Document:

Exhibit 10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

BY AND AMONG

OKLAHOMA ACQUISITION CORP.,

THE MEMBERS OF TECHRIZON, LLC,

AND

THE SELLERS’ REPRESENTATIVE

Dated as of April 1, 2007

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  	 

	
  ARTICLE 1

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Construction

  	
   

  	
  8

  
	
  ARTICLE
  2

  	
   

  	
  THE
  ACQUISITION

  	
   

  	
  8

  
	
  2.1

  	
   

  	
  The
  Acquisition; Deliveries

  	
   

  	
  8

  
	
  2.2

  	
   

  	
  Purchase Price

  	
   

  	
  10

  
	
  2.3

  	
   

  	
  Adjustment to Purchase Price

  	
   

  	
  10

  
	
  2.4

  	
   

  	
  Escrow Amount

  	
   

  	
  11

  
	
  2.5

  	
   

  	
  Escrow Release

  	
   

  	
  12

  
	
  2.6

  	
   

  	
  Purchase Price Allocation

  	
   

  	
  13

  
	
  ARTICLE
  3

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE SELLERS

  	
   

  	
  13

  
	
  3.1

  	
   

  	
  Organization
  and Qualification

  	
   

  	
  13

  
	
  3.2

  	
   

  	
  Membership Interests

  	
   

  	
  13

  
	
  3.3

  	
   

  	
  No Subsidiaries

  	
   

  	
  14

  
	
  3.4

  	
   

  	
  Members, Managers and Officers

  	
   

  	
  14

  
	
  3.5

  	
   

  	
  No Conflicts

  	
   

  	
  14

  
	
  3.6

  	
   

  	
  Company Financial Statements

  	
   

  	
  15

  
	
  3.7

  	
   

  	
  Books and Records;
  Organizational Documents

  	
   

  	
  15

  
	
  3.8

  	
   

  	
  Absence of Changes

  	
   

  	
  15

  
	
  3.9

  	
   

  	
  No Undisclosed Liabilities

  	
   

  	
  19

  
	
  3.10

  	
   

  	
  Taxes

  	
   

  	
  19

  
	
  3.11

  	
   

  	
  Legal Proceedings

  	
   

  	
  21

  
	
  3.12

  	
   

  	
  Licenses and Registrations;
  Compliance with Laws and Orders

  	
   

  	
  21

  
	
  3.13

  	
   

  	
  Plans; ERISA

  	
   

  	
  22

  
	
  3.14

  	
   

  	
  Real Property

  	
   

  	
  24

  
	
  3.15

  	
   

  	
  Tangible Personal Property

  	
   

  	
  25

  
	
  3.16

  	
   

  	
  Intellectual Property

  	
   

  	
  25

  
	
  3.17

  	
   

  	
  Contracts

  	
   

  	
  28

  
	
  3.18

  	
   

  	
  Government Contracts

  	
   

  	
  30

  
	
  3.19

  	
   

  	
  Insurance

  	
   

  	
  37

  
	
  3.20

  	
   

  	
  Affiliate Transactions

  	
   

  	
  37

  
	
  3.21

  	
   

  	
  Employees; Labor Relations

  	
   

  	
  38

  
	
  3.22

  	
   

  	
  Environmental Matters

  	
   

  	
  39

  
	
  3.23

  	
   

  	
  Accounts Receivable

  	
   

  	
  39

  
	
  3.24

  	
   

  	
  Brokers; Third-Party
  Expenses

  	
   

  	
  40

  
	
  3.25

  	
   

  	
  Banks and Brokerage Accounts

  	
   

  	
  40

  
	
  3.26

  	
   

  	
  Warranty Obligations

  	
   

  	
  40

  
	
  3.27

  	
   

  	
  Foreign Corrupt Practices
  Act

  	
   

  	
  40

  
	
  3.28

  	
   

  	
  Financial Projections

  	
   

  	
  40

  
	
  3.29

  	
   

  	
  Takeover Statutes

  	
   

  	
  41

  
	
  3.30

  	
   

  	
  Disclosure

  	
   

  	
  41

  
	
  ARTICLE
  3A

  	
   

  	
  ADDITIONAL
  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

  	
   

  	
  41

  
	
  3A.1

  	
   

  	
  Ownership
  of Interests

  	
   

  	
  41

  
	
  3A.2

  	
   

  	
  Authority Relative to this
  Agreement

  	
   

  	
  41

  
	
  3A.3

  	
   

  	
  No Conflicts

  	
   

  	
  41

  
	
  3A.4

  	
   

  	
  Agreements

  	
   

  	
  42

  
	
  3A.5

  	
   

  	
  Legal Proceedings

  	
   

  	
  42

  

 

 i
 

 

	
  ARTICLE 4

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF PURCHASER

  	
   

  	
  43

  
	
  4.1

  	
   

  	
  Organization

  	
   

  	
  43

  
	
  4.2

  	
   

  	
  Authority Relative to this
  Agreement

  	
   

  	
  43

  
	
  4.3

  	
   

  	
  No Conflicts

  	
   

  	
  43

  
	
  4.4

  	
   

  	
  Brokers; Third-Party
  Expenses

  	
   

  	
  44

  
	
  ARTICLE
  5

  	
   

  	
  ADDITIONAL
  AGREEMENTS

  	
   

  	
  44

  
	
  5.1

  	
   

  	
  Confidentiality

  	
   

  	
  44

  
	
  5.2

  	
   

  	
  Indemnification by company
  of managers and officers

  	
   

  	
  45

  
	
  5.3

  	
   

  	
  Certain Tax Matters

  	
   

  	
  45

  
	
  5.4

  	
   

  	
  Accounts Receivable

  	
   

  	
  47

  
	
  5.5

  	
   

  	
  Satisfaction of UAR Payments

  	
   

  	
  47

  
	
  ARTICLE
  6

  	
   

  	
  SURVIVAL
  OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS, INDEMNIFICATION

  	
   

  	
  48

  
	
  6.1

  	
   

  	
  Survival
  of Representations, Warranties, Covenants and Agreements

  	
   

  	
  48

  
	
  6.2

  	
   

  	
  Indemnification

  	
   

  	
  48

  
	
  6.3

  	
   

  	
  Indemnification Procedures

  	
   

  	
  50

  
	
  6.4

  	
   

  	
  Further Limitations on
  Remedies

  	
   

  	
  51

  
	
  6.5

  	
   

  	
  Adjustment to Purchase Price

  	
   

  	
  51

  
	
  6.6

  	
   

  	
  Sole Remedy

  	
   

  	
  51

  
	
  ARTICLE
  7

  	
   

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  	
  51

  
	
  7.1

  	
   

  	
  Notices

  	
   

  	
  51

  
	
  7.2

  	
   

  	
  Entire Agreement

  	
   

  	
  53

  
	
  7.3

  	
   

  	
  Amendment

  	
   

  	
  53

  
	
  7.4

  	
   

  	
  Further Assurances;
  Post-Closing Cooperation

  	
   

  	
  53

  
	
  7.5

  	
   

  	
  Waiver

  	
   

  	
  53

  
	
  7.6

  	
   

  	
  Third-Party Beneficiaries

  	
   

  	
  53

  
	
  7.7

  	
   

  	
  No Assignment; Binding
  Effect

  	
   

  	
  53

  
	
  7.8

  	
   

  	
  Headings

  	
   

  	
  54

  
	
  7.9

  	
   

  	
  Invalid Provisions

  	
   

  	
  54

  
	
  7.10

  	
   

  	
  Governing Law

  	
   

  	
  54

  
	
  7.11

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  54

  
	
  7.12

  	
   

  	
  Construction

  	
   

  	
  54

  
	
  7.13

  	
   

  	
  Counterparts

  	
   

  	
  55

  
	
  7.14

  	
   

  	
  Specific Performance

  	
   

  	
  55

  
	
  7.15

  	
   

  	
  Sellers’ Representative

  	
   

  	
  55

  
	
  7.16

  	
   

  	
  Publicity

  	
   

  	
  55

  
	
  7.17

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  56

  

 

EXHIBIT A — Escrow Agreement

EXHIBIT B — Form of Legal Opinion

EXHIBIT C-1 — Form of Non-competition Agreement

EXHIBIT C-2 — Form of Member Release

 ii

MEMBERSHIP
INTEREST PURCHASE AGREEMENT

This
MEMBERSHIP INTEREST PURCHASE AGREEMENT is dated as of April 1, 2007 (the “Closing
Date”), by and among Oklahoma Acquisition Corp., a Delaware corporation
(the “Purchaser”), the members of Techrizon, LLC, an Oklahoma limited
liability company (the “Company”), listed on the signature pages hereof
(each, a “Seller” and collectively, the “Sellers”) and Bill W.
Burgess, Jr., David S. Aldrich, and Thomas J. Ferrara, as the exclusive agents
of the Sellers in accordance with Section 7.15 hereof (the “Sellers’
Representative”).  Capitalized terms
used and not otherwise defined herein have the meanings set forth in
Article 1.

RECITALS

A.            The Sellers are the beneficial and record owners of all
of the issued and outstanding membership interests (the “Interests”) of
the Company.

B.            The Purchaser desires to purchase
and acquire from the Sellers, and the Sellers desire to sell and transfer to
Purchaser, all of the Interests for the consideration, and upon the terms and
subject to the conditions, set forth in this Agreement and the related
documents to be executed and delivered in connection herewith (the “Acquisition”).

C.            The Sellers and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Acquisition.

NOW, THEREFORE, in
consideration of the covenants, representations and warranties contained
herein, and subject to and on the terms and conditions set forth herein,
intending to be legally bound hereby, the parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1           Definitions.   As used in this Agreement, the following
defined terms shall have the meanings indicated below:

“Actions or Proceedings”
means any action, suit, complaint, investigation, proceeding, arbitration or
litigation, whether civil or criminal, in law or in equity, or before any
arbitrator or Governmental or Regulatory Authority.

“Affiliate” means, as
applied to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with, that Person.  For the purposes of this definition, “control”
(including with correlative meanings, the terms “controlling,” “controlled
by” and “under common control with”) as applied to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
ownership of voting securities or by contract or otherwise.

 

“Agreement” means
this Membership Interest Purchase Agreement, including (unless the context otherwise
requires) the Exhibits, the Schedules and the Company Disclosure Schedule, as
the same may be amended from time to time in accordance with the terms hereof.

“Approval” means any
approval, authorization, consent, license, or permit, or any waiver of any of
the foregoing, required to be obtained from or made with, or any notice
required to be filed with or delivered to, any Governmental or Regulatory
Authority or any other Person.

“Assets and Properties”
of any Person means all assets and properties of every kind, nature, character
and description (whether real, personal or mixed, whether tangible or
intangible and wherever situated), including the goodwill related thereto,
operated, owned, licensed or leased by such Person, including cash, cash equivalents,
Investment Assets, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory, goods and
Intellectual Property.

“Associate” means,
with respect to any Person, any corporation or other business organization of
which such Person is an officer or partner or is the beneficial owner, directly
or indirectly, of five percent (5%) or more of any class of equity securities,
any trust or estate in which such Person has a substantial beneficial interest
or as to which such Person serves as a trustee or in a similar capacity and any
spouse of such Person.

“Books and Records”
means all files, documents, papers, books and records relating to the Business
or Condition of the Company, including financial statements, internal reports,
Tax Returns and related work papers and letters from accountants, budgets,
ledgers, deeds, title policies, minute books, documents relating to the
ownership of the Interests, Contracts, Licenses, customer lists, computer files
and programs (including data processing files and records), retrieval programs,
operating data and plans and environmental studies and plans, excluding,
however, in all cases any materials that contain any confidential information
of any third party (other than the Company or Purchaser) that is restricted by
agreement or applicable Law from being disclosed to Purchaser and/or any other
Persons.

“Business Day” means
a day other than Saturday, Sunday or any day on which banks located in the
Commonwealth of Virginia are authorized or obligated to close.

“Business or Condition of
the Company” means the business, condition (financial or otherwise),
results of operations, or Assets and Properties of the Company.

“Closing” means the
closing of the transactions contemplated hereby and by the other Transaction
Documents on the Closing Date, and shall be deemed to have occurred at 12:01
a.m., Eastern time, on the Closing Date.

“Company Disclosure
Schedule” means the schedules delivered to Purchaser by or on behalf of the
Sellers, in connection with this Agreement, and identified as such on the title
page thereto.

 2
 

 

“Company Intellectual
Property” means any Intellectual Property that (a) is owned by the Company
or (b) is licensed to the Company.

“Contract” means any note,
bond, mortgage, contract, license, lease, sublease, covenant, commitment, power
of attorney, proxy, indenture, or other agreement or arrangement, including any
Government Contract.

 “Direct Costs” means, as defined in FAR
Section 2.101, any cost that is identified specifically with a particular final
cost objective.  Direct costs are not
limited to items that are incorporated in the end product as material or
labor.  Costs identified specifically
with a contract are direct costs of that contract.  All costs identified specifically with other
final cost objectives of the contractor are direct costs of those cost
objectives.

“Environmental Law”
means any federal, state, local or foreign environmental, health and safety or
other Law relating to Hazardous Materials, including the Comprehensive,
Environmental Response Compensation and Liability Act, the Clean Air Act, the
Federal Water Pollution Control Act, and the Solid Waste Disposal Act.

“Equity Equivalents”
means securities (including Options to purchase any Interests) which, by their
terms, are or may be exercisable, convertible or exchangeable for or into
Interests or other securities at the election of the holder thereof.

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder.

“Escrow Agent” means
SunTrust Bank.

“Escrow Agreement”
means that certain escrow agreement dated as of the Closing Date, by and among
Purchaser, Sellers’ Representative and the Escrow Agent, in the form attached
hereto as Exhibit A.

“Estimated Working
Capital” means the good faith estimate of the Working Capital of the
Company as of 12:01 a.m., Eastern time, on the Closing Date, in the amount of
$2,529,329.72 calculated as set forth in Schedule 2.3(c).

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

“Government” means
the government of the United States of America, its agencies and
instrumentalities; the government of any state of the United States of America,
its agencies and instrumentalities; and any local government located within the
United States of America, its agencies and instrumentalities.

“Government Bid”
means any proposal or offer, solicited or unsolicited made by Company prior to
the Closing Date which, if accepted, would result in a Government Contract.

 3
 

 

A Government Bid: (i) includes any proposal or offer
made by the Company that has been accepted by the Company but has not resulted
in a Government Contract prior to the Closing Date; and (ii) does not include
any proposal or offer made by the Company that has been accepted and has
resulted in a Government Contract prior to the Closing Date.

“Government Contract”
means any prime contract, subcontract, purchase order, task order, delivery
order, blanket purchasing agreement, teaming agreement or arrangement, joint
venture agreement, strategic alliance agreement, basic ordering agreement,
pricing agreement, letter contract or other similar arrangement of any kind,
that is currently active in performance or that have otherwise not been closed
out and released with no further liability to the Company, or that had been
active in performance at any time in the five (5) year period prior to the
Closing Date, between Company, on the one hand, and (i) any Governmental
or Regulatory Authority, (ii) any prime contractor of a Governmental or
Regulatory Authority in its capacity as a prime contractor, or (iii) any
subcontractor at any tier with respect to any contract of a type described in
clauses (i) or (ii) above, on the other hand.  A task, purchase or delivery order under a
Government Contract shall not constitute a separate Government Contract, for
purposes of this definition, but shall be part of the Government Contract to
which it relates.

“Governmental or Regulatory Authority” means
any federal, state, local, foreign or other governmental, quasi-governmental or
administrative body, department or agency, or any court, authority, tribunal,
administrative hearing body, or other body exercising or entitled to exercise
any administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power.

“Hazardous Material”
means (a) any chemical, material, substance or waste including, containing or
constituting petroleum or petroleum products, solvents (including chlorinated
solvents), nuclear or radioactive materials, asbestos in any form that is or
could become friable, radon, lead-based paint, urea formaldehyde foam
insulation or polychlorinated biphenyls, or (b) any chemicals, materials,
substances or wastes which are now defined as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants”
or words of similar import under any Environmental Law.

“Indebtedness” of any
Person means all financial obligations of such Person (i) for borrowed money,
(ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for
the deferred purchase price of goods or services (other than trade payables,
accrued vacations, accrued wages or other accruals incurred in the ordinary
course of business and taken into account in determining any adjustment to the
Purchase Price in accordance with Section 2.3), (iv) under capital leases
classified as such under GAAP or (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.

 “Indirect Costs” means, as defined in
FAR Section 2.101, any costs not directly identified with a single final cost
objective, but identified with two or more final cost objectives or with at
least one intermediate cost objective.

 4
 

 

“Intellectual Property”
means all trademarks and trademark rights (whether or not registered), trade names
and trade name rights, service marks and service mark rights (whether or not
registered), service names and service name rights, patents and patent rights,
utility models and utility model rights, copyrights (statutory or registered),
mask work rights, moral rights, brand names, trade dress, product designs,
product packaging, business and product names, logos, slogans, rights of
publicity, trade secrets, inventions (whether patentable or not), invention
disclosures, improvements, processes, formulae, industrial models, processes,
designs, specifications, technology, methodologies, proprietary techniques,
computer software (including all source code and object code), firmware,
development tools, flow charts, annotations, all Web addresses, sites and domain
names, all data bases and data collections and all rights therein, any right to
enforce confidential treatment of information, whether or not subject to
statutory registration, and all related technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for,
registrations of any of the foregoing, and all documents, disks, records, files
and other media on which any of the foregoing is stored.

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

“Investment Assets”
means all debentures, notes and other evidences of Indebtedness, stocks,
securities (including rights to purchase and securities convertible into or
exchangeable for other securities), interests in joint ventures and general and
limited partnerships and limited liability companies, and mortgage loans owned
or held by a Person.

“Law” or “Laws”
means any law, statute, Order, rule, regulation, or ordinance of any Governmental
or Regulatory Authority.

“Legal and Investment
Banking Fees” means all amounts in respect of legal and investment banking
fees and expenses through and including the Closing.

 “Liabilities” means all Indebtedness,
obligations and other liabilities of a Person, whether absolute, accrued,
contingent (or based upon any contingency), known or unknown, fixed or
otherwise, or whether due or to become due.

“License” means any
Contract that grants a Person the right to use or otherwise enjoy the benefits
of any Intellectual Property (including any covenants not to sue with respect
to any Intellectual Property).

“Liens” means any
mortgage, pledge, assessment, security interest, lease, lien, easement,
license, covenant, condition, restriction, adverse claim, levy, charge, option,
or restriction or other encumbrance of any kind, or any conditional sale
Contract, title retention Contract or other Contract to give any of the
foregoing, except for any restrictions on transfer generally arising under any
applicable federal or state securities Law.

“Manager” means any
Person vested with the right or power, alone or together with other Persons, to
manage the affairs, property and/or business of a limited liability company 

 5
 

 

and, with respect to the Company, means any Person
vested with such right or power pursuant to Section 18 of the Operating
Agreement.

“Option” with respect
to any Person means any security, right, subscription, warrant, option, “phantom”
stock right (including, with respect to the Company, the UARs), unsatisfied
preemptive rights, calls or commitments or other Contract that gives the right
to (a) purchase or otherwise receive or be issued any shares of capital stock
or other equity interests of such Person or any security of any kind
convertible into or exchangeable or exercisable for any shares of capital stock
or other equity interests of such Person or (b) receive any benefits or rights
similar to any rights enjoyed by or accruing to the holder of shares of capital
stock or other equity interests of such Person, including any rights to
participate in the equity, income or election of directors or Managers of such
Person.

“Order” means any
writ, judgment, decree, injunction or similar order of any Governmental or
Regulatory Authority (in each such case whether preliminary or final).

“Permitted Liens” means any (a) mechanic’s, materialmen’s and
similar Liens, (b) Liens for Taxes not yet due and payable and (c)
purchase money Liens and Liens securing rental payments under capital lease
arrangements.

“Person” means any
natural person, corporation, general partnership, limited partnership, limited
liability company or partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.

“Plan” means (a) each
of the “employee benefit plans” (as such term is defined in Section 3(3) of
ERISA), and (b) any other plan or employment, severance or other agreement,
arrangement or policy of the Company or any of its ERISA Affiliates providing
for health, life, vision or dental insurance coverage (including self-insured
arrangements), workers’ compensation, disability benefits, supplemental
unemployment benefits, vacation benefits or retirement benefits, fringe
benefits, or for profit sharing, deferred compensation, bonuses, stock options,
stock appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits, as to which any of the Company or any
member of the same controlled group of trades or businesses as the Company within
the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code or
Section 4001(a)(14) of ERISA (an “ERISA Affiliate”) is a sponsor or
participating employer or as to which the Company or any of its ERISA
Affiliates makes contributions or is required to make contributions or has any
Liabilities thereunder, whether formal or informal, written or oral, for the
benefit of any director, Manager, officer, consultant or employee, whether
active or terminated.

“Registered Intellectual
Property” means all federal, state, local, international and foreign:  (a) patents and patent applications
(including provisional applications); (b) registered trademarks and service
marks, and applications to register trademarks and servicemarks;
(c) registered copyrights and applications for copyright registration; (d)
any mask work registrations and applications to register mask works; and (e)
registered domain names and applications to register domain names.

 6
 

 

“Subsidiary” means
any Person in which the Company or Purchaser, as the context requires, directly
or indirectly through Subsidiaries or otherwise, beneficially owns at least
fifty percent (50%) of either the equity interest in, or the voting control of,
such Person.

“Takeover Statute”
means a “fair price,” “moratorium,” “control share acquisition” or other
similar anti-takeover statute or regulation enacted under the Laws of the State
of Oklahoma.

“Tax” or “Taxes”
means any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Internal Revenue Code
Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax or similar charge, fee,
levy or impost of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or not.

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

“Transaction Documents”
means this Agreement and any other documents, certificates or instruments
executed or delivered in connection with the transactions contemplated hereby.

“Transaction Expenses”
means the aggregate fees, costs, expenses and obligations incurred by or on
behalf of the Company or for which the Company is liable in connection with the
transactions contemplated by the Transaction Documents, including all amounts
in respect of accounting, tax, and other similar fees and expenses through and
including the Closing; provided, however, that Transaction Expenses shall not
include Legal and Investment Banking Fees.

“Treasury Regulations”
means the federal income Tax regulations promulgated under the Internal Revenue
Code, as amended from time to time, and including corresponding provisions of
succeeding regulations.

“UARs” means all
interests granted to certain employees of the Company and certain other Persons
pursuant to the 2001 Unit Appreciation Rights Option Plan.  

“Unallowable Costs”
means, as defined in FAR 2.101, any cost that, under the provisions of any
pertinent law, regulation, or contract, cannot be included in prices,
cost-reimbursements, or settlements under a Government Contract to which it is
allocable.

 7
 

 

1.2           Construction.

(a)           Unless the context of this Agreement otherwise requires,
(i) words of any gender include each other gender and the neuter, (ii) words
(including terms defined herein) using the singular or plural number also
include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement as a
whole and not to any particular Article, Section or other subdivision, (iv) the
terms “Article” or “Section” or other subdivision refer to the specified
Article, Section or other subdivision of the body of this Agreement, (v) the
phrases “ordinary course of business” and “ordinary course of business
consistent with past practice” refer to the business and practice of the
Company, (vi) the words “include,” “includes” and “including” shall be deemed
to be followed by the phrase “without limitation,” and (vii) when a reference
is made in this Agreement to Exhibits, such reference shall be to an Exhibit to
this Agreement unless otherwise indicated. 
All accounting terms used herein and not expressly defined herein shall
have the meanings given to them under GAAP.

(b)           When used herein, the phrases “to the knowledge of”
any Person or “known to” any Person, or any similar phrases or words,
mean (i) with respect to any Person who is an individual, the actual
knowledge of such Person, (ii) with respect to any other Person, the
actual knowledge of the officers, directors or Managers of such Person and
other individuals that have a similar position or have similar powers and duties
as the officers and senior management of such Person, and (iii) in the
case of each of (i) and (ii), the knowledge of facts that such individuals
should have after due inquiry.

ARTICLE 2

THE ACQUISITION

2.1           The Acquisition; Deliveries.

(a)           Purchaser hereby purchases and acquires from each of the Sellers, and
each of the Sellers hereby sells and transfers to Purchaser, the Interests set
forth in Schedule 2.1(a) across from such Seller’s name for and in
exchange of the portion of the Purchase Price (as defined in Section 2.2
hereof) payable to each such Seller as set forth in Schedule 2.1(a).

(b)           Simultaneously with
the execution hereof, the Sellers have delivered to Purchaser:

(i)            the Company’s Books and Records relating to the
ownership of the Interests, minute books, company seal and all of its similar
company materials;

(ii)           copies
of the Approvals listed on Schedule 3.5(c) and Schedule 3A.3(c)
of the Company Disclosure Schedule, in form and substance reasonably
satisfactory to the Purchaser;

 

 8

(iii)          a
certificate from an authorized officer of the Company attaching and certifying:
(A) the Company’s Articles of Organization, certified by the Secretary of
State of Oklahoma as of a recent date; (B) the Company’s Operating
Agreement; (C) a certificate of the Secretary of State of Oklahoma as of a
recent date as to the legal existence and good standing of the Company; and
(D) evidence as of a recent date of the qualification of the Company as a
foreign limited liability company in the jurisdictions listed on Schedule 3.1
of the Company Disclosure Schedule;

(iv)          a
legal opinion, in the form attached hereto as Exhibit B, from
Bingham McCutchen LLP, counsel to the Company and the Sellers;

(v)           the
Escrow Agreement, executed by the Sellers’ Representative;

(vi)          evidence
in form and substance reasonably satisfactory to the Purchaser that all
Indebtedness of the Company has been fully paid off and discharged and all
Liens securing any such Indebtedness have been terminated and released, and
that all Legal and Investment Banking Fees have been fully paid off and
discharged;

(vii)         non-competition
agreements and member releases in the forms attached hereto as Exhibits C-1
and C-2, respectively, from those members of the Company listed on Schedule 2.1(b)(vii)
hereof;

(viii)        an
executed unanimous written consent of the Company’s Manager Board dated prior
to Closing providing for the termination prior to Closing of any Company Plan
which provides benefits under Code Section 401(a) or (k), 100% vesting of any
participant Plan accounts as of the Plan termination and the discontinuation of
any contributions to such Plan for any periods on or after the Plan’s
termination; and

(ix)           an
affidavit of non-foreign status that complies with Treasury Regulation
section 1.1445-2(b)(2) from each Seller.

(c)           Simultaneously with
the execution hereof, the Purchaser has delivered:

(i)            to
the Sellers’ Representative, the Escrow Agreement, executed by the Purchaser
and the Escrow Agent;

(ii)           to
the Escrow Agent, (A) Three Million Dollars ($3,000,000) (such initial escrow amount or, following release
of funds as contemplated herein and in the Escrow Agreement, such reduced
escrow amount, as the case may be, in each case together with any and all
interest and/or earnings thereon, being the “Escrow Amount”), by
wire transfer of immediately available funds to such interest bearing bank
account as per written instructions of the Purchaser and Sellers, given to the Escrow
Agent at least three (3) Business Days prior to the Closing Date, pursuant
to the terms and conditions of the Escrow Agreement and Section 2.4
hereof, and (B) the Escrow Agreement, executed by the Purchaser;

 

 9
 

(iii)          to
the recipients of the Company’s Legal and Investment Banking Fees identified on
Schedule 2.1(c)(iii), the amounts set forth opposite such recipients’
names on such Schedule (in an aggregate amount equal to $200,000), by wire
transfer of immediately available funds to such bank account or accounts as per
written instructions of the Sellers, given to Purchaser at least three
(3) Business Days prior to the Closing Date;

(iv)          to
the Company’s payroll account, on behalf of the holders of UARs, an aggregate
amount of $1,718,705.64, by wire transfer of immediately available funds to
such bank account, to be distributed to such holders of UARs as set forth on Schedule 2.1(c)(iv)
and in accordance with Section 5.5;

(v)           to
the Sellers’ Representative on behalf of the Sellers, the remaining portion of
the Purchase Price in the aggregate amount of $25,410,624.08 as set forth on Schedule 2.1(c)(v),
by wire transfer of immediately available funds to such bank account or
accounts as per written instructions of the Sellers’ Representative, given to
Purchaser at least three (3) Business Days prior to the Closing Date, which
Sellers’ Representative will distribute to the Sellers promptly following
receipt in accordance with Schedule 2.1(c)(v); and

(vi)          to
the Sellers’ Representative, copies of the Approvals listed on Schedule 4.3(c),
in form and substance reasonably satisfactory to the Sellers’ Representative.

2.2           Purchase
Price.  For and in consideration of the Interests,
the Purchaser hereby delivers the consideration set forth in
Sections 2.1(c)(ii) through (v) above, in the aggregate amount of
$30,329,329.72 (collectively, the “Purchase Price”).  The Purchase Price shall be subject to
adjustment after the Closing in accordance with Section 2.3(c).

2.3           Adjustment to Purchase Price.

(a)           Within forty-five
(45) days after the Closing Date, Purchaser shall prepare or cause to be
prepared and shall deliver to the Sellers’ Representative (i) a balance sheet
of the Company as of 12:01 a.m., Eastern time, on the Closing Date
prepared in accordance with GAAP (except for the absence of notes) and
(ii) a statement setting forth a detailed calculation of the Working
Capital as of 12:01 a.m., Eastern time, on the Closing Date, prepared on
the basis of such balance sheet (together, the “Closing Working Capital
Statement”).  For purposes hereof, “Working
Capital” means current assets of the Company less current liabilities of
the Company (including all Taxes and other amounts required by applicable Law
to be withheld or paid in connection therewith, but excluding any liability in
respect of the outstanding UARs), determined in accordance with GAAP, applied
on a basis consistent with the Company’s past practice (to the extent
consistent with GAAP).  The Seller’s
Representative and any representative thereof shall be given reasonable access
to the Books and Records of the Company to determine if the Sellers’ Representative
has any objection to the Closing Working Capital Statement.  If within fifteen (15) days following
delivery of the Closing Working Capital Statement, the Sellers’ Representative  does not give Purchaser written notice of the Sellers’
objection to the Closing Working Capital Statement (which such notice must
contain a statement of the basis of the 

 

 10
 

Sellers’ objection), then the Closing Working Capital Statement shall
be conclusive and binding on the parties.

(b)           If the Sellers’ Representative gives
Purchaser a timely written notice of objection to the Closing Working
Capital Statement, and if the
parties are unable to resolve the Sellers’ objections within fifteen (15) days
following such objection, then the
issue(s) in dispute will be submitted to the Company’s Auditor for
resolution.  The determination of the
Company’s Auditor shall be set forth in a written notice delivered to Purchaser
and the Sellers’ Representative by the Company’s Auditor and will be conclusive
and binding on the parties.  Purchaser
and Sellers will each bear fifty percent (50%) of the fees and expenses of the
Company’s Auditor for such determination.

(c)           At
such time as the Closing Working Capital Statement is finally determined pursuant
to Section 2.3(a) or Section 2.3(b), as the case may be, if the
Working Capital shown on the Closing Working Capital Statement is:

(i)            less
than the Estimated Working Capital (the amount of such shortfall being referred
to as the “Post-Closing Working Capital Shortfall”), then Purchaser and
Sellers’ Representative promptly shall jointly instruct the Escrow Agent in
writing to pay (A) to Purchaser a portion of the Escrow Amount equal to
the Post-Closing Working Capital Shortfall and (B) to the Sellers’
Representative (on behalf of the Sellers) an amount equal to $1,000,000 minus
the Post-Closing Working Capital Shortfall (provided that Post-Closing Working
Capital Shortfall is not equal to or greater than $1,000,000), and the Escrow
Agent shall pay such amount(s) within ten (10) Business Days after
Purchaser and Sellers’ Representative deliver such written instructions;
provided, however, that if the Post-Closing Working Capital Shortfall exceeds
the Escrow Amount, then the Sellers shall pay to Purchaser the amount by which
the Post-Closing Working Capital Shortfall exceeds the Escrow Amount in cash
within such ten (10)-Business Day time period; and

(ii)           greater
than or equal to the Estimated Working Capital (the amount of such excess being
referred to as the “Post-Closing Working Capital Surplus”), the
Purchaser shall pay to the Sellers such Post-Closing Working Capital Surplus in
cash within ten (10) Business Days after such final determination, and
Purchaser and Sellers’ Representative promptly shall jointly instruct the
Escrow Agent in writing to pay to the Sellers’ Representative (on behalf of the
Sellers) an amount equal to $1,000,000, and the Escrow Agent shall pay such
amount(s) within ten (10) Business Days after Purchaser and Sellers’
Representative deliver such written instructions.

2.4           Escrow Amount.

(a)           On the Closing Date, Purchaser shall pay to the Escrow
Agent the Escrow Amount in cash payable by wire transfer of immediately
available funds for deposit in an escrow account in accordance with the terms
and conditions of the Escrow Agreement. 
The Escrow Amount shall serve as security for the payment, if any, of
(i) the Sellers’ indemnification obligations under Article 6 hereof, and
(ii) Sellers’ obligations, if any, under Section 2.3(c)(i) 

 

 11
 

hereof, and shall be held and distributed by the Escrow Agent in
accordance with the terms and conditions of this Agreement and the Escrow
Agreement.

(b)           If Purchaser makes any claim on behalf of itself or any
other Purchaser Indemnified Party for indemnification by Sellers prior to the
Escrow Release Date, Purchaser shall deliver written notice to Sellers’
Representative and the Escrow Agent (a “Claim Notice”), which Claim
Notice shall (i) describe in general terms the facts upon which Purchaser,
on behalf of itself or any other Purchaser Indemnified Party, makes such claim
and state a good faith estimate of Loss(es) subject to the indemnification obligations
of Seller under Article 6 hereof, and (ii) specify the amount of the
Escrow Amount that Purchaser seeks to have released from escrow in connection
with such claim (the “Claim Amount”).

(c)           Within fourteen (14) days after receipt of a
Claim Notice from Purchaser seeking payment from the Escrow Amount, Sellers’
Representative shall deliver written notice to Purchaser and the Escrow Agent
(a “Response Notice”), which Response Notice shall  either (i) state that Sellers do not
object to the Claim Notice and instruct the Escrow Agent to disburse the Claim
Amount to Purchaser, or (ii) state that Sellers dispute the Claim Notice
and all or a portion of the Claim Amount. 
If the Response Notice states that Sellers dispute the Claim Notice and
all or a portion of the Claim Amount, then the Escrow Agent shall disburse that
portion (if any) of the Claim Amount not in dispute to Purchaser, but shall not
disburse that portion of the Claim Amount in dispute until the dispute is resolved
in accordance with Section 2.4(d).

(d)           If Sellers object to a Claim Notice, then Purchaser and
Sellers’ Representative shall negotiate in good faith to agree upon how to
handle the Claim Notice and, if successful in reaching agreement on such Claim
Notice, shall jointly deliver to the Escrow Agent a written notice executed by
Purchaser and Sellers’ Representative (a “Joint Written Notice”), which
Joint Written Notice shall direct the Escrow Agent how to proceed with respect
to the disputed Claim Notice.  If
Purchaser and Sellers’ Representative are unable to agree on how to handle the
disputed Claim Notice within thirty (30) days after the date Purchaser
receives the Response Notice from Sellers’ Representative (or if Sellers’
Representative does not deliver a Response Notice within fourteen (14) days
after receipt of a Claim Notice), then either Purchaser or Sellers’
Representative shall be entitled at any time thereafter to initiate an Action
or Proceeding with respect to such Claim Notice in accordance with and subject
to Section 7.11 of this Agreement.  At
such time as a final, non-appealable judgment is rendered in connection with
any such Action or Proceeding, the prevailing party in the Action or Proceeding
shall deliver to the Escrow Agent and the non-prevailing party written notice
(a “Judicial Decision Notice”), which Judicial Decision Notice shall
notify the Escrow Agent of the outcome of the final, non-appealable judgment
and instruct the Escrow Agent what action to take in accordance with such
judgment; provided that at any time prior to any such judgment being rendered,
Purchaser and Sellers’ Representative may settle or otherwise resolve any such
Action or Proceeding or disputed Claim Notice, and upon such settlement or
other resolution shall deliver jointly to the Escrow Agent a Joint Written
Notice directing the Escrow Agent how to act with respect to the disputed Claim
Notice.

2.5           Escrow
Release.  Subject to the terms and provisions
of this Section 2.5, on the first
anniversary of the Closing Date (the “Escrow Release Date”), the
Escrow Agent shall 

 

 12
 

disburse to the Sellers’ Representative (on
behalf of the Sellers) the remaining Escrow Amount, if any.  In the
event, however, that Seller has received, on or before the Escrow Release Date,
a Claim Notice for which the Escrow Agent may be required to disburse all or a
portion of the Escrow Amount to Purchaser, the portion of the Escrow Amount subject
to such Claim Notice shall continue to be held by the Escrow Agent until the
Claim Amount with respect thereto has been resolved.  As soon as any dispute with respect to such
Claim Amount has been resolved, the Escrow Agent shall be instructed to
disburse such portion of the Escrow Amount, if any, as is required to be
disbursed to Purchaser, and the Escrow
Agent shall disburse the entire remaining portion of the Escrow Amount, if any,
to Sellers.

2.6           Purchase Price Allocation.  The parties hereto
agree that the Purchase Price and the Liabilities of the Company (plus other
relevant items) paid and/or assumed by the Purchaser pursuant to its purchase
of the Interests, which purchase will be treated as a purchase of the Company’s
assets for U.S. federal income tax purposes, shall be allocated among the
assets of the Company for Tax purposes as shown on Schedule 2.6,
subject to adjustment based on any adjustment of the Purchase Price after the
Closing in accordance with Section 2.3(c). 
The parties hereto shall file all Tax Returns (including amended returns
and claims for refund) and information reports in a manner consistent with such
allocation.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF
THE SELLERS

Each Seller, jointly and severally, hereby
represents and warrants to Purchaser, subject to such exceptions as are
specifically disclosed in the Company Disclosure Schedule, as follows:

3.1           Organization and Qualification.  The Company is a limited liability company
duly organized, validly existing and in good standing under the Laws of
Oklahoma and has full limited liability company power and authority to conduct
its business as now conducted and as currently proposed to be conducted and to
own, use, license and lease its Assets and Properties.  Schedule 3.1 of the Company
Disclosure Schedule sets forth each jurisdiction where the Company is
qualified, licensed or admitted to do business and is in good standing as a
foreign limited liability company.  The
Company is duly qualified, licensed or admitted to do business and is in good
standing as a foreign limited liability company in each jurisdiction in which
the ownership, use, licensing or leasing of its Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except for such failures to be so duly qualified, licensed
or admitted and in good standing that could not reasonably be expected to have
a material adverse effect on the Business or Condition of the Company.  The copies of the articles of organization
and the operating agreement of the Company previously delivered to the
Purchaser, in each case as amended through the Closing (the “Articles of
Organization” and the “Operating Agreement,” respectively), are
true, complete and correct.  The Company
is not in violation of any provisions of its Articles of Organization or
Operating Agreement.

 

 13
 

3.2           Membership Interests.

(a)           Immediately prior to
the consummation of the Acquisition, all of the authorized, issued and
outstanding Interests are lawfully owned, beneficially and of record, by the
Sellers.  The Company has no other
authorized, issued or outstanding Interests. 
Except as set forth on Schedule 3.2(a)  of the Company
Disclosure Schedule,
there are no existing Options relating to (i) the Interests of the Company
or (ii) any Equity Equivalents.

(b)           Assuming the
Purchaser has the requisite power and authority to be the lawful owner of the
Interests, upon delivery by the Purchaser of the payment required by
Section 2.1(c)(v) to the Sellers’ Representative pursuant to written wire
transfer instructions previously provided to the Purchaser, the Purchaser shall
own good and valid title to the Interests, free and clear of all Liens, other
than those arising from acts of the Purchaser and its Affiliates.

(c)           Upon performance of Purchaser’s
obligation under Section 5.5 hereof, the UARs shall be extinguished.

(d)           No debt securities of the Company are issued and
outstanding.

3.3           No Subsidiaries. 
The Company has no Subsidiaries and does not otherwise hold any
Investment Assets in any Person.

3.4           Members, Managers and Officers.  The names and positions with the Company of
each member, Manager and officer of the Company on the Closing Date are listed
in Schedule 3.4 of the Company Disclosure Schedule.  No claim for indemnification against the
Company has been made by any current or former member, Manager, officer or
other employee of the Company and, to the knowledge of the Company or the
Sellers, no basis exists for any such claim for indemnification.

3.5           No Conflicts. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents do not:

(a)           conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Company’s Articles of Organization
or Operating Agreement;

(b)           following the obtaining of the Approvals disclosed in Schedule 3.5(c)
of the Company Disclosure Schedule, conflict with or result in a violation or
breach of any Law or Order applicable to the Company or any of its Assets and
Properties; or

(c)           following the obtaining of the Approvals disclosed in Schedule 3.5(c)
of the Company Disclosure Schedule, (i) conflict with or result in a
violation or breach of, (ii) constitute a default (or an event that, with
or without notice or lapse of time or both, would constitute a default) under,
(iii) require the Company to obtain any Approval as a result or under the
terms of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result
in or give to any Person any 

 

 14
 

additional rights or
entitlement to increased, additional, accelerated or guaranteed payments or
performance under, (vi) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the Company’s Assets and
Properties under or (vii) result in the loss of any material benefit
under, any of the terms, conditions or provisions of any Contract to which the
Company is a party or by which any of its Assets and Properties is bound.

The Approvals listed in Schedule 3.5(c)
of the Company Disclosure Schedule, copies of which have been delivered to the
Purchaser pursuant to Section 2.1(b)(ii), have not been withdrawn,
suspended or conditioned.

3.6           Company
Financial Statements.  Schedule 3.6 of the Company Disclosure Schedule attaches
(a) the audited balance sheets of the Company as at December 31,
2006, December 31, 2005 and December 31, 2004 and the related
statements of income for the twelve (12) month periods ended
December 31, 2006, December 31, 2005 and December 31, 2004 (the “Company
Audited Financials”) and (b) the unaudited balance sheets of the
Company as at January 31, 2007 and February 28, 2007 and the related
statements of income for the periods then ended (the “Company Unaudited Financials”
together with the Company Audited Financials, the “Company Financials”).  The Company Audited Financials have been
prepared in accordance with GAAP, applied on a basis consistent with past
practice of the Company (to the extent consistent with GAAP).  The Company Financials are complete and
correct, are in accordance with the Books and Records of the Company and
present fairly, in all material respects, the financial condition and operating
results of the Company as of the dates and during the periods indicated therein
(subject, in the case of the Company Unaudited Financials to normal, recurring
and year-end audit adjustments and the exclusion of footnotes).  The Company maintains systems of internal
accounting controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit the preparation of
financial statements in conformity with GAAP applied on a basis consistent with
past practice of the Company and to maintain accountability for assets; and
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization.

3.7           Books and Records; Organizational Documents.  Copies of the minute books and record books
reflecting the ownership of the Interests and meetings and written consents in
lieu of meetings of the members, Managers and committees of the board of
Managers of the Company from the date of formation of the Company through the
Closing (a) have been provided or made available to Purchaser or its
counsel prior to the execution of this Agreement, and (b) are complete and
correct in all material respects.

3.8           Absence of Changes. 
Since December 31, 2006, except as set forth in Schedule 3.8
of the Company Disclosure Schedule, there has not been any occurrence or event
which, individually or in the aggregate, has had or is reasonably expected to
have any material adverse effect upon the Business or Condition of the Company.  In addition, without limiting the generality
of the foregoing, except as expressly contemplated by this Agreement and except
as disclosed in Schedule 3.8 of the Company Disclosure Schedule,
since December 31, 2006:

 

 15
 

(a)           other
than with Purchaser, the Company has not entered into any Contract or incurred
any Liabilities outside of the ordinary course of business consistent with past
practice;

(b)           the Company has not altered, or entered into any Contract
or other commitment to alter, its interest in any corporation, association,
joint venture, partnership or business entity in which the Company directly or
indirectly holds any interest on the Closing Date;

(c)           the Company has not entered into any strategic alliance,
joint development or joint marketing Contract;

(d)           there has not been any material amendment or other
material modification (or agreement to do so) or violation of the terms of any
of the Contracts set forth or described in the Company Disclosure Schedule;

(e)           the Company has not entered into any material transaction
with any officer, member, Affiliate or Associate of the Company, other than
pursuant to any Contract disclosed to Purchaser in Schedule 3.8(e)
or Schedule 3.20(a) of the Company Disclosure Schedule or other
than pursuant to any Contract of employment listed in Schedule 3.17(a)
of the Company Disclosure Schedule;

(f)            the Company has not entered into or amended any Contract
pursuant to which any other Person is granted production, marketing,
distribution, licensing or similar rights of any type or scope with respect to
any products or services of the Company or Company Intellectual Property, other
than as contemplated by the Contracts and Licenses disclosed in the Company
Disclosure Schedule;

(g)           no Action or Proceeding has been commenced or, to the
knowledge of the Company or the Sellers, has been threatened, by or against the
Company;

(h)           except as disclosed on Schedule 3.8(h) of the
Company Disclosure Schedule, the Company has not declared or set aside or paid
any dividends on or made any other distributions (whether in cash, Interests or
Equity Equivalents or property) in respect of any Interests or Equity
Equivalents, or effected or approved any split, combination or reclassification
of any Interests or Equity Equivalents, or issued or authorized the issuance of
any other securities in respect of, in lieu of or in substitution for Interests
or Equity Equivalents, or repurchased, redeemed or otherwise acquired, directly
or indirectly, any Interests or Equity Equivalents;

(i)            (i) the Company has not issued, granted, delivered,
sold or authorized or proposed to issue, grant, deliver or sell, or purchased
or proposed to purchase, any Interests or Equity Equivalents, (ii) the
Company has not modified or amended the rights of any holder of any outstanding
Interests or Equity Equivalents, and (iii) there have not been any
agreements, arrangements, plans or understandings obligating the Company to
make any such modification or amendment;

 

 16
 

(j)            there has not been any amendment to the Company’s Articles
of Organization or Operating Agreement;

(k)           there has not been any transfer (by way of a Contract,
License or otherwise) to any Person of rights to any Company Intellectual
Property;

(l)            the Company has not made or agreed to make any material
disposition or sale of, waiver of rights to, license or lease of, or incurrence
of any Lien on, any Assets and Properties of the Company, other than
dispositions of inventory, or nonexclusive licenses of Assets or Properties, in
the ordinary course of business of the Company consistent with past practice;

(m)          the Company has not made or agreed to make any purchase of
any Assets and Properties of any Person other than (i) acquisitions of
inventory, or licenses of Assets or Properties, in the ordinary course of
business of the Company consistent with past practice, and (ii) other
acquisitions in an amount not exceeding Five Thousand Dollars ($5,000) in the
case of any individual item or Twenty-Five Thousand Dollars ($25,000) in the
aggregate;

(n)           the Company has not made or agreed to make any capital
expenditures or commitments for additions to property, plant or equipment of
the Company constituting capital assets in the aggregate in an amount exceeding
Twenty-Five Thousand Dollars ($25,000);

(o)           the Company has not made or agreed to make any write-off
or write-down, any determination to write off or write-down, or revalue, any of
the Assets and Properties of the Company, or change any reserves or Liabilities
associated therewith, in the aggregate in an amount exceeding Five Thousand
Dollars ($5,000);

(p)           the Company has not made or agreed to make payment,
discharge or satisfaction, in an amount in excess of Five Thousand Dollars
($5,000), in any one case, or Twenty-Five Thousand Dollars ($25,000) in the
aggregate, of any Liability, other than the payment, discharge or satisfaction
in the ordinary course of business of Liabilities reflected or reserved against
in the Company Financials and other than Liabilities incurred in the ordinary
course of business since December 31, 2006;

(q)           the Company has not failed to pay or otherwise satisfy any
Liabilities presently due and payable of the Company (other than delays in the
ordinary course of the Company’s business consistent with past practices that
will not have a material adverse effect on the Business or Condition of the
Company), except such Liabilities which are being contested in good faith by
appropriate means or procedures and which, individually or in the aggregate,
are not material;

(r)            the Company has not incurred any Indebtedness or
guaranteed any Indebtedness of any other Person, except as reasonably necessary
for the ordinary operation of the Company’s business in a manner and in amounts
consistent with past practices and has not 

 

 17
 

issued or sold any debt
securities of the Company, or guaranteed any debt securities of others, except
as disclosed in Schedule 3.8(r) of the Company Disclosure Schedule;

(s)           the Company has not granted any severance or termination
pay to any member, officer, employee or consultant;

(t)            except in each case as disclosed in Schedule 3.8(t)
of the Company  Disclosure Schedule, the Company has not (i) granted
or approved any increase in salary, rate of commissions, rate of consulting
fees or any other compensation of any current or former employee or independent
contractor or consultant, (ii) granted or approved at all any increase in
salary, rate of commissions, rate of consulting fees or any other compensation
of any officer or member of the Company or any other person whose compensation from the Company
is or is expected to be One Hundred Thousand Dollars ($100,000) or more in the
current fiscal year, or (iii) paid or agreed or made any commitment
to pay any discretionary or stay bonus or any other bonuses, benefits or other forms of direct
or indirect compensation to any employee, independent contractor, consultant,
officer or member;

(u)           except as set forth on Schedule 3.8(u), the
Company has not paid or approved the payment of any consideration of any nature
whatsoever (other than salary, commissions or consulting fees and customary
benefits paid to any current or former officer, member, employee or consultant
of the Company in the ordinary course of business) to any current or former
officer, member, employee, independent contractor or consultant of the Company;

(v)           the Company has not increased, adopted, entered into,
amended, modified or terminated (partially or completely) any Plan;

(w)          the Company has not made any change in accounting policies,
principles, methods, practices or procedures (including for bad debts,
allocation of limited liability company expenses, contingent liabilities or
otherwise, respecting capitalization or expense of research and development
expenditures, depreciation or amortization rates or timing of recognition of
income and expense);

(x)            the Company has not commenced or terminated, or made any
material change in, any line of business;

(y)           there has been no physical damage, destruction or other
casualty loss (whether or not covered by insurance) affecting any of the real
or personal property or equipment of the Company in the aggregate in an amount
exceeding Twenty-Five Thousand Dollars ($25,000); or

(z)            none
of the Sellers, their Affiliates, or the Company has agreed to or legally
obligated itself to take any of the actions described above in this
Section 3.8.

 18

 

3.9           No Undisclosed Liabilities.  Except as reflected or reserved against in
the Company Financials (including the notes thereto) or as disclosed in Schedule 3.9
of the Company Disclosure Schedule, the Company has no material undisclosed
Liabilities required to be set forth on a balance sheet prepared in accordance
with GAAP applied on a basis consistent with past practice.  As of the Closing and giving effect to the
payments described in Section 2.1(c)(iii), all Indebtedness of the Company and
all Legal and Investment Banking Fees have been fully paid off and discharged,
and all Liens securing any such Indebtedness, if any, have been terminated and
released.

3.10         Taxes.

(a)           The Company has properly prepared and timely filed all Tax
Returns required to be filed.  All such
Tax Returns are true, correct and complete in all material respects.  All Taxes owed by the Company (whether or not
shown on any Tax Return) have been paid except for Taxes not yet due and
payable or that are being contested by appropriate proceedings.  The Company is not currently the beneficiary
of any extension of time within which to file any Tax Return.  The Company has not received any notice of
Tax deficiency or additional assessment from any Governmental or Regulatory
Authority with respect to Liabilities for Taxes payable by the Company that has
not been fully paid or finally settled. 
No claim has ever been made by any Governmental or Regulatory Authority
in any jurisdiction where the Company does not file Tax Returns that the Company
is or may be subject to taxation by that jurisdiction.  Except as set forth on Schedule 3.10(a)
of the Company Disclosure Schedule, there are no Liens with respect to Taxes on
any of the Assets and Properties of the Company other than Liens for Taxes not
yet due and payable.

(b)           The Company has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, member or other
third party.  The amount set forth at Section
2.1(c)(iv) is sufficient for the extinguishment of the UARs in full and for any
related administrative costs and expenses (including without limitation
incremental payroll processing costs) and Taxes (including any withholding Tax
and the employer’s share of FICA, FUTA and any other Taxes on the employer
relating to such performance).

(c)           To the knowledge of the Company or the Sellers, there
exists no reasonable basis for any Governmental or Regulatory Authority to
assess any additional Taxes for any period for which Tax Returns have been
filed.  Except as set forth on Schedule
3.10(c) of the Company Disclosure Schedule, there are no pending or
threatened audits, investigations, or disputes concerning any Tax Liability of
the Company either (i) claimed or raised by any Governmental or Regulatory
Authority or (ii) as to which the Company or the Sellers has or have knowledge
based upon contact with any agent of any such Governmental or Regulatory
Authority.  The Company has not waived
any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.  Schedule 3.10(c) of the Company
Disclosure Schedule lists all federal, state, local, and foreign income Tax
Returns filed with respect to the Company for taxable periods ended on or after
December 31, 2003, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the

 19
 

subject of audit.  The Company has delivered or made
available to Purchaser true, correct and complete copies of all federal income
Tax Returns filed since January 1, 2004 and all formal Tax opinions and
examination reports received, and statements of deficiencies assessed against
or agreed to, by or on behalf of the Company. 
The Company has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Internal Revenue
Code.  The Company has not engaged in a
transaction that is the same or substantially similar to one of the types of
transactions that the Internal Revenue Service has determined to be a
reportable transaction, as set forth in Treasury Regulation § 1.6011-4(b).

(d)           The Company is not a party to or bound
by any Tax indemnity, Tax allocation, Tax sharing or gain recognition agreement
(whether written, unwritten or under operation of certain state Laws as a
result of being a member of a unitary group, or under comparable Laws of other
states or foreign jurisdictions).  The
Company has not been, and will not be, required to include any item of income
in, or exclude any item of deduction from, taxable income for any Tax period
(or portion thereof) ending on or after the Closing Date as a result of (A) any
change in method of accounting for a Tax period ending on or prior to the
Closing Date under Section 481 of the Internal Revenue Code (or any
corresponding or similar provision of state, local or foreign income Tax Law);
(B) any “closing agreement” as described in Section 7121 of the Internal
Revenue Code (or any corresponding or similar provision of state, local or
foreign income Tax Law); (C) any installment sale or open transaction
disposition made on or prior to the Closing Date; (D) any prepaid amount received
on or prior to the Closing Date; or (E) the application of Section 263A of the
Internal Revenue Code (or any corresponding or similar provision of state,
local or foreign income Tax Law) with respect to a Tax period ending on or
prior to the Closing Date.

(e)           The Company has no Liability for the
Taxes of any Person other than the Company as a transferee or successor, by
Contract, or otherwise.

(f)            The Company is not party to any nonqualified deferred
compensation plan that fails to meet the requirements of
Section 409A(a)(2), (3) and (4) of the Internal Revenue Code or
is not operated in accordance with such requirements.

(g)           From the date of its formation, the Company has been
classified as a partnership for federal and all applicable state Tax purposes.

(h)           The Company is not a foreign person within the meaning of
Section 1445(f)(3) of the Internal Revenue Code.

(i)            None of the Sellers nor the Company has executed any
power of attorney, which is currently in effect, with respect to any matter
relating to Taxes of the Company.

(j)            The unpaid Taxes of the Company (A) did not, as of
the most recent fiscal month end, exceed the reserve for Tax Liabilities
(rather than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of

 20
 

the Most Recent Year-End Balance Sheet (rather than
in any notes thereto) and (B) do not exceed that reserve as adjusted for
the passage of time through the Closing in accordance with the past custom and
practice of the Company in filing its Tax Returns.

(k)           The
Company is not party to or bound by any written ruling or agreement, or to the
knowledge of the Company or the Sellers any other agreement, with any
Governmental or Regulatory Authority which would have continuing effect in any
Tax period of the Company for which a Tax Return has not yet been filed.

(l)            Schedule
3.10(l) of the Company Disclosure Schedule discloses all jurisdictions
outside the United States in which the Company is subject to Tax, is engaged in
business or has a permanent establishment.

(m)          Except
as disclosed in Schedule 3.10(m) of the Company Disclosure Schedule, the
Company is not party to any joint venture, partnership, or other arrangement or
Contract that would be treated as a partnership for federal income Tax
purposes.

3.11         Legal Proceedings. 
Except as set forth in Schedule 3.11 of the Company
Disclosure Schedule:

(a)           there are no Actions or Proceedings pending against the
Company or, to the knowledge of the Company or the Sellers, threatened against
the Company or adversely affecting the Company or any of its Assets and
Properties in connection any of the Government Contracts listed or required to
be listed on Schedule 3.18(a)(i);

(b)           to the knowledge of the Company or the Sellers there are
no facts or circumstances that could reasonably be expected to give rise to any
Action or Proceeding against the Company or any of its Assets and Properties;
and

(c)           neither the Company nor any of the Sellers has received
written notice, and do not otherwise have knowledge of any Orders outstanding
against the Company.

Schedule 3.11 of the Company Disclosure
Schedule sets forth all Actions or Proceedings against or, to the knowledge of
the Company or the Sellers, threatened against the Company or any of its Assets
and Properties during the three (3)-year period prior to the Closing Date.

3.12         Licenses and Registrations; Compliance with Laws and
Orders.  The Company has all permits,
authorizations, licenses, orders, registrations and approvals of, and has made
all required registrations with, any Governmental or Regulatory Authority which
are necessary for the Company to carry on its business as presently conducted
(collectively, “Permits”).  Such
Permits are in full force and effect; no material violations are or have been
recorded in respect of any Permit; and no proceeding is pending or, to the
knowledge of the Company or the Sellers, threatened to revoke or limit any
Permit.  The Company is in compliance in
all material respects with the terms of such Permits.   The Company is in compliance in all material
respects with applicable Laws and Orders. 
The Company and the Sellers have not received any written communication,
and to the knowledge of the Company or the Sellers, neither the Company nor

 21
 

any of the Sellers are aware of any communication
from any Governmental or Regulatory Authority alleging, that the Company is not
in compliance in any material respect with any applicable Law or Order.  Schedule 3.12 of the Company
Disclosure Schedule lists all Contracts, Licenses and agreements between the
Company and any other Person wherein or whereby the Company has agreed to, or
assumed, any obligation or duty to warrant, indemnify, reimburse, hold
harmless, guaranty or otherwise assume or incur any obligation or Liability, or
provide a right of rescission, with respect to compliance with any Law or
Order.  The Company has not made any
illegal payment to officers or employees of any Governmental or Regulatory
Authority, or made any payment to customers for the sharing of fees or to
customers or suppliers for rebating of charges, or engaged in any other
reciprocal practices, or made any illegal payment or given any other illegal
consideration to purchasing agents or other representatives of customers in
respect of the sales made or to be made by the Company.

3.13         Plans; ERISA.

(a)          All of the Plans of the Company and
its ERISA Affiliates are listed on Schedule 3.13(a) of the Company
Disclosure Schedule.  Any Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code or
Section 501(a) of the Internal Revenue Code is so qualified and is subject
to a current determination letter from the Internal Revenue Service regarding
such qualification (or, where there is no determination letter but such Plan is
based upon a master and prototype or volume submitter form, the sponsor of such
form has received a current advisory opinion as to the form upon which the
Company is entitled rely under applicable Internal Revenue Service procedures),
which has been provided to Purchaser, and nothing has occurred which has
resulted or is likely to result in the revocation of such qualification or
which requires or could require action under the compliance resolution programs
of the Internal Revenue Service to preserve such qualification.  No Plan is covered by Title IV of ERISA
or Section 412 of the Internal Revenue Code.  Neither the Company nor any of its ERISA
Affiliates has been a contributing employer to any multiemployer plan as
defined under Section 4001 of ERISA. 
Neither the Company nor any officer or member of the Company has
incurred any Liability or penalty under Section 4971 through 4980E of the
Code or Title 1 of ERISA.  None of
the Plans promises or provides medical or other welfare benefits subsequent to
termination of employment to any person except as required by Internal Revenue
Code Section 4980B and ERISA Sections 601 to 608 and any similar state
laws.  Each Plan has been maintained and
administered in all respects in compliance with its terms and with the
requirements prescribed by any and all Laws, including ERISA and the Internal
Revenue Code, which are applicable to such Plans.  No Action or Proceeding (excluding claims for
benefits incurred in the ordinary course of Plan activities) has been brought,
or to the knowledge of the Company or the Sellers, is threatened against or
with respect to any Plan  or
to the knowledge of the Company or the Sellers any fiduciary or service
provider thereof and, to the knowledge of the Company or the Sellers, there is
no basis for any such legal action, proceeding or investigation.  All reports, returns, forms and notices
required to be filed with any Government or Regulatory Authority or furnished
to participants or beneficiaries with respect to the Plans, by the Internal
Revenue Code, ERISA or any other applicable Law, have been so filed and
furnished.  Except as disclosed on Schedule 3.13(a)
of the Company Disclosure Schedule, neither the Company nor any of its

 22
 

ERISA Affiliates is under a
legal or contractual obligation to continue any of the Plans and may terminate
any or all of the Plans at any time without incurring any Liability.

(b)           With
respect to each Plan, the Sellers have delivered or made available (or have
caused the Company to have delivered or made available) to the Purchaser
accurate and complete copies, if applicable, of:  (i) all Plan texts and agreements and
related trust agreements or insurance or annuity contracts; (ii) all
material employee communications (including all summary plan descriptions and
material modifications thereto); (iii) the three most recent Forms 5500,
if applicable, and annual reports, including all schedules thereto;
(iv) the most recent annual and periodic accounting of plan assets;
(v) the most recent determination or opinion letter received from the IRS;
and (vi) the most recent actuarial valuation.

(c)           With
respect to each Plan: (i) no breach of fiduciary duty has occurred;
(ii) no prohibited transaction, as defined in Section 406 of ERISA or
Section 4975 of the Code, has occurred, excluding transactions effected
pursuant to a statutory or administration exemption which has been furnished to
Purchaser, and (iii) all contributions and premiums have been timely made as
required under ERISA, the Code, other applicable Law and/or the terms of the
respective Plan, or have been fully accrued on the Company’s or ERISA Affiliate’s
financial statements and all benefits due through the Closing Date have been
provided.

(d)           Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment or increased benefit (including severance,
unemployment compensation, bonus or otherwise) becoming due to any current or
former member, officer, employee or consultant of the Company or ERISA
Affiliate under any Plan or otherwise or (ii)  increase any benefits
otherwise payable under any Plan.

(e)           The Company has not made any payments, is not obligated to
make any payments, and is not a party to any agreement that under certain circumstances
could obligate it to make any payments, that will not be deductible under Code
Sections 162(m) or 280G.

(f)            To the extent applicable, the Company and its ERISA
Affiliates have complied with the continuation health care coverage
requirements of Section 4980B of the Internal Revenue Code and Sections 601
through 608 of ERISA with respect to “qualifying events,” as defined in the
Internal Revenue Code and ERISA, which occur or have occurred on or before the
Closing Date with respect to any current or former employees of the Company or
ERISA Affiliate and their respective “qualified beneficiaries,” as defined in
the Internal Revenue Code and ERISA, and with the requirements of the Health
Insurance Portability and Accountability Act and other applicable health
insurance requirements in Section 4980D of the Internal Revenue Code and
Sections 701 through 734 of ERISA.

(g)           No communication, report or disclosure has been made
which, at the time made, did not accurately reflect the terms and operations of
any Plan.  Except as provided in Section
3.13(i) below, the Company has not announced its intention, or undertaken
(whether or not legally bound) to modify or terminate any Plan or adopt any
arrangement or program which,

 23
 

once
established, would come within the definition of an Plan.  The Company has not undertaken to maintain
any Plan for any period of time and each such Plan is terminable at the sole
discretion of the sponsor thereof, subject only to such constraints as may
imposed by applicable law.  The Company
has no liability, including under any Plan, arising out of the treatment of any
service provider as a consultant or independent contractor and not as an
employee.

(h)           The Company does not have any plan, program or arrangement
that is a nonqualified deferred compensation plan within the meaning of Section
409A of the Code and that has not since December 31, 2004 been operated and
maintained in accordance with the requirements of Section 409A of the Code, the
proposed Treasury Regulations thereunder, and Notice 2005-1 with respect to
amounts subject to such requirements.

(i)            The Company’s Manager Board has executed a unanimous
written consent dated prior to Closing providing for the termination prior to
Closing of any Company Plan which provides benefits under Code Section 401(a)
or (k), 100% vesting of any participant Plan accounts as of the Plan
termination and the discontinuation of any contributions to such Plan for any
periods on or after the Plan’s termination.

3.14         Real Property.

(a)           Schedule 3.14(a) of the
Company Disclosure Schedule contains a true and correct list of (i) each parcel
of real property leased, utilized and/or operated by the Company the Company
(as lessor or lessee or otherwise) (the “Leased Real Property”) and (ii)
all Liens, except for Permitted Liens, to which the Leased Real Property is
subject.  True, correct and complete
copies of the documents under which the Leased Real Property is leased,
subleased (to or by the Company or otherwise), utilized and/or operated (the “Lease
Documents”) have been made available to Purchaser and such Lease Documents
are unmodified and in full force and effect. 
The Company does not own any real property other than Company owned
leasehold improvements, if any, on the Leased Real Property.

(b)           Subject to the terms of the Lease Documents, the Company
has a valid leasehold estate in and the right to quiet enjoyment of each of the
Leased Real Properties for the full term of the leases relating thereto.  Each Lease Document referred to in Schedule 3.14(a)
is a legal, valid and binding agreement, enforceable in accordance with its
terms in all material respects, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar Laws relating to the enforcement of creditors’ rights generally
and by general principles of equity, of the Company, and of each other Person
that is a party thereto, and except as set forth in Schedule 3.14(b)
of the Company Disclosure Schedule, the Company is not in default thereunder,
and the Company has received no written notice of any, default (or any
condition or event which, after notice or lapse of time or both, would
constitute a default) thereunder.  The
Company does not owe brokerage commissions or finders fees with respect to any
such Leased Real Property.

(c)           Except as disclosed in Schedule 3.14(c) of the
Company Disclosure Schedule, all improvements on the Leased Real Property
(i) comply with applicable Laws

 24
 

(including Environmental
Laws) and all applicable Liens, Approvals, and Contracts and (ii) are in
all material respects in good operating condition and in a state of good
maintenance and repair, ordinary wear and tear excepted, and such improvements
are in all material respects adequate and suitable for the purposes for which
they are presently being used and there are no condemnation or appropriation
proceedings pending or, to the knowledge of the Company or the Sellers,
threatened against any of such real property or the improvements thereon.

3.15         Tangible Personal Property.  The Company is in possession of and has good
and marketable title to, or has valid leasehold interests in or valid rights
under Contract to use, all tangible personal property used in the conduct of
its business, including all tangible personal property reflected on the Company
Financials and tangible personal property acquired since the date of the
Company Financials, other than property disposed of since such date in the
ordinary course of business consistent with past practice.  Except for Permitted Liens, all such tangible
personal property (including plant, property and equipment) is owned by the
Company free and clear of all Liens and is suitable in all material respects
for the conduct by the Company of its business as presently conducted, and is
in good working order and condition in all material respects, ordinary wear and
tear excepted, and its use complies in all material respects with all
applicable Laws.

3.16         Intellectual Property.

(a)           Schedule 3.16(a) of the Company Disclosure
Schedule lists all Company Registered Intellectual Property and all material
(as determined by the Company) unregistered Company Intellectual Property that
is owned by the Company, and lists any Actions or Proceedings pending as of the
Closing Date before any Governmental or Regulatory Authority (including the
United States Patent and Trademark Office (the “PTO”) or equivalent
authority anywhere in the world) related to any Company Intellectual Property,
except for official
actions of the relevant jurisdiction’s patent and trademark office or other
government intellectual property office (“Office Actions”).

(b)           The Company has all requisite right, title and interest in
or valid and enforceable rights under Contracts or Licenses to use all Company
Intellectual Property that is necessary for the Company to conduct its business
in the ordinary course as currently conducted. 
Each item of Intellectual Property and Registered Intellectual Property
that is necessary for the Company to conduct its business in the ordinary
course as currently conducted which is owned by the Company, is owned by the
Company in its own name and is free and clear of any Liens other than Permitted
Liens and as set forth on Schedule 3.16(d).

(c)           To
the extent that any material Company Intellectual Property has been developed
or created by any Person other than the Company, the Company has either
(i) obtained ownership of all such Intellectual Property by operation of
law or by valid written assignment of any such rights or (ii) has obtained
a License for such Intellectual Property (as identified in Schedule 3.16(c)(ii)
of the Company Disclosure Schedule).

 25

(d)           Except as identified
in Schedule 3.16(d) of the Company Disclosure Schedule, the Company
has not transferred ownership of or granted any License of or other right to
use or authorized the retention of any rights to use any Intellectual Property
that is or was Company Intellectual Property to any other Person.

(e)           The Company Intellectual Property
constitutes all the Intellectual Property necessary for the Company to conduct
its business in the ordinary course as currently conducted.

(f)            Schedule 3.16(f) of the Company
Disclosure Schedule lists (i) all Contracts and Licenses currently in effect to
which the Company is a party (including all inbound Licenses, but excluding all
commercially available off-the-shelf software purchased or licensed by the Company)
with respect to any Intellectual Property necessary for the Company to conduct
its business in the ordinary course as currently conducted, and (ii) all
Contracts and Licenses in which the Company has licensed or permitted a Person
to use any Company Intellectual Property. 
Except as specifically identified in Schedule 3.16(f) of the
Company Disclosure Schedule, no Person other than the Company has ownership
rights to improvements made by the Company in Intellectual Property that has
been licensed to the Company.

(g)           Except as disclosed in Schedule 3.16(g)
of the Company Disclosure Schedule, to the knowledge of the Company or the
Sellers, the operation of the business of the Company as currently conducted
does not (i) infringe, violate or misappropriate the Intellectual Property of
any Person, (ii) violate any term or provision of any License or Contract
concerning such Intellectual Property (including any provision required by or
imposed pursuant to 35 U.S.C. §§200-212 in any License or Contract to which the
Company is a party requiring that products be manufactured substantially in the
United States), or (iii) constitute unfair competition or an unfair or unlawful
practice under any Law, and neither the Company nor any of the Sellers has
received written notice from any Person claiming that such operation or any
act, product, technology or service of the Company infringes, violates or
misappropriates the Intellectual Property of any Person or constitutes unfair
competition or unlawful practices under any Law, including, without limitation,
written notice of infringement of third-party patent or other Intellectual
Property rights from a potential licensor of such rights.

(h)           Each item of Company
Intellectual Property is valid and subsisting, free of any Liens, other than
the Permitted Liens and Licenses.  To the
knowledge of the Company or the Sellers, the Company has the sole and exclusive
right to file for and apply for patents, utility models, trademarks, service
marks, domain names, and copyrights, and the sole and exclusive right to sue
for past infringement, if any, in connection with any of the Intellectual
Property owned by the Company, except to the extent limited by a Government
Contract or License set forth on Schedule 3.16(d).  For each item of Company Registered
Intellectual Property that is material to the Company’s business as currently
conducted, all necessary registration, maintenance, renewal fees, annuity fees
and taxes in connection with such Company Registered Intellectual Property have
been paid and all necessary documents and certificates in connection with such
Company Registered Intellectual Property have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining such
Company Registered Intellectual Property. 

 26
 

Schedule 3.16(h) of the Company
Disclosure Schedule lists all actions, including, without limitation, Office
Actions, that must be taken by the Company within ninety (90) days from the
Closing Date, including the payment of any registration, maintenance, renewal
fees, annuity fees and taxes or the filing of any documents, applications or
certificates for the purposes of maintaining, perfecting or preserving or renewing
any Company Registered Intellectual Property.

(i)            To the knowledge of
the Company or the Sellers, no Person is infringing, violating or
misappropriating any Company Intellectual Property.

(j)            Except as set forth
in Schedule 3.16(j) of the Company Disclosure Schedule, the Company
and the Sellers have taken commercially reasonable steps to protect the rights
in confidential information and trade secrets as well as the potentially
patentable inventions of the Company or provided by any other Person to the
Company subject to a duty of confidentiality.

(k)           Except as set forth
in Schedule 3.16(k), no Company Intellectual Property or product,
technology or service of the Company is subject to any Contract, Order, Action
or Proceeding that restricts, or that is reasonably expected to restrict in any
manner, the use, transfer or licensing of any Company Intellectual Property by
the Company or that may affect the validity, use or enforceability of such
Company Intellectual Property.

(l)            Neither this Agreement nor any
transactions to be accomplished pursuant to this Agreement will result in the
Company’s granting any rights or licenses with respect to the Company
Intellectual Property to any Person pursuant to any Contract to which the
Company is a party or by which any of its Assets and Properties are bound.  As of the date hereof, the Company is not a
party to any Contract or License pursuant to which it is obligated to pay any
royalties to any third party after the Closing.

(m)          Schedule 3.16(m) of the Company
Disclosure Schedule sets forth a list of all open source software used by the
Company in and necessary for the Company to conduct its business.  The Company has all rights necessary to the
use of such open source software, and except as set forth in Schedule 3.16(m), the software licensed or
otherwise provided by the Company to any Person does not contain any open
source software and the use, sale, or licensing of such software is not
governed, in whole or in part, by the terms of the GNU General Public License
or any other license requiring the Company to disclose the source code to any
such Company software.

(n)           The products and
services of the Company comply with all specifications and performance
standards set forth in the product data sheets of the Company.  To the knowledge of the Company or the
Sellers, there are no outstanding claims (or facts known to the Company that
are likely to lead to a claim) for breach of warranties by the Company in
connection with the foregoing.  All
product or service performance comparisons heretofore furnished by the Company
to customers or Purchaser are accurate as of the dates so furnished (except
that, in the case of performance 

 27
 

comparisons made as of a specified earlier date,
such comparisons shall be accurate as of such specified earlier date, and, in
the case of performance comparisons superseded by a subsequent performance
comparison furnished to the customer before the customer’s acquisition of a
product or service covered by the superseded comparison, the superseding
comparison shall be accurate and the superseded comparison shall be
disregarded).

3.17         Contracts.

(a)           Schedule 3.17(a)
of the Company Disclosure Schedule contains a true and complete list of each of
the following Contracts, except Government Contracts, to which the Company is a
party or by which any of its Assets and Properties are bound (true, correct and
complete copies or, if none, reasonably complete and accurate written
descriptions of which, together with all amendments and supplements thereto and
all waivers of any terms thereof, have been made available to Purchaser prior
to the execution of this Agreement):

(i)            Contracts
with any current or former officer, Manager, member, Affiliate, employee,
consultant, or agent of the Company currently in effect;

(ii)           Contracts with any
labor union or association representing any employee;

(iii)          Contracts
for the purchase or sale of materials, supplies, equipment, merchandise or
services that contain an escalation, renegotiation or redetermination clause
and require payment by the Company in excess of, or a series of payments which
in the aggregate exceed, Ten Thousand Dollars ($10,000);

(iv)          Contracts
for the sale of any of the Company’s Assets or Properties other than in the ordinary course of business consistent with
past practice, or for the grant to any Person of any preferential rights
to purchase any of its Assets or Properties that require payment to the Company
in excess of, or a series of payments which in the aggregate exceed, Ten
Thousand Dollars ($10,000);

(v)           Contracts
that cannot be canceled by the Company with less than ninety (90) days’ notice
without incurring Liability, premium or penalty in excess of, or a series of
payments which in the aggregate exceed, Ten Thousand Dollars ($10,000);

(vi)          joint
venture agreements;

(vii)         Contracts
under which the Company agrees to indemnify any party or share Tax Liability of
any party that are not subject to a cap on the amount of indemnification or
sharing of Tax Liability;

(viii)        Contracts
with customers or suppliers for the sharing of fees, the rebating of charges or
other similar arrangements;

 28
 

(ix)           Contracts
containing covenants of the Company not to compete in any line of business or
with any Person in any geographical area or covenants of any other Person not
to compete with the Company in any line of business or in any geographical
area;

(x)            Contracts
relating to the acquisition by the Company of any operating business,
substantially all of the assets of or the equity interests of any other Person;

(xi)           Contracts
for the payment of fees or other consideration to any officer, Manager or
Affiliate of the Company or to any other entity in which any of the foregoing
has an interest;

(xii)          Contracts
relating to the borrowing of money in excess of Ten Thousand Dollars ($10,000);
and

(xiii)         Contracts
with any Seller, their Affiliates or any entity in which any Seller or their
Affiliates, individually or in the aggregate, own a controlling interest (other
than the Company) or in which any Seller is a director, Manager, officer or
employee thereof.

(b)           Each Contract to
which the Company is a party or by which any of its Assets and Properties are
bound, including without limitation each Contract required to be disclosed in Schedule 3.17(a)
of the Company Disclosure Schedule, is in full force and effect and constitutes
a legal, valid and binding agreement, enforceable in all material respects in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar Laws relating to the enforcement of creditors’ rights generally
and by general principles of equity. 
Except as disclosed in Schedule 3.17(b) of the Company
Disclosure Schedule, there is no event of default or event or condition that,
after notice or lapse of time or both, would constitute a material violation,
breach or event of default under any Contract on the part of the Company or, to
the knowledge of the Company or the Sellers, any other party thereto.

(c)           Except as disclosed
in Schedule 3.17(c) of the Company Disclosure Schedule, the Company
is not a party to or bound by any Contract that automatically terminates or
allows termination by the other party thereto upon consummation of the
transactions contemplated by this Agreement. 
At and after the Closing, the Company shall have and be entitled to
exercise all of its rights under each Contract to which the Company is a party
or by which any of its Assets and Properties are bound, without the payment of
any additional amounts or consideration other than ongoing fees, royalties or
payments that the Company would otherwise be required to pay had the
transactions contemplated by this Agreement not occurred.

(d)           Schedule 3.17(d)
of the Company Disclosure Schedule lists the ten (10) largest customers of
the Company on the basis of revenues collected or accrued for the fiscal year
ended December 31, 2006.  Schedule 3.17(d)
of the Company Disclosure Schedule lists the twenty (20) largest suppliers
of the Company on the basis of cost of goods or services purchased or accrued
for the fiscal year ended December 31, 2006. 
Except as disclosed in Schedule 3.17(d) of the Company
Disclosure Schedule, no such customer or supplier has ceased or materially
reduced its purchases from or sales or provision of services to the Company
since December 31,

 29
 

2006 or, to the knowledge of the Company or the Sellers, has threatened
to cease or materially reduce such purchases or sales or provision of services
after the Closing.  Except as disclosed
in Schedule 3.17(d) of the Company Disclosure Schedule, to the
knowledge of the Company or the Sellers, none of the customers or suppliers set
forth on Schedule 3.17(d) of the Company Disclosure Schedule is
threatened with bankruptcy or insolvency.

3.18         Government
Contracts.

(a)           (i)            Schedule 3.18(a)(i) of the
Company Disclosure Schedule lists all current Government Contracts, and with
respect to each such listed Government Contract, Schedule 3.18(a)(i) of
the Company Disclosure Schedule accurately lists:  (A) the contract name; (B) the award date;
(C) the customer; (D) the contract end date; (E) the contract’s ceiling value;
(F) the contract’s funded value; and (G) as applicable, whether the current
Government Contract is premised on the Company’s small business status, the
Company’s status as a participant in the Small Business Administration’s 8(a)
Business Development program, small disadvantaged business status, veteran
owned status, protégé status, or other preferential status, or whether, to the
knowledge of the Sellers or the Company, the prime contractor under which the
Company is performing any Government Contract as a subcontractor has taken
credit based on the Company’s small business status, the Company’s status as a
participant in the Small Business Administration’s 8(a) Business Development
program, small disadvantaged business status, veteran owned status, protégé
status, or other preferential status. 
Attached to Schedule 3.18(a)(i) of the Company Disclosure
Schedule is the above-listed contract information for each current Government
Contract listed in Schedule 3.18(a)(i) of the Company Disclosure
Schedule for which the Company is the prime contractor.

(ii)           Schedule
3.18(a)(ii) of the Company Disclosure Schedule lists the Company’s current project
charge codes, and with respect to each such charge code, Schedule
3.18(a)(ii) of the Company Disclosure Schedule accurately lists:  (A) the customer; (B) the customer’s contract
number corresponding to the charge code; (C) the customer’s order number; (D)
the Company’s internal project charge code number for each Government Contract;
or if the Company tracks only by task/delivery order, the Company’s internal
project charge code number for each task/delivery order; (E) the corresponding
project name; (F) the end date; (G) inception to February 28, 2007 funding; (H)
inception to February 28, 2007 revenue received; (I) the ceiling value; and (J)
payments due as of thirty (30) days or more prior to the date of this Agreement
for work previously performed and billed. 
Schedule 3.18(a)(ii) of the Company Disclosure Schedule also
indicates the basis for billing with respect to the charge codes that represent
fixed price task orders.

(iii)          Schedule
3.18(a)(iii) of the Company Disclosure Schedule lists all Government Bids,
including task order bids under current Government Contracts submitted by the
Company and for which no award has been made thirty (30) days or more prior to
the date of this Agreement, and with respect to each such Government Bid, Schedule
3.18(a)(iii) of the Company Disclosure Schedule accurately lists:  (A) the customer agency and title; (B) the
request for proposal (RFP) number or, if such Government Bid is for a task
order under a prime contract, the applicable prime contract number; (C) the
date of proposal submission; (D) the expected

 30
 

award
date, if known; (E) the estimated period of performance; (F) the estimated
value based on the proposal, if any; and (G) except for Government Bids for
task orders whether such Government Bid is premised on the Company’s small
business status, the Company’s status as a participant in the Small Business
Administration’s 8(a) Business Development program, small disadvantaged
business status, veteran owned status, protégé status, or other preferential
status.  The Company has delivered to
Purchaser true, correct and complete copies of all Government Contracts and of
all Government Bids and provided access to Purchaser to true and correct copies
of all documentation related thereto requested by Purchaser.

(b)           Except as set forth
in Schedule 3.18(b) of the Company Disclosure Schedule, (i) the Company
has not received any written notification of cost, schedule, technical or
quality problems that could result in claims against the Company (or successors
in interest) by a Governmental or Regulatory Authority, a prime contractor or a
higher-tier subcontractor; (ii) to the knowledge of the Company or Sellers,
there are no Government Contracts pursuant to which the Company is reasonably
likely to experience material cost, schedule, technical or quality problems
that could reasonably result in claims against the Company (or successors in
interest) by a Governmental or Regulatory Authority, a prime contractor or a
higher-tier subcontractor; (iii) all of the Government Contracts were legally
awarded, are binding on the parties thereto, and are in full force and effect;
(iv) the Government Contracts are not currently the subject of bid or award
protest proceedings, and, to the knowledge of the Company or the Sellers, no reasonable
basis exists to protest the Government Contracts; and (v) to the knowledge of
the Company or the Sellers, no Person has notified, in writing, the Company
that any Governmental or Regulatory Authority intends to seek the Company’s
agreement to lower rates under any of the Government Contracts or Government
Bids.

(c)           Except as set forth
in Schedule 3.18(c) of the Company Disclosure Schedule:  (i) the Company has fully complied with all
material terms and conditions of each Government Contract and Government Bid to
which it is or they are a party; (ii) the Company has complied with all
applicable statutory and regulatory requirements, including, but not limited
to, the Service Contract Act, the Contract Disputes Act, the Procurement
Integrity Act, the Federal Procurement and Administrative Services Act and the
provisions of the Federal Acquisition Regulation (“FAR”), including, but
not limited to, provisions governing defective pricing, use of Government
property or Government equipment, and certification of cost or pricing data and
related cost principles and Cost Accounting Standards; (iii) the
representations, certifications and warranties made by the Company with respect
to the Government Contracts or Government Bids were accurate in all respects as
of their effective date, and the Company has complied with all such
certifications in all respects; (iv) no written termination for default,
written cure notice, written show cause notice or other similar written notice
has been issued and remains unresolved with respect to any Government Contract,
and to the knowledge of the Company or the Sellers, no event, condition or
omission has occurred or exists that would constitute grounds for such action;
(v) no past performance evaluation received by the Company with respect to any
such Government Contract has set forth a default or other failure to perform
thereunder or termination or default thereof; (vi) no money due to the Company
pertaining to any Government Contract has been withheld or set-off nor has there
been any attempt to withhold or set off any money due under any Government
Contract; (vii) to the knowledge of the Company

 31
 

or
the Sellers, all invoices and claims (including requests for progress payments
and provisional costs payments) submitted by the Company under each Government
Contract were accurate and complete in all material respects as of their
submission date; and (viii) to the knowledge of the Company or the Sellers,
neither the execution, delivery nor performance of this Agreement and the Transaction
Documents conflicts with or results in a breach or default under any Government
Contract.

(d)           Except as set forth
in Schedule 3.18(d) of the Company Disclosure Schedule, with respect to
the Government Contracts, no Governmental or Regulatory Authority, prime
contractor or higher-tier subcontractor under a Government Contract or any
other Person has notified, in writing, the Company of any actual or alleged
violation or breach of any statute, regulation, representation, certification,
disclosure obligation, contract term, condition, clause, provision or
specification by the Company that reasonably could be expected to have a
material adverse effect on the Business or Condition of the Company.

(e)           The Company has not
taken any action and is not a party to any litigation that could reasonably be
expected to give rise to (i) liability under the False Claims Act, (ii) a claim
for price adjustment under the Truth in Negotiations Act, or (iii) any other
request for a reduction in the price of any Government Contract, including
claims based on actual or alleged defective pricing.  To the knowledge of the Company or the
Sellers, there exists no basis for a claim of any liability of the Company by
any Governmental or Regulatory Authority as a result of defective cost and
pricing data submitted by the Company to any Governmental or Regulatory
Authority.  The Company is not a named
party in any pending claim and to the knowledge of the Company or the Sellers,
there is no basis for the Company to bring a claim under the Contract Disputes
Act against the United States Government or any prime contractor, subcontractor
or vendor arising under or relating to any Government Contract or Government
Bid.

(f)            Except as set forth
in Schedule 3.18(f) of the Company Disclosure Schedule, no Government
Contract in effect during the last five (5) years was terminated for default;
and (ii) the Company did not receive any written notice terminating, either
fully or partially, any Government Contract in effect during such time for convenience.

(g)           Except as set forth
in Schedule 3.18(g) of the Company Disclosure Schedule, the Company has
not received any written notice of any outstanding claims against the Company
relating to the Government Contracts or Government Bids and involving either a
Governmental or Regulatory Authority, any prime contractor, or any higher-tier
subcontractor.

(h)           Neither the Company,
nor any of its Managers or executive officers, has ever been, nor is currently,
suspended, debarred or proposed for suspension or debarment from bidding on any
Government Contract, declared ineligible, or otherwise excluded by Law or Order
from participation in the award of any Government Contract or for any reason
been listed on the List of Parties Excluded from Federal Procurement and
Non-procurement programs.  No suspension,
debarment or exclusion proceeding actions with respect to Government Contracts
have been commenced or, to the knowledge of the Company or the Sellers,
threatened against the Company, or any of its Managers or executive
officers.  To the knowledge of the
Company or the 

 32
 

Sellers,
no circumstances exist that would warrant the institution of suspension or
debarment proceedings against the Company, or any of its Managers or executive
officers.

(i)            No negative determination
of responsibility has been issued against the Company with respect to any
Government Bid.

(j)            Except
for routine reviews initiated not as a result of any allegation of fraud,
mismanagement, or abuse (i.e., “desk audits”) as set forth in Schedule 3.18(j)
of the Company Disclosure Schedule, the Company has not undergone any audit,
inspection, survey, or examination of records by any Governmental or Regulatory
Authority relating to any Government Contract. 
Since January 1, 2004, the Company has not received written notice that
any audit, review, inspection, investigation, survey or examination of records
with respect to any Government Contracts performed by the Defense Contract
Audit Agency of the United States Government (the “DCAA”) has revealed
any fact, occurrence or practice which could reasonably be expected to have a
material adverse effect on the Business or Condition of the Company.  Except as set forth in Schedule 3.18(j), the
Company has not been required to pay, repay, remit or otherwise refund,
directly or indirectly, any amount to any Governmental or Regulatory Authority
as a result of any audit, inspection, survey or examination of records by the
DCAA, with respect to services of the Company, at any time on or after January
1, 2004.

(k)           Except as set forth
in Schedule 3.18(k) of the Company Disclosure Schedule, during the last five
(5) years (i)  the Company has not
conducted any internal investigation in connection with which the Company has
used any legal counsel, auditor, accountant or investigator, and (ii) to the
knowledge of the Company or Sellers, the Company has not made any written
disclosure to any Governmental or Regulatory Authority or prime contractor or
higher-tier subcontractor related to any suspected or alleged violation of a
contract requirement, any apparent or alleged irregularity, misstatement or
omission arising under or relating to a Government Contract or Government Bid,
or any violation of law or regulation.

(l)            Except as set forth
in Schedule 3.18(l), none of the Company, or, to the knowledge of the
Company or the Sellers, its Managers or executive officers, have been engaged
in or been charged with, or received or been advised in writing of any charge,
investigation, claim or assertion of, nor has the Company, nor any of its
Managers or executive officers, been subject to any criminal indictment or
information, lawsuit, subpoena, civil investigative demand, administrative
proceeding, voluntary disclosure, dispute, mediation or arbitration with regard
to any violation of any requirement pertaining to a Government Contract or
Government Bid, including violations of any statutory or regulatory
requirements, including without limitation (i) defective pricing within the
meaning of the Truth in Negotiations Act, as amended; (ii) accounting,
estimating, inventory, material requirements planning, material management and
accounting systems, government property records or purchasing system
deficiencies; (iii) mischarging of Direct Costs or Indirect Costs; (iv)
delivery to the Government or to a Government prime or subcontractor of
material, components, items or services that do not or did not meet
specifications or standards therefor, or delivery to the Government or to a
Government prime or subcontractor of foreign-made material, components or items
where domestic-made material, components or items were required; (v) improperly
soliciting, obtaining, attempting to

 33
 

solicit
or obtain or making or attempting to make any payment for any non-public
proprietary or source selection information; (vi) unallowable costs, including
unallowable Direct Costs or Indirect Costs; (vii) improper testing or test
reports; (viii) failure to abide by the terms of a Customer Contract,
Government Contract or a Government Bid; or (ix) Laws relating to any Customer
Contract or Government Contract or Government Bid, including the following: (A)
the False Statements Act (18 U.S.C. 1001), (B) the False Claims Act (18 U.S.C.
287), (C) the False Claims Act (31 U.S.C. 3729), (D) the Bribery, Gratuities
and Conflicts of Interest Act (18 U.S.C. 201 and 5 U.S.C. 7353), (E) the
Anti-Kickback Act (41 U.S.C. 51, 54), (F) the Anti-Kickback Enforcement Act of
1986 (Pub. L. 99-634), (G) the Arms Export Control Act (22 U.S.C. 277 et.
seq.), (H) the Foreign Corrupt Practices Act (15 U.S.C. 78 m, 78 dd-1, 78 ff),
(I) the Export Administration Act (50 U.S.C. App. 2401 et. seq.), (J) the War
and National Defense Act (18 U.S.C. 793), (K) the Racketeer Influenced and
Corrupt Organizations Act (18 U.S.C. 1961-68) or of any statute the violation
of which would constitute “racketeering activity” within the meaning of such
act, (L) the Conspiracy to Defraud the Government Act (18 U.S.C. 371), (M) the
Program Fraud Civil Remedies Act (Pub. L. 99-509), (N) the Byrd Amendment, Pub.
L. 101-121, § 319, (O) “revolving door” legislation (37 U.S.C. 801, 41 U.S.C.
423, 18 U.S.C. 207, 18 U.S.C. 208, 18 U.S.C. 218, 18 U.S.C. 281, 10 U.S.C.
2397, 10 U.S.C. 2397a, 10 U.S.C. 2397b, 10 U.S.C. 2397), (P) the Defense
Production Act (50 U.S.C. App. 2061), (Q) United States anti-boycott laws (the
Ribicoff Amendment to the 1976 Tax Reform Act, and the 1979 Export
Administration Act), (R) the Defense Industrial Regulation (DoD 5220.22-R) or
National Industrial Security Program Operating Manual (DoD 5220.22-M), or any
agreement with the Defense Security Service, (S) the FAR any applicable
supplements thereto, alternative regulations applicable in lieu thereof, or
applicable predecessor regulations, (T) the Service Contract Act of 1965, as
amended, (U) Cost Accounting Standards, (V) Treasury Department embargo and
sanctions regulations, 31 C.F.R. Part 500 et. seq., (W) the Small Business Act,
as amended, (X) Executive Order 11246, as amended, and corresponding Department
of Labor regulations, (Y) the Anti-Assignment Act, 41 U.S.C. § 15, (Z) the
Davis-Bacon Act, as amended, (AA) the Fair Labor Standards Act, as amended,
(BB) the Walsh-Healey Act, as amended or (CC) the Drug-Free Workplace Act, as
amended, nor has Company conducted any internal investigation in connection
with any such alleged violation on its own or with the assistance of any legal
counsel, auditor, accountant or investigator outside Company.

(m)          All indirect and
general, administrative and selling/bid and proposal/independent research and
development (G&A) expense rates are being billed consistent with
DCAA-approved rates or provisional rates.

(n)           The Company is in
compliance with all applicable national security obligations, including those
specified in the National Industrial Security Program Operating Manual, DOD
5220.22-M (January 1995), and any supplements, amendments or revised editions
thereof.

(o)           To the knowledge of
the Company or the Sellers, there are no existing circumstances that would
reasonably be expected to result in a material claim against the Company by a
Governmental or Regulatory Authority or any prime contractor, subcontractor,

 34
 

vendor
or other third party arising under or relating to any Government Contract or
Government Bid arising under or relating to any Government Contract or
Government Bid.

(p)           All Government Bids
listed on Schedule 3.18(a) of the Company Disclosure Schedule were based on
assumptions believed by the management of the Company to be reasonable, and the
Company reasonably believes all Government Bids listed on Schedule 3.18(a) of
the Company Disclosure Schedule are capable of performance by the Company in
accordance with the terms and conditions of such Government Bid without a total
program loss (calculated in accordance with the Company’s accounting principles
consistently applied).

(q)           Except as set forth
on Schedule 3.18(q) of the Company Disclosure Schedule, no Government
Contract has incurred or currently projects losses or cost overruns in an
amount exceeding Ten Thousand Dollars ($10,000), on an annual basis.  No payment has been made by the Company, or
to the knowledge of the Company or the Sellers by a Person acting on the
Company’s behalf, to any Person (other than to any bona fide employee or agent
of the Company, as defined in subpart 3.4 of the FAR) which is or was
improperly contingent upon the award of any Government Contract or which would
otherwise be in violation of any applicable procurement law or regulation or
any other Laws.  The Company is not subject
to any “forward pricing” regulations or agreements as contemplated, for
example, in Section 9-1200 of the DCAA Contract Audit Manual (2006).

(r)            Except as set forth
on Schedule 3.18(r) of the Company Disclosure Schedule, the Company has
not assigned or otherwise conveyed or transferred, or agreed to assign, to any
Person, any Government Contracts, or any account receivable relating thereto,
whether a security interest or otherwise.

(s)           Except as set forth
on Schedule 3.18(s) of the Company Disclosure Schedule, the Company has
reached agreement with the cognizant government audit agency approving and “closing”
all indirect costs charged to Government Contracts for the years 2000 through
2004.

(t)            Except as set forth
on Schedule 3.18(t), no personal property, equipment or fixtures are
loaned, bailed or otherwise furnished to the Company by or on behalf of a
Government.

(u)           The Company
certifies that (i) no written claims exist against the Company with respect to
express warranties and guarantees contained in Government Contracts on products
or services provided by the Company; (ii) no such claims have been made against
the Company in the past five (5) years; (iii) no amendment has been made to any
written warranty or guarantee contained in any Government Contract that would
reasonably be expected to result in a material adverse effect on the Business
or Condition of the Company; and (iv) 
the Company has not taken any action which would reasonably be expected
to give any Person a right to make a claim under any written warranty or
guarantee contained in any Government Contract.

 35

(v)           Except
to the extent prohibited by applicable Law, Schedule 3.18(v) of the
Company Disclosure Schedule sets forth all facility security clearances held by
the Company.

(w)          The
Company maintains systems of internal controls (including cost accounting systems,
estimating systems, purchasing systems, proposal systems, billing systems and
material management systems) that are in compliance with all requirements of
all of the Government Contracts.

(x)            Neither
the Company nor, to the knowledge of the Company or the Sellers, any of the
Company’s Managers and executive officers has violated any legal,
administrative or contractual restriction concerning the employment of (or
discussions concerning possible employment with) current or former officials or
employees of a state, local or federal government (regardless of the branch of
government), including, but not limited to, the so-called “revolving door”
restrictions set forth at 18 U.S.C. § 207.

(y)            Except
as set forth on Schedule 3.18(a)(i) of the Company Disclosure Schedule,
none of Company’s Government Contracts are premised upon Company’s small
business status, the Company’s status as a participant in the Small Business
Administration’s 8(a) Business Development program, small disadvantaged
business status, veteran owned status, protégé status, or other preferential
status, nor did any Governmental or Regulatory Authority rely upon Company’s
small business, small disadvantaged business status, veteran owned status,
protégé status, or other preferential status in evaluation any of Company’s
quotations, bids, or proposals, or in making award of any Government Contract
to Company.

(z)            To
the knowledge of the Company and the Sellers, currently there is no reasonable
basis for any disallowance greater than $5,000 in respect of any Government
Contract.

(aa)         To
the knowledge of the Company or the Sellers, all Company costs (both Direct
Costs and/or Indirect Costs) that have been, prior to Closing Date, charged to
any Government Contract shall be allowable in accordance with applicable cost
accounting standards.  All costs (both
Direct Costs and Indirect Costs) to be charged to Company by Parent any of
their respective Affiliates pursuant to any existing subcontract or service
agreements shall be allowable in accordance with applicable cost accounting
standards.

(bb)         The
Company has not had access to non-public information nor provided systems
engineering, technical direction, consultation, technical evaluation, source
selection services or services of any type, nor prepared specifications of
work, nor engaged in any other conduct that would create in connection with any
Government procurement an organizational conflict of interest as defined in the
FAR or other applicable law.

(cc)         Except
as set forth on Schedule 3.18(cc), the Company has not obligated itself
in writing in a subcontract, consulting agreement, or teaming agreement
guaranteeing a minimum percentage of the work on any Government Contract.

 36
 

3.19         Insurance.  Schedule 3.19
of the Company Disclosure Schedule contains a true and complete list of all
insurance policies (by policy number, insurer, expiration date and type, amount
and scope of coverage) held by the Company relating to the Assets and
Properties of the Company, copies of which have been provided or made available
to Purchaser.  In the three (3) year
period ending on the Closing Date, neither the Company nor any of the Sellers
has received any written notice from, or on behalf of, any insurance carrier
relating to or involving any adverse change other than in the ordinary course
of business, in the conditions of insurance, any written refusal to issue an
insurance policy or non-renewal of a policy. 
The insurance coverage provided by the policies set forth in Schedule 3.19
of the Company Disclosure Schedule will not terminate or lapse by reason of any
of the transactions contemplated by this Agreement or any of the other
Transaction Documents.  Each policy
listed in Schedule 3.19 of the Company Disclosure Schedule is valid
and binding and in full force and effect, all premiums due thereunder have been
paid when due and neither the Company nor the Sellers has received any written
notice of cancellation or termination in respect of any such policy or is in
default thereunder, and neither the Company nor any of the Sellers has any
knowledge of:  (i) any default by any
other Person thereunder, (ii) any reason or state of facts that is reasonably
likely to lead to the cancellation of such policies or (iii) any written threat
of termination of, or material premium increase with respect to, any such
policies.  The insurance policies listed
in Schedule 3.19 of the Company Disclosure Schedule, (i) to
the knowledge of the Company or the Sellers, in light of the business,
operations and Assets and Properties of the Company, are in amounts and have
coverages that are reasonable and customary for Persons engaged in similar
businesses and operations and having similar Assets and Properties and
(ii) are in amounts and have coverages as required by any Contract to
which the Company is a party or by which any of its Assets and Properties is
bound.  Schedule 3.19 of the
Company Disclosure Schedule contains a list of all claims in excess of Twenty
Thousand Dollars ($20,000) made under any insurance policies covering the
Company in the last two (2) years. 
Neither the Company nor any of the Sellers has received any written
notice that any insurer under any policy listed in Schedule 3.19 of
the Company Disclosure Schedule is denying, disputing or questioning liability
with respect to a claim listed on Schedule 3.19.

3.20         Affiliate Transactions.

(a)           Except as disclosed in Schedule 3.20(a) of the
Company Disclosure Schedule, (i) there are no Contracts or Liabilities
between the Company, on the one hand, and (A) any current or former officer,
Manager, member, Affiliate or Associate of the Company currently in effect, or
(B) any Person who, to the knowledge of the Company or the Sellers, is an
Associate of any such officer, Manager, member or Affiliate, on the other hand;
(ii) the Company does not provide or cause to be provided any Assets and
Properties, services or facilities to any such current or former officer,
Manager, member, Affiliate or Associate; (iii) no such current or former
officer, Manager, member, Affiliate or Associate provides or causes to be
provided any Assets and Properties, services or facilities to the Company or
its Affiliates; and (iv) the Company or its Affiliates does not
beneficially own, directly or indirectly, any Investment Assets of any such
current or former officer, Manager, member, Affiliate or Associate.

 37
 

(b)           Except as disclosed in Schedule 3.20(b) of the
Company Disclosure Schedule, each of the Contracts and Liabilities listed in Schedule 3.20(a)
of the Company Disclosure Schedule was entered into or incurred, as the case
may be, on terms no less favorable to the Company (in the reasonable judgment
of the Company) than if such Contract or Liability was entered into or incurred
on an arm’s length basis on competitive terms.

3.21         Employees; Labor Relations.

(a)           The Company is not a party to any collective bargaining
agreement or other Contract with any group of employees, labor organization or
other representative of any of the employees of Company and there are no
activities or proceedings of any labor union or other party to organize or
represent such employees.  There has not
occurred nor, to the knowledge of the Company or the Sellers, been threatened
any strike, slow-down, picketing, work-stoppage or other similar labor activity
with respect to any such employees.  The
Company is in material compliance with all Laws relating to employment or the
workplace, including provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment
opportunity, immigration and the withholding of income Taxes, unemployment
compensation, worker’s compensation, and social security contributions.  Except as set forth on Schedule 3.21(a)
of the Company Disclosure Schedule, to the knowledge of the Company or the
Sellers, there are no unresolved labor controversies (including unresolved
grievances and age or other discrimination claims), if any, between the Company
and Persons employed by or providing services to the Company or Actions or
Proceedings involving the Company regarding employment-related matters.  The Company has not undergone a “plant
closing” or “mass layoff” that would subject it to the requirements of the
Worker Adjustment and Retraining Notification Act.

(b)           Except as set forth in Schedule 3.21(b)(i) of
the Company Disclosure Schedule, each Person who is an employee of the Company
is employed at will.  No employee of the
Company is represented by a union in connection with his or her employment with
the Company.  Each Person who is an
independent contractor of the Company is properly classified as an independent
contractor, and each Person who is an employee of the Company is properly
classified as an employee, in each case for purposes of all employment-related
Laws and all Laws concerning the status of independent contractors.  Schedule 3.21(b)(ii) of the
Company Disclosure Schedule sets forth, individually and by category, the name
of each Person employed by or providing services to the Company, together with
such Person’s position or function, annual base salary or wage, accrued
vacation and any incentive, severance or bonus arrangements with respect to
such Person.  No person listed on Schedule 3.21(b)(ii)(A)
of the Company Disclosure Schedule shall have any continuing employment
obligation or other obligation to provide services to any Person other than the
Company, including the Sellers or any Affiliate of the Sellers, following the
Closing.  To the knowledge of the Company
or the Sellers, no current employee of the Company listed on Schedule
3.21(b)(ii)(B) has threatened or announced his or her intention to
terminate such employee’s relationship with the Company for any reason,
including because of the consummation of the transactions contemplated by this
Agreement.  The Company is not a party to
any agreement for the provision of labor from any outside agency.  To the knowledge of the Company or the
Sellers, there have been no claims against the Company by

 38
 

employees of such outside
agencies, if any, with regard to employees assigned to work for the Company,
and no claims by any Governmental or Regulatory Authority with regard to such
employees.

(c)           To the knowledge of the Company or the Sellers, no
officer, employee or consultant of the Company is obligated under any Contract
to which such Person is a party, or subject to any Order or Law, that
materially interferes with the Company’s business as currently conducted.  Neither the execution nor delivery of this
Agreement, nor the carrying on of the Company’s business as presently conducted
nor any activity of such officers or employees in connection with the carrying
on of the Company’s business as presently conducted, conflicts with or results
in a breach of the terms, conditions or provisions of, constitutes a default
under, or triggers a condition precedent to any rights under any Contract under
which any of such officers or employees is now bound.

3.22         Environmental Matters.

(a)           To the knowledge of the Company or
the Sellers, no Hazardous Material is present in, on, under or adjacent to any
property that the Company has at any time owned, operated, occupied, leased or
used (including both the land and improvements thereon).  The Company has not transported, stored,
used, manufactured, disposed of, sold, released or exposed its employees or any
other Person to any Hazardous Material, or arranged for the disposal,
discharge, storage or release of any Hazardous Material, and does not currently
engage in any of the foregoing activities, in violation of any applicable
Environmental Law or other Law.

(b)           No Approvals are required to be
obtained by the Company under any Environmental Laws.  The Company has been and is in compliance in
all material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws.

(c)           No Action or Proceeding is pending,
or to the knowledge of the Company or the Sellers, threatened against the
Company concerning any Environmental Law, Hazardous Material or any Hazardous
Materials activity of the Company.  The
Company is not aware of any fact or circumstance that could involve the Company
in any environmental litigation or impose upon the Company any material
environmental Liability.

3.23         Accounts Receivable. 
The accounts and notes receivable of the Company reflected on the
Closing Working Capital Statement (a) arose from bona fide sales transactions
in the ordinary course of business, consistent with past practice, and are
payable on ordinary trade terms, (b) are legal, valid and binding obligations
of the respective debtors enforceable in accordance with their respective
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
Laws relating to the enforcement of creditors’ rights generally and by general
principles of equity, (c) are not subject to any valid set-off or counterclaim,
(d) subject to compliance with the covenant at Section 5.4, have been collected
or are fully collectible before the date that is One Hundred Twenty (120) days
after the acceptance of an invoice by the related customer, and (e) do

 39
 

not represent obligations for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement other than customers’ rights to inspect goods
upon receipt and reject nonconforming goods.

3.24         Brokers; Third-Party Expenses.  Except as set forth in Schedule 3.24
of the Company Disclosure Schedule, no broker, investment banker, financial
advisor or other Person is entitled to any broker’s, finder’s, financial
advisor’s or similar fee or commission in connection with this Agreement and
the transactions contemplated hereby based on arrangements made by the Company
or the Sellers or, to the Company’s or Sellers’ knowledge, made on behalf of
the Company or the Sellers.

3.25         Banks and Brokerage Accounts.  Schedule 3.25 of the Company
Disclosure Schedule sets forth (a) a true and complete list of the names and
locations of all banks, trust companies, securities brokers and other financial
institutions at which the Company has an account or safe deposit box or
maintains a banking, custodial, trading or other similar relationship, (b) a
true and complete list and description of each such account, box and
relationship, indicating in each case the account number and the names of the
respective officers, employees, agents or other similar representatives of the
Company having signatory power with respect thereto and (c) a list of each
Investment Asset, the name of the record and beneficial owner thereof, the
location of the certificates, if any, therefor.

3.26         Warranty Obligations. 
Schedule 3.26 of the Company Disclosure Schedule sets forth
(i) a list of all forms of written warranties, indemnification obligations,
guarantees and written warranty policies of the Company in respect of any of
the Company’s products and services, which are currently in effect (the “Warranty
Obligations”), and the duration of each such Warranty Obligation, and (ii)
each of the Warranty Obligations which is subject to any dispute or, to the
knowledge of the Company or the Sellers, threatened dispute.  True, correct and complete copies of the
Warranty Obligations have been made available to Purchaser prior to the
execution of this Agreement.  Except as
disclosed in Schedule 3.26 of the Company Disclosure Schedule,
there have not been any material deviations from the Warranty Obligations, and
no salesperson, employee or agent of the Company other than corporate officers
is authorized to undertake warranty obligations to any customer or other Person
in excess of such Warranty Obligations.

3.27         Foreign Corrupt Practices Act.  Neither the Company nor, to the knowledge of
the Company or the Sellers, any agent, employee or other Person acting on
behalf of the Company 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 to foreign or domestic political
parties or campaigns from corporate funds, violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate,
payoff, influence payment, kickback or other similar unlawful payment.

3.28         Financial Projections.  The Sellers and the Company have made
available to Purchaser those financial projections attached as Schedule 3.28
hereto, which projections were

 40
 

prepared for internal use only.  The Sellers make no representation or
warranty regarding the accuracy of such projections or as to whether such
projections will be achieved, except that the Sellers represent and warrant
that such projections were prepared in good faith and are based on assumptions
believed by the Company and the Sellers to be reasonable as of the date(s)
thereof.

3.29         Takeover Statutes. 
No Takeover Statute is applicable to the Acquisition or the other
transactions contemplated hereby.

3.30         Disclosure.  No
representation or warranty made by the Sellers contained in this Agreement, and
no statement contained in the Company Disclosure Schedule or in any of the
Transaction Documents (including the Company Financials and the notes thereto),
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements herein or therein, in the light
of the circumstances under which they were made, not misleading.

ARTICLE 3A

ADDITIONAL REPRESENTATIONS AND
WARRANTIES OF THE SELLERS

Each Seller, severally but
not jointly, hereby represents and warrants to Purchaser, subject to such
exceptions as are specifically disclosed in the Company Disclosure Schedule, as
follows:

3A.1        Ownership of Interests.  Such Seller owns of record and beneficially
all of the issued and outstanding Interests disclosed opposite his name on Schedule
2.1(a)(i) of the Company Disclosure Schedule.  Such Interests are, and when delivered by
such Seller to Purchaser pursuant to this Agreement will be, free and clear of
any and all Liens other than Permitted Liens.

3A.2        Authority Relative to this Agreement.  Each Seller that is not an individual has all
requisite right, power and authority and all approvals required to enter into,
execute and deliver this Agreement, each of the other Transaction Documents to
which it is a party and each and every transaction contemplated hereby and
thereby and to perform fully its obligations hereunder and thereunder.  This Agreement and each of the other
Transaction Documents to which it is a party have been duly executed and
delivered by each Seller that is not an individual.  This Agreement and each of the other
Transaction Documents to which such Seller is a party, assuming due
authorization, execution and delivery of this Agreement and each of the other Transaction
Documents by the other parties hereto and thereto, are valid and binding
obligations of such Seller enforceable against such Seller in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the rights
and remedies of creditors generally and to general principles of equity
(regardless of whether considered in equity or at law).

3A.3        No Conflicts. 
The execution and delivery by such Seller of this Agreement and the
other Transaction Documents to which such Seller is a party do not, and the
performance by such Seller of its obligations under this Agreement and the
other Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not:

 41
 

(a)           for each Seller that is not an individual, conflict with
or result in a violation or breach of any of the terms, conditions or
provisions of its organizational documents;

(b)           following the obtaining of the Approvals disclosed in Schedule 3A.3(c)
of the Company Disclosure Schedule, conflict with or result in a violation or
breach of any Law or Order applicable to such Seller or any of its Assets and
Properties; or

(c)           except as disclosed in Schedule 3A.3(c) of the
Company Disclosure Schedule, (i) conflict with or result in a violation or
breach of, (ii) constitute a default (or an event that, with or without notice
or lapse of time or both, would constitute a default) under, (iii) require such
Seller to obtain any Approval as a result or under the terms of, (iv) result in
or give to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, (v) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments or performance under, (vi) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon such Seller’s
Assets and Properties under or (vii) result in the loss of any material benefit
under, any of the terms, conditions or provisions of any Contract to which such
Seller is a party or by which any of his, her or its Assets and Properties is
bound.

The Approvals listed in Schedule 3A.3(c),
copies of which have been delivered to the Purchaser pursuant to Section
2.1(b)(ii), have not been withdrawn, suspended or conditioned.

3A.4        Agreements. 
Except as set forth in Schedule 3A.4 of the Company Disclosure
Schedule, there are no Contracts not referenced herein or disclosed in a Schedule
hereto, to which such Seller is a party relating to the business of the Company
or to such Seller’s rights and obligations as a member of the Company.  Except as set forth in Schedule 3A.4
of the Company Disclosure Schedule, such Seller does not own, directly or
indirectly, on an individual or joint basis, any ownership interest in, or
serve as an officer, director or Manager of, any customer, competitor or
supplier of the Company, or any organization which has a Contract with the
Company.

3A.5        Legal Proceedings. 
Except as set forth in Schedule 3A.5 of the Company
Disclosure Schedule:

(a)           there are no Actions or Proceedings pending against such
Seller or, to the knowledge of such Seller, threatened against such Seller, in
relation to the affairs of the Company, such Seller’s ownership of its
Interests or that would materially interfere with such Seller’s ability to
consummate the transactions contemplated by the Transaction Documents; and

(b)           to the knowledge of such Seller there are no facts or
circumstances that could reasonably be expected to give rise to any Action or
Proceeding described in Section 3A.5.

 42
 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and
warrants to the Sellers as follows:

4.1           Organization. 
Purchaser is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, and is a wholly-owned
subsidiary of Stanley, Inc.

4.2           Authority Relative to this Agreement. The Purchaser
has all requisite right, power and authority and all approvals required to
enter into, execute and deliver this Agreement, each of the other Transaction
Documents to which it is a party and each and every transaction contemplated
hereby and thereby and to perform fully its obligations hereunder and
thereunder.  This Agreement and each of
the other Transaction Documents to which it is a party have been duly executed
and delivered by the Purchaser.  This
Agreement and each of the other Transaction Documents to which the Purchaser is
a party, assuming due authorization, execution and delivery of this Agreement
and each of the other Transaction Documents by the parties hereto and thereto,
are valid and binding obligations of the Purchaser enforceable against the
Purchaser in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting the rights and remedies of creditors generally and to general
principles of equity (regardless of whether considered in equity or at law).

4.3           No Conflicts. 
The execution and delivery by the Purchaser of this Agreement and the
other Transaction Documents to which the Purchaser is a party does not, and the
performance by the Purchaser of its obligations under this Agreement and the other
Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not:

(a)           conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Purchaser’s certificate of
incorporation or bylaws, in each case, as amended through the Closing;

(b)           following its obtaining of the Approvals disclosed in Schedule 4.3(c),
conflict with or result in a violation or breach of any Law or Order applicable
to the Purchaser or any of its Assets and Properties; or

(c)           except as disclosed in Schedule 4.3(c), (i)
conflict with or result in a violation or breach of, (ii) constitute a default
(or an event that, with or without notice or lapse of time or both, would
constitute a default) under, (iii) require the Purchaser to obtain any Approval
as a result or under the terms of, (iv) result in or give to any Person any
right of termination, cancellation, acceleration or modification in or with
respect to, (v) result in or give to any Person any additional rights or
entitlement to increased, additional, accelerated or guaranteed payments or
performance under, (vi) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon the Purchaser’s Assets and
Properties under or (vii) result in the loss of

 43
 

any material benefit under,
any of the terms, conditions or provisions of any Contract to which the
Purchaser is a party or by which any of its Assets and Properties is bound.

The Approvals listed in Schedule
4.3(c), copies of which have been delivered to the Sellers’ Representative
pursuant to Section 2.1(c)(vi), have not been withdrawn, suspended or
conditioned.

4.4           Brokers; Third-Party Expenses.  No broker, investment banker, financial
advisor or other Person is entitled to any broker’s, finder’s, financial
advisor’s or similar fee or commission in connection with this Agreement and
the transactions contemplated hereby based on arrangements made by the
Purchaser, or to the Purchaser’s knowledge, made on behalf of the Purchaser.

ARTICLE 5

ADDITIONAL AGREEMENTS

5.1           Confidentiality. 

(a)           The
Sellers acknowledge and agree that they and the Company have had in the past,
currently have, and in the future may possibly have, access to (i) certain
information of the business of the Company that has not been disclosed to the
public and which constitutes confidential and proprietary business information
(the “Confidential Information of the Company”), and (ii) certain
information of Purchaser that has not been disclosed to the public and which
constitutes confidential and proprietary business information (the “Confidential
Information of Purchaser”), including but not limited to, in each case,
client and customer lists, software, data, formulae, processes, inventions,
trade secrets, marketing information and plans, business strategies and other
information about products and services offered or developed or planned to be
offered or developed.  Notwithstanding
the foregoing, Confidential Information of the Company and Confidential
Information of Purchaser does not include any information (A) that is or
becomes publicly available, other than as a result of a disclosure by the
Sellers or any of their Affiliates in violation of this Agreement or (B) which
must be disclosed by the Sellers or any of their Affiliates under applicable
Laws or by order of any Governmental or Regulatory Authority.  In the event the Sellers or any of their
Affiliates are requested or required (including, without limitation, by oral
questions, interrogatories, requests for information or documents in a legal
proceeding, subpoena, civil investigative or other similar process) to disclose
any Confidential Information of the Company or Confidential Information of
Purchaser as described in subpart (B) of the immediately preceding sentence,
the Sellers and/or the Company shall provide Purchaser with prompt written
notice of any such request or requirement so that Purchaser may seek a
protective order or other appropriate remedy, at Purchaser’s sole expense,
and/or waive compliance with the provisions of this Agreement.  Each Seller agrees that, on his behalf and on
behalf of his Affiliates, without prior written consent of Purchaser, from and
after the Closing Date for a period of two (2) years, none of the Sellers nor
any of their Affiliates shall in any manner directly or indirectly disclose to
any Person or use any Confidential Information of the Company or Confidential
Information of Purchaser for any purpose or reason.

 44

(b)           The Sellers acknowledge that any breach or threatened
breach of the provisions of this Section 5.1 will cause irreparable injury to
the Purchaser and/or the Company for which an adequate monetary remedy does not
exist.  Accordingly, in the event of any
such breach or threatened breach, the Purchaser and/or the Company shall be
entitled, in addition to the exercise of other remedies, to seek and (subject
to court approval) obtain injunctive relief, restraining the Sellers from
committing such breach or threatened breach. 
The right provided under this Section 5.1(b) shall be in addition
to, and not in lieu of, any other rights and remedies available to the
Purchaser or the Company.

(c)           Each
Seller (i) has carefully read and understands all of the provisions of
this Agreement and has had the opportunity for this Agreement to be reviewed by
counsel, (ii) acknowledges that the duration, geographical scope and
subject matter of this Section 5.1 are reasonable and necessary to protect the
goodwill, customer relationships, legitimate business interests, trade secrets
and confidential information of the Company and the Purchaser,
(iii) acknowledges that the Purchaser would not be willing to enter into
the Transaction Documents or consummate the transactions contemplated thereby
without the benefits contained in this Agreement and (iv) will be able to earn
a satisfactory livelihood without violating this Agreement.

5.2           Indemnification by Company of Managers and Officers.  Subject to the limitations in Section 22 of the
Operating Agreement, the Purchaser shall cause the Company to indemnify and
hold harmless any Person who was a Manager or officer of the Company on or
prior to the Closing Date for any liability (including reasonable attorneys’
fees and court costs) incurred by such Person as a result of a third party
bringing an action in connection with any liability disclosed to Purchaser on
the Company Financials.

5.3           Certain Tax Matters.The following
provisions shall (i) govern the allocation of responsibility as between
Purchaser and Sellers for certain Tax matters following the Closing Date, and
(ii) address certain other matters relating to Taxes:

(a)           Tax
Indemnification.  The Sellers,
jointly and severally, shall indemnify the Company and Purchaser and hold them
harmless from and against any Losses attributable to (i) all Taxes (or the
non-payment thereof) of the Company for all taxable periods ending on or before
the Closing Date and the portion through the end of the Closing Date for any
taxable period that includes (but does not end on) the Closing Date (“Pre-Closing
Tax Period”), and (ii) any and all Taxes of any Person (other than the
Company) imposed on the Company as a transferee or successor, by Contract or
pursuant to any Law, which Taxes relate to an event or transaction occurring
before the Closing Date; provided however, that the Sellers shall be liable
only to the extent that such Taxes exceed the amount, if any, reserved for such
Taxes (excluding any reserve for deferred Taxes established to reflect timing
differences between book and income Tax income) and taken into account in
determining any adjustment to the Purchase Price pursuant to Section 2.3.  The Sellers shall pay to (or as directed by)
Purchaser any such amounts by no later than five (5) Business Days prior
to the due date for paying such amount of Taxes to the relevant tax
authority.  Any indemnification claim
made under this Section 5.3 shall comply with and be subject the provisions of
Section 6.3 and 6.5.

 45
 

(b)           Straddle
Period.  In the case of any taxable
period that includes (but does not end on) the Closing Date (a “Straddle
Period”), the amount of any Taxes based on or measured by income or
receipts of the Company 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 for such purpose, the taxable period of any partnership or
other pass-through entity in which the Company holds a beneficial interest
shall be deemed to terminate at such time) and the amount of other Taxes of the
Company for a Straddle Period that relates 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.

(c)           Responsibility
for Filing Tax Returns.  The Sellers’
Representative shall prepare or cause to be prepared and file or cause to be
filed, at Sellers’ expense, all income Tax Returns for the Company that are
filed after the Closing Date and relate to any period of time on or prior to
the Closing Date.  To the extent
necessary to prepare such Tax Returns, Purchaser shall provide access to the
Books and Records of the Company to the Sellers’ Representative and any
representatives or advisors of the Sellers or the Sellers’ Representative, upon
reasonable request of the Sellers’ Representative.  The Sellers’ Representative shall permit
Purchaser to review and comment on any income Tax Return described in the prior
sentence at least ten (10) days prior to filing and shall make such revisions
to such Tax Return as are reasonably requested by Purchaser.  Each Seller shall include any income, gain,
loss, deduction or other Tax items of the Company on his Tax Returns in a
manner consistent with the Schedule K-1s furnished by the Company to each
Seller.  Purchaser shall prepare or cause
to be prepared and file or cause to be filed all Tax Returns other than income
Tax Returns for the Company that are filed after the Closing Date.  Purchaser shall permit the Sellers to review
and comment on each such Tax Return described in the prior sentence at least
ten (10) days prior to filing and shall make such revisions to such Tax Returns
as are reasonably requested by the Sellers.

(d)           Cooperation
on Tax Matters.

(i)            Purchaser
and the Sellers shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax Returns for
all periods that begin before the Closing Date and any audit, litigation or
other Action or 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 Action or
Proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.  Purchaser and the Sellers
agree (A) to retain all Books and Records with respect to Tax matters
pertinent to the Company relating to any taxable period beginning before the
Closing Date until the expiration of the applicable statute of limitations
(and, to the extent notified by the other party, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements
entered into with any Governmental or Regulatory Authority, and (B) to
give the other party reasonable written notice prior to transferring,
destroying or discarding any

 46
 

such Books and Records and, if the other party so
requests, the Purchaser or the Sellers, as the case may be, shall allow the
other party to take possession of such Books and Records.

(ii)           Purchaser
and Sellers further agree, upon request, to use their best efforts to obtain
any certificate or other document from any Governmental or Regulatory Authority
or any other Person as may be necessary to mitigate, reduce or eliminate any
Tax that could be imposed (including without limitation any Tax with respect to
the transactions contemplated hereby).

(iii)          Purchaser
and Sellers further agree, upon request, to provide the other party with all
information that either party may be required to report pursuant to Section 6043
of the Internal Revenue Code, and all Treasury Department Regulations
promulgated thereunder.

(e)           Tax Sharing Agreements. All
Tax sharing agreements or similar agreements with respect to or involving the
Company shall be terminated as of the Closing and, after the Closing, the
Company shall not be bound thereby or have any Liability thereunder.

(f)            Certain
Taxes.  All transfer, documentary,
sales, use, stamp, registration and other such Taxes and fees (including any
penalties and interest thereon) incurred in connection with this Agreement
shall be shared equally by Sellers, on the one hand, and Purchaser, on the
other hand, when due, and Sellers and Purchaser shall cooperate to file all
necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other such Taxes and
fees, and, if required by applicable Law, each of Purchaser and the Sellers
will, and will cause its or their Affiliates to, join in the execution of any
such Tax Returns and other documentation. 
Any expenses incurred by Purchaser in connection with filing the Tax
Returns or other documentation shall be shared equally by Purchaser and the
Sellers’ Representative.

5.4           Accounts Receivable.   With
respect to those accounts receivable of the Company used in determining Working
Capital pursuant to Section 2.3, Purchaser shall cause the Company from and
after the Closing to continue to use collection activity efforts consistent
with the Company’s past practices, and shall promptly remit to the Sellers’
Representative, for the benefit of the Sellers,
or shall cause the Company promptly to remit to the Sellers’ Representative,
for the benefit of the Sellers, any amount of such accounts receivable that (i)
is not collected within One Hundred Twenty (120) days after the invoice date
thereof and are counted or credited against the Escrow Amount in accordance
with Sections 3.23 and 6.2(a)(i) and (ii) is ultimately received after the date
hereof by the Company or Purchaser.

5.5           Satisfaction
of UAR Payments.  Within ten (10)
Business Days following the Closing, Purchaser agrees to cause the Company
payroll account to release to each holder of a UAR his, her or its allocable
portion (as set forth in Schedule 2.1(c)(iv)) an aggregate payment
amount of $1,627,050.00 (subject to applicable Tax withholding) in full
payment, satisfaction and termination of all outstanding UARs; provided,
however, that Purchaser shall not direct the release of such payment until
(i) such UAR holder has delivered to the Purchaser an executed

 47
 

notice of exercise and release, in form and substance
satisfactory to Purchaser, (ii) the Purchaser has delivered a copy thereof to
the Sellers’ Representative.  Promptly
following the release of each such payment, the Purchaser shall deliver to the
Sellers’ Representative evidence that each such payment has been made to each
holder of a UAR.

ARTICLE 6

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND

AGREEMENTS; INDEMNIFICATION

6.1           Survival of Representations, Warranties, Covenants and
Agreements.  Except for the
representations and warranties at Sections 3.2, 3.10, 3.13, 3.18, 3.27, 3A.1,
3A.2 and 4.2  (which shall survive and continue
until the applicable statute of limitations has expired), all of the
representations and warranties contained in this Agreement or in any
Transaction Document shall survive and continue until the first anniversary of
the Closing Date.  No Action or
Proceeding may be instituted to enforce, or seek damages or other remedies with
respect to the breach of any representation or warranty after the expiration of
the period of survival for such representation or warranty as described
above.  The covenants and agreements set
forth in this Agreement shall survive and continue until the applicable statute
of limitations has expired unless a different term is expressly provided for
herein.

6.2           Indemnification.

(a)               The Sellers, jointly and
severally, shall indemnify and hold harmless the Purchaser and its Affiliates
(including, after the Closing, the Company), officers, directors, employees,
agents, successors and assigns (each, a “Purchaser Indemnified Party”
and collectively, the “Purchaser Indemnified Parties”) for any and all
Liabilities, losses, damages of any kind, diminution in value, claims, costs,
expenses, fines, fees, deficiencies, interest, awards, judgments, amounts paid
in settlement and penalties (including, without limitation, reasonable
attorneys’, consultants’ and experts’ fees and expenses and other reasonable
costs of defending, investigating or settling claims) actually suffered or
incurred by them (including, without limitation, in connection with any action
brought or otherwise initiated by any of them) (hereinafter, “Loss(es)”),
arising out of or resulting from:

(i)            any inaccuracy in or breach (or any claim by any third
party alleging or constituting an inaccuracy or breach) of any representation
or warranty of the Company or the Sellers contained in this Agreement or in any
of the other Transactions Documents to which any Seller is a party, including
the Company Disclosure Schedule (but not including the representations and
warranties of the Sellers in Article 3A hereof or those portions of the Company
Disclosure Schedule relating thereto); or

(ii)           the failure of
any portion of the Indebtedness of the Company or the Legal and Investment
Banking Fees to be paid at or prior to the Closing, or the failure of any
Transaction Expenses to have been included in determining Working Capital for
purposes of Section 2.3 hereof.

 48
 

Notwithstanding the joint
and several obligations of the Sellers pursuant to this Section 6.2(a), in no
event shall any Seller be obligated pursuant to this Section 6.2(a) to
indemnify the Purchaser Indemnified Parties in an aggregate amount that exceeds
such Seller’s portion of the Purchase Price as set forth on Schedule
2.1(c)(v).

(b)           Each Seller, severally but not jointly, shall indemnify
and hold harmless the Purchaser Indemnified Parties for any and all Losses
arising out of or resulting from:

(i) any inaccuracy in or
breach (or any claim by any third party alleging or constituting an inaccuracy
or breach) of any representation or warranty of such Seller in Article 3A
hereof, including those portions of the Company Disclosure Schedule relating
thereto; or

(ii) any breach of any covenant or agreement
made by such Seller in this Agreement or any of the other Transaction Documents
to which such Seller is a party.

(c)           The Purchaser shall indemnify and hold harmless the
Sellers and their Affiliates, agents, successors, heirs and assigns (each, a “Seller
Indemnified Party” and collectively, the “Seller Indemnified Parties”)
for any and all Losses arising out of or resulting from:

(i)            any inaccuracy in or breach (or any claim by any third
party alleging or constituting an inaccuracy or breach) of any representation
or warranty of Purchaser contained in this Agreement or any of the other
Transaction Documents to which the Purchaser is a party; or

(ii)           any breach of any covenant or agreement made by Purchaser
in this Agreement or in any of the other Transaction Documents to which the
Purchaser is a party.

(d)           Notwithstanding anything to the contrary contained in this
Agreement, (i) except with respect to claims based on fraud, the maximum
aggregate amount of indemnifiable Losses arising out of or resulting from the
causes enumerated in Section 6.2(a)(i), Section 6.2(b)(i) or Section 6.2(c)(i)
that may be recovered from the Sellers or Purchaser, as the case may be (each,
an “Indemnifying Party”), shall not exceed Ten Million Dollars
($10,000,000) (the “Maximum Indemnity”); provided, however, that the
limitations set forth in this Section 6.2(d) shall not apply to indemnification
claims arising from any inaccuracy in or breach (or any claim by any third party
alleging or constituting an inaccuracy or breach) of any representation or
warranty contained in Sections 3.2, 3.10, 3A.1, 3A.2 or 4.2; and with respect
to any claim based on fraud or any indemnification claim arising from any
inaccuracy in or breach (or any claim by any third party alleging or
constituting an inaccuracy or breach) of any representation or warranty
contained in Sections 3.2, 3.10, 3A.1, 3A.2 or 4.2, the maximum aggregate
amount of indemnifiable Losses that may be recovered from the Sellers or
Purchaser, as the case may be, shall not exceed the Purchase Price.

 49
 

(e)           Notwithstanding anything to the contrary contained in this
Agreement, no obligation of any Indemnifying Party with respect to any
indemnifiable Loss otherwise payable by such Indemnifying Party under Section
6.2(a)(i), Section 6.2(b)(i) or Section 6.2(c)(i), as the case may be, shall be
payable until such time as all indemnifiable Losses payable by such
Indemnifying Party shall exceed Two Hundred Twenty-Five Thousand Dollars ($225,000),
at which time such Indemnifying Party shall be liable in full for all Losses it
is required to indemnify (including such $225,000 amount), subject to
Section 6.2(d); provided, however, that the limitations set forth in this
Section 6.2(e) shall not apply to claims based on fraud, or indemnification
claims arising from any inaccuracy in or breach (or any claim by any third
party alleging or constituting an inaccuracy or breach) of any representation
or warranty contained in Sections 3.2, 3.10, 3.13, 3.23, 3A.1, 3A.2 or 4.2.

6.3           Indemnification Procedures.

(a)               The obligations and Liabilities
of an Indemnifying Party under this Article 6 with respect to Losses
arising from claims of any third party which are subject to the indemnification
provided for in this Article 6 (“Third Party Claims”) shall be governed
by and contingent upon the terms and conditions set forth in this
Section 6.3.  If any Person entitled
to indemnification pursuant to Section 6.2(a), Section 6.2(b) or Section
6.2(c) (an “Indemnified Party”) shall receive notice of any Third Party
Claim, the Indemnified Party shall give the Indemnifying Party notice of such
Third Party Claim within ten (10) days of the receipt by the Indemnified
Party of such notice; provided, however, that the failure to provide such
notice shall not release the Indemnifying Party from any of its respective
obligations under this Article 6 except to the extent that the Indemnifying
Party is materially prejudiced by such failure. 
The notice of claim shall describe in reasonable detail the facts known
to the Indemnified Party giving rise to such indemnification claim, and the
amount or good faith estimate of the amount arising therefrom.

(b)               The Indemnifying Party shall be
entitled to assume and control the defense of a Third Party Claim at its
expense and through counsel of its choice (such counsel to be reasonably
acceptable to the Indemnified Party) if it gives notice of its intention to do
so to the Indemnified Party within fifteen (15) days after the receipt of
such notice from the Indemnified Party; provided, however, if there exists or
is reasonably likely to exist a conflict of interest that would make it
inappropriate for the same counsel to represent both the Indemnified Party and
the Indemnifying Party, then the Indemnified Party shall be entitled to retain
its own counsel, in each jurisdiction for which counsel is required, at the
expense of the Indemnifying Party.  In
the event that the Indemnifying Party exercises the right to undertake any such
defense against any such Third Party Claim as provided above, the Indemnifying
Party shall conduct the defense of the Third Party Claim actively and
diligently and the Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make available to the Indemnifying Party at the
Indemnifying Party’s expense, all witnesses, pertinent records, materials and
information in the Indemnified Party’s possession or under the Indemnified
Party’s control relating thereto as is reasonably required by the Indemnifying
Party.  Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the defense against
any such Third Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make 

 50
 

available to the Indemnified Party, at the
Indemnifying Party’s expense, all such witnesses, records, materials and
information in the Indemnifying Party’s possession or under the Indemnifying
Party’s control relating thereto as is reasonably required by the Indemnified
Party.  No such Third Party Claim may be
settled by any party conducting the defense against such claim without the
prior written consent of the other party, which consent shall not be
unreasonably delayed, withheld or conditioned.

6.4           Further
Limitations on Remedies.  No Indemnifying Party shall be liable to any
Indemnified Party for indirect, special, incidental, consequential or punitive
damages claimed by an Indemnified Party resulting from the Indemnifying Party’s
breach of its obligations, agreements, representations or warranties hereunder;
provided that nothing under this Section 6.4 shall preclude any recovery
by an Indemnified Party against an Indemnifying Party for Third Party Claims.

6.5           Adjustment to
Purchase Price.  All indemnification payments paid pursuant to
this Article 6 shall, to the maximum extent permitted by Law, be treated as an
adjustment to the Purchase Price for Tax purposes.

6.6           Sole Remedy.   The Escrow Amount shall be the sole recourse
available to Purchaser Indemnified Parties for any claims under this Article 6
until such Escrow Amount has been completely expended or until the Escrow
Release Date, whichever is earlier. 
Further, the remedies provided in this Article 6 shall constitute the exclusive
remedies of the parties hereto at law for any breach of a representation,
warranty or covenant contained in this Agreement or any other Transaction
Document and the parties hereto waive any other remedy which they or any other
person entitled to be indemnified pursuant to this Article 6 may have at law
with respect to any breach of any such representation, warranty or covenant.

ARTICLE 7

MISCELLANEOUS PROVISIONS

7.1           Notices.  All
notices, requests and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally or by
facsimile transmission against facsimile confirmation or mailed by a nationally
recognized overnight courier prepaid, to the parties at the following addresses
or facsimile numbers:

If to Purchaser to:

Stanley, Inc.

3101 Wilson Boulevard

Suite 700

Arlington, Virginia  22201

Facsimile No.: (703) 683-0039

Attn:  Scott D. Chaplin, Esq.

 51
 

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

Venable LLP

8010 Towers Crescent Drive

Suite 300

Vienna, Virginia  22182

Facsimile No.:  (703) 821-8949

Attn:  Joseph C. Schmelter, Esq.

If
to the Company to:

Techrizon, LLC

111 SW C Avenue

Lawton, OK  73501

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

Bingham McCutchen LLP

2020 K Street, NW

Washington, D.C.  20006

Facsimile No.:  (202) 373-6001

Attn:  John J. Klusaritz, Esq.

If to the Sellers or to the
Sellers’ Representative to:

David S. Aldrich, as Sellers’
Representative

PO Box 450

The Plains, VA 20198

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

Bingham McCutchen LLP

2020 K Street, NW

Washington, D.C.  20006

Facsimile No.:  (202) 373-6001

Attn:  John J. Klusaritz, Esq.

All such notices, requests and other communications
will (a) if delivered personally to the address as provided in this
Section 7.1, be deemed given upon delivery, (b) if delivered by facsimile
transmission to the facsimile number as provided for in this Section 7.1, be
deemed given upon facsimile confirmation, and (c) if delivered by
overnight courier to the address as provided in this Section 7.1, be deemed
given on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom
a copy of such

 52
 

notice is to be delivered pursuant to this Section
7.1).  Any party from time to time may
change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other
party hereto.

7.2           Entire Agreement. 
This Agreement and the Exhibits and Schedules hereto, including the
Company Disclosure Schedule, constitute the entire Agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof (including specifically that certain letter agreement
dated February 22, 2007, by and among the Company, Bill W. Burgess, Jr., David
S. Aldrich, Brad Burgess and Purchaser).

7.3           Amendment. 
This Agreement may be amended by the parties hereto at any time by
execution of an instrument in writing signed on behalf of the Purchaser, the
Company and the Sellers’ Representative.

7.4           Further Assurances; Post-Closing Cooperation.  At any time or from time to time after the
Closing Date, each party shall execute and deliver to the other parties such
other documents and instruments, provide such materials and information and
take such other actions as the other party may reasonably request to consummate
the transactions contemplated by this Agreement and otherwise to cause the
other party to fulfill its obligations under this Agreement and the
transactions contemplated hereby.

7.5           Waiver.  Any
term or condition of this Agreement may be waived at any time by the party that
is entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf of the
party waiving such term or condition.  No
waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion.  All remedies, either under this Agreement or
by Law or otherwise afforded, will be cumulative and not alternative.

7.6           Third-Party Beneficiaries.  The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights, and this Agreement does not confer any
such rights, upon any other Person other than any Person entitled to indemnity
under Article 6.

7.7           No Assignment; Binding Effect.  Neither this Agreement nor any right,
interest or obligation hereunder may be assigned (by operation of law or
otherwise) by any party without the prior written consent of the other party
and any attempt to do so will be void; provided, however, that the prior written
consent of the Sellers shall not be required for any collateral assignment of
the Purchaser’s rights and remedies under this Agreement to any lender under
credit and collateral agreements, as such agreements may be amended, modified
or replaced from time to time.  The Sellers hereby agree to execute and
deliver such documents, instruments and agreements as such lender may
reasonably require to confirm, reaffirm or perfect such collateral
assignment.  Subject to the preceding
sentence, this Agreement is binding upon, inures to the

 53
 

benefit of and is enforceable by the parties hereto
and their respective successors and permitted assigns.

7.8           Headings. 
The headings and table of contents used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.

7.9           Invalid Provisions. 
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable,
(b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part
of this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible.

7.10         Governing Law. 
This Agreement, any other Transaction Documents and any other closing
documents shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia, without giving effect to its principles or rules
regarding conflicts of laws.

7.11         Submission to Jurisdiction.  Each
party hereto irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by another party hereto or its successors or assigns
shall be brought and determined by either a state court or federal court
sitting in the Commonwealth of Virginia and each party hereto hereby
irrevocably submits with regard to any such action or proceeding for itself and
in respect to its property, generally and unconditionally, to the nonexclusive
jurisdiction of the aforesaid courts. 
Each party hereto hereby irrevocably waives, and agrees not to assert,
by way of motion, as a defense, counter claim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to serve process in accordance with this Section 7.11,
(b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise), and (c) to the fullest extent
permitted by applicable Law, that (i) the suit, action or proceeding in any
such court is brought in an inconvenient forum, (ii) the venue of such suit,
action or proceeding is improper and (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts.

7.12         Construction. 
The parties hereto agree that this Agreement is the product of
negotiation between sophisticated parties and individuals, all of whom were
represented by counsel, and each of whom had an opportunity to participate in
and did participate in, the drafting of each provision hereof.  Accordingly, ambiguities in this Agreement,
if any, shall not 

 54
 

be construed strictly or in favor of or against any
party hereto, but rather shall be given a fair and reasonable construction
without regard to the rule of contra proferentem.

7.13         Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

7.14         Specific
Performance.  The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. 
It is agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity. 
Nothing in Article 6 shall be construed or interpreted to limit this
Section 7.14.

7.15         Sellers’ Representative.  Following
the Closing, the Sellers’ Representative shall serve as the exclusive agent of
the Sellers for all purposes of this Agreement and the transactions
contemplated hereby; provided, however, that any action taken by Sellers’
Representative must be taken with the approval of two of the three individuals
acting jointly as Sellers’ Representative (pursuant to the introductory
paragraph of this Agreement) to bind the Sellers.  Without limiting the generality of the
foregoing, the Sellers’ Representative shall be authorized (a) to execute
all certificates, documents and agreements on behalf of and in the name of any
of the Sellers necessary to effectuate the transactions contemplated hereby,
and (b) to negotiate, execute and deliver all amendments, modifications
and waivers to this Agreement or any other agreement, document or instrument
contemplated by this Agreement.  The
Sellers’ Representative also shall be exclusively authorized to take all
actions on behalf of the Sellers in connection with any claims made under this
Agreement or in respect of the transactions contemplated hereby, to bring,
prosecute, defend or settle such claims, and to make and receive payments in
respect of such claims on behalf of the Sellers, and no Seller shall take any
such action without the Sellers’ Representative’s prior written approval.  The Sellers’ Representative shall not be
liable to any of the Sellers for any action taken by him pursuant to this
Agreement unless he has acted in bad faith or with gross negligence or willful
misconduct, and the Sellers shall jointly and severally indemnify him from any
Losses arising out of or relating to him serving as agent hereunder.  The Sellers’ Representative is serving in the
capacity as exclusive agent of the Sellers hereunder solely for purposes of
administrative convenience.

7.16         Publicity. No party
shall issue a press release or make any other public announcement concerning
the transaction contemplated by the Transaction Documents without the prior
written consent of the Purchaser and the Sellers’ Representative, which consent
shall not be unreasonably withheld, delayed or conditioned, except to the
extent required by Law or the applicable rules of any stock exchange on which
Purchaser lists securities; provided that, to the extent any such disclosure is
required by Law, the party intending to make such release shall use its commercially
reasonable efforts consistent with Law to consult with the other party with
respect to the text thereof.

 55
 

7.17         Waiver of Jury
Trial.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.

[SIGNATURE
PAGE(S) FOLLOW]

 56

IN WITNESS WHEREOF,
Purchaser, the Sellers and the Sellers’ Representative have caused this
Agreement to be executed as of the date first written above.

	
  

  	
  PURCHASER:

  
	
   

  	
   

  	
  OKLAHOMA ACQUISITION CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Christopher J. Torti

  
	
   

  	
   

  	
   

  	
  Name:   Christopher J. Torti

  
	
   

  	
   

  	
   

  	
  Title:   Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SELLERS:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Bill W. Burgess, Jr.

  
	
   

  	
  BILL W. BURGESS, JR.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ALDRICH T OK OWNERSHIP
  CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David S. Aldrich

  
	
   

  	
   

  	
  Name:  David S. Aldrich

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Brad Burgess

  
	
   

  	
  BRAD BURGESS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Brent Smith

  
	
   

  	
  BRENT SMITH

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ C. Todd Bridges

  
	
   

  	
  C. TODD BRIDGES

  

 

 57
 

 

	
  

  	
  FERRARA T OK OWNERSHIP
  CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. Ferrara

  
	
   

  	
   

  	
  Name:  Thomas J. Ferrara

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ George I. Bridges, III

  
	
   

  	
  GEORGE I. BRIDGES, III

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ James Arrington Smith

  
	
   

  	
  JAMES ARRINGTON SMITH

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ M. Monty Hightower

  
	
   

  	
  M. MONTY HIGHTOWER, P.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MEEK T OK OWNERSHIP
  CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary L. Meek

  
	
   

  	
   

  	
  Name:  Gary L. Meek

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Robert A. Smith

  
	
   

  	
  ROBERT A. SMITH

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SAPENTER T OK OWNERSHIP
  CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Sapenter

  
	
   

  	
   

  	
  Name:  Michael D. Sapenter

  
	
   

  	
   

  	
  Title: President

  

 

 58
 

 

	
  

  	
  SMITH T OK OWNERSHIP
  CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary W. Smith

  
	
   

  	
   

  	
  Name:  Gary W. Smith

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STEVE BROX INVESTMENTS,
  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Brox

  
	
   

  	
   

  	
  Name:  Steven J. Brox

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STRICKLIN T OK OWNERSHIP
  CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Toney Stricklin

  
	
   

  	
   

  	
  Name:  Toney Stricklin

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Terry Bell

  
	
   

  	
  TERRY BELL

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BRIDGES FAMILY TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George I. Bridges, Jr.

  
	
   

  	
   

  	
  Name:  George I. Bridges, Jr.

  
	
   

  	
   

  	
  Title: Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WESTERN VENTURE
  PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Braught

  
	
   

  	
   

  	
  Name:  John R. Braught

  
	
   

  	
   

  	
  Title: Managing Partner

  

 

 59
 

 

	
  

  	
  SELLERS’ REPRESENTATIVE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David S. Aldrich

  
	
   

  	
   

  	
  DAVID S. ALDRICH

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Bill W. Burgess, Jr.

  
	
   

  	
   

  	
  BILL W. BURGESS, JR.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Thomas J. Ferrara

  
	
   

  	
   

  	
  THOMAS J. FERRARA

  

 

 60Exhibit 10.12

PACIFIC PREMIER BANCORP, INC.

2004
LONG-TERM INCENTIVE PLAN

STOCK
OPTION AGREEMENT

Stock Option Agreement
(this “Agreement”), dated as of                    ,
2007 (the “Grant Date”), between Pacific Premier Bancorp, Inc. (the “Company”)
and                          
(the “Participant”). This Agreement is pursuant to the terms of the Pacific
Premier Bancorp, Inc. 2004 Long-Term Incentive Plan (the “Plan”), a copy of
which has been furnished to the Participant and the terms of which are incorporated
herein by reference. Unless otherwise indicated, whenever capitalized terms are
used in this Agreement, they shall have the meanings set forth in the Plan.

Section 1.  Grant of Award

  The Participant is hereby granted an award of
stock options representing                         
shares of Common Stock under the terms and conditions specified herein (the “Award”).

Section 2.  Vesting of Shares

2.1         Vesting Schedule.  Subject to Section 3, shares covered by the
Award (the “Restricted Shares”) shall vest based on the passage of time
according to the following vesting schedule:

	
  Number of Restricted Shares

  	
   

  	
  Vesting Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2.2           Accelerated
Vesting.  Notwithstanding Section
2.1, Restricted Shares shall become fully and immediately vested upon a Sale
Event.

2.3           Discretionary
Vesting.  The Board may, in its sole
discretion, accelerate the vesting of any or all Restricted Shares at any time
and for any reason.

Section 3. Forfeiture in the Event of
Termination of Employment

If the Participant’s employment with the Company and
its subsidiaries is terminated for any reason, the Participant shall forfeit
his or her interest in any Restricted Shares that have not yet become vested,
which shall be cancelled and be of no further force or effect.

Section 4.  Dividends and Voting Rights

The Participant shall be entitled to receive any
dividends paid with respect to the Restricted Shares; provided, however,
that no dividends shall be payable to or for the benefit of a Participant with
respect to record dates occurring prior to the Grant Date, or with respect to
record dates occurring on or after the date, if any, on which the Participant
has forfeited the Restricted Shares pursuant to Section 3 hereof.  The Participant shall be entitled to vote the
Restricted Shares to the same extent as would have been applicable to the
Participant if the Participant was then vested in the Restricted Shares; provided,
however, that the Participant shall not be entitled to vote the
Restricted Shares with respect to record dates occurring prior to the Grant
Date, or with respect to record dates occurring on or after the date, if any,
on which the Participant has forfeited the Restricted Shares pursuant to
Section 3 hereof.

Section 5.  Adjustments

If at any time while the Award is outstanding, the
number of outstanding shares of Common Stock is changed by reason of a
reorganization, recapitalization, stock split or any other event described in
Article V of the Plan, the number and/or kind of Restricted Shares covered by
the Award shall be adjusted accordingly pursuant to the provisions of the Plan.

Section
6.  Limitations on Restricted Shares

Restricted Shares
may not be sold, assigned, transferred, pledged or otherwise encumbered until
the Participant is vested in such shares in accordance with the provisions
hereof.

Section 7.  No Right to Continued Employment

Nothing in this Agreement shall confer upon a
Participant who is an employee of the Company or any of its subsidiaries any
right to continue in the employ of the Company or any of its subsidiaries or to
interfere in any way with the right of the Company or any of its subsidiaries
to terminate the Participant’s employment at any time.

Section 8.  Deposit of Restricted Shares

Each certificate issued in respect of Restricted
Shares granted under this Agreement shall be registered in the name of the
Participant and shall be deposited with an escrow agent designated by the
Board.  The grant of Restricted Shares is
conditioned upon the Participant endorsing in blank a stock power for the
Restricted Shares.

Section 9.  Withholding of Taxes

The Company shall withhold from any amounts due and
payable by the Company to the Participant (or secure a cash payment from the
Participant in lieu of withholding) the amount of any federal or state
withholding or other taxes, if any, due from the Company with respect to the
Restricted Shares.

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Section 10.  Miscellaneous Provisions

10.1                       Notices. All notices,
requests and demands to or upon a party hereto shall be in writing and shall be
deemed to have been duly given when delivered by hand or three days after being
deposited in the mail, postage prepaid or, in the case of facsimile notice,
when received, addressed as follows or to such other address as either party
may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

a)              If to the Company, to the following address:

Pacific
Premier Bancorp, Inc.

1600
Sunflower Avenue, 2nd Floor

Costa
Mesa, California  92626

Attn:
Steven R. Gardner,

President
and Chief Executive Officer

Facsimile:  (714) 433-3080

b)             If to the Participant, to the address or
facsimile number as shown on the signature page hereto.

10.2         Amendment.  This Agreement may be amended only by a
writing executed by the parties hereto that specifically states that it is
amending this Agreement.

10.3         Governing Law.  This Agreement shall be construed and
interpreted in accordance with and governed by the laws of the State of Delaware,
other than the conflict of laws provisions of such laws.

10.4         Titles.  Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.

10.5         Construction.  The construction of this Agreement is vested
in the Board, and the Board’s construction shall be final and conclusive on all
persons.

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IN WITNESS WHEREOF,
this Agreement has been executed and delivered by the parties hereto.

	
  PARTICIPANT

  	
   

  	
  PACIFIC PREMIER BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name: Steven R. Gardner

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Title: President / CEO

  
	
   

  	
   

  	
   

  
	
  Telephone Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  

 

 4

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