Document:

Execution
      Copy

    

    ASSET
      PURCHASE AGREEMENT

    

    BY
      AND
      AMONG

    

    ZANETT
      COMMERCIAL SOLUTIONS, INC.

    

    PS
      GOLIVE
      LLC 

    

    and

    

    MICHAEL
      JOHNSON

    

    Dated
      as
      of November 25, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSET
      PURCHASE AGREEMENT 

     

    This
      ASSET PURCHASE AGREEMENT (this “Agreement”)
      is
      made and entered into this 25th day of November, 2008 by and among ZANETT
      COMMERCIAL SOLUTIONS, INC., a Delaware corporation (“Buyer”),
      a
      wholly-owned subsidiary of Zanett, Inc. (“Zanett”),
      PS
      GOLIVE
      LLC,
      a
      Florida limited liability company (“Seller”),
      and
MICHAEL
      JOHNSON,
      an
      individual residing in the state of Florida and owner of all of the outstanding
      equity interests of Seller (the “Owner”).
      

    

    WHEREAS,
      Seller is an Oracle Partner and authorized Oracle software reseller engaged
      in
      the business of, among other things, providing upper end services for PeopleSoft
      Enterprise products and business processes.

    

    WHEREAS,
      the parties hereto desire to provide for the sale of substantially all of the
      assets of Seller to Buyer, and for certain other matters, all on the terms
      and
      subject to the conditions set forth in this Agreement.

    

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual representations,
      warranties, covenants and agreements contained herein, the parties hereto,
      intending to be legally bound, agree as follows:

    

    ARTICLE
      I. 

     

    DEFINITIONS
      AND CONSTRUCTION

     

    1.1 Definitions.

     

    “Actual
      Net Working Capital”
shall
      mean (i) Current Assets including cash, minus (ii) Current Liabilities, in
      each
      case as of the Closing Date, all as recorded on the Closing Financial
      Statements.

     

    “Adjusted
      Income”
shall
      mean for any period, earnings of Seller and its subsidiaries before deductions
      for Taxes, depreciation and amortization subject to the provisions,
      qualifications and other provisions of this Agreement, in accordance with GAAP
      as applied on a basis consistent with Seller’s past practices. In determining
      such Adjusted Income: 

     

    (i) Adjusted
      Income shall not include any gains, losses or profits realized from the sale
      of
      any assets other than in the ordinary course of business;

     

    (ii) No
      deduction shall be made for any management fees, general overhead expenses
      or
      other intercompany charges, of whatever kind or nature, charged by Buyer or
      any
      of its Affiliates to Seller; and

     

    (iii) No
      deduction shall be made for legal or accounting fees and expenses arising out
      of, or payments made pursuant to this Agreement or any agreement contemplated
      hereby.

     

    “Adjusted
      Income Target”
shall
      mean (i) for the first One-Year Performance Period, $990,000, (ii) for the
      second One-Year Performance Period, $1,158,000 and (iii) for the third One-Year
      Performance Period, $1,284,000. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Affiliate”
shall
      mean, as to any Person, any other Person controlled by, under the control of,
      or
      under common control with, such Person. As used in this definition, “control”
shall mean possession, directly or indirectly, of the power to direct or cause
      the direction of management or policies (whether through ownership of securities
      or partnership or other ownership interests, by contract or
      otherwise).

     

    “American
      Express Debt”
shall
      mean all amounts due under Seller’s American Express Cash Rebate Card and
      American Express Blue Cash for Business Credit Card (collectively the
“American
      Express Debt”).

     

    “Authority”
means
      the United States of America or any other nation, any state, or other political
      subdivision thereof, or any entity, agency, or authority (foreign, federal,
      state, or local) exercising executive, legislative, judicial, regulatory, or
      administrative functions of government.

     

    “Authorizations”
means
      any federal, foreign, state, local, regulatory and other governmental consents,
      licenses, certificates permits, franchises, approvals, notifications, numbers,
      identifiers, grants, and other authorizations issued, granted, given, or
      otherwise made available by or under the authority of any Authority or pursuant
      to any Law.

     

    “Benefit
      Plans”
shall
      mean any profit sharing, group insurance, medical, dental and/or
      hospitalization, stock option, pension, retirement, bonus, deferred
      compensation, stock bonus or stock purchase plan, or collective bargaining
      agreements, contracts or other arrangements under which pensions, deferred
      compensation or other retirement benefits are being paid or may become payable
      by a party, or any other employee welfare or benefit agreements, plans or
      arrangements, as defined in Section 3(3) of ERISA, any plan created in
      accordance with Section 125 of the Code, or any nonqualified employee benefit
      plans or deferred compensation, bonus, stock or incentive plans, or other
      employee benefit or fringe benefit programs, established for the benefit of
      a
      party’s former or current officers, directors or employees, including each trust
      or other agreement with any custodian or any trustee for funds held under any
      such agreement plan or agreement.

     

    “Books
      and Records”
shall
      mean (i) the minute books of Seller containing the minutes of all meetings
      and
      written consents of the members and board of managers (or similar governing
      body) and (ii) all other books and records of Seller prior to the Closing Date,
      including customer lists, reports, plans, projections and advertising and
      marketing materials and financial and accounting books and records.

     

    “Business”
shall
      mean the business currently carried on by Seller, including, without limitation,
      acting as an Oracle Partner and an authorized Oracle software reseller providing
      upper end servers for People Soft Enterprise products and business
      processes.

     

    “Business
      Day”
shall
      mean any day other than a Saturday, Sunday or legal holiday in the State of
      New
      York or Florida.

     

    “Closing”
shall
      mean the purchase of the assets by Buyer as set forth herein.

     

    “Closing
      Balance Sheet”
shall
      mean the balance sheet of Seller included in the Closing Financial
      Statements.

     

    “Closing
      Date”
shall
      mean the date on which the Closing is completed.

     

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

     

    “Competitors”
shall
      mean those entities other than Seller engaged in the Business.

     

    “Current
      Assets”
shall
      mean, in respect of any period, (i) all assets expected to be converted into
      cash or otherwise realized in the twelve months following the balance sheet
      date
      and recorded as current assets in Seller’s Financial Statements and the Closing
      Financial Statements in accordance with GAAP, as applied on a basis consistent
      with Seller’s past practices, including, but not limited to, cash and cash
      equivalents, accounts receivable, notes receivable, interest receivable, prepaid
      expenses, and current assets and any provisions recorded thereon and (ii) those
      items identified as “Current Assets” on Schedule
      1.1.

     

    “Current
      Liabilities”
shall
      mean, in respect of any period, (i) all liabilities expected to be settled
      in
      the twelve months following the balance sheet date and recorded as current
      liabilities in Seller’s Financial Statements and the Closing Financial
      Statements in accordance with GAAP, as applied on a basis consistent with
      Seller’s past practices, including, but not limited to, accounts payable,
      accrued expenses, accrued payroll liabilities, interest payable, deferred
      revenue and the current portion of any debt obligations, and (ii) those items
      identified as “Current Liabilities” on Schedule
      1.1.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Deposit”
shall
      have the meaning given to it in the Letter of Intent dated September 22, 2008
      by
      and between Zanett and Seller.

     

    “Effective
      Date”
shall
      mean 11:59 P.M. on the Closing Date.

     

    “Encumbrance”
shall
      mean a mortgage, charge, pledge, lien, option, restriction, claim, right of
      first refusal, right of preemption, third party right or interest or other
      encumbrance or security interest of any kind or similar right or any other
      matter affecting title.

     

    “Environmental
      Laws”
means
      all federal, state and local, provincial and foreign, civil and criminal laws,
      regulations, rules, ordinances, codes, decrees, judgments, directives or
      judicial or administrative orders, agreements or settlements relating to
      pollution or protection of the environment, natural resources or human health
      and safety, including, without limitation, laws relating to releases or
      threatened releases of Hazardous Substances (including, without limitation,
      releases or threatened releases to ambient air, surface water, groundwater,
      land, surface and subsurface strata) or otherwise relating to the manufacture,
      processing, distribution, use, treatment, storage, release, transport, disposal
      or handling of Hazardous Substances. “Environmental Laws” include, without
      limitation, the Comprehensive Environmental Response, Compensation and Liability
      Act (42 U.S.C. §§ 9601 et seq.), the Hazardous Materials Transportation Law (49
      U.S.C. §§ 5101 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
§§ 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
      seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances
      Control Act (15 U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33 U.S.C. §§
2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
      §§ 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et
      seq.), each as amended to date and all other state laws similar to any of the
      above.

     

    “Environmental
      Liabilities”
means
      all liabilities of Seller that (i) arise under or relate to violations of
      Environmental Laws or arise in connection with or related to any matter
      disclosed or required to be disclosed on Schedule
      4.19
      and (ii)
      are attributable to actions or omissions occurring or conditions existing on
      or
      prior to the Closing Date.

     

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

     

    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, together with all rules
      and regulations promulgated thereunder.

     

    “Financial
      Statements”
shall
      mean Seller’s audited balance sheets as of December 31, 2005, 2006 and 2007 and
      related statements of income, statements of changes in shareholder’s equity and
      statements of cash flows for such years and Seller’s unaudited balance sheet as
      of September 30, 2008 and the related statements of income, statements of
      changes in shareholder’s equity and statements of cash flows for the nine months
      then ended

     

    “GAAP”
shall
      mean, at any particular time, accounting principles generally accepted in the
      United States of America, consistently applied on a going concern
      basis.

     

    “Hazardous
      Substances”
means:
      (i) all Materials or Substances (whether or not wastes, contaminants or
      pollutants) that are or become regulated by any of the Environmental Laws,
      (ii)
      all Materials or Substances that are or become defined or described by any
      of
      the Environmental Laws as “hazardous” or “toxic” or a “pollutant,”
“contaminant,” “hazardous substance,” “hazardous waste,” “extremely hazardous
      waste,” “acutely hazardous waste” or “acute hazardous waste,” and (iii)
      petroleum, including crude oil or any fraction thereof, asbestos, including
      asbestos containing materials, and polychlorinated biphenyls.

     

    “Inventory”
means,
      all assets of Seller, wherever located, which are finished goods or work in
      process of the Business, and raw materials, spare parts and all other materials
      and supplies held by Seller that were acquired for use or consumption by Seller
      in the production of finished goods for the Business, including all rights
      related to consignment inventory.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “Key
      Employees”
shall
      mean Michael Johnson, Joseph Shobe, Lisa Edwards, John Simeone, Paul Grossman,
      Kelly Hewitt, John Gunnigle, Arnold Radwich, DeAnn Zier, Kristina Smallwood,
      Keerthi Byri, and Dhanraj Biyani. 

     

    “Law”
means
      any law (including principles of common law), statute, regulation, rule, permit,
      license, certificate, judgment, order, award, or other decision or requirement
      of any arbitrator, court, government or governmental agency, instrumentality,
      or
      other Authority (domestic or foreign).

     

    “Liens”
means
      any mortgage, pledge, security interest, encumbrance, lien, or charge of any
      kind, including any conditional sale or other title retention agreement, any
      lease in the nature thereof, and the filing of or agreement to give any
      financing statement under the Uniform Commercial Code of any jurisdiction and
      including any lien or charge arising by statute or other laws, which secures
      the
      payment of a debt (including any Tax) or the performance of an
      obligation.

     

    “Materials
      or Substances”
shall
      mean all elements, compounds, substances, matrices or mixtures that are
      hazardous, toxic, ignitable, reactive or corrosive.

     

    “Membership
      Unit”
shall
      mean the limited liability company interest of Seller.

     

    “One-Year
      Performance Period”
shall
      mean each of the three successive annual periods commencing on December 1,
      2008
      and ending on November 30, 2011.

     

    “Performance
      Period”
shall
      mean each of the One-Year Performance Periods.

     

    “Person”
shall
      mean an individual, company, partnership, limited liability company, limited
      liability partnership, joint venture, trust or unincorporated organization,
      joint stock corporation or other similar organization, government or any
      political subdivision thereof, or any other legal entity.

     

    “Receivables”
shall
      mean the accounts receivable, trade receivables, notes receivable and other
      receivables arising out of or related to Seller’s operations, in each case
      determined in accordance with GAAP.

     

    “Related
      Agreements”
shall
      mean all instruments, agreements and other documents executed and delivered
      or
      to be executed and delivered pursuant to this Agreement including without
      limitation the Bill of Sale, the Confidentiality, Non-Competition, and
      Non-Solicitation Agreements, and the Lock-up Agreement.

     

    “Related
      Party”
means
      any officer, director, stockholder, member, or Affiliate of either Seller or
      Owner or any individual related by blood or marriage to any such Person.

     

    “Reserves”
shall
      mean those reserves for bad debts, contractual adjustments and disallowances,
      self-insured risks, risk management and unspecified uninsured liabilities,
      established and maintained by Seller and reflected in the Financial
      Statements.

     

    “Revenue”
shall
      mean gross revenue, calculated in accordance with GAAP, as applied on a basis
      consistent with Seller’s past practices.

     

    “Revenue
      Target”
means
      (i) for the first One-Year Performance Period, $3,400,000, (ii) for the second
      One-Year Performance Period, $3,900,000 and (iii) for the third One-Year
      Performance Period, $4,300,000. 

     

    “Schedules”
shall
      mean the disclosure schedules delivered by Seller to Buyer pursuant to this
      Agreement. 

     

    “Target
      Net Working Capital”
shall
      mean $0. 

     

    “Taxes”
shall
      mean all taxes, assessments, charges, duties, fees, levies or other governmental
      charges, including but not limited to, all federal, state, local, foreign,
      or
      other income, profits, unitary, business, franchise, capital stock, real
      property, personal property, intangible taxes, withholding, FICA, Medicare,
      unemployment compensation, disability, transfer, sales, use, excise and other
      taxes, assessments, charges, duties, fees, or levies of any kind whatsoever
      (whether or not requiring the filing of Tax Returns) and all deficiency
      assessments, additions to tax, penalties and interest.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Tax
      Returns”
shall
      mean any return, amended return or other report (including but not limited
      to
      elections, declarations, disclosures, schedules, estimates and information
      returns) required to be filed with any Tax authority or other governmental
      authority.

     

    “Wachovia
      Bank”
shall
      mean Wachovia Bank, National Association.

     

    “Wachovia
      Debt”
shall
      mean that certain Promissory Note for a line of credit in the amount of $300,000
      between Seller and Wachovia Bank dated April 25, 2008.

     

    “Zanett
      Stock”
shall
      mean the common stock of Zanett, $0.001 par value per share.

     

    1.2 Location
      of Certain Defined Terms. The following terms used in this Agreement are defined
      in the Section indicated.

     

    
      	
              Additional
                Contingent Payment

            	 	 	
              3.2(b

            	
              )

            
	
              Additional
                Contingent Payment Cap

            	 	 	
              3.2(b

            	
              )

            
	
              Adjustment
                Payment

            	 	 	
              3.4(c

            	
              )

            
	
              Advance
                Amount

            	 	 	
              3.5

            	 
	
              Assumed
                Liabilities

            	 	 	
              2.4

            	 
	
              Audit

            	 	 	
              8.7

            	 
	
              Balance
                Sheet

            	 	 	
              4.4(e

            	
              )

            
	
              Balance
                Sheet Date

            	 	 	
              4.5(e

            	
              )

            
	
              Buyer
                Indemnified Parties

            	 	 	
              7.2(a

            	
              )

            
	
              Buyout
                Payment

            	 	 	
              3.2(c

            	
              )

            
	
              Claim

            	 	 	
              4.9

            	 
	
              Closing

            	 	 	
              2.7

            	 
	
              Closing
                Date

            	 	 	
              2.7

            	 
	
              Closing
                Financial Statements

            	 	 	
              3.5(a

            	
              )

            
	
              Confidential
                Information

            	 	 	
              8.2

            	 
	
              Consent

            	 	 	
              2.2

            	 
	
              Consideration

            	 	 	
              3.1

            	 
	
              Contingent
                Payment

            	 	 	
              3.2(a

            	
              )

            
	
              Contract

            	 	 	
              2.1(c

            	
              )

            
	
              Damages

            	 	 	
              7.2(a

            	
              )

            
	
              Debt
                Repayment

            	 	 	
              8.5(a

            	
              )

            
	
              Default

            	 	 	
              4.10(i

            	
              )

            
	
              Disputed
                Amounts

            	 	 	
              8.6

            	 
	
              Excluded
                Assets

            	 	 	
              2.3

            	 
	
              Excluded
                Liabilities

            	 	 	
              2.5

            	 
	
              Indemnifying
                Party

            	 	 	
              7.3

            	 
	
              Indemnified
                Party

            	 	 	
              7.3

            	 
	
              Independent
                Accounting Firm

            	 	 	
              8.7

            	 
	
              Intellectual
                Property

            	 	 	
              4.15(a

            	
              )

            
	
              IRCA

            	 	 	
              4.12(f

            	
              )

            
	
              IRS

            	 	 	
              4.1(d

            	
              )

            
	
              Lock
                Up Agreement

            	 	 	
              9.2(m

            	
              )

            
	
              Performance
                Period Financial Statements

            	 	 	
              8.6

            	 
	
              Performance
                Period Requirements

            	 	 	
              3.2(a

            	
              )

            
	
              Permitted
                Encumbrances

            	 	 	
              4.5(f

            	
              )

            
	
              Pre-Closing
                Receivables

            	 	 	
              8.5(a

            	
              )

            
	
              Purchased
                Assets

            	 	 	
              2.1

            	 
	
              Seller
                Indemnified Parties

            	 	 	
              7.2(b

            	
              )

            

    

    

    1.3 Construction.

     

    (a) The
      headings and captions used herein are intended for convenience of reference
      only, and shall not modify or affect in any manner the meaning or interpretation
      of any of the provisions of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) As
      used
      herein, the singular shall include the plural, the masculine and feminine
      genders shall include the neuter, and the neuter gender shall include the
      masculine and feminine, unless the context otherwise requires.

     

    (c) The
      words
“hereof,” “herein” and “hereunder”, and words of similar import, when used in
      this Agreement shall refer to this Agreement as a whole and not to any
      particular provision of this Agreement.

     

    (d) All
      references herein to Sections, Schedules or Exhibits shall be deemed to refer
      to
      Sections of and Schedules or Exhibits to this Agreement, unless specified to
      the
      contrary. All Exhibits and Schedules to this Agreement are integral parts of
      this Agreement as if fully set forth herein.

     

    (e) The
      words
“include,” “includes” and “including” when used herein shall be deemed in each
      case to be followed by the words “without limitation.”

     

    (f) “To
      the
      knowledge of Seller,” “to the best knowledge, information and belief of Seller”
or any similar phrase shall be deemed to mean that (i) a Seller Responsible
      Person (as defined below) is actually aware of a particular fact or matter
      or
      (ii) a prudent individual in such Seller Responsible Person’s capacity could
      reasonably be expected to discover or otherwise become aware of that fact or
      matter in the ordinary course of performing his functions on behalf of Seller
      or
      in the ordinary course of conducting a reasonable investigation regarding the
      accuracy of any representation or warranty contained in this Agreement. For
      purposes of this definition, the term Seller Responsible Person consists of
      all
      directors and executive officers of Seller, including Owner. 

     

    (g) “Material
      adverse change” or “material adverse effect” means, with respect to a specified
      party, any change or effect, as the case may be, that has, or is reasonably
      likely to have, individually or in the aggregate, a material adverse impact
      on
      the assets, business, prospects or condition (financial or otherwise) of such
      party and its subsidiaries taken as a whole.

     

    (h) As
      all
      parties participated in negotiating and drafting this Agreement, no rule of
      construction shall apply to this Agreement which construes ambiguous language
      in
      favor of or against any party by reason of that party’s role in drafting this
      Agreement.

     

    ARTICLE
      II. 

     

    THE
      SALE AND TRANSFER OF ASSETS

     

    2.1 Purchase
      and Sale of
      Assets.
      Subject
      to the terms and conditions of, and on the basis of and in reliance upon, the
      covenants, agreements, and representations and warranties set forth in this
      Agreement, at the Closing, Seller shall sell, assign, transfer, and convey
      to
      Buyer, free and clear of any Liens other than Permitted Encumbrances, and Buyer
      shall purchase from Seller, all of Seller’s right, title, and interest in and to
      all assets, properties, goodwill, rights, and claims of every kind and
      description, personal and mixed, tangible and intangible, known and unknown,
      actual and contingent, and wherever situated, which are owned, leased, licensed,
      held, or used by Seller in the Business (excluding only the Excluded Assets)
      (the “Purchased
      Assets”).
      The
      transfer of the Purchased Assets shall not include the assumption of any
      liability by Buyer whatsoever unless Buyer expressly assumes such liability
      pursuant to Section
      2.4.
      Without
      limiting the foregoing, the Purchased Assets shall include the following assets
      relating to the Business as they exist on the Closing Date and to the extent
      of
      Seller’s right, title, and interest therein, except to the extent they are
      Excluded Assets:

     

    (a) all
      Inventory;

     

    (b) all
      tangible personal property, including all furniture, equipment, computers and
      peripherals (including installed software), supplies, packaging, office
      materials, tools, parts, fixtures, machinery, and the tangible property listed
      on Schedule
      2.1(b);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) all
      rights in, to, and under each purchase order (including open purchase orders
      for
      inventory), policy sheet, sales agreement, equipment lease, distribution
      agreement, licensing agreement, franchise, guaranty, release, instrument,
      contract, agreement, commitment, and arrangement (in every case, oral or
      written) to which Seller is a party or by which the Business or the Purchased
      Assets are otherwise bound (each, a “Contract”),
      including those Contracts listed on Schedule
      2.1(c);

     

    (d) all
      Intellectual Property used primarily in the Business;

     

    (e) all
      Authorizations, including those Authorizations listed on Schedule
      2.1(e)
      that are
      not identified as non-transferable;

     

    (f) with
      respect to the Business, all books and records (including such books and records
      as are contained in computerized storage media), including all Inventory,
      purchasing, accounting, sales, export, import, manufacturing, and shipping
      records, all customer, supplier, and vendor lists, files, records, literature,
      and correspondence, all advertising, marketing, and public relations materials,
      and, subject to applicable Law, copies of all personnel records of
      Seller;

     

    (g) all
      unperformed commitments or obligations owing to Seller which pertain to the
      Business or any of the Purchased Assets, (except those relating exclusively
      to
      Excluded Liabilities);

     

    (h) all
      other
      tangible and intangible rights and property of Seller, including the telephone
      and telecopy numbers of Seller which are held, or used in, or necessary to,
      the
      operation of the Business; 

     

    (i) all
      insurance benefits, including rights and proceeds, arising from or relating
      to
      the Purchased Assets or the Assumed Liabilities prior to the Effective
      Date;

     

    (j) all
      claims of Seller against third parties relating to the Purchased Assets or
      the
      Business, whether choate or inchoate, known or unknown, contingent or
      non-contingent, including all causes of action, rights of action, contract
      rights, and warranty and product liability claims against third parties (except
      those relating exclusively to Excluded Liabilities);

     

    (k) all
      rights of Seller in and to any and all security deposits in respect of any
      Purchased Asset; and

     

    (l) all
      of
      the goodwill associated with the Business as a going concern.

     

    2.2 Nonassignability.
      Notwithstanding anything in this Agreement to the contrary, if any Contract
      or
      Authorization included in the Purchased Assets may not be transferred without
      the consent, approval, or waiver (“Consent”)
      of a
      third party (including any Authority), such transfer or attempted transfer
      would
      constitute a breach thereof or a violation of any Law and such Consent is listed
      in Schedule
      4.2(b),
      nothing
      in this Agreement or any Related Agreement shall constitute a transfer or
      attempted transfer thereof. To the extent that any Consent is not obtained
      by
      the Effective Date, Seller (a) shall cooperate with Buyer at its request in
      endeavoring to obtain such Consent promptly with Buyer and Seller each paying
      their own costs in connection therewith and (b) if any such Consent is
      unobtainable, shall cooperate with Buyer in any arrangement (provided that
      such
      arrangement is not a breach or violation of such Contract or Authorization)
      designed to provide for Buyer the benefits under the applicable Contract or
      Authorization (provided that such arrangement is not a breach or violation
      of
      such Contract or Authorization) as if such Contract and Authorization had been
      duly assigned to Buyer, including enforcement for the benefit of Buyer of any
      and all rights of Seller against any other party thereto. Buyer shall be
      responsible only for the liabilities or obligations arising out of the Contracts
      and Authorizations to the extent they are assigned or transferred to Buyer
      pursuant to the terms of this Agreement or Buyer is provided the benefits,
      claims, and rights under such Contracts and Authorizations. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3 Excluded Assets.
      Notwithstanding anything to the contrary in this Agreement, the following
      specified rights, properties, and assets of Seller shall not be included in
      the
      Purchased Assets (the “Excluded
      Assets”):

     

    (a) cash
      and
      cash equivalents and marketable securities;

     

    (b) all
      Receivables (other than any Pre-Closing Receivables transferred to Buyer
      pursuant to Section
      8.5(b));

     

    (c) seals,
      minute books, and Books and Records relating to the membership interests of
      Seller, bank accounts and taxpayer identification numbers;

     

    (d) those
      assets specifically listed on Schedule
      2.3(i);
      

     

    (e) all
      casualty, liability, or other policies of insurance of Seller (except to extent
      set forth in Sections
      2.1(i)
      and
2.1
      (j))
      and all
      claims and rights of Seller with respect to refunds related to such policies
      solely (and only to the extent) due to overpayments made by Seller prior to
      the
      Effective Date;

     

    (f) all
      Benefit Plans of Seller and all assets owned or held by any such Benefit
      Plans;

     

    (g) all
      claims and rights of Seller to any Tax refunds, Tax credits, or other Tax
      benefits; and

     

    (h) Seller’s
      rights under this Agreement.

     

    2.4 Assumed
      Liabilities.
      Subject
      to the terms and conditions of, and on the basis of and in reliance upon the
      covenants, agreements, and representations and warranties set forth in this
      Agreement, at the Effective Date, Buyer shall assume and agree to discharge
      the
      liabilities and obligations of Seller to be performed or discharged after
      Closing pursuant to the Contracts included in the Purchased Assets (other than
      any liability or obligation for a breach or default that occurred prior to
      Closing or to pay money that accrued prior to the Effective Date) and listed
      on
Schedule
      2.4(a) Seller
      (collectively, the “Assumed
      Liabilities”).

     

    2.5 Excluded
      Liabilities.
      Except
      for the Assumed Liabilities, Buyer shall not assume, or in any way be liable
      or
      responsible for, any direct or indirect liabilities, obligations, or debts
      of
      Seller or the Business of any type or nature, fixed or unfixed, known or
      unknown, accrued or unaccrued, asserted or unasserted, choate or inchoate,
      liquidated or unliquidated, secured or unsecured, contingent or otherwise
      (collectively, the “Excluded
      Liabilities”),
      including the liabilities listed below, that are based on acts or omissions
      of
      Seller or any Affiliate of Seller occurring on, before or after the Effective
      Date. Seller shall retain all Excluded Liabilities and agrees to pay or
      discharge when due all of the Excluded Liabilities. Without limiting the
      foregoing, the Excluded Liabilities shall include all of the
      following:

     

    (a) any
      obligation or liability relating to or arising out of the Excluded
      Assets;

     

    (b) any
      obligation or liability relating to or arising out of the Wachovia
      Debt;

     

    (c) any
      product warranty or product liability, negligence, or other claim of any nature
      in respect of products or services sold, manufactured, installed, or provided
      by
      or for Seller prior to the Effective Date;

     

    (d) any
      obligation or liability for Taxes that have been or may be incurred as a result
      of Seller’s operation of the Business or ownership of the Purchased Assets on or
      before the Effective Date, including (i) any liability for deferred Taxes of
      any
      nature; and (ii) any Taxes of any Person for which Seller is liable, arising
      out
      of any tax sharing agreement as a transferee or successor, or by reason of
      membership in any affiliated group of corporations;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) any
      Environmental Liabilities arising or related to the operation of Seller and
      the
      Business, or arising or relating to the acts or omissions of any Person or
      Authority, or from any conditions, whether known or unknown, naturally occurring
      or otherwise, or any events, facts, or circumstances whatsoever, in each case
      first occurring before the Effective Date;

     

    (f) any
      obligation or liability arising under any Contract that (i) is not transferred
      to Buyer as part of the Purchased Assets or (ii) relates to any breach or
      default (or an event which might, with the passing of time or the giving of
      notice or both, constitute a default) under any Contract or to any goods or
      services provided or to be provided by Seller under any such Contract arising
      out of or relating to periods prior to the Effective Date;

     

    (g) any
      obligation or liability of Seller to indemnify its officers, directors,
      employees, or agents;

     

    (h) any
      obligation or liability of the Business to any Affiliate or Related
      Party;

     

    (i) any
      obligation or liability relating to any Benefit Plan, pension or retirement
      benefits (including any 401(k) plan) and health care or other employee benefits
      or employee stock option plans for employees or former employees;

     

    (j) any
      obligation or liability under any employment, severance, retention, termination,
      or similar agreement with any employee of Seller or any of its
      Affiliates;

     

    (k) any
      obligation or liability arising out of or related to any employee of Seller,
      including employee grievances, arising out of or relating to periods prior
      to
      the Effective Date;

     

    (l) any
      obligation or liability of Seller to distribute to its member or otherwise
      to
      apply all or any part of the consideration received under this
      Agreement;

     

    (m) any
      obligation or liability of Seller to the extent that Seller has the right to
      be
      indemnified by an insurer or other third party under the policies in force
      immediately preceding the Effective Date;

     

    (n) any
      obligation or liability of Seller arising out of existing or pending claims,
      actions, suits, proceedings (arbitration or otherwise), litigations or
      investigations arising out of, or relating to, an occurrence or event happening
      before the Effective Date, whether or not set forth in the Disclosure
      Schedule;

     

    (o) any
      obligation or liability arising out of any “bulk sale” type of Law or successor
      liability protection Law, including any Law regarding notice of the transactions
      contemplated hereby to be given to any Tax Authority or imposing Damages on
      Buyer or Buyer Parent or Liens on the Purchased Assets if such notice is not
      given;

     

    (p) any
      obligation or liability arising under the WARN Act or any similar Law, to the
      extent caused by any action of Seller before the Effective Date;

     

    (q) any
      obligation or liability (including any fees, expenses, or other payments) of
      Seller or Owner to any brokers, financial advisors, or comparable other Persons
      retained or employed by any of them in connection with the Agreement or the
      transactions contemplated hereunder;

     

    (r) any
      obligation or liability of Seller for infringement associated with the use
      of
      any trademarks prior to the Effective Date; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (s) all
      capital lease obligations of Seller and other outstanding debt of Seller, except
      as set forth on Schedule 2.5(r).

     

    2.6 Certain
      Taxes.
      Seller
      and Owner shall be responsible for the payment of all Taxes imposed on Seller
      or
      Johnson that are payable or arise as a result of this Agreement or any related
      Agreements; provided,
      however,
      that
      Seller and Buyer shall share equally any transfer Taxes that are payable or
      arise as a result of the transactions contemplated by this Agreement.

     

    2.7 Closing.
      Subject
      to the terms and conditions hereof, the closing of the transactions contemplated
      by this Agreement (the “Closing”)
      will
      take place on the first business day after the satisfaction or waiver of the
      conditions set forth in Article IX (other than any such conditions that by
      their
      terms cannot be satisfied until the Closing Date, which conditions shall be
      required to be so satisfied or waived on the Closing Date), unless another
      time
      or date is agreed to by the parties hereto (the actual time and date of the
      Closing, the “Closing
      Date”).
      The
      Closing shall be held at the offices of Drinker Biddle & Reath LLP, One
      Logan Square, 18th
      and
      Cherry Streets, Philadelphia, PA 19103-6996 fax: (215) 988-2757, or at such
      other place as the parties hereto may agree.

     

    2.8 Deliveries
      at the Closing
      At the
      Closing, in addition to the other actions contemplated elsewhere
      herein:

     

    (a) Owner
      shall deliver, or shall cause to be delivered, to Buyer the
      following:

     

    (i) a
      certificate, dated as of the Closing Date and duly executed by such Owner,
      to
      the effect set forth in Section 9.2(a)
      and
9.2(b)
      hereof;

     

    (ii) a
      certificate from such Owner substantially in the form set forth in Treasury
      Regulation Section 1.1445-2(b); and 

     

    (iii) such
      other documents and instruments as Buyer may reasonably request to effectuate
      or
      evidence the transactions contemplated by this Agreement.

     

    (b) Seller
      shall deliver to Buyer the following:

     

    (i) a
      certificate of an authorized officer of Seller, provided pursuant to the
      requirements of Treasury Regulation Sections 1.1445-2(c)(3) and 1.897-2(h);
      

     

    (ii) a
      certificate, dated as of the Closing Date and duly executed by an authorized
      officer of Seller, to the effect set forth in Section 9.2(a)
      and
9.2(b)
      hereof;

     

    (iii) a
      certificate from the Secretary of State of Florida as to Seller’s formation,
      valid existence and good standing as a domestic limited liability company in
      the
      State of Florida, together with a certificate of good standing from the
      Secretary of State or other appropriate governmental official of each
      jurisdiction in which Seller is qualified to conduct its business as a foreign
      entity, all dated no more than five days prior to the Closing Date;

     

    (iv) the
      third
      party consents and documents evidencing the termination of the agreements,
      in
      each case as specified in Schedule
      2.7(b);
      

     

    (v) an
      assignment, bill of sale, and assumption agreement in the form of Exhibit
      A
      (the
“Bill
      of Sale”)
      executed by Seller; 

     

    (vi) an
      intellectual property assignment in the form of Exhibit
      B
      (the
“Intellectual
      Property Assignment”)
      executed by Seller;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (vii) a
      certificate of the secretary of Seller in form and substance satisfactory to
      Buyer, dated as of the Closing Date, attaching (A) the certificate of formation
      of Seller and all amendments thereto, certified as of a recent date by the
      Secretary of State of the State of Florida, (B) the operating agreement of
      Seller, (C) incumbency, authority, and specimen signatures of each of the
      officers of Seller executing this Agreement and any other Related Agreement
      executed on behalf of Seller and certifying the authenticity of such signatures
      and (D) the resolutions duly adopted by the board of managers (or similar
      governing body) of Seller and by the sole member of Seller, authorizing and
      approving the execution, delivery, and performance of this Agreement and the
      consummation of the transactions contemplated hereunder; 

     

    (viii) copies
      of
      executed payoff letters for all outstanding indebtedness of Seller, if any
      (other than the Wachovia Debt), along with duly executed releases or
      terminations of financing statements, or other evidence satisfactory to Buyer
      that all Liens on any Purchased Asset (other than Permitted Encumbrances) have
      been released and terminated; and

     

    (ix) such
      other documents and instruments as Buyer may reasonably request to effectuate
      or
      evidence the transactions contemplated by this Agreement.

     

    (c) Buyer
      shall deliver, or shall cause to be delivered, to Seller the
      following:

     

    (i) a
      certificate, dated as of the Closing Date and duly executed by an authorized
      representative of Buyer, as applicable, to the effect set forth in Sections
      9.3(a),
      and
9.3(b)
      hereof;
      

     

    (ii) the
      Bill
      of Sale executed by Buyer;

     

    (iii) the
      Intellectual Property Assignment executed by Buyer; and 

     

    (iv) such
      other documents and instruments as Seller may reasonably request to effectuate
      or evidence the transactions contemplated by this Agreement.

     

    ARTICLE
      III.

     

    CONSIDERATION

     

    3.1 Consideration.

     

    (a) The
      “Consideration”
for
      the
      Purchased Assets, shall be up to $1,200,000 (plus the Additional Contingent
      Payment), subject to Section
      3.2(c)
      and
      adjustment as set forth in this Article III, payable to Seller as
      follows:

     

    (i) in
      respect of each of the One-Year Performance Periods, an amount of cash or Zanett
      Stock with a value (as described below) of up to $400,000, payable to the Seller
      after the Closing in accordance with Section
      3.2(a)
      (each
      such payment, a “Contingent
      Payment”);
      and

     

    (ii) such
      additional amount as Buyer may pay to the Seller after the Closing in accordance
      with Section
      3.2(b)
      (such
      additional payment, the “Additional
      Contingent Payment”).

     

    Buyer
      shall pay each Contingent Payment in cash, shares of Zanett Stock or a
      combination of both, as Buyer shall determine in its sole discretion; provided,
      however, that not less than 50% of any Contingent Payment shall be paid in
      cash.
      In respect of any portion of a Contingent Payment paid with Zanett Stock, the
      value of such Zanett Stock shall be calculated based on the average price for
      Zanett Stock as
      reported on NASDAQ (or such other national securities exchange or automated
      quotation system on which the Zanett Stock is listed or quoted) for the three
      (3) consecutive trading days ending on the trading day immediately prior to
      the
      last day of the corresponding One-Year Performance Period.
      In
connection
      with all stock issuances hereunder, Zanett shall not be required to issue any
      fractional shares. All fractional shares shall be rounded up to the nearest
      whole number of shares of Zanett Stock.  

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.2 Payment
      of Consideration.

     

    (a) Contingent
      Payment.
      In
      respect of each Performance Period, upon complete satisfaction of the
      Performance Period Requirements set forth below, Buyer shall pay to Seller
      the
      applicable Contingent Payment. The Contingent Payment shall be determined as
      follows:

     

    (i) If
      the
      Performance Multiple (defined below) for the Performance Period is less than
      one, the Contingent Payment shall be equal to the product of the Performance
      Multiple and the maximum Contingent Payment payable for the Performance Period;
      and

     

    (ii) If
      the
      Performance Multiple for the Performance Period is equal to or greater than
      one,
      the Contingent Payment shall be equal to the maximum Contingent Payment payable
      for the Performance Period.

     

    In
      respect of each Performance Period, the applicable Performance Multiple shall
      be
      calculated as follows:

    

    PM
      =
      ((AI/AIT) + (R/RT))/2

    Where
      

    

    
      	
              PM
                

            	
              =
                

            	
              the
                Performance Multiple;

            
	 	 	 
	
              AI

            	
              =

            	
              the
                Adjusted Income for the Performance Period;

            
	 	 	 
	
              AIT

            	
              =

            	
              the
                Adjusted Income Target for the Performance Period;

            
	 	 	 
	
              R

            	
              =

            	
              the
                Revenue for the Performance Period; and

            
	 	 	 
	
              RT

            	
              =

            	
              the
                Revenue Target for the Performance
                Period.

            

    

    

    With
      respect to each Performance Period, the requirements set forth in paragraphs
      1-4
      below (the “Performance
      Period Requirements”)
      must
      be satisfied as a condition precedent to Buyer’s obligation to pay the
      applicable Contingent Payment to the Owners for such Performance
      Period:

    

    1. The
      Adjusted Income of Buyer for the Performance Period must be equal to or exceed
      eighty-five percent (85%) of that Performance Period’s Adjusted Income Target;
      and

     

    2. The
      Revenue of Buyer for the Performance Period must be equal to or exceed
      eighty-five percent (85%) of that Performance Period’s Revenue Target;
      and

     

    3. During
      the Performance Period, Owner’s employment shall not have been terminated by
      Buyer, Seller or an Affiliate of Seller as applicable, and Owner shall not
      have
      terminated his employment with Buyer, Seller or an Affiliate of Seller as
      applicable; and

     

    4. Each
      Key
      Employee shall be in compliance with all non-competition sections of any
      employment agreement or non-competition agreement to which he is a party
      (including the Confidentiality, Non-Competition, and Non-Solicitation Agreement
      referenced in Section
      9.2(j)
      hereof).
      For purposes of this Section
      3.2(a),
      any
      attempt by an Owner to have the above referenced agreements to which he is
      a
      party deemed void or unenforceable by a court of law or equity shall be deemed
      to be a violation of the Performance Period Requirements with respect to such
      Owner.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Additional
      Contingent Payment.
      In the
      event that the Performance Multiple for each Performance Period is greater
      than
      one, following the completion of the third Performance Period and upon complete
      satisfaction of the Performance Period Requirements for each Performance Period,
      in addition to the payments called for by Section
      3.2(a),
      Buyer
      shall pay Owner an amount equal to the sum of the maximum Contingent Payment
      payable for each Performance Period multiplied by the difference between the
      Performance Multiple for the applicable Performance Period and one; provided
      that the
      aggregate amount of the Contingent Payments and the Additional Contingent
      Payment payable for all Performance Periods, shall not exceed, in the aggregate,
      $1,500,000 (the “Additional
      Contingent Payment Cap”).
      Buyer
      shall pay the Additional Contingent Payment in cash, shares of Zanett Stock
      or a
      combination of both, as Buyer shall determine in its sole discretion; provided,
      however, that not less than 50% of the Additional Contingent Payment shall
      be
      paid in cash. 

     

    (c) Buyout
      Payment.
      Notwithstanding Section 3.1 or Section 3.2(a) and (b), Buyer shall have the
      option of paying the Buyout Payment, as defined below, prior to the one year
      anniversary of the Closing Date. If Buyer shall elect to make the Buyout
      Payment, such Buyout Payment shall be deemed to be the “Consideration” for
      purposes of this Agreement, and Buyer shall have no further obligation to make
      any Contingent Payment or the Additional Contingent Payment to Seller. The
      Buyout Payment shall be calculated as follows:

     

    (i) If
      Buyer
      elects to pay the Buyout Payment on or prior to the six month anniversary of
      the
      Closing Date, the Buyout Payment shall be a lump sum cash payment of
      $750,000.

     

    (ii) If
      Buyer
      elects to pay the Buyout Payment after the six month anniversary of the Closing
      Date, but on or prior to the one year anniversary of the Closing Date, the
      Buyout Payment shall be a lump sum cash payment of $1,000,000.

     

    3.3 Accounting
      Procedures of the Company. Unless
      otherwise agreed to in writing by the parties, all financial statements for
      the
      Business for all times from and after the Closing shall be prepared separately
      in accordance with GAAP applied on a basis consistent with Seller’s past
      practices in a manner such that Adjusted Income, Revenue, any Contingent
      Payment, Additional Contingent Payment, and all matters relating to the
      calculation of Adjusted Income, Revenue and any Contingent Payment, Additional
      Contingent Payment (including the determination with respect to capitalization
      or expense of various items and related depreciation or amortization periods,
      reserve methods for accounts receivable and inventory, and the treatment of
      other unusual or extraordinary items) shall be determined in accordance with
      Seller’s past practices. The parties agree that any changes in GAAP accounting
      rules from and after the date hereof shall not affect the calculation of any
      contingent payment. The parties shall use the GAAP rules, regulations and
      standards in effect as of the date hereof as a basis for calculation of all
      contingent payments. 

     

    3.4 Determination
      of Working Capital Adjustment.
      

     

    (a) As
      promptly as practicable after the Closing Date, but in no way more than ninety
      (90) days after the Closing Date, Buyer shall prepare, or cause to be prepared
      at its sole expense, and deliver to Owner balance sheets for Seller as of the
      Closing Date, and related statements of income, statements of change in
      Membership Unit holders’ equity and statements of cash flows, each prepared in
      accordance with GAAP, as applied on a basis consistent with Seller’s past
      practices (“Closing
      Financial Statements”)
      to
      determine the Actual Net Working Capital of Seller.

     

    (b) In
      connection with the delivery of the Closing Financial Statements, Buyer shall
      deliver a calculation of Actual Net Working Capital and a notice (the
“Buyer’s
      Notice of Adjustment”)
      setting forth its proposed adjustment, if any, of the Consideration contemplated
      hereby. Upon
      reasonable notice from Owner, Buyer will make available to Seller and its
      representatives all books, records, personnel, including auditors work papers,
      used in connection with the Actual Net Working Capital
      determination.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) The
      Consideration shall be decreased by any difference between the Target Net
      Working Capital and the Actual Net Working Capital (the “Adjustment
      Payment”).
      The
      amount of any Contingent Payment or Additional Contingent Payment payable to
      Seller shall be reduced, on a dollar-for-dollar basis, by an amount equal to
      the
      Adjustment Payment until the aggregate amount of such reductions equals the
      Adjustment Payment. If Buyer elects to make the Buyout Payment pursuant to
      Section
      3.2(c),
      such
      Buyout Payment will be reduced, on a dollar-for-dollar basis, by an amount
      equal
      to the Adjustment Payment. 

     

    3.5 Advance
      Amount Adjustment
      The
      Consideration shall be further decreased by an amount equal to the sum of (i)
      the Deposit and (ii) the American Express Debt paid by Buyer pursuant to Section
      8.6 (such sum, the “Advance
      Amount”).
      The
      amount of any Contingent Payment or Additional Contingent Payment payable to
      Seller shall be reduced, on a dollar-for-dollar basis by an amount equal to
      the
      Advance Amount until the aggregate amount of reductions equals the Advance
      Amount. If Buyer elects to make the Buyout Payment pursuant to Section
      3.2(c),
      such
      Buyout Payment will be reduced, on a dollar-for-dollar basis, by an amount
      equal
      to the Advance Amount. 

     

    ARTICLE
      IV. 

     

    REPRESENTATIONS
      AND WARRANTIES REGARDING SELLER

     

    As
      a
      material inducement for Buyer to enter into this Agreement and to consummate
      the
      transactions contemplated hereby, Seller and the Owner hereby jointly and
      severally make the following representations and warranties as of the date
      hereof, each of which is relied upon by Buyer regardless of any investigation
      made or information obtained by or on behalf of Buyer.

     

    4.1 Organization;
      Qualification; Corporate Records.

     

    (a) Seller
      is
      a limited liability company duly organized, validly existing and in good
      standing under the laws of the State of Florida and has the power to own all
      of
      its property and assets, to incur all of its liabilities and to carry on its
      Business as now being conducted.

     

    (b) Seller
      is
      duly qualified to do business and in good standing in each jurisdiction in
      which
      the nature or conduct of the Business or the character or location of its
      properties makes such qualification necessary, except where any such failure
      would not have a material adverse effect on Seller. Schedule
      4.1(b)
      lists
      each jurisdiction in which Seller is authorized to do business.

     

    (c) The
      names
      of the managers and officers of Seller, together with the offices they hold,
      are
      set forth on Schedule
      4.1(c).
      Seller
      has delivered to Buyer true and complete copies of (i) the certificate of
      formation of Seller, together with all amendments thereto and (ii) the operating
      agreement of Seller, together with all amendments thereto, as currently in
      effect.

     

    (d) Except
      as
      set forth on Schedule
      4.1(d),
      since
      January 1, 2008, Seller has not (i) made or permitted any change in the
      authorized, issued, or treasury shares of its equity securities, or (ii) taken
      any action which, if taken after the date of this Agreement, would require
      the
      prior written consent of Buyer pursuant to this Agreement. There is no liability
      for accumulated but unpaid distributions of cash or other property with respect
      to any equity interest in Seller.

     

    (e) Except
      as
      set forth on Schedule
      4.1(e)
      Seller
      has not made any distributions to any holders of Membership Units or
      participated in or effected any issuance, exchange or retirement of Membership
      Units, or otherwise changed the equity interests of holders of Membership Units
      within the one year immediately preceding the date of this
      Agreement.

     

    (f) Except
      as
      set forth on Schedule
      4.1(f),
      Seller
      has not conducted business under any name other than its own. Schedule
      4.1(f)
      includes
      a list of all of Seller’s fictitious name registrations.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (g) Subject
      to the satisfaction of the conditions precedent set forth herein, Seller has
      the
      power to execute, deliver and perform this Agreement and the Related Agreements
      to which Seller is a party, and, subject to the satisfaction of the conditions
      precedent set forth herein, has taken all action required by its certificate
      of
      formation, operating agreement or otherwise, to authorize the execution,
      delivery and performance of this Agreement and the Related Agreements. The
      execution and delivery of this Agreement has been approved by the members and
      operating manager of Seller. This Agreement is a valid obligation of Seller,
      legally binding upon it and enforceable in accordance with its
      terms.

     

    (h) All
      books
      and financial records included in the Books and Records of Seller are complete
      and correct in all material respects and have been maintained in accordance
      with
      good business practice. True and complete copies of all minutes, resolutions,
      Membership Unit certificates and transfer ledgers of Seller are contained in
      the
      minute books and transfer ledgers that have been delivered to Buyer for
      inspection. 

     

    4.2 No
      Violations of Laws or Agreements, Consents or Defaults.

     

    (a) The
      execution and delivery of this Agreement by Seller and the consummation by
      Seller of the transactions contemplated by this Agreement and the Related
      Agreements will not result in any breach or violation of any of the terms or
      provisions of, or constitute a default under, (i) the certificate of formation,
      limited liability company agreement or other operating agreement of Seller
      or
      (ii) any statute, order, decree, proceeding, rule, or regulation of any court
      or
      governmental agency or body, United States or foreign, having jurisdiction
      over
      Seller, any assets of Seller. 

     

    (b) Except
      as
      set forth in Schedule
      4.2(b),
      the
      delivery by Seller of this Agreement, the Related Agreements and the
      consummation by Seller of the transactions contemplated hereby and thereby
      will
      not result in a breach or violation of the term of, or constitute a default
      under, or require notice to any third party under, any agreement, instrument,
      or
      commitment to which Seller is party, by which Seller is bound, or to which
      any
      of Seller’s assets are subject (including, without limitation, any agreement,
      instrument or commitment related to or arising from the Wachovia Debt), and
      no
      consent or approval is required from any third party for the transactions
      contemplated by this Agreement and the Related Agreements other than such
      consents or approvals that the failure to receive which are not reasonably
      expected to have a material adverse effect on the transactions contemplated
      by
      this Agreement or the Related Agreements, the Business, or the assets of Seller,
      including the Purchased Assets .

     

    (c) Seller
      is
      not in default under, or in violation of any provision of, its certificate
      of
      formation, operating agreement, any promissory note, indenture or any evidence
      of indebtedness or security thereto, lease, purchase contract or other
      commitment, or any other agreement that is material to the business of
      Seller.

     

    4.3 No
      Subsidiaries.
      Seller
      does not own any interest in and does not control, directly or indirectly,
      any
      other corporation, association or business organization. Seller is not a party
      to any joint venture or partnership.

     

    4.4 Financial
      Information.

     

    (a) Attached
      hereto as Schedule
      4.4(a)
      are true
      and complete copies of the Financial Statements. The Financial Statements
      (except as may be disclosed therein), fairly present the financial position
      and
      the results of operations of Seller as of the dates and for the periods
      indicated. The Financial Statements provide for all bad and doubtful debts,
      material liabilities (actual, contingent, deferred or otherwise) and material
      financial commitments existing as of the respective dates
      thereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Except
      for obligations incurred in the ordinary course of business since December
      31,
      2007 or as set forth on Schedule
      4.4(b),
      (i)
      there are no liabilities or obligations of Seller whether known or unknown,
      asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
      or unliquidated, due or to become due, required in accordance with GAAP or
      otherwise to be reserved against or disclosed in the Financial Statements,
      which
      are not so reserved or disclosed, (ii) to the knowledge of Seller, there is
      not
      any past or present fact, situation, circumstance, condition or other basis
      for
      any present or future action, suit or proceeding, hearing, charge, complaint,
      claim or demand against Seller giving rise to any such liability or obligation
      and (iii) Seller has no liability or obligation, singularly or in the aggregate,
      whether accrued, absolute, contingent or otherwise, as of the respective dates
      of the Financial Statements not required to be reflected or disclosed in the
      Financial Statements.

     

    (c) Except
      as
      disclosed on Schedule
      4.4(c),
      the
      Financial Statements do not reflect any income or expense that was unusual
      in
      nature, nonrecurring, extraordinary, or otherwise not in the ordinary course
      of
      Seller’s Business, consistent with past practices.

     

    (d) All
      tangible assets used by Seller in the Business are reflected in the Financial
      Statements except those sold, transferred or otherwise disposed of, or purchased
      or otherwise acquired, in the ordinary course of business.

     

    4.5 Absence
      of Certain Changes.
      Since
      December 31, 2007, except as set forth on Schedule
      4.5,
      and
      except for transactions contemplated by this Agreement, Seller has conducted
      the
      Business only in the ordinary course and consistent with past practice, and
      has
      not:

     

    (a) suffered
      any material adverse change;

     

    (b) incurred
      any liabilities or obligations (absolute, accrued, contingent or otherwise)
      except current liabilities incurred and liabilities under contracts entered
      into
      in the ordinary course of business and consistent with past practice (including
      obligations or liabilities arising from one transaction or a series of related
      or similar transactions, and all periodic installments or payments under any
      lease or other agreement providing for periodic installments or payments, as
      a
      single obligation or liability), or increased, or experienced any change in
      any
      assumptions underlying or methods of calculating any bad debt, contingency
      or
      other reserves;

     

    (c) declared,
      set aside or paid any dividend or distribution in respect of any Membership
      Units or other equity interest of Seller or redeemed, purchased or otherwise
      acquired any Seller equity interest;

     

    (d) issued,
      delivered, or sold, or authorized the issuance, delivery or sale of, any
      securities or any option or rights with respect thereto, or modification or
      amendment of any right of any holder of outstanding securities with respect
      thereto;

     

    (e) paid,
      discharged or satisfied any claims, liabilities or obligations (absolute,
      accrued, contingent, known or unknown, or otherwise) other than the payment,
      discharge or satisfaction in the ordinary course of business and consistent
      with
      past practice of liabilities and obligations reflected or reserved against
      in
      the balance sheet dated as of (the “Balance
      Sheet Date”)
      included in the Financial Statements (the “Balance
      Sheet”)
      or
      incurred in the ordinary course of business and consistent with past practice
      since the Balance Sheet Date;

     

    (f) permitted
      or allowed any of the assets or properties of Seller to be subjected to any
      Encumbrance, restriction or charge of any kind, except for (a) Encumbrances
      related to Taxes not yet due and payable, (b) Encumbrances for landlord’s
      warehouseman’s, mechanic’s, materialmen’s and other similar liens for sums not
      overdue, (c) pledges or deposits to secure obligations under workmen’s
      compensation laws or similar legislation, and (d) those Encumbrances listed
      on
Schedule
      4.5(f)
      (collectively, “Permitted
      Encumbrances”);

     

    (g) written
      down the value of any inventory or written off as uncollectible any notes or
      accounts receivable;

     

    (h) canceled
      any debts, or waived any claims or rights of substantial value;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) sold,
      transferred or otherwise disposed of any of its properties or assets, except
      in
      the ordinary course of business and consistent with past practice;

     

    (j) disposed
      of or permitted to lapse any rights to the use of any patent, trademark, trade
      name or copyright, or disposed of or disclosed to any Person other than an
      Affiliate any invention, discovery, know-how, trade secret, formula, process
      or
      other intellectual property not theretofore a matter of public knowledge that
      is
      material to the Business;

     

    (k) granted
      any general increase in the compensation of employees of Seller (including
      any
      such increase pursuant to any bonus, pension, profit sharing or other plan
      or
      commitment) or any increase in the compensation payable or to become payable
      to
      any employee of Seller in excess of merit increases consistent with past
      practice, and no such increase is customary on a periodic basis or required
      by
      agreement or understanding;

     

    (l) made
      any
      capital expenditure or commitment for capital expenditures other than those
      capital expenditures or commitments that have been paid in full;

     

    (m) made
      any
      change in any method of accounting or accounting practice or failed to maintain
      the books and records of Seller in the ordinary course of business and
      consistent with past practice;

     

    (n) failed
      to
      maintain any of its properties or equipment in good operating condition and
      repair, subject to ordinary wear and tear;

     

    (o) failed
      to
      maintain in full force and effect all existing policies of insurance at least
      at
      such levels as were in effect prior to such date or canceled any such insurance
      or, to its knowledge, taken or failed to take any action that would enable
      the
      insurers under such policies to avoid liability for claims arising out of
      occurrences prior to the Closing;

     

    (p) entered
      into any transaction or made or entered into any material contract or
      commitment, or terminated or amended any material contract or commitment, except
      in the ordinary course of business and consistent with past practice, and not
      in
      excess of current requirements; 

     

    (q) taken
      any
      action that could reasonably be expected to have a material adverse effect
      on
      the business organization of Seller or Seller’s current relationships with its
      customers, employees, suppliers, distributors, advertisers, subscribers or
      others having business relationships with Seller; or

     

    (r) agreed
      in
      writing or otherwise to take any action with respect to any of the matters
      described in this Section
      4.5.

     

    4.6 Licenses;
      Regulatory Approvals.
      Seller
      holds all Authorizations required or necessary to be applied for or obtained
      in
      connection with the Business as presently conducted by Seller, except where
      the
      failure to obtain such Authorizations would not have a material adverse effect.
      All such Authorizations are listed on Schedule
      4.6.
      Except
      as set forth on Schedule
      4.6,
      all
      such Authorizations relating to the Business, operations and facilities of
      Seller are in full force and effect and will remain in full force and effect
      following the consummation of the transactions contemplated hereby. Any and
      all
      past litigation concerning such Authorizations, and all claims and causes of
      action raised therein, have been finally adjudicated, and, in the case of such
      litigation finally adjudicated since the Balance Sheet Date such adjudication
      has not had a material adverse effect on Seller. Except as set forth on
Schedule
      4.6,
      no such
      Authorization has been revoked, conditioned (except as may be customary) or
      restricted, and no action (equitable, legislative or administrative),
      arbitration or other process is pending, or to the knowledge of Seller,
      threatened, which in any way challenges the validity of, or seeks to revoke,
      condition or restrict any such Authorization. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.7 Regulatory
      Matters.

     

    (a) Except
      as
      may be disclosed in Schedule
      4.7(a),
      (i)
      Seller is not the subject of any outstanding, nor, to the knowledge of Seller,
      any threatened, investigation, audit, review or other examination of Seller
      by
      any Authority with respect to Seller or the Business, and (ii) Seller is not
      subject to, nor has Seller received any notice or advice that it may become
      subject to, any order, agreement, memorandum of understanding or other
      regulatory enforcement action or proceeding with any Authority with respect
      to
      Seller or the Business. 

     

    (b) To
      the
      knowledge of Seller, there is no proposed or pending change in any law or
      regulation affecting the Business which would have a material adverse effect
      on
      Seller.

     

    4.8 Tax
      Matters.
      

     

    (a) Seller
      has timely prepared and filed in accordance with applicable laws, rules and
      regulations all federal, state and local income, franchise, excise, sales,
      use,
      real and personal property and other Tax Returns, information statements and
      reports, required to be filed by it, or Seller has prepared and filed
      appropriate requests for extensions to file such Tax Returns and all such
      requests have been granted and have not expired in accordance with applicable
      Tax laws, rules and regulations. Complete and correct copies of all Tax Returns
      of Seller for the last three (3) years have been delivered to Buyer and are
      listed on Schedule
      4.8(a).

     

    (b) All
      such
      Tax Returns correctly and completely reflect the information required to be
      presented therein in all respects. Seller has not paid any penalty, surcharge,
      fine or interest in connection with any alleged underpayment of
      Taxes.

     

    (c) Except
      as
      disclosed on Schedule
      4.8(c)
      (which
      lists good faith tax disputes), Seller has paid all Taxes that have become
      due
      and payable to (or claimed to be due and payable by) the appropriate Tax
      Authorities. Seller has made full provision or reserve in the Financial
      Statements for all Taxes for which Seller is or may be accountable on or before
      the dates thereof, including distributions made on or before such dates or
      provided for in such Financial Statements, and adequate provision has been
      made
      in such Financial Statements for deferred Tax for which Seller is or may be
      accountable on or before the dates thereof in accordance with GAAP and in the
      aggregate do not materially fail to provide for potential Tax liabilities.
      All
      estimated Tax payments of Seller that have become due and payable prior to
      the
      date of this Agreement have been paid. No claim has ever been made by an
      Authority in a jurisdiction where Seller does not file Tax Returns that it
      is or
      may be subject to taxation by that jurisdiction. There are no liens for Taxes
      (other than Taxes not yet due and payable) upon any of the assets of
      Seller.

     

    (d) Seller
      has properly withheld all Taxes from the salaries, wages or other compensation
      paid to officers, employees or other persons, and has paid such Tax to the
      appropriate Tax Authorities. 

     

    (e) No
      event,
      transaction, act or omission has occurred which could result in Seller becoming
      liable for any Tax which is primarily or directly chargeable against or
      attributable to a Person other than Seller or which is charged by reference
      to
      the income or gains of another Person. In the event that Seller has been part
      of
      a consolidated group of taxpayers, Seller is not liable for any Tax obligations
      of the other members of the group.

     

    (f) To
      Seller’s knowledge, no Tax Return (or item in a Tax Return) is currently under
      audit by any Tax Authority, and there are no agreements for the waiver of any
      statute of limitations in respect of any Taxes or for the extension of time
      for
      the assessment or payment of any Tax. Seller is not, and does not expect to
      be,
      involved in any dispute in relation to any Tax matters, and to Seller’s
      knowledge no Tax Authority has investigated or indicated that it intends to
      investigate Seller’s Tax matters. Seller is not aware of any facts which may
      constitute the basis for the proposal of any Tax deficiencies for any unexamined
      year.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (g) Seller
      is
      not a party to any agreement, contract, arrangement or plan that could result,
      separately or in the aggregate, in the payment of (i) any “excess parachute
      payment” within the meaning of Code §280G (or any corresponding provision of
      state, local or foreign Tax law) or (ii) any amount that would not be fully
      deductible as a result of Code 162(m) (or any corresponding provision of
      state, local or foreign Tax law). Seller is not a party to or bound by any
      Tax
      allocation or sharing agreement (other than Seller’s limited liability company
      agreement). Seller (i) has at all times been classified as a partnership, and
      not as a corporation, for federal income tax purposes and (ii) has no liability
      for the Taxes of any Person under Reg. §1.1502-6 (or any similar provision
      of state, local, or foreign law), as a transferee or successor, by contract,
      or
      otherwise.

     

    (h) Seller
      has not entered into any transaction or course of conduct (other than
      legitimate, good faith Tax planning) designed in whole or in part to evade
      Taxes
      contrary to applicable Tax Law.

     

    4.9 Litigation
      Claims.

     

    (a) There
      is
      no action, suit, claim, investigation or proceeding, whether at law or in equity
      (a “Claim”),
      pending or, to the knowledge of Seller, threatened that questions the validity
      of this Agreement or the Related Agreements or any action taken or to be taken
      by Seller or Seller in connection with the consummation of the transactions
      contemplated hereby or thereby or which seeks to prohibit, enjoin or otherwise
      challenge any of the transactions contemplated hereby or thereby. 

     

    (b) Schedule
      4.9(b) sets
      forth an accurate and complete list, and a brief description (setting forth
      the
      names of the parties involved, the court or other governmental or mediating
      entity involved, the relief sought and the substantive allegations and the
      status thereof), of each Claim pending or, to the knowledge of Seller,
      threatened against or affecting Seller. None of the pending or threatened Claims
      set forth on Schedule
      4.9(b),
      if
      adversely determined, would individually or in the aggregate, result in a
      material adverse effect on Seller. To the knowledge of Seller, no event has
      occurred and no circumstance, matter or set of facts exist which would
      constitute a valid basis for the assertion by any third party of any Claim,
      other than those listed on Schedule
      4.9(b).
      Except
      as set forth in Schedule
      4.9(b),
      there
      is no outstanding or, to the knowledge of Seller, threatened judgment,
      injunction, order or consent or similar decree or agreement (including, without
      limitation, any consent or similar decree or agreement with any governmental
      entity) against, affecting or naming Seller.

     

    (c) Except
      as
      disclosed in Schedule
      4.9(c),
      there
      is no Claim (whether based on statute, negligence, breach of warranty, strict
      liability or any other theory) pending, or to the knowledge of Seller,
      threatened, relating directly or indirectly to any product manufactured or
      sold,
      or any services performed, by Seller.

     

    4.10 Properties,
      Contracts; Leases and Other Agreements; Bank Accounts.

     

    (a) Seller
      does not own any real property. 

     

    (b) All
      leasehold interests for real property and any material personal property used
      by
      Seller in the Business are held pursuant to lease agreements which are valid
      and
      enforceable in accordance with their terms, the agreements for which are listed
      on Schedule
      4.10(b).
      All
      such properties comply in all material respects with all applicable private
      agreements, zoning requirements and other governmental laws and regulations
      relating thereto and there are no condemnation proceedings pending or threatened
      with respect to such properties. Seller has not assigned or subleased its
      interests under such leases or the assets covered thereby. Each such lease
      has
      been duly and validly executed, is in full force and effect and constitutes
      the
      valid and binding agreement of the parties thereto. Any additional business
      offices maintained by Seller during the past two (2) years are also listed
      by
      location on Schedule
      4.10(b).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Except
      as
      set forth on Schedule
      4.10(c),
      and
      excluding trade accounts payable incurred in the ordinary course of business
      and
      payable to Persons other than Affiliates of Seller, Seller does not have any
      liabilities for borrowed funds, extensions of credit or other advances that
      are
      subject to repayment whether pursuant to a written agreement, oral understanding
      or course of conduct, and whether reflected on the Financial Statements as
      indebtedness, accounts payable or otherwise, and any such liability set forth
      on
Schedule
      4.10(c) may
      be
      prepaid at any time without premium or penalty.

     

    (d) Except
      as
      set forth in Schedule
      4.10(d),
      Seller
      is not a party to any agreements, contracts or commitments relating to the
      acquisition of the assets or capital stock of any other business
      enterprise.

     

    (e) Except
      as
      set forth in Schedule
      4.10(e),
      Seller
      is not a party to any agreements, loans, contracts, leases, guarantees, letters
      of credit, lines of credit or commitments of Seller not referred to elsewhere
      in
      this Agreement which:

     

    (i) involve
      potential payments by Seller or incurring by Seller of costs or obligations,
      of
      more than $5,000 in the aggregate;

     

    (ii) involve
      payments based on profits of Seller;

     

    (iii) relate
      to
      the future purchase of goods or services in excess of the requirements of the
      Business at current levels or for normal operating purposes;

     

    (iv) include
      powers of attorney or grants of agency by Seller;

     

    (v) cannot
      be
      canceled by Seller without penalty or premium on no more than thirty (30) days’
notice;

     

    (vi) were
      not
      made in the ordinary course of business; or

     

    (vii) otherwise
      materially affect the Business or financial condition of Seller.

     

    (f) Except
      as
      set forth in Schedule
      4.10(f),
      no
      contracts material to the Business or financial condition of Seller are
      terminable or are subject to modification by reason of the consummation of
      the
      transactions contemplated by this Agreement and the Related Agreements, and
      Seller has not received notice of any potential termination or modification
      of
      such contracts.

     

    (g) Except
      as
      set forth in Schedule
      4.10(g),
      neither
      Seller, nor any other party, is in default, technical or otherwise, of any
      real
      estate lease, equipment lease, loan or credit agreement, or any other contract
      or agreement to which Seller is a party, and no event or condition has occurred
      or exists which, with the passage of time, giving of notice or both, would
      cause
      Seller, or, to the knowledge of Seller, any other party, to be in default
      thereunder.

     

    (h) Set
      forth
      on Schedule
      4.10(h)
      is an
      accurate and complete list showing the name and address of each bank, securities
      broker, mutual fund, investment company, investment adviser or other financial
      institution or similar Person with which Seller has an account, including the
      account or box number and the names of all persons and entities authorized
      to
      draw thereon or have access thereto.

     

    (i) All
      material Contracts to which Seller is a party, including, without limitation,
      any contract or agreement disclosed on Schedules
      4.10(b), 4.10(d) and 4.10(e) (i)
      are
      valid and enforceable in accordance with their respective terms; (ii) no Default
      (as defined below) exists under any Contract either by Seller or, to the
      knowledge of Seller, by any other party thereto; (iii) Seller is not aware
      of
      the assertion by any third party of any claim of Default or breach under any
      of
      the Contracts; and (iv) Seller has no knowledge of any present intention on
      the
      part of any significant customer or supplier or other business partner of Seller
      to either (A) terminate or significantly change its existing business
      relationship with Seller either now or in the foreseeable future, or (B) fail
      to
      renew or extend its existing business relationship with Seller at the end of
      the
      term of any existing contractual arrangement such entity may have with Seller.
      For purposes of this Agreement, the term “Default”
means,
      with respect to any Contract, (x) any breach of or default under such Contract,
      or (y) any event, other than the normal passage of time, which would (either
      with or without notice or lapse of time or both) give rise to any right of
      full
      or partial termination, cancellation or acceleration of any obligation with
      respect to such Contract.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (j) Set
      forth
      on Schedule
      4.10(j)
      is an
      accurate and complete list showing all Contracts to which Seller is a party
      or
      by which it is bound.

     

    (k) Set
      forth
      on Schedule
      4.10(k)
      is an
      accurate and complete list showing (i) each vehicle, item of machinery,
      equipment, tools, and other tangible asset (other than real property) of Seller
      used in the Business and the location thereof and (ii) each vehicle, item of
      machinery, equipment, tools, and other tangible asset (other than real property)
      leased to or by Seller with respect to the Business under agreement, together
      with the location of such asset, the identities of the lessor and lessee, the
      annual rental, and the unexpired term of the lease.

     

    (l) Except
      as
      set forth on Schedule
      4.10(k)
      and
      those which are no longer in effect, Seller has not granted any right of first
      refusal or similar right in favor of any third party with respect to any
      material portion of its properties or assets or entered into any non-competition
      agreement or similar agreement restricting its ability to engage in any business
      in any location.

     

    4.11 Employee
      Matters; Benefit Plans; ERISA.
      

     

    (a) Except
      as
      may be disclosed in Schedule
      4.11(a),
      Seller
      has not entered into any collective bargaining agreement with any labor
      organization with respect to any group of employees of Seller and, to the
      knowledge of Seller, there is no present effort nor existing proposal to attempt
      to unionize any group of employees of Seller.

     

    (b) Except
      as
      may be disclosed in Schedule
      4.11(b):

     

    (i) Seller
      is
      and has been in material compliance with all applicable laws relating to
      employment and employment practices, terms and conditions of employment and
      wages and hours, including, without limitation, any such laws respecting
      employment discrimination and occupational safety and health requirements,
      and
      Seller is not engaged in any unfair labor practices;

     

    (ii) There
      is
      no unfair labor practice complaint against Seller pending or, to the knowledge
      of Seller, threatened before the National Labor Relations Board;

     

    (iii) There
      is
      no labor dispute, strike, slowdown or stoppage pending or, to the knowledge
      of
      Seller, threatened against or directly relating to Seller; and

     

    (iv) Seller
      has not experienced any work stoppage or other material labor difficulty during
      the past year.

     

    (c) Except
      as
      described and attached to Schedule
      4.11(c),
      Seller
      is not a party to any agreement for the employment, retention or engagement
      or
      severance of any officer, employee, agent, advisor or consultant.

     

    (d) Schedule
      4.11(d)
      contains
      a correct and complete list of all Benefit Plans maintained by Seller or to
      which Seller or any ERISA Affiliate (as defined below) contributes. Seller
      has
      delivered or made available to Buyer, with respect to all such Benefit Plans,
      complete and correct copies of the following: all plan documents, handbooks,
      manuals, collective bargaining agreements and similar documents governing
      employment policies, practices and procedures; the most recent summary plan
      descriptions and any subsequent summaries of material modifications and all
      other material employee communications discussing any employee benefit; Forms
      series 5500 as filed with the IRS for the three most recent plan years
      (including all attachments thereto); the most recent report of the enrolled
      actuary for any plans requiring actuarial valuation; all trust agreements with
      respect to the Benefit Plans; plan contracts with service providers or insurers
      providing benefits for participants or liability insurance for fiduciaries
      and
      other parties in interest or bonding; the most recent annual audit and
      accounting of plan assets for all funded plans; and the most recent Internal
      Revenue Service (“IRS”)
      determination letter or opinion letter for all plans qualified under Section
      401(a) of the Code.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) Neither
      Seller nor any ERISA Affiliate participates in or maintains or has ever
      maintained or been obligated to contribute to a multi-employer plan (as defined
      in Section 3(37) of ERISA), and neither Seller nor any ERISA Affiliate has
      withdrawal liability with respect to any multi-employer plan.

     

    (f) Neither
      Seller nor any ERISA Affiliate maintains or has ever maintained or been
      obligated to contribute to an employee pension benefit plan (as defined in
      Section 3(2) of ERISA) subject to Title IV of ERISA.

     

    (g) Seller
      has made full payment of all amounts it is required, under applicable law or
      the
      terms of each Benefit Plan, to have contributed thereto before the Closing
      Date
      for all periods through and including the close of the last plan year ending
      prior to the Closing Date, or proper accruals for such contributions have been
      made and are reflected on its balance sheet and books and records. Seller will
      pay such contributions to the Benefit Plans for the current plan year prior
      to
      the Closing Date, or, if any such contributions will not be due prior to the
      Closing Date, has made adequate provision for reserves therefor. All such
      contributions are fully deductible by Seller for purposes of Seller’s federal
      income taxes, and Seller has no actual or potential liability for the 10 percent
      tax imposed by section 4972 of the Code.

     

    (h) All
      Taxes, penalties, interest charges and other financial obligations to federal,
      state and local governments and to participants or beneficiaries under the
      Benefit Plans with respect to any period ending on or before the Closing Date
      have been or will be met in full on or before the Closing Date.

     

    (i) All
      reports, returns, notices and similar documents with respect to the Benefit
      Plans required to be filed with any governmental agency or distributed to any
      Benefit Plan participant or beneficiary have been duly and timely filed or
      distributed.

     

    (j) Each
      Benefit Plan required to be listed on Schedule
      4.11(d)
      that is
      intended to be qualified under Section 401 of the Code is (and from its
      establishment has been) the subject of a favorable determination letter or
      opinion letter issued by the IRS, and no such determination letter or opinion
      letter has been revoked nor, to Seller’s knowledge, has revocation been
      threatened, nor has any Benefit Plan been amended since the date of its most
      recent determination letter or application therefor in any respect which would
      adversely affect its qualification or materially increase its cost, and no
      Benefit Plan has been amended in a manner that would require security to be
      provided in accordance with Section 401(a)(29) of the Code. Each trust
      maintained under any such Benefit Plan is (and from its establishment has been)
      exempt from federal income tax under Section 501 of the Code.

     

    (k) Each
      Benefit Plan required to be listed on Schedule
      4.11(d)
      complies, in both form and operation, with the applicable requirements of ERISA,
      the Code and other applicable law. There are no pending investigations by any
      governmental agency involving such Benefit Plans, no termination proceedings
      involving the Benefit Plans, and, to Seller’s knowledge, no threatened or
      pending claims (except for routine claims for benefits), suits or proceedings
      against any Benefit Plan or asserting any rights or claims to benefits under
      any
      Benefit Plan which could give rise to any liability nor, to Seller’s knowledge,
      are there any facts which could give rise to any liability in the event of
      any
      such investigation, claim, suit or proceeding.

     

    (l) Neither
      Seller nor any “party in interest” (as defined in section 3(14) of ERISA) or
“disqualified person” (as defined in section 4975(e)(2) of the Code) with
      respect to any Benefit Plan has engaged in a “prohibited transaction” (as
      defined in Section 4975 of the Code or Section 406 of ERISA) for which a
      statutory, administrative, or regulatory exemption is not available. No Benefit
      Plan has been (or will be as a result of the transactions contemplated hereby)
      completely or partially terminated or has been (or will be as a result of the
      transactions contemplated hereby) subject to a “reportable event” (as defined in
      section 4043 of ERISA) or to any event requiring disclosure under section
      4062(e) or 4063(a) of ERISA.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (m) Seller
      is
      in full compliance with the continuation coverage requirements of the
      Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the
      health insurance obligations (sometimes referred to as “HIPAA”) imposed by
      section 9801 of the Code and Part 7 of Subtitle B of Title I of
      ERISA.

     

    (n) Other
      than the group health plan continuation coverage requirements required by
      applicable law (as described in subsection (m) above), the cost of which is
      fully paid by the former employee or his or her dependent, Seller does not
      maintain retiree life or retiree health plans providing for continuing coverage
      for any employee or any beneficiary of an employee after the employee’s
      termination of employment.

     

    (o) Except
      as
      set forth on Schedule
      4.11(o),
      Seller
      is not a party to any oral or written agreement with any director, executive,
      officer or other key employee, the benefits of which are contingent or the
      terms
      of which are materially altered or permit termination, upon the occurrence
      of a
      transaction of the nature contemplated by this Agreement and the Related
      Agreements, or agreement or plan, including any stock option plan, stock
      appreciation rights plan, restricted stock plan or stock purchase plan, any
      of
      the benefits of which will be increased, or the vesting of which will be
      accelerated, by the occurrence of any of the transactions contemplated by this
      Agreement and
      the
      Related Agreements or the value of any of the benefits of which will be
      calculated on the basis of any of the transactions contemplated by this
      Agreement and the Related Agreements.

     

    4.12 Personnel.

     

    (a) Schedule
      4.12(a)
      contains
      a true and complete list of the following information for all
      persons employed by Seller,
      including each employee on leave of absence or layoff status: 

     

    (i) Name

     

    (ii) Job
      title

     

    (iii) Department
      (if applicable)

     

    (iv) Location
      of Employment

     

    (v) Indicate
      Billable/Non Billable

     

    (vi) Hourly
      Rate

     

    (vii) Annual
      Salary (Current)

     

    (viii) Gross
      Salary 2007 and Year to Date 2008

     

    (ix) Bonus
      paid 2007 and Year to Date 2008

     

    (x) Hire
      date

     

    (xi) Vacation
      accrued

     

    (xii) Service
      credited for purposes of vesting and eligibility to participate under any
      pension, retirement, profit-sharing, option, cash bonus, ownership
      plan

     

    (xiii) Severance
      pay

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (xiv) Any
      assignment of inventions or similar agreement

     

    (xv) Social
      Security Number

     

    (xvi) Copies
      of
      performance reports

     

    (xvii) All
      disciplinary records

     

    (b) Schedule
      4.12(b)
      contains
      a correct and complete description of Seller’s performance measurement and
      compensation policies and procedures as they relate to employees in effect
      as of
      the Closing Date and for the year prior to the Closing Date.

     

    (c) Schedule
      4.12(c)
      lists
      all Persons who are currently performing services for Seller who are classified
      as “consultants” or “independent contractors” the compensation of each such
      Person and whether Seller is party to an agreement with such Person (whether
      or
      not in writing). Any such agreements are listed on Schedule
      4.12(c)
      and have
      been delivered (or, in the case of agreements that are not in writing, a summary
      thereof has been delivered) to Buyer. All Persons engaged by Seller as
      independent contractors, rather than employees, have been properly classified
      as
      such and have been engaged in accordance with all applicable Laws.

     

    (d) Except
      as
      disclosed in Schedule
      4.12(d),
      (i) none of the employees of Seller has notified or otherwise indicated to
      Seller that he or she intends to terminate his or her employment with Seller,
      or
      not to continue employment after the Closing, (ii) Seller does not have a
      present intention to terminate the employment of any employee, (iii) to the
      knowledge of Seller, no employee of Seller has since January 1, 2008 received
      an
      offer of an employment from any other Person, (iv) to the knowledge of
      Seller, no employee of Seller is a party to or is bound by any employment
      contract, patent disclosure agreement, noncompetition agreement or other
      restrictive covenant or other contract with any Person that would be likely
      to
      affect in any way (A) the performance by such employee of any of his or her
      duties or responsibilities as a employee or (B) the business or operations
      of Seller, (v) to the knowledge of Seller, no employee of Seller is in violation
      of any term of any employment contract, patent disclosure agreement,
      noncompetition agreement, or any other restrictive covenant with or to a former
      employer relating to the right of any such employee to be employed by Seller,
      and (vi) Seller is not and never has been engaged in any dispute or
      litigation with an employee or former employee. 

     

    (e) Seller
      is
      in compliance, and has complied, in all material respects with all applicable
      laws respecting employment and employment practices, terms and conditions of
      employment and wages and hours. Seller is not liable for the payment of material
      Taxes, fines, penalties or other amounts, however designated, for failure to
      comply with any of the foregoing laws. Seller is not engaged, and to the
      knowledge of Seller has never engaged, in any unfair labor practice of any
      nature. The employees of Seller have been, and currently are, properly
      classified under the Fair Labor Standards Act of 1938, as amended, and under
      any
      applicable state law. Except as set forth on Schedule
      4.12(e),
      Seller
      has not failed to pay any of its employees, consultants or contractors for
      any
      wages (including overtime), salaries, commissions, bonuses, benefits or other
      direct compensation for any services performed by them to the date hereof or
      amounts required to be reimbursed to such individuals.

     

    (f) Seller,
      and, to the knowledge of Seller, each of its employees, is in compliance with
      all applicable visa and work permit requirements, and no visa or work permit
      held by an employee of Seller will expire during the six-month period following
      the date of this Agreement. Schedule
      4.12(f)
      sets
      forth (i) a true and complete list of all current employees of Seller, if any,
      who are employed in the United States, but are not citizens of the United States
      or who are not permanent residents of the United States, together with a listing
      of each such employee’s visa status and visa expiration date, and (ii) each
      employee regarding whom Seller has received a notice challenging or otherwise
      relating to such employee’s authorization to work in the United States. Seller
      has not received any written notice of any inspection or investigation relating
      to any alleged noncompliance with or violation of the Immigration Reform and
      Control Act of 1986, as amended, and all regulations promulgated thereunder
      (collectively, “IRCA”), nor has it been warned, fined or otherwise penalized by
      reason of any failure to comply with IRCA. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.13 Ownership
      Sufficiency and Condition of Properties.

     

    (a) Seller
      owns and has good and valid title to each and all of the Purchased Assets,
      free
      and clear of any Lien, other than Permitted Encumbrances.

     

    (b) There
      are
      no agreements affecting the right of Seller to convey the Purchased Assets
      to
      Buyer or any other right of Seller with respect to the Purchased Assets, and
      Seller has the absolute right, authority, power, and capacity to sell, assign,
      and transfer the Purchased Assets to Buyer free and clear of any Encumbrance,
      other than Permitted Encumbrances. 

     

    (c) Upon
      execution and delivery to Buyer of the Bill of Sale and the Intellectual
      Property Assignment, Buyer will acquire good and valid title to the Purchased
      Assets, free and clear of any Encumbrances other than Permitted
      Encumbrances.

     

    

    (d) The
      Purchased Assets constitute all of the rights, properties, and assets necessary
      for Buyer to operate the Business in the same manner operated by Seller prior
      to
      Closing. The Purchased Assets and the Excluded Assets constitute all of the
      assets of Seller.

     

    (e) Except
      for inventory that is excess, damaged or obsolete, for which Seller has
      established in the aggregate an adequate reserve in the Balance Sheet in
      accordance with GAAP, the inventory reflected in the Balance Sheet, if any,
      and
      not disposed of or reserved since such date is of good and merchantable quality,
      of a quantity and quality saleable in the ordinary course of the Business,
      in
      accordance with past practices and is adequate as of the date hereof for the
      Business as conducted as of such date.

     

    4.14 Product
      and Service Warranties.
      Except
      as set forth on Schedule
      4.14,
      each
      product or service delivered or licensed by Seller has been in conformity in
      all
      material respects with all applicable federal, state, local or foreign laws
      and
      regulations, contractual commitments and all express and implied warranties,
      and, to the knowledge of Seller, Seller has no liability for replacement or
      repair thereof or other damages in connection therewith, except for liabilities
      incurred in the ordinary course of business, and no product or service delivered
      or licensed by Seller is subject to any guaranty, warranty, or other
      indemnity.

     

    4.15 Intellectual
      Property.
      

     

    (a) Except
      as
      set forth on Schedule
      4.15(a),
      Seller
      owns, free and clear of all Encumbrances of every nature, kind and description,
      except for Permitted Encumbrances, and has good and merchantable title to,
      or
      holds adequate licenses or otherwise possesses all rights necessary to use,
      all
      patents, trademarks, service marks, trade names, copyrights (including any
      applications for any of the foregoing), domain names (including
      www.psgolive.com), all other names embodying business or product goodwill (or
      both), inventions, discoveries and improvements, processes, know-how, trade
      secrets, scientific, technical, engineering and marketing data, computer
      programs, software, including all object and source codes, programming tools
      and
      all other techniques used or necessary for the conduct of the Business as now
      conducted (collectively, the “Intellectual
      Property”).

     

    (b) Schedule
      4.15(b)
      contains
      an accurate and complete list of (i) all such patents, trademarks, trade names,
      service marks, assumed names and copyrights, and all applications therefor,
      and,
      with respect to registered items, contains a list of all jurisdictions in which
      such items are registered and all registration numbers, (ii) all licenses,
      permits and other agreements relating thereto, and (iii) all agreements relating
      to any of such Intellectual Property that Seller is licensed or authorized
      to
      use by others. The patents, trademarks, service marks and copyrights, licenses,
      permits and other agreements constituting a part of such Intellectual Property
      and solely owned by Seller, if any, are valid, subsisting and enforceable,
      and
      are duly recorded in the name of Seller.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) All
      software, other than generally available software such as Microsoft Office,
      and
      other standard “off-the-shelf” software, and generally available system
      development tools, that is either marketed to customers of Seller as a program
      or as part of a service to support the Business is owned by Seller or Seller
      has
      the right to use, modify, copy, sell, distribute, sublicense and make derivative
      works free and clear of any limitations or Encumbrance, except for Permitted
      Encumbrances and as may be set forth in any license agreement listed in
Schedule
      4.15(c).
      To the
      extent third party software is marketed to customers of Seller together with
      the
      Intellectual Property solely owned by Seller, the third party rights have been
      identified in Schedule
      4.15(c),
      all
      necessary licenses have been obtained and no royalties or payments are due
      from
      Seller to third parties except as identified on Schedule
      4.15(c).

     

    (d) Except
      as
      set forth on Schedule
      4.15(d),
      to the
      knowledge of Seller, Seller has the sole and exclusive right to use the patents,
      service marks and copyrights listed in Schedule
      4.15(b)
      and the
      trademarks and trade names listed in Schedule
      4.15(b),
      in each
      case, in all jurisdictions in which the Business is conducted or in which any
      products of the Business are distributed, and the consummation of the
      transactions contemplated hereby will not alter or impair any such
      rights.

     

    (e) No
      claims
      have been asserted by any Person challenging or questioning the ownership,
      validity, enforceability or use by Seller of any of the Intellectual Property
      and, to the knowledge of Seller, there is no valid basis for any such claim,
      and, to the knowledge of Seller, the use or other exploitation of the
      Intellectual Property by Seller does not infringe on or dilute the rights of
      any
      Person; and, to the knowledge of Seller, no Person is infringing on the rights
      of Seller with respect to any of the Intellectual Property.

     

    (f) Seller
      has taken all reasonable security measures to protect the secrecy,
      confidentiality and value of the Intellectual Property of Seller, including
      computer programs, trade secrets and other confidential information. Except
      as
      disclosed in Schedule
      4.15(f),
      no
      Person has any marketing rights to the Intellectual Property of Seller. To
      the
      knowledge of Seller, no Person listed in such schedule is in breach or default
      under its obligations.

     

    (g) Seller
      has made available to Buyer all documents in Seller’s custody, possession or
      control with respect to any invention, discovery, process, design, computer
      program or other know-how or trade secret included in the Intellectual Property,
      which documents shall be accurate in all material respects and reasonably
      sufficient in detail and content to identify and explain such invention,
      discovery, process, design, computer program or other know-how or trade secret
      and to facilitate its full and proper use.

     

    4.16 Insurance.
      Schedule
      4.16
      lists
      all policies of insurance owned or held by Seller or insuring its assets. All
      current premiums and any other obligations under such insurance have been paid,
      and all such policies are valid and enforceable and in full force and effect
      on
      the date hereof. Seller has not received any notice of cancellation or of
      premium increase under any such policies within the last ninety (90)
      days.

     

    4.17 Relationships.

     

    (a) Other
      than general economic conditions, Seller has no knowledge of any present or
      future conditions or state of facts or circumstances which would materially
      adversely affect Seller after the Closing Date.

     

    (b) Schedule
      4.17(b)
      lists
      the 10 largest customers of Seller as a percentage of revenues for fiscal year
      2007, as well as year-to-date 2008. Seller’s relationships with its customers,
      clients and vendors are satisfactory, and Seller has no knowledge of any facts
      or circumstances, including a change of control in the ownership of Seller,
      that
      might materially alter, negate, impair or in any way materially adversely affect
      the continuity of any such relationships and the Business.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Except
      as
      disclosed in Schedule
      4.17(c),
      Seller
      has no knowledge of and has not received notice of any complaints, claims or
      threats, plans or intentions to discontinue commercial relations or transactions
      from any customer of Seller, any purchaser of goods or services from Seller,
      any
      employee or independent contractor significant to the conduct or operation
      of
      Seller or any party to any agreement to which Seller is a party. 

     

    (d) Seller
      has no knowledge of any present or future condition or state of facts or
      circumstances, including a change of control in the ownership of Seller (except
      as contemplated by this Agreement), that would materially prevent the Business
      of Seller from being carried on after the Closing Date in essentially the same
      manner as it is presently being carried on.

     

    4.18 Compliance
      With Laws.

     

    (a) Except
      as
      set forth in Schedule
      4.18(a),
      the
      operations and activities of Seller has previously and continues to comply
      with
      all applicable Laws as in effect on or before the date of this Agreement,
      including without limitation, all rules and regulations of the Occupational
      Safety and Health Administration. The conduct of the Business of Seller as
      presently conducted does not conflict with the rights of any other Person or
      violate or, with or without the giving of notice or the passage of time, or
      both, will not violate, conflict with or result in a default, right to
      accelerate or loss of rights under, any terms or provisions of its certificate
      of formation or operating agreement as presently in effect or, to the knowledge
      of Seller, any Encumbrance, lease, license, agreement, Laws or understanding
      to
      which Seller is a party or by which it may be bound or affected. Seller has
      received no notice or communication from any Person asserting a failure to
      comply with any Laws, nor has Seller received any notice that any authority
      or
      third party intends to seek enforcement against Seller to compel compliance
      with
      any such Laws.

     

    (b) (i)
      Seller has not made, and, to the knowledge of Seller, no officer, director,
      employee, agent or other representative of any of them acting on behalf thereof
      has made, directly or indirectly, with respect to the business of Seller, any
      illegal bribes, kickbacks or other illegal payments of a similar nature, or
      illegal political contributions with corporate funds not recorded in the
      corporate records of Seller, illegal payments from Seller funds to governmental
      officials, or illegal payments from corporate funds to obtain or retain business
      either within the United States, the Philippines or elsewhere, and (ii) neither
      Seller nor, to the knowledge of Seller, any officer, employee or agent of Seller
      acting on its behalf, nor any other Person acting on its behalf has, directly
      or
      indirectly, within the past three (3) years given or agreed to give any gift
      or
      similar benefit to any customer, supplier, governmental employee or other Person
      who is or may be in a position to help or hinder Seller (or assist Seller in
      connection with any actual or proposed transaction) which (A) might subject
      Seller to any damage or penalty in any civil, criminal or governmental
      litigation or proceeding, (B) if not given in the past might have had
a
      material
      adverse
      effect to
      Seller,
      or (C) if not continued in the future, might result in a material adverse effect
      to Seller.

     

    4.19 Environmental
      Matters.
      

     

    (a) Seller
      has not obtained and is not required to obtain, any permits, licenses or other
      authorizations under any applicable Environmental Laws.

     

    (b) Except
      as
      set forth on Schedule
      4.19,
      Seller
      is, to its knowledge, in material compliance with all limitations, restrictions,
      conditions, standards, prohibitions, requirements, obligations, schedules and
      timetables contained in the Environmental Laws. Except as set forth on
Schedule
      4.19,
      since
      Seller’s formation, no written notice, demand, request for information,
      citation, summons or complaint has been received or order has been issued,
      no
      complaint has been filed, no suit or action has been instituted, no penalty
      has
      been assessed and no investigation or review is pending or, to the knowledge
      of
      Seller, threatened by any governmental entity or other Person with respect
      to
      any (i) alleged violation by Seller of any Environmental Law or liability
      thereunder, (ii) alleged failure by Seller to have any permit, certificate,
      license, approval, registration or authorization required under any
      Environmental Law, (iii) release of Hazardous Substances by or on behalf of
      Seller, or (iv) any Environmental Liabilities attributed to
      Seller.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Except
      as
      set forth on Schedule
      4.19,
      there
      are no Environmental Liabilities that have had, or could reasonably be expected
      to have individually, or in the aggregate, a material adverse effect with
      respect to Seller.

     

    (d) Except
      as
      set forth on Schedule
      4.19,
      to the
      knowledge of Seller, no state of facts exists as to environmental matters or
      Hazardous Substances that involves the reasonable likelihood of a material
      capital expenditure by Seller or a material fine or penalty imposed on or
      attributable to Seller, or that may otherwise have a material adverse effect
      with respect to Seller or does or could interfere with or prevent compliance
      with any Environmental Laws or give rise to any common law or other legal
      liability.

     

    (e) No
      Hazardous Substances have been manufactured, treated, stored, transported or
      disposed of by Seller, or otherwise deposited by Seller, in or on or are present
      beneath properties currently or formerly owned, leased or used by Seller in
      violation of, or which may be required to be investigated or remediated under,
      any applicable Environmental Laws. 

     

    (f) There
      has
      been no disposal, escape, seepage, leakage, spillage, discharge, emission,
      release or threatened release of any Hazardous Substance as a result of the
      actions or omissions of Seller (i) on, from or affecting any properties owned,
      leased or used by Seller, or (ii) for which Seller is, is alleged or may be
      held
      to be, responsible as a result of conduct occurring or conditions existing
      at or
      before Closing. 

     

    4.20 Records.
      The
      books of account of Seller are sufficient, in all material respects, to prepare
      the Financial Statements in accordance with GAAP. The Books and Records of
      Seller accurately and fairly reflect, in all material respects, Seller’s income,
      expenses, assets and liabilities. Seller maintains internal accounting controls
      which provide reasonable assurance that: (i) transactions are recorded as
      necessary to permit preparation of financial statements in conformity with
      GAAP
      and (ii) all intercompany transactions, charges and expenses (x) are at fair
      arms length value and (y) are accurately reflected in all Financial
      Statements.

     

    4.21 Receivables.
      Schedule
      4.21
      sets
      forth a true and complete list of all Receivables and the aging thereof as
      of
      September 30, 2008. All Receivables represent sales actually made or services
      actually performed in the ordinary course of business with no additional
      services required to entitle Seller to collect such Receivables, and have been
      fully collected or are fully collectible as of the Closing Date or are fully
      reserved against in the Balance Sheet. 

     

    4.22 Related
      Party Transactions.
      Except
      as set forth on Schedule
      4.22,
      there
      have been no transactions or contractual relationships during the two (2) fiscal
      years ended December 31, 2007 or between December 31, 2007 and the date hereof,
      and no agreement or understanding to enter into or consummate any transactions
      or contractual relationships between Seller on the one hand and any Related
      Party directly or indirectly, on the other hand. All such transactions have
      been
      on terms and conditions no less favorable to Seller than could have been
      obtained from any independent party after arms-length negotiations.

     

    4.23 Vote
      Required.
      The
      affirmative vote of the holders of a majority of the outstanding Membership
      Interests is the only vote of the holders of any class or series of Seller
      equity interests necessary to approve this Agreement and the transactions
      contemplated hereby.

     

    4.24 Brokers.
      No
      Person will have, as a result of the transactions contemplated by this
      Agreement, any valid right to, interest in or claim upon Buyer or Seller for
      any
      commission, fee or other compensation as a finder or broker because or any
      act
      or omission by Seller or Seller. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.25 Disclosure.
      No
      representation or warranty by Seller contained in this Agreement, and no
      representation or warranty contained in any document, list (including, without
      limitation, the Schedules), certificate or other communication furnished or
      to
      be furnished by or on behalf of Seller to Buyer or any of its representatives
      in
      connection with the transactions contemplated hereby, contains or will contain
      any untrue statement of a material fact, or omits or will omit to state any
      material fact necessary, in light of the circumstances under which it was or
      will be made, in order to make the statements herein or therein not
      misleading.
      The
      financial projections relating to Seller delivered to Buyer by Seller have
      been
      prepared in good faith based on assumptions that management of Seller are
      reasonable, and neither the Owner nor Seller is aware of any fact or information
      that would lead them or it to believe that such projections are materially
      incorrect or misleading in any material respect.

     

    4.26 Securities
      Matters.
      Seller
      understands that none of the shares of Zanett Stock included in the
      Consideration (including the shares of Zanett Stock underlying any option grants
      pursuant to Section
      3.2(b))
      has
      been registered under the Securities Act, on the grounds that the issuance
      thereof in connection with the transactions contemplated by this Agreement
      and
      the Related Agreements is exempt from registration pursuant to Section 4(2)
      of
      the Securities Act and/or Regulation D promulgated under the Securities Act
      (“Regulation
      D”),
      and
      that the reliance of Buyer on such exemptions is predicated in part on the
      representations, warranties, covenants and acknowledgements set forth in this
      Section
      4.26.

     

    (a) The
      Zanett Stock will be acquired by Seller for its own account, not as a nominee
      or
      agent, for investment and without a view to resale or other distribution within
      the meaning of the Securities Act, and Seller will not distribute or transfer
      any of the Zanett Stock in violation of the Securities Act. 

     

    (b) Seller:
      (i) acknowledges that the Zanett Stock to be issued as part of the Consideration
      is not registered under the Securities Act and must be held indefinitely by
      Seller unless the Zanett Stock is subsequently registered under the Securities
      Act or an exemption from registration is available, (ii) is aware that any
      routine sales of the Zanett Stock made under Rule 144 of the Securities and
      Exchange Commission under the Securities Act may be made only in limited amounts
      and in accordance with the terms and conditions of that Rule and that in such
      cases where the Rule is not applicable, registration or compliance with some
      other registration exemption will be required, (iii) is aware that Rule 144
      is
      not now and for a period of at least one year following the Closing Date hereof
      will not be, available for use by the Seller for resale of the Zanett Stock,
      and
      (iv) is aware that Buyer is not obligated to register any sale, transfer or
      other disposition of the Zanett Stock.

     

    (c) Seller
      is
      an
“accredited investor” (as such term is defined in Rule 501(a) of Regulation D)
      and has
      such
      knowledge and experience in financial and business matters that it is fully
      capable of evaluating the risks and merits of its investment in the Zanett
      Stock.

     

    (d) Seller
      acknowledges and agrees that the certificates representing the Zanett Stock
      issuable as Consideration will contain a restrictive legend noting the
      restrictions on transfer described in this Section and under federal and
      applicable state securities laws, and that appropriate “stop-transfer”
instructions will be given to Zanett’s stock transfer agent.

     

    ARTICLE
      V.

     

    REPRESENTATIONS
      AND WARRANTIES OF Owner 

     

    As
      a
      material inducement for Buyer to enter into this Agreement and to consummate
      the
      transactions contemplated hereby, Owner hereby
      makes the following representations and warranties as of the date hereof, each
      of which is relied upon by Buyer regardless of any investigation made or
      information obtained by or on behalf of Buyer:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    5.1 Power
      and Authority; Ownership.

     

    (a) Owner
      is
      an
      adult individual with full power and authority to own his properties, to manage
      his fiscal affairs and to enter into this Agreement and each of the Related
      Agreements to which he is a party and to agree to the transactions contemplated
      hereby and thereby and to perform all of his obligations hereunder and
      thereunder. Owner is not subject
      to any legal disability which would prevent him from performing under this
      Agreement or any Related Agreement, and no order has been entered appointing
      a
      receiver for Owner or
      any of
      his assets. There is no claim, action, suit or proceeding (including, without
      limitation, current investigations by governmental agencies) pending against
      Owner seeking to enjoin the execution and delivery of this Agreement, the
      Related Agreements or consummation of the transactions contemplated hereby
      or
      thereby.

     

    (b) This
      Agreement and each of the Related Agreements to which Owner
      is
      a
      party constitute the legal, valid and binding obligations of him, enforceable
      against him, in accordance with their respective terms, subject to applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar laws now
      or
      hereafter in effect relating to creditors’ rights and remedies generally and
      subject, as to enforceability, to general principles of equity (regardless
      of
      whether enforceability is considered in a proceeding at law or in
      equity).

     

    (c) Owner
      owns
      all of
      the issued and outstanding equity interests of Seller. Owner has good and
      marketable title to all of the outstanding Membership Units, free and clear
      of
      all Encumbrances and restrictions, legal or equitable, of every kind. Owner
      has
      full and unrestricted legal right, power, and authority to sell, assign, and
      transfer the Membership Units held by him without obtaining the consent or
      approval of any other person, entity, or governmental authority. 

     

    5.2 No
      Violations of Laws or Agreements, Consents or Defaults.

     

    (a) The
      execution and delivery of this Agreement by Owner and the consummation by Owner
      of the transactions contemplated by this Agreement and the Related Agreements
      will not result in any breach or violation of any of the terms or provisions
      of,
      or constitute a default under any statute, order, decree, proceeding, rule,
      or
      regulation of any court or governmental agency or body, United States or
      foreign, having jurisdiction over Owner, or any assets of Owner. 

     

    (b) Except
      as
      set forth in Schedule 5.2(b), the delivery by the Owner of this Agreement,
      the
      Related Agreements and the consummation by Owner of the transactions
      contemplated hereby and thereby will not result in a breach or violation of
      the
      term of, or constitute a default under, or require notice to any third party
      under, any agreement, instrument, or commitment to which he is party, by which
      he is bound, or to which any of his assets are subject, and no consent or
      approval is required from any third party for the transactions contemplated
      by
      this Agreement and the Related Agreements other than such consents or approvals
      that the failure to receive which would not reasonably be expected to have
      a
      material adverse effect on the transactions contemplated by this Agreement
      or
      the Related Agreements, the Business, or the assets of Seller.

     

    5.3 Brokers.
      No
      Person will have, as a result of the transactions contemplated by this
      Agreement, any valid right to, interest in or claim upon Buyer or Seller for
      any
      commission, fee or other compensation as a finder or broker because or any
      act
      or omission by Owner.

     

    ARTICLE
      VI.

     

    REPRESENTATIONS
      AND WARRANTIES OF Buyer

     

    As
      a
      material inducement for Seller and Owner to enter into this Agreement and to
      consummate the transactions contemplated hereby, Buyer hereby
      makes
      the
      following representations and warranties as of the date hereof, each of which
      is
      relied upon by Seller and the Owner regardless of any investigation made or
      information obtained by Seller and the Owner: 

     

    6.1 Organization,
      Existence and Capital Stock.

     

    (a) Buyer
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of Delaware.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) All
      of
      the shares of Zanett Stock issued in connection with the transactions
      contemplated by this Agreement will be, when issued in accordance with this
      Agreement, duly authorized, validly issued, fully paid, nonassessable, and
      free
      of all preemptive rights.
      The
      shares of Zanett Stock issued to Seller in connection with the transactions
      contemplated by this Agreement will be issued in the name of Seller, with Seller
      as record holders of such shares, and Seller shall have good and marketable
      title to such shares of Zanett Stock, free of any liens and Encumbrances, other
      than those created by or through Seller
      pursuant
      to the Lock Up Agreement or otherwise.

     

    6.2 Power
      and Authority.
      Subject
      to the satisfaction of the conditions precedent set forth herein, Buyer has
      the
      corporate power to execute, deliver and perform this Agreement and the Related
      Agreements and to consummate the transactions contemplated hereby, and, subject
      to the satisfaction of the conditions precedent set forth herein, has taken
      all
      action required by law, its certificate of incorporation, its by-laws or
      otherwise, to authorize the execution and delivery of this Agreement and such
      related documents. This Agreement is a valid obligation Buyer and is legally
      binding on Buyer in accordance with its terms.

     

    6.3 No
      Violations of Laws.

     

    (a) The
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated by this Agreement and the Related Agreements will
      not
      result in any breach or violation of any of the terms or provisions of, or
      constitute a default under, (i) the certificate of incorporation or by-laws
      of
      Buyer or (ii) any statute, order, decree, proceeding, rule, or regulation of
      any
      court or governmental agency or body, United States or foreign, having
      jurisdiction Buyer or any of its assets.

     

    (b) The
      delivery by Buyer of this Agreement, the Related Agreements and the consummation
      by Buyer of the transactions contemplated hereby and thereby will not result
      in
      a material breach or violation of the term of, or constitute a material default
      under, any agreement, instrument, or commitment to which Buyer is a party,
      by
      which is bound, or to which any of Buyer’s assets are subject, and no consent or
      approval is required from any third party for the transactions contemplated
      by
      this Agreement and the Related Agreements other than such consents, or
      approvals, that are not reasonably expected to have a material adverse effect
      on
      the transactions contemplated by this Agreement or the Related
      Agreements.

     

    (c) Buyer,
      is
      not in material default under, or in violation of any provision of, its
      certificate of incorporation or bylaws, any promissory note, indenture or any
      evidence of indebtedness or security thereto, lease, purchase contract or other
      commitment, or any other agreement that is material to the business of
      Buyer.

     

    6.4 Brokers.
      No
      Person will have, as a result of the transactions contemplated by this
      Agreement, any valid right to, interest in or claim upon Buyer for any
      commission, fee or other compensation as a finder or broker because or any
      act
      or omission by Buyer or its Affiliates.

     

    6.5 Litigation
      Claims. There
      is
      no Claim pending or, to the knowledge of Buyer, threatened that questions the
      validity of this Agreement or the Related Agreements or any action taken or
      to
      be taken by Buyer in connection with the consummation of the transactions
      contemplated hereby or thereby or which seeks to prohibit, enjoin or otherwise
      challenge any of the transactions contemplated hereby or
      thereby.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII.

     

    SURVIVAL
      OF REPRESENTATIONS; INDEMNIFICATION

     

    7.1 Survival
      of Representations.
      All
      representations and warranties made by any party to this Agreement or pursuant
      hereto, as modified by any Schedule, exhibit, certificate or other document
      executed and delivered pursuant hereto, shall survive the Closing and any
      investigation made by or on behalf of any party hereto for a period of 24 months
      following the Closing Date; provided, however, that the representations and
      warranties contained in Section
      4.1
      (Organization; Qualification; Corporate Records), Section
      6.1
      (Organization, Existence and Capital Stock), and Section
      5.1
      (Power
      and Authority; Ownership) shall survive closing indefinitely and the
      representations and warranties contained in, Section
      4.8
      (Tax
      Matters), 4.11
      (Employee Matters; Benefit Plans; ERISA) and 4.19
      (Environmental Matters) shall survive the Closing and any investigations made
      by
      or on behalf of the relevant party until 60 days following the expiration of
      the
      applicable statute of limitations. All representations and warranties contained
      herein or in any schedule, exhibit, certificate or other document executed
      and
      delivered pursuant hereto shall be deemed representations and warranties for
      purposes of Sections
      9.2(a),
      9.3(a)
      and this
Section
      7.1.
      Notwithstanding the foregoing, the covenants and agreements of Buyer, Seller
      and
      Owner made herein shall survive the Closing and shall continue in full force
      and
      effect indefinitely. The right to indemnification or other remedy based upon
      such representations and warranties shall not be affected by any investigation
      conducted with respect to, or any knowledge acquired at any time, whether before
      or after execution and delivery of this Agreement or the Closing Date, with
      respect to the accuracy or inaccuracy of any such representation or
      warranty.
      Each of
      Buyer, Seller and Owner shall notify the other parties in writing of the
      discovery of any inaccuracy in any representation or warranty of any party
      hereto. 

     

    7.2 Indemnification.
      

     

    (a) Subject
      to the terms and conditions of this Article VII, following the Closing, Seller
      and Owner shall jointly and severally, indemnify, defend and hold harmless
      Buyer
      (and its respective officers, directors, employees, Affiliates, successors
      or
      assigns other than the Owner) (collectively, the “Buyer
      Indemnified Parties”),
      from
      and against all Claims, assessments, losses, damages, liabilities, deficiencies,
      judgments, settlements, costs and expenses, including interest, penalties and
      reasonable attorneys’ fees and expenses incurred in enforcing this
      indemnification or in any litigation between the parties or with third parties
      (collectively, “Damages”)
      asserted against, resulting to, imposed upon, suffered or incurred by a Buyer
      Indemnified Party, directly or indirectly, by reason of or resulting from (i)
      any failure of Seller or Owner to duly perform or observe any covenant or
      agreement to be performed or observed by any of them, pursuant to this Agreement
      or any Related Agreement and/or (ii) a breach of any representation, warranty,
      covenant or agreement of Seller or Owner contained in or made pursuant to this
      Agreement or any of the Related Agreements. 

     

    (b) Subject
      to the terms and conditions of this Article VII, Buyer shall indemnify, defend
      and hold harmless Seller and Owner (and Seller and Owner’s respective heirs,
      representatives and assigns) (collectively, the “Seller
      Indemnified Parties”)
      at any
      time after consummation of the Closing, from and against all Damages asserted
      against, resulting to, imposed upon or incurred by Seller Indemnified Parties,
      directly or indirectly, by reason of or resulting from: (i) the assertion
      against Owner or Seller of any claim for payment or performance of any
      obligation, debt, or liability in connection with Buyer’s operation of the
      Business from and after the Closing, (ii) any failure of Buyer to duly perform
      or observe any covenant or agreement to be performed or observed by it, prior
      to
      the Closing, pursuant to this Agreement or any Related Agreement; or (iii)
      a
      breach of any representation, warranty, covenant or agreement of Buyer contained
      in or made pursuant to this Agreement or any Related Agreement.

     

    (c) Buyer’s
      maximum liability to the Seller Indemnified Parties under this Section
      7.2
      shall
      not exceed the Consideration received by the Seller hereunder.

     

    (d) No
      Indemnifying Party shall be liable to or obligated to indemnify any Indemnified
      Party hereunder for any punitive or exemplary damages, or any consequential,
      special or multiple damages, except to the extent such damages have been
      recovered by a third person (including a Governmental Authority) and are the
      subject of a third party claim for which indemnification is available under
      this
      Article VII.

     

    (e) Except
      as
      expressly provided in this Agreement, the remedies provided herein shall be
      cumulative and shall not preclude assertion by any party hereto of any other
      rights or the seeking of any other remedies against any other party
      hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.3 Conditions
      of Indemnification.
      The
      obligations and liabilities of Buyer, on the one hand, and Seller and Owner,
      on
      the other hand, as indemnifying parties (each, an “Indemnifying
      Party”)
      to
      indemnify Seller Indemnified Parties or Buyer Indemnified Parties, as applicable
      (each, an “Indemnified
      Party”),
      under
      Section 7.2 with respect to Claims made by third parties shall be subject to
      the
      following terms and conditions:

     

    The
      Indemnified Party shall give written notice to the Indemnifying Party of any
      Damages with respect to which it seeks indemnification promptly after the
      discovery by such party of any matters giving rise to such Claim for
      indemnification; provided, however, that the failure of any Indemnified Party
      to
      give notice as provided herein shall not relieve the Indemnifying Party of
      its
      obligations under Section
      7.2
      unless
      it shall have been prejudiced by the omission to provide such notice. In case
      any Claim is brought against an Indemnified Party, the Indemnifying Party shall
      be entitled to participate in the defense thereof and, to the extent that it
      may
      wish, to assume the defense thereof, with counsel reasonably satisfactory to
      the
      Indemnified Party, and after notice from the Indemnifying Party of its election
      so to assume the defense thereof, the Indemnifying Party will not be liable
      to
      the Indemnified Party under Section
      7.2
      for any
      legal or other expense subsequently incurred by the Indemnified Party in
      connection with the defense thereof; provided, however, that (i) if the
      Indemnifying Party shall elect not to assume the defense of such claim or action
      or (ii) if the Indemnified Party reasonably determines that there may be a
      conflict between the positions of the Indemnifying Party and the Indemnified
      Party in defending such Claim, then separate counsel shall be entitled to
      participate in and conduct such defense, and the Indemnifying Party shall be
      liable for any reasonable legal or other expenses incurred by the Indemnified
      Party in connection with such defense (but not more than one counsel). The
      Indemnifying Party shall not be liable for any settlement of any Claim effected
      without its written consent, which consent shall not be unreasonably withheld.
      The Indemnifying Party shall not, without the Indemnified Party’s prior written
      consent, which consent shall not be unreasonably withheld, settle or compromise
      any Claim to which the Indemnified Party is a party or consent to entry of
      any
      judgment in respect thereof. The Indemnifying Party further agrees that it
      will
      not, without the Indemnified Party’s prior written consent, settle or compromise
      any claim or consent to entry of any judgment in respect thereof in any pending
      or threatened Claim in respect of which indemnification may be sought hereunder
      (whether or not the Indemnified Party is an actual or potential party to such
      Claim) unless such settlement or compromise includes an unconditional release
      of
      the Indemnified Party from all liability arising out of such Claim.

    

    ARTICLE
      VIII.

     

    COVENANTS.

     

    8.1 Public
      Disclosures.
      Buyer,
      Seller and Owner will consult with each other before issuing any press release
      or otherwise making any public statement with respect to the transactions
      contemplated by this Agreement, and shall not issue any such press release
      or
      make any such public statement prior to such consultation except as may be
      required by applicable law or requirements of any national securities exchange
      or automated quotation system on which the Zanett Stock is listed or quoted.
      The
      parties shall issue a joint press release, mutually acceptable to Seller and
      Buyer, promptly upon execution and delivery of this Agreement.

    8.2 Confidentiality.
      Buyer,
      Seller and Owner shall hold, and shall use their best efforts to cause their
      respective auditors, attorneys, financial advisors, bankers and other
      consultants and advisors to hold in strict confidence, unless compelled to
      disclose by judicial or administrative process or by other requirements of
      law,
      all documents and information concerning the other party furnished to it by
      the
      other party or its representatives in connection with the transactions
      contemplated by this Agreement, including, without limitation, the terms and
      conditions of the Agreement (except to the extent that such information shall
      be
      shown to have been (a) already known by the party to which it was furnished,
      (b)
      in the public domain through no fault of such party or (c) later lawfully
      acquired from other sources by the party to which it was furnished)
      (“Confidential
      Information”),
      and
      each party shall not release or disclose such Confidential Information to any
      other Person, except its auditors, attorneys, financial advisors, bankers and
      other consultants and advisors in connection with the transactions contemplated
      by this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.3 Affirmative
      Covenants of Seller.
      Prior
      to the Closing, unless Buyer agrees otherwise in writing:

     

    (a) Seller
      will maintain its existence as a limited liability company and will conduct
      the
      Business and its operations in the usual and ordinary course of business in
      accordance with past custom and practice, including, without limitation,
      maintaining adequate working capital balances, collecting accounts receivable,
      paying accounts payable, making repair and maintenance capital expenditures
      and
      managing cash accounts generally, all in the usual and ordinary course of
      business and in compliance in all material respects with all Laws,
      authorizations, contracts and agreements (including those identified in the
      Schedules).

     

    (b) Seller
      will carry on the Business in substantially the same manner as presently
      conducted and keep its business organizations and properties intact, including
      its present business operations, physical facilities, working conditions and
      employees and its present relationships with employees, lessors, licensors,
      suppliers and customers and others having business relations with it.

     

    (c) Seller
      shall maintain its Books and Records in accordance with past practice, and
      use
      best efforts to maintain in full force all licenses, certificates and other
      regulatory approvals required or necessary to be applied for or obtained in
      connection with the Business (except where the failure to maintain such
      licenses, certificates or other regulatory approvals would not have a material
      adverse effect) and all insurance policies and binders.

     

    (d) Seller
      shall promptly advise Buyer in writing of the threat or commencement against
      Seller or Owner of any dispute, action, claim, investigation or proceeding
      by,
      against or affecting Seller or any of its operations, assets or prospects,
      or
      which questions or may affect the validity of this Agreement or the Related
      Agreements or any action taken or to be taken by Seller or Owner in connection
      with the consummation of the transactions contemplated hereby or thereby or
      which seeks to prohibit, enjoin or otherwise challenge any of the transactions
      contemplated hereby or thereby.

     

    (e) Seller
      shall pay any and all amounts owed to any holder of Membership Units and shall
      collect any and all amounts owed to Seller by any holder of Membership Units.
      There shall be no receivables or payables to or from Owner on the Closing
      Balance Sheet, other than reasonable reimbursable business expenses incurred
      in
      the ordinary course within 30 days prior to the date of the Closing Balance
      Sheet.

     

    (f) Seller
      shall promptly advise Buyer in writing of any event or the existence of any
      fact
      which makes untrue, or will make untrue as of the Closing, any representation
      or
      warranty of Seller or Seller set forth in this Agreement or the Related
      Agreements (including but not limited to any acquisitions, sale of license
      of
      any material portion of its assets, or amendments to any material distribution,
      licensing, or other material agreements).

     

    (g) Seller
      shall cooperate with Buyer to obtain prior to Closing, searches (the
“Searches”),
      in
      all appropriate jurisdictions, for state and federal tax liens, judgment liens,
      Uniform Commercial Code financing statements and pending litigation against
      Seller or its assets; provided that, such Searches shall be performed by a
      nationally recognized company satisfactory to Buyer, and Seller shall be
      responsible for the cost thereof. 

     

    8.4 Negative
      Covenants of Seller.
      Prior
      to the Closing, unless Buyer agrees otherwise in writing:

     

    (a) Seller
      will not take any action or permit to occur any event within Seller’s reasonable
      control which, if taken or occurring prior to the date hereof would require
      any
      disclosure in the Schedules, or would breach any covenant of Seller or Owner,
      or
      cause any representation or warranty of Seller or Owner to be untrue as of
      the
      Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Seller
      will not (i) make or permit any change in its authorized, issued or treasury
      securities of its equity securities, (ii) grant any option or right to purchase
      Seller’s securities, (iii) issue or make any commitment to issue any security,
      including any security convertible into Membership Units, (iv) grant any
      registration rights, (v) purchase, redeem, retire or make any other acquisition
      of any securities, or (vi) declare, set aside or pay any dividends, redeem
      or
      make any other distributions on or with regard to its equity.

     

    (c) Seller
      will not amend its certificate of formation or operating agreement.

     

    (d) Seller
      will not fail to pay or discharge when due any liability or obligation of
      Seller.

     

    (e) Seller
      will not (i) make any payments to officers, directors, partners, managers,
      trustees or beneficiaries other then in the ordinary course of business and
      in
      accordance with past custom and practice or (ii) make any loans or enter into
      any transactions or contracts with any holder of Membership Units or an
      Affiliate of any holder of Membership Units, other than in the ordinary course
      of business and as contemplated by this Agreement.

     

    (f) Seller
      will not, except as specifically contemplated by this Agreement, (i) enter
      into
      any material contract, agreement or transaction, (including but not limited
      to
      any acquisitions, sale of license of any material portion of its assets, or
      amendments to any material distribution, licensing, or other material
      agreements), (ii) change, accelerate or alter the payment terms of any existing
      material Contracts, or (iii) incur
      any
      additional debt, other
      than in the ordinary course of business in accordance with past custom and
      practice.

     

    (g) Seller
      will not hire any employees, change any employee’s compensation, pay any bonus
      or enter into any severance arrangements, or accelerate the vesting of any
      restricted stock or stock options. 

     

    (h) 
      Seller
      shall deliver to Buyer all Tax clearance certificates necessary for Buyer to
      avoid any potential successor liability for the Taxes of Seller, dated as of
      the
      Closing or the most recent practical date before the Closing. 

     

    8.5 Payment
      of Wachovia Debt. 

     

    (a) Prior
      to
      and following the Closing, Seller shall use its best efforts to collect
      Receivables for
      sales
      made or services
      performed prior to the Closing Date (“Pre-Closing
      Receivables”)
      in a
      manner consistent
      with its past business practice and without discounting payment of such
      Pre-Closing Receivables.
      Seller
      shall immediately apply all Pre-Closing Receivables collected to repay the
      Wachovia Debt in full (the “Debt
      Repayment”).
      Within 2 business days of the Debt Repayment, Seller shall or shall cause
      Wachovia Bank to have all Encumbrances affecting the Purchased Assets released
      and discharged and shall provide to Buyer evidence reasonably satisfactory
      to
      Buyer (including, without limitation, a UCC-3 termination statement) that such
      Encumbrances have been released and discharged of record. 

     

    (b)
       Following
      the Debt Repayment, Seller shall take all necessary action to promptly transfer
      the remaining Pre-Closing Receivables to Buyer.
      Any
      Pre-Closing Receivables transferred to Buyer pursuant to this Section
      8.5(b)
      shall be
      deemed a Purchased Asset for purposes of this Agreement..

     

    8.6 Payment
      of American Express Debt.
      Prior
      to or promptly following the Closing, Buyer shall pay the American Express
      Debt
      on behalf of the Seller.

     

    8.7 Performance
      Period Financial Statements; Annual Reports.
      Within
      90 days after the end of each Performance Period, Buyer shall deliver to Owner
      an income statement for such Performance Period and a balance sheet as of the
      end of such Performance Period. These financial statements (“Performance
      Period Financial Statements”)
      shall
      (i) be prepared from monthly financial statements prepared by Buyer in
      accordance with GAAP as
      applied on a basis consistent with Seller’s past practices
      and (ii)
      set forth the Adjusted Income and Revenue of Buyer for such Performance Period
      (including the figures used and calculations made to determine the Adjusted
      Income and Revenue).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.8 Accounting
      Disputes.
      Notwithstanding anything to the contrary in this Agreement, if Seller has any
      dispute relating to the determination of Actual Net Working Capital or the
      amount of Adjusted Income or Revenue for any purpose hereunder, then Seller
      will
      notify Buyer, in writing, of each disputed amount (collectively, the
“Disputed
      Amounts”),
      specifying the grounds for such dispute, within 15 Business Days after delivery
      of the Closing Financial Statements, the Performance Period Financial Statements
      or other notice containing such determination, as the case may be. If Buyer
      and
      Seller cannot resolve any such dispute within 10 Business Days after delivery
      of
      such notice, then such dispute will be resolved by an independent accounting
      firm mutually acceptable to Buyer and Seller (the “Independent
      Accounting Firm”).
      If
      Buyer and Seller do not agree upon a mutually acceptable Independent Accounting
      Firm within the 10 Business Day period after delivery of the notice, Buyer
      and
      Seller will each select an independent accounting firm, and the Independent
      Accounting Firm will be selected by the firms chosen by Buyer and Seller. The
      determination of the Independent Accounting Firm (i) will be made as promptly
      as
      practicable, (ii) will be prepared in accordance with GAAP and this Agreement,
      and (iii) will be final and binding on the parties, absent manifest error,
      which
      error may only be corrected by such Independent Accounting Firm. Any expenses
      relating to the engagement of the Independent Accounting Firm will be allocated
      evenly between Buyer and the Seller, provided, however, that if the
      determination of the Independent Accounting Firm results in a restatement of
      more than 10% of the Actual Net Working Capital, Adjusted Income or Revenue
      claimed by Seller, then the Buyer shall pay all expenses related to the
      engagement of the Independent Accounting Firm; provided further, however, that
      if the determination of the Independent Accounting Firm results in a restatement
      of less than 10% of the Actual Net Working Capital, Adjusted Income or Revenue
      claimed by Buyer, then the Seller shall pay all expenses related to the
      engagement of the Independent Accounting Firm.

     

    8.9 Audit;
      Cooperation.
      Following the Closing, Owner and Seller shall cooperate with Buyer in connection
      with Buyer’s preparation of financial statements, and, if necessary, an audit
      (the “Audit”)
      of the
      financial performance of Seller, for all periods required in connection with
      Buyer’s reporting obligations under the United States securities laws. Such
      cooperation shall include, but not be limited to, providing full access to
      the
      Books and Records, any work papers generated in connection therewith, Seller
      personnel, Seller’s outside auditors and assisting Buyer in obtaining any
      required consent of such outside auditors in connection with Buyer’s reporting
      obligations under the United Stated securities laws. From
      and
      after the Closing Date and until the end of the final One-Year Performance
      Period, Buyer shall permit Seller
      and its
      counsel, accountants, engineers, consultants and other authorized
      representatives to have full and complete access to all documents, books,
      contracts and records relating to the Business (but not to Zanett or Buyer
      generally) and to make copies thereof during normal business hours in order
      to
      permit Seller to conduct investigations and reviews relative to this Agreement.
      Seller
      and its
      representatives shall conduct such investigations and reviews in such manner
      as
      shall not interfere with or disrupt the conduct of business of Zanett or Buyer.
      

     

    8.10 Acknowledgment
      Regarding Reorganizations and Similar Transactions.
      Seller
      and Owner hereby acknowledge and agree that, notwithstanding anything to the
      contrary set forth herein, Buyer shall be entitled to consummate any sale,
      merger, reorganization, consolidation or other similar transaction involving
      Seller, in each case to a Person that is an Affiliate of Buyer or Zanett,
      without requiring any consent of Seller, and the consummation of such
      transaction shall not be deemed to violate any provision of this Agreement;
      provided, however, that such sale, merger, reorganization, consolidation or
      other similar transaction shall not release Buyer from its obligations
      hereunder.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IX.

     

    CONDITIONS
      TO CLOSING.

     

    9.1 Mutual
      Conditions.
      The
      respective obligations of each party to effect the transactions contemplated
      by
      this Agreement at the Closing shall be subject to the satisfaction, at or prior
      to the Closing Date, of the following conditions (any of which may be waived
      in
      writing by Buyer, Owner and Seller).

     

    (a) None
      of
      Buyer, Owner or Seller nor any of their respective subsidiaries shall be subject
      to any order, decree or injunction by a court of competent jurisdiction which
      (i) prevents or materially delays the consummation of the transactions
      contemplated by this Agreement or (ii) would impose any material limitation
      on
      the ability of Buyer effectively to exercise full rights of ownership of any
      material portion of the assets or Business of Seller, taken as a
      whole.

     

    (b) No
      statute, rule or regulation, shall have been enacted by the government (or
      any
      governmental agency) of the United States or any state, municipality or other
      political subdivision thereof that makes the consummation of the transactions
      contemplated by this Agreement illegal.

     

    (c) Buyer,
      Owner and Seller shall have received all consents, approvals and authorizations
      of third parties (including governmental approvals) that are required of such
      third parties prior to the consummation of the transactions contemplated by
      this
      Agreement, in form and substance acceptable to Buyer or Seller, as the case
      may
      be, except where the failure to obtain such consent, approval or authorization
      would not have a material adverse effect on the Business of Seller.

     

    9.2 Conditions
      to the Obligations of Buyer.
      The
      obligations of Buyer under this Agreement are subject to the satisfaction,
      at or
      before the Closing, of each of the following conditions (any of which may be
      waived in writing by Buyer):

     

    (a) The
      representations and warranties of Seller and Owner contained herein that are
      qualified as to materiality shall be true in all respects on and as of the
      Closing Date (except for the representations and warranties made as of a
      specific date which shall be true in all material respects as of such date)
      with
      the same force and effect as though made on and as of such date, and each of
      the
      representations and warranties of Seller and Owner contained herein that are
      not
      so qualified shall be true in all material respects as of such
      dates.

     

    (b) Seller
      and the Owner shall have performed and complied in all material respects with
      all covenants, agreements, obligations and conditions required by this Agreement
      to be performed or complied with by them at or prior to the
      Closing.

     

    (c) There
      shall not be threatened, instituted or pending any suit, action, investigation,
      inquiry or other proceeding by or before any court or governmental or other
      regulatory or administrative agency or commission requesting or looking toward
      an order, judgment or decree that (a) restrains or prohibits the consummation
      of
      the transactions contemplated hereby, (b) could reasonably be expected to have
      a
      material adverse effect on Buyer’s ability to exercise control over or manage
      Seller after the Closing or (c) could reasonably be expected to have a material
      adverse effect on the Business of Seller.

     

    (d) On
      the
      Closing Date, there shall be no effective injunction, writ, preliminary
      restraining order or other order issued by a court of competent jurisdiction
      restraining or prohibiting the consummation of the transactions contemplated
      hereby.

     

    (e) Buyer
      shall have received an opinion of Jones, Foster, Johnston & Stubbs, P.A.,
      counsel to Seller, dated the Closing Date, in form and substance reasonably
      satisfactory to Buyer.

     

    (f) Buyer
      shall have received from Seller at least 2 business days prior to Closing,
      payoff
      letters from American Express Company providing for the payoff amount as of
      Closing, of the American Express Debt.

     

    (g) Buyer
      shall have received reasonable evidence that all indebtedness of Seller has
      been
      paid in full other than the Wachovia Debt.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h) Buyer
      shall have received satisfactory evidence that all debt owed by Seller to Dana
      Johnson has been assigned as personal debt of Owner.

     

    (i) Buyer
      shall have received the Searches in accordance with Section 8.3(g). Seller
      shall
      have had all Encumbrances, other than Permitted Encumberances, affecting Seller
      or its assets released and discharged (whether or not such Encumbrances are
      reflected in the Searches or the Schedules). Buyer shall have received evidence
      reasonably satisfactory to it (including, without limitation, UCC-3 termination
      statements) that such Encumbrances have been released and discharged of
      record.

     

    (j) Buyer
      shall have received a consent from Wachovia Bank consenting to the transactions
      contemplated by this agreement, in a form acceptable to Buyer in its sole
      discretion.

     

    (k) Each
      Key
      Employee shall have entered into a confidentiality, non-competition, and
      non-solicitation agreement (the “Confidentiality,
      Non-Competition, and Non-Solicitation Agreement”),
      substantially in the form of Exhibit
      C.

     

    (l) Each
      Key
      Employee shall have accepted Buyer’s offer of employment with Buyer pursuant to
      an offer letter, in a form acceptable to Buyer in its sole
      discretion.

     

    (m) Seller
      and Owner shall have entered into a lock-up agreement with Zanett (the
“Lock-up
      Agreement”),
      substantially in the form of Exhibit
      D.

     

    (n) The
      lease
      agreement between Seller, Dana Johnson and Owner for the property located at
      631
      US Highway One, Suite 412, North Palm Beach, Florida, shall have been assigned
      to Buyer. 

     

    (o) Zanett’s
      Executive Committee and Buyer’s Board of Directors shall have approved the
      Agreement and the transactions contemplated hereby.

     

    (p) Zanett’s
      lender, LaSalle Bank National Association, shall have approved the Agreement
      and
      the transactions contemplated hereby, including the assumption of the Wachovia
      Debt by Buyer.

     

    (q) There
      shall have been no material adverse change to the Business from the date hereof
      to the Closing.

     

    9.3 Conditions
      to the Obligations of Seller and the Owner.
      The
      obligations of Seller and the Owner under this Agreement at the Closing are
      subject to the satisfaction, at or before the Closing, of each of the following
      conditions (any of which may be waived in writing by Seller and the
      Owner):

     

    (a) The
      representations and warranties of Buyer contained herein that are qualified
      as
      to materiality shall be true in all respects on and as of the Closing Date
      (except for the representations and warranties made as of a specific date which
      shall be true in all material respects as of such date) with the same force
      and
      effect as though made on and as of such date, and each of the representations
      and warranties of Buyer contained herein that are not so qualified shall be
      true
      in all material respects as of such dates.

     

    (b) Buyer
      shall have performed and complied in all material respects with all covenants,
      agreements, obligations and conditions required by this Agreement to be so
      performed or complied with by Buyer at or prior to the Closing.

     

    (c) There
      shall not be threatened, instituted or pending any suit, action, investigation,
      inquiry or other proceeding by or before any court or governmental or other
      regulatory or administrative agency or commission requesting or looking toward
      an order, judgment or decree that (a) restrains or prohibits the consummation
      of
      the transactions contemplated hereby or (b) could reasonably be expected to
      have
      a material adverse effect on the business of Buyer or Seller (following the
      Closing).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) On
      the
      Closing Date, there shall be no effective injunction, writ, preliminary
      restraining order or other order issued by a court of competent jurisdiction
      restraining or prohibiting the consummation of the transactions contemplated
      hereby.

     

    ARTICLE
      X.

     

    MISCELLANEOUS

     

    10.1 Notices.
      Any
      communications required or desired to be given hereunder shall be deemed to
      have
      been properly given if sent by hand delivery or by facsimile and overnight
      courier or overnight courier to the parties hereto at the following addresses,
      or at such other address as either party may advise the other in writing from
      time to time:

     

    If
      to
      Buyer:

    

    Zanett
      Commercial Solutions, Inc.

    c/o
      Zanett, Inc.

    635
      Madison Avenue

    15th
      Floor

    New
      York,
      NY 10022

    Attention:
      President

    Facsimile:
      (646) 502-1808

    

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

    

    Drinker
      Biddle & Reath LLP

    One
      Logan
      Square

    18th
      and
      Cherry Streets

    Philadelphia,
      PA 19103

    Attention:
      Stephen T. Burdumy, Esq.

    Facsimile:
      (215) 988-2757

    

    If
      to
      Seller:

    

    PS
      GoLive
      LLC

    631
      US
      Highway One, Suite 412 

    North
      Palm Beach, FL 33401

    

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

     

    Jones,
      Foster, Johnston & Stubbs, P.A.

    505
      Flagler Drive, Suite 1100

    West
      Palm
      Beach, FL 33401

    Attention:
      John S. Trimper, Esq.

    Facsimile:
      (561) 650-0490

    

    If
      to
      Owner:

    

    Michael
      Johnson

    124
      Satinwood Lane

    Palm
      Beach Gardens, FL 33408

    

     

    All
      such
      communications shall be deemed to have been delivered on the date of hand
      delivery or facsimile or on the next Business Day following the deposit of
      such
      communications with the overnight courier.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.2 Further
      Assurances.
      Each
      party hereby agrees to perform any further acts and to execute and deliver
      any
      documents which may be reasonably necessary to carry out the provisions of
      this
      Agreement.

     

    10.3 Governing
      Law.
      This
      Agreement shall be interpreted, construed and enforced in accordance with the
      laws of the State of New York, applied without giving effect to any conflicts
      of
      law principles.

     

    10.4 Right
      of Setoff.
      Notwithstanding any provision hereof to the contrary, Buyer shall be entitled
      to
      set-off (i) any amounts due to Buyer from Owner hereunder, whether by reason
      of
      overpayment of the Consideration or, indemnification under Article VII, or
      otherwise, against (ii) amounts due from Buyer to Seller or Owner hereunder.
      Any
      set-off shall be applied against amounts payable to the Seller or Owner in
      the
      chronological order all amounts of every kind payable to Seller or Owner are
      due
      until the set-off is complete. Notwithstanding any provision hereof to the
      contrary, upon making a claim for indemnification under Article VII, Buyer
      may
      withhold from amounts otherwise due hereunder an amount equal to Buyer’s
      reasonable estimate of the amount of such claim until such time as the actual
      amount of Buyer’s indemnification claim, and right of set-off hereunder, is
      determined. Claims for indemnification for which Buyer exercises its right
      of
      set-off hereunder shall be promptly submitted to binding arbitration in New
      York
      in accordance with the rules and regulations of the American Arbitration
      Association. The arbitrators will be selected by the American Arbitration
      Association. The determination of the arbitrator(s) will be conclusive and
      binding upon the parties, and any determination by the arbitrator(s) of any
      award may be filed with the clerk of a court of competent jurisdiction as a
      final adjudication of the claim involved, or application may be made to such
      court for judicial acceptance of the award and an order of enforcement. Each
      party will bear its own expenses with respect to such arbitration. Any amount
      withheld by Buyer pursuant to the set-off right under this Section
      10.4
      that the
      arbitrator(s) determines was in excess of the amount that Seller or Owner was
      liable for under the indemnification claim brought to such arbitration shall
      be
      returned forthwith to Seller or Owner. The arbitrator may award reasonable
      attorneys’ fees and costs to the prevailing party.

     

    10.5 Consent
      to Jurisdiction.
      Each of
      the parties hereto (a) consents to submit itself to the personal jurisdiction
      of
      any Federal court located in the State of New York in the event any dispute
      arises out of this Agreement or any of the transactions contemplated by this
      Agreement, (b) agrees that it will not attempt to deny or defeat such personal
      jurisdiction by motion or other request for leave from any such court, and
      (c)
      agrees that it will not bring any action relating to this Agreement or any
      of
      the transactions contemplated by this Agreement in any court other than a
      Federal court sitting in the State of New York.

     

    10.6 Integration
      of Exhibits and Schedules.
      All
      Exhibits and Schedules to this Agreement are integral parts of this Agreement
      as
      if fully set forth herein.

     

    10.7 Entire
      Agreement.
      This
      Agreement, the Related Agreements, including all Exhibits and Schedules attached
      hereto and thereto contain the entire agreement of the parties and supersede
      any
      and all prior or contemporaneous agreements between the parties, written or
      oral, with respect to the transactions contemplated hereby. Such agreement
      may
      not be changed or terminated orally, but may only be changed by an agreement
      in
      writing signed by the party or parties against whom enforcement of any waiver,
      change, modification, extension, discharge or termination is
      sought.

     

    10.8 Expenses.
      Except
      as set forth on Schedule 4.4(b) or as expressly provided otherwise, each party
      hereto will bear its own costs and expenses (including fees and expenses of
      auditors, attorneys, financial advisors, bankers, brokers and other consultants
      and advisors) incurred in connection with this Agreement, the Related Agreements
      and the transactions contemplated hereby and thereby.

     

    10.9 Counterparts.
      This
      Agreement may be executed in several counterparts, each of which, when so
      executed, shall be deemed to be an original, and such counterparts shall
      together constitute and be one and the same instrument.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.10 Binding
      Effect.
      This
      Agreement shall be binding on, and shall inure to the benefit of, the parties
      hereto, and their respective successors and assigns, and no other person shall
      acquire or have any right under or by virtue of this Agreement. No party may
      assign any right or obligation hereunder without the prior written consent
      of
      the other parties.

     

    10.11 Termination
      Events.
      By
      notice given prior to or at the Closing, subject to Section 11.2, this Agreement
      may be terminated as follows: 

     

    (a) by
      Buyer
      if a material breach of any provision of this Agreement has been committed
      by
      Seller or Owner, such breach has not been cured within 10 days following receipt
      by Seller of notice of such breach, and such breach has not been waived by
      Buyer;

     

    (b) by
      Seller
      if a material breach of any provision of this Agreement has been committed
      by
      Buyer such breach has not been cured within 10 days following receipt by Buyer
      of notice of such breach, and such breach has not been waived by
      Seller;

     

    (c) by
      either
      Buyer or Seller if the transactions contemplated hereby have not been
      consummated by December 15, 2008; provided, however, that the right to terminate
      this Agreement under this Section 10.11(c) shall not be available to any party
      whose failure to fulfill any obligation under this Agreement has been the cause
      of or resulted in the failure of such transaction to occur on or before such
      date; or

     

    (d) by
      mutual
      consent of Buyer, Seller, and the Owner.

     

    10.12 Effect
      Of Termination.
      Each
      party’s right of termination under Section
      10.11
      is in
      addition to any other rights it may have under this Agreement or otherwise,
      and
      the exercise of such right of termination will not be an election of remedies.
      If this Agreement is terminated pursuant to Section
      10.11,
      all
      obligations of the parties under this Agreement will terminate, except that
      the
      obligations of the parties in this Article X will survive; provided, however,
      that if this Agreement is terminated because of a breach of this Agreement
      by
      the non-terminating party or because one or more of the conditions to the
      terminating party’s obligations under this Agreement is not satisfied as a
      result of the party’s failure to comply with its obligations under this
      Agreement, the terminating party’s right to pursue all legal remedies will
      survive such termination unimpaired.

     

    [SIGNATURE
      PAGE FOLLOWS]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Buyer, Seller and the Owner have caused this Asset Purchase
      Agreement to be executed by their respective duly authorized officers, all
      as of
      the day and year first above written.

    

    
      	
              ZANETT
                COMMERCIAL SOLUTIONS, INC.

            
	 	 
	
              By:

            	
              /s/
                Claudio Guazzoni

            
	 	
              Name:
                Claudio Guazzoni

            
	 	
              Title:
                President

            
	 	 
	
              PS
                GOLIVE LLC

            
	 	 
	
              By:

            	
              /s/
                Michael Johnson

            
	 	
              Name:
                Michael Johnson

            
	 	
              Title:
                Sole Member

            
	 	 
	
              /s/
                Michael Johnson

            
	
              Michael
                Johnson

            

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

      The
        following schedules to the agreement have been omitted. The registrant will
        furnish a supplementary copy of any omitted schedule to the Securities and
        Exchange Commission upon request.

      

      

      
        	 
	
                Schedule
                  1.1

              	
                Current
                  Assets and Current Liabilities 

              
	
                Schedule
                  2.1(b)

              	
                Seller’s
                  Tangible Property

              
	
                Schedule
                  2.1(c)

              	
                Seller’s
                  Contracts

              
	
                Schedule
                  2.1(e)

              	
                Seller’s
                  Authorizations

              
	
                Schedule
                  2.2(b)

              	
                Consents

              
	
                Schedule
                  2.3(i)

              	
                Excluded
                  Assets

              
	
                Schedule
                  2.4(a)

              	
                Assumed
                  Liabilities

              
	
                Schedule
                  2.4(b)

              	
                Assumed
                  Liabilities

              
	
                Schedule
                  2.5(r)

              	
                Excluded
                  Capital Lease Obligations

              
	
                Schedule
                  2.7(b)

              	
                Third
                  Party Consents

              
	
                Schedule
                  4.1(b)

              	
                Jurisdiction
                  in which Seller is Authorized to Do Business 

              
	
                Schedule
                  4.1(c)

              	
                Seller’s
                  Managers and Officers

              
	
                Schedule
                  4.1(d)

              	
                Change
                  in Shares; Action Requiring Written Consent of Buyer

              
	
                Schedule
                  4.1(e)

              	
                Changes
                  to Equity Interests of Holders of Seller’s Membership
                  Units

              
	
                Schedule
                  4.1(f)

              	
                Seller’s
                  Fictitious Name Registration

              
	
                Schedule
                  4.2(b)

              	
                Violation
                  or Breach of Agreements; Consents Required

              
	
                Schedule
                  4.4(a)

              	
                Financial
                  Statements

              
	
                Schedule
                  4.4(b)

              	
                Liabilities
                  

              
	
                Schedule
                  4.4(c)

              	
                Unusual,
                  Nonrecurring, Extraordinary or Not in Ordinary Course Income or
                  Expense

              
	
                Schedule
                  4.5

              	
                Occurrence
                  of Certain Change

              
	
                Schedule
                  4.5(f)

              	
                Permitted
                  Encumbrances

              
	
                Schedule
                  4.6

              	
                Seller’s
                  Authorizations

              
	
                Schedule
                  4.7(a)

              	
                Regulatory
                  Matters

              
	
                Schedule
                  4.8(a)

              	
                Tax
                  Returns

              
	
                Schedule
                  4.8(c)

              	
                Tax
                  Disputes

              
	
                Schedule
                  4.9(b)

              	
                Claims
                  Against Seller

              
	
                Schedule
                  4.9(c)

              	
                Legal
                  Claims Against Seller Relating to Seller’s Products or
                  Services

              
	
                Schedule
                  4.10(b)

              	
                Leases

              
	
                Schedule
                  4.10(c)

              	
                Loans,
                  Extension of Credit and Advances

              
	
                Schedule
                  4.10(d)

              	
                Acquisition
                  of Assets or Capital Stock of Another Business

              
	
                Schedule
                  4.10(e)

              	
                Other
                  Agreements

              
	
                Schedule
                  4.10(f)

              	
                Material
                  Contracts Effected by APA or Related Agreements

              
	
                Schedule
                  4.10(g)

              	
                Agreements
                  Subject to Potential Default

              
	
                Schedule
                  4.10(h)

              	
                Bank,
                  Brokerage, Mutual Fund, Investment Company, Investment Advisor
                  and other
                  Financial Institution Accounts

              
	
                Schedule
                  4.10(j)

              	
                Contracts

              
	
                Schedule
                  4.10(k)

              	
                Owned
                  Leased Vehicles, Machinery, Equipment, Tools and other Tangible
                  Assets

              
	
                Schedule
                  4.11(a)

              	
                Collective
                  Bargaining Agreements or Efforts

              
	
                Schedule
                  4.11(b)

              	
                Employment
                  Compliance and Employee Relations

              
	
                Schedule
                  4.11(c)

              	
                Employee
                  Agreements

              
	
                Schedule
                  4.11(d)

              	
                Employee
                  Benefit Plan

              
	
                Schedule
                  4.11(o)

              	
                Change
                  of Control Agreements

              
	
                Schedule
                  4.12(a)

              	
                Employee
                  Information

              
	
                Schedule
                  4.12(b)

              	
                Employee
                  Valuation Methods

              
	
                Schedule
                  4.12(c)

              	
                Consultants
                  and Independent Contractors

              
	
                Schedule
                  4.12(d)

              	
                Employee
                  Termination

              
	
                Schedule
                  4.12(e)

              	
                Employee
                  Compensation Dispute

              
	
                Schedule
                  4.12(f)

              	
                Non-Resident
                  Employees

              

      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                Schedule
                  4.14

              	
                Product
                  and Service Warranties

              
	
                Schedule
                  4.15(a)

              	
                Encumbrances
                  on Intellectual Property

              
	
                Schedule
                  4.15(b)

              	
                Intellectual
                  Property

              
	
                Schedule
                  4.15(c)

              	
                Software

              
	
                Schedule
                  4.15(d)

              	
                Non-Exclusive
                  Intellectual Property

              
	
                Schedule
                  4.15(f)

              	
                Intellectual
                  Property Marketing Rights

              
	
                Schedule
                  4.16

              	
                Insurance

              
	
                Schedule
                  4.17(b)

              	
                Top
                  Ten Customers

              
	
                Schedule
                  4.17(c)

              	
                Threats
                  of Customer Discontinuance

              
	
                Schedule
                  4.18(a)

              	
                Legality
                  of the Business and Operations of Seller

              
	
                Schedule
                  4.19

              	
                Environmental
                  Liabilities 

              
	
                Schedule
                  4.21

              	
                Receivables

              
	
                Schedule
                  5.2(b)

              	
                Breach
                  of AgreementsThird Amendment and Waiver dated November 25, 2008 to the Credit Agreement

 Exhibit 10.1 
 EXECUTION COPY 
 THIRD AMENDMENT, dated as of November 25, 2008 (the “Amendment”), to
the CREDIT AGREEMENT, dated as of as of June 12, 2007 (as amended or otherwise modified prior to the date hereof, the “Credit Agreement”), among CITADEL BROADCASTING CORPORATION, a Delaware corporation (the
“Company”), the several lenders from time to time parties thereto (the “Lenders”), the Syndication Agents and Documentation Agents party thereto and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”). 
 W I T N E S S E T H : 
 WHEREAS, pursuant to the Credit Agreement, the Lenders have extended credit to the Company on the terms set forth in the Credit Agreement; 
 WHEREAS, the Company has requested that the Required Revolving/Tranche A Lenders approve certain amendments to Section 13.1 of the Credit Agreement;

 WHEREAS, pursuant to such request, the Required Revolving/Tranche A Lenders have consented to amend the Credit Agreement on the terms and
conditions contained herein; 
 NOW, THEREFORE, the parties hereto hereby agree as follows: 
 SECTION 1. DEFINITIONS. 
 1.1 Defined Terms.
Terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement unless otherwise defined herein or the context otherwise requires. 
 SECTION 2. AMENDMENTS. 
 2.1 Amendment of Subsection 1.1 (Definitions). Subsection 1.1 of the
Credit Agreement is hereby amended by adding the following term in proper alphabetical order: 
 “Consolidated Total
Leverage Ratio”: for any period of four consecutive fiscal quarters, as of the end of such period the ratio of (a) Consolidated Total Indebtedness (provided that Indebtedness under clause (b) of the definition of
Indebtedness shall only be included to the extent of any unreimbursed drawings under any letter of credit) as of the end of such period to (b) Consolidated EBITDA for such period, provided that (i) the Consolidated Total Leverage
Ratio for any period of four consecutive fiscal quarters shall be calculated giving pro forma effect to any Indebtedness incurred or repaid in connection with a Material Acquisition or Material Disposition occurring during the relevant Measurement
Period or prior to the relevant date of determination as if such Indebtedness had been incurred or repaid on the first day of such period (provided that the Company shall not be required to make the foregoing pro forma calculations for any
Material Acquisition or Material Disposition occurring after the end of the relevant Measurement Period and within three (3) Business Days of the date on which the certificate for such period is delivered under subsection 12(b)) and
(ii) if the Consolidated Total Leverage Ratio is determined as of any Borrowing Date, the Consolidated Total Leverage Ratio for the period of four consecutive fiscal quarters most recently ended prior to such Borrowing Date for which the
financial statements required by subsections 12.1 and 12.2 have been delivered shall be calculated giving pro forma effect to any Indebtedness incurred or repaid after the end of such period and on or prior to such Borrowing Date (including the
Indebtedness to be incurred on such Borrowing Date (but 

 
not the use of proceeds thereof)) as if such Indebtedness had been incurred or repaid on the last day of such period. 
 2.2 Amendment of Subsection 13.1 (Financial Condition Covenant). Subsection 13.1 of the Credit Agreement is hereby amended by deleting such
subsection in its entirety and replacing it with the following: 
 13.1 Financial Condition Covenant. Permit, without
the approval of the Required Revolving/Tranche A Lenders, as of the last day of any fiscal quarter of the Company or any Borrowing Date, the Consolidated Total Leverage Ratio for the period of four consecutive fiscal quarters ended on such day (or,
in the case of a Borrowing Date, the last day of the fiscal quarter of the Company most recently ended prior to such Borrowing Date for which the financial statements required by subsections 12.1 and 12.2 have been delivered) to be more than the
ratio set forth opposite such period below; provided that this covenant will only apply (a) to the Revolving Credit Facility and the Tranche A Term Facility (except as otherwise provided in paragraph (c) of Section 14) and
(b) when any Tranche A Term Loans, Revolving Credit Loans, Swing Line Loans or Revolving L/C Obligations (other than Revolving L/C Obligations that are cash-collateralized) are outstanding on the last day of any such period or shall be borrowed
on such Borrowing Date: 
  

			
	 Period Ending
	  	 Ratio

		
	 September 30, 2007
	  	8.5 to 1.0
		
	 December 31, 2007
	  	8.5 to 1.0
		
	 March 31, 2008
	  	8.5 to 1.0
		
	 June 30, 2008
	  	8.5 to 1.0
		
	 September 30, 2008
	  	8.5 to 1.0
		
	 December 31, 2008
	  	8.5 to 1.0
		
	 March 31, 2009
	  	8.5 to 1.0
		
	 June 30, 2009
	  	8.5 to 1.0
		
	 September 30, 2009
	  	8.5 to 1.0
		
	 December 31, 2009
	  	8.25 to 1.0
		
	 March 31, 2010
	  	7.75 to 1.0
		
	 June 30, 2010
	  	7.25 to 1.0
		
	 September 30, 2010
	  	7.25 to 1.0
		
	 December 31, 2010 and thereafter
	  	6.75 to 1.0

 SECTION 3. MISCELLANEOUS. 
 3.1 Conditions to Effectiveness. This Amendment shall become effective on the date (the “Amendment Effective Date”) on which: 
 (a) Amendment. The Administrative Agent shall have received this Amendment, executed and delivered by a duly authorized officer of each of the
Company and the Required Revolving/Tranche A Lenders. 
  

 2 

 (b) Acknowledgment and Confirmation. The Administrative Agent shall have received the
Acknowledgment and Confirmation, substantially in the form of Exhibit A hereto, executed and delivered by an authorized officer of the Company and each other Loan Party. 
 (c) Payment of Fees, Expenses. The Company shall have paid all fees and expenses as required pursuant to subsection 3.6 of this Amendment or otherwise; provided that the reasonable fees and disbursements
of counsel to the Administrative Agent may be paid within a reasonable period of time after receipt of invoice. 
 3.2 Representation and
Warranties; After giving effect to the amendments and waivers contained herein, on the Amendment Effective Date the Company hereby confirms that the representations and warranties set forth in Section 10 of the Credit Agreement are true and
correct in all material respects (except to the extent such representations and warranties specifically refer to an earlier date); provided that each reference in such Section 10 to “this Agreement” shall be deemed to include
this Amendment, all other prior amendments thereto and the Credit Agreement, as amended by this Amendment. 
 3.3 Continuing Effect; No
Other Waivers or Amendments. This Amendment shall not constitute an amendment or waiver of or consent to any provision of the Credit Agreement and the other Credit Documents not expressly referred to herein and shall not be construed as an
amendment, waiver or consent to any action on the part of the Company that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein. Except as expressly amended hereby, the provisions
of the Credit Agreement and the other Credit Documents are and shall remain in full force and effect in accordance with their terms. 
 3.4
No Default. No Default or Event of Default shall have occurred and be continuing as of the Amendment Effective Date after giving effect to this Amendment. 
 3.5 Counterparts. This Amendment may be executed in any number of separate counterparts by the parties hereto (including by telecopy or via electronic mail), each of which counterparts when so executed shall be
an original, but all the counterparts shall together constitute one and the same instrument. 
 3.6 Payment of Fees and Expenses. The
Company agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and reasonable expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions
contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent. The Company also agrees to pay to each Lender holding Tranche A Term Loans or Revolving Credit Commitments and
consenting to this Amendment by the specified consent deadline an amendment fee of 125 basis points of such Lender’s Tranche A Term Loans and Revolving Credit Commitments (after giving effect to any irrevocable notice of reduction of the
Revolving Credit Commitments submitted on or prior to the Amendment Effective Date). 
 3.7 GOVERNING LAW. THIS AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 [The remainder of this page is intentionally left blank.] 
  

 3 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their
respective duly authorized officers as of the date first above written. 
  

					
	CITADEL BROADCASTING CORPORATION
		
	By:	 	 /s/ Randy L. Taylor

		 	Name:	 	Randy L. Taylor
		 	Title:	 	 Senior Vice President-Finance and
 Chief Financial
Officer

 Signature Page to Third Amendment 

			
	 JPMORGAN CHASE BANK, N.A., as
     Administrative Agent and as a Lender

		
	By:	 	/s/ Tina L. Ruyter
		 	Name: Tina L. Ruyter
		 	Title: Vice President

 Signature Page to Third Amendment 

 EXHIBIT A 
 FORM OF ACKNOWLEDGMENT AND CONFIRMATION 
 1. Reference is made to the Third Amendment, dated as of
November 25, 2008 (the “Third Amendment”) to the Credit Agreement, dated as of June 12, 2007, as amended (as the same may be further amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Citadel Broadcasting Corporation, a Delaware corporation (the “Company”), the lenders party from time to time thereto (the “Lenders”), the Syndication Agents and Documentation Agents
named therein and JPMorgan Chase Bank, N.A. as administrative agent (in such capacity, the “Administrative Agent”). 
 2.
The Credit Agreement is being amended pursuant to the Third Amendment. Each of the parties hereto hereby agrees, with respect to each Credit Document to which it is a party: 
 (a) all of its obligations, liabilities and indebtedness under such Credit Document, including guarantee obligations, shall remain in full
force and effect on a continuous basis after giving effect to the Third Amendment; and 
 (b) all of the Liens and security
interests created and arising under such Credit Document remain in full force and effect on a continuous basis, and the perfected status and priority of each such Lien and security interest continues in full force and effect on a continuous basis,
unimpaired, uninterrupted and undischarged, after giving effect to the Third Amendment as collateral security for its obligations, liabilities and indebtedness under the Credit Agreement and under its guarantees in the Credit Documents. 

3. THIS ACKNOWLEDGMENT AND CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 4. This Acknowledgment and Confirmation may be executed by one or more of the parties hereto on any number of separate counterparts
(including by telecopy or electronic mail), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 
 [rest of page intentionally left blank] 

 IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment and Confirmation to be duly
executed and delivered by their proper and duly authorized officers as of the day and year first above written. 
 Citadel Broadcasting
Corporation 
 Citadel Broadcasting Company 
 ALPHABET ACQUISITION CORP. 
 (F/K/A ABC RADIO HOLDINGS, INC.) 
 DETROIT RADIO, LLC 
 (F/K/A ABC RADIO
DETROIT, LLC) 
 ATLANTA RADIO, LLC 
 (F/K/A ABC RADIO ATLANTA, LLC) 
 INTERNATIONAL RADIO, INC. 
 (F/K/A ABC RADIO INTERNATIONAL, INC.) 
 RADIO WATERMARK, INC. 
 (F/K/A ABC/WATERMARK, INC.) 
 MINNEAPOLIS RADIO, LLC 
 MINNEAPOLIS RADIO ASSETS, LLC 
 RADIO LICENSE HOLDING III, LLC 
 KLOS RADIO,
LLC 
 KLOS SYNDICATIONS ASSETS, LLC 
 KLOS-FM RADIO ASSETS, LLC 
 RADIO LICENSE HOLDING XII, LLC 
 SAN FRANCISCO RADIO, LLC 
 SF LICENSE, LLC

 SAN FRANCISCO RADIO ASSETS, LLC 
 RADIO LICENSE HOLDING VIII, LLC 
 DC RADIO, LLC 
 DC RADIO ASSETS, LLC 
 RADIO LICENSE HOLDING VII, LLC 
 WPLJ RADIO, LLC 
 RADIO LICENSE HOLDING IX,
LLC 
 CHICAGO FM RADIO ASSETS, LLC 
 RADIO LICENSE HOLDING V, LLC 
 RADIO NETWORKS, LLC 
 NETWORK LICENSE, LLC 
 RADIO LICENSE HOLDING I, LLC 
 RADIO LICENSE HOLDING II, LLC 
 RADIO
ASSETS, LLC 
 LA RADIO, LLC 
 LA LICENSE, LLC 
 RADIO LICENSE HOLDING VI, LLC 
 WBAP-KSCS RADIO ACQUISITON, LLC 
 WBAP-KSCS ACQUISITION PARTNER, LLC 
 WBAP-KSCS ASSETS, LLC 
 WBAP-KSCS RADIO
GROUP, LTD 
 RADIO LICENSE HOLDING IV, LLC 
 CHICAGO RADIO HOLDING, LLC 
 CHICAGO RADIO, LLC 
 CHICAGO RADIO ASSETS, LLC 
 RADIO LICENSE
HOLDING XI, LLC 
 CHICAGO LICENSE, LLC 
 NY RADIO, LLC 
 NY LICENSE, LLC 
 NY RADIO ASSETS, LLC 
 RADIO LICENSE HOLDING X, LLC 
 RADIO TODAY ENTERTAINMENT, INC. 
  

			
	By:	 	/s/ Randy L. Taylor
	Name:	 	Randy L. Taylor
	Title:	 	Senior Vice President-Finance and Chief Financial Officer

 Signature Page to Exhibit A to Third Amendment

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