided for in this Agreement shall be the sole and exclusive remedies of the parties and their respective officers, directors, employees, affiliates, agents, representatives, successors and assigns for any breach of or inaccuracy in
any representation or warranty contained in this Agreement or any certificate delivered at Closing, provided, however, that nothing herein is intended to waive any claims for fraud or willful misconduct or waive any equitable remedies to which a
party may be entitled. 
  
 6.3.7 No Double Recovery.
Notwithstanding anything herein to the contrary, no party shall be entitled to indemnification or reimbursement under any provision of this Agreement for any amount to the extent such party or its Affiliate has been indemnified or reimbursed for
such amount under any other provision of this Agreement the Exhibits or Schedules attached hereto, or any document executed in connection with this Agreement or otherwise. 
  
 6.3.8 Treatment of Indemnity Payments Between the Parties. Unless otherwise required by applicable law, all
indemnification payments shall constitute adjustments to the Purchase Price for all Tax purposes, and no party shall take any position inconsistent with such characterization. 
  
 6,3,9 Duty to Mitigate. Each party hereto agrees to use commercially reasonable efforts to mitigate any damages which
form the basis of any claim hereunder. 
  
 6.4 Access and
Information. Premier shall afford to Parent, Federal, Acquisition Sub and to a reasonable number of their respective officers, employees, accountants, counsel and 

  

 34 

 
other authorized representatives full and complete access, upon reasonable advance telephone notice, during regular business hours, throughout the period
prior to the earlier of the Closing Date or the termination of this Agreement pursuant to its terms, to Premier’s offices, properties, books and records, and Premier shall use reasonable efforts to cause its representatives and independent
public accountants to furnish to Parent such additional financial and operating data and other information as to its business, customers, vendors and properties as Parent may from time to time reasonably request. Parent, Federal and Acquisition Sub
and their respective officers, employees, accountants, counsel and other authorized representatives shall be required to maintain the confidentiality of the information and documents regarding Premier received and reviewed by them in accordance with
this Agreement. Notwithstanding the foregoing, all visits to any office of Premier will be coordinated and conducted so as to not be disruptive to the operations of Premier and to preserve the confidentiality of the transactions contemplated hereby.
In addition, with the prior consent of Premier, Parent, Federal and Acquisition Sub shall be permitted to meet with Premier’s employees and with Premier’s significant customers, with the format of such meetings and the items of discussion
to be agreed to by Premier and Parent, Federal and Acquisition Sub in advance of such meetings. 
  
 6.5 Public Disclosure. Immediately following the execution of this Agreement, Parent shall disseminate the press release attached hereto as Exhibit
6.5. Except as otherwise required by law, Parent shall make no other public disclosure of information regarding the transactions contemplated herein prior to the Closing without the consent of Premier, which consent shall not be unreasonably
withheld or delayed. Premier and Parent agree that each party’s non-disclosure obligations contained in Section 11 of the Letter of Intent shall remain in full force and effect in accordance with the terms thereof and hereof. 
  
 6.6 Further Assurances. 
  
 6.6.1 Generally. Subject to terms and conditions herein provided and
to the fiduciary duties of the board of directors and officers or representatives of any party, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated hereby. In case at any time any further action, including, without limitation, the
obtaining of waivers and consents under any agreements, material contracts or leases and the execution and delivery of any licenses or sublicenses for any software, is necessary, proper or advisable to carry out the purposes of this Agreement, the
proper officers and directors or representatives of each party to this Agreement are hereby directed and authorized to use commercially reasonable efforts to effectuate all required action. 
  
 6.6.2 Novation of Contracts. Each party agrees to use commercially
reasonable efforts to effect the novation of each of the Premier Engagements with a Governmental Entity that may require novation under its terms or under applicable laws or regulations, and further agrees to provide all documentation necessary to
effect each such novation, including, without limitation, all instruments, certifications, requests, legal opinions, audited financial statements, and other documents required by Part 42 of the Federal Acquisition Regulation to effect a novation of
any contract with the Government of the United States. In particular and without limiting the generality of the foregoing, Premier and Bajwa shall continue 

  

 35 

 
to communicate with responsible officers of the Government of the United States from time to time as may be appropriate and permissible, to request speedy
action on any and all requests for consent to novation. Notwithstanding the foregoing, neither Premier nor Bajwa makes any representation or warranty that any such novation of any of the Premier Engagements with a Governmental Entity will in fact be
obtained. 
  
 6.7 Tax Matters 
  
 6.7.1 Allocation of Purchase Price. Acquisition Sub, Premier and
Bajwa agree that the Purchase Price and the liabilities of Premier (plus other relevant items) will be allocated to the Premier Assets and the Premier Obligations for all purposes (including Tax and financial accounting purposes) in a manner
consistent with an allocation schedule to be jointly prepared by Acquisition Sub and Premier on or before the Closing, which allocation schedule shall be made based upon the fair market values of the applicable Premier Assets and Premier
Obligations. Acquisition Sub and Premier shall prepare such allocation schedule in accordance with Code section 1060 and the Treasury regulations thereunder. Acquisition Sub, Premier and Bajwa will file all Tax Returns (including amended returns and
claims for refund) and information reports (including without limitation Form 8594) in a manner consistent with such allocation schedule and will take no position and will cause their Affiliates to take no position inconsistent with the allocation
schedule and Form 8594 for any Tax purposes. 
  
 6.7.2
Cooperation on Tax Matters. 
  
 (a)
Acquisition Sub, Premier and Bajwa shall cooperate fully, as and to the extent reasonably requested by any party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided hereunder. Premier and Bajwa agree (i) to retain all books and records with respect to Tax matters pertinent to Premier relating to any taxable period beginning before
the Closing Date until the expiration of the statute of limitations any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give Acquisition Sub
reasonable written notice prior to transferring, destroying or discarding any such books and records and, if Acquisition Sub so requests, allow Acquisition Sub to take possession of such books and records. 
  
 (b) Acquisition Sub, Premier and Bajwa further agree, upon
request, to use commercially reasonable efforts to obtain any certificate or other document from any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby). 
  
 6.7.3 Certain Taxes. All transfer, documentary, sales, use, stamp, registration 
  

 36 

 
and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be paid one-half ( 1/2) by Acquisition Sub and one-half ( 1/2) by Premier and/or Bajwa (the “Selling Group”) when due, and the Selling Group will, at its own expense, prepare and file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees, and, if required by applicable law, Acquisition Sub will, and will cause its Affiliates to, join in the execution of any such Tax
Returns and other documentation. 
  
 6.8
Notification. From the date hereof until the Closing Date, Premier shall promptly disclose to Parent and Acquisition Sub in writing any material variances from the representations and warranties contained in Article 3 promptly upon discovery
thereof, in the form of “Updated Schedules” delivered to Parent, Federal and Acquisition Sub. From the date hereof until the Closing Date, Parent, Federal and Acquisition Sub shall promptly disclose to Premier in writing any material
variances from Parent’s, Federal’s and Acquisition Sub’s representations and warranties contained in Article 4. 
  
 6.9 Accounts Receivable. Effective as of the Closing, except as otherwise required by the Subcontract Agreement, Premier hereby irrevocably
constitutes and appoints Acquisition Sub its true and lawful attorney-in-fact, with full power of substitution, in its name, place and stead to endorse the name of Premier on any checks and other remittances received on account of the Premier
Receivables and the Premier Work-In-Process and to perform all other acts necessary or desirable to collect the Premier Receivables and amounts received with respect to the Premier Work-In-Process for the account of Acquisition Sub. In accordance
with the Transition Services Agreement attached hereto as Exhibit G, Premier agrees that it shall promptly after receipt after the Closing, transfer and deliver to Acquisition Sub any cash or other property that Premier may receive in respect of
such Premier Receivables or on account of the Premier Work-In-Process, and any mail, checks or other documents received by Premier relating to any of the Premier Assets or Premier Obligations transferred to Acquisition Sub hereunder, such cash,
property, mail, checks and documents to be delivered in the form and condition in which received, except for the opening of any envelope or package. Premier shall use its commercially reasonable efforts to assist Acquisition Sub in the collection of
the Premier Receivables and all amounts receivable on account of the Premier Work- In-Process after the Closing to the extent requested by Acquisition Sub. 
  
 Acquisition Sub agrees to diligently bill the unbilled portions of the Premier Receivables and pursue the collection of the Premier Receivables after the
Closing. The parties hereto agree that none of the Premier Receivables shall be deemed to be uncollectible, such that Premier is deemed to have breached the representation and warranty by Premier in Section 3.15.2 that all of the Premier
Receivables, less any allowances for doubtful accounts reflected in the Estimated Closing Balance Sheet, are collectible, until such Premier Receivables remain uncollected twelve (12) months after the Closing Date. Upon seeking payment for an
uncollectable receivable from Premier or Stockholder, Acquisition Sub shall provide to Premier or Stockholder on a monthly basis information relating to the receivable and Acquisition Sub’s collection effort of such receivable. Stockholder may
contact Luther Bell, CACI Director of Cash Management and Harry Thornsvard, or if such individual(s) are no longer employed by Federal or Acquisition Sub, a Federal designated successor regarding Acquisition Sub’s collection efforts of Premier
accounts receivable. In the event that Acquisition Sub collects an unrecoverable receivable after 

  

 37 

 
recovering such unrecoverable receivable from Premier or Stockholder, Acquisition Sub shall promptly remit such collection amounts to Premier or Stockholder.

  
 6.10 Change of Name. Concurrently with the Closing,
Premier shall take all action required to change its name to a name having no relationship to “Premier Technology Group, Inc.” or any other name used in the Business; provided, however, that Premier shall be able to retain and use the name
“Premier Technology Group, Inc.” during the term of the Subcontract Agreement. 
  
 6.11 Preservation of Goodwill. Premier and Bajwa shall use their respective commercially reasonable efforts to aid Acquisition Sub in establishing itself as the new owner and operator of the Premier Assets and
the Business and, in connection therewith, shall use their respective commercially reasonable efforts to maintain their goodwill and reputation with the suppliers, clients and creditors of Premier and any others having business relations with them
and in the business community generally. 
  
 6.12
Employees. 
  
 6.12.1 General. 
  
 (a) Subject to the Closing of the transactions contemplated
by this Agreement, Acquisition Sub shall offer employment to the employees of Premier and the Premier Business Affiliates and Acquisition Sub and Federal shall use commercially reasonable efforts to cause such employees to accept such offers of
employment. The employees of Premier and the Premier Business Affiliates shall be eligible to receive employee benefits and base salary that in the aggregate are substantially comparable to the employee benefits and base salary currently provided to
them by Premier or Premier’s Affiliates. All employees of Premier or Premier Business Affiliates shall receive full credit for any service they performed for and on behalf of Premier or Premier Business Affiliates for purposes of eligibility to
participate, accrual of benefits, and vesting schedules under any of CACI Acquisition Sub and Federal employee benefit plans, vacation, service awards and/or programs. 
  
 6.12.2 Employee Benefits. Premier 401(k) Plans. Premier shall retain full responsibility for the continued
administration or termination of its 401(k) plans. No assets or liabilities with respect to the Business employees shall be transferred as a result of this Agreement from any retirement Plan of Premier (defined contribution and defined benefit) to
any plan maintained or established by Acquisition Sub. Premier shall retain all obligations to fund or otherwise provide benefits accrued on or before the Closing Date by the employees under Premier’s retirement Plans. Acquisition Sub shall
have no obligations with respect to Premier’s qualified retirement Plans, provided that nothing in this Agreement shall prohibit rollovers pursuant to Section 402(c) of the Code. 
  
 6.12.3 Parent hereby agrees that, with the approval of the plan administrator of the Parent’s tax-qualified 401(k) plan
(the “Parent’s 401(k) Plan”), which approval will not be unreasonably withheld, Parent will cause the Parent’s 401(k) Plan to accept rollovers or direct rollovers of “eligible rollover distributions” within the meaning
of Section 402(c) of the Code 

  

 38 

 
made with respect to Premier’s employees pursuant to the Premier’s 401(k) Plan by reason of the transactions contemplated by this Agreement.
Rollover amounts contributed to the Parent’s 401(k) Plan in accordance with this Section 6.12.3 shall at all times be 100% vested and shall be invested in accordance with the provisions of the Parent’s 401(k) Plan. 
  
 6.12.4 CACI Acquisition Sub shall offer medical and dental insurance to the
former employees of Premier and Premier’s Business Affiliates hired by CACI in accordance with its customary employment practices. 
  
 6.12.5 Cooperation. Premier and Acquisition Sub shall cooperate and provide such information as may reasonably be necessary with respect to each of
the actions contemplated in this Section, including, without limitation, the procurement of any required approvals from Governmental Entities. 
  
 6.12.6 Obligations. It is intended by the parties that the responsibilities, liabilities, and covenants assumed or agreed to by Acquisition Sub
pursuant to this Section 6.12.4 shall also bind any assignee or Affiliate of Acquisition Sub to which all or substantially all of the Business is transferred, and Acquisition Sub agrees to cause any such assignee or Affiliate to observe the
provisions and covenants of this Section. 
  
 6.13 Earn Out
Payments. 
  
 6.13.1 Payment and Dispute Procedure.
Payment of the earn-out shall be in accordance with Section 2.4.4 of the Agreement. In the event that Bajwa disagrees with Acquisition Sub’s determination, Bajwa shall notify Acquisition Sub within 30 days of his objections and the basis
therefor. If an objection is made Acquisition Sub and Bajwa will negotiate in good faith to reach an agreement regarding the matters in dispute. Resolution of any disputes shall be in accordance with the procedures set forth in Section 2.8.4.

  
 6.13.2 Indefeasability of Earn-Out Payments. The
obligation of Parent, Federal and Acquisition Sub under Section 2.4.4 hereof to make any ear-out payment upon reaching the targets provided therein shall not be affected by the death or disability of Bajwa, or the termination of any continuing
relationship between Bajwa and Premier, Acquisition Sub, Federal and/or Parent for any reason. In the event that Parent, Federal or Acquisition Sub sell the DCSINT contract or the CASCOM contract which are the subject of the earn-out in Section
2.4.4 in a transaction other than the purchase of all the outstanding stock of Parent or substantially all the assets of Parent, within two (2) years of the Closing Date, Parent shall pay Bajwa all outstanding payments remaining under the earn-out
with respect to the applicable contract. 
  
 Article 7

 CONDITIONS PRECEDENT 
  
 7.1 Conditions Precedent to the Obligations of Each Party. The obligations of the parties hereto to effect the
Transaction shall be subject to the fulfillment at or prior to the Closing of the following conditions, any of which conditions may be waived in writing prior to Closing by the party for whose benefit such condition is imposed: 
  

 39 

 7.1.1 No Illegality. There shall not have been any action taken, and no statute, rule or
regulation shall have been enacted, by any state, federal or other (including foreign) government agency since the date of this Agreement that would prohibit or materially restrict the Transaction or any other material transaction contemplated
hereby. 
  
 7.1.2 No Injunction. No injunction or
restraining or other order issued by a court of competent jurisdiction that prohibits or materially restricts the consummation of the Transaction contemplated hereby shall be in effect (each party agreeing to use all reasonable efforts to have any
injunction or other order immediately lifted), and no action or proceeding shall have been commenced or threatened in writing seeking any injunction or restraining or other order that seeks to prohibit, restrain, invalidate or set aside consummation
of the transactions contemplated hereby. 
  
 7.1.3 Escrow
Agreement. Each of the parties hereto, together with the Escrow Agent, shall have entered into the Escrow Agreement. 
  
 7.1.4 Subcontract Agreement. Each of the applicable parties shall have entered into the Subcontract Agreement. 
  
 7.2 Conditions Precedent to Obligation of Parent, Federal and Acquisition
Sub to Consummate the Transaction. The obligation of Parent, Federal and Acquisition Sub to consummate the Transaction shall be subject to the fulfillment at or prior to the Closing of the following additional conditions, any of which conditions
may be waived in writing by Parent, Federal or Acquisition Sub prior to Closing: 
  
 7.2.1 Representations and Warranties. The representations and warranties of Premier contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date, except for
changes contemplated by this Agreement (including those changes permitted under Section 5.1 hereof) and except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of
such date), with the same force and effect as if made on and as of the Closing Date, except, in all such cases, for such breaches, inaccuracies or omissions of such representations and warranties which have neither had, nor reasonably would be
expected to have, a Premier Material Adverse Effect (it being understood that, for purposes of determining the accuracy of such representations and warranties, any update of or modifications to the Schedules made or purported to have been made after
execution of this Agreement, including the Updated Schedules, shall be disregarded); and Premier and Bajwa shall have delivered to Parent a certificate to that effect, dated the Closing Date and signed on behalf of Premier by the President and Chief
Financial Officer of Premier as well as by Bajwa in his individual capacity. 
  
 7.2.2 Agreements and Covenants. Premier shall have performed in all material respects all of its agreements and covenants set forth herein that are required to be performed at or prior to the Closing Date; and
Premier and Bajwa shall have delivered to Parent a certificate to that effect, dated as of the Closing Date and signed on behalf of Premier by the President and Chief Financial Officer of Premier as well as by Bajwa in his individual capacity.

  
 7.2.3 Legal Opinion. Parent, Federal and Acquisition
Sub shall have received 

  

 40 

 
an opinion from Holland & Knight LLP, counsel to Premier in substantially the form attached hereto as Exhibit B. 
  
 7.2.4 Closing Documents. Premier and Bajwa shall have delivered to
Parent the closing certificate described hereafter in this paragraph and such closing documents as the Parent shall reasonably request (other than additional opinions of counsel). The closing certificate, dated as of the Closing Date, duly executed
by Premier’s secretary, shall certify as to (a) the signing authority, incumbency and specimen signature of the signatories of this Agreement and other documents signed on behalf of Premier in connection herewith, (b) the resolutions adopted by
the board of directors of Premier authorizing and approving the execution, delivery and performance of this Agreement and the other documents executed in connection herewith and the consummation of the transactions contemplated hereby and thereby
and state that such resolutions have not been modified, amended, revoked or rescinded and remain in full force and effect, and (c) the charter documents and by-laws of Premier. 
  
 7.2.5 Third Party Consents. All third party consents or approvals listed in Schedule 7.2.5 hereto shall have been
obtained by Premier and shall be effective and shall not have been suspended, revoked, or stayed by action of any such third party. 
  
 7.2.6 Diligence Review. Parent and its accountants and attorneys shall have conducted prior to the date of this Agreement a diligence investigation
of all matters related to the Business of Premier deemed relevant by Parent or its accountants and attorneys to such diligence investigation, and the results of such diligence investigation shall have been satisfactory to Parent in its sole
discretion. Parent shall after the date of this Agreement use its commercially reasonable efforts to continue and complete its diligence investigation solely with respect to its entitlement to meet with Premier’s employees and with
Premier’s significant customers, with the format of such meetings and the items of discussion to be agreed to by Premier and Parent, Federal and Acquisition Sub in advance of such meetings, and its review pursuant to Section 7.2.10 herein.

  
 7.2.7 Non-Compete, Non-Solicitation and Non-Disturbance
Agreements. Premier shall have entered into a non-compete, non-solicitation and non-disturbance agreement with Bajwa in substantially the form of Exhibit C, with Neelima Bajwa in substantially the form of Exhibit D and with Bruce E. Jesson
substantially the form of Exhibit E. 
  
 7.2.8 Employment
Agreements. Acquisition Sub shall have entered into an employment agreement in the Form of Exhibit F with (a) at least 24 of the key employees listed on Schedule 7.2.8(a), and (b) at least 95% of the persons employed by Premier and the Premier
Business Affiliates as of the date of the execution of the Agreement other than the administrative employees as listed on Schedule 7.2.8 (b). 
  
 7.2.9 Review of Contracts in Place. By May 7, 2003, Acquisition Sub shall have had the opportunity to review all documentation regarding the
Premier Engagements in the location where such documentation is maintained by Premier, and may not close if any information found in such documentation in Acquisition Sub’s reasonable discretion, shall have a Premier Material Adverse Effect.

  

 41 

 7.2.10 Material Adverse Effect. Since the date of this Agreement, Premier shall not have suffered
a Premier Material Adverse Effect. 
  
 7.3 Conditions to
Obligations of Premier and Bajwa to Consummate the Transaction. The obligation of Premier and Bajwa to consummate the Transaction shall be subject to the fulfillment at or prior to the Closing of the following additional conditions, any of which
may be waived in writing by Premier or Bajwa prior to Closing: 
  
 7.3.1 Representations and Warranties. The representations and warranties of Parent, Federal and Acquisition Sub contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date, except for
changes contemplated by this Agreement and except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made on and as
of the Closing Date, except in all such cases, for such breaches, inaccuracies or omissions of such representations and warranties which have neither had nor reasonably would be expected to have a Parent Material Adverse Effect; and Parent shall
have delivered to Premier a certificate to that effect, dated the date of the Closing and signed on behalf of Parent by the President and Chief Financial Officer of Parent. 
  
 7.3.2 Agreements and Covenants. Parent, Federal and Acquisition Sub shall have performed in all material respects all
of their agreements and covenants set forth herein that are required to be performed at or prior to the Closing Date; and Parent shall have delivered to Premier a certificate to that effect, dated as of the Closing Date and signed on behalf of
Parent by the Chief Executive Officer and Chief Financial Officer of Parent. 
  
 7.3.3 Legal Opinion. Premier shall have received an opinion from Parent in substantially the form attached hereto as Exhibit H. 
  
 7.3.4 Closing Documents. Parent, Federal and Acquisition Sub shall have delivered to Premier closing certificates of
Parent, Federal and Acquisition Sub and such other closing documents as Premier shall reasonably request (other than additional opinions of counsel). Each of the closing certificates of Parent, Federal and Acquisition Sub, dated as of the Closing
Date, duly executed by the secretary of Parent, Federal and Acquisition Sub, respectively, shall certify as to (a) the signing authority, incumbency and specimen signature of the signatories of this Agreement and other documents signed on behalf of
Parent, Federal and Acquisition Sub in connection herewith, (b) the resolutions adopted by the board of directors of Parent, Federal and Acquisition Sub authorizing and approving the execution, delivery and performance of this Agreement and the
other documents executed in connection herewith and the consummation of the transactions contemplated hereby and thereby and state that such resolutions have not been modified, amended, revoked or rescinded and remain in full force and effect, and
(c) the Certificate of Incorporation and By-Laws of Parent, the Certificate of Incorporation and By-Laws of Federal and the Certificate of Incorporation and By-Laws of Acquisition Sub. 
  
 7.3.5 Material Adverse Effect. Since the date of this Agreement, Parent shall 

  

 42 

 
not have suffered a Parent Material Adverse Effect. 
  
 7.3.6 Payment of Purchase Price. Parent shall have tendered the Direct Payment to Premier pursuant to the provisions of Section 2.4.2 hereof and
shall have delivered the Escrow Payment to the Escrow Agent pursuant to the provisions of Section 2.4.3 hereof. 
  
 7.3.7 Payment of Premier Credit Facilities. Parent, Federal or Acquisition Sub shall have paid in full the Premier Credit Facilities concurrently
with the Closing. 
  
 Article 8 
 SURVIVAL OF REPRESENTATIONS 
  
 8.1 Premier’s Representations. All representations and warranties made by Premier and Bajwa in this Agreement,
or any certificate or other writing delivered by Premier or any of its Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Parent and shall terminate on the date
which is 18 months after the Closing Date (except that Indemnified Party claims pending on such date continue until resolved). The pre-Closing covenants made by Premier and Bajwa in this Agreement or any certificate or other writing delivered by
Premier or any of its Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Parent and shall terminate on the date which is 18 months after the Closing Date (except
that Indemnified Party claims pending on such date continue until resolved). The post-Closing covenants made by Premier and Bajwa in this Agreement or any certificate or other writing delivered by Premier or any of its Affiliates pursuant hereto or
in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Parent. 
  
 8.2 Parent’s Representations. All representations and warranties made by Parent, Federal and Acquisition Sub in this Agreement or any
certificate or other writing delivered by Parent, Federal, Acquisition Sub or any of their respective Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Premier
and shall terminate on the later of the date when all amounts that may become payable pursuant to Section 2.4.4 are either paid in full or cease to have the potential to become payable (except that Premier claims pending on such date shall continue
until resolved) or on the date which is 18 months after the Closing Date (except that Indemnified Party claims pending on such date continue until resolved). The covenants made by Parent, Federal or Acquisition Sub in this Agreement or any
certificate or other writing delivered by Premier or any of its Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Premier. 
  
 Article 9 
 OTHER PROVISIONS 
  
 9.1 Termination Events. This Agreement may be terminated and the Transaction 

  

 43 

 
abandoned at any time prior to the Closing Date, provided however that upon any such termination the surviving obligations of the Parties under the Letter of
Intent, including the obligations of confidentiality and non-solicitation, shall continue in full force and effect in accordance with the terms of the Letter of Intent: 
  
 (a) by mutual written consent of Parent and Premier; 
  
 (b) by Parent if there has been a breach of any
representation, warranty, covenant or agreement contained in this Agreement on the part of Premier or Bajwa and such breach has not been cured within ten business days after written notice to Premier (provided, that none of Parent, Federal or
Acquisition Sub is in material breach of the terms of this Agreement, and provided further, that no cure period shall be required for a breach which by its nature cannot be cured) such that the conditions set forth in Section 7.2.1 or Section 7.2.2
hereof, as the case may be, will not be satisfied; 
  
 (c) (i) by Parent, if Premier, its board of directors or Bajwa shall have (1) withdrawn, modified or amended in any material respect the approval of this Agreement or the transactions contemplated herein, or (2) taken any public position
inconsistent with its approval or recommendation, including, without limitation, having failed (without the consent of Parent) after a reasonable period of time to reject or disapprove any Acquisition Proposal (or after a reasonable period of time
to recommend to its shareholders such rejection or disapproval), provided, that none of Parent, Federal or Acquisition Sub is and in material breach of the terms of this Agreement, and in that event Premier shall pay to Parent the amount specified
in Section 6.1; 
  
 (ii) by Premier, if Parent,
Federal, Acquisition Sub or their respective boards of directors shall have (1) withdrawn, modified or amended in any material respect the approval of this Agreement or the transactions contemplated herein, or (2) taken any public position
inconsistent with its approval or recommendation (provided, that neither Premier nor Bajwa is in material breach of the terms of this Agreement) and in that event Parent shall pay to Premier the amount specified in Section 6.1; 
  
 (d) by Premier, if there has been a breach of any
representation, warranty, covenant or agreement contained in this Agreement on the part of Parent, Federal or Acquisition Sub and such breach has not been cured within ten business days after written notice to Parent (provided, that neither Premier
nor Bajwa is in material breach of the terms of this Agreement, and provided further, that no cure period shall be required for a breach which by its nature cannot be cured) such that the conditions set forth in Section 7.3.1 or Section 7.3.2
hereof, as the case may be, will not be satisfied, and in that event Parent shall pay to Premier the amount specified in Section 6.1; 
  
 (e) by Premier, if Premier accepts an Acquisition Proposal for any reason, including pursuant to a good-faith determination by its Board
of Directors, after consulting with counsel, that not to accept the Acquisition Proposal would constitute a breach of the Directors’ fiduciary duty under the law of Premier’s jurisdiction of organization; provided, however, that in
that event Premier shall pay to Parent the amount 

  

 44 

 
pursuant to Section 6.1; 
  
 (f) by any party hereto if: (i) there shall be a final, non-appealable order of a federal or state court in effect preventing consummation
of the Transaction; (ii) there shall be any final action taken, or any statute, rule, regulation or order enacted, promulgated or issued or deemed applicable to the Transaction by any Governmental Entity which would make consummation of the
Transaction illegal or which would prohibit Parent’s or Federal’s ownership or operation of all or a material portion of the stock or assets of Premier, or compel Parent, Federal or Acquisition Sub to dispose of or hold separate all or a
material portion of the business or assets of Premier or Parent, Federal or Acquisition Sub as a result of the Transaction; or 
  
 (g) by any party hereto if the Transaction shall not have been consummated by May 15, 2003, provided that the right to terminate this
Agreement under this Section 9.1(g) shall not be available to any party whose failure to fulfill any material obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing Date to occur on or before such date.

  
 9.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered by hand sent via a reputable nationwide courier service or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice) and shall be deemed given on the date on which so hand-delivered or on the third business day following the date on which so mailed or sent: 
  
 To Parent, Federal and Acquisition Sub: 
  
 CACI International Inc 
 1100 North Glebe Road 
 Arlington, VA 22201 
 Attention: Dr. J. P. London, Chairman 
  
 with copies to: 
  
 Jeffrey P. Elefante 
 Executive Vice President, General Counsel and Secretary 
 CACI International Inc 
 1100 North Glebe Road 
 Arlington, VA 22201 
  
 and 
  
 David W. Walker 
 Foley Hoag LLP 
 155 Seaport Boulevard 
 Boston, MA 02210 
  
 To Premier: 
  
 Before the Closing: 
 Rajiv Bajwa 
  

 45 

 President and CEO 
 Premier Technology Group, Inc. 
 12701 Fair Lakes Circle 
 Suite 1000 
 Fairfax, VA 22033 
  
 After the Closing: 
  
 Rajiv Bajwa 
 President and CEO 
 Premier Technology Group, Inc. 
 at such address to be provided in writing by Bajwa to Acquisition Sub 
  
 with a copy to: 
  
 William J. Mutryn, Esq. 
 Holland & Knight LLP 
 2099 Pennsylvania Avenue, N.W. 
 Suite 100 
 Washington, DC 20006 
  
 9.3 Entire Agreement.
Unless otherwise herein specifically provided, this Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, including the Letter of Intent. Each party hereto acknowledges that, in
entering this Agreement and completing the transactions contemplated hereby, such party is not relying on any representation, warranty, covenant or agreement not expressly stated in this Agreement or in the agreements among the parties contemplated
by or referred to herein. 
  
 9.4 Assignability. This
Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder, except as otherwise expressly provided herein. Neither this Agreement nor any of the rights and obligations of the parties hereunder
shall be assigned or delegated, whether by operation of law or otherwise, without the written consent of all parties hereto. 
  
 9.5 Validity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and effect. 
  
 9.6 Specific Performance. The parties hereto acknowledge that damages alone may not adequately compensate a party for violation by another party of this Agreement. Accordingly, in addition to all other remedies
that may be available hereunder or under applicable law, any party shall have the right to any equitable relief that may be appropriate to remedy a breach or threatened breach by any other party hereunder, including the right to enforce specifically
the terms of this Agreement by obtaining injunctive relief in respect of any violation or non-performance hereof. 
  

 46 

 9.7 Governing Law This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the Commonwealth of Virginia, without regard to its principles of conflicts of laws. 
  
 9.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which together shall constitute one and the same agreement.

  

 47 

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

	CACI International Inc
		
	 By:
	 	  

	 	 	 Title:

	
	CACI, Inc. - Federal
		
	 By:
	 	  

	 	 	 Title:

	
	CACI Premier Technology, Inc.
		
	 By:
  
	 	  

	 	 	 Title:

	
	Premier Technology Group, Inc.
		
	 By:
	 	  

	 	 	 Title:

	
	  

	Rajiv Bajwa

  
 [Signature Page
to Asset Purchase Agreement] 

 List of Exhibits and Schedules 
  

	Exhibit

	 	 Description

		
	A	 	Escrow Agreement
		
	B	 	Form of Opinion of Premier’s Counsel
		
	C	 	Form of Non-Compete, Non-Solicitation and Non-Disturbance Agreement (Bajwa)
		
	D	 	Form of Non-Compete, Non-Solicitation and Non-Disturbance Agreement (Wife)
		
	E	 	Form of Non-Compete, Non-Solicitation and Non-Disturbance Agreement (Jesson)
		
	F	 	Form of Parent Employment Agreement
		
	G	 	Transition Services Agreement
		
	H	 	Form of Opinion of Counsel to CACI International Inc
		
	 I
 J
	 	 Subcontract Agreement
 Schedule of
Liens

		
	K	 	Purchase Price Allocation
		
	3.18	 	Form of Premier Employee Agreement
		
	6.5	 	Public Disclosure
		
	Schedule

	 	 Description

	 2.1.2
	 	 Premier Engagements

		
	 2.1.3
	 	Premier Contracts
		
	 2.2
	 	Excluded Assets
		
	 2.3.1
	 	Assumed Accounts Payable, etc.
		
	 3.1
	 	Corporate Status of Premier.
		
	 3.2
	 	Capital Stock.
		
	 3.4
	 	Authority for Agreement; Noncontravention.
		
	 3.6
	 	Absence of Material Adverse Changes.
		
	 3.7
	 	Absence of Undisclosed Liabilities.
		
	 3.8
	 	Compliance with Applicable Law, Charter and By-Laws.
		
	 3.9
	 	Litigation and Audits.
		
	 3.10
	 	Tax Matters.
		
	 3.11
	 	Employee Benefit Plans.
		
	 3.12
	 	Employment-Related Matters.
		
	 3.13
	 	Environmental Matters.
		
	 3.15
	 	Assets Other Than Real Property.
		
	 3.16
	 	Premier Leases.
		
	 3.17
	 	Agreements, Contracts and Commitments.
		
	 3.18
	 	Intellectual Property.
		
	 3.19
	 	Insurance Contracts.
		
	 3.20
	 	Banking Relationships.
		
	 3.22
	 	Absence of Certain Relationships.
		
	 4.5
	 	Litigation and Audits
		
	 5.1
	 	Conduct of Business of Premier.
		
	 7.2.5
	 	Third Party Consents.
		
	 7.2.8(a)
	 	Key Employees
		
	 7.2.8(b)
	 	Employees of Premier Business Affiliates to be Engaged by Acquisition Sub.Business Loan Agreement dated as of September 26, 2003

 Exhibit 4.1 
  

BUSINESS LOAN AGREEMENT 
 (Bank of
America, N.A. – Excelligence Learning Corporation et al.) 
  
 This Agreement, dated as of September 26, 2003 (this “Agreement”), is between BANK OF AMERICA, N.A. (the “Bank”) and EXCELLIGENCE LEARNING CORPORATION, a Delaware corporation (“Borrower 1”), EARLYCHILDHOOD LLC,
a California limited liability company (“Borrower 2”), EDUCATIONAL PRODUCTS, INC., a Texas corporation (“Borrower 3”), SMARTERKIDS.COM, INC., a Delaware corporation (“Borrower 4”), MARKETING LOGISTICS, INC., a Minnesota
corporation dba Early Childhood Manufacturers’ Direct (“Borrower 5”), and COLORATIONS, INC., an Ohio corporation (“Borrower 6”). Borrower 2, Borrower 3, Borrower 4, Borrower 5 and Borrower 6 are wholly-owned subsidiaries of
Borrower 1. In this Agreement, unless otherwise specified, all of the Borrowers are referred to collectively as the “Borrower.” 
  
 1. DEFINITIONS 
  
 In addition to the terms which are defined elsewhere in this Agreement, the following terms have the meanings indicated for the purposes of this Agreement: 
  
 1.1 “Loan Documents” mean this Agreement, and all other documents, written
representations or instruments entered into between Borrower and Bank, or by Borrower in favor of, or for the benefit of Bank, that recite that they are to secure Borrower’s obligations under this Agreement or are otherwise made pursuant to the
requirements of this Agreement, as it may be amended or continued from time to time, or any successor loans from the Bank to the Borrower. 
  
 1.2 “Borrowing Base” means the sum of the following: 
  

	(a)	 	80% of the balance due on Acceptable Receivables; and 

  

	(b)	 	35% of the value of Acceptable Inventory, except from April 1 through July 31, 45% of the value of Acceptable Inventory shall be used. Notwithstanding the foregoing, the Borrowing
Base shall include a maximum of Seven Hundred Fifty Thousand Dollars ($750,000.00) based on the value of inventory which is “Slow-Moving.” The term “Slow-Moving” shall mean any inventory held for sale for greater than one (1)
year. 

  
 In determining the value of Acceptable Inventory to be
included in the Borrowing Base, the Bank will use the lowest of (i) the Borrower’s cost, (ii) the Borrower’s estimated market value, or (iii) the Bank’s independent determination (in the exercise of its Permitted Discretion) of the
resale value of such inventory in such quantities and on such terms as the Bank deems appropriate. 
  
 After calculating the Borrowing Base as provided above, the Bank may deduct such reserves as the Bank may establish from time to time in its Permitted Discretion, including, without limitation, reserves for rent at
leased locations subject to statutory or contractual landlord’s liens, inventory shrinkage, dilution, customs charges, warehousemen’s or bailees’ charges, and the amount of estimated maximum exposure, as reasonably determined by the
Bank from time to time, under any interest rate contracts which the Borrower enters into with the Bank (including interest rate swaps, caps, floors, options thereon, combinations thereof, or similar contracts). 
  
 1.3 “Acceptable Receivable” means an account receivable which satisfies the
following requirements; provided, however, that such requirements may be fixed and revised from time to time by the Bank in its Permitted Discretion: 
  

	(a)	 	The account has resulted from the sale of goods by the Borrower in the ordinary course of the Borrower’s business and without any further obligation on the part of the Borrower
to service, repair, or maintain any such goods sold other than pursuant to any applicable warranty. 

	(b)	 	There are no conditions which must be satisfied before the Borrower is entitled to receive payment of the account. Accounts arising from COD sales, consignments or guaranteed sales
are not acceptable. 

  

	(c)	 	The debtor upon the account does not claim any defense to payment of the account, whether well founded or otherwise. 

  

	(d)	 	The account balance does not include the amount of any counterclaims or offsets which have been or may be asserted against the Borrower by the account debtor (including offsets for
any “contra accounts” owed by the Borrower to the account debtor for goods purchased by the Borrower or for services performed for the Borrower). To the extent any counterclaims, offsets, or contra accounts exist in favor of the debtor,
such amounts shall be deducted from the account balance. 

  

	(e)	 	The account represents a genuine obligation of the debtor for goods sold to and accepted by the debtor, or for services performed for and accepted by the debtor. To the extent any
credit balances exist in favor of the debtor, such credit balances shall be deducted from the account balance. 

  

	(f)	 	The account balance does not include the amount of any finance or services charges payable by the account debtor. To the extent any finance charges or services charges are included,
such amounts shall be deducted from the account balance. 

  

	(g)	 	The Borrower has sent an invoice to the debtor in the amount of the account. 

  

	(h)	 	The Borrower is not prohibited by the laws of the state where the account debtor is located from bringing an action in the courts of that state to enforce the debtor’s
obligation to pay the account. The Borrower has taken all appropriate actions to ensure access to the courts of the state where the account debtor is located, including, where necessary, the filing of a Notice of Business Activities Report or other
similar filing with the applicable state agency or the qualification by the Borrower as a foreign corporation authorized to transact business in such state. 

  

	(i)	 	The account is owned by the Borrower free of any title defects or any liens or interests of others except the security interest in favor of the Bank. 

  

	(j)	 	The debtor upon the account is not any of the following: 

  

	 	(i)	 	An employee, affiliate, parent or subsidiary of the Borrower, or an entity which has common officers or directors with the Borrower. 

  

	 	(ii)	 	The U.S. government or any agency or department of the U.S. government unless the Bank agrees in writing to accept the obligation, the Borrower complies with the procedures in the
Federal Assignment of Claims Act of 1940 (41 U.S.C. §15) with respect to the obligation, and the underlying contract expressly provides that neither the U.S. government nor any agency or department thereof shall have the right of set-off
against the Borrower. 

  

	 	(iii)	 	Any state, county, city, town or municipality, excluding any school, school district, or government sponsored school program conducted for preschool children or outside of regular
school hours. 

  

	 	(iv)	 	Any person or entity located in a foreign country. 

  

	(k)	 	The account is not in default. An account will be considered in default if any of the following occur: 

  

 2 

	 	(i)	 	the account is not paid within 90 days from its invoice date or 60 days from its due date, whichever occurs first; 

  

	 	(ii)	 	the debtor obligated upon the account suspends business, makes a general assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or

  

	 	(iii)	 	any petition is filed by or against the debtor obligated upon the account under any bankruptcy law or any other law or laws for the relief of debtors. 

  

	(l)	 	The account is not the obligation of a debtor who is in default (as defined above) on 50% or more of the accounts upon which such debtor is obligated. 

  

	(m)	 	The account does not arise from the sale of goods which remain in the Borrower’s possession or under the Borrower’s control. 

  

	(n)	 	The account is not evidenced by a promissory note or chattel paper, nor is the account debtor obligated to the Borrower under any other obligation which is evidenced by a promissory
note. 

  
 In addition to the foregoing limitations, the dollar
amount of accounts included as Acceptable Receivables which are the obligations of a single debtor shall not exceed the concentration limit established for that debtor. To the extent the total of such accounts exceeds a debtor’s concentration
limit, the amount of any such excess shall be excluded. The concentration limit for each debtor shall be equal to 10% of the total amount of the Borrower’s Acceptable Receivables at that time. 
  
 1.4 “Acceptable Inventory” means inventory which satisfies the following
requirements; provided, however, that such requirements may be fixed and revised from time to time by the Bank in its Permitted Discretion: 
  

	(a)	 	The inventory is owned by the Borrower free of any title defects or any liens or interests of others except the security interest in favor of the Bank. 

  

	(b)	 	The inventory is located at locations which the Borrower has disclosed to the Bank and which are acceptable to the Bank. If the inventory is covered by a negotiable document of
title (such as a warehouse receipt) that document must be delivered to the Bank. Inventory which is in transit is not acceptable. 

  

	(c)	 	The inventory is held for sale in the ordinary course of the Borrower’s business and is of good and merchantable quality. Inventory which is obsolete, unsalable, damaged,
defective, used, or which has been returned by the buyer, is not acceptable.  

  

	(d)	 	The inventory is covered by insurance as required in Paragraph 10.21. 

  

	(e)	 	The inventory has not been manufactured to the specifications of a particular account debtor. Notwithstanding the foregoing, specially wrapped packs of standard items assembled and
sold by Borrower 3 shall constitute Acceptable Inventory under this Agreement. 

  

	(f)	 	The inventory is not subject to any licensing agreements which would prohibit or restrict in any way the ability of the Bank to sell the inventory to third parties.

  

	(g)	 	The inventory has been produced in compliance with the requirements of the U.S. Fair Labor Standards Act (29 U.S.C. §§201 et seq.). 

  

	(h)	 	The inventory is not placed on consignment. 

  
 1.5 “Permitted Discretion” means a determination made in good faith and in the exercise of 
  

 3 

 reasonable (from the perspective of a secured asset-based lender) business judgment. 
  
 2. FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS

  
 2.1 Line of Credit Amount. 
  

	(a)	 	During the availability period described below, the Bank will provide a line of credit to the Borrower. The maximum amount of the line of credit (the “Facility No. 1
Commitment”) is Fifteen Million Dollars ($15,000,000.00). Notwithstanding the forgoing provision, if the principal balance of advances under the Facility No. 1 Commitment and the Facility No. 2 Commitment exceeds (i) $12,000,000.00 from June 1
to September 30 of any calendar year, or (ii) $10,000,000.00 at all other times, then the Facility No. 1 Commitment shall be the lesser of $15,000,000.00, or the Borrowing Base as defined above. For the purposes of determining whether the Borrowing
Base is applicable, the amounts outstanding shall include any standby letters of credit issued by the Bank under Facility No. 1 and the $1,500,000.00 overdraft facility available under Facility No. 1. If the Borrowing Base is applicable, then the
amount available for borrowing under the Facility No. 1 Commitment shall equal the applicable amount of the Facility No. 1 Commitment minus the sum of the following items each of which are set out more fully below: 

  

	 	(1)	 	the amount of any advances under Facility No. 2 Commitment that are used by the Borrower to fund the purchase of an any intangible asset, including, but not limited to, goodwill of
a business; 

  

	 	(2)	 	the amount of any letters of credit issued under Facility No. 1; and 

  

	 	(3)	 	the $1,500,000.00 overdraft facility available under Facility No. 1. 

  

	(b)	 	This is a revolving line of credit. During the availability period, the Borrower may repay principal amounts and reborrow them.  

  

	(c)	 	The Borrower agrees not to permit the principal balance outstanding to exceed the Facility No. 1 Commitment. If the Borrower exceeds this limit, the Borrower will immediately pay
the excess to the Bank upon the Bank’s demand. 

  
 2.2
Availability Period. The line of credit is available between the date of this Agreement and October 1, 2005, or such earlier date as the availability may terminate as provided in this Agreement (the “Facility No. 1 Expiration
Date”). 
  
 2.3 Repayment Terms. 
  

	(a)	 	The Borrower will pay interest on September 1, 2003, and then monthly thereafter until payment in full of any principal outstanding under this line of credit. Any interest period
for an optional interest rate (as described below) shall expire no later than the Facility No. 1 Expiration Date. 

  

	(b)	 	The Borrower will repay in full all principal and any unpaid interest or other charges outstanding under this line of credit no later than the Facility No. 1 Expiration Date.

  
 2.4 Preferred Interest Rate. 
  

	(a)	 	The interest rate is a rate per year equal to the LIBOR Daily Floating Rate plus 1.75 percentage points. 

  

	(b)	 	The LIBOR Daily Floating Rate is a fluctuating rate of interest equal to the average per annum interest rate (rounded upwards to the nearest 1/100 of one percent) at which U.S.
dollar deposits would be offered for one month by major banks in the London inter-bank market, as shown on Telerate Page 3750 (or any successor page) as determined for each banking day at 

  

 4 

	 	 
approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, as adjusted from time to time in the Bank’s sole
discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. If such rate does not appear on Telerate Page 3750 (or any successor page), the rate will be determined by such alternate method as selected by the
Bank in its Permitted Discretion. A “London Banking Day” is a day on which the Bank’s London Banking Center is open for business and dealing in offshore dollars. Interest will accrue on any non-banking day at the rate in effect on the
immediately preceding banking day. 

  
 2.5 Alternate Interest
Rate. The applicable interest rate under Facility No. 1 shall be the interest rate defined in Paragraph 2.4 above. Notwithstanding the foregoing, if the interest rate defined in Paragraph 2.4 is not available due to circumstances beyond the
control of Bank, the applicable interest rate under Facility No. 1 shall be as follows: 
  

	(a)	 	The interest rate is a rate per year equal to the Bank’s Prime Rate minus 0.75 percentage point(s). 

  

	(b)	 	The Prime Rate is the rate of interest publicly announced from time to time by the Bank as its Prime Rate. The Prime Rate is set by the Bank based on various factors, including the
Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans. The Bank may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate
shall take effect at the opening of business on the day specified in the public announcement of a change in the Bank’s Prime Rate. 

  
 2.6 Optional Interest Rates. Instead of the interest rate based on the rate stated in the paragraph entitled “Interest Rate” above, the Borrower may
elect the optional interest rate listed below for this Facility No. 1 during interest periods agreed to by the Bank and the Borrower. The optional interest rate shall be subject to the terms and conditions described later in this Agreement. Any
principal amount bearing interest at an optional rate under this Agreement is referred to as a “Portion.” The following optional interest rate is available: A fixed rate based on the LIBOR Rate (as defined in Paragraph 4.2) plus 1.75
percentage point(s). 
  
 2.7. Letters of Credit. 
  

	(a)	 	During the availability period, at the request of the Borrower, the Bank will issue standby letters of credit with a maximum maturity of 60 days but not to extend beyond the
Facility No. 1 Expiration Date. 

  

	(b)	 	The total amount of the letters of credit outstanding at any one time (including the drawn and unreimbursed amounts of the letters of credit) may not exceed One Million Dollars
($1,000,000.00). 

  

	(c)	 	In calculating the principal amount outstanding under the Facility No. 1 Commitment, the calculation shall include the amount of any letters of credit outstanding, including amounts
drawn on any letters of credit and not yet reimbursed. 

  

	(d)	 	The Borrower agrees: 

  

	 	(i)	 	Any sum drawn under a letter of credit may, at the option of the Bank, be added to the principal amount outstanding under this Agreement. The amount will bear interest and be due as
described elsewhere in this Agreement. 

  

	 	(ii)	 	If there is a default under this Agreement, to immediately prepay and make the Bank whole for any outstanding letters of credit. 

  

	 	(iii)	 	The issuance of any letter of credit and any amendment to a letter of credit is subject to the Bank’s written approval and must be in form and content satisfactory to the Bank
(in 

  

 5 

	 	 
the exercise of its Permitted Discretion) and in favor of a beneficiary acceptable to the Bank. 

  

	 	(iv)	 	To sign the Bank’s form Application and Agreement for Standby Letter of Credit, as applicable. 

  

	 	(v)	 	To pay any issuance and/or other fees that the Bank notifies the Borrower will be charged for issuing and processing letters of credit for the Borrower. 

  

	 	(vi)	 	To allow the Bank to automatically charge its checking account for applicable fees, discounts, and other charges. 

  

	 	(vii)	 	To pay the Bank a non-refundable fee equal to 1.50% per annum of the outstanding undrawn amount of each standby letter of credit, payable quarterly in advance, calculated on the
basis of the face amount outstanding on the day the fee is calculated. If there is a default under this Agreement, at the Bank’s option, the amount of the fee shall be increased up to 3.0% per annum at Bank’s sole discretion,
effective starting on the day the Bank provides notice of the increase to the Borrower. 

  
 2.8 The Overdraft Limit. The line of credit provided under the Facility No. 1 Commitment may be used to pay overdrafts in the Borrower’s checking accounts. The total amount of all unreimbursed overdrafts
outstanding at any one time may not exceed One Million Five Hundred Thousand Dollars ($1,500,000.00) (the “Overdraft Limit”). This portion of the Facility No. 1 Commitment may only be accessed through this overdraft facility. 

 
 2.9 The Covered Account. The checking account that the Borrower may overdraw is
listed below: 
  
 Account Number 
  
 14911 01603 
  
 3. FACILITY NO. 2: LINE OF CREDIT AMOUNT AND TERMS

  
 3.1 Line of Credit Amount. 
  

	(a)	 	During the availability period described below, the Bank will provide a line of credit to the Borrower. The amount of the line of credit (the “Facility No. 2 Commitment”)
is the amount indicated for each period set forth below: 

  

	 Period

	  	Amount

	 From the date of this Agreement until September 30, 2004
	  	$	5,000,000.00
	 From October 1, 2004 until March 31, 2005
	  	$	4,444,445.00
	 From April 1, 2005 until September 30, 2005
	  	$	3,888,890.00
	 From October 1, 2005 until March 31, 2006
	  	$	3,333,335.00
	 From April 1, 2006 until September 30, 2006
	  	$	2,777,780.00

  

 6 

	 From October 1, 2006 until March 31, 2007
	  	$	2,222,225.00
	 From April 1, 2007 until September 30, 2007
	  	$	1,666,670.00
	 From October 1, 2007 until March 31, 2008
	  	$	1,111,115.00
	 From April 1, 2008 until the Facility No. 2 Expiration Date
	  	$	555,560.00

  

	(b)	 	This is a revolving line of credit. During the availability period, the Borrower may repay principal amounts and reborrow them.  

  

	(c)	 	The Borrower agrees not to permit the principal balance outstanding to exceed the Facility No. 2 Commitment. If the Borrower exceeds this limit, the Borrower will immediately pay
the excess to the Bank upon the Bank’s demand. 

  
 3.2
Availability Period. The line of credit is available between the date of this Agreement and October 1, 2008, or such earlier date as the availability may terminate as provided in this Agreement (the “Facility No. 2 Expiration
Date”). 
  
 3.3 Repayment Terms. 
  

	(a)	 	The Borrower will pay interest on September 1, 2003 and then monthly thereafter until payment in full of any principal outstanding under this line of credit.

  

	(b)	 	From and after October 1, 2004, the Borrower shall make semi-annual principal payments in the minimum amount that the outstanding principal exceeds the Facility No. 2 Commitment for
that date. The second payment shall be due on April 1, 2005, and subsequent payments shall be due on October 1 and April 1 of each year thereafter. 

  

	(c)	 	The Borrower will repay in full all principal and any unpaid interest or other charges outstanding under this line of credit no later than the Facility No. 2 Expiration Date.

  

	(d)	 	Notwithstanding the forgoing provisions, if advances under the Facility No. 2 Commitment are used by the Borrower for the purchase of an intangible asset, including, but not limited
to, goodwill of a business, then the repayment of such advances shall be amortized over three (3) years from the date of purchase and the amortized portion of the principal shall be payable on October 1 and April 1 of each year thereafter.

  
 3.4 Preferred Interest Rate. 
  

	(a)	 	The interest rate is a rate per year equal to the LIBOR Daily Floating Rate plus 2.00 percentage points. 

  

	(b)	 	The LIBOR Daily Floating Rate is a fluctuating rate of interest equal to the average per annum interest rate (rounded upwards to the nearest 1/100 of one percent) at which U.S.
dollar deposits would be offered for one month by major banks in the London inter-bank market, as shown on Telerate Page 3750 (or any successor page) as determined for each banking day at approximately 11:00 a.m. London time two (2) London Banking
Days prior to the date in question, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. If such rate does not appear on Telerate Page 3750 (or any
successor page), the rate will be determined by such alternate method as selected by the Bank in its Permitted Discretion. A “London Banking Day” is a day on which the 

  

 7 

	 	 
Bank’s London Banking Center is open for business and dealing in offshore dollars. Interest will accrue on any non-banking day at the rate in effect on
the immediately preceding banking day. 

  
 3.5 Alternate
Interest Rate. The applicable interest rate under Facility No. 2 shall be the interest rate defined in Paragraph 3.4 above. Notwithstanding the foregoing, if the interest rate defined in Paragraph 3.4 is not available due to circumstances beyond
the control of Bank, the applicable interest rate under Facility No. 2 shall be as follows: 
  

	(a)	 	The interest rate is a rate per year equal to the Bank’s Prime Rate minus 0.50 percentage point(s). Any interest period for an optional interest rate (as described below) shall
expire no later than the Facility No. 2 Expiration Date. 

  

	(b)	 	The Prime Rate is the rate of interest publicly announced from time to time by the Bank as its Prime Rate. The Prime Rate is set by the Bank based on various factors, including the
Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans. The Bank may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate
shall take effect at the opening of business on the day specified in the public announcement of a change in the Bank’s Prime Rate. 

  
 3.6 Optional Interest Rates. Instead of the interest rate based on the rate stated in the paragraph entitled “Interest Rate” above, the Borrower
may elect the optional interest rates listed below for this Facility No. 2 during interest periods agreed to by the Bank and the Borrower. The optional interest rates shall be subject to the terms and conditions described later in this Agreement.
Any principal amount bearing interest at an optional rate under this Agreement is referred to as a “Portion.” The following optional interest rates are available: 
  

	(a)	 	A fixed rate based on the LIBOR Rate (as defined in Paragraph 4.2) plus 2.00 percentage point(s). 

  

	(b)	 	Long Term Fixed Rate. 

  
 4. OPTIONAL INTEREST RATES 
  
 4.1 Optional Rates. Each optional interest rate is a rate per year. Interest will be paid on the first day of each month during the interest period. No Portion
will be converted to a different interest rate during the applicable interest period. Upon the occurrence of an event of default under this Agreement, the Bank may terminate the availability of optional interest rates for interest periods commencing
after the default occurs. At the end of any interest period, the interest rate will revert to the rate stated in the paragraph(s) entitled “Preferred Interest Rate” above, unless the Borrower has designated another optional interest rate
for the Portion. 
  
 4.2 LIBOR Rate. The election of LIBOR Rates shall be
subject to the following terms and requirements: 
  

	(a)	 	The interest period during which the LIBOR Rate will be a minimum of thirty (30) days and shall not exceed three hundred sixty (360) days. The first day of the interest period must
be a day other than a Saturday or a Sunday on which the Bank is open for business in New York and London and dealing in offshore dollars (a “LIBOR Banking Day”). The last day of the interest period and the actual number of days during the
interest period will be determined by the Bank using the customary practices of the London inter-bank market. 

  

	(b)	 	Each LIBOR Rate Portion will be for an amount not less than Five Hundred Thousand Dollars ($500,000.00). 

  

 8 

	(c)	 	The “LIBOR Rate” means the interest rate determined by the following formula, rounded upward to the nearest 1/100 of one percent. (All amounts in the calculation will be
determined by the Bank as of the first day of the interest period.) 

  

	LIBOR Rate =	  	London Inter-Bank Offered Rate

	  
	  	(1.0 -Reserve Percentage)

  
 Where, 
  

	 	(i)	 	“London Inter-Bank Offered Rate” means the average per annum interest rate at which U.S. dollar deposits would be offered for the applicable interest period by major banks
in the London inter-bank market, as shown on the Telerate Page 3750 (or any successor page) at approximately 11:00 a.m. London time two (2) London Banking Days before the commencement of the interest period. If such rate does not appear on the
Telerate Page 3750 (or any successor page), the rate for that interest period will be determined by such alternate method as selected by the Bank in its Permitted Discretion. A “London Banking Day” is a day on which the Bank’s London
Banking Center is open for business and dealing in offshore dollars. 

  

	 	(ii)	 	“Reserve Percentage” means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage will be expressed as a decimal, and will include, but not be limited to, marginal, emergency,
supplemental, special, and other reserve percentages. 

  

	(d)	 	The Borrower shall irrevocably request a LIBOR Rate Portion no later than 12:00 noon Pacific time on the LIBOR Banking Day preceding the day on which the London Inter-Bank Offered
Rate will be set, as specified above. For example, if there are no intervening holidays or weekend days in any of the relevant locations, the request must be made at least three (3) days before the LIBOR Rate takes effect. 

 

	(e)	 	The Bank will have no obligation to accept an election for a LIBOR Rate Portion if any of the following described events has occurred and is continuing: 

  

	 	(i)	 	Dollar deposits in the principal amount, and for periods equal to the interest period, of a LIBOR Rate Portion are not available in the London inter-bank market; or

  

	 	(ii)	 	the LIBOR Rate does not accurately reflect the cost of a LIBOR Rate Portion. 

  

	(f)	 	Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason of acceleration or otherwise, will be accompanied by the amount of accrued interest on the amount prepaid and a
prepayment fee as described below. A “prepayment” is a payment of an amount on a date earlier than the scheduled payment date for such amount as required by this Agreement. 

  

	(g)	 	The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss, cost or expense incurred by it as a result of the prepayment, including any loss of
anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of this paragraph, the Bank shall be deemed to have funded each Portion by a matching deposit or other borrowing in the applicable interbank market,
whether or not such Portion was in fact so funded. 

  
 4.3 Long
Term Fixed Rate. The election of Long Term Fixed Rates shall be subject to the following terms and requirements: 
  

 9 

	(a)	 	The interest period during which the Long Term Fixed Rate will be in effect will be one year or more up to the maturity date of the Facility. 

  

	(b)	 	The “Long Term Fixed Rate” means the fixed interest rate the Bank and the Borrower agree will apply to the Portion during the applicable interest period.

  

	(c)	 	Each Long Term Fixed Rate Portion will be for an amount not less than Five Hundred Thousand Dollars ($500,000.00). 

  

	(d)	 	The Borrower may prepay the Long Term Fixed Rate Portion in whole or in part in the minimum amount of One Hundred Thousand Dollars ($100,000.00). The Borrower will give the Bank
irrevocable written notice of the Borrower’s intention to make the prepayment, specifying the date and amount of the prepayment. The notice must be received by the Bank at least two (2) banking days in advance of the prepayment. All prepayments
of principal on the Long Term Fixed Rate Portion will be applied on the most remote payment of principal then unpaid. 

  

	(e)	 	Each prepayment of a Long Term Fixed Rate Portion, whether voluntary, by reason of acceleration or otherwise, will be accompanied by payment of all accrued interest on the amount of
the prepayment and the prepayment fee described below. 

  

	(f)	 	The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss, cost or expense incurred by it as a result of the prepayment, including any loss of
anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of this paragraph, the Bank shall be deemed to have funded each Portion by a matching deposit or other borrowing in the applicable interbank market,
whether or not such Portion was in fact so funded. 

  
 5. FEES AND EXPENSES 
  
 5.1 Fees.

  

	(a)	 	Waiver Fee. If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrower will, at the Bank’s option, pay the Bank a fee not to
exceed One Thousand Dollars ($1000.00) (the amount to be determined by Bank in its sole and only discretion) for each waiver or amendment. Nothing in this paragraph shall imply that the Bank is obligated to agree to any waiver or amendment requested
by the Borrower. The Bank may impose additional reasonable requirements as a condition to any waiver or amendment. 

  

	(b)	 	Late Fee. To the extent permitted by law, the Borrower agrees to pay a late fee in an amount not to exceed four percent (4%) of any particular payment or invoice that is more
than fifteen (15) days late. The imposition and payment of a late fee shall not constitute a waiver of the Bank’s rights with respect to the default. 

  

	5.2	 	Expenses. The Borrower agrees to immediately repay the Bank for direct out-of-pocket expenses incurred in connection with the Loan Documents that include, but are not limited
to, filing, recording and search fees, appraisal fees, title report fees, and documentation fees. 

  
 5.3 Reimbursement Costs. 
  

	(a)	 	The Borrower agrees to reimburse the Bank for reasonable legal fees and costs incurred by the Bank in connection with the preparation of the Loan Documents (the “Legal
Fees”). The Borrower shall reimburse the Bank for the Legal Fees, which shall not exceed Twenty Five 

  

 10 

	 	 
Thousand Dollars ($25,000.00) and which shall be payable upon execution of this Agreement. In addition, the Borrower agrees to reimburse the Bank for the
$3,470 fee incurred by the Bank for the initial field exam of the Borrower’s collateral. 

  

	(b)	 	The Borrower agrees to reimburse the Bank for the cost of periodic field examinations of the Borrower’s books, records and collateral, and appraisals of the collateral, at such
intervals as the Bank may reasonably require. The actions described in this paragraph may be performed by employees of the Bank or by independent appraisers. As long as the Borrower remains in full compliance with each and every term and condition
of this Agreement, periodic field examinations will occur no more often than semi-annually and at a total annual cost not to exceed Six Thousand Dollars ($6,000.00). 

  
 6. COLLATERAL 
  
 6.1 Personal Property. The Borrower’s obligations to the Bank under this Agreement will be secured by personal property the Borrower now owns or will own in
the future as listed below. The collateral is further defined in security agreement(s) executed by the Borrower. In addition, all personal property collateral securing this Agreement shall also secure all other present and future obligations of the
Borrower (or, if there is more than one Borrower, any one of them) to the Bank (excluding any consumer credit covered by the federal Truth in Lending law, unless the Borrower has otherwise agreed in writing or received written notice thereof). All
personal property collateral securing any other present or future obligations of the Borrower (or, if there is more than one Borrower, any one of them) to the Bank shall also secure this Agreement. 
  

	(a)	 	Equipment, fixtures and furniture. 

  

	(b)	 	Inventory. 

  

	(c)	 	Receivables. 

  

	(d)	 	Patents, trademarks and other general intangibles. 

  

	(e)	 	Leases. 

  

	(f)	 	The equity interest held by any Borrower in any subsidiary, joint venture or partnership. 

  
 Notwithstanding the foregoing provisions of this Paragraph 6.1, such grant of a security interest shall not extend to, and the term
“collateral” shall not include, any equity interest in any joint venture or partnership acquired after the date of this Agreement, and not exceeding Five Hundred Thousand Dollars ($500,000.00) in the aggregate, to the extent that such
equity interest in any joint venture or partnership is not assignable or capable of being encumbered as a matter of law or under the terms of any agreement applicable thereto (but solely to the extent than any such restriction shall be enforceable
under applicable law) without the consent of the applicable party thereto and such consent has not been obtained. 
  
 7. DISBURSEMENTS, PAYMENTS AND COSTS 
  
 7.1 Disbursements and Payments. 
  

	(a)	 	Each payment by the Borrower will be made in immediately available funds by direct debit to a deposit account as specified below or by mail to the address shown on the
Borrower’s statement or at one of the Bank’s banking centers in the United States. 

  

	(b)	 	Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the Borrower to
sign one or more promissory notes. 

  

 11 

 7.2 Telephone and Telefax Authorization. 
  

	(a)	 	The Bank may honor telephone or telefax instructions for advances or repayments given, or purported to be given, by any one of the individuals authorized to sign loan agreements on
behalf of the Borrower, or any other individual designated by any one of such authorized signers. 

  

	(b)	 	Advances will be deposited in and repayments will be withdrawn from account number 14911 01603 owned by the Borrower, or such other of the Borrower’s accounts with the Bank as
designated in writing by the Borrower. 

  

	(c)	 	The Borrower will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions the Bank
reasonably believes are made by any individual authorized by the Borrower to give such instructions. This paragraph will survive this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents.

  
 7.3 Direct Debit. 
  

	(a)	 	The Borrower agrees that interest and principal payments and any fees will be deducted automatically on the due date from account number 14911 01603 owned by the Borrower, or such
other of the Borrower’s accounts with the Bank as designated in writing by the Borrower. 

  

	(b)	 	The Borrower will maintain sufficient funds in the account on the dates the Bank enters debits authorized by this Agreement. If there are insufficient funds in the account on the
date the Bank enters any debit authorized by this Agreement, the Bank may reverse the debit. 

  

	(c)	 	The Borrower may terminate this direct debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement. If the Borrower
terminates this arrangement, then the principal amount outstanding under this Agreement will, at the option of the Bank (in the exercise of its Permitted Discretion), bear interest at a rate per annum which is the lesser of (i) the Maximum Rate or
(ii) 0.5 percentage point(s) higher than the rate of interest otherwise provided under this Agreement. 

  
 7.4 Banking Days. Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday, Sunday or other day on which commercial banks are
authorized to close, or are in fact closed, in the state where the Bank’s lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any), means any such day on which dealings in dollar deposits are
conducted among banks in the offshore dollar interbank market. All payments and disbursements which would be due on a day which is not a banking day will be due on the next banking day. All payments received on a day which is not a banking day will
be applied to the credit on the next banking day. 
  
 7.5 Interest
Calculation. Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed. This results in more interest or a higher fee than if a 365-day year
is used. Installments of principal which are not paid when due under this Agreement shall continue to bear interest until paid. 
  
 7.6 Default Rate. Upon the occurrence of any default under this Agreement, all amounts outstanding under this Agreement, including any interest, fees, or costs
which are not paid when due, will at the option of the Bank bear interest at a rate up to 2.0 percentage point(s) higher than the rate of interest otherwise provided under this Agreement. This may result in compounding of interest. This will not
constitute a waiver of any default. 
  
 8.
CONDITIONS 
  
 The Bank must receive the following items, in form and content
acceptable to the Bank, before it is required to extend any credit to the Borrower under this Agreement: 
  

 12 

 8.1 Conditions to First Extension of Credit. Before the first extension of credit: 
  

	(a)	 	Authorizations. If any Borrower or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by such Borrower and/or such
guarantor of this Agreement and all other Loan Documents have been duly authorized. 

  

	(b)	 	Governing Documents. If required by the Bank, a copy of the Borrower’s organizational documents. 

  

	(c)	 	Security Agreements. Signed original security agreements covering the personal property collateral which the Bank requires. 

  

	(d)	 	Perfection and Evidence of Priority. Financing statements and fixture filings (and any collateral in which the Bank requires a possessory security interest), together with
evidence that the security interests and liens in favor of the Bank are valid, enforceable, and prior to all others’ rights and interests, except those the Bank consents to in writing. 

  

	(e)	 	Payment of Fees. Payment of all accrued and unpaid expenses incurred by the Bank as required by Paragraph 5.3(a). 

  

	(f)	 	Legal Opinion. An opinion from the Borrower’s legal counsel as to (i) the Borrower’s corporate existence, (ii) the authority of Borrower to borrow under this
Agreement, and (iii) to the actual knowledge of Borrower’s legal counsel that the Borrower will not violate any other agreement by executing this Agreement. 

  

	(g)	 	Landlord Consent. Signed original acknowledgment of landlord waiver and consent by real property owner(s), in form and content acceptable to the Bank, covering the personal
property collateral held on any premises leased by Borrower and Borrower’s rights under those leases (the “Landlord Consent”). If the Bank, in its sole and absolute discretion, elects to extend credit to Borrower hereunder without
first receiving all necessary and required Landlord Consent(s), then the Bank shall be entitled to deduct an amount equal to the “Landlord Reserve” from the Borrowing Base. The term “Landlord Reserve” shall mean an amount equal
to three (3) months rent due under any lease agreement for which the Bank has not received a corresponding Landlord Consent. 

  

	(h)	 	Other Items. Any other items that the Bank requires in its Permitted Discretion. 

  
 9. REPRESENTATIONS AND WARRANTIES 
  
 When the Borrower signs this Agreement, and until the Bank is repaid in full, the Borrower makes the following representations and
warranties. Each request for an extension of credit constitutes a renewal of these representations and warranties as of the date of the request: 
  
 9.1 Formation. If any Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state where organized. 
  
 9.2 Authorization. Entry into this Agreement and the other Loan Documents is within
the Borrower’s powers, has been duly authorized, and does not conflict with any of its organizational papers. 
  
 9.3 Enforceable Agreement. This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms,
and the other Loan Documents, when executed and delivered, will be similarly legal, valid, binding and enforceable. 
  
 9.4 Good Standing. In each state in which Borrower 1 does business, except for the State of Missouri (which Borrower 1 is diligently working to resolve), it is
properly licensed, in good standing, and, 
  

 13 

 
where required, in compliance with fictitious name statutes, in each case where the failure to be so licensed, in such good standing or be in such compliance
would not result in a material adverse change in the Borrower’s (or any Obligor’s) business condition (financial or otherwise), operations or properties, or ability to repay the credit. 
  
 9.5 No Conflicts. This Agreement does not violate in any material respect any law
applicable to the Borrower. To the Borrower’s knowledge after reasonable inquiry, this Agreement does not conflict with any agreement or contractual obligation by which the Borrower is bound. 
  
 9.6 Financial Information. All financial and other information (taken as a whole) that
has been or will be supplied to the Bank is sufficiently complete to give the Bank accurate knowledge of the Borrower’s (and any guarantor’s) financial condition, including all material contingent liabilities. Since the date of the most
recent financial statement provided to the Bank, there has been no material adverse change in the business condition (financial or otherwise), operations or properties of the Borrower (or any Obligor). 
  
 9.7 Lawsuits. Except for those matters that have been disclosed in writing to Bank,
there is no lawsuit, tax claim or other dispute pending or, to the Borrower’s knowledge, threatened against the Borrower which, if lost, would materially and adversely impair the Borrower’s financial condition or ability to repay the loan,
except as have been disclosed in writing to the Bank. For the purpose of this Paragraph 9.7, material and adverse impairment shall be limited to (a) lawsuits, tax claims or disputes seeking damages in excess of Five Hundred Thousand Dollars
($500,000.00), individually or in the aggregate, over the Borrower’s applicable insurance coverage or (b) lawsuits, tax claims or disputes seeking damages in excess of Five Hundred Thousand Dollars ($500,000.00), individually or in the
aggregate, that are not covered by insurance. 
  
 9.8 Collateral. All
collateral required in this Agreement is owned by the grantor of the security interest free of any title defects or any liens or interests of others, except those which have been approved by the Bank in writing. 
  
 9.9 Permits, Franchises. To the Borrower’s knowledge after reasonable inquiry,
Borrower possesses all permits, memberships, franchises, contracts and licenses and all trademark rights, trade name rights, patent rights and fictitious name rights, in each case necessary to enable it to conduct the business in which it is now
engaged. 
  
 9.10 Other Obligations. The Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank. 
  
 9.11 Tax Matters. The Borrower has no knowledge of any pending assessments or
adjustments of its income tax for any year and all taxes due have been paid, except as have been disclosed in writing to the Bank. 
  
 9.12 No Event of Default. There is no event which is, or with notice or lapse of time or both would be, a default under this Agreement. 
  
 9.13 Insurance. The Borrower has obtained, and maintained in effect, the insurance
coverage required in Paragraph 10.21. 
  
 9.14 Location of Borrower. Each
Borrower’s place of business (or, if any Borrower has more than one place of business, its chief executive office) is located at the address listed under the Borrower’s signature on this Agreement. 
  
 9.15 Leases. All of Borrowers’ leases of facilities used in Borrower’s
business are in good standing and Borrower will promptly notify the Bank of any change in any existing leases or any new leases. 
  
 10. COVENANTS 
  

 14 

 The Borrower agrees, so long as credit is available under this Agreement and until the Bank is repaid in full:

  
 10.1 Use of Proceeds. To use the proceeds of Facility No. 1 only to
assist with working capital needs of Borrower’s business or businesses; and to use the proceeds of Facility No. 2 only to finance the purchase of equipment, furniture, fixtures, computer software, and the acquisition of any business not
substantially different than Borrower’s existing business or businesses. 
  
 10.2 Financial Information. To provide the following financial information and statements in form and content acceptable to the Bank, and such additional information as reasonably requested by the Bank from time to time: 

 

	(a)	 	Within 120 days of the fiscal year end, the annual financial statements of Borrower 1 certified and dated by an authorized officer of Borrower 1. These financial statements must be
audited by KPMG LLP or another certified public accountant or firm reasonably acceptable to the Bank. The statements shall be prepared on a consolidated basis including the other Borrowers. 

  

	(b)	 	Within 45 days of the period’s end, quarterly financial statements of Borrower 1 certified and dated by an authorized officer of Borrower 1. These financial
statements may be company-prepared. The statements shall be prepared on a consolidated and consolidating basis including the other Borrowers. 

  

	(c)	 	Within the period(s) provided in (a) and (b) above, a compliance certificate of Borrower 1 signed by an authorized financial officer of the Borrower 1 setting forth (i) the
information and computations (in sufficient detail) to establish that Borrower 1 is in compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the
date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action Borrower 1 is taking and proposes to take
with respect thereto. 

  

	(d)	 	Copies of the Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report for Borrower 1 within one (1) banking day of the date of filing with the Securities and
Exchange Commission. 

  

	(e)	 	One-year financial projections specifying the assumptions used in creating the projections. The projections shall be provided to the Bank no later than February 28 of each fiscal
year. 

  

	(f)	 	Upon requesting an advance that will cause total advances to exceed the thresholds set forth in Paragraph 2.1(a) above and monthly thereafter by the 15th of the next month until the
principal amount of advances falls below the such thresholds, a borrowing base certificate of Borrower 1 signed by an authorized financial officer of Borrower 1 setting forth accounts receivable aging, inventory listing/schedule, and accounts
payable aging. The certificate shall be prepared on a consolidated basis including the other Borrowers. 

  

	(g)	 	Bank acknowledges that Borrower 4, Borrower 5 and Borrower 6 may each be dissolved or merged into the other Borrowers and agrees that no financial information will be required from
those Borrowers following such event. 

  
 10.3 Tangible Net
Worth. To maintain on a consolidated basis Tangible Net Worth equal to at least Twenty One Million Dollars ($21,000,000.00). 
  
 “Tangible Net Worth” means the value of total assets (including leaseholds and leasehold improvements and reserves against assets but excluding goodwill,
patents, trademarks, trade names, organization expense, unamortized debt discount and expense, capitalized or deferred research and development 
  

 15 

 costs, deferred marketing expenses (with the exception of Borrower’s catalogs produced in the ordinary course of
business), and other like intangibles, and monies due from affiliates, officers, directors, employees, shareholders, members or managers) less total liabilities, including but not limited to accrued and deferred income taxes, but excluding the
non-current portion of Subordinated Liabilities. 
  
 “Subordinated
Liabilities” means liabilities subordinated to the Borrower’s obligations to the Bank in a manner acceptable to the Bank in its sole discretion. 
  
 10.4 Quick Ratio. To maintain on a consolidated basis a ratio of quick assets to current liabilities of at least the ratios indicated for each period specified
below: 
  

	 Period

	  	Ratios

	 From March
 through June
	  	0.35:1.0
	 From September
 through December
	  	0.85:1.0

  
 “Quick assets” means cash,
short-term cash investments, net trade receivables and marketable securities not classified as long-term investments. 
  
 10.5 Profitability. To maintain on a consolidated basis a positive net income, before taxes, extraordinary items, impairment of goodwill and other intangibles, and
non-cash compensation charges related to the Borrower’s stock option programs, in an amount not less than Two Million Five Hundred Thousand Dollars ($2,500,000.00) for the prior four (4) quarters computed at the end of each quarterly accounting
period. 
  
 10.6 Debt Service Coverage Ratio. To maintain on a consolidated
basis a Debt Service Coverage Ratio of at least 1.5:1.0.  
  
 “Debt
Service Coverage Ratio” means the ratio of Cash Flow to the sum of the current portion of long-term debt and the current portion of capitalized lease obligations, plus interest expense on all obligations. 
  
 “Cash Flow” is defined as (a) net income, after income tax, (b) less income or plus
loss from discontinued operations and extraordinary items, (c) plus non-cash items (such as depreciation, depletion, and amortization), (d) plus interest expense on all obligations, and (e) minus dividends, withdrawals, and other distributions. This
ratio will be calculated at the end of each reporting period for which the Bank requires financial statements, using the results of the twelve-month period ending with that reporting period. The current portion of long-term liabilities will be
measured as of the last day of the calculation period. 
  
 10.7 Out of Debt
Period. To pay all amounts of principal and interest outstanding under Facility No. 1 (including overdrafts pursuant to Paragraph 2.7) and be out of debt thereafter for a period of at least sixty (60) consecutive days between September 1, 2003
and February 1, 2004. During the remaining term of this Agreement, Borrower shall pay all amounts of principal and interest outstanding under Facility No. 1 and be out of debt thereafter for a period of at least sixty (60) consecutive days between
September 1 and February 1 of each subsequent year. In no event shall the out of debt period begin later than December 1 of any year. Borrower shall not utilize the overdraft facility during the out of debt period. 
  
 10.8 Capital Expenditures. Not to spend or incur obligations (including the total
amount of any capital leases) to acquire fixed assets for more than the amounts specified below for each fiscal year specified below on a consolidated basis: 
  

 16 

	 Period

	  	Amounts

	 From the date of this Agreement
 through December 31, 2003
	  	$	2,100,000.00
	 From January 1, 2004 and thereafter
	  	$	3,000,000.00

  
 10.9 Stock Repurchases. Not to
purchase, redeem or otherwise acquire for value any of its shares, or create any sinking fund in relation thereto, except from earnings available for dividends and earned during the immediately preceding fiscal year, and in any event, not in excess
of Two Hundred Thousand Dollars ($200,000.00) in any one fiscal year. 
  
 10.10
Dividends and Distributions. Not to declare or pay any dividends or distributions to any of its members, except from earnings available for distributions and earned during the immediately preceding fiscal year, and in any event, not in excess
of Two Hundred Thousand Dollars ($200,000.00) in any one fiscal year, provided such payment would not have resulted in a default under this Agreement if it had been made during the preceding fiscal year. 
  
 10.11 Acquisition Limitation. Not to acquire any unaffiliated business entity or
portion thereof or any intangible asset of such entity, including, but not limited to, goodwill, in an amount exceeding One Million Five Hundred Thousand Dollars ($1,500,000.00) during any calendar year (the “Limit Amount”). The Limit
Amount shall apply to the sum of the cash paid plus liabilities assumed. 
  
 10.12
Other Debts. Not to have outstanding or incur any direct or contingent liabilities or capital lease obligations (other than those to the Bank), or become liable for the liabilities of others, in an amount exceeding One Hundred Fifty Thousand
Dollars ($150,000.00), without the Bank’s written consent. This does not prohibit: 
  

	(a)	 	Acquiring goods, supplies, or merchandise on normal trade credit. 

  

	(b)	 	Endorsing negotiable instruments received in the usual course of business. 

  

	(c)	 	Obtaining surety or appeal bonds in the usual course of business. 

  

	(d)	 	Liabilities, lines of credit and leases in existence on the date of this Agreement disclosed in writing to the Bank. 

  

	(e)	 	Refinancing, renewing or extending the Borrower’s existing debt without increasing the principal balance or interest rates applicable to that existing debt.

  

	(f)	 	Entering into intercompany debt arrangements between or among any of the Borrowers to the extent that those debts, if secured, are subordinate to Bank’s security interest.

  

	(g)	 	Guaranteeing the existing indebtedness of a subsidiary or parent of the Borrower or guaranteeing new indebtedness that is entered into in compliance with this Agreement.

  
 10.13 Other Liens. Not to create, assume, or allow any
security interest or lien (including judicial liens) on property the Borrower now or later owns, to secure amounts in excess of One Hundred Fifty Thousand Dollars ($150,000.00), except: 
  

	(a)	 	Liens and security interests in favor of the Bank. 

  

	(b)	 	Liens for taxes not yet due. 

  

	(c)	 	Liens outstanding on the date of this Agreement disclosed in writing to the Bank. 

  

	(d)	 	Liens evidencing the interests of lessors under capital leases permitted under this Agreement. 

  

 17 

	(e)	 	Liens arising by operation of law in favor of warehousemen, carriers, mechanics, materialmen, laborers or suppliers that are incurred and satisfied in the ordinary course of
business and not in connection with the borrowing of money. 

  

	(f)	 	Liens arising from deposits made in connection with obtaining workers’ compensation or other unemployment insurance. 

  

	(g)	 	Liens or deposits to secure performance of bids, tenders or leases incurred in the ordinary course of business in the aggregate not in excess of One Hundred Fifty Thousand Dollars
($150,000.00) at any time outstanding and not in connection with the borrowing of money. 

  

	(h)	 	Liens granted as security for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of business in connection with lawsuits that do not create an
event of default under Paragraph 11.9. 

  

	(i)	 	Liens that are replacements of the liens permitted hereunder to the extent that the original indebtedness thereunder is refinanced, renewed or extended under Paragraph 10.12, and so
long as the replacement liens only encumber those assets that previously secured the refinanced, renewed or existing indebtedness. 

  

	(j)	 	Liens arising by operation of law in favor of real property owners that are incurred as a result of holding the collateral on premises leased by the Borrower, provided that,
pursuant to the provisions of Paragraph 8.1(g), either (1) such liens are subordinated to the Bank’s interest pursuant to a Landlord Consent approved by the Bank, or (2) a Landlord Reserve has been established with the Bank’s consent in
lieu of subordinating such liens to the Bank’s interest pursuant to a Landlord Consent. 

  
 10.14 Maintenance of Assets. 
  

	(a)	 	Not to sell, assign, lease, transfer or otherwise dispose of any part of the Borrower’s business or the Borrower’s assets except in the ordinary course of the
Borrower’s business. 

  

	(b)	 	Not to sell, assign, lease, transfer or otherwise dispose of any assets with a value in excess of Fifty Thousand Dollars ($50,000.00) for less than fair market value, or enter into
any agreement to do so. 

  

	(c)	 	Not to enter into any sale and leaseback agreement covering any of its fixed assets. 

  

	(d)	 	To maintain and preserve all rights, privileges, and franchises the Borrower now has. 

  

	(e)	 	To make any repairs, renewals, or replacements to keep the Borrower’s properties in good working condition. 

  

	(f)	 	The Bank acknowledges that some or all of Borrower 4, Borrower 5 and Borrower 6 may be liquidated and their assets or business absorbed by another Borrower or they may be merged
into one of the other Borrowers and the Bank agrees that such action shall not violate any covenant contained herein so long as the remaining Borrowers continue the business of the liquidated or merged Borrower. 

  
 10.15 Investments. Not to have any existing, or make any new, investments in any
individual or entity, or make any capital contributions or other transfers of assets to any individual or entity, except for: 
  

	(a)	 	Existing investments disclosed to the Bank in writing. 

  

	(b)	 	Investments in the Borrower’s current subsidiaries. 

  

 18 

	(c)	 	Investments in any of the following: 

  

	 	(i)	 	certificates of deposit; 

  

	 	(ii)	 	U.S. treasury bills and other obligations of the federal government; or 

  

	 	(iii)	 	readily marketable securities (including commercial paper, but excluding restricted stock and stock subject to the provisions of Rule 144 under the Securities Act of 1933, as
amended). 

  

	(d)	 	Investments in new subsidiaries acquired during the term of this Agreement when the equity in the subsidiary is pledged to Bank to secure the indebtedness pursuant to the Loan
Documents. 

  

	(e)	 	Investments in joint ventures related to Borrowers business in a cumulative amount not to exceed Five Hundred Thousand Dollars ($500,000.00). 

  
 10.16 Loans. Not to make any loans, advances or other extensions of credit to any
individual or entity, except for: 
  

	(a)	 	Existing extensions of credit disclosed to the Bank in writing. 

  

	(b)	 	Extensions of credit to the Borrower’s current subsidiaries. 

  

	(c)	 	Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to
non-affiliated entities. 

  

	(d)	 	Extensions of credit to employees of Borrower up to One Hundred Thousand Dollars ($100,000.00) in the aggregate at any one time. 

  
 10.17 Change of Management. Not to change the present chief executive officer of
Borrower 1 unless the proposed successor chief executive officer is acceptable to the Bank (in the exercise of its Permitted Discretion). As of the date of this Agreement, Ronald C. Elliott is the chief executive officer of Borrower 1. 

 
 10.18 Change of Ownership. Not to cause, permit, or suffer any change in capital
ownership such that there is a change of more than fifty percent (50%) in the direct or indirect capital ownership of the Borrower. 
  
 10.19 Additional Negative Covenants. Not to, without the Bank’s written consent: 
  

	(a)	 	Enter into any consolidation, merger, or other combination, or become a partner in a partnership, a member of a joint venture, or a member of a limited liability company requiring
an investment of cash, or the assumption of debt, by Borrower of more than Five Hundred Thousand Dollars ($500,000.00) on a per transaction basis. 

  

	(b)	 	Engage in any business activities substantially different from the Borrower’s present business requiring an investment of cash, or the assumption of debt, by Borrower of more
than Five Hundred Thousand Dollars ($500,000.00) on a per transaction basis. 

  

	(c)	 	Liquidate or dissolve the Borrower’s business. 

  

	(d)	 	Voluntarily suspend the Borrower’s business. 

  

	(e)	 	 The Bank acknowledges that some or all of Borrower 4, Borrower 5 and Borrower 6 may be liquidated and their assets and business absorbed by another Borrower or they
may be merged into one of the other Borrowers and the Bank agrees that such action shall not violate any 

  

 19 

	 	 
covenant contained herein so long as the remaining Borrowers continue the business of the liquidated or merged Borrower. 

  
 10.20 Notices to Bank. To promptly notify the Bank in writing of: 
  

	(a)	 	Any lawsuit that exceeds insurance coverage by Five Hundred Thousand Dollars ($500,000.00), against the Borrower (or any guarantor or, if any Borrower is comprised of the trustees
of a trust, any trustor). 

  

	(b)	 	Any substantial dispute between any governmental authority and the Borrower (or any guarantor or, if any Borrower is comprised of the trustees of a trust, any trustor).

  

	(c)	 	Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default. 

  

	(d)	 	Any material adverse change in the Borrower’s (or any Obligor’s) business condition (financial or otherwise), operations or properties, or ability to repay the credit.

  

	(e)	 	Any change in the Borrower’s name, legal structure, place of business, or chief executive office if the Borrower has more than one place of business. 

 

	(f)	 	Any contingent liabilities of any Borrower (or any guarantor or, if any Borrower is comprised of the trustees of a trust, any trustor), and any such contingent liabilities which are
reasonably foreseeable, that exceed insurance coverage by One Million Dollars ($1,000,000.00). 

  
 10.21 Insurance. 
  

	(a)	 	General Business Insurance. To maintain insurance as is usual for the business it is in. 

  

	(b)	 	Insurance Covering Collateral. To maintain all risk property damage insurance policies covering the tangible property comprising the collateral. Each insurance policy must be
in an amount acceptable to the Bank (in the exercise of its Permitted Discretion). The insurance must be issued by an insurance company acceptable to the Bank (in the exercise of its Permitted Discretion) and must include a lender’s loss
payable endorsement in favor of the Bank in a form acceptable to the Bank (in the exercise of its Permitted Discretion). 

  

	(c)	 	Evidence of Insurance. Upon the request of the Bank, to deliver to the Bank a copy of each insurance policy, or, if permitted by the Bank, a certificate of insurance listing
all insurance in force. 

  
 10.22 Compliance with Laws. To
comply with the laws (including any fictitious name statute), regulations, and orders of any government body with authority over the Borrower’s business. Should the Borrower be charged with violations of any laws, regulations or orders and
promptly report the charges to Bank in writing, it shall only be a default of this Paragraph 10.22 if the Bank, in the exercise of its Permitted Discretion, determines that the alleged violation, individually or in the aggregate for multiple
violations, will result in a material adverse change in the Borrower’s (or any Obligor’s) business condition (financial or otherwise), operations or properties, or ability to repay the credit. 
  
 10.23 ERISA Plans. Promptly during each year, to pay and cause any subsidiaries to pay
contributions adequate to meet at least the minimum funding standards under ERISA with respect to each and every Plan; file each annual report required to be filed pursuant to ERISA in connection with each Plan for each year; and notify the Bank
within ten (10) days of the occurrence of any Reportable Event that might constitute grounds for termination of any capital Plan by the Pension Benefit Guaranty Corporation or for the appointment by the appropriate United States District Court of a
trustee to administer any Plan. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. Capitalized terms in this paragraph shall have the meanings defined within ERISA. 
  

 20 

 10.24 Books and Records. To maintain adequate books and records. 
  
 10.25 Audits. Upon one (1) banking day’s prior notice, to allow the Bank and its
agents to inspect the Borrower’s properties and examine, audit, and make copies of books and records at any reasonable time. If any of the Borrower’s properties, books or records are in the possession of a third party, the Borrower
authorizes that third party to permit the Bank or its agents to have access to perform inspections or audits and to respond to the Bank’s reasonable requests for information concerning such properties, books and records. 
  
 10.26 Perfection of Liens. To help the Bank perfect and protect its security interests
and liens under the Loan Documents, and reimburse it for related costs it incurs to protect its security interests and liens under the Loan Documents. 
  
 10.27 Cooperation. To take any action reasonably requested by the Bank to carry out the intent of this Agreement. 
  
 11. DEFAULT AND REMEDIES 
  
 If any of the following events of default occurs, the Bank may do one or more of the
following: declare the Borrower in default, stop making any additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice. In addition, if any event of default occurs, the Bank
shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs
under the paragraph entitled “Bankruptcy,” below, with respect to any Borrower, then the entire debt outstanding under this Agreement will automatically be due immediately. 
  
 11.1 Failure to Pay. The Borrower fails to make a payment under this Agreement when due. 
  
 11.2 Other Bank Agreements. Any Borrower (or any Obligor) or any of the
Borrower’s related entities or affiliates fails to meet the conditions of, or fails to perform any obligation under any other agreement any Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has with the Bank
or any affiliate of the Bank. For purposes of this Agreement, “Obligor” shall mean any guarantor, any party pledging collateral to the Bank, or, if any Borrower is comprised of the trustees of a trust, any trustor. 
  
 11.3 Cross-default. Any payment default occurs under any agreement in connection with
any credit any Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has obtained from anyone else or which any Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has guaranteed in
an amount exceeding Five Hundred Thousand Dollars ($500,000.00). 
  
 11.4 False
Information. To the best of their knowledge, no Borrower or Obligor has given the Bank false or materially misleading information or representations in connection with the Loan Documents. 
  
 11.5 Bankruptcy. Any Borrower, any Obligor, or any general partner of any Borrower or
of any Obligor files a bankruptcy petition, a bankruptcy petition is filed against any of the foregoing parties, or any Borrower, any Obligor, or any general partner of any Borrower or of any Obligor makes a general assignment for the benefit of
creditors. 
  
 11.6 Receivers. A receiver or similar official is appointed
for a substantial portion of any Borrower’s or any Obligor’s business, or the business is terminated, or, if any Obligor is anything other than a natural person, such Obligor is liquidated or dissolved. 
  
 11.7 Lien Priority. The Bank fails to have an enforceable first lien (except for any
prior liens to which the Bank has consented in writing) on or security interest in any property given as security for this Agreement (or any guaranty). 
  

 21 

 11.8 Lawsuits. Any lawsuit or lawsuits are filed on behalf of one or more trade creditors against any Borrower or
any Obligor in an aggregate amount of Five Hundred Thousand Dollars ($500,000.00) or more in excess of any insurance coverage. 
  
 11.9 Judgments. Any judgments or arbitration awards are entered against any Borrower or any Obligor, or any Borrower or any Obligor enters into any settlement
agreements with respect to any litigation or arbitration, in an aggregate amount of Five Hundred Thousand Dollars ($500,000.00) or more in excess of any insurance coverage unless such judgment is stayed pending resolution of appeal. 
  
 11.10 Material Adverse Change. A material adverse change occurs in the Borrower’s
(or any Obligor’s) business condition (financial or otherwise), operations or properties, or ability to repay the credit. 
  
 11.11 Government Action. Any government authority takes action that the Bank believes (in its Permitted Discretion) materially adversely affects the
Borrower’s or any Obligor’s financial condition or ability to repay the credit. 
  
 11.12 Default under Other Loan Documents. Any default occurs under any of the other Loan Documents, or, if applicable, any guarantor purports to revoke or disavow its guaranty. 
  
 11.13 ERISA Plans. Any one or more of the following events occurs with respect to a
Plan of the Borrower subject to Title IV of ERISA, provided such event or events could reasonably be expected, in the judgment of the Bank (in the exercise of its Permitted Discretion), to subject the Borrower to any tax, penalty or liability (or
any combination of the foregoing) which, in the aggregate, could have a material adverse effect on the financial condition of the Borrower: 
  

	(a)	 	A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan. 

  

	(b)	 	Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or partial withdrawal from a Plan by the Borrower or any ERISA Affiliate.

  
 11.14 Other Breach Under Agreement. The Borrower fails to
meet the conditions of, or fails to perform any obligation under, any term of this Agreement not specifically referred to in this Article 11. This includes any failure or anticipated failure by the Borrower to comply with any financial covenants set
forth in this Agreement, whether such failure is evidenced by financial statements delivered to the Bank or is otherwise known to the Borrower or the Bank. Notwithstanding any other provision in this Article 11, the Bank acknowledges that Borrower 1
intends to dissolve Borrower 4, Borrower 5 and Borrower 6 during the term of this Agreement, and the Bank agrees that such dissolution shall not constitute an event of default hereunder. 
  
 12. ENFORCING THIS AGREEMENT; MISCELLANEOUS 
  
 12.1 GAAP. Except as otherwise stated in this Agreement, all financial information provided to the Bank and all financial covenants
will be made under generally accepted accounting principles as in effect from time to time in the United States of America, consistently applied. 
  
 12.2 California Law. This Agreement is governed by California law. 
  
 12.3 Successors and Assigns. This Agreement is binding on the Borrower’s and the Bank’s successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Bank’s prior consent. The Bank may sell participations in or assign this loan, and may exchange financial information about the Borrower with actual or potential participants or assignees. If a participation is
sold or the loan is assigned, the purchaser will have the right of set-off against the Borrower. 
  
 12.4 Arbitration and Waiver of Jury Trial. 
  

 22 

	(a)	 	This paragraph concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this Agreement (including any renewals, extensions or modifications); or (ii) any of the other Loan Documents (collectively a “Claim”). For the purposes of this arbitration
provision only, the term “parties” shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this Agreement.

  

	(b)	 	At the request of any party to this Agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the
“Act”). The Act will apply even though this Agreement provides that it is governed by the law of a specified state. 

  

	(c)	 	Arbitration proceedings will be determined in accordance with the Act, the applicable rules and procedures for the arbitration of disputes of JAMS or any successor thereof
(“JAMS”), and the terms of this paragraph. In the event of any inconsistency, the terms of this paragraph shall control. 

  

	(d)	 	The arbitration shall be administered by JAMS and conducted, unless otherwise required by law, in any U.S. state where real or tangible personal property collateral for this credit
is located or if there is no such collateral, in California. All Claims shall be determined by one arbitrator; however, if Claims exceed Five Million Dollars ($5,000,000.00), upon the request of any party, the Claims shall be decided by three (3)
arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the close of
the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The
arbitration award may be submitted to any court having jurisdiction to be confirmed and enforced. 

  

	(e)	 	The arbitrator(s) will have the authority to decide whether any Claim is barred by the statute of limitations and, if so, to dismiss the arbitration on that basis. For purposes of
the application of the statute of limitations, the service on JAMS under applicable JAMS rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitrable
shall be determined by the arbitrator(s). The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this Agreement. 

  

	(f)	 	This paragraph does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure
against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ of possession or appointment of a
receiver, or additional or supplementary remedies. 

  

	(g)	 	The procedure described above will not apply if the Claim, at the time of the proposed submission to arbitration, arises from or relates to an obligation to the Bank secured by real
property. In this case, all of the parties to this Agreement must consent to submission of the Claim to arbitration. If both parties do not consent to arbitration, the Claim will be resolved as follows: The parties will designate a referee (or a
panel of referees) selected under the auspices of JAMS in the same manner as arbitrators are selected in JAMS administered proceedings. The designated referee(s) will be appointed by a court as provided in California Code of Civil Procedure Section
638 and the following related sections. The referee (or presiding referee of the panel) will be an active attorney or a retired judge. The award that results from the decision of the referee(s) will be entered as a judgment in the court that
appointed the referee, in accordance with the provisions of California Code of Civil Procedure Sections 644 and 645. 

  

	(h)	 	The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to
arbitration. 

  

 23 

	(i)	 	By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Claim. Furthermore, without intending
in any way to limit this Agreement to arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such Claim. This provision is a material inducement
for the parties entering into this Agreement. 

  
 12.5
Severability; Waivers. If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The Bank retains all rights, even if it makes a loan after default. If the Bank waives a default, it may enforce a later
default. Any consent or waiver under this Agreement must be in writing. 
  
 12.6
Attorneys’ Fees. The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees incurred by the Bank in connection with the enforcement or preservation of any rights or remedies under this Agreement and any of
the other Loan Documents, and in connection with any amendment, waiver, “workout” or restructuring under this Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and reasonable
attorneys’ fees incurred in connection with the lawsuit or arbitration proceeding, as determined by the court or arbitrator. In the event that any case is commenced by or against the Borrower under the Bankruptcy Code (Title 11, United States
Code) or any similar or successor statute, the Bank is entitled to recover costs and reasonable attorneys’ fees incurred by the Bank related to the preservation, protection, or enforcement of any rights of the Bank in such a case. As used in
this paragraph, “attorneys’ fees” includes the allocated costs of the Bank’s in-house counsel as applied to specific matters related to the Loan Documents, which shall be based upon reasonable and customary hourly billing rates
in the marketplace. 
  
 12.7 Joint and Several Liability. 
  

	(a)	 	Each Borrower agrees that it is jointly and severally liable to the Bank for the payment of all obligations arising under this Agreement, and that such liability is independent of
the obligations of the other Borrower(s). Each obligation, promise, covenant, representation and warranty in this Agreement shall be deemed to have been made by, and be binding upon, each Borrower, unless this Agreement expressly provides otherwise.
The Bank may bring an action against any Borrower, whether an action is brought against the other Borrower(s). 

  

	(b)	 	Each Borrower agrees that any release which may be given by the Bank to the other Borrower(s) or any guarantor will not release such Borrower from its obligations under this
Agreement unless such release expressly provides otherwise. 

  

	(c)	 	Each Borrower waives any right to assert against the Bank any defense, setoff, counterclaim, or claims which such Borrower may have against the other Borrower(s) or any other party
liable to the Bank for the obligations of the Borrowers under this Agreement. 

  

	(d)	 	Each Borrower waives any defense by reason of any other Borrower’s or any other person’s defense, disability, or release from liability. The Bank can exercise its rights
against each Borrower even if any other Borrower or any other person no longer is liable because of a statute of limitations or for other reasons. 

  

	(e)	 	Each Borrower agrees that it is solely responsible for keeping itself informed as to the financial condition of the other Borrower(s) and of all circumstances which bear upon the
risk of nonpayment. Each Borrower waives any right it may have to require the Bank to disclose to such Borrower any information which the Bank may now or hereafter acquire concerning the financial condition of the other Borrower(s).

  

	(f)	 	Each Borrower waives all rights to notices of default or nonperformance by any other Borrower under this Agreement. Each Borrower further waives all rights to notices of the
existence or the creation of new indebtedness by any other Borrower and all rights to any other notices to any party liable on any of the credit extended under this Agreement. 

  

 24 

	(g)	 	The Borrowers represent and warrant to the Bank that each will derive benefit, directly and indirectly, from the collective administration and availability of credit under this
Agreement. The Borrowers agree that the Bank will not be required to inquire as to the disposition by any Borrower of funds disbursed in accordance with the terms of this Agreement. 

  

	(h)	 	Until all obligations of the Borrowers to the Bank under this Agreement have been paid in full and any commitments of the Bank or facilities provided by the Bank under this
Agreement have been terminated, each Borrower (i) waives any right of subrogation, reimbursement, indemnification and contribution (contractual, statutory or otherwise), including without limitation, any claim or right of subrogation under the
Bankruptcy Code (Title 11, United States Code) or any successor statute, which such Borrower may now or hereafter have against any other Borrower with respect to the indebtedness incurred under this Agreement; and (ii) waives any right to enforce
any remedy which the Bank now has or may hereafter have against any other Borrower, and waives any benefit of, and any right to participate in, any security now or hereafter held by the Bank. 

  

	(i)	 	Each Borrower waives any right to require the Bank to proceed against any other Borrower or any other person; proceed against or exhaust any security; or pursue any other remedy.
Further, each Borrower consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Borrower under this Agreement or which, but for this provision, might operate as a discharge of the
Borrower. 

  
 12.8 One Agreement. This Agreement and the
other Loan Documents collectively: 
  

	(a)	 	represent the sum of the understandings and agreements between the Bank and the Borrower concerning this credit; 

  

	(b)	 	replace any prior oral or written agreements between the Bank and the Borrower concerning this credit; and 

  

	(c)	 	are intended by the Bank and the Borrower as the final, complete and exclusive statement of the terms agreed to by them. 

  
 In the event of any conflict between this Agreement and any of the other Loan Documents, this
Agreement will prevail. Any reference in any related document to a “promissory note” or a “note” executed by the Borrower and dated as of the date of this Agreement shall be deemed to refer to this Agreement, as now in effect or
as hereafter amended, renewed, or restated. 
  
 12.9 Disposition of Schedules
and Reports. The Bank will not be obligated to return any schedules, invoices, statements, budgets, forecasts, reports or other papers delivered by the Borrower. The Bank will destroy or otherwise dispose of such materials at such time as the
Bank, in its Permitted Discretion, deems appropriate. 
  
 12.10 Returned
Merchandise. Until the Bank exercises its rights to collect the accounts receivable as provided under any security agreement required under this Agreement, the Borrower may continue its present policies for returned merchandise and adjustments.
Credit adjustments with respect to returned merchandise shall be made immediately upon receipt of the merchandise by the Borrower or upon such other disposition of the merchandise by the debtor in accordance with the Borrower’s instructions. If
a credit adjustment is made with respect to any Acceptable Receivable, the amount of such adjustment shall no longer be included in the amount of such Acceptable Receivable in computing the Borrowing Base. 
  
 12.11 Verification of Receivables. The Bank may at any time, either orally or in
writing, request confirmation from any debtor of the current amount and status of the accounts receivable upon which such debtor is obligated. 
  

 25 

 12.12 Waiver of Confidentiality. With the Borrower’s consent, which shall not be unreasonably withheld, the
Bank shall be permitted to discuss the Borrower’s financial affairs and business operations with any accountants, auditors, business consultants, or other professional advisors employed by the Borrower, and such parties shall be authorized to
disclose to the Bank such financial and business information or reports (including management letters) concerning the Borrower as the Bank may request. 
  
 12.13 Indemnification. The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or
arising directly or indirectly out of (a) this Agreement or any of the other Loan Documents, (b) any credit extended or committed by the Bank to the Borrower hereunder, (c) any claim, whether well-founded or otherwise, that there has been a failure
to comply with any law regulating the Borrower’s sales or leases to or performance of services for debtors obligated upon the Borrower’s accounts receivable and disclosures in connection therewith, and (d) any litigation or proceeding
related to or arising out of this Agreement, any such document, any such credit, or any such claim. This indemnity includes but is not limited to reasonable attorneys’ fees (including the allocated cost of in-house counsel as applied to
specific matters related to the Loan Documents, which shall be based upon reasonable and customary hourly billing rates in the marketplace). This indemnity extends to the Bank, its parent, subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys, and assigns (collectively, the “Indemnified Persons”). This indemnity will survive repayment of the Borrower’s obligations to the Bank. All sums due to the Bank hereunder shall be obligations
of the Borrower, due and payable immediately without demand. Notwithstanding the foregoing, the Borrower will have no obligation to indemnify any Indemnified Person hereunder with respect to any loss, liability, damage, judgment or cost resulting
from the gross negligence or willful misconduct of such Indemnified Person. 
  
 12.14 Notices. Unless otherwise provided in this Agreement or in another agreement between the Bank and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage
prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time
in writing. Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if
hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered. 
  
 12.15 Headings. Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement. 
  
 12.16 Counterparts. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. 
  
 [signature page follows] 
  

 26 

 This Agreement is executed as of the date stated at the top of the first page. 
  

	 The “Bank”
	 	 “Borrower 1”

		
	 Bank of America, N.A.
	 	 EXCELLIGENCE LEARNING CORPORATION,
 a Delaware corporation

				
	 By
	 	 /s/ John M. Fitzgerald

	 	 By
	 	 /s/ Ronald C. Elliott

	 Name
	 	 John M. Fitzgerald
	 	 Name:
	 	 Ronald C. Elliott

	 Title
	 	 Senior Vice President
	 	 Title:
	 	 Chief Executive Officer

				
	 By
	 	
	 	 By
	 	 /s/ Judith McGuinn

	 Name
	 	  

	 	 Name:
	 	 Judith McGuinn

	 Title
	 	
	 	 Title:
	 	 Executive Vice President and
 Chief Operating Officer

		
	 Address where notices to
 the
Bank are to be sent:
 405 Main Street, Second Floor
 Salinas,
California 93901
 Facsimile: (831) 755-3001
	 	 Address where notices to
 Borrower 1 are to be sent:
 2 Lower Ragsdale Drive, Suite 200
 Monterey, California 93940
 Telephone: (831) 333-2000
 Facsimile: (831) 333-2592

			
	 	 	 	 	 Borrower 1’s place of business (or chief
 executive office, if more than one place
 of business), if different from address
 listed above: N/A.

			
	 	 	 	 	“Borrower 2”
			
	 	 	 	 	 EARLYCHILDHOOD LLC,
 a
California limited liability company

				
	 	 	 	 	 By
	 	 /s/ Ronald C. Elliott

	 	 	 	 	 Name:
	 	 Ronald C. Elliott

	 	 	 	 	 Title:
	 	 President/Chief Executive Officer

				
	 	 	 	 	 By
	 	 /s/ Judith McGuinn

	 	 	 	 	 Name:
	 	 Judith McGuinn

	 	 	 	 	 Title:
	 	 Chief Operating Officer

			
	 	 	 	 	 Address where notices to
 Borrower 2 are to be sent:
 2 Lower Ragsdale Drive, Suite 200
 Monterey, California 93940
 Telephone: (831) 333-2000
 Facsimile: (831) 333-2592

	Borrower 2’s place of business (or chief executive office, if more than one place of business), if different from address listed above: N/A.
	
	 “Borrower 3”

	
	 EDUCATIONAL PRODUCTS, INC.,
 a Texas corporation

		
	 By
	 	 /s/ Judith McGuinn

	 Name:
	 	 Judith McGuinn

	 Title:
	 	 President

		
	 By
	 	 /s/ Jeffrey C. Grace

	 Name:
	 	 Jeffrey C. Grace

	 Title:
	 	 Secretary/Treasurer

	
	 Address where notices to
 Borrower 3 are to be sent:
 2 Lower Ragsdale Drive, Suite 200
 Monterey, California 93940
 Telephone: (831) 333-2000
 Facsimile: (831) 333-2592

	
	 Borrower 3’s place of business (or chief
 executive office, if more than one place
 of business), if different from address
 listed above:

	 2155 Silber, Suite 100

	 Houston, Texas 77055

	
	 “Borrower 4”

	
	 SMARTERKIDS.COM, INC.,
 a Delaware corporation

		
	 By
	 	 /s/ Judith McGuinn

	 Name:
	 	 Judith McGuinn

	 Title:
	 	 President

		
	 By
	 	 /s/ Jeffrey C. Grace

	 Name:
	 	 Jeffrey C. Grace

	 Title:
	 	 Secretary/Treasurer

	 Address where notices to
 Borrower 4 are to be sent:
 2 Lower Ragsdale Drive, Suite 200
 Monterey, California 93940
 Telephone: (831) 333-2000
 Facsimile: (831) 333-2592

	
	 Borrower 4’s place of business (or chief
 executive office, if more than one place
 of business), if different from address
 listed above: N/A.

	
	“Borrower 5”
	
	 MARKETING LOGISTICS, INC.,
 a
Minnesota corporation dba

	 Early Childhood Manufacturers’ Direct

		
	 By
	 	 /s/ Ronald C. Elliott

	 Name:
	 	 Ronald C. Elliott

	 Title:
	 	 President/Chief Executive Officer

		
	 By
	 	 /s/ Judith McGuinn

	 Name:
	 	 Judith McGuinn

	 Title:
	 	 Vice President/Secretary

	
	 Address where notices to
 Borrower 5 are to be sent:
 2 Lower Ragsdale Drive, Suite 200
 Monterey, California 93940
 Telephone: (831) 333-2000
 Facsimile: (831) 333-2592

	
	 Borrower 5’s place of business (or chief
 executive office, if more than one place
 of business), if different from address
 listed above: N/A.

	
	 “Borrower 6”

	
	 COLORATIONS, INC., an Ohio corporation

		
	 By
	 	 /s/ Ronald C. Elliott

	 Name:
	 	 Ronald C. Elliott

	 Title:
	 	 President

		
	 By
	 	 /s/ Ronald C. Elliott

	 Name:
	 	 Ronald C. Elliott

	 Title:
	 	 Vice President/Secretary/Treasurer

	 Address where notices to
 Borrower 6 are to
be sent:
 2 Lower Ragsdale Drive, Suite 200
 Monterey, California
93940
 Telephone: (831) 333-2000
 Facsimile: (831)
333-2592

	
	 Borrower 6’s place of business (or chief
 executive office, if more than one place
 of business), if different from address
 listed above: N/A.

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