Document:

Exhibit 10.1

                            STOCK PURCHASE AGREEMENT
                                      AMONG
                             HERLEY INDUSTRIES, INC.
                                       AND
                              ICI ACQUISITION CORP.
                                    AS SELLER
                                       AND
                          ELBIT SYSTEMS OF AMERICA, LLC
                                  AS PURCHASER
                                       FOR
              THE PURCHASE OF ALL OF THE OUTSTANDING CAPITAL STOCK
                                       OF
                            INNOVATIVE CONCEPTS, INC.

                         DATED AS OF SEPTEMBER 18, 2008

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                                        TABLE OF CONTENTS
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                                                                                                           Page

ARTICLE 1 PURCHASE SALE AND REPURCHASE OF SHARES; CLOSING....................................................1
<S>         <C>                                                                                             <C>
   1.1      Agreement to Purchase, Repurchase and Sell...................................................... 1
   1.2      Consideration. ................................................................................. 1
   1.3      Manner of Delivery...............................................................................2
   1.4      Time and Place of Closing........................................................................2
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER...........................................................2
   2.1      General Statement................................................................................2
   2.2      Corporate........................................................................................3
   2,3      Financial........................................................................................5
   2.4      Taxes............................................................................................7
   2.5      Conduct of Business .............................................................................9
   2.6      Contracts.......................................................................................11
   2.7      Employment and Benefit Matters..................................................................13
   2.8      Litigation and Claims...........................................................................16
   2.9      Environmental Matters...........................................................................17
   2.10     Intellectual Property...........................................................................18
   2.11     Real Property...................................................................................20
   2.12     Government Contracts............................................................................20
   2.13     Export and Import Control.......................................................................24
   2.14     Anti-Corruption and Anti-Bribery................................................................24
   2.15     Adequacy of Assets and Other Matters............................................................25
 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER......................................................26
    3.1     General Statement. .............................................................................26
    3.2     Corporate.......................................................................................26
    3.3     Litigation......................................................................................27
    3.4     Fees............................................................................................27
 ARTICLE 4 CONDUCT PRIOR TO THE CLOSING.....................................................................27
    4.1     General.........................................................................................27
    4.2     Seller's Obligations............................................................................27
    4.3     Joint Obligations...............................................................................31
    4.4     Deliveries of Information; Consultations .......................................................31
 ARTICLE 5 CONDITIONS TO CLOSING............................................................................32
    5.1     Conditions to Seller's Obligations..............................................................32
    5.2     Conditions to Purchaser's Obligations...........................................................33
 ARTICLE 6 CLOSING..........................................................................................34
    6.1     Form of Documents...............................................................................34
    6.2     Purchaser's Deliveries..........................................................................34
    6.3     Seller's Deliveries,............................................................................35
    6.4     Section 338(0)(10) Election.....................................................................36
  ARTICLE 7 POST. CLOSING AGREEMENTS........................................................................36
    7.1     Post-Closing Agreements.........................................................................36
    7.2     Inspection of Records...........................................................................36
    7.3     Payments of Accounts Receivable.................................................................36
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   7.4      Non-Competition; Non-Solicitation...............................................................36
   7.5      Third Party Claims..............................................................................37
   7.6      Severance Agreements............................................................................38
   7.7      Offset to Government Contract Indemnification...................................................38
ARTICLE 8 INDEMNIFICATION...................................................................................38
   8.1      General.........................................................................................38
   8.2      Seller's Indemnification Obligations............................................................38
   8.3      Limitation on Seller's Indemnification Obligations..............................................39
   8.4      Purchaser's Indemnification Obligations.........................................................41
   8.5      Limitations on Purchaser's Indemnification Obligations,.........................................41
   8.6      Cooperation.....................................................................................41
   8.7      Subrogation.....................................................................................42
   8.8      Procedures......................................................................................42
ARTICLE 9 TERMINATION.......................................................................................43
   9.1      General.........................................................................................43
   9.2      Right to Terminate,.............................................................................43
   9.3      Certain Effects of Termination..................................................................44
   9.4      Remedies........................................................................................44
   9.5      Effect of Termination...........................................................................44
   9.6      Specific Performance............................................................................45
   9.7      Time is of Essence..............................................................................45
ARTICLE 10 TAX MATTERS......................................................................................45
   10.1     Tax Returns for Periods Ending on or Before the Closing Date....................................45
   10.2     Tax Returns for Periods Beginning Before and Ending After the Closing Date......................45
   10.3     Allocation of Straddle Period Taxes ............................................................46
   10.4     Audits and Contests Regarding Taxes.............................................................46
   10.5     Cooperation on Tax Matters......................................................................47
   10.6     Tax Sharing Agreements..........................................................................47
   10.7     Section 338(h)(10) Election.....................................................................47
 ARTICLE 11 DEFINITIONS.....................................................................................48
   11.1     Index of Definitions............................................................................48
   11.2     Other Definitions...............................................................................50
 ARTICLE 12 MISCELLANEOUS...................................................................................57
   12.1     Publicity.......................................................................................57
   12.2     Notices.........................................................................................58
   12.3     Expenses; Transfer Taxes........................................................................58
   12.4     Entire Agreement................................................................................59
   12.5     Non-Waiver. ....................................................................................59
   12.6     Counterparts. ..................................................................................59
   12.7     Severability,...................................................................................59
   12.8     Applicable Law..................................................................................59
   12.9     WAIVER OF JURY TRIAL............................................................................60
   12.10    Binding Effect; Benefit.........................................................................60
   12.11    Assignability...................................................................................60
   12.12    Amendments......................................................................................60
   12.13    Headings........................................................................................60
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                            STOCK PURCHASE AGREEMENT

     THIS STOCK.  PURCHASE  AGREEMENT (this "Agreement") is made as of September
18,  2008,  by and among  ELBIT  SYSTEMS OF  AMERICA,  LLC,  a Delaware  limited
liability  company   ("Purchaser"),   INNOVATIVE  CONCEPTS,   INC.,  a  Virginia
corporation ("la"), HERLEY INDUSTRIES,  INC., a Delaware corporation  ("Herley")
and sole  stockholder of ICI  ACQUISITION  CORP., a Delaware  corporation  ("ICI
Acquisition"),  and ICI Acquisition, the sole stockholder of ICI (Herley and ICI
Acquisition are herein collectively referred to as "Seller" and shall be jointly
and severally  liable for all of the  representations,  warranties and covenants
made by Seller  hereunder).  All capitalized  terms shall have the meanings used
herein, including as referenced in .Article 11 hereof.

                               R E C I T A L S

     A. Seller owns all of the  outstanding  shares of capital stock of ICI (the
"Shares");

     B. ICI is a communications  technology development firm specializing in the
research,  design,  development,  production,  sale and support of wireless data
communications  and other  products and services  for  federal,  government  and
commercial customers;

     C.  Pursuant  to the terms  and  conditions  set  forth in this  Agreement,
Purchaser desires to purchase all of the outstanding  Shares, and Seller desires
to sell to Purchaser all of the outstanding Shares; and

     D, Prior to the Closing (as defined below),  Seller shall acquire ownership
of all of the outstanding capital stock of Stapor Research, Inc., a wholly owned
subsidiary of ICI (the "Excluded Business"), and Purchaser shall not acquire nor
assume  liability  for, any of the assets,  obligations  and  operations  of the
Excluded Business.

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE 1
                 PURCHASE SALE AND REPURCHASE OF SHARES; CLOSING

1.1  Agreement to Purchase, Repurchase and Sell.

     On the basis of the representations, warranties, covenants, and agreements,
and subject to the satisfaction or waiver of the conditions set forth herein, at
the  Closing,  Purchaser  shall  purchase  from  Seller,  and Seller shall sell,
assign, transfer and deliver to Purchaser,  all of the Shares, free and clear of
all Claims. The total  consideration to be given by Purchaser in connection with
the  acquisition  of the Shares  shall be the sum of the  payments  described in
Section 1.2 below (collectively, the "Purchase Price").

1.2  Consideration.

     1.2.1 Cash  Payments at Closing.  The cash  payment at Closing  shall equal
Fifteen Million Dollars ($15,000,000) and shall be payable as follows:
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     (a) as  partial  consideration  for the  Shares,  the  amount  of  Fourteen
Million, Two Hundred Fifty Thousand  ($14,250,000) (the "Closing Cash Payment"),
shall be paid or  satisfied  at the  Closing  by wire  transfer  of  immediately
available  funds to such bank  account(s)  as Seller shall  designate by written
notice delivered to Purchaser not later than five (5) business days prior to the
Closing; and

     (b) the amount of Seven  Hundred Fifty  Thousand  Dollars  ($750,000)  (the
"Escrow  Amount")  will  be  deposited  into an  interest  bearing  escrow  (the
"Escrow") and held pursuant to an escrow agreement  substantially in the form of
Exhibit A (the  "Escrow  Agreement"),  The Escrow will be held,  maintained  and
disbursed by TD Bank, National Association, the escrow agent provided for in the
Escrow  Agreement (the "Escrow Agent") and will serve solely as security for any
potential Claims of Purchaser Indemnitees for indemnification for the Claims (as
defined herein) set forth in Sections 8.2.3,  8.2.4,  8.2.5, 8.2.6, 8.2.7, 8.2.8
and 8.2.9 below.

     (c) The amount of any intercompany balances due to or from Henley or any of
its Affiliates  (other than ICI) to ICI,  calculated in accordance  with Section
4.5, as of the date which is five (5) business  days prior to the Closing  Date,
shall be settled prior to the Closing date.

1.3  Manner of Delivery.

     At the Closing,  Seller shall deliver to Purchaser certificates  evidencing
the Shares,  accompanied by valid stock powers duly executed in blank, in proper
form for transfer and in form and substance satisfactory to Purchaser.

1.4  Time and Place of Closing.

     The  transactions  contemplated by this Agreement shall be consummated (the
"Closing") at 10:00 a.m., at the offices of Greenberg Traurig,  LLP, 1750 Tysons
Blvd., Suite 1200, McLean,  Virginia 22102, on October 2, 2008 or promptly after
the  satisfaction  or waiver of each of the conditions set forth in Sections 5.1
and 5.2, or on such other date,  or at such time or place,  as shall be mutually
agreed  upon in writing by Seller and  Purchaser.  The date on which the Closing
occurs  in  accordance  with  the  preceding  sentence  is  referred  to in this
Agreement as the "Closing Date."

                                    ARTICLE 2
                    REPRESENTATIONS AND WARRANTIES OF SELLER

2.1  General Statement.

     Except as set  forth in the  disclosure  schedule  provided  by Seller  and
attached to this Agreement ("Seller's  Disclosure  Schedule"),  Seller makes the
representations and warranties set forth in this Article 2. Such representations
and  warranties to Purchaser  shall not be limited or otherwise  affected by any
investigation or lack of investigation by Purchaser.  No specific representation
or warranty  shall  limit the  generality  or  applicability  of a more  general
representation or warranty.

                                       2
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2.2  Corporate.

     22.1 ICI is a  corporation  duly  organized,  validly  existing and in good
standing  under the laws of the  Commonwealth  of Virginia,  with full corporate
power and  authority  to carry on its  business  as such  business  is now being
conducted,  except where the failure to have such power and authority  would not
have a Material Adverse Effect,

     2.22 ICI is  qualified to do business as a foreign  entity,  and is in good
standing,  under the laws of Pennsylvania and in all other  jurisdictions  where
the nature of its business or the nature or location of its assets requires such
qualification,  except  where  the  failure  to be so  qualified  in such  other
jurisdictions  would not have a Material  Adverse Effect.  All  jurisdictions in
which ICI is qualified as a foreign entity are set forth in Schedule 2.22,

     2.2.3 Except for the shares of Stapor  Research,  Inc., ICI does not own or
have the right to  acquire,  directly or  indirectly,  any  securities  or other
equity  interests of any Person or hold or beneficially  own any other direct or
indirect  interest  (whether  it be capital  stock or any  comparable  ownership
interest  in any  Person  that  is  not a  corporation),  or any  subscriptions,
options,  warrants, rights, calls, convertible securities or other agreements or
commitments for any such equity interest in any Person.

     2.2.4 True and complete copies of the Articles of  Incorporation of ICI and
all amendments thereto,  the bylaws as amended and currently in force, all stock
records,  and all corporate  minute books and records of ICI have been furnished
to Purchaser for review and inspection.  Such stock records  accurately  reflect
all  transactions  relating to the Shares from and after the Seller  Acquisition
Date and the current ownership of the Shares.

     2.2.5 The authorized and issued and outstanding capital stock of ICI is set
out in Schedule 2.2.5.  There are no shares of capital stock of ICI of any other
class  authorized,  issued or  outstanding.  All of the issued  and  outstanding
capital stock of ICI  consisting  of 1,500 shares of Class A Common  Stock,  has
been duly authorized and is validly issued, fully paid and non- assessable.  ICI
Acquisition, owns all of the issued and outstanding shares of ICI capital stock,
free and clear of all Claims and Herley  owns all of the issued and  outstanding
shares of ICI  Acquisition,  free and clear of all  Claims.  There are no Claims
relating to the issued or unissued  capital stock or other  securities of ICI or
obligating  ICI to issue any  securities of any kind.  No  preemptive  rights or
rights of first  refusal  exist with  respect to the shares of capital  stock of
ICI.  There  are  no  outstanding  or  authorized  rights,  options,   warrants,
convertible securities,  subscription rights, conversion rights, exchange rights
or other  agreements or commitments of any kind that could require ICI or Seller
to issue or sell any shares of ICI's capital stock (or debt or equity securities
convertible  into or exchangeable for shares of ICI's capital stock) and no such
rights or commitments  of any kind arise by virtue of or in connection  with the
transactions  contemplated  hereby. There are no outstanding stock appreciation,
phantom stock, profit participation or other similar rights with respect to ICI.
There are no proxies, voting rights, shareholders agreements or other agreements
or understandings with respect to the voting or transfer of the capital stock of
ICI. ICI is not obligated to redeem or otherwise  acquire any of its outstanding
shares of capital stock.

                                        3
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     2.2.6  The  execution  and  delivery  by  each of ICI  and  Seller  of this
Agreement  and the other  Transaction  Documents  to be executed  in  connection
herewith, constitute the legal, valid and binding obligations of ICI and Seller,
respectively,  enforceable  against  ICI and  Seller in  accordance  with  their
respective  terms (except to the extent that enforcement may be affected by laws
relating to bankruptcy,  insolvency and creditors'  rights  generally and by the
availability  of injunctive  relief,  specific  performance  and other equitable
remedies),  ICI and Seller have the  absolute  and  unrestricted  right,  power,
authority and capacity to execute and deliver this Agreement and the Transaction
Documents  and,  subject to the receipt of the  Approvals  described in Schedule
2.12.10, the advance  notification  described in Schedule 2.2.6 and the consents
described in Schedule  2.2.9,  to perform each of their  respective  obligations
under this Agreement and the Transaction Documents.

     2.2.7 The Board of  Directors  of the Seller and the Board of  Directors of
ICI have approved this  Agreement  and the other  Transaction  Documents and the
transactions  contemplated  hereby and thereby and has authorized the execution,
delivery and performance of this Agreement and the other  Transaction  Documents
and the consummation of the transactions  contemplated  hereby and thereby.  The
shareholders  of Seller are not  required  to approve  the sale of the Shares to
Purchaser and no other  corporate  proceedings  on the part of Seller or ICI are
necessary to approve and authorize the  execution,  delivery and  performance of
this Agreement and the other  Transaction  Documents and the consummation of the
transactions contemplated hereby and thereby.

     2.2,8 Except with regard to the  approvals  described  in Schedule  2.12,10
relating to the facility security clearances,  personnel security clearances and
permits listed on that schedule,  no Approval of any  Governmental  Authority is
required  for the  execution  and  delivery  of  this  Agreement  and the  other
Transaction Documents by Seller and ICI and the consummation of the transactions
contemplated hereby and thereby by Seller and ICI.

     2.2.9 Except as set forth on Schedule  2.2.9,  the execution,  delivery and
performance  by  Seller  and ICI of this  Agreement  and the  other  Transaction
Documents  and  the   consummation  by  Seller  and  ICI  of  the   transactions
contemplated  hereby and  thereby and the  fulfillment  by Seller and ICI of the
terms hereof and  thereof:  (i) shall not cause either of Seller or ICI to be in
violation  or Breach  of, and will not  conflict  with or  constitute  a default
under,  and shall not accelerate or permit the  acceleration  of the performance
required by, any of the terms of the Articles of  Incorporation or bylaws of ICI
or any Security Document or any other Contract or agreement, written or oral, to
which  Seller  or ICI is a party or by which it is bound;  (ii)  shall not be an
event which,  after notice or lapse of time or both, will result in any material
violation, Breach, conflict, default, or acceleration; (iii) shall not result in
a violation  under any material law,  Judgment,  permit or other  material legal
requirement  of any  Governmental  Authority  applicable  to Seller or ICI; (iv)
shall  not  result in the  creation  or  imposition  of any Lien in favor of any
Person upon the Shares or any of the  properties  or assets of Seller or ICI and
(v) will not adversely effect ICI's rights in any of its Intellectual  Property.
Except as set forth on Schedule 2.2.9, no notice to, filing with, or consent of,
any Person is necessary for the execution,  delivery or performance by Seller or
ICI of this Agreement and the other  Transaction  Documents nor the consummation
by Seller or ICI of the transactions contemplated hereby or thereby.

                                       4
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2.3  Financial.

     2.3.1 Since the Seller Acquisition Date, ICI's books,  accounts and records
are, and have been,  maintained in ICI's  ordinary  course of business,  and all
material  transactions  to which ICI is or has been a party are  accurately  and
properly reflected therein in all material respects.

     2.3.2 Schedule 2.3.2 contains complete and accurate copies of the unaudited
balance  sheets and statements of profit and loss of ICI as of and for the years
ended July 29, 2007, July 30, 2006 and July 31, 2005 (the  "Unaudited  Financial
Statements") and the preliminary unaudited balance sheet and statement of profit
and loss of ICI as of and for the 2008  fiscal  year  ended  August 3, 2008 (the
"2008 Financial  Statements").  The Unaudited Financial  Statements and the 2008
Financial Statements are hereinafter referred to as the "Financial  Statements".
The Financial  Statements are complete and correct in all material  respects and
present  fairly the  financial  position  of ICI as of the date  thereof and its
results of operations for the periods covered by such statements,  in accordance
with U.S.  GAAP,  consistently  applied;  except for (a) the absence of footnote
disclosures  required by U.S. GAAP, (b) normal  recurring  year-end  adjustments
which are not material, individually or in the aggregate and (c) as set forth in
any footnotes to the 2008 Financial Statements.

     2,3.3  None of the  accounts  receivable  and  notes  receivable  which are
reflected in the Financial  Statements or which arose  subsequent to the date of
the 2008 Financial  Statements is or was subject to any deduction,  counterclaim
or set-off in excess of the aggregate amounts, if any, reserved as uncollectible
for  such  purpose  on the  2008  Financial  Statements.  All of  such  accounts
receivable and notes receivable arose out of bona fide, arms-length transactions
for the  sale of  goods  or  performance  of  services,  and all  such  accounts
receivable  and  notes  receivable  (whether  billed  or  =billed)  are good and
collectible (or have been collected) at the aggregate  recorded  amounts thereof
within 180 days of the date of the  invoice  other than as set forth in Schedule
2.3.3,  subject to the amount  reserved  for  uncollectible  accounts  and notes
receivable on the 2008 Financial Statements.

     2.3.4 On the date of this Agreement, the Funded Customer Backlog of ICI was
not less than the amount specified in Schedule 2.3.4. As used in this Agreement,
the term "Funded  Customer  Backlog"  means  purchase  orders or Contracts  from
customers with funding  currently  available and fixed prices,  fixed quantities
and  fixed  delivery  dates,  and cost  plus  Contracts,  subject  to the  terms
otherwise provided in the Contracts listed in Schedule 2.6.2. Except as provided
in  Schedule  2.3.4,  ICI has not  received  any written  notification  from any
customer that any of such Funded Customer  Backlog may be canceled or revised by
an amount in excess of $50,000, individually or in the aggregate.

     2.3.5  Except as  specifically  identified  in Schedule  2.3.5,  ICI has no
Liabilities except for:

     (a) Liabilities provided for or reserved against in the Unaudited Financial
Statements;

                                       5
<PAGE>
     (b)  Liabilities  which have been incurred by ICI subsequent to the date of
the  Unaudited  Financial  Statements  in the  ordinary  course of business  and
consistent with past practice;  and

     (c) Liabilities under the executory portion of any Contract by which ICI is
bound  and  which was  entered  into in the  ordinary  course  of  business  and
consistent with past practice.

     Any of the Liabilities  described in subparagraphs  (a) through (c) of this
Section 2,3.5 that constitute Indebtedness are set forth in Schedule 2.3.5. None
of the Liabilities  described in  subparagraphs  (a) through (c) of this Section
2.3.5 relates to or has arisen out of a Breach by or against ICI, any Proceeding
involving  ICI or  violation  of  Applicable  Law and none of such  Liabilities,
individually or in the aggregate, would have a Material Adverse Effect.

     2.3.6 Schedule 2.3.6, in all material respects, sets forth a true, accurate
and complete list and description of all uncompleted  Contracts of ICI as of the
date hereof and all outstanding bids,  including  Government Bids, of ICI which,
as of the date hereof,  have not been  accepted by the proposed  customers.  All
outstanding bids were made in the ordinary course of ICI's business.

     2.3,7  ICI has good and  marketable  title to all of its  assets,  free and
clear of any Liens,  except for Permitted  Liens. As of the Closing Date,  there
are no unreleased Security Documents encumbering any of ICI' s assets.

     2.3.8 ICI has no guarantees,  surety bonds, instruments or other agreements
to which ICI is a party as an obligor,  surety or  guarantor,  other than checks
endorsed for collection or deposit in the ordinary course of business.

     2.3.9  Schedule  2.3.9  contains a true,  accurate  and  complete  list and
description  {including  coverages,  deductibles  and  expiration  dates) of all
insurance  policies  which are owned by ICI or which name ICI as an insured  (or
loss  payee),  and the  claims  history  since  January  1, 2007 under each such
policy. All such insurance policies are in full force and effect and neither ICI
nor Seller has received notice of  cancellation of any such insurance  policies,
In the three (3) year period ending on the date hereof,  there has not occurred,
and neither  Seller nor ICI has received any written  notice from,  or on behalf
of, any insurance  carrier  relating to or involving any change in conditions of
insurance of ICI, any refusal to issue an insurance  policy or non- renewal of a
policy  covering,  or requiring  material  adverse  changes or material  premium
increases relating to ICI.

     2.3.10 Section 2.3.10 contains a list showing:

     (a) the  name  of each  bank,  safe  deposit  company  or  other  financial
institution in which ICI has an account, lock box or safe deposit box; and

     (b) the names of all Persons  authorized  to draw thereon or to have access
thereto and the names of all Persons,  if any,  holding  powers of attorney from
ICI.

                                       6
<PAGE>
     2.3.11  Schedule 2.3.11  describes  each:(.) (i) Contract or other business
relationship  (excluding  employee  compensation and other ordinary incidents of
employment)  between  (x)  ICI  and  (y) any  Related  Party;  (ii)  transaction
occurring  since the Seller  Acquisition  Date between ICI and any Related Party
involving  payment in excess of $50,000;  and (iii) amount owing by or to any of
the  Related  Parties,  respectively,  to or  from  ICI as of the  date  of this
Agreement.  No property or interest in any property which is used in the current
operation  of ICI's  business  is  presently  owned by or leased or  licensed by
Seller or by any other Related Party.

     2.3.12 The closing balance sheet will be prepared  jointly by Purchaser and
Seller  based  on the  Allocation  Schedule  agreed  to in  connection  with the
elections  under Section  338(h)(10)  and any  analogous  provisions of state or
local Law as  provided  in Section  10.7 of this  Agreement  based on a purchase
price of $15,000,000 and will be prepared promptly following agreement as to the
Allocation Schedule,

2.4  Taxes.

     2.4.1 ICI or Seller has filed on a timely basis all Tax Returns required to
have been filed with respect to ICI's assets or  operations  or on behalf of any
"affiliated group" (within the meaning of Section 1504 of the Code) of which ICI
is or was a  member.  All such Tax  Returns  are  correct  and  complete  in all
material  respects.  All Taxes required to have been paid by or on behalf of ICI
(whether or not shown on any Tax Return) have been paid on a timely basis or, if
not yet due and owed,  have been accrued and reserved as a current  liability on
the  balance  sheets  included  in the  Financial  Statements.  Since the Seller
Acquisition  Date  no  Claim  has  been  made  or  is  currently  pending  by  a
Governmental  Authority in a jurisdiction  where ICI or Seller does not file Tax
Returns  that  either  ICI or Seller is or may be subject  to  taxation  by that
jurisdiction  based upon the assets or operations of ICI. Neither Seller nor ICI
has  requested  or obtained  any  extension of time within which to file any Tax
Return  related to ICI's  assets or  operations,  which Tax Return has not since
been filed. The accruals and reserves for Taxes reflected in ICI's balance sheet
included in the Financial  Statements,  if any, are adequate to cover all unpaid
Taxes  of ICI and such  reserves  for  Taxes  as  adjusted  for  operations  and
transactions and the passage of time through the Closing Date in accordance with
past custom and  practice of ICI are  adequate to cover all unpaid  Taxes of ICI
accruing through the Closing Date.

     2.4.2 Since the Seller  Acquisition  Date and to Seller's  Post-Acquisition
Knowledge prior to the Seller  Acquisition Date, ICI and Seller have complied in
all material  respects with all applicable laws, rules and regulations  relating
to withholding Taxes for employees, contractors or consultants of ICI, and have,
within the time and manner  prescribed by law,  withheld from employee wages and
paid over to the proper Governmental Authority all amounts required to have been
so withheld and paid  (including,  without  limitation,  any such Taxes due as a
result  of a plan or  compensation  agreement  intended  or  purporting  to be a
"deferred  compensation  arrangement"  that does not comply with Section 409A of
the Code).

     2.4.3  There is no  audit or other  proceeding  presently  pending  or,  to
Seller's  Knowledge,  threatened  with  regard  to any  Tax of ICI or of  Seller
relating to ICI or ICI's  operations  or assets.  ICI has not  received a ruling
from a  Governmental  Authority  relating  to any Tax or entered  into a written
agreement  with a Governmental  Authority  relating to any Tax. Since the Seller
Acquisition Date and to Seller's Post-Acquisition  Knowledge prior to the Seller

                                       7
<PAGE>
Acquisition  Date, no issue has been raised by any  Governmental  Authority with
respect to Taxes of ICI in any prior  examination  which,  by application of the
same or similar principles, could reasonably be expected to result in a proposed
deficiency for any other taxable period.

     2.4.4 No agreement,  waiver ox other document or arrangement extending,  or
having the effect of extending, the period for assessment or collection of Taxes
(including, but not limited to, any applicable statute of limitation),  has been
executed or filed with any  Governmental  Authority  by or on behalf of ICI that
has continuing  effect;  and no power of attorney with respect to any Tax matter
relating to ICI is currently in force.

     2.4.5 ICI has not filed any  consent or entered  into any  agreement  under
Section 341(f) of the Code with respect to any of its assets.

     2.4.6 ICI is not a party to any contract,  agreement,  plan or  arrangement
that,  individually  or  collectively,  (i) requires it to make  payments to any
person that could be characterized as "parachute payments" within the meaning of
Section 2800 of the Code (or any  corresponding  or similar  provision of state,
local or foreign  Tax law);  (ii)  could give rise to the  payment of any amount
(whether in cash or property,  including shares of capital stock) that would not
be deductible  pursuant to the terms of Sections  162(a)(1),  162(m),  162(n) or
280G of the Code; or (iii) would be subject to the excise Tax under Section 4999
of the Code.

     2.4.7 ICI has not made or agreed to make,  and is not required to make, any
change  in method  of  accounting  of ICI  which  would  require  ICI to make an
adjustment to its income  pursuant to Section 481(a) of the Code (or any similar
provision);  and neither is there any application  pending with any Governmental
Authority  requesting  permission  for ICI to make any change in any  accounting
method,  nor has ICI received any notice that a Governmental  Authority proposes
to require a change in method of accounting.

     2.4.8  ICI is not and  has not  been a  party  to any Tax  allocation,  Tax
sharing or similar agreement or arrangement. ICI (i) has not been a member of an
"affiliated  group"  (within the meaning of Section  1504 of the Code)  filing a
consolidated  federal income Tax Return,  other than the  consolidated  group of
which Seller is the common parent,  and (ii) has no Liability for Taxes owing by
any other Person,  including,  without limitation (A) under Treasury  Regulation
Section 1.1502-6 (or any similar provision of state, local, or foreign law), (B)
as a transferee or successor, or (C) by contract or otherwise.

     2.4.9 ICI has not taken any action  not in  accordance  with past  practice
that  would  have the  effect of  deferring  a measure  of Tax from a period (or
portion  thereof) ending on or prior to the Closing Date to a period (or portion
thereof)  beginning  after the Closing Date.  ICI has no deferred  income or Tax
Liability arising out of any transaction,  including without limitation, any (i)
intercompany  transaction (as defined in Treasury Regulation Section 1.1502-13),
or (ii) the disposal of any property in a  transaction  accounted  for under the
installment method pursuant to Section 453 of the Code.

     2.4.10 Schedule 2.4.10  identifies all Tax Returns that ICI has filed after
the Seller  Acquisition  Date,  and the taxable  period covered by each such Tax
Return,  and  identifies  those Tax Returns or periods that have been audited or

                                       8

<PAGE>
are  currently  the  subject of an audit by a  Governmental  Authority.  ICI has
provided to  Purchaser  complete  and  accurate  copies of all of the  following
materials that relate to Tax periods ending after the Seller  Acquisition  Date:
(A) with respect to ICI only all income Tax Returns  filed by or with respect to
ICI,  (B) all  elections  relating  to Taxes  which have  continuing  effect for
taxable  years  ending  after the Closing Date filed by or on behalf of ICI with
any  Governmental  Authority  (other  than  elections  which are  included in or
apparent from Tax Returns referred to in A above),  (C) all examination  reports
relating to Taxes of ICI, and (D) all statements of Taxes assessed against ICI.

     2.4,11  ICI  is  not  currently  a  United  States  real  property  holding
corporation  within the meaning of Code Section  897(c)(2) at any time since the
Seller Acquisition Date.

     2.4.12 ICI has not  constituted  either a  "distributing  corporation" or a
"controlled  corporation" within the meaning of Section 355(a)(1)(A) of the Code
in a  distribution  qualifying (or intended to qualify) under Section 355 of the
Code (or so much of Section  356 as  relates  to  Section  355) since the Seller
Acquisition Date.

     2.4.13  Seller or ICI have  disclosed on their income Tax Returns since the
Seller  Acquisition Date all material positions taken therein that could, if not
so disclosed, give rise to a substantial understatement penalty assessed against
ICI within the meaning of Section 6662 of the Code (or any comparable  provision
of state law). ICI has not Mowed, and to Seller's Knowledge, no state of affairs
exist that could result in ICI incurring,  any penalty under Section  6662(e) of
the Code (or any comparable provision of state law). ICI has not been a party to
or  participated  in any way in a  transaction  that  could  be  described  as a
"reportable  transaction"  within the  meaning of  Treasury  Regulation  Section
1.6011-4(b)  (including  without  limitation,  any "listed  transaction") or any
confidential  corporate  Tax shelter  within the meaning of Treasury  Regulation
Section 1,6111-2, nor has any Tax item or any Tax strategy that has been derived
from or related to any such transaction been reflected in any Tax Return of ICI.

     2.4.14 Seller is not a foreign person within the meaning of Section 1445 of
the Code.

     2.4.15  (a) Since the Seller  Acquisition  Date,  ICI has not (1)  acquired
assets from another  corporation  in a transaction  in which ICI's tax basis for
the acquired assets was determined, in whole or in part, by reference to the tax
basis of the acquired  assets in the hands of the transferor or (2) acquired the
stock of any corporation that is a qualified subchapter S subsidiary; and (b) no
taxes have been or will be for periods through the Closing Date,  imposed on ICI
pursuant to Sections 1374 or 1375 of the Code.

     2.4.16 Schedule 2.4.16 sets forth ICI's tax basis in its assets for federal
income tax purposes which is accurate and complete in all material respects.

2.5  Conduct of Business.

     2.5.1 Since August 3, 2008,  except as set forth on Schedule 2.5.1, ICI has
conducted  its business in the ordinary  course of business in  accordance  with
past practices and has not, nor has Seller in the name of or on behalf of ICI:

     (a) sold, assigned, leased, exchanged, transferred or otherwise disposed of
any of its material  assets or property  (including but not limited to transfers

                                       9
<PAGE>
to Seller or any of its non-ICI  Affiliates),  except for sales of its Inventory
in the ordinary course of business in accordance with past practices;

     (b) suffered any casualty,  damage, destruction or loss, or interruption in
use, of any asset or property (whether or not covered by insurance),  on account
of fire, flood, riot, strike or other hazard or act of God;

     (c) written off any material asset as unusable or obsolete or for any other
reason;

     (d) made or suffered  any  material  change in the conduct or nature of any
aspect of the businesses of ICI,  whether or not made in the ordinary  course of
business or whether or not such change had a Material Adverse Effect;

     (e) made (or  committed to make)  capital  expenditures  in an amount which
exceeds $50,000 for any item or $250,000 in the aggregate;

     (f) paid (or delayed payment of) payables, collected (or delayed collection
of)  receivables or waived any material  rights,  in each case other than in the
ordinary course of business in accordance with past practices;

     (g) made any change in accounting methods or principles, other than changes
required to comply with changes in U.S. GAAP;

     (h) adopted,  amended or announced the amendment or adoption of any Benefit
Plan;

     (i)  borrowed  any money or issued  any bonds,  debentures,  notes or other
corporate  securities,  including without limitation,  those evidencing borrowed
money;

     (j) entered into any  transactions  or agreements  with any Related  Party,
paid (or been paid by) any Related  Party,  or charged (or been  charged by) any
Related  Party,  for (A) goods sold or  services  rendered  by or to ICI, or (B)
corporate overhead expenses,  management fees, legal or accounting fees, capital
charges, or similar charges or expenses, in each case other than in the ordinary
course of business consistent with past practice;

     (k)  increased  the  compensation  payable to any  employee,  except in the
normal course of business;

     (l) made any  payments  or  distributions  to its  employees,  officers  or
directors except such amounts as constitute currently effective compensation for
services  rendered,  or  reimbursement  for  reasonable  ordinary and  necessary
out-of-pocket business expenses;

     (m) lost or  transferred  to Seller or a non-ICI  Affiliate  of Seller  the
services of any Key Employee;

     (n) sold or  purchased  any  securities  of any  class of any  third  party
(exclusive of short term liquid investments);

                                       10
<PAGE>
     (o) paid,  declared or set aside any dividend or other  distribution on its
capital stock, exchanged or redeemed any of its capital stock;

     (p)  experienced  a material  change in the  aggregate  amount of  accounts
receivable or the aging thereof;

     (q)  been  debarred,   suspended  or  disqualified   from  bidding  for  or
participating in the award of any Government  Contract,  or received notice that
any suspension,  debarment or disqualification Proceeding has been commenced or,
to Seller's Knowledge, threatened against ICI by any Governmental Authority with
respect to ICI's participation in any Government Contract; or

     (r) without limitation by the enumeration of any of the foregoing,  entered
into any material  transaction  other than in the usual and  ordinary  course of
business in accordance with past practices.

     2.5.2  ICI has  not  suffered  or been  threatened  with  (and to  Seller's
Knowledge,  there  are no facts  which are  likely  to cause or  result  in) any
material adverse change in the business,  operations,  assets,  liabilities,  or
financial  condition of ICI,  including,  without limiting the generality of the
foregoing,  the existence or threat of a labor dispute,  or any material adverse
change in, or loss of, any relationship between ICI and any Key Employee.

     2.5.3  To  Seller's  Knowledge,  no  Significant  Customer,  including  the
Department of the Army, intends to terminate its business relationship with ICI,
including  pursuant  to  the  right  of  the  Significant   Customer  who  is  a
Governmental  Authority to terminate for  convenience,  or to limit or alter its
business relationship with ICI in any material respect (including by non-renewal
of any Contract or non-exercise  of any Contract  option  period),  whether as a
result  of the  transactions  contemplated  hereby  or  otherwise.  To  Seller's
Knowledge,   no   Significant   Supplier   intends  to  terminate  its  business
relationship with ICI or to limit or alter its business relationship with ICI in
any material respect whether as a result of the transactions contemplated hereby
or otherwise.

     2.5,4 Schedule 2.5.4 sets forth in reasonable detail all material goods and
services which Seller or any Affiliate  (other than ICI)  currently  provides to
ICI to support the  operation  of ICI's  business or ICI's sales of any goods or
services.

2.6  Contracts.

     2,6,1  Except as set  forth on  Schedule  2.6,1,  ICI is not a party to, or
bound by, or the issuer,  beneficiary  or recipient of, any oral  Contract(s) of
any kind or nature which provide for the receipt or expenditure of  individually
$25,000,  or in the aggregate  $50,000,  or more over the remaining  duration of
such oral Contract(s).

     2.6.2  Schedule  2,6.2  contains a complete and accurate  list, and ICI has
made  available to Purchaser  true and complete  copies of all of the  following
Contracts to which ICI is a party:

     (a)  Contracts  for the  employment  of any Person  entered  into since the
Seller Acquisition Date or which remain in effect;

                                       11
<PAGE>
     (b) consulting agreements entered into since the Seller Acquisition Date or
which remain in effect;

     (c) plans or  Contracts or  arrangements  providing  for bonuses,  options,
deferred compensation,  severance,  retirement payments, profit sharing, medical
and/or dental benefits or similar benefits covering employees of ICI;

     (d)  Contracts or orders for the purchase by ICI of  Inventory,  Equipment,
Services  or other  assets,  except  for  purchase  orders  entered  into in the
ordinary  course of ICI's  business,  which  involve  more than  $50,000  in the
aggregate;

     (e) agreements  for the sale of any  Equipment,  Inventory or other assets,
except for sales of Inventory in the ordinary course of business,  and exchanges
or transfers of obsolete or worn  equipment,  involving less than $50,000 in the
aggregate;

     (f) agreements, loans, purchase orders and advances between ICI, on the one
hand, and Seller or any of its Affiliates,  or any other Related Parties, on the
other hand ;

     (g) agreements of agency, representation,  distribution, or franchise which
cannot be  canceled by ICI without a  termination  payment or other  penalty for
cancellation, upon notice of thirty (30) days or less;

     (h) agreements for the advertisement, display, or promotion of any of ICI's
products or  services  which  cannot by  canceled  by ICI without a  termination
payment or other  penalty for  cancellation,  upon notice of thirty (30) days or
less;

     (i)  service  agreements  relating  to  any  of  ICI's  assets  other  than
agreements  that in the aggregate  are not material to the  business,  financial
affairs or assets of ICI;

     (j)  guaranties,  performance,  bid or  completion  bonds,  and sureties or
indemnification agreements (without any dollar threshold);

     (k) loan, credit or other financing agreements,  notes, Security Documents,
factoring  agreements  or letters of  credit;,  except as  disclosed  in Section
2.6.2(f);

     (l)  Contracts,  other than  purchase  orders or bills of lading,  with any
shipping or transportation company, exceeding $50,000 in the aggregate;

     (m)  leases  or  subleases,  either  as  lessee  or  sublessee,  lessor  or
sublessor,  of real or personal  property or intangibles which lease or sublease
requires payment by or to ICI of at least $20,000 per year;

     (n) partnerships or joint venture agreements;

     (o) Government Contracts (as defined in Section 11,2.37 of this Agreement),
the list of  which at  Schedule  2.6.2  contains  the  following  categories  of
information for each such contract:  contract name,  contract number,  procuring
agency,  ICI  bidding/offeror  status  (e.g.,  Section 8(a),  prime  contractor,
subcontractor,  subcontractor  to joint  venture,  joint venturer  etc.),  award

                                       12
<PAGE>
basis,  agency credit,  contract start date,  contract  expiration  date,  total
signed value, funded backlog, and unfunded backlog; or

     (p) other Contracts not specifically  enumerated above that provide for the
receipt or expenditure of an amount certain or reasonably estimated of more than
$50,000 over the remaining duration of such Contract.

     2.6.3 All of the  Contracts  identified  in Section 2.6.2 are in full force
and effect and are valid and enforceable in accordance with their terms, subject
to the rights of a  Governmental  Authority to  terminate  for  convenience  and
except for laws related to bankruptcy, insolvency and equitable rights, and none
of such Contracts has been sold, assigned, otherwise transferred or subjected to
any Lien,  other than Pei pitted  Liens.  ICI is in  compliance  in all material
respects with all terms and  requirements of each such Contract and, to Seller's
Knowledge,  each other  Person  that is party to such a Contract  is in material
compliance  with the  terms  and  requirements  of such  Contract.  To  Seller's
Knowledge,  no event has occurred or  circumstance  exists that (with or without
notice or lapse of time) may contravene,  conflict with or result in a violation
or breach of, or give ICI or any other  Person the right to declare a default or
exercise any remedy under,  or to accelerate the maturity or performance  of, or
to cancel,  terminate  or  modify,  any such  Contract.  ICI has not given to or
received from any other Person any written notice or communication regarding any
actual, alleged, or potential violation or Breach of, or default under, any such
Contract.  There are no renegotiations,  or attempts to renegotiate any material
amount to be paid or payable to or by ICI under any such  Contract and no Person
has made a written demand for such renegotiation. ICI has not released or waived
any  of  its  rights  under  any  such  Contract.  To  Seller's  Knowledge,   no
subcontractor to which ICI has  subcontracted  any work under any Contract is in
material default under the terms of the subcontract.

     2.6.4  Neither ICI nor Seller on its behalf,  has paid or agreed to pay any
fee or commission to any employee, agent or representative, the payment of which
would be a violation of the prohibition  against contingent fees as set forth in
the Federal  Acquisition  Regulation  ("FAR") or any other regulation  including
those relating to foreign military sales.

     2,6.5 Neither Seller nor ICI or any of their respective Affiliates is bound
by any agreement restricting in any manner ICI's right to compete with any other
Person,  ICI's right to sell to or purchase from any other Person,  the right of
any other  Person to compete  with ICI,  or the ability of such Person to employ
any of ICI's employees.

2.7  Employment and Benefit Matters.

     2.7.1 Benefits Plans

     (a) Schedule  2.7.1(a)  contains a list of each  Employee  Welfare  Benefit
Plan,  Employee Pension Benefit Plan and each plan fund,  program,  agreement or
arrangement for the provision of executive  compensation,  deferred or incentive
compensation,  profit sharing, stock bonus, bonus, stock option, stock purchase,
termination, salary continuation,  employee assistance, supplemental retirement,
severance,  vacation,  sickness,  disability,  death, fringe benefit, insurance,
medical or other benefits  (whether provided through  insurance,  on a funded or
unfunded  basis,  or otherwise),  to any current or former  employee,  director,

                                       13

<PAGE>
consultant  or  independent  contractor  of  ICI,  or any of  their  dependents,
survivors  or  beneficiaries  with  respect  to any of the  foregoing,  which is
maintained, administered or contributed to by ICI or any ERISA Affiliate of ICI,
whether or not legally binding  (collectively,  the "Benefit  Plans") that is or
has been in effect since the Seller Acquisition Date.

     (b) Each Benefit Plan (and each related trust,  insurance contract or fund)
has been  maintained,  funded and  administered in accordance with its governing
instruments and all applicable  laws,  including,  but not limited to, ERISA and
the Code. Each plan which is or has been maintained, administered or contributed
to by ICI or an ERISA  Affiliate has been  administered  in accordance  with the
applicable provisions of COBRA and IIIPAA.

     (c) All  contributions,  premiums or other  payments due under the terms of
each Benefit Plan or required by  applicable  law have been made within the time
due and all unpaid amounts attributable to any such plan for any period prior to
the Closing Date will be accrued on ICI's books and records in  accordance  with
U.S. GAAP.

     (d) The IRS has issued a favorable determination letter to ICI or to Seller
with  respect to ICI,  with  respect to each  Benefit  Plan which is intended to
qualify under Code Section 401(a)  (collectively,  the "Qualified Plans"),  such
determination  letter  may be  relied  upon  with  respect  to the  most  recent
amendment,  if any, to each Qualified Plan, and nothing has occurred which could
adversely affect the tax qualified status of any such Qualified Plan.

     (e) There have been no  Prohibited  Transactions  with respect to any ERISA
Plan  which  could  result  in  liability  to ICI.  There  has been no breach of
fiduciary duty  (including  violations  under Part 4 of Title I of ERISA) or any
other  failure  to act or  comply  in  connection  with  the  administration  or
investment  of the assets of any ERISA Plan which could  result in  liability to
ICI. No action, suit,  procedure,  hearing, or investigation with respect to the
administration  of the  investment  of the assets of any such plan  (other  than
routine claims for benefits) is pending or, to Seller's  Knowledge,  threatened.
To Seller's Knowledge,  there is no basis for any such action, suit, proceeding,
hearing or investigation.

     (f) Since the  Seller  Acquisition  Date and to  Seller's  Post-Acquisition
Knowledge,  prior to the  Seller  Acquisition  Date,  neither  ICI nor any ERISA
Affiliate of ICI has ever sponsored, maintained,  administered,  contributed to,
or had any obligation to contribute to or had any other  liability under or with
respect  to  any  Employee   Pension  Benefit  Plan  which  is  subject  to  the
requirements  of  Section  412 of the Code,  Section  302 of Title I of ERISA or
Title IV of ERISA.

     (g) Since the  Seller  Acquisition  Date and to  Seller's  Post-Acquisition
Knowledge,  prior to the  Seller  Acquisition  Date,  neither  ICI nor any ERISA
Affiliate of ICI has ever sponsored, maintained,  administered,  contributed to,
or had any obligation to contribute to or had any other  liability under or with
respect to any Employee  Welfare  Benefit Plan which  provides  health,  life or
other benefits for former directors, officers or employees of ICI (or any spouse
or former spouse or other dependent  thereof),  other than benefits  required by
COBRA.

                                       14
<PAGE>
     (h) Since the  Seller  Acquisition  Date and to  Seller's  Post-Acquisition
Knowledge,  prior to the Seller  Acquisition  Date, no Employee  Welfare Benefit
Plan providing  medical,  dental,  vision or similar  insurance  benefits to ICI
employees is self insured.

     (i) Since the  Seller  Acquisition  Date and to  Seller's  Post-Acquisition
Knowledge,  prior to the  Seller  Acquisition  Date,  neither  ICI nor any ERISA
Affiliate has ever maintained a "voluntary  employees  beneficiary  association"
within the meaning of Section 5011(9) of the Code or any other "welfare  benefit
fund" as defined in Section 419(e) of the Code.

     (j) Since the  Seller  Acquisition  Date and to  Seller's  Post-Acquisition
Knowledge,  prior to the Seller  Acquisition  Date, all reports and  information
relating to each Benefit Plan required to be filed with a Governmental Authority
have been accurately and timely filed;  all reports and information  relating to
each such Benefit Plan required to be disclosed or provided to  participants  or
their  beneficiaries  have been timely  disclosed  or provided  and there are no
restrictions on the right of ICI or any ERISA Affiliate to terminate or decrease
(prospectively)  the level of benefits  under any Benefit Plan after the Closing
Date without liability to any participant or beneficiary thereunder.

     (k) Each ERISA Affiliate of ICI is identified in Schedule 2.7.1 b

     (1) Each Benefit Plan sponsored by ICI since the Seller Acquisition Date is
terminable at the  discretion  of ICI and without cost to ICI. ICI may,  without
cost,  withdraw its  employees,  directors,  officers and  consultants  from any
Benefit Plan which is not  sponsored  by ICI. No Benefit Plan has any  provision
which  could  increase  or  accelerate  benefits  or any  provision  which could
increase  liability  to  ICI  or  Purchaser  as a  result  of  the  transactions
contemplated hereby, alone or together with any other event.

     (m) Neither ICI nor any ERISA Affiliate  contributes to, has been obligated
to contribute to, or has any Liability to any "multiemployer plan" as defined in
Section 3(37) of ERISA.

     (n) Each  Benefit Plan that  provides  nonqualified  deferred  compensation
within the  meaning of Section  409A of the Code has  complied  since the Seller
Acquisition  Date in  operation  with the  requirements  of Section 409A and any
regulations promulgated thereunder.

     2.7.2 Employee Matters

     (a) Schedule 2.7.2 contains a complete and correct list of all employees of
ICI and their  respective  titles and security  clearances as of the date hereof
(the "ICI Employees"),  the 2008 compensation  payable to each such employee and
the date of  employment of each such  employee.  Except as set forth on Schedule
2.7.2(a),  (1) the  employment  or engagement of all  directors,  officers,  ICI
Employees,   agents,  consultants  and  professional  advisers  of  ICI  may  be
terminated  at will with  notice  given at any time and  without  liability  for
payment of severance or other additional compensation or damages, (ii) there are
no  agreements  between  any ICI  Employee  and any  other  Person  which  would
restrict,  in any manner,  such employee's ability to perform services for ICI ,
(iii) and there are no  severance  plans or payments  which are or could  become
payable by ICI to any ICI Employees or  consultants  under the terms of any oral
or written  agreement  or  commitment  or any law,  custom,  trade or  practice.

                                       15

<PAGE>
Schedule  2.7.2  describes  any  incentive  commission  program or related sales
program  operated  by ICI and the amounts of payments  due  thereunder  to ICI's
employees as of the date hereof.

     (b) ICI is not, and has not since the Seller  Acquisition Date, been, bound
by or subject to (and none of its assets or  properties  are bound by or subject
to) any  arrangement  with  any  labor  union  or  other  collective  bargaining
representative.  Since the Seller Acquisition Date, there has not been, there is
not  presently  pending or existing,  and, to Seller's  Knowledge,  there is not
threatened,  (i) any material  strike,  slowdown,  picketing,  work  stoppage or
employee grievance process;  (ii) any material charge,  grievance  proceeding or
other claim  against or affecting  ICI relating to the alleged  violation of any
law pertaining to labor relations or employment matters, including any charge or
complaint filed by an employee or union with the National Labor Relations Board,
the Equal  Employment  Opportunity  Commission  or any  comparable  Governmental
Authority,  (iii) any union organizational activity or other labor or employment
dispute against or affecting ICI, or (iv) any application for certification of a
collective bargaining agent.

     (c) ICI is and has been  since  the  Seller  Acquisition  Date in  material
compliance  with  all  applicable  laws  respecting  employment  and  employment
practices,  terms and conditions of employment,  and wages and hours,  including
without  limitation  any such laws  regarding  employment  documentation,  equal
employment  opportunities,  fair employment  practices,  plant closings and mass
layoffs,  sexual  harassment,  discrimination  based on sex,  race,  disability,
health  status,  pregnancy,  religion,  national  origin,  age or other tortious
conduct, workers' compensation, family and medical leave, the Immigration Reform
and Control Act, and occupational  safety and health  requirements,  and ICI has
not engaged in any unfair  labor  practice.  IC is not liable for the payment of
any  compensation,  damages,  taxes,  fines,  penalties or other amounts however
designated  for  failure  to  comply  with  any of the  foregoing.  All  Persons
classified by ICI as independent  contractors have satisfied the requirements of
law to be so  classified,  and ICI  has  fully  and  accurately  reported  their
compensation  on IRS Forms 1099 when  required to do so. No  individual  who has
performed  services  for or on behalf of ICI, and who has been treated by ICI as
an independent  contractor,  is classifiable as a "leased  employee," within the
meaning of Section 414(nX2) of the Code with respect to ICI.

     (d) Schedule  2.72(d)  lists all ICI  employees  who are currently on leave
relating to work related  injuries  and/ or receiving  disability  or medical or
family leave benefits under any Benefit Plan.

     (e) No Key  Employee  has  advised  Seller or ICI that he or she intends to
terminate employment with ICI within the next ninety (90) days or as a result of
the purchase of ICI by Purchaser hereunder, prior to, upon, or shortly after the
Closing.

2.8  Litigation and Claims.

     2.8.1 There is no  Proceeding  in law or in equity  (including  Proceedings
before any commission or other administrative authority) pending or, to Seller's
Knowledge,  threatened  in  writing  against  ICI  or any  of  its  officers  or
directors;  or any Proceedings against ICI or Seller related to the consummation
of the  transactions  contemplated  hereby or relating to any of ICI's assets or
operations.

                                       16
<PAGE>
     2.8.2  Since the  Seller  Acquisition  Date,  ICI has not made any  written
warranties,  or to  Seller's  Knowledge,  oral  warranties  with  respect to the
quality or absence of defects of its  products or services  which it has sold or
performed  which are in force as of the date hereof except for those  warranties
which are  described  in Schedule  2.8.2().  There are no Claims  pending or, to
Seller's Knowledge, threatened against ICI with respect to breach of warranty or
the  quality of or absence of defects in such  products  or  services.  Schedule
2.8.2(ii)  sets forth a summary,  which is accurate and complete in all material
respects,  of all  material  returns  of  defective  products  during the period
beginning  January 1, 2006 and ending on the date hereof,  all material  credits
and allowances for defective products or services given to customers during said
period,  and the defect which  resulted in the return,  allowance or credit.  To
Seller's Knowledge,  there are no products sold or services performed by ICI for
which warranties are presently in effect that will result in any material Claims
of $50,000 or greater for breach of such warranties after the Closing Date.

     2.8.3  Neither  ICI nor Seller is a party to, or bound by, any  Judgment or
agreement with respect to a Proceeding  relating to or affecting the properties,
assets, personnel or business activities of ICI.

     2.8.4 ICI and  Seller  have been in  compliance  in all  respects  with all
Judgments,  and in all material  respects with all Applicable Laws and Approvals
of  Governmental  Authorities,  that relate to ICI,  its  operations  or assets,
including but not limited to the Guilty Plea  Agreement by Seller entered in the
U.S.  District Court for the Eastern  District of Pennsylvania  and the Seller's
Settlement Agreement with the United States. Since January 1, 2008, neither ICI,
nor Seller with regard to ICI, has received from any Governmental  Authority any
written notification with respect to possible or alleged  noncompliance with any
Judgment, Applicable Law or Approval.

2.9  Environmental Matters.

     2.9,1 ICI is, and has been since the Seller Acquisition Date, in compliance
with  applicable  Environmental  Laws  and  Environmental  Permits  and  has  no
Liability  for  any  Environmental   Claim  or  for   non-compliance   with  any
Environmental Law or Environmental Permit.

     2.9.2 ICI  possesses all  Environmental  Permits which are required for the
operation of its business.

     2.9.3 Neither ICI nor Seller has received any written  communication  since
the Seller  Acquisition  Date  alleging that ICI is not or was not in compliance
with applicable Environmental Laws or Environmental Permits.

     2.9.4 Since the Seller  Acquisition  Date,  there has been no Environmental
Claim  pending or, to Seller's  Knowledge,  threatened  against  ICI.  Since the
Seller Acquisition Date, ICI has not received notice of any Environmental  Claim
nor, to Seller's Knowledge, is there any Environmental Claim pending.

     2.9.5 Since the Seller  Acquisition  Date, no wastes  generated by ICI have
been directly or indirectly sent, transferred,  transported to, treated, stored,
or  disposed  of at any site  listed or  formally  proposed  for  listing on the
National   Priorities  List  or  the   Comprehensive   Environmental   Response,

                                       17
<PAGE>
Compensation  and  Liability  Information  System,  both  promulgated  under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended  ("CERCLA"),  or any comparable state list. Since the Seller Acquisition
Date,  ICI has not received  any written  notice from any Person with respect to
any real  property  referred to in this  subparagraph,  of  potential  or actual
liability or a written request for information from any Person under or relating
to CERCLA or any comparable state or local law.

     2.9.6 Since the Seller  Acquisition  Date there have not been any Hazardous
Substances used, generated, treated, stored, transported,  disposed of, handled,
Released or otherwise existing in connection with ICI's business.

     2.9.7  Since  the  Seller   Acquisition  Date,  there  have  not  been  any
underground or aboveground  storage tanks,  asbestos  containing  materials,  or
transformers containing or contaminated with PCBs used or existing in connection
with ICI's business.

     2,9.8 Seller's  Disclosure  Schedule lists all environmental data, studies,
analyses or reports and  Environmental  Permits in the  possession  of Seller or
ICI, and true and complete copies thereof have been delivered to Purchaser.

2.10 Intellectual Property.

     2,10.1  Schedule 2.10.1 , in all material  respects,  sets forth a complete
and accurate  list of all U.S. and foreign  copyright  registrations,  copyright
applications,  patents,  patent applications,  identified inventions,  invention
disclosures,  trademark  registrations,  service mark  registrations  (including
Internet  domain  name  registrations),  trademark  applications,  service  mark
applications, material unregistered trademarks and material unregistered service
marks  included  within the  Intellectual  Property that are owned by ICI or for
which ICI has the exclusive,  perpetual  right to use without further payment or
royalty.  ICI is the owner of or has exclusive,  perpetual  rights to use all of
the  Intellectual  Property  described  in  Schedule  2.10.1,  ICI has not sold,
assigned  or  otherwise  transferred  or  subjected  to  any  Lien  any  of  its
Intellectual Property,

     2.10.2  ICI is the  sole  owner  of  record  of the  Intellectual  Property
identified  on  Schedule  2.10.1,   No  application  for  registration  nor  any
registration  of any  patent,  trademark,  service  mark or  copyright  has been
withdrawn or terminated by ICI since the Seller Acquisition Date and each of the
aforementioned   applications  and   registrations  has  been  duly  maintained,
including the  submission  of all necessary  filings and payment of all fees and
charges  in  accordance  with  the  requirements  of the  applicable  Government
Authorities.

     2.10.3 Schedule 2.10.3, in all material respects,  lists all Software which
is owned ("Proprietaly  Software") or licensed,  leased or otherwise used by ICI
and designates which Software is owned,  licensed,  leased or otherwise used, as
the case may be.  ICI does not use any  non-Proprietary  Software  unless  it is
licensed for such use in the manner ICI currently  uses such  Software.  ICI has
paid all applicable license fees for  non-Proprietary  Software through at least
December 31, 2008.  ICI has and, as of the Closing Date,  will retain all rights
to any  Intellectual  Property  required by it for the continued  conduct of its
business in the manner such business is currently conducted.

                                       18
<PAGE>
     2.10.4  Schedule  2.10.4(i),  in all  material  respects.,,  sets  forth  a
complete and accurate list of all  agreements  between ICI, on the one hand, and
any Person,  on the other  hand,  granting  ownership  rights in or any right to
license,  sublicense,  use or practice any rights under any of the  Intellectual
Property owned by ICI or by any other Person,  including all IP addresses  owned
or licensed by ICI or any other  Person  (collectively,  "Intellectual  Property
Licenses").  Since  the  Seller  Acquisition  Date,  ICI  has  not  licensed  or
sublicensed  any  rights in any of the  Intellectual  Property  or  received  or
granted  any such  rights,  other than  pursuant  to the  Intellectual  Property
Licenses.  Except as set forth on Schedule  2.10.4(ii),  ICI has not provided to
any third  party or  deposited  into  escrow a copy of any  source  code for its
Proprietary Software. Since August 1, 2005, ICI has not agreed to provide a copy
of any source code for its Proprietary Software other than as required under its
Government Contracts.

     2.10.5 The conduct of ICI's business, the use of its Intellectual Property,
and the exercise of its rights  relating to its  Intellectual  Property  used in
ICI's  business do not  infringe  upon or  otherwise  violate  the  Intellectual
Property rights of any Person.

     2.10.6 To Seller's  Knowledge,  no Person is  infringing  upon or otherwise
violating any of the Intellectual Property of ICI.

     2.10.7 Since the Seller  Acquisition Date and to Seller's  Post-Acquisition
Knowledge,  prior to the Seller  Acquisition  Date,  neither  Seller nor ICI has
received  notice of any Claims and there are no  pending  Claims by any  Persons
relating to the scope, ownership or use of any of the Intellectual Property.

     2.10.8 All Intellectual Property of ICI and Proprietary Software of ICI was
either  developed (A) by employees of ICI within the scope of their  employment;
or (B) by independent  contractors  who have assigned their entire right,  title
and  interest in such  Intellectual  Property  and  Proprietary  Software to ICI
pursuant to written agreements.

     2.10.9 Since the Seller  Acquisition Date and to Seller's  Post-Acquisition
Knowledge,  prior to the Seller  Acquisition  Date,  neither  Seller nor ICI has
agreed to  deliver or provide  to any third  party any  Software  or any data or
information related thereto that is not subject to the applicable  restricted or
limited  rights  under  the  FAR and  Defense  Federal  Acquisition  Regulations
Supplement ("DFARS"), respectively.

     2.10.10 Subject to (a) the consent of the  Israel-United  States Binational
Industrial  Research  and  Development  Foundation  under  the  Cooperation  and
Property Funding Agreement  described below be obtained for any assignment,  and
(b) the  non-exclusive  royalty free license rights of the governments of Israel
and the United States to make or use any products  derived from,  and to use for
non-commercial  purposes,  the Intellectual  Property  developed pursuant to the
Cooperation  and  Property  Funding  Agreement,  ICI  retains  all rights to the
Intellectual  Property  developed  or created by ICI under the  Cooperation  and
Project Funding Agreement between Paragon  Communications,  Ltd., Seller and the
Israel-United States Binational Industrial Research and Development  Foundation,
dated April 9, 2008.  ICI is not in Breach of any of its  obligations  under the
Cooperation  and Project  Funding  Agreement or the Contract with Full Spectrum,
Inc., dated October 10, 2007. ICI is not currently using and has no current plan

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<PAGE>
or  intention to hereafter use in any manner the Intellectual Property developed
under the Contract with Full Spectrum.

     2.10,11 As used herein (a) "Intellectual  Property" means all right,  title
and interest in any intellectual property,  including,  without limitation,  all
patents,   trade  secrets,   identified   inventions,   invention   disclosures,
trademarks, designs, service marks, copyrights, Internet domain names, web sites
and IP  addresses,  trade or business  names,  trade dress and slogans  (and all
registrations  of any of the foregoing,  and all  applications  for registration
thereof), Software, and any goodwill associated with such Intellectual Property,
(b) "Software"  means any and all (i) computer  programs,  including any and all
software  implementation  of  algorithms,  models and  methodologies  whether in
source code or object code, (ii) databases and  computations,  including any and
all data and collections of data,  (iii)  documentation,  including user manuals
and training materials,  relating to any of the foregoing,  and (iv) content and
information  contained in any web site and (c) "IP addresses"  means any and all
TCP/IP addresses.

2.11 Real Property.

     2.11.1 Since the Seller  Acquisition  Date and currently,  ICI does not own
any real property.

     2.11.2  Schedule  2,11,2 lists all real property leased or subleased by ICI
(the "Leased Real Property"). The Leased Real Property: (i) constitutes all real
property  and  improvements  leased or used by ICI;  (ii) is not  subject to any
leases, tenancies or rights of possession of any kind (except for ICI's lease as
to Leased Real  Property);  (iii) is, and has been since the date of  possession
thereof by ICI, in the peaceful  possession of ICI; (iv) is served by all water,
sewer,  electrical,  telephone,  drainage and other  utilities  required for the
operations of ICI's  business;  (v) to Seller's  Knowledge,  requires no work or
improvements  to bring it into  compliance  'with any Applicable Law, is in good
condition and repair,  and no material  expenditures are required to be made for
the repair,  replacement or maintenance of any  improvements  on the Leased Real
Property.  Any options in favor of ICI to extend,  expand or terminate any lease
as to Leased Real Property, if any, are in full force and effect.

     2.11.3  ICI,  and to  Seller's  Knowledge,  the  owner of the  Leased  Real
Property, as applicable,  currently hold all certificates of occupancy,  permits
and any other approvals of any Governmental  Authority or any other Person which
are material for the lawful  occupancy and operation of the Leased Real Property
or which are material to the operation of ICI's  business on the premises of the
Leased Real Property. All such certificates of occupancy,  permits and approvals
that ICI is required to have are current and in full force and effect.

2.12 Government Contracts.

     2,12,1 Since the Seller  Acquisition Date and to Seller's  Post-Acquisition
Knowledge  prior to the  Seller  Acquisition  Date,  neither  Seller nor ICI has
received  any  decision  of  a  contracting   officer  or  prime  contractor  or
subcontractor  at  any  tier  asserting  any  Claim  or  request  for  equitable
adjustment  against ICI with respect to any Government  Contract held by ICI and
no such Claim is currently  pending.  There are no disputes  between ICI and the
U.S.  Government under the Contract Disputes Act of 1978, any dispute resolution

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<PAGE>
regulations,  procedures or contract clauses or any other federal statute. There
are no disputes,  including any bid.  protests  filed at the agency,  Government
Accountability  Office, or court level, or other legal or administrative  causes
of action between or among ICI and any prime  contractor,  subcontractor  at any
tier, other bidder or offeror,  or vendor or any other third party arising under
or relating to any  Government  Contract.  To Seller's  Knowledge,  there are no
facts,  events or  circumstances  likely  to give  rise to a  dispute  under any
Government  Contract.  In addition,  (i) all required 2007 and prior fiscal year
final indirect cost rate proposals  concerning any Government Contract have been
submitted,  and (ii) provisional indirect rates have been established and agreed
to by ICI and the U.S.  Government up to and  including  ICI's fiscal year ended
August 3, 2008. Schedule 2.12.1 further sets out a list differentiating  between
Government Contracts that have not been fully performed and those that have been
fully  performed  but  as  to  which  the  U.S.  Government's  or a  higher-tier
contractor's  rights to review,  audit,  or  investigate  have not expired under
Applicable Law.

     2.12.2  Since  the  Seller  Acquisition  Date  neither  Seller  nor ICI has
received  any  notice  of  the  intention  of the  U.S.  Government  or a  prime
contractor  or  subcontractor  to terminate any  Government  Contract for either
convenience or default or any other reason, whether or not permitted thereunder,
including,  but not  limited  to, a breach or  violation  in any  respect of any
statute or regulation  pertaining to any Government  Contract and no such notice
is  currently  pending.  Neither  Seller  nor ICI has,  since  January  1, 2006,
received any show cause notices,  cure notices,  or negative  determinations  of
responsibility  with  respect  to  any  Government  Contract.  There  exists  no
outstanding  Claim  against ICI,  either by the U.S.  Government or by any prime
contractor,  subcontractor at any tier,  other bidder or offeror,  vendor or any
other third party, arising under or relating to any Government Contract.

     2.12.3 Since the Seller  Acquisition Date and to Seller's  Post-Acquisition
Knowledge,  prior to the Seller  Acquisition  Date,  neither  Seller nor ICI has
asserted  any  Claim or  request  for  equitable  adjustment  concerning  money,
interpretation  of contract terms or other relief under any Government  Contract
performed  by ICI and no such  Claim is  currently  pending.  Since  the  Seller
Acquisition Date, and, to the Seller's Knowledge prior to the Seller Acquisition
Date, no money due to ICI or Seller  pertaining to any  Government  Contract has
been withheld or set off nor has any Claim been made for such withholding or set
off. ICI is entitled to receive and retain all progress  payments received under
all Government  Contracts.

     2.12.4  Since the  Seller  Acquisition  Date,  neither  Seller  nor ICI has
received notice of any failure to comply with the Truth in Negotiations  Act (10
U.S.C.  sec. 2306a, 41 U.S.C.  sec.  254(d)) or to submit where required cost or
pricing  data that were  accurate,  complete  and  current and no such notice is
currently pending.  Neither Seller nor ICI has received notice of any failure to
comply  with the  pricing  and  discount  disclosure  requirements  or the price
reduction  clause  in any  Contract  ICI may  hold  with  the  General  Services
Administration pursuant to GSA's Multiple Award Schedule program.

     2.12.5  Neither  Seller nor ICI is subject to any Claim for or with respect
to price adjustment under any Government  Contract  performed by ICI,  including
any liability  for defective  pricing.  In relation to any  Government  Contract
where  ICI is a  subcontractor  at any  tier,  to ICI's  Knowledge,  there is no
dispute  between or among the prime  contractor,  upper-tier  contractor and the

                                       21
<PAGE>
Government  customer which may give rise to a Liability of ICI or which may lead
to the termination of the prime contract or the subcontract

     2.12,6 Since the Seller  Acquisition Date and to Seller's  Post-Acquisition
Knowledge,  prior to the Seller  Acquisition  Date,  neither  Seller nor ICI has
received  notice that either ICI or any of its directors,  officers,  employees,
agents,   or   consultants   is  under   administrative,   civil,   or  criminal
investigation,   indictment   or  writ  of   information,   audit  or   internal
investigation  with  respect  to any  alleged  or  potential  violation  of law,
irregularity, misstatement, or omission regarding any Government Contract and no
such  notice is  currently  pending.  Since the Seller  Acquisition  Date and to
Seller's  Post-Acquisition  Knowledge,  prior to the  Seller  Acquisition  Date,
neither the U.S.  Government nor any prime  contractor,  subcontractor  or other
Person has notified ICI or Seller that ICI has breached or violated any statute,
regulation,  certification,  representation,  clause,  provision or  requirement
pertaining to any  Government  Contract or Government  Bid and no such notice is
currently pending.

     2,12.7 ICI has not been debarred,  suspended or  disqualified  from bidding
for or participation in the award of any Government Contract (excluding for this
purpose  ineligibility to bid on certain  contracts due to generally  applicable
bidding  requirements)  and neither Seller nor ICI has received  notice that any
suspension,  debarment or disqualification action has been commenced against ICI
with respect to any Government  Contract.  To Seller's Knowledge there exists no
fact or circumstance that would warrant the institution of suspension, debarment
or  disqualification   proceedings  or  the  finding  of   nonresponsibility  or
ineligibility  on the  part  of ICI  with  respect  to any  employee,  director,
officer,  agent or consultant of ICI, To Seller's  Knowledge,  there is no valid
basis for (i) the suspension,  debarment or disqualification of ICI from bidding
on or performing Contracts or subcontracts with any Governmental  Authority,  or
(ii) any Claim pursuant to any audit by any Governmental Authority in connection
with any  Contracts  or  subcontracts  relating to the  provision of products or
services to or for the benefit of a Governmental Authority. Upon the acquisition
of ICI by Purchaser pursuant to this Agreement, (a) the United States Department
of the Navy would not  consider  Purchaser  or any  subsidiary  or  Affiliate of
Purchaser,  including ICI, to be a party to the Administrative Agreement between
the United States Department of the Navy and Herley,  and (ii) the United States
Department of the Navy would not pursue a separate Administrative Agreement with
Purchaser or any subsidiary or Affiliate of the Purchaser,  including ICI, based
solely on the acquisition of ICI,

     2.12.8 ICI has  complied in all  material  respects  with all the terms and
conditions  of  each  Government  Contract,   including  its  obligations  under
Government  Contracts relating to any  Government-Furnished  Property or similar
property or Equipment owned by the United States.

     2.12.9 ICI has complied in all material  respects with all applicable  U.S.
Government  laws  and  regulations  in  connection  with  all  cost  accounting,
materials  management and procurement  systems maintained by ICI and none of its
Government Contracts is or has been subject to the Cost Accounting Standards set
forth in FAR  Part 30.  No  material  cost  incurred  by ICI  pertaining  to any
Government Contract or Government Bid has, since the Seller Acquisition Date and
to Seller's  Post-Acquisition  Knowledge,  prior to the Seller Acquisition Date,
been formally questioned or challenged, been the subject of any investigation or
been  disallowed  by the U.S.  Government.  ICI (or  Seller on its  behalf)  has

                                       22
<PAGE>
maintained  accounting systems,  including cost accounting systems, and data and
document  custody and maintenance  controls that meet all requirements set forth
in ICI's Government Contracts and Applicable Laws.

     2.12,10 ICI possesses all necessary facility security clearances, personnel
security  clearances and permits for the execution of its obligations  under any
Government  Contract  and  Schedule  2.12.10  sets forth all  facility  security
clearances held by ICI and ICI employees.  Since the Seller Acquisition Date and
to Seller's Post-Acquisition Knowledge prior to the Seller Acquisition Date, ICI
and each of its  directors,  officers,  and  employees,  has  complied  with all
requirements set forth in its Government  Contracts relating to the safeguarding
of,  and  access  to,  classified  information  as  governed  by the  applicable
provisions  of  the  National   Industrial  Security  Program  Operating  Manual
("NISPOM") and applicable  requirements of the Defense Security Service ("DSS").
Neither  ICI nor  Seller  has been  advised  in writing  of,  and,  to  Seller's
Knowledge,  there are no facts or actions  indicating  a violation  or potential
violation  of the  applicable  provisions  of  the  NISPOM  or DSS  requirements
governing the safeguarding of, and access to, classified information.

     2.12.11 Since the Seller Acquisition Date, ICI has complied in all material
respects with all applicable statutes and other regulations, including the False
Claims Act, the Anti- Kickback Act of 1986, the Federal Election Campaign Act of
1971,  the Sherman  Act,  the Clayton  Act,  the  Service  Contract  Act and the
regulations  under  each of  them.  Since  the  Seller  Acquisition  Date and to
Seller's  Post-Acquisition  Knowledge,  prior to the Seller Acquisition Date, no
payment has been made by ICI,  or by any person on behalf of ICI, in  connection
with  securing any award or obtaining  favorable  treatment  with respect to any
Government  Contract or Government  Bid in violation of any  applicable  laws or
regulations.

     2.12.12  Since  the  Seller   Acquisition   Date,  ICI  has  not  made  any
representations or certifications  that are incomplete or untrue in any material
respect or filed any  accountings  that are  inaccurate in any respect as to any
Government  Contract.  ICI has complied in all material  respects  with all such
representations and certifications.

     2.12.13 Schedule 2.12.13  identifies (i) by description or inventory number
all  material  Government-Furnished  Property  that  is  or  should  be  in  the
possession of ICI, and (ii) each Government  Contract to which each such item of
Government-Furnished Property relates.

     2,12.14  Since the Seller  Acquisition  Date,  ICI has not been  audited or
investigated  and is not now being  audited or  threatened  in  writing  with an
investigation by the Government  Accountability  Office, the U.S.  Department of
Justice, the Inspector General of any Governmental Authority,  the Department of
Defense or any of its agencies  other than the Defense  Contract Audit Agency on
routine audit matters.  ICI has not, since January 1, 2006,  been the subject or
recipient of any adverse audit finding or report by the Defense  Contract  Audit
Agency.

     2.12.15  Since  the  Seller  Acquisition  Date,  ICI has not  conducted  or
initiated any internal investigation, or made a voluntary disclosure to the U.S.
Government,  with respect to any alleged irregularity,  misstatement or omission
arising under or relating to any Government  Contract or Government  Bid, and to
Seller's  Knowledge  there  exists no  irregularity,  misstatement  or  omission
arising under or relating to any Government Contract or Government Bid  that has

                                       23

<PAGE>
led to any of the  consequences  set forth in this section or any other  damage,
penalty assessment, recoupment of payment or disallowance of cost. Since January
1, 2006, ICI has not conducted any  investigation  in connection  with which ICI
has  engaged  outside  legal  counsel or  independent  accountants,  or made any
voluntary  disclosure  to the U.S.  Government  outside the  ordinary  course of
business as a result of any suspected irregularity or breach with respect to any
Government Contract.

     2.12.16 ICI has no interest in any pending or potential  Claim  against the
U.S.  Government or any prime  contractor,  subcontractor  of any tier,  vendor,
other  bidder or offeror or any other third party  arising  under or relating to
any Government Contract or Government Bid.

     2.12.17 ICI has not  submitted  any  Government  Bid or offer to develop or
assist in the development of  specifications  or requirements for any Government
Contract solicitation that could reasonably result in a conflict of interest for
ICI with respect to such Government Bid or otherwise could  reasonably cause ICI
to be prohibited  from obtaining any rights to bid for or receive any Government
Contract.

     2.12.18  ICI  holds a valid and  current  General  Services  Administration
Federal Supply Services Authorized  Professional.  Engineering Services Schedule
Contract No.  GS-23F-0204M  awarded May 31, 2002 with an initial expiration date
of May 30, 2007,  subsequently modified on Amendment PS-0002 executed on May 22,
2007 for Option Period 1 for the period of Performance  May 31, 2007 through May
30, 2012.  The GSA Schedule also has two option periods of 5 years each, if both
are exercised that extend that Contract through May 30, 2022.

2.13 Export and Import Control.

     2.13.1 Since the Seller  Acquisition Date, ICI has conducted its export and
import transactions in accordance with all applicable Export and. Import Control
Laws. Without limiting the foregoing: (i) ICI is in compliance with the terms of
all  applicable  Export and Import  Approvals;  (ii) there are no pending or, to
Seller's Knowledge,  threatened,  claims, charges,  investigations,  violations,
settlements,  civil or criminal  enforcement actions,  lawsuits,  or other court
actions  against ICI with  respect to any Export and Import  Control  Laws;  and
(iii), to Seller's Knowledge, there are no actions,  conditions or circumstances
pertaining to ICI's export or import  transactions  that are likely give rise to
any future claims, charges,  investigations,  violations,  settlements, civil or
criminal actions,  lawsuits,  or other court actions under the Export and Import
Control Laws,

     2.13.2 ICI has established and currently  maintains a compliance program or
internal  controls or procedures  appropriate to the  requirements of Export and
Import Control Laws.

     2.13.3 ICI has established and currently maintains a list of export control
classifications,  Harmonized Tariff Schedule Codes, and Schedule B Codes for its
products,  services,  software and technologies and has provided  Purchaser with
all Voluntary Disclosures currently pending or made since January 1, 2006.

2.14 Anti-Corruption and Anti-Bribery.

     2.14.1  Since the Seller  Acquisition  Date,  neither  ICI nor Seller  with

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respect to ICI 24 (including any of its officers,  directors,  agents, employees
or other  Person  associated  with or  acting on its  behalf)  has  directly  or
indirectly,  used  any  corporate  funds  for  unlawful  contributions,   gifts,
entertainment or other unlawful  expenses relating to political  activity,  made
any unlawful payment to foreign or domestic government officials or employees or
made any bribe,  rebate,  payoff;  influence payment,  kickback or other similar
unlawful payment, or taken any action which would cause it to be in violation of
any  Anti-Corruption  or Anti-Bribery Laws (for purposes of this Agreement,  the
term  "Anti-Corruption  and  Anti-Bribery  Laws" shall mean the Foreign  Corrupt
Practices Act of 1977, as amended, any rules or regulations  thereunder,  or any
other applicable United States or foreign  anti-corruption  or anti-bribery laws
or regulations.)

     2.14.2 There are no pending or, to ICI's or Seller's Knowledge, threatened,
claims,  charges,  investigations,  violations,  settlements,  civil or criminal
enforcement actions,  lawsuits,  or other court actions against ICI with respect
to any Anti-Corruption and Anti-Bribery Laws; and

     2.143  To  Seller's  Knowledge,   there  are  no  actions,   conditions  or
circumstances pertaining to ICI's activities that are likely to give rise to any
future  claims,  charges,  investigations,  violations,  settlements,  civil  or
criminal actions, lawsuits, or other court actions under any Anti-Corruption and
Anti-Bribery Laws.

     2,14,4 ICI has established and currently  maintains a compliance program or
internal   controls  or   procedures   appropriate   to  the   requirements   of
Anti-Corruption and Anti-Bribery Laws.

2.15 Adequacy of Assets and Other Matters.

     2.15,1 The Equipment and other personal property owned or leased by ICI and
used in its operations is in good operating  condition and repair (ordinary wear
and tear  excepted).  Schedule  2.15.1  contains a  complete  list of all leased
Equipment and a description of any debt or lease payment obligations  associated
therewith.

     2.15.2 The assets  owned by or  licensed  or leased to ICI  constitute  all
assets (including, without limitation,  Intellectual Property) necessary for, or
in fact used in, the conduct of the business of ICI as it is currently conducted
and in  accordance  with  recent  historical  practice,  and are  located at the
facilities  leased by ICI.  Schedule 2.15 identifies all assets used by ICI that
are owned by Seller or any of its  non-ICI  Affiliates  that will be retained by
Seller or such Affiliate after the Closing.

     2.15.3 ICI currently  maintains an Inventory in an amount, type and quality
consistent  with its  historical  practices  and  sufficient to meet its current
contractual  obligations to its customers.  ICI's  Inventory has been fully paid
for,  or will be fully paid for in the  ordinary  course of ICI's  business  and
consistent with its historical practice,  is located at the facilities leased by
ICI, and is usable and  saleable  upon  customary  terms and  conditions  in the
ordinary course of business.

     2.15.4 ICI possesses all accreditations or certifications  from third party
accreditation or certification  bodies required to conduct its business as it is
currently conducted and in accordance with recent historical  practice,  and, to
Seller's  Knowledge,  no  accrediting  or certifying  body that has conducted an
evaluation,  certification  or  accreditation  of ICI or  any of its  assets  or

                                       25
<PAGE>
operations  has  withdrawn,   suspended  or  terminated  such  accreditation  or
certification.  Neither  Seller  nor ICI has any  reason  to  believe  that such
accreditations or certifications will not continue as currently in effect.

     2.15.5 Neither Seller,  nor any of its  Affiliates,  nor ICI has dealt with
any Person who is or may be entitled  to a broker's  commission,  finder's  fee,
investment  banker's fee or similar  payment  from either ICI or  Purchaser  for
arranging the  transactions  contemplated  hereby or introducing  the parties to
each other.

                                    ARTICLE 3
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

3.1  General Statement.

     Except as set forth in the  disclosure  schedule  provided by Purchaser and
attached to this Agreement ("Purchaser's Disclosure Schedule"),  Purchaser makes
the   representations   and  warranties  set  forth  in  this  Article  3.  Such
representations  and  warranties of Purchaser  shall not be limited or otherwise
affected by any  investigation or lack of  investigation by Seller.  No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty.

3.2  Corporate.

     3.2.1  Purchaser is duly organized,  validly  existing and in good standing
under the laws of the State of Delaware,  with full power and authority to carry
on its business as such business is now being conducted.

     3.2.2 The Board of Directors of Purchaser has duly approved this  Agreement
and the other  Transaction  Documents  to which  Purchaser  is a party,  and the
transactions  contemplated hereby and thereby, and has authorized the execution,
delivery and performance of this Agreement and the other  Transaction  Documents
to  which  Purchaser  is a  party  and  the  consummation  of  the  transactions
contemplated  hereby and thereby.  Purchaser  has the full power,  authority and
legal right to enter into this Agreement and the other Transaction  Documents to
which it is a party and to consummate the transactions  contemplated  hereby and
thereby.  The  execution  and delivery by Purchaser  of this  Agreement  and the
Transaction Documents to be executed by it, will constitute the legal, valid and
binding  obligations of Purchaser,  enforceable  against Purchaser in accordance
with  their  respective  terms  (except to the extent  that  enforcement  may be
affected  by  laws  relating  to  bankruptcy,  reorganization,   insolvency  and
creditors'  rights  generally  and by the  availability  of  injunctive  relief,
specific performance and other equitable remedies).

     3,23 Except as set forth on Schedule  3.2.4,  the  execution,  delivery and
performance by Purchaser of this Agreement and the other  Transaction  Documents
and the  consummation by Purchaser of the transactions  contemplated  hereby and
thereby and the  fulfillment  by Purchaser of the terms hereof and thereof:  (i)
are not in violation or Breach of, do not conflict  with or constitute a default
under the terms of the Operating Agreement of Purchaser.

                                       26
<PAGE>
3.3  Litigation.

     There  are no  Claims  or  Proceedings  pending  or,  to the  knowledge  of
Purchaser,  threatened  against,  relating to or affecting  Purchaser before any
court or  Governmental  Authority  or any  arbitrator  that seek to  restrain or
enjoin the  consummation  of the  Transactions  contemplated  by this Agreement.
Purchaser is not subject to any Judgment of any court,  Governmental  Authority,
or  any  arbitrator  which  prohibits  or  restricts  the  consummation  of  the
transactions contemplated by this Agreement.

3.4  Fees.

     Neither  Purchaser nor any of its  Affiliates has dealt with any Person who
is or may  be  entitled  to a  broker's  commission,  finder's  fee,  investment
banker's  fee or similar  payment  from Seller for  arranging  the  transactions
contemplated hereby or introducing the parties to each other.

3.5  Status.

     Purchaser  shall  use its good  faith  efforts  to be  qualified  as of the
Closing Date to possess all necessary  material  facility  security  clearances,
personnel  security  clearances  and permits for the  performance  following the
Closing Date of ICI's obligations under any current Government  Contract of ICI,
and will use its best effort satisfy,  as of the Closing Date, all  requirements
applicable to a controlling  person under the Government  Contracts to which ICI
is a party, and under the Export and Import Controls applicable to ICI.

3.6  Conflicts.

     The execution,  delivery and performance by Purchaser of this Agreement and
the  other  Transaction  Documents  and the  consummation  by  Purchaser  of the
transactions contemplated hereby and thereby and the fulfillment by Purchaser of
the terms hereof and thereof: (a) will not conflict with or constitute a default
under, the terms of the Purchaser's  organizational  documents; and (b) will not
result in a material  violation under any law,  Judgment,  permit or other legal
requirement of any Governmental Authority applicable to Purchaser.

                                    ARTICLE 4
                          CONDUCT PRIOR TO THE CLOSING

4.1  General.

     Seller and Purchaser  shall have the respective  rights and obligations set
forth in this  Article 4 during  the  period  between  the date  hereof  and the
Closing Date.

4.2  Seller's Obligations.

     4.2.1  Seller  shall  cause  ICI to give  access to  Purchaser's  officers,
employees, agents, attorneys, consultants, accountants and lenders to all of the
books, Contracts,  documents,  records and personnel of ICI and shall furnish to
Purchaser  and  such  Persons  as  Purchaser  shall  designate  to  Seller  such
information  as  Purchaser or such Persons may at any time and from time to time
reasonably request; provided that access shall be conditioned on each such third

                                       27
<PAGE>
party's  agreement  in writing  to be bound by the  provisions  of the  existing
confidentiality agreement between Purchaser and Seller and provided further that
such access shall be granted in a manner designed to minimize  interference with
the normal business  operations of ICI,  including  normal business hours and on
reasonable notice.

     4.2.2 Seller shall cause ICI (and Purchaser shall cooperate with Seller and
ICI) to use  its  good  faith  efforts  to  obtain  all  consents,  waivers  and
assignments  necessary  for  the  consummation  by  Seller  of the  transactions
contemplated  hereby  under  or  with  respect  to  any  Contract,  Approval  or
Environmental  Permit  which  is  required  to be  scheduled  pursuant  to  this
Agreement  or  otherwise  necessary  or  desirable  for the  operation of ICI in
substantially the same manner as it was operated on the date hereof.

     4.2.3 Seller shall cause ICI to use its good faith  efforts to preserve its
business and the goodwill of its customers, suppliers and others having business
relations  with it and to retain its business  organizations  intact,  including
keeping available the services of its employees, representatives and agents, and
to  maintain  all of its  properties  in good  operating  condition  and repair,
ordinary  wear and tear  excepted;  and shall notify  Purchaser of any actual or
prospective  impairment of any thereof  immediately  upon becoming  aware of the
same.

     4.2.4 Seller shall cause ICI to conduct  business in the usual and ordinary
course  consistent with prudent  industry  practice and to carry on all business
operations (including,  without limitation,  the purchase and sale of Inventory,
the  payment of trade  payables  and other  obligations  and the  collection  of
accounts receivable), all in accordance with past practices.

     4.2.5 Seller shall provide  Purchaser with reasonable access to each of the
employees  listed on Schedule 4.2.5 so that Purchaser may request such employees
to discuss with Purchaser their possible continued employment with ICI following
the Closing..

     4.2.6 Seller will not, and Seller will not permit any of its Affiliates to,
initiate,  solicit, or encourage (including by way of furnishing  information or
assistance), or take any other action to facilitate, any inquiries or the making
of any proposal  relating to, or that may reasonably be expected to lead to, any
Competing Transaction, or enter into discussions or negotiate with any Person in
furtherance of such inquiries or to obtain a Competing  Transaction,  or endorse
or agree to  endorse  any  Competing  Transaction,  or  authorize  or permit any
investment  banker,   financial   advisor,   attorney,   accountant,   or  other
representative  retained  by Seller or any of its  Affiliates,  to take any such
action.

     4.2.7 Without the prior written consent of Purchaser,  and without limiting
the generality of any other provision of this Agreement,  Seller shall cause ICI
not to:

     (a) amend its Articles of Incorporation or by-laws;

     (b) make any change in its authorized capital stock, or issue any shares of
stock or  issue  or  become  a party  to any  subscriptions,  warrants,  rights,
options,  convertible  securities  or other  agreements  or  commitments  of any
character  relating  to its issued or  unissued  capital  stock or other  equity
securities or grant any stock appreciation or similar rights;

                                       28
<PAGE>
     (c) make  any  payment  or  distributions  to its  employees,  officers  or
directors except such amounts as constitute currently effective compensation for
services  rendered or  reimbursement  for  reasonable,  ordinary  and  necessary
out-of-pocket business expenses;

     (d) hire any new employee (other than direct charge  employees)  other than
in the ordinary course of business  consistent with ICI's  historical  practices
who shall have,  or  terminate  the  employment  or  contract  of any  employee,
consultant  or  independent  contractor  who has, an annual  salary in excess of
$50,000;

     (e)  incur or commit to incur  any  capital  expenditures  not set forth in
Seller's Disclosure Schedule in excess of $50,000 in the aggregate;

     (f) do any act or omit to do any act,  or  permit  any act or  omission  to
occur, which will cause a Breach by it of any of the Contracts it is a party to;

     (g) grant any salary  increase  or other  increase in  compensation  to, or
increase the draw of, or make loans to any of its officers, directors, employees
or agents,  or enter into any new, or amend or alter any existing  Benefit Plan,
trust  agreement or other similar  arrangement,  or any employment or consulting
agreement, except in the normal course of business;

     (h) prepay any of its material  obligations  or attempt to  accelerate  the
collection  of any of its  accounts  receivable  or defer  payment of any of its
outstanding  accounts  payable  outside the ordinary  course of ICI's  business,
consistent with its historical practices;

     (i) incur, assume or guarantee any long-term or short-term Indebtedness;

     (j)  enter  into any  settlement  agreement,  consent,  decree  or  similar
obligation  relating  to any actual or pending  Claim  against  ICI,  except for
Claims that  require  payment of less than $50,000 and only if done in the usual
and ordinary course of ICI's business, consistent with its historical practices;

     (k) sell,  transfer,  license or encumber or otherwise dispose of any asset
or property of any kind or nature,  except in the usual and  ordinary  course of
ICI's business, consistent with its historical practices;

     (l) amend,  terminate  or give notice of  termination  with  respect to any
existing Contract to which it is a party, or waive any of ICI's material rights;

     (m)  pay,  declare,  accrue  or  set  aside  any  dividends  or  any  other
distributions, in cash, property or otherwise, on its securities of any class or
purchase,  exchange or redeem any of its securities of any class,  or making any
inter-company advance, loan or payment between Seller and its Affiliates and ICI
other than in the usual and ordinary course of ICI's  business,  consistent with
its historical practices;

     (n) except as required by appliCable law, make any changes in its reporting
for Taxes or  accounting  methods;  make any  change to its  method or adopt any
method of reporting income, deductions, or other Tax items for Tax purposes that
is  inconsistent  with  positions  taken,  elections  made  or  methods  used in
reporting such Tax items in prior periods; or make, amend or revoke any election

                                       29
<PAGE>
with respect to Taxes,  amend any Tax Return,  or settle or  compromise  any Tax
liability; or

     (o) layoff and/or terminate or reduce the hours of employees, except in the
ordinary course of business consistent with its historical employment practices.

     4.2,8 (a) During the period  beginning on the date hereof and ending on the
Closing Date,  prior to ICI directly or indirectly  entering  into, or assuming,
any material Contract (other than a Contract for which Purchaser or an Affiliate
of Purchaser is or is reasonably anticipated to be a competitive bidder) and for
no purpose other than  compliance  with the terms of this Section 4.2.8,  Seller
shall  provide to  Purchaser a copy of such  proposed  Contract,  including  the
applicable  solicitation  document  and ICI's bid or proposal  thereto and shall
consult with  Purchaser  regarding any questions or concerns that  Purchaser may
have regarding such Contract; provided that such consultation shall be conducted
in a manner that will not interfere with ICI's ordinary course of business.

     (b)  During  the  period  beginning  on the date  hereof  and ending on the
Closing Date, with respect to any bid or proposal for a Government  Contract for
which ICI will be the prime contractor or  subcontractor  (other than a Contract
for which Purchaser or an Affiliate of Purchaser is or is reasonably anticipated
to be a competitive  bidder) and for no purpose other than  compliance  with the
terms of this Section  4.2.8,  Seller shall provide for  Purchaser's  review and
comment the bid or proposal,  including the proposed fully burdened labor rates,
estimated  level  of  effort,  proposed  or  anticipated  fee or  profit,  other
anticipated direct costs for contract performance and all proposed indirect rate
costs and Seller  shall keep  Purchaser  apprised of all  material  developments
relating to that bid or proposal,  including any material  changes to any of the
information  previously  provided to Purchaser  pursuant to Section  4.2.8(a) or
(b), provided that such submission will not interfere with ICI's ordinary course
of business.

     (c) Seller  agrees that in all  non-Government  Contract bids and proposals
where it is anticipated or proposed that ICI be a subcontractor to Seller or any
of its  Affiliates,  such bid or proposal shall include a separate fee or profit
payable to ICI.  Such fee will be  consistent  with fees ICI  charges on similar
contracts with Persons other than Seller and its Affiliates.  Seller agrees that
in all  Government  Contract  bids  and  proposals  where it is  anticipated  or
proposed that ICI be a subcontractor  to Seller or any of its  Affiliates,  such
bid or  proposal  shall not  include a  separate  fee or profit  payable to ICI;
provided that ICI shall receive 50 percent  (unless  another  amount is mutually
agreed  to in  writing  between  Purchaser  and  Seller)  of  the  contract  fee
percentage  or contract  profit  percentage  payable to Seller or its  Affiliate
under that  Government  Contract with respect to the goods or services  provided
after the Closing Date by ICI under its subcontract.

     4.2.9 Seller shall cause ICI to maintain the insurance policies required to
be listed in Schedule  2.3.8 to be in full force and effect.  If any of the said
policies shall expire, ICI shall use commercially reasonable efforts to renew or
replace the same prior to the expiration of the expiring  policies with policies
from a reputable insurance carrier containing  insurance coverage in the same or
greater amount than the existing policies and in substantially the same form and
substance as the existing policies.

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<PAGE>
     4.2.10 Seller shall take all appropriate actions to transfer and divest ICI
of  ownership  of all shares of capital  stock of Stapor  Research,  Inc. and to
ensure that ICI shall have no remaining  obligation or liability  relating to or
arising from the Excluded  Business on and after the Closing Date. Such transfer
and  divestiture  shall be consummated  such that ICI shall not incur any Tax or
other liability as a result thereof.

     4.2,11 Seller shall remit to ICI payment in full of all outstanding amounts
under loans and  advances  that ICI shall have made to Seller or any of Seller's
other  Subsidiaries,   and  Seller  shall  have  terminated  and  cancelled  all
obligations  of ICI to repay any loans or advances  made to ICI by Seller or any
of its non-ICI Affiliates.

     4.2.12  Notwithstanding  the restrictions in any other Contract between the
parties,   upon  a  request  by  Purchaser,   Seller  shall  allow   Purchaser's
representatives  to  communicate  with any Key  Employee(s)  for the  purpose of
discussing and  contracting  with such Key  Employee(s)  with respect to his/her
employment  with ICI or Purchaser  following  the Closing.  Such  communications
shall be conducted  in a manner that does not  unreasonably  interfere  with the
normal  business  operations  of ICI or the  provision  of  services by such Key
Employees to ICI.

4.3  Joint Obligations.

     4.3.1 Each of the parties hereto shall use commercially  reasonable efforts
to take, or cause to be taken,  all actions and to do, or cause to be done,  all
things reasonably necessary,  proper or advisable to consummate the transactions
contemplated hereby as soon as practicable.

     4.3.2 Each party shall  promptly give the other party written notice of the
existence or occurrence of any condition which would make any  representation or
warranty it made under this Agreement untrue as of the date of this Agreement or
any subsequent  date as if made on and as of such subsequent date or which might
reasonably  be  expected  to  prevent  the   consummation  of  the  transactions
contemplated hereby,

4.4  Deliveries of Information; Consultations.

     From time to time prior to the Closing Date:

     4.4.1 Seller shall furnish promptly to Purchaser:  (1) all separate monthly
financial  statements and budgets of ICI (if and to the extent  prepared by ICI)
promptly after such financial  statements and budgets are available and (ii) all
other material information  concerning the operations,  properties and personnel
of ICI as Purchaser may reasonably request.

     4.4,2 Upon request by  Purchaser,  Seller  shall  consult from time to time
with representatives of Purchaser on operational matters of ICI; provided,  that
such consultations do not unreasonably interfere with the operations of ICI.

4.5  Intercompany Payables and Receivables

     Seller has provided to Purchaser a preliminary  unaudited  balance sheet of
ICI dated  August 3, 2008,  as referred to in Section  2.3.2 of this  Agreement.
Seller shall provide to Purchaser a detailed  reconciliation of all intercompany
balances  (as  defined  below)  due to or from  Herley or any of its  Affiliates

                                       31
<PAGE>
(other than ICI) to ICI from the date of the preliminary unaudited balance sheet
dated August 3, 2008 up to the date which is five (5) business days prior to the
Closing Date,  Seller shall provide to Purchaser  any back-up  documentation  or
work papers supporting the  reconciliation of intercompany  balances and further
agree  that  intercompany  transactions  between  Herley  or any of its  non-ICI
Affiliates  (except for inventory  components  shipped by Herley to ICI) and ICI
will  not be made  from  the  date of the  said  reconciliation  until  Closing.
Purchaser and Seller shall cooperate in good faith to resolve all  disagreements
regarding the intercompany  balances  reconciliation  prior to the Closing Date.
The amount of the intercompany  balances,  after reconciliation,  as of the date
five (5) business  days prior to the Closing Date shall  represent the amount of
cash due to or from Herley and any of its non-ICI Affiliates (except for amounts
owing to Herley on account of inventory  components  shipped to ICI) and ICI and
will be settled prior to the Closing  Date, as set forth in Section  1.2.1(c) as
follows (a) if the intercompany  balances would result in an amount owed to ICI,
Seller  will pay off  such  balance  to ICI  prior  to  Closing;  and (b) if the
intercompany balances would result in an amount owed to Herley, ICI will pay off
such balance prior to Closing.  The  outstanding  intercompany  payable  balance
owing by ICI to Herley on account of the shipment of inventory  components  will
be treated as a trade  accounts  payable  and will be due and  payable by ICI to
Herley net 30 days from the date of the  respective  invoices.  As used above in
this Section 4.5, the term  "intercompany  balances" means the net amount of all
intercompany  transactions  (excluding the trade accounts payable  identified in
the  preceding  sentence)  between  ICI on the  one  hand,  and  Herley  and its
Affiliates  other than ICI on the other hand,  including  but not limited to, an
allocation to ICI of corporate overhead, consistently applied.

     The Seller agrees not to add  additional  external  credit to ICI from what
currently exists and is reflected in the preliminary  balance sheet dated August
3, 2008.

4.6  Funding Agreement with BIRD Foundation

     Seller shall use its good faith efforts to obtain the written  consent from
the  Israel-United   States  Binational   Industrial  Research  and  Development
Foundation ("BIRD Foundation") and from Paragon  Communications Ltd. ("Paragon")
to the assignment to Purchaser of the Cooperation and Project Funding  Agreement
(the "Funding Agreement").  After Closing,  Seller shall also allow Purchaser to
communicate  with the BIRD  Foundation and Paragon to seek their consents to the
assignment of the Funding Agreement to Purchaser. If the foregoing assignment of
the Funding  Agreement is not completed prior to the Closing,  at the request of
Purchaser,  Seller,  consistent with the  limitations of the Funding  Agreement,
shall  continue to use its good faith  efforts to obtain that consent  following
the Closing,

                                    ARTICLE 5
                              CONDITIONS TO CLOSING

5.1  Conditions to Seller's Obligations.

     The obligation of Seller to close the transactions  contemplated  hereby is
subject to the fulfillment of all of the following conditions:

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<PAGE>
     5.1.1 The Purchaser  shall have  performed in all material  respects all of
its  obligations  hereunder  required to be  performed  by it on or prior to the
Closing  Date,  including  the  deliveries  set forth in  Section  6.2,  and the
representations  and  warranties  of the Purchaser  contained in this  Agreement
shall be true and correct at and as of the Closing Date, as such representations
and  warranties  are  expressly  qualified by  materiality  or Material  Adverse
Effect, if applicable,  as if made at and as of such date, and Seller shall have
received a certificate  signed by an officer of the  Purchaser  attesting to the
foregoing.

     5.1.2  No  Proceeding  shall  have  been  commenced  or  threatened  by any
Governmental Authority on any grounds to restrain,  enjoin or hinder, or to seek
material   damages  on  account  of,  the   consummation  of  the   transactions
contemplated hereby.

     5.1.3  Purchaser  shall have  obtained the approval  from the United States
Committee on Foreign  Investment in the United States and any other Governmental
Authority necessary to consummate the acquisition of ICI contemplated herein.

5.2  Conditions to Purchaser's Obligations.

     The obligation of Purchaser to close the transactions  contemplated  hereby
is subject to the fulfillment of all of the following conditions:

     5.2.1 Each of ICI and Seller shall have performed in all material  respects
all of its respective obligations hereunder required to be performed by it on or
prior to the Closing Date,  including the  deliveries  set forth in Section 6.3,
the representations and warranties of ICI and Seller contained in this Agreement
shall be true and correct at and as of the Closing Date, as such representations
and  warranties  are  expressly  qualified by  Materiality  or Material  Adverse
Effect,  if applicable,  as if made at and as of such date, and Purchaser  shall
have received a certificate  signed by an officer of ICI and Seller attesting to
the foregoing.

     5.2.2 All of the consents  referred to in Section 4.2.2 shall have been and
shall be in full force and effect.

     5.2,3  Adequate  assurances  shall have been  obtained that the DSS and any
other Governmental  Authority responsible for the issuance and administration of
ICI's security clearances has indicated in substance that it will not terminate,
suspend,  revoke, or in any way materially change either the Government Contract
or security  clearances with respect to such Government  Contract as a result of
this Agreement or the consummation of the transactions contemplated hereby.

     5.2.4  Purchaser  shall  have  obtained  the  approval  to  consummate  the
acquisition of ICI from the United States Committee on Foreign Investment in the
United  States and any other  approvals  from any other  Governmental  Authority
required for the consummation of the transactions contemplated herein. Purchaser
shall also have received written  confirmation from U.S.  Department of the Navy
upon the  acquisition of ICI by Purchaser  pursuant to this  Agreement,  (a) the
United  States  Department  of the Navy  would  not  consider  Purchaser  or any
subsidiary  or  Affiliate  of  Purchaser,  including  ICI,  to be a party to the
Administrative  Agreement  between the United States  Department of the Navy and
Herley,  and (ii) the United  States  Department  of the Navy would not pursue a

                                       33
<PAGE>
separate Administrative  Agreement with Purchaser or any subsidiary or Affiliate
of the Purchaser, including ICI, based solely on the acquisition of ICI.

     5.2.5  No  Proceeding  shall  have  been  commenced  or  threatened  by any
Governmental  Authority or private Person on any grounds against the business or
assets of ICI or to restrain,  enjoin or hinder,  or to seek material damages on
account of, the consummation of the transactions contemplated hereby.

     5.2.6  Prior to the  Closing  Date,  all  amounts due and owing by ICI with
respect to any Indebtedness  shall have been paid in full and terminated without
liability  to ICI and all  amounts  due and owing to or from ICI by or to any of
the Related Parties or former shareholders  (excluding employee compensation and
other  ordinary  incidents  of  employment)  shall  have  been  paid in full and
terminated without liability to ICI.

     5.2.7  During the period  from the date  hereof to the  Closing  Date there
shall not have  occurred,  and there  shall not exist on the Closing  Date,  any
condition or fact which has, or which reasonably may be expected to result in, a
Material Adverse Effect to ICI.

     5.2.8  ICI's net working  capital as of the Closing  Date shall not be less
than zero dollars

                                    ARTICLE 6
                                     CLOSING

6.1  Form of Documents.

     At the Closing, the parties shall deliver the documents,  and shall perform
the acts,  which are set forth in this  Article 6. All  documents  which  Seller
shall  deliver  shall  be in  form  and  substance  reasonably  satisfactory  to
Purchaser and Purchaser's  counsel.  All documents which Purchaser shall deliver
shall be in form and substance  reasonably  satisfactory  to Seller and Seller's
counsel.

6.2  Purchaser's Deliveries.

     Purchaser shall execute and/or deliver to Seller all of the following:

     6.2.1 the Closing  Cash Payment and the Escrow  Amount,  each in the manner
provided in Section 1.2;

     62.2 an incumbency and specimen  signature  certificate with respect to the
officers  of  Purchaser  executing  this  Agreement  and any  other  Transaction
Document delivered hereunder on behalf of Purchaser; and

     6.2.3 a closing certificate duly executed by the President of Purchaser (or
any other officer of Purchaser  specifically  authorized to do so), on behalf of
Purchaser, as set forth in Section 5.1.1.

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<PAGE>
     6.2.4  the  written  opinion  of  Greenberg  Traurig  LLP,  counsel  to the
Purchaser,  dated as of the Closing Date, substantially in the form of Exhibit B
attached hereto.

6.3  Seller's Deliveries.

     Seller shall execute or deliver to Purchaser all of the following,  each of
which shall be satisfactory in form and substance to Purchaser:

     6.3.1 certificates of good standing of ICI issued not earlier than ten (10)
days prior to the Closing Date by the appropriate  certifying authorities in the
states of Virginia and Pennsylvania;

     63.2 certificates  representing the Shares,  duly endorsed in blank or with
duly executed stock powers attached;

     6.3.3 an incumbency and specimen signature  certificate with respect to the
officers of ICI  executing  this  Agreement and any other  Transaction  Document
delivered hereunder on behalf of ICI;

     6.3,4 a closing  certificate duly executed by ICI and Seller,  as set forth
in Section 5.2.1;

     6.3.5 the written  resignations,  effective as of the Closing Date, of such
of the directors and officers of ICI as are designated by Purchaser to resign;

     6.3.6  written  evidence  that  all  outstanding  long  term or  short-term
Indebtedness  of ICI, in each case including the current  portions  thereof,  as
more fully  described  in  Schedule  2.3.5,  shall have been  satisfied  in full
immediately prior to the Closing;

     6.3.8 physical  possession where located at ICI's or Seller's facilities of
all  records,  tangible  assets,  licenses,  written  policies,  procedures  and
processes  Contracts,  Benefit Plans or other instruments owned by or pertaining
to ICI;

     6.3.10 the written opinion of Beckman,  Lieberman & Barandes,  LLP, counsel
to Seller,  dated as of the Closing Date, in substantially the form of Exhibit C
attached hereto;

     6,3.11 a properly executed Foreign  Investment and Real Property Tax Act of
1980 Notification  Letter,  which states that shares of ICI capital stock do not
constitute  "United  States real property  interests"  under Section 8971 of the
Code,  for  purposes  of  satisfying  Purchaser's   obligations  under  Treasury
Regulation  Section  1.1445-21(3)  and a form of notice to the IRS in accordance
with the requirements of Treasury Regulation Section  1.897-2(h)(2),  along with
written  authorization  for  Purchaser to deliver such notice form to the IRS on
behalf of ICI;

     6,3.12 a mutual  release  between ICI, on the one hand,  and Seller and its
Affiliates,  on the other  hand,  whereby  each  party  releases  all Claims and
Indebtedness  of every kind,  including  any loans or advances made by Seller or
any non-ICI  Affiliate to ICI, which it may have against the other party for any
matters arising from or related to any period prior to the Closing,  in form and
substance reasonably satisfactory to Purchaser,  provided such release shall not
release any claims that Seller may have against  Purchaser or that Purchaser may

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<PAGE>
have against Seller (a) under this Agreement or the other Transaction Documents,
(b) for  intercompany  balances  that are applied as provided in Section 4.5 and
(c) for trade accounts  payable between ICI to Herley  Lancaster  referred to in
Section 4.5;

     6.3.13  a  copy  of  IRS  Form  8023,   Elections  Under  Section  338  for
Corporations Making Qualified Stock Purchases, executed by Seller; and

     6.3,14 any other  documents  reasonably  required from Seller to consummate
the transactions contemplated hereby.

6.4   Section 338(10(10) Election.

     Purchaser  and  Seller  agree to take,  or cause to be  taken,  any and all
action  necessary and to do, or cause to be done, or to execute,  or cause to be
executed,  such documents as may be necessary or desirable to effect any Section
338(h)(10)  Election,  with respect to  Purchaser's  acquisition  of the capital
stock of ICI, in accordance with the provisions of Section 10.7.

                                    ARTICLE 7
                             POST-CLOSING AGREEMENTS

7.1  Post-Closing Agreements.

     From and after the Closing,  the parties shall have the  respective  rights
and obligations set forth in this Article 7.

7.2  Inspection of Records.

     Seller,  on the one  hand,  and  Purchaser,  on the other  hand,  and their
respective  Affiliates,  shall each retain and make their  respective  books and
records   (including   work  papers  in  the  possession  of  their   respective
accountants)  relating solely to ICI's operations prior to the Closing available
for inspection  and copying for  reasonable  tax reporting  compliance and other
reasonable  business  purposes during normal business hours,  for a two (2) year
period after the Closing Date.  The  representatives  of a party  inspecting the
records of the other party shall be reasonably satisfactory to the other party.

7,3  Payments of Accounts Receivable.

     In the event Seller shall  receive any  instruments  of payment or any cash
constituting  payment of any of the accounts  receivable  of ICI relating to any
period,  Seller shall promptly  deliver such cash and  instruments to Purchaser,
endorsed where necessary, without recourse, in favor of Purchaser.

7.4  Non-Competition; Non-Solicitation.

     7.4.1  Seller  agrees for itself and its  Affiliates  that,  for the period
commencing  on the Closing  Date and  expiring on the third  anniversary  of the
Closing  Date it will not,  nor will any of its  Affiliates,  without  the prior
written  consent of Purchaser,  directly or indirectly,  or by action in concert
with others, own, manage, operate, join, control,  finance or participate in, or
participate

                                       36
<PAGE>
in  the  ownership,  management,  operation,  control  or  financing  of,  or be
connected as a principal, agent, representative, consultant, employee, investor,
owner, partner, manager, joint venturer or otherwise with, or permit its name to
be used by or in  connection  with,  any  business,  enterprise  or other entity
engaged  anywhere  in the  world in a  business  that is  engaged  in  providing
technology  solutions for military  applications  for (a) routing and processing
tactical   messaging  data  over  IP-based  or  point-to-point   networks  using
voice-grade  radios and /or (b)  development of ad hoc  networking  software for
sale as a standalone software product.

     7.4.2  Seller  agrees  for  itself and its  Affiliates  that,  for a period
commencing on the date of this  Agreement and expiring on the third  anniversary
of the Closing  Date it will not,  nor will any of its  Affiliates,  without the
written consent of Purchaser,  directly or indirectly, for its own account or on
behalf of any other  Person,  hire any person who is then an  employee of ICI or
Purchaser  or any of their  Affiliates,  or induce  or  attempt  to  induce  any
employee to leave his or her  employment  with ICI or  Purchaser or any of their
Affiliates.

     7,4.3  Seller  agrees for itself and its  Affiliates  that,  for the period
commencing  on the Closing  Date and  expiring on the third  anniversary  of the
Closing Date it will not, nor shall any of its ,Affiliates,  without the written
consent of Purchaser,  directly or indirectly,  for its own account or on behalf
of any other Person,  solicit,  divert, take away or attempt to take away any of
the customers or suppliers of ICI or Purchaser or any of its Affiliates,  or the
business or patronage of any such  customers or suppliers of ICI or Purchaser or
in any way  interfere  with,  disrupt or attempt  to disrupt  any  relationships
between ICI or Purchaser or any of its Affiliates,  and any of their  respective
customers or suppliers.

     7,4.4 Seller acknowledges and agrees for itself and its Affiliates that (a)
the  restrictions  contained  in this  Section 7.4 are  reasonably  necessary to
protect the legitimate  business interests of Purchaser and its Affiliates;  and
(b) any  violation  of such  provisions  will  result in  irreparable  injury to
Purchaser  and its  Affiliates  for which money  damages will not be an adequate
remedy.  Accordingly,  Seller  agrees that,  in addition to such money  damages,
Seller  may be  restrained  and  enjoined  from any  continuing  breach  of such
covenants without any bond or other security being required by any court. If any
restriction contained in this Section 7,4 shall be deemed to be invalid, illegal
or  unenforceable  by reason of the extent,  duration or geographical  scope, or
otherwise,  then the court  making  such  determination  shall have the right to
reduce such extent, duration,  geographical scope or other provision hereof, and
that the reduced form of such restriction will then be enforceable in the manner
contemplated thereby.

     7.4.5  Notwithstanding  any provision to the contrary,  in the event that a
third party  acquires  all or  substantially  all of the assets of the Seller or
acquires the majority of the voting  securities  of the Seller or its  successor
entity by merger or consolidation or otherwise with the Seller, that third party
shall not be bound by the provisions of this Section 7.4.

7.5  Third Party Claims.

     The parties shall  cooperate with each other with respect to the defense of
any Claims or litigation  made or commenced by third  parties  subsequent to the
Closing Date which are not subject to the indemnification  provisions  contained

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<PAGE>
in Article 8; provided,  that the party requesting  cooperation  shall reimburse
the other  party for the  other  party's  reasonable  out-of-  pocket  costs and
expenses of furnishing such cooperation.

7.6  Severance Agreements.

     Seller acknowledges and agrees that it shall be responsible for any and all
costs  associated with any severance  obligation or commitment made by Seller or
ICI to any ICI employees  prior to the Closing that becomes  payable as a result
of the  voluntary  resignation  or  termination  of any ICI employee at any time
prior to the Closing.

7.7  Offset to Government Contract Indemnification.

     Purchaser  agrees that it shall cause ICI,  consistent with ICI's customary
practices and  applicable  law, to use good faith efforts to (1) maximize  ICI's
cost recovery on active cost plus firm fixed price Contracts (including, without
limitation , pursuit of the  approximate  $800,000 rates deviation claim ICI has
or is about to make on 2008 contracts prior to Closing) and (ii) with respect to
all Government Contracts , challenge,  to the extent there is a lawful basis and
consistent  with  ICI's  customary  practices,   disallowance  of  expenses  and
otherwise  obtain and retain the  maximum  amount of payments  under  Government
Contracts,  all with the  objective  of  providing  an  offset  or credit to any
disallowable  costs  sustained  by ICI or the  Purchaser  on cost plus fixed fee
Government   Contracts   so  as  to  minimize   the  amount,   if  any,  of  any
Indemnification  Claim sought by Purchaser  under  Article 8 of this  Agreement.
Other  than with  respect to the  offset  provided  above,  Seller  agrees  that
Purchaser and ICI shall own and have full use of, and be entitled to the benefit
of, any funds represented by recoveries under active cost plus Contracts and any
other amounts  recoverable  by ICI  subsequent to the Closing Date on account of
Government Contracts in existence on or prior to the Closing Date.

                                    ARTICLE 8
                                 INDEMNIFICATION

8.1  General.

     From and after the  Closing,  the  parties  shall  indemnify  each other as
provided  in  this   Article  8.  For  the  purposes  of  this  Article  8,  all
representations  and  warranties  in this  Agreement  made by any  party to this
Agreement, shall be deemed to have been made at and as of the Closing,

8.2  Seller's Indemnification Obligations.

     Seller shall indemnify and hold harmless Purchaser, its Affiliates and ICI,
and their  respective  officers,  directors,  shareholders,  members,  managers,
successors   and   permitted   assigns  (each  a  "Purchaser   Indemnitee"   and
collectively,   the  "Purchaser  Indemnitees")  from  and  against  all  Damages
sustained or incurred by any Purchaser  Indemnitee as a result of or arising out
of or by virtue of

     8,2.1 any inaccuracy in or Breach of any representation or warranty made by
Seller or ICI to Purchaser  herein or in any Transaction  Document  delivered to
Purchaser in connection herewith;

                                       38
<PAGE>
     8.2.2 any Breach by Seller of, or failure of Seller to comply with,  any of
the  covenants or  obligations  under this  Agreement  or any other  Transaction
Document  to  be  performed  by  Seller  (including,   without  limitation,  its
obligations under this Article 8);

     8.2.3 any Debt,  liability of obligation  arising from or related to Stapor
Research,  Inc.  or the  Excluded  Business,  including,  but not limited to any
liability  for Taxes that are or owed as a result of the transfer of the capital
stock of Stapor Research to Seller or an Affiliate of Seller;

     8.2.4 any of the Proceedings set forth on Schedule 8.2.4;

     8.2.5 any action or failure to act, in whole or in part, on or prior to the
Closing Date with  respect to any Benefit Plan which ICI or any ERISA  Affiliate
of ICI has at any time  maintained or  administered or to which ICI or any ERISA
Affiliate has at any time contributed;

     8.2,6  (i) any  Taxes of ICI with  respect  to any Tax  period  or  portion
thereof  ending on or before the Closing  Date and the  portion of the  Straddle
Period  attributable  to Seller under the principles of Article 10, and (ii) any
Taxes  resulting by reason of the several  liability  of ICI under  Treas.  Reg.
ss.1.1502-6  (or any similar  provision  of state,  local or foreign  law) or by
reason of its  having  been a member of any  consolidated,  combined  or unitary
group on or prior to the Closing  Date,  or as a  transferee  or  successor,  by
contract,  or  otherwise  or pursuant to any Law,  which  relates to an event or
transaction occurring on or before the Closing;

     8.2.7 any U.S. Government,  prime contractor or subcontractor  disallowance
of incurred  Direct  Contract  Costs  and/or  Indirect  Costs of ICI  including,
without  limitation,  any Damages arising out of disallowance based on the terms
and conditions of any Contract,  disallowances arising out of U.S. Government or
prime contractor or subcontractor  audits of final Indirect Cost rate proposals,
audits of compliance  with Cost  Accounting  Standards,  or audits of compliance
with the Truth in  Negotiations  Act, in respect of costs incurred in any period
prior to the Closing Date. For the purpose of  calculating  Damages under Claims
for  indemnification  under this Section  8.2.7,  such Damages  shall be reduced
dollar for dollar,  but not below zero (0), by the amount,  if any,  paid to ICI
following the Closing as a result of any agreement by a Government  Authority to
increase  reimbursement  for Direct  Contract Costs and/or Indirect Costs of ICI
relating to any Government  Contract for any period prior to the Closing Date (a
"Pre-Closing  Reimbursement Increase").  Following the Closing,  Purchaser shall
use good faith efforts to identify, in its good faith judgment,  any opportunity
to recover a material  Pre-Closing  Reimbursement under applicable law and under
the terms of the applicable  Government Contract and to request recovery of such
amount from the applicable Governmental Authority.  Any such recovery beyond the
amount that offsets in full  Purchaser's  Damages as  referenced in this Section
8.2.7 shall be retained by Purchaser.

     8.2.8 all  outstanding  Indebtedness  of ICI, in each case,  including  the
current portions thereof; and

     8.2.9 any liability for Damages incurred by ICI or Purchaser that arise out
of, or result from a Breach of, Section 2.10.10.

8.3  Limitation on Seller's Indemnification Obligations.

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<PAGE>
     8.3.1 Except as set forth in Section  8.3.2,  Seller shall not be liable to
the Purchaser  Indemnitees with respect to any Claims for indemnification  under
Section 8.3 unless the  aggregate  amount of Damages is in excess of one hundred
fifty thousand dollars ($150,000) (the  "Indemnification  Threshold").  Once the
Indemnification  Threshold  has been met,  Seller  shall  then be liable for all
Claims in excess of the Indemnification  Threshold excluding such Claims as were
aggregated  to  reach  the   Indemnification   Threshold.   Notwithstanding  the
foregoing,  Seller  shall be liable for all Claims for  indemnification  arising
under Sections 8.2.3 through 8.2.6 and Sections 8.2.8 and 8.2.9, all Breaches of
the representations or warranties set forth in Sections 2.2.5, 2.3, 2.4 and 2.7,
and  any   Claims   based  on   fraud,   willful   misconduct   or   intentional
misrepresentation,  without  regard to the  Indemnification  Threshold.  For the
purpose of  calculating  Damages  under  Claims for  indemnification  under this
Section 8.3.1,  such Damages shall be reduced  dollar for dollar,  but not below
zero (0), by the amount, if any, paid to ICI by Full Spectrum,  Inc.  subsequent
to the Closing  pursuant to the Contract  dated October 10, 2007 between ICI and
Full Spectrum.

     8.3.2 Seller shall not be liable to the Purchaser  Indemnitees with respect
to any Claims for  indemnification  under  Section  8.2.7  unless the  aggregate
amount of Damages for such Claims is in excess of five hundred  thousand dollars
($500,000),  subject to offset as provided in the last  sentence of this Section
(the  "Special  Indemnification  Threshold").  Once the Special  Indemnification
Threshold  has been met,  Seller  shall then be liable for all such Claims under
Section 8.2.7 in excess of the Special Indemnification Threshold, excluding such
Claims  as were  aggregated  to reach  the  Special  Indemnification  Threshold.
Notwithstanding  the  foregoing,  Seller  shall be  liable  for all  Claims  for
indemnification  arising  under  Section  8.2.7  without  regard to the  Special
Indemnification  Threshold if there was Seller's  Knowledge or  Post-Acquisition
Seller's Knowledge of the act or omission to act giving rise to such Claim or if
such  Claim  arose  from  Seller's  fraud,  willful  misconduct  or  intentional
misrepresentation.  For the  purpose of  calculating  Damages  under  Claims for
indemnification  under this Section 8.32,  such Damages shall be reduced  dollar
for dollar, but not below zero (0), by the amount, if any, paid to ICI following
the Closing as a result of any  agreement by a Government  Authority to increase
reimbursement for Direct Contract Costs and/or Indirect Costs of ICI relating to
any Government Contract for any period prior to the Closing Date.  Following the
Closing,  Purchaser shall use good faith efforts to identify,  in its good faith
judgment, any opportunity to recover a material Pre-Closing  Reimbursement under
applicable  law and the  terms  of the  applicable  Government  Contract  and to
request recovery of such amount from the applicable Governmental Authority.  Any
such  recovery  beyond the amount that  offsets in full  Purchaser's  Damages as
referenced in this Section 8.3.3 shall be retained by Purchaser.

     8.3.3 The maximum  amount for which Seller shall be liable to the Purchaser
Indemnitees under this Agreement for indemnification Claims under this Article 8
is one hundred percent (100%) of the Purchase Price (the "Indemncation Limit").

     8.3.4 Except as set forth in this Section 8.3.4,  Seller's  representations
and warranties,  and Seller's obligation to indemnify the Purchaser  Indemnitees
under Section 8.3, shall survive the Closing and will remain in effect until the
date that is eighteen  (18) months  after the Closing  Date with  respect to any
failure on the part of Seller or ICI to perform any covenants or agreements  set
forth  herein,  or any  Breach  by  Seller  of any  of the  representations  and
warranties  made  in  Article  2.   Notwithstanding   the  foregoing,   Seller's

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<PAGE>
indemnification  obligations  under  Section 8.2.7 shall survive the Closing and
will remain in. effect until the date that is twenty-four  (24) months after the
Closing.  Notwithstanding the foregoing Seller's  representations and warranties
made in Sections 2.2.5, 2.3, 2.4 and 227, Seller's  indemnification  obligations
under  Sections  8.2.3  through  8.2.9 and any  indemnification  Claims based on
fraud,  willful  misconduct or intentional  misrepresentation  shall survive the
Closing and will remain in effect until the expiration of the applicable statute
of  limitations.   Notwithstanding  the  foregoing,   Seller's  representations,
warranties and obligation to indemnify the Purchaser  Indemnitees  under Section
8.3 with  respect to any pending  Claim for  indemnification  shall  survive and
remain in effect until such pending Claim is finally resolved.

8.4  Purchaser's Indemnification Obligations.

     Purchaser shall indemnify,  and hold harmless Seller and its successors and
assigns ("Seller  Indemnitees")  from and against and from all Damages sustained
or  incurred  by any Seller  Indemnitee  as a result of or arising  out of or by
virtue of:

     8.4.1 any inaccuracy in or Breach of any  representation  and warranty made
by Purchaser to Seller herein or in any Transaction Document delivered to Seller
in connection herewith; or

     8.4,2 any Breach by  Purchaser  of, or failure by Purchaser to comply with,
any of the covenants or obligations  under this Agreement or in any  Transaction
Document to be  performed  by  Purchaser  (including,  without  limitation,  its
obligations under this Article 8).

8.5  Limitations on Purchaser's Indemnification Obligations.

     8.5.1 Purchaser shall not be liable to Seller  Indemnitees  with respect to
any Claim for  indemnification  under Section 8.4 unless the aggregate amount of
Damages is in excess of the Indemnification  Threshold. Once the Indemnification
Threshold has been met,  Purchaser shall then be liable for all Claims in excess
of the  Indemnification  Threshold  excluding such Claims as were  aggregated to
reach the Indemnification  Threshold.  Notwithstanding the foregoing,  Purchaser
shall be liable for all Claims based on fraud, willful misconduct or intentional
misrepresentation, without regard to the Indemnification Threshold.

     8.5.2 The  maximum  amount  for which  Purchaser  shall be liable to Seller
Indemnitees under this Agreement is the Indemnification Limit.

     8.5.3   Purchaser's   representations   and  warranties,   and  Purchaser's
obligation to indemnify Seller  Indemnitees under Section 8.4, shall survive the
Closing  and will remain in effect  until the date that is eighteen  (18) months
after   the   Closing   Date.   Notwithstanding   the   foregoing,   Purchaser's
representations, warranties and obligation to indemnify Seller Indemnitees under
Section 8.4 with respect to any pending Claim for indemnification  shall survive
and remain in effect until such pending Claim is finally resolved.

8.6  Cooperation.

     Subject to the provisions of Sections 8.8 and 8.9, the  Indemnifying  Party
shall have the right,  at its own expense,  to participate in the defense of any

                                       41

<PAGE>
Third Party Claim,  and if said right is exercised,  the parties shall cooperate
in the investigation and defense of said Third Party Claim.

8.7  Subrogation.

     The Indemnifying  Party shall not be entitled to require that any action be
brought  against any other Person before action is brought  against it hereunder
by the  Indemnified  Party and shall  not be  subrogated  to any right of action
until it has paid in full or successfully defended against the Third Party Claim
for which indemnification is sought.

8.8  Procedures.

     All Claims or demands  for  indemnification  under this  Article 8 shall be
asserted and resolved as follows:

     8.8.1  In  the  event  an  Indemnified   Party  has  a  Claim  against  any
Indemnifying  Party  hereunder  which does not  involve a Claim  being  asserted
against or sought to be collected by a third party, the Indemnified  Party shall
with reasonable  promptness send notice of such Claim to the Indemnifying Party.
In case the  Indemnifying  Party  shall  object  in  writing  to any  Claim  for
indemnification  made in accordance  with this Section  8.8.1,  the  Indemnified
Party  shall have  fifteen  (15) days to respond in a written  statement  to the
objection of the Indemnifying  Party. If after such 15 -day period there remains
a dispute as to any indemnification Claims or if the indemnifying party does not
dispute such Claim as required under Section 8.8.2, the parties shall attempt in
good faith for thirty (30) days to reach written  agreement on the resolution of
such indemnification Claim. If no such agreement can be reached after good faith
negotiation   during  that  30  day  period,   the  parties   shall  submit  the
indemnification Claim for final determination by binding arbitration,  with such
arbitration  proceeding conducted in accordance with the Commercial Rules of the
American  Arbitration  Association  then in effect.  The arbitration  proceeding
shall be held in the New York City metropolitan area and the costs thereof shall
be paid by the prevailing party in such arbitration  proceeding.  The failure of
the Indemnifying  Party to respond shall not be an  acknowledgement of liability
by the Indemnifying Party.

     8.8.2 In the event that any Claim for which any party would be liable to an
Indemnified  Party hereunder is asserted against an Indemnified Party by a third
party,  the  Indemnified  Party  shall  with  reasonable  promptness  notify the
Indemnifying  Party of such Third  Party  Claim,  specifying  the nature of such
Claim and the amount or the estimated amount thereof to the extent then feasible
(which  estimate shall not be conclusive of the final amount of such Claim) (the
"Claim Notice").  The  Indemnifying  Party shall have fifteen (15) days from the
receipt of the Claim  Notice (the  "Notice  Period")  to notify the  Indemnified
Party (i)  whether  or not the  Indemnifying  Party  disputes  liability  to the
Indemnified  Party  hereunder with respect to such Third Party Claim and (ii) if
the  Indemnifying  Party does not  dispute  such  liability,  whether or not the
Indemnifying Party desires, at its sole cost and expense, to defend against such
Claim. In the event that the Indemnifying  Party notifies the Indemnified  Party
within the Notice  Period  that the  Indemnifying  Party  does not  dispute  its
obligation to indemnify  hereunder and desires to defend the  Indemnified  Party
against such Third Party Claim, except as hereinafter provided, the Indemnifying
Party  shall  have  the  right  to  defend  by  appropriate  proceedings,  which
proceedings shall be promptly settled or prosecuted by the Indemnifying Party to

                                       42

<PAGE>
a final conclusion; provided that, unless the Indemnified Party otherwise agrees
in  writing,  the  Indemnifying  Party may not settle any matter (in whole or in
part) unless such settlement  includes a complete and  unconditional  release of
the Indemnified  Party. If the Indemnified  Party desires to participate in, but
not control, any such defense or settlement,  the Indemnified Party may do so at
the Indemnified  Party's sole cost and expense. If the Indemnifying Party elects
not to defend the Indemnified  Party against such Third Party Claim,  whether by
failure of the Indemnifying Party to give the Indemnified Party timely notice as
provided above or otherwise,  then, the Indemnified  Party,  without waiving any
rights  against the  Indemnifying  Party,  may settle or defend against any such
Claim in the Indemnified Party's sole discretion and the Indemnified Party shall
be entitled to recover from the Indemnifying  Party the amount of any settlement
or judgment and, on an ongoing basis,  all  indemnifiable  costs and expenses of
the Indemnified  Party with respect  thereto,  including  interest from the date
such costs and expenses were incurred.

     8.8.3 An Indemnified Party may make an indemnification Claim hereunder, for
potential or contingent  Claims or demands  provided the Claim Notice sets forth
the specific basis for any such  potential or contingent  Claim or demand to the
extent then feasible and the Indemnified Party has reasonable grounds to believe
that such a Claim or demand may be made.

     8.8.4 The Indemnified  Party's failure to give reasonably  prompt notice to
the  Indemnifying  Party of any actual,  threatened or possible  Claim or demand
which may give rise to a right of  indemnification  hereunder  shall not relieve
the  Indemnifying  Party of any Liability  which it may have to the  Indemnified
Party unless the failure to give such notice materially and adversely prejudiced
the Indemnifying Party.

     8.8.5 Seller  hereby  waives and releases  irrevocably  any right to make a
Claim against Purchaser or ICI for contribution,  indemnification or subrogation
for any Damages  asserted against Seller pursuant to this Article 8. In no event
shall Seller have a claim  following the Closing against ICI for a breach by ICI
of any of its  obligations  under this  Agreement,  including  breaches of ICI's
representations  and  warranties  and covenants  thereunder,  or under the other
Transaction Documents.

                                    ARTICLE 9
                                   TERMINATION

9.1  General.

     The  parties  shall  have the  rights  and  remedies  with  respect  to the
termination  and/or  enforcement of this  Agreement  which are set forth in this
Article 9.

9.2  Right to Terminate.

     Anything to the contrary  herein  notwithstanding,  this  Agreement and the
transactions  contemplated  hereby  may be  terminated  at any time prior to the
Closing:

     9.2.1 by the mutual written consent of Purchaser and Seller;

     9.2.2 by  Seller  if there has been a  misrepresentation  or a  default  or
Breach by Purchaser  with respect to its  representations  or warranties in this

                                       43
<PAGE>
Agreement or the due and timely performance of any of Purchaser's  covenants and
agreements contained in this Agreement which,  individually or in the aggregate,
would constitute grounds for the condition to Closing set forth in Section 5.2.1
to not be satisfied at the Closing Date, and such misrepresentation,  default or
Breach shall not have been cured within ten (10) days after receipt by Purchaser
of notice specifying particularly such misrepresentation, default or Breach;

     9.2.3 by  Purchaser if there has been a  misrepresentation  or a default or
Breach by ICI or Seller with respect to any of their respective  representations
or  warranties  in this  Agreement or the due and timely  performance  by ICI or
Seller of any of their  respective  covenants and  agreements  contained in this
Agreement which, individually or in the aggregate,  would constitute grounds for
the  condition to Closing set forth in Section  5.1.1 to not be satisfied at the
Closing Date, and such misrepresentation,  default or Breach shall not have been
cured  within  ten (10) days after  receipt  by ICI or Seller of written  notice
specifying particularly such misrepresentation, default or Breach;

     9.2.4 by prompt notice given in accordance  with Section 12.2 by any of the
parties if the  Closing  shall not have  occurred  at or before  11:59  p,m.  on
October  2,  2008;  provided  that if the  United  States  Committee  on Foreign
Investment  in the United  States  elects to exercise  its right to  investigate
Purchaser's  application for approval of the transactions  contemplated  hereby,
such date shall automatically be extended to November 5, 2008; or

     9.2,5 by Seller,  on the one hand, or by  Purchaser,  on the other hand, if
there  shall be an order of a federal or state  court in effect  preventing  the
consummation of the transactions  contemplated by this Agreement; or there shall
be any  action  taken,  or any  statute,  rule,  regulation  or  order  enacted,
promulgated  or  issued  or  deemed   applicable  to  the  transactions  by  any
Governmental  Authority which would make the  consummation  of the  transactions
illegal.

9.3  Certain Effects of Termination.

     This Section 9.3,  Section 9.5 and Article 8 shall survive any  termination
of this Agreement.

9.4  Remedies.

     Notwithstanding  any termination right granted in Section 9.2, in the event
of the  nonfulfillment of any condition to a party's closing  obligations,  such
party may elect to do one of the following:

     9.4.1  proceed  to  close  despite  the   non-fulfillment  of  any  closing
condition; or

     9.4.2 decline to close and terminate  this Agreement as provided in Section
9.2,. 9.5 Effect of Termination.

     Except as set forth in Section  9.6,  in the event of the  failure to close
the transactions  contemplated  hereby or termination of this Agreement pursuant
to Article 9, this Agreement  shall become void and have no effect,  without any

                                       44
<PAGE>
liability  on the  part  of any  party  hereto  or its  directors,  officers  or
stockholders  in  respect of this  Agreement,  except  that the  Confidentiality
Agreement between the parties shall survive any termination of this Agreement.

9.6  Specific Performance.

     If Seller fails to consummate  the  transaction  contemplated  at or before
11:59 p.m. on the date for Closing required under Section 9.2.4, notwithstanding
that  the  Purchaser  has  fulfilled  or is  prepared  to  fulfill  all  of  its
obligations  under this  Agreement on the Closing Date and all of the conditions
set forth in Section  5.1 have been met or waived in  writing by Seller,  Seller
hereby grants to Purchaser,  as its sole and exclusive remedy, the right to seek
and obtain  injunctive and other equitable relief to enforce  specifically  this
Agreement and the terms and provisions  hereof,  in any action  instituted after
the  Closing  and Seller  agrees not to assert a position in such action that is
inconsistent  with such grant.  In  consideration  of the grant by Seller of the
right to seek and  obtain  injunctive  and other  equitable  relief  to  enforce
specifically  this  Agreement  and the terms and  provisions  hereof,  Purchaser
hereby irrevocably waives all claims for damages, liabilities and loss sustained
by  Purchaser  as a  consequence  of the failure of Seller to fully  perform its
obligations and/or breech the representations and warranties of Seller set forth
in this Agreement.

9.7  Time is of Essence.

     Time is of the essence in this Agreement

                                   ARTICLE 10
                                   TAX MATTERS

10.1 Tax Returns for Periods Ending on or Before the Closing Date.

     Seller shall  prepare or cause to be prepared and file or cause to be filed
all Tax Returns  for ICI which are filed after the Closing  Date for all periods
ending on or prior to the Closing Date and such Tax Returns shall be prepared in
a manner that is  consistent  with past  practices  of Seller  unless  otherwise
required by  Applicable  Law.  Seller  shall  permit the  Purchaser a reasonable
opportunity  to review  and  comment on each such Tax  Return  described  in the
preceding  sentence  prior to filing and shall make such  revisions  to such Tax
Returns limited to computations as reasonably requested by Purchaser.  Purchaser
shall not file, or cause to be filed,  any amended  federal,  state or local Tax
Returns for any periods  ending on or before the Closing  Date without the prior
written consent of the Seller.

     The parties agree that the election to ratably allocate items of income and
expense  for Federal  income tax  purposes  under  Treasury  Regulation  Section
1.1502-76(b)(2)  shall not be made in the event a short  period Tax year  arises
upon a  termination  of the  Company's  regular Tax year on the Closing Date and
that the  Company's  net income for any such  resulting  short period Tax return
shall be  determined  by a closing of the books of the  Company  on the  Closing
Date.

10.2 Tax Returns for Periods Beginning Before and Ending After the Closing Date.

     Purchaser  shall properly and accurately  prepare (or cause to be prepared)
and file (or  cause to be filed)  each Tax  Return  required  to be filed by ICI

                                       45
<PAGE>
after the  Closing  Date that  includes a taxable  period  beginning  before the
Closing Date and ending after the Closing Date exclusive of a Tax Return for the
short period Tax Year  referenced  in Section 10.1 above.  To the extent any Tax
shown as due on such Tax  Return is  payable  by  Seller  (taking  into  account
indemnification obligations hereunder), (A) such Tax Return shall be provided to
Seller at least 30 days prior to the due date for filing  such  return  (or,  if
required  to be  filed  within  30 days  of the  Closing,  as  soon as  possible
following  the  Closing);  and (B)  Seller  shall  have the right to review  and
comment on such Tax Return.  The amount of any Taxes due with respect to any Tax
Returns  relating  to  periods  ending on or prior to the  Closing  Date and the
amount of any Taxes  allocable  to Seller  under  Section 10.2 with respect to a
Straddle Period Tax Return shall be paid by Seller to Purchaser within the later
of five (5) days of Purchaser's request therefor.

10.3 Allocation of Straddle Period Taxes.

     For  purposes of this  Agreement,  in the case of any  Taxable  period that
commences on or prior to and includes  (but does not end on) the Closing Date (a
"Straddle  Period"),  the amount of any Taxes  based on or  measured  by income,
profits or  receipts of ICI or for other  Taxes of ICI for the  Pre-Closing  Tax
Period shall be  determined  based on an interim  closing of the books as of the
close of business on the  Closing  Date and the amount of any real and  personal
property Taxes of ICI for a Straddle  Period which relate to the Pre-Closing Tax
Period  shall be deemed  to be the  amount  of such Tax for the  entire  taxable
period  multiplied by a fraction the numerator of which is the number of days in
the taxable  period ending on the Closing Date and the  denominator  of which is
the number of days in such Straddle Period.

10.4 Audits and Contests Regarding Taxes.

     Any party who  receives  any notice of a pending or  threatened  Tax audit,
assessment,  or adjustment against or with respect to ICI which may give rise to
liability of another party hereto, shall promptly notify such other party within
ten (10) business days of the receipt of such notice.  The parties each agree to
consult with and to keep the other  parties  hereto  informed on a regular basis
regarding  the  status of any Tax audit or  proceeding  ("Tax  Contest")  to the
extent that such Tax Contest  could  affect a  liability  of such other  parties
(including indemnity  obligations  hereunder).  Purchaser shall control any such
Tax Contests, except that Seller shall have the right to represent its and ICI's
interests  in any Tax  Contest , and Seller  shall have the right to control the
Tax Contest and to employ counsel of their choice,  but reasonably  satisfactory
to Purchaser,  at Seller's  expense,  but only to the extent such audit or other
proceeding pertains to Tax periods ending on or before the Closing Date and then
only to the extent that any such Tax  Contests  are related  exclusively  to the
liability for any Taxes, the entire amount of which is owed by Seller hereunder.
In the event that Seller  elects to contest an  adjustment  by paying the Tax at
issue and  seeking a refund,  Seller  shall  advance  the  amount of such Tax to
Purchaser with such advance being  repayable  only out of the contest  recovery.
Purchaser  shall have the right to  participate  in such  proceeding  at its own
expense,  and shall be entitled to control the disposition of any issue involved
in such proceeding which does not effect a potential  liability of Seller.  Both
Purchaser and Seller shall be entitled to represent their own interests in light
of their  responsibilities  (including  indemnity  obligations)  for the related
Taxes,  at their  own  expense,  in any  audit  or  administrative  or  judicial

                                       46
<PAGE>
proceedings involving a Tax period that includes but does not end on the Closing
Date.  Notwithstanding  the foregoing,  Seller shall not agree to any settlement
for any taxable period that would effect Tax Liabilities of Purchaser or ICI for
any Tax period  beginning  on or after the Closing Date  without  prior  written
consent of Purchaser. Except as provided in this Section 10.3, the provisions of
Article 8 including the  provisions  therein  addressing  settlement  authority,
shall  govern  the  manner  in which  Tax audit or  administrative  or  judicial
proceedings are resolved.

10.5 Cooperation on Tax Matters.

     10.4.1  Purchaser,  ICI and Seller  shall  cooperate  fully,  as and to the
extent reasonably requested by the other party, in connection with the filing of
Tax  Returns  pursuant  to this  Article 10 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.
Seller, Purchaser and ICI agree (i) to retain all books and records with respect
to Tax matters  pertinent to ICI (including Tax Returns) relating to any taxable
period  beginning before the Closing Date until the expiration of the statute of
limitations  (and,  to the extent  notified  by another  party,  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 the other
parties hereto  reasonable  written notice prior to transferring,  destroying or
discarding any such books and records and, if the other party so requests, shall
allow the other party to take possession of such books and records,

10.6 Tax Sharing Agreements.

     All tax sharing agreements or similar agreements,  arrangements or policies
with respect to or involving ICI shall be terminated as of the Closing Date and,
after the Closing Date, Purchaser and ICI shall not be bound thereby or have any
liability thereunder.

 10.7 Section 338(11)(10) Election.

     10.7.1  Seller  and  Purchaser  shall join in making  the  elections  under
Section 338(h)(10) of the Code or any analogous  provision of state or local Law
(each  such  election,  a  "Section  338(4)(10)  Election"),   with  respect  to
Purchaser's  purchase of the capital stock of ICI. Seller and Purchaser agree to
take, or cause to be taken,  any and all action necessary and to do, or cause to
be done,  or to  execute,  or cause to be  executed,  such  documents  as may be
necessary or desirable to effect any Section 338(11)(10) Election,  with respect
to Purchaser's  acquisition of the capital stock of ICI. At Closing, the parties
shall  execute  IRS  Form  8023 (or any  successor  form(s)  thereto),  with all
attachments.

     10.7.2 Purchaser and Seller agree that the Purchase Price will be allocated
to the assets of ICI in  accordance  with  Sections 338 and 1060 of the Code and
the  regulations  thereunder.  Within  ninety (90) days after the Closing  Date,
Purchaser  shall  complete  and  deliver to Seller a schedule  (the  "Allocation
Schedule")  allocating the Purchase Price among the assets of ICI.  Seller shall
be  entitled  to have  reasonable  comments  incorporated  into  the  Allocation
Schedule.  If the parties cannot resolve a dispute over the Allocation Schedule,
the items remaining in dispute shall be submitted to the Referee.  Purchaser and

                                       47
<PAGE>
Seller  shall be bound by the  determination  by the  Referee,  absent  manifest
error.  Purchaser and Seller acknowledge and agree that, upon termination of the
Escrow Agreement,  the Allocation  Schedule shall be revised consistent with the
applicable  provisions  of the Code and.  Treasury  Regulations.  Purchaser  and
Seller  shall file all Tax  Returns  (including  amended  returns and claims for
refund),  IRS  Form  8883 and any  information  reports  in a manner  consistent
therewith.

     10.7.3 Seller shall include any income, gain, loss, deduction, or other tax
item resulting from the Section 338(11)(10)  Elections on its tax returns to the
extent  required by Applicable Law. Seller also shall pay any Tax imposed on ICI
attributable to the making of the Section  338(h)(10)  Elections,  including any
Tax imposed under Section 1374 of the Code.

                                   ARTICLE 11
                                   DEFINITIONS

11.1 Index of Definitions.

         The following terms are defined in the following sections of this
Agreement:
<TABLE>
           <S>                                                          <C>
           Defined Term                                                 Section
           2008 Financial Statements                                    Section 2.3.2
           Affiliate                                                    Section 11.2.1
           Agreement                                                    Preamble
           Allocation Schedule                                          Section 10.7.2
           Anti-Corruption and Anti-Bribery Laws                        Section 2.14.1
           Applicable Law                                               Section 11.2.2
           Approvals                                                    Section 11.2.3
           Benefit Plan                                                 Section 2.7,1(a)
           Breach                                                       Section 11.2.4
           Capitalized Lease                                            Section 11.2.5
           CERCLA                                                       Section 2.9,5
           Claim Notice                                                 Section 8.8.2
           Claims                                                       Section 112.6
           Closing                                                      Section 1.4
           Closing Cash Payment                                         Section 1.2.1(a)
           Closing Date                                                 Section 1.4
           COBRA                                                        Section 11.2.7
           Code                                                         Section 11.2.8
           Competing Transaction                                        Section 11.2.9
           Contract                                                     Section 11.2.10
           Cost Accounting Standards                                    Section 11,2.11
           Damages                                                      Section 11.2.12
           Direct Contract Costs                                        Section 11.2.13
           DFARS                                                        Section 2.10.9
           DSS                                                          Section 2.12,10
           Employee Pension Benefit Plan                                Section 11.2.14
           Employee Welfare Benefit Plan                                Section 11.2.15
           Environmental Claim                                          Section 11.2.16
           Environmental Laws                                           Section 11.2.17
           Environmental Permits                                        Section 11.2.18

                                       48

<PAGE>
           Equipment                                                    Section 11.2.19
           ERISA                                                        Section 11.2.20
           ERISA Affiliate                                              Section 11.2.21
           ERISA Plan                                                   Section 11.2.22
           Escrow                                                       Section 1.2.1(b)
           Escrow Agent                                                 Section 1.2.1(b)
           Escrow Agreement                                             Section 1.2.1(b)
           Escrow Amount                                                Section 1.2.1(b)
           Excluded Business                                            Recitals
           Export and Import Approvals                                  Section 11.223
           Export and Import Control Laws                               Section 11.2.24
           FAR                                                          Section 2.6.4
           Fiduciary                                                    Section 11.2.25
           Financial Statements                                         Section 2.3.2
           Funded Customer Backlog                                      Section 2.3,4
           Government Bid                                               Section 11.2.26
           Government Contract                                          Section 11.2.37
           Governmental Authority                                       Section 11,2.28
           Government-Furnished Property                                Section 11.2.29
           Hazardous Substances                                         Section 11.2.30
           Herley                                                       Preamble
           HIPAA                                                        Section 11.2.31
           ICI                                                          Preamble
           ICI Acquisition                                              Preamble
           ICI Employees                                                Section 2.7,2(a)
           Indebtedness                                                 Section 11.2.32
           Indemnification Limit                                        Section 8.3.3
           Indemnification Threshold                                    Section 8.3.1
           Indemnified Party                                            Section 11.2.33
           Indemnifying Party                                           Section 11.2.34
           Indirect Costs                                               Section 11,2.35
           Intellectual Property                                        Section 2.10.11
           Intellectual Property Licenses                               Section 2.10.4
           Interest Expense                                             Section 11.2.36
           Inventory                                                    Section 11.2.37
           LP addresses                                                 Section 2.10.11
           Judgment                                                     Section 11.2.38
           Key Employee                                                 Section 11.2.39
           Leased Real Property                                         Section 2.11.2
           Liability                                                    Section 11.2.41
           Lien                                                         Section 11.2.42
           Material Adverse Effect                                      Section 11.2.43
           Net Income                                                   Section 11.2.44
           NISPOM                                                       Section 2.12.10
           Notice Period                                                Section 8.82
           PCBs                                                         Section 11.2.30

                                       49
<PAGE>
           Permitted Liens                                              Section 11.2.45
           Person                                                       Section 11.2.46
           Proceeding                                                   Section 11.2.47
           Prohibited Transaction                                       Section 11.2.48
           Proprietary Software                                         Section 2.10.3
           Purchase Price                                               Section 1.1
           Purchaser                                                    Preamble
           Purchaser Indemnitee                                         Section 8.2
           Purchaser's Disclosure Schedule                              Section 3.1
           Qualified Plans                                              Section 2.7.1(d)
           Related Party                                                Section 11.2.49
           Release                                                      Section 11.2.50
           Remedial Action                                              Section 11.2.51
           Removal                                                      Section 11.2.51
           Response                                                     Section 11.2.51
           Restriction                                                  Section 11.2.52
           Section 338(h)(10) Election                                  Section 10.7.1
           Security Document                                            Section 11.2.53
           Seller                                                       Preamble
           Seller Indemnitees                                           Section 8.4
           Seller Acquisition Date                                      Section 11.2.54
           Seller's Disclosure Schedule                                 Section 2.1
           Seller's Knowledge                                           Section 11.2.41
           Seller's Post-Acquisition Knowledge                          Section 11.2.55
           Shares                                                       Recitals
           Significant Customer                                         Section 11.2.56
           Significant Supplier                                         Section 11.2.57
           Software                                                     Section 2.10.11
           Special Indemnification Threshold                            Section 8.3.2
           Straddle Period                                              Section 10.3
           Tax                                                          Section 11.2.58
           Tax Contest                                                  Section 10.4
           Tax Returns                                                  Section 11.2.59
           Taxes                                                        Section 11.2.58
           Third Party Claim                                            Section 11.2.60
           Transaction Documents                                        Section 11.2.61
           U.S. GAAP                                                    Section 112.62
           U.S. Government                                              Section 11.2.63
           Unaudited Financial Statements                               Section 2.3.2
</TABLE>
11.2 Other Definitions.

     The following terms shall have the following  defined meanings when used in
this Agreement (terms defined in the singular having a correlative  meaning when
used in the plural and vice versa):

                                       50
<PAGE>
     11.2.1  "Affiliate"  means  any  Person  which  controls  a  party  to this
          Agreement, which that party controls, or which is under common control
          with that party.  For  purposes of the  preceding  sentence,  the term
          "control" means the power, direct or indirect,  to direct or cause the
          direction of the  management  and policies of a Person  through voting
          securities, contract or otherwise.

     11.2.2  "Applicable  Law" means all  statutes,  laws,  rules,  common  law,
          regulations and ordinances that apply to or govern a matter.

     11.2.3 "Approvals"  means all licenses,  permits,  consents,  approvals and
          authorizations of, and all filings, registrations and agreements with,
          any  Governmental  Authority  or  court  (federal,   state,  local  or
          foreign).

     11.2.4 "Breach" means any breach of Contract,  breach of  representation or
          warranty, tort or infringement and any related Claim.

     11.2.5 "Capitalized  Lease" shall mean a lease under which the  obligations
          of the  lessee  would,  in  accordance  with  U.S.  GAAP  consistently
          applied,  be included in determining total liabilities as shown on the
          liability side of a balance sheet of the lessee.

     11,2.6  "Claims"  means  all  options,   proxies,   voting  trusts,  voting
          agreements,  Judgments,  pledges,  charges,  requests  or demands  for
          payment,  escrows,  rights of first  refusal  or first  offer or other
          pre-emptive rights, claims,  transfer  restrictions,  Liens, equities,
          and other  encumbrances of every kind and nature  whatsoever,  whether
          arising by agreement, operation of law or otherwise.

     11.2.7 "COBRA" means Section 4980B of the Code, Part 6 of Title I of ER1SA,
          similar provisions of state law and applicable regulations relating to
          any of the foregoing.

     11.2.8 "Code" means the Internal Revenue Code of 1986, as amended from time
          to time.  All  citations to the Code,  or to the Treasury  Regulations
          promulgated thereunder, shall include any amendments or any substitute
          or successor provisions thereto.

     11.2,9 "Competing  Transaction"  means any of the following (other than the
          transactions  contemplated by this  Agreement)  involving ICI: (a) any
          merger,  consolidation,   share  exchange,  business  combination,  or
          similar transaction;  (b) any sale, lease, exchange, mortgage, pledge,
          transfer,  or other  disposition of five percent or more of the assets
          used in the business of ICI; or (c) any offer for five percent or more
          of the outstanding shares of capital stock of ICI.

     11.2.10"Contract" means each contract, agreement, commitment,  undertaking,
          purchase order, lease,  sublease,  indenture,  debenture,  instrument,
          note,  Security  Document,  or other  similar  obligation or document,
          written or oral,  including,  without  limitation,  all  contracts and
          policies of insurance.

     11.2,11 "Cost Accounting  Standards" means  regulations  promulgated by the
          Cost  Accounting  Standards  Board set forth at 48 C.F.R.  Parts 9903,

                                       51
<PAGE>
          9904 and 9905,  and any  guidance,  interpretations,  or  preambles to
          those regulations  published by the Cost Accounting Standards Board in
          the Federal Register.

     11.2.12"Damages" shall mean all Liabilities,  demands,  Claims,  actions or
          causes of action,  regulatory,  legislative or judicial Proceedings or
          investigations,   assessments,   levies,  losses,  fines,   penalties,
          damages,  Taxes, costs and expenses,  including,  without  limitation,
          attorneys',  accountants',   investigators',  and  experts'  fees  and
          expenses,  sustained  or  incurred  in  connection  with the  defense,
          settlement or investigation of any Claim.

     11.2.13 "Direct  Contract  Costs"  means,  with respect to any period,  the
          aggregate  amounts  of labor and  other  direct  expenses,  including,
          without limitation, expenses for materials, subcontracts,  consultants
          and travel.

     11.2.14"Emplovee Pension Benefit Plan" has the meaning set forth in Section
          3(2) of ERISA.

     11.2.15"Employee Welfare Benefit Plan" has the meaning set forth in Section
          3(1) of ERISA

     11.2.16  "Environmental  Claim"  shall  mean  any and  all  administrative,
          regulatory  or  judicial  actions,  suits,  demands,  demand  letters,
          directives,   Claims,   liens,   investigations,    statutory   liens,
          Proceedings or notices of noncompliance or violation (written or oral)
          made  or  threatened  by  any  Person  alleging  potential   liability
          (including  potential liability for enforcement,  investigatory costs,
          cleanup costs, Responses,  Removals or Remedial Actions,  governmental
          response  costs,  removal costs,  remedial  costs,  natural  resources
          damages, property damages, personal injuries or penalties) arising out
          of, based on or resulting from: (1) the presence,  or Release into the
          environment,  of any  Hazardous  Substance  at or from  any  location,
          whether or not owned by ICI; or (2) circumstances forming the basis of
          any  violation  or  alleged  violation,  of any  Environmental  Law or
          Environmental  Permit; or (3) any and all Claims by any Person seeking
          damages, contribution, indemnification, cost recovery, compensation or
          injunctive  relief  resulting  from the  presence  or  Release  of any
          Hazardous Substances.

     11.2.17  "Environmental  Laws"  shall  mean  all  federal,  state  or local
          statutes,  laws,  rules,  ordinances,   codes,  rule  of  common  law,
          regulations,  judgments  and orders  relating to  protection  of human
          health or the environment  (including  industrial hygiene,  pollution,
          ambient air, surface water,  ground water,  drinking water,  wildlife,
          plants,  land  surface  or  subsurface  strata),  including  laws  and
          regulations  relating to Releases or threatened  Releases of Hazardous
          Substances,  or  otherwise  relating to the  manufacture,  processing,
          distribution, use, treatment, storage, disposal, transport or handling
          of Hazardous Substances.

     11.2.18 "Environmental  Permits" shall mean all  environmental,  health and
          safety permits,  licenses,  registrations,  and governmental Approvals
          and  authorizations,  including  but not  limited to any air  emission

                                       52

<PAGE>
          permits,  wastewater  discharge  or  treatment  permits,  storm  water
          permits,   underground   storage  tank   registrations  and  Hazardous
          Substance handling, treatment, storage or disposal permits.

     11.2.19 "Equipment"  means all furniture,  fixtures,  vehicles,  machinery,
          equipment,  aircraft,  vessels,  tools,  dies, molds,  jigs,  computer
          hardware and other tangible personal property (other than Inventory).

     11.2,20"ERISA"  shall mean the Employee  Retirement  Income Security Act of
          1974, as amended.

     11.2.21 "ERISA  Affiliate" means each Person which,  within any time during
          the past six  years,  is or was  required  to be  treated  as a single
          employer with ICI under Section 414 of the Code or Sections  4001(0(1)
          or 4001(b)(1) of ERISA.

     11.2.22"ERISA Plan" means any Employee Pension Benefit Plan or any Employer
          Welfare Benefit Plan.

     11.2.23 "Export and Import  Approvals" means all export  licenses,  license
          exceptions,    consents,   notices,   waivers,   approvals,    orders,
          authorizations,  registrations, declarations and filings, from or with
          any  Governmental  Authority,  that are required for  compliance  with
          Export and Import Control Laws.

     11.2.24 "Export  and Import  Control  Laws"  means any U.S.  or  applicable
          non-U.S.  law,  regulation,  or order governing (i) imports,  exports,
          reexports,   or  transfers  of  products,   services,   software,   or
          technologies from or to the United States or another country; (ii) any
          release of  technology  or software  in any foreign  country or to any
          foreign  Person  (anyone  other  than a citizen  or  lawful  permanent
          resident of the United States, or a protected individual as defined by
          8 U.S.C.  ss.  1324b(a)(3))  located in the  United  States or abroad;
          (iii)  economic  sanctions  or  embargoes;  or  (iv)  compliance  with
          unsanctioned foreign boycotts.

     11.2.25 "Fiduciary" has the meaning set forth in ERISA Section 3(21).

     11.2.26"Government Bid" means a bid, tender or proposal which, if accepted,
          would result in a Government Contract.

     11.2.27 "Government  Contract" means any Contract,  including an individual
          task order or delivery  order under a broader  agreement,  between ICI
          and the U.S. Government,  or any other Governmental Authority, as well
          as any  subcontract  or other  arrangement  by which ICI has agreed to
          provide goods or services to a prime  contractor,  to the Governmental
          Authority,  or to a  higher-tier  subcontractor  where  such  goods or
          services  ultimately  will  benefit  or be  used  by the  Governmental
          Authority,  including any closed  Contract or  subcontract as to which
          the  right of the  U.S.  Government  or a  higher-tier  contractor  to
          review, audit or investigate has not expired under Applicable Law.

     11.2.28 "Governmental  Authority" shall mean any nation or government,  any
          state or other  instrumentality or political  subdivision thereof, and

                                       53
<PAGE>
          any entity  exercising  executive,  legislative,  judicial,  military,
          regulatory or administrative functions of or pertaining to government.

     11.2.29"Government-Furnished Property" shall mean all machinery, Equipment,
          tools,  dies, spare parts and all other personal property and fixtures
          loaned,  bailed or otherwise  furnished by the U.S.  Government to ICI
          pursuant to Government Contracts.

     11.2.30"Hazardous  Substances"  shall mean:  (1) any petroleum or petroleum
          products (and any breakdown products), radioactive materials, asbestos
          in any form, urea formaldehyde foam insulation,  transformers or other
          Equipment that contain dielectric fluid containing regulated levels of
          polychlorinated biphenyls ("PCBs"), radon gas and chlorinated solvents
          (and any  breakdown  products);  and (2) any  chemicals,  materials or
          substances  which are now or ever have been  defined as or included in
          the  definition  of  "hazardous   substances,"   "hazardous   wastes,"
          "hazardous   materials,"  "extremely  hazardous  wastes,"  "restricted
          hazardous   wastes,"   "toxic    substances,"    "toxic   pollutants,"
          "pollutants,"   or  other   words  of   similar   import,   under  any
          Environmental Law.

     11.2.31 "HIPAA" means  Subtitle K of the Code,  Part 7 of Title I of ERISA,
          Part C of  Subchapter XI of Chapter 7 of Title 42 of the United States
          Code,  as  amended,  similar  provisions  of state law and  applicable
          regulations relating to any of the foregoing.

     11.2.32  "Indebtedness"  shall mean at a particular  time,  without  dupli-
          cation,   (i)  any  indebtedness  for  borrowed  money  or  issued  in
          substitution for or exchange of indebtedness for borrowed money,  (ii)
          any indebtedness  evidenced by any note, bond, debenture or other debt
          security,  (iii) any indebtedness  for the deferred  purchase price of
          property  or  services  with  respect  to  which a Person  is  liable,
          contingently or otherwise,  as obligor or otherwise  (other than trade
          payables and other current liabilities incurred in the ordinary course
          of business that are not more than one hundred  twenty (120) days past
          due), (iv) any obligations  under  Capitalized  Leases with respect to
          which a Person is  liable,  contingently  or  otherwise,  as  obligor,
          guarantor or otherwise,  or with respect to which obligations a Person
          assures a creditor  against loss,  (v) any  indebtedness  secured by a
          Lien on a Person's  assets,  and (vi) any  unsatisfied  obligation for
          "withdrawal  liability"  (as such term is  defined  under  ERISA) to a
          "multiemployer plan" as defined in Section 3(37) of ERISA.

     11.2.33  "Indemnified  Party"  shall  mean  a  party  who  is  entitled  to
          indemnification pursuant to Article 8.

     11.2.34"Indemni&ing  Party"  shall mean a party  hereto who is  required to
          provide indemnification under Article 8.

     11.2.35  "Indirect  Costs"  shall mean any  fringe  benefits,  general  and
          administrative expenses and overhead expenses.

                                       54
<PAGE>
     11.2.36  "Interest  Expense"  shall mean,  for any period,  total  interest
          expense  (including  that portion  attributable  to capital  leases in
          accordance  with  U.S.  GAAP  and  capitalized  interest)  of ICI with
          respect  to  all  outstanding   Indebtedness  of  ICI,  including  all
          commissions, discounts and other fees and charges owed with respect to
          letters of credit and net costs under hedging obligations.

     11.2.37 "Inventory" means raw materials, work in process and finished goods
          held for sale.

     11.2.38"Judgmenr  means any order,  writ,  award,  injunction,  judgment or
          decree of any court, Governmental Authority or tribunal.

     11.2.39"Kep Employee" means John Bpperly, Rich Barrett, Greg Smith, Charles
          Woloszynski,  Richard  Griffin,  Troy  Smith,  Robert  Krobock,  Scott
          Rothrock, Dan Conner, Richard Harrison and Scott Murdock.

     11.2.40"Knowledge  of Seller" or "Seller's  Knowledge"  or words of similar
          import mean the actual  knowledge of Andy  Feldstein,  Scott  Murdock,
          Richard Harrison, Myron Levy and/or John Epperly.

     11.2.41 "Liability" means any indebtedness,  obligation or liability of any
          nature whatsoever (direct or indirect, matured or unmatured, absolute,
          accrued,  contingent  or  otherwise),  whether or not required by U.S.
          GAAP to be  provided  for or  reserved  against on a balance  sheet or
          disclosed in the notes thereto.

     11.2.42 "Lien" means any security interest, lien, charge,  hypothecation or
          encumbrance of any kind.

     11.2.43 "Material  Adverse  Eff'ect"  means,  when used with respect to any
          Person, any event, change or effect which is materially adverse to the
          financial  performance,  financial  condition,  operations,  business,
          assets, liabilities, results of operations, prospects or reputation of
          ICI.

     11.2.44 "Net Income" shall mean,  for any period,  the net income (or loss)
          of ICI for such period taken as a single  accounting period determined
          in conformity with U.S. GAAP; provided,  however,  that net income (or
          loss) shall  exclude any gains or losses  attributable  to asset sales
          and any non-cash extraordinary gains or losses.

     11.2.45 "Permitted  Liens" means (a) statutory Liens for Taxes not yet due,
          (b)  Liens  of  carriers,  warehousemen,   mechanics  and  materialmen
          incurred in the ordinary  course of business for sums not yet due, (c)
          Liens incurred or deposits made in the ordinary  course of business in
          connection  with  workers'  compensation,  unemployment  insurance and
          other  types of social  security;  (d) liens  securing  the  executory
          obligations  under any Lease that is an  "operating  lease" under GAAP
          and (e) liens securing the payment of unpaid inventory owned by ICI in
          the payment amount set forth in Schedule 2.3.5.

                                       55
<PAGE>
     11.2.46  "Person"  means any  individual,  corporation,  general or limited
          partnership,  company,  limited  liability  company  or other  entity,
          trust, estate or other legal person, or any Governmental Authority.

     11.2.47 "Proceeding" means any litigation,  suit, action, claim, proceeding
          or investigation before any court, Governmental Authority or tribunal.

     11.2.48 "Prohibited Transaction" has the meaning set forth in ERISA Section
          406 and Code Section 4975.

     11.2.49 "Related Party" means Seller and any Affiliate of Seller or ICI.

     11.2.50"Release"  shall have the meaning  ascribed to it in Section 101(22)
          of CERCLA, as amended by the Superfund  Amendments and Reauthorization
          Act ("SARA"), 42 U.S.C. ss. 9601(22).

     11.2.51 "Response," "Removal" and "Remedial Action" shall have the meanings
          ascribed to them in Sections  101(23)401(25)  of CERCLA, as amended by
          SARA, 42 U.S.C. ss.ss. 9601(23)-9601(25).

     11.2.52  "Restriction"  means,  to the extent  applied to any  Person,  all
          terms,  conditions and provisions of any articles of  incorporation or
          association,  bylaws, other organizational documents,  Applicable Law,
          Judgments, and Contracts that bind or effect such Person or any of its
          assets or property.

     11.2.53 "Security Document" means each mortgage,  security agreement, trust
          deed, chattel mortgage,  financing  statement,  hypothecation,  pledge
          agreement or other  agreement,  document or instrument which creates a
          Lien.

     11.2.54 "Seller Acquisition Date" means April 12, 2005.

     11.2.55 "Seller's  Post-Acquisition  Knowledge"  means, with respect to any
          period prior to the Seller  Acquisition  Date, the actual knowledge of
          Scott Murdock,  Richard Harrison, Myron Levy, John Epperly and/or Andy
          Feldstein  that is acquired by such Person at any time on or after the
          Seller Acquisition Date.

     11.2.56 "Significant Customer" means any customer of ICI with which ICI has
          Contracts in excess of $50,000 in value in the aggregate.

     11.2.57 "Significant  Supplier" means any supplier of ICI from whom ICI has
          purchased  $50,000 or more of goods or services during either of years
          ended December 31, 2006 or 2007 for use in ICI's business.

     11.2.58 "Tax" or "Taxes" shall mean (i) all federal,  state, local, foreign
          or other tax of any kind whatsoever, including without limitation, all
          income,  gross  receipts,   license,  payroll,   employment,   excise,
          severance,    stamp,    occupation,    premium,    windfall   profits,
          environmental, customs duties, capital stock, ad valorem, value added,
          inventory,   franchise,  profits,  withholding,  social  security  (or

                                       56
<PAGE>
          similar), unemployment,  disability, real property, personal property,
          unclaimed  property,  escheat,  sales,  use,  transfer,  registration,
          alternative  or add-on  minimum,  or estimated  tax, and including any
          interest,  penalty, or addition thereto, whether disputed or not; (ii)
          all liability for the payment of any amounts of the type  described in
          clause  (i) as the  result of being (or  ceasing to be) a member of an
          affiliated, consolidated, combined or unitary group (or being included
          (or required to be included) in any Tax Return related  thereto);  and
          (iii) all  liability  for the payment of any amounts as a result of an
          express or implied  obligation  to indemnify  or  otherwise  assume or
          succeed  to the  liability  of any other  person  with  respect to the
          payment of any amounts of the type  described  in clause (i) or clause
          (ii);

     11.2.59 "Tax  Return"  shall mean a report,  return,  statement,  claim for
          refund, election, declaration or other information with respect to any
          Tax required to be filed, permitted to be filed or actually filed with
          a taxing authority,  including any schedule or attachment thereto, and
          including any amendment thereof.

     11.2.60"Third Party Claim" shall mean any Proceeding  which is initiated or
          threatened by a party other than the parties hereto,  their successors
          and permitted  assigns,  against any Indemnified Party or to which any
          Indemnified Party is subject.

     11.2.61  "Transaction  Documents"  means  this  Agreement  and  each  other
          agreement,  document or  instrument  to be executed  and  delivered by
          Purchaser,  Seller  or ICI in order  to  effectuate  the  transactions
          contemplated by this Agreement.

     11.2.62 "U.S.  GAAP" means  United  States  generally  accepted  accounting
          principles.

     11.2.63 "US.  Government"  means the  government  of the  United  States of
          America,  including  all  of  its  executive,  legislative,  judicial,
          military, regulatory and administrative agencies, bureaus, departments
          and other instrumentalities.

                                   ARTICLE 12
                                  MISCELLANEOUS

12.1 Publicity.

     Except as otherwise  required by Applicable  Law,  press releases and other
publicity  concerning  this  transaction  shall  be made  only  with  the  prior
agreement of Seller and Purchaser,  which  agreement  shall not be  unreasonably
withheld. Seller and Purchaser shall use reasonable efforts to consult and agree
with each other with respect to the content of any such  required  press release
or other publicity.

12.2 Notices.

     All notices required or permitted to be given hereunder shall be in writing
and may be delivered by hand, by facsimile,  by  nationally  recognized  private
courier,  or by United States mail. Notices shall be deemed given when received.
All notices shall be addressed as follows:

                                       57
<PAGE>
                 If to Seller:

                 Herley Industries, Inc.
                 101 North Pointe Boulevard
                 Lancaster, Pennsylvania 17601
                 Attn: Mr. Myron Levy, Chief Executive Officer Fax: 717-297-9506

                 with copies to:

                 Beckman, Lieberman & Barandes, LLP 116 John Street, Suite 1313
                 New York, New York 10038
                 Attn: David H Lieberman, Esq.
                 Fax: 516-433-5858

                 If to Purchaser:

                 Elbit Systems of America Attn: David Mace Roberts 4700
                 Marine Creek Parkway Fort Worth, Texas 76179 Fax: (817)
                 231-4499

                  with copies to:

                  Greenberg Traurig LLP
                  Attn: Scott Meza
                  1750 Tysons Blvd., Suite 1200 McLean, Virginia 22102
                  Fax: (703)749-1301

     and/or to such  other  respective  addresses  and/or  addressees  as may be
designated  by notice given in  accordance  with the  provisions of this Section
12.2.

 12.3 Expenses; Transfer Taxes.

     Except as otherwise provided in this Agreement,  each party hereto shall be
responsible for all fees and expenses incurred by such party in connection with,
relating to or arising out of the negotiation,  preparation, execution, delivery
and  performance  of  this  Agreement  and  the  Transaction  Documents  and the
consummation  of  the  transactions  contemplated  hereby,  including,   without
limitation, financial advisors', attorneys', accountants' and other professional
fees and expenses ("Transaction Costs"); provided that all Transactions Costs of
Seller and ICI incurred  prior to the Closing  shall be paid by ICI or Seller on
or prior to Closing and Seller shall  deliver to  Purchaser at Closing  releases
from all such  advisors  in a form  acceptable  to  Purchaser,  Seller  shall be
responsible  for  the  cost  of all  sales,  use,  excise,  documentary,  stamp,
transfer,  and any other such Taxes and fees (including  penalties and interest)
incurred in connection with this Agreement.

                                       58
<PAGE>
12A Entire Agreement.

     This Agreement,  the other Transaction  Documents and the instruments to be
delivered  by  the  parties  pursuant  to  the  provisions  hereof  and  thereof
constitute  the entire  agreement  between the parties and shall be binding upon
and inure to the  benefit  of the  parties  hereto  and their  respective  legal
representatives,  successors  and permitted  assigns.  Each exhibit and schedule
shall be considered incorporated into this Agreement.

12.5 Non-Waiver.

     The  failure  in any  one or  more  instances  of a party  to  insist  upon
performance of any of the terms,  covenants or conditions of this Agreement,  to
exercise any right or privilege in this  Agreement  conferred,  or the waiver by
said party of any Breach of any of the terms,  covenants or  conditions  of this
Agreement,  shall not be  construed  as a  subsequent  waiver of any such terms,
covenants,  conditions,  rights or  privileges,  but the same shall continue and
remain  in full  force  and  effect  as if no such  forbearance  or  waiver  had
occurred.  No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.

 12.6 Counterparts.

     This  Agreement  may be executed in  multiple  counterparts,  each of which
shall be deemed to be an original,  and all such  counterparts  shall constitute
but one instrument,

 12.7 Severability.

     The invalidity of any provision of this Agreement or portion of a provision
shall not affect the validity of any other  provision  of this  Agreement or the
remaining portion of the applicable provision.

 12.8 Applicable Law.

     This   Agreement   shall  be  governed  and   controlled  as  to  validity,
enforcement,  interpretation,  construction, effect and in all other respects by
the laws of the State of New York,  without  giving  effect to that body of laws
pertaining to conflict of laws. Each of the parties hereto irrevocably  consents
to the exclusive  jurisdiction and venue of the United States District Court for
the Southern  District of New York, in connection  with any matter based upon or
arising out of this Agreement or the transactions contemplated hereby (including
enforcement  of the  provisions  of Section 8.8 or  enforcement  of any judgment
provided thereunder),  agrees that process may be served upon them in any manner
authorized  by the laws of the State of New York for such Persons and waives and
covenants not to assert or plead any objection  which they might  otherwise have
to such jurisdiction,  venue and process. Each party hereto hereby agrees not to
commence any legal  proceedings  relating to or arising out of this Agreement or
the transactions contemplated hereby in any jurisdiction or courts other than as
provided  herein.  The parties to this Agreement elect not to be governed by the
United Nations Convention on Contracts for the International Sale of Goods.

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<PAGE>
12.9 WAIVER OF JURY TRIAL.

     EACH OF THE PARTIES HERETO HEREBY  IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY AND ANY ACTION,  PROCEEDING  OR  COUNTERCLAIM  (WHETHER  BASED ON CONTRACT,
TORT, OR OTHERWISE)  ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF ANY PARTY HERETO IN NEGOTIATION,  ADMINISTRATION,  PERFORMANCE OR ENFORCEMENT
HEREOF.

12.10 Binding Effect; Benefit.

     This  Agreement  shall  inure to the  benefit  of and be  binding  upon the
parties  hereto,  and their  successors and permitted  assigns.  Nothing in this
Agreement, express or implied, shall confer on any Person other than the parties
hereto,  and their  respective  successors  and permitted  assigns,  any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

12.11 Assignability.

     This  Agreement  shall not be  assignable  by any party  without  the prior
written  consent of the other  parties,  except that at or prior to the Closing,
Purchaser may assign its rights and delegate its duties under this  Agreement to
a  subsidiary  or parent  corporation  and may  assign  its  rights  under  this
Agreement  to its  lenders  for  collateral  security  purposes,  and  after the
Closing,  Purchaser  may assign its rights and  delegate  its duties  under this
Agreement to any third party,  including,  without  limitation,  full or partial
assignments  of Claims and rights under  Section 8.3. No such  assignment  shall
relieve Purchaser of any of its liabilities under this Agreement.

  12.12 Amendments.

     This  Agreement  shall not be  modified  or amended  except  pursuant to an
instrument  in writing  executed and  delivered on behalf of each of the parties
hereto.

  12.13 Headings.

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

                            [Signature pages follow]

                                       60
<PAGE>
     IN WITNESS  WHEREOF,  the parties have executed this  Agreement on the date
first above written.

                             INNOVATIVE CONCEPTS, INC.

                             By:   /s/ Myron Levy
                                   ---------------------------------------------
                             Name:     Myron Levy
                                   ---------------------------------------------
                             Title:
                                   ---------------------------------------------

                             HERLEY INDUSTRIES, INC.:

                             By:   /s/ Myron Levy
                                   ---------------------------------------------
                             Name:     Myron Levy
                                   ---------------------------------------------
                             Title:
                                   ---------------------------------------------

                             ICI ACQUISITION CORP.

                             By:   /s/ Myron Levy
                                   ---------------------------------------------
                             Name:     Myron Levy
                                   ---------------------------------------------
                             Title:
                                   ---------------------------------------------

                             ELBIT SYSTEMS OF AMERICA, LLC:

                             By:   /s/ Raman Horowitz
                                   ---------------------------------------------
                             Name:     Raman Horowitz
                                   ---------------------------------------------
                             Title: President and Chief Executive Officer
                                   ---------------------------------------------

                                       61f8k111008ex10i_eurotrend.htm

    

    

     

    Exhibit
10.1

    
      	
               

               

               

               

              ASSET
      PURCHASE AGREEMENT

               

            
	
               

              by
      and between

               

              Novastor
      Corporation

               

              as
      Seller

               

              and

               

              Data
      Storage Corporation

               

              as
      Purchaser

               

               

               

               

              November
      10, 2008

               

            

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    

    ASSET
PURCHASE AGREEMENT

     

    This
ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of November 10,
2008, by and between Data Storage Corporation, a Delaware Corporation
(“Purchaser”), and Novastor Corporation., a California corporation (“Seller” or
“Novastor”).

     

    WHEREAS,
Seller is engaged in the business of developing and marketing data protection
and availability software (the “Business”);

     

    WHEREAS,
Seller wishes to sell to Purchaser and Purchaser wishes to purchase and assume
from Seller, certain assets and liabilities with respect to the Business on the
terms and subject to the conditions set forth in this Agreement;

     

    NOW
THEREFORE, In consideration of the mutual covenants, agreements, representations
and warranties contained in this Agreement, the parties agree as
follows:

     

     

    ARTICLE
I

    PURCHASE AND SALE OF
ASSETS

     

    1.1           Sale and Transfer of
Assets.  On and subject to the terms and conditions set forth
in this Agreement, Seller agrees to sell, convey, transfer, assign and deliver
to Purchaser, and Purchaser agrees to purchase and acquire from Seller, free and
clear of any encumbrances, all of Seller’s right, title, and interest in and to
all of the assets of Seller as set forth on Schedule 1.1 attached hereto
(“Purchased Assets”) at the Closing in consideration for the payment by
Purchaser of the Purchase Price as specified below in Section
1.3.  The Purchased Assets shall not include any of Novastor’s
accounts receivable, intellectual property, software or hardware.

     

    1.2 No Assumption of
Liabilities.  Other than as set forth in Schedule 1.2, the
Purchaser shall in no event assume or be responsible for any liabilities, liens,
security interests, claims, obligations or encumbrances of Seller, contingent or
otherwise.

     

    1.3 Consideration.  Upon
the terms and subject to the satisfaction of the conditions contained in this
Agreement, in consideration of the aforesaid sale, assignment, transfer and
delivery of the Purchased Assets, Buyer will pay or cause to be paid a purchase
price consisting of (i) the sum of One Hundred Seventeen Thousand Eighteen
Dollars and Fifty-Six Cents ($117,018.56) in cash at Closing (the “Closing
Payment”), (ii) the Assumed Liabilities (as defined in Section 1.2 below), (iii)
the Guaranteed Post-Closing Payments (as defined below) and (iv) and the
Thirteenth Month Payment (as defined below) (collectively, the “Purchase
Price”).

     

    1.3.1 Payment of Purchase
Price

     

    (a) Closing
Payment.  The Closing Payment will be made by the Purchaser to
the Seller at Closing.  The Purchaser will wire funds of One Hundred
Thirteen Thousand, Three Hundred Fifty Dollars and Sixty-Three Cents
($113,350.63) to Seller’s bank adjusting Closing Payment for deferred revenues
of Twelve Thousand Four Hundred Twenty-Three Dollars and Ninety Cents
($12,423.90) already received by NovaStor plus uncollected accounts receivables
aged 90 days or less of Two Thousand Seven Hundred Fifty-Six Dollars and Three
Cents ($2,756.03) and hosting, support and management fees during the transition
period of Six Thousand Dollars ($6,000.00).

     

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

     

    (b) Guaranteed Post-Closing
Payment.  For the calendar month of May 2009 up to and
including the calendar month of October 2009, monthly payments (each a
“Guaranteed Post-Closing Payment” and collectively, the “Guaranteed Post-Closing
Payments”) shall be made by the Purchaser to the Seller.  Each
Guaranteed Post-Closing Payment shall be equal to Nine Thousand Seven Hundred
Fifty-One Dollars and Fifty-Five Cents ($9,751.55).

     

    (c) Thirteenth Month
Payment.  Within thirty (30) days after the end of the
October 2009 calendar month, a payment (the “Thirteenth Month Payment”)
shall be made by the Purchaser to the Seller equal to (a) twenty-four (24) times
the GAAP monthly revenue amount related to the Purchased Assets for October
2009, minus (b)
the sum of: (i) the Closing Payment; and (ii) each Guaranteed Post-Closing
Payment; provided, however,
that in no event shall the total of all payments including the Thirteenth Month
Payment be either: (A) greater than Two Hundred Ninety-Two Thousand, Five
Hundred Forty-Six Dollars and Forty Cents ($292,546.40) which represents 1.25
times the Original Amount (as defined below) , or (B) less than One Hundred
Seventy-Five Thousand Five Hundred Twenty-Seven Dollars and Eighty-Four Cents
($175,527.84) which represents 0.75 times the Original Amount.  The
“Original Amount” means two (2) times the aggregate GAAP revenue amount related
to the Purchased Assets for the twelve (12) calendar months prior to the
Closing.

     

    ARTICLE
II

    REPRESENTATIONS AND
WARRANTIES OF SELLER

     

    Seller
represents and warrants to Purchaser that the statements contained in this
Article II are correct and complete as of the date hereof:

     

    2.1 Due
Incorporation.  Seller is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as now being conducted.  Seller is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a material adverse effect on the
business, operations or financial condition of Seller.

     

    2.2 Authority;
Enforceability.  This Agreement and any other agreements
delivered together with this Agreement or in connection herewith have been duly
authorized, executed and delivered by Seller and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity; and Seller has full corporate power and
authority necessary to enter into this Agreement and such other agreements
delivered together with this Agreement or in connection herewith and to perform
its obligations hereunder and under all other agreements entered into by Seller
relating hereto.

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

     

    2.3 Approvals;
Consents.  Seller has, and on the Closing Date will have, the
right, power and authority to enter into this Agreement and to sell, transfer
and deliver the Purchased Assets and to perform all undertakings and obligations
hereunder.  No approval, authorization, consent, order or other action
of, or filing with, any third party, including without limitation, any public,
governmental, administrative or regulatory authority, agency or body
(collectively, “consents”), is required in connection with the execution,
delivery and/or performance of this Agreement by Seller or the consummation of
the transactions contemplated hereby.

     

    2.4 Liens.  Seller
has good and marketable title to  the Purchased Assets and has full
power and authority to sell, assign and transfer to Purchaser all of the
Purchased Assets free and clear of restrictions on or conditions to transfer or
assignment, and free and clear of mortgages, liens, pledges, charges,
encumbrances, equities, claims, covenants, conditions, or
restrictions.

     

    2.5 Taxes.  Seller
has filed all federal, state, local, foreign or other tax returns which are
required Taxes to be filed by any of them or been approved for an extension of
same, and such returns are, to the best knowledge of Seller, true and
correct.  There is no material liability for the payment of any
federal, state, local, foreign or other taxes whatsoever (including any interest
or penalties) with respect to Seller except for which non-compliance would not
have a material adverse effect on the Purchased Assets (a “Material Adverse
Effect”).

     

    2.6 Applicable
Laws.  Seller has complied with all applicable laws, rules and
regulations of the City, County, State and federal government as required except
for which non-compliance would not have a Material Adverse Effect.

     

    2.7 No
Brokers.  No broker, finder or intermediary has been employed
by or on behalf of Purchaser in connection with the transactions contemplated
hereby, and there is no such person entitled, as a result of Purchaser’s action,
to any fee or commission upon the consummation of the transactions contemplated
hereby.

     

    2.8 Legal
Proceedings.  To the best knowledge of the Seller, there is no
(a) legal proceeding pending or threatened, against, involving or affecting the
Seller and/or any of its respective assets or rights, including the Purchased
Assets; (b) judgment, decree, injunction, rule, or order of any governmental
entity applicable to the Seller that has had or is reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect; (c) legal
proceeding pending or threatened, against the Seller that seeks to restrain,
enjoin or delay the consummation of this Agreement or any of the other
transactions contemplated by this Agreement or that seeks damages in connection
therewith; or (d) injunction, of any type. Should this be both
ways?

     

    2.9 Licenses; Compliance with
Regulatory Requirements.  The
Seller holds all licenses, franchises, ordinances, authorizations, permits,
certificates, variances, exemptions, concessions, leases, rights of way,
easements, instruments, orders and approvals, domestic or foreign (collectively,
the “Licenses”) required for or which are material to the ownership of the
Purchased Assets. The Seller is in compliance with, and has conducted its
business so as to comply with, the terms of its respective Licenses and with all
applicable laws, rules, regulations, ordinances and codes (domestic or
foreign).  Without limiting the generality of the foregoing, the
Seller (i) has all Licenses of foreign, state and local governmental entities
required for the operation of the facilities being operated on the date hereof
by the Seller (the “Permits”), (ii) has duly and currently filed all reports and
other information required to be filed with any governmental entity in
connection with such Permits and (iii) is not in violation of any of such
Permits. 

     

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    ARTICLE
III

    PURCHASER'S
REPRESENTATIONS

     

    Purchaser
hereby represents and warrants to Seller that the statements contained in this
Article III are correct and complete as of the date hereof:

     

    3.1 Approvals;
Consents.  Purchaser has, and on the Closing Date will have,
the right, power and authority to enter into this Agreement and to perform all
undertakings and obligations hereunder.  No approval, authorization,
consent, order or other action of, or filing with, any third party, including
without limitation, any public, governmental, administrative or regulatory
authority, agency or body (collectively, “consents”), is required in connection
with the execution, delivery and/or performance of this Agreement by Purchaser
or the consummation of the transactions contemplated hereby.

     

    3.2 Legal
Proceedings.  To the best knowledge of Purchaser, there is no
legal proceeding pending or threatened against Purchaser that seeks to restrain,
enjoin or delay the consummation of the transactions contemplated in this
Agreement.

     

    3.3 Due
Incorporation.  Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as now being conducted.  Purchaser is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a material adverse effect on the
business, operations or financial condition of Purchaser or its
subsidiaries.

     

    3.4 Authority;
Enforceability.  This Agreement, the and any other agreements
delivered together with this Agreement or in connection herewith have been duly
authorized, executed and delivered by Purchaser and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights generally and
to general principles of equity; and Purchaser has full corporate power and
authority necessary to enter into this Agreement, the and such other agreements
delivered together with this Agreement or in connection herewith and to perform
its obligations hereunder and under all other agreements entered into by
Purchaser relating hereto.

     

    3.5 No
Brokers.  No broker, finder or intermediary has been employed
by or on behalf of Purchaser in connection with the transactions contemplated
hereby, and there is no such person entitled, as a result of Purchaser’s action,
to any fee or commission upon the consummation of the transactions contemplated
hereby.

     

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    ARTICLE
IV

    THE
CLOSING

     

    4.1 Seller's Obligations at
Closing.  At the Closing, which shall occur simultaneously with
the execution of this Agreement, Seller shall deliver or cause to be delivered
to Purchaser:

     

    4.1.1 Instruments
transferring to Purchaser all right, title and interest in and to Purchased
Assets, or such other forms as Purchaser may reasonably request.

     

    4.1.2 A Bill of
Sale transferring all of the Purchased Assets of Seller being purchased
hereunder in a form acceptable to Purchaser and its counsel.

     

    4.1.3 Such
other items as may be reasonably necessary for the Closing to
occur.

     

    4.2 Cooperation by
Seller.  Seller, at any time before or after the Closing Date,
will execute, acknowledge, and deliver any further assignments, conveyances, and
other assurances, documents, and instruments of transfer, reasonably requested
by Purchaser, and will take any other Seller consistent with the terms of this
Agreement that may reasonably be requested by Purchaser for the purpose of
assigning, transferring, granting, conveying, and confirming to Purchaser, or
reducing to possession, any or all property to be conveyed and transferred by
this Agreement.

     

    4.3 Purchaser's Obligations at
Closing.  Purchaser will deliver the required consideration;
and such other items as may be reasonably necessary for the Closing to
occur.

     

    4.4 Related
Agreements.  Purchaser and Seller shall enter into a (i)
Transition Services Agreement between Purchaser and Seller in the form attached
hereto as Exhibit A, and (ii) a Strategic Alliance Agreement between the
Purchaser and Seller in the form attached hereto as Exhibit B (collectively the
“Related Agreements”).

     

    ARTICLE
V

     

    POST CLOSING
COVENANTS

     

    5.1 Premium Partner
Status.  Seller will provide Purchaser with the benefits of
Premium Partner Status for a period of two (2) years from the date of
Closing.   “Preferred Partner Status” shall have the meaning
referred to in the Strategic Alliance Agreement attached hereto as Exhibit
B.

     

    

    ARTICLE
VI

     

    GENERAL

     

    6.1 Indemnities.

     

    6.1.1 Seller
shall indemnify, defend and hold Purchaser, each of the officers, agents and
directors and current shareholders of Purchaser as of the Closing Date, harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including,
without limitation, reasonable attorneys' fees (collectively, “Losses”), that it
shall incur or suffer, which directly or indirectly arise out of, result from,
or relate to any breach, or failure to perform, any of Seller's representations,
warranties, covenants, or agreements in this Agreement or in any schedule,
certificate, exhibit, or other instrument furnished or to be furnished by Seller
under this Agreement.  

     

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    The
indemnification described herein shall also apply in the event of an assertion
against Purchaser, or the Purchased Assets, by any person, entity, government or
subdivision thereof, of any claim, demand, penalty, fine, or tax accruing prior
to the Closing. The indemnification provided for in this paragraph shall survive
the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.  The indemnified Losses described
herein shall not exceed the amount paid by Purchaser to Seller for the Purchased
Assets.

     

    6.1.2 Upon
Notice to Seller specifying in reasonable detail the basis
therefor.  Purchaser may set off any amount to which it may be
entitled under this Article V against amounts otherwise payable under this
Agreement.  Neither the exercise nor the failure to exercise such
right of setoff shall limit Purchaser in any manner in the enforcement of any
other remedies that may be available to it.

     

    6.2 Confidentiality.  Each
party hereto agrees with the other party that, unless and until the transactions
contemplated by this Agreement have been consummated, they and their
representatives will hold in strict confidence all data and information obtained
with respect to another party or any subsidiary thereof from any representative,
officer, director or employee, or from any books or records or from personal
inspection, of such other party, and shall not use such data or information or
disclose the same to others, except:  (i)  to the extent
such data is a matter of public knowledge or is required by law to be published;
and (ii)  to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.

     

    6.3 Transition.  For
a period of three (3) months following Closing, Seller shall cooperate and shall
use best efforts to assist Purchaser in the smooth transition of the ownership
of the Purchased Assets and in the preservation for Purchaser of the goodwill of
Seller’s advertisers, customers, suppliers, and others having business relations
with Sellers and related to the Purchased Assets including the use of their web
site and back office e-commerce systems until such time that the clients are
stable and DSC’s hardware and software are in place and ready to perform the
transition.   Further, Novastor will train DSC employees in Level
1 and 2 support in accordance with the Transition Services
Agreement attached as Exhibit A and the
Strategic Marketing
Alliance Agreement attached as Exhibit
B.  Novastor makes no representation or warranty with respect
to the continued volume of business generated by the Purchased Assets or the
number of licenses included in the Preferred Assets that will remain in effect
after the Closing.

     

    6.4 Effect of
Heading.  The subject headings of the paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only
and shall not affect the construction or interpretation of any of its
provisions.

     

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

     

    6.5 Counterparts.  This
Agreement may be executed simultaneously in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     

    6.6 Schedules.  All
schedules referred to herein shall be deemed incorporated by reference in their
entirety as though fully set forth at the places to which they are
referred.  Unless otherwise stated, all references to schedules are
references to schedules to this Agreement.

     

    6.7 Gender.  Wherever
appropriate in this Agreement, plural shall be deemed also to refer to the
singular, the neuter shall be deemed to refer to the masculine, and vice
versa.

     

    6.8 Parties in
Interest.  Nothing in this Agreement whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third person any right of
subrogation or Seller over or against any party to this Agreement.

     

    6.9 Assignment.  This
Agreement shall be binding on, and shall inure to the benefit of, the parties to
it and their respective heirs, legal representatives, successors and assigns;
provided, however, no party may assign any or all of its rights under this
Agreement without the prior written consent of the others.

     

    6.10 Survival. All
representations, warrants and covenants contained in this Agreement shall
survive the Closing and remain in full force and effect until the third
anniversary of the Closing Date.

     

    6.11 Preparation of
Agreement.  Each party acknowledges that:  (i) the
party had the advice of, or sufficient opportunity to obtain the advice of,
legal counsel separate and independent of legal counsel for any other party
hereto; (ii) the terms of the transactions contemplated by this Agreement are
fair and reasonable to such party; and (iii) such party has voluntarily entered
into the transactions contemplated by this Agreement without duress or
coercion.  Each party further acknowledges that such party was not
represented by the legal counsel of any other party hereto in connection with
the transactions contemplated by this Agreement, nor was he or it under any
belief or understanding that such legal counsel was representing his or its
interests.  Each party agrees that no conflict, omission or ambiguity
in this Agreement, or the interpretation thereof, shall be presumed, implied or
otherwise construed against any other party to this Agreement on the basis that
such party was responsible for drafting this Agreement.

     

    6.12 Governing Law; Waiver of
Jury Trial.  All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed
and enforced in accordance with the domestic laws of the State of New York
without giving effect to any choice or conflict of law provision or rule
(whether in the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.  In furtherance of the foregoing, the internal law of the State
of New York will control the interpretation and construction of this Agreement,
even if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.

     

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    BECAUSE
DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY SELLER, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED
HERETO.

     

    6.13 Submission to
Jurisdiction.  Any legal action or proceeding with respect to
this Agreement must be brought in the courts of the State of New York or the
appropriate federal court located in New York and, by execution and delivery of
this Agreement, the parties hereby accept for themselves and in respect to their
property, generally and unconditionally, the jurisdiction of the aforesaid
courts.  The parties hereby irrevocably waive, in connection with any
such Seller or proceeding, any objection, including, without limitation, any
objection to the venue or based on the grounds of forum non-convenience, which
it may now or hereafter have to the bringing of any such Seller or proceeding in
such respective jurisdictions.

     

    6.14 Severability.  It
is the desire and intent of the parties that the provisions of this Agreement be
enforced to the fullest extent permissible under the law and public policies
applied in each jurisdiction in which enforcement is
sought.  Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any
jurisdiction.  Notwithstanding the foregoing, if such provision could
be more narrowly drawn so as not to be invalid, prohibited or unenforceable in
such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other
jurisdiction.

     

    6.15 Marketing
Support.  In consideration of the purchase price paid Novastor
will use best efforts to supply DSC with all client leads derived from
Cnet.com/download.com related to the online backup service
only.   Further Novastor will permit DSC to use any and all
content of their current web site referring to the online backup service, not
including source code, as well as utilize the current active web site and back
office ecommerce systems for the purposes of the online backup service only, as
described in the Transition Services Agreement with the exception that DSC must
during the transition period move to their own Merchant Banking Account for
process and clearing.  Novastor will also submit to DSC all accounts
over the past twelve (12) months listed as bad debt (credit card issues,
et.al)

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

     

     

    6.16 Expenses.  Each
of Seller and Purchaser will bear its own costs and expenses (including, without
limitation, fees and expenses of attorneys, accountants, investment bankers and
other advisors) incurred in connection with this Agreement and the transactions
contemplated hereby.

     

    6.17 Notices.  Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by facsimile addressed as
follows:

     

    If to
Seller:

     

    Novastor
Corporation

    Attn: Mike
Andrews

    80B West
Cochran St.

    Simi
Valley, CA 93065

     

    If to
Purchaser:

     

    Data
Storage Corporation

    Attn: Charles
M. Piluso

    875
Merrick Avenue

    Westbury,
NY 11590

    Tel:
(212) 564-4922

    Fax:
(212) 202-7966

     

    with a copy to (which shall
not constitute notice):

     

    Anslow
& Jaclin, LLP

    Attn:
Richard I. Anslow, Esq.

    195 Route
9 South, Suite 204

    Manalapan,
New Jersey 07726

    Tel: (732)
409-1212

    Fax: (732)
577-1188

     

    or such
other addresses as shall be furnished in writing by any party in the manner for
giving notices hereunder, and any such notice or communication shall be deemed
to have been given as of  the date so delivered, mailed or
faxed.

     

    6.18 Entire Agreement;
Modification; Waiver.  This Agreement and the exhibits attached
hereto constitute the entire agreement between the parties pertaining to the
subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties.  No
supplement, modification, or amendment of this Agreement shall be binding unless
executed in writing by all parties.  No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.  No waiver shall be binding unless executed in
writing by the party making the waiver.

     

     

     

    [Signature
page follows]

     

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    
 

     

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

     

    
      	
               

              “Seller”

               

              NOVASTOR
      CORPORATION

               

               

              By:                                                            
                                                   

              Name:

              Title:

            
	 
      
	 
      
	
               

              “Purchaser”

               

              DATA
      STORAGE CORPORATION

               

               

              By:                                                              
                                                     

              Name:  Charles
      M. Piluso

              Title:    President,
      Chief Executive Officer

            

    

    

    

    

    

    

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    

    

     

    

    SCHEDULE
1.1

     

    PURCHASED
ASSETS

     

    All
existing end user customers and associated licenses of Novastor’s online backup
service licenses as of October 31, 2008 (the “Existing Clients”)

     

    An
additional 500 client licenses to ramp up new business
opportunities.

     

    

     

    NB:
Novastor will provide an allowance for 25% additional licenses compared to the
number of licenses handed over at the time of Close.  Additional
license should only be made available until the date of last payment and any
lost licenses from the original purchase, should be re-used before any of the
25% are allocated.

     

    If
purchase clients attempt to cancel services and require a price reduction or
additional storage, Novastor and DSC will use their best efforts to resolve and
hold the client on the service.  This impact of holding the client may
cause a reduction in annual contract renewals and overages monthly
billing.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    SCHEDULE
1.2

     

    ASSUMED
LIABILITIES

    
 

    Obligations
to perform under the licenses included in the Purchased Assets.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    EXHIBIT
A

     

    TRANSITION
SERVICES AGREEMENT

    
 

    To be
agreed upon by the Purchaser and Seller within a reasonable time after the
Closing.

    

    

    

    

    

     

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    

    EXHIBIT
B

     

     STRATEGIC
ALLIANCE AGREEMENT

     

    To be
agreed upon by the Purchaser and Seller within a reasonable time after the
Closing.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}]]