Document:

cteform10k080331_ex10-38.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Exhibit
10.38

    

    STOCK PURCHASE
AGREEMENT

     

    This
Stock Purchase Agreement (“Agreement”) is made
as of March 28, 2008, by and among CardioTech International Inc, a Delaware
corporation (“Seller”), Catheter
and Disposable Technology, Inc., a Minnesota corporation (“CDT”) and Tacpro,
Inc., a California corporation (the “Buyer”).

     

    BACKGROUND.

     

    (a)           CDT is a wholly owned subsidiary of
Seller.  CDT is an original equipment manufacturer and supplier of
specialized disposable medical devices to medical device companies from concept
to finished packaged, sterile product, with a principal focus on the design,
development and manufacture of unique disposable medical devices – primarily
catheters – used in angioplasty, minimally invasive surgery, electrophysiology,
fertility treatments and other procedures  (collectively, the
“Business”).

     

    (b)           Buyer
is engaged in the business of manufacturing, marketing and selling medical
devices and components.

     

    (c)           For
the consideration contemplated by this Agreement and subject to and upon the
terms and conditions set forth in this Agreement, Seller desires to sell, and
Buyer desires to purchase, the Shares (as such term is defined
below).

     

    The
parties, intending to be legally bound, agree as follows:

     

    1.           DEFINITIONS

     

    For
purposes of this Agreement, the following terms have the meanings specified or
referred to in this Section 1:

     

    “Affiliate” means with respect to any
Person, any Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Person.

     

    “Applicable Contract”
means any Contract (a) under which CDT has or may acquire any rights, (b) under
which the CDT has or may become subject to any obligation or liability, or (c)
by which the CDT or any of the assets owned or used by it is or may become
bound.

     

    “Balance Sheet” shall
have the meaning defined in Section 3.4.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Best Efforts” the
commercially reasonable best efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to ensure that such result is
achieved in a reasonably expeditious manner; provided, however,
that an obligation to use Best Efforts under this Agreement does not require the
Person subject to that obligation to take actions that would result in a
Material Adverse Change in the benefits to such Person of this Agreement and the
Contemplated Transactions.

     

    “Business” shall have
the meaning defined in the Background section of this Agreement.

     

    “Breach” of a
representation, warranty, covenant, obligation, or other provision of this
Agreement or any instrument delivered pursuant to this Agreement will be deemed
to have occurred if there is or has been any inaccuracy in or breach of, or any
failure to perform or comply with, such representation, warranty, covenant,
obligation, or other provision.

     

    “Buyer” shall have the meaning
defined in the first paragraph of this Agreement.

     

    “Closing” shall have
the meaning defined in Section 2.3.

     

    “Closing Date” shall
have the meaning defined in Section 2.3.

     

    “Consent” means any
approval, consent, ratification, waiver, or other authorization (including any
Governmental Authorization).

     

    “Contract” means any
agreement, contract, obligation, promise, or undertaking (whether written or
oral and whether express or implied) that is legally binding.

     

    “Damages” shall have
the meaning defined in Section 10.2.

     

    “Disclosure Schedule”
means the disclosure schedule delivered by Sellers to Buyer concurrently with
the execution and delivery of this Agreement.

     

     “Employee Plan” shall
have the meaning defined in Section 3.12.

     

    “Encumbrance” means
any charge, claim, community property interest, condition, equitable interest,
lien, option, pledge, security interest, right of first refusal, or restriction
of any kind, including any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership.

     

    “Environment” means
soil, land surface or subsurface strata, surface waters (including navigable
waters, ocean waters, streams, ponds, drainage basins, and wetlands),
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life, and any other environmental medium or
natural resource.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Environmental, Health, and
Safety Liabilities” means any cost, damages, expense, liability,
obligation, or other responsibility arising from or under Environmental Law or
Occupational Safety and Health Law and consisting of or relating
to:

     

    
      	
              (a)  

            	
              any
      environmental, health, or safety matters or conditions (including on-site
      or off- site contamination, occupational safety and health, and regulation
      of chemical substances or
products);

            

    

     

    
      	
              (b)  

            	
              fines,
      penalties, judgments, awards, settlements, legal or administrative
      proceedings, damages, losses, claims, demands and response, investigative,
      remedial, or inspection costs and expenses arising under Environmental Law
      or Occupational Safety and Health
Law;

            

    

     

    
      	
              (c)  

            	
              financial
      responsibility under Environmental Law or Occupational Safety and Health
      Law for cleanup costs or corrective action, including any investigation,
      cleanup, removal, containment, or other remediation or response actions
      (“Cleanup”) required by applicable Environmental Law or Occupational
      Safety and Health Law (whether or not such Cleanup has been required or
      requested by any Governmental Body or any other Person) and for any
      natural resource damages; or

            

    

     

    
      	
              (d)  

            	
              any
      other compliance, corrective, investigative, or remedial measures required
      under Environmental Law or Occupational Safety and Health
    Law.

            

    

     

    The terms
“removal,” “remedial,” and “response action,” include the types of activities
covered by the United States Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. 9601 et seq., as amended (“CERCLA”).

     

    “Environmental Law”
means any Legal Requirement that requires or relates to:

     

    
      	
              (a)  

            	
              advising
      appropriate authorities, employees, and the public of intended or actual
      releases of pollutants or hazardous substances or materials, violations of
      discharge limits, or other prohibitions and of the commencements of
      activities, such as resource extraction or construction, that could have
      significant impact on the
Environment;

            

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              preventing
      or reducing to acceptable levels the release of pollutants or hazardous
      substances or materials into the
Environment;

            

    

     

    
      	
              (c)  

            	
              reducing
      the quantities, preventing the release, or minimizing the hazardous
      characteristics of wastes that are
generated;

            

    

     

    
      	
              (d)  

            	
              assuring
      that products are designed, formulated, packaged, and used so that they do
      not present unreasonable risks to human health or the Environment when
      used or disposed of;

            

    

     

    
      	
              (e)  

            	
              protecting
      resources, species, or ecological
amenities;

            

    

     

    
      	
              (f)  

            	
              reducing
      to acceptable levels the risks inherent in the transportation of hazardous
      substances, pollutants, oil, or other potentially harmful
      substances;

            

    

     

    
      	
              (g)  

            	
              cleaning
      up pollutants that have been released, preventing the threat of release,
      or paying the costs of such clean up or prevention;
  or

            

    

     

    
      	
              (h)  

            	
              making
      responsible parties pay private parties, or groups of them, for damages
      done to their health or the Environment, or permitting self-appointed
      representatives of the public interest to recover for injuries done to
      public assets.

            

    

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974 or any successor law, and
regulations and rules issued pursuant to that Act or any successor
law.

     

    “Escrow Agent” means
Citizens Bank of Massachusetts.

     

    “Escrow Deposit” shall
have the meaning defined in Section 2. 2.

     

    “Escrow Fund” shall
have the meaning defined in Section 2. 2.

     

    “Facilities” means any
real property, leaseholds, or other interests currently or formerly owned or
operated by CDT and any buildings, plants, structures, or equipment (including
motor vehicles, tank cars, and rolling stock) owned or operated by
CDT.

     

    “GAAP” means generally
accepted United States accounting principles, applied on a basis consistent with
the basis on which the Balance Sheet and the other financial statements referred
to in Section 3.4(b) were prepared.

     

    “Governmental
Authorization” means any approval, consent, license, permit, waiver, or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Governmental Body”
means any:

     

    
      	
              (a)  

            	
              nation,
      state, county, city, town, village, district, or other jurisdiction of any
      nature;

            

    

     

    
      	
              (b)  

            	
              federal,
      state, local, municipal, foreign, or other
  government;

            

    

     

    
      	
              (c)  

            	
              governmental
      or quasi-governmental authority of any nature (including any governmental
      agency, branch, department, official, or entity and any court or other
      tribunal);

            

    

     

    
      	
              (d)  

            	
              multi-national
      organization or body; or

            

    

     

    
      	
              (e)  

            	
              body
      exercising, or entitled to exercise, any administrative, executive,
      judicial, legislative, police, regulatory, or taxing authority or power of
      any nature.

            

    

     

    “Hazardous Activity”
means the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer,
transportation, treatment, or use (including any withdrawal or other use of
groundwater) of Hazardous Materials in, on, under, about, or from the Facilities
or any part thereof into the Environment, and any other act, business,
operation, or thing that increases the danger, or risk of danger, or poses an
unreasonable risk of harm to persons or property on or off the Facilities, or
that may affect the value of the Facilities or CDT.

     

    “Hazardous Materials”
means any waste or other substance that is listed, defined, designated, or
classified as, or otherwise determined to be, hazardous, radioactive, or toxic
or a pollutant or a contaminant under or pursuant to any Environmental Law,
including any admixture or solution thereof, and specifically including
petroleum and all derivatives thereof or synthetic substitutes therefor and
asbestos or asbestos-containing materials.

     

    “Indebtedness” shall
mean any indebtedness for borrowed money.

     

    “Indemnified Persons”
shall have the meaning defined in Section 10.2.

     

    “Intellectual Property
Assets” shall have the meaning defined in Section 3.22.

     

    “Interim Balance
Sheet” shall have the meaning defined in Section 3.4.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Inventory” shall
include, but not be restricted to, raw materials, work in process (progress),
sub-assemblies and finished goods.  The valuation of Inventory at the
Closing Date shall be consistent with GAAP and the normal costing methodology
used by Seller and CDT at previous month-ends.

    

    “IRC” means the
Internal Revenue Code of 1986 or any successor law, and regulations issued by
the IRS pursuant to the Internal Revenue Code or any successor law.

    

    “IRS” means the United
States Internal Revenue Service or any successor agency, and, to the extent
relevant, the United States Department of the Treasury.

     

    “Knowledge” means with
respect to: (a) an individual respecting a particular fact or other matter,
that  such individual is actually aware of such fact or other matter,
or a prudent individual could be expected to discover or otherwise become aware
of such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter; and (b) a Person (other than an individual) respecting a particular fact
or other matter, that any individual who is serving, or who has at any time
served, as a director, officer, partner, executor, or trustee of such Person (or
in any similar capacity) has, or at any time had, Knowledge of such fact or
other matter.

     

    “Legal Requirement”
means any federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.

     

    “Material Adverse
Change” shall mean any state of facts, change, development, effect,
condition or occurrence that is (i) material and adverse to the valuation,
business, assets (including intangible assets), liabilities, properties,
(including intangible property), operations, prospects, liabilities or condition
(financial or otherwise) of CDT, or (ii) materially affects the ability of CDT
and / or the Seller to perform their respective obligations under this Agreement
or to consummate the transactions contemplated by this Agreement.

     

    “Occupational Safety and
Health Law” means any Legal Requirement designed to provide safe and
healthful working conditions and to reduce occupational safety and health
hazards, and any program, whether governmental or private (including those
promulgated or sponsored by industry associations and insurance companies),
designed to provide safe and healthful working conditions.

     

    “Order” means any
award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Ordinary Course of
Business” an action taken by a Person will be deemed to have been taken
in the “Ordinary Course of Business” only if such action is consistent with the
past practices of such Person and is taken in the ordinary course of the normal
day-to-day operations of such Person.

     

    “Organizational
Documents” means (a) the articles or certificate of incorporation and the
bylaws of a corporation; (b) the partnership agreement and any statement of
partnership of a general partnership; (c) the limited partnership agreement and
the certificate of limited partnership of a limited partnership; (d) any charter
or similar document adopted or filed in connection with the creation, formation,
or organization of a Person; and (e) any amendment to any of the
foregoing.

     

    “Person” means any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental
Body.

     

    “Proceeding” means any
action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental Body
or arbitrator.

     

    “Proprietary Rights
Agreement” shall have the meaning defined in Section
3.19(b).

     

    “Release” means any
spilling, leaking, emitting, discharging, depositing, escaping, leaching,
dumping, or other releasing into the Environment, whether intentional or
unintentional.

     

    “Representative”
means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor, or other representative of such Person, including
legal counsel, accountants, and financial advisors.

     

    “Securities Act” means
the Securities Act of 1933 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.

     

    “Seller” shall have
the meaning defined in the first paragraph of this Agreement.

     

    “Shares” shall have
the meaning defined in Section 3.3.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Subsidiary” means
with respect to any Person (the “Owner”), any corporation or other Person of
which securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body, or
otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred) are
held by the Owner or one or more of its Subsidiaries; when used without
reference to a particular Person, “Subsidiary” means a Subsidiary of
CDT.

     

    “Taxes” shall mean any and all
forms of taxation, withholdings, duty, impost, social security contributions,
and rates or levy of any nature (whether federal, state or local) whatsoever,
and whenever and wherever charged, levied or imposed, and any interest,
surcharge, fine or penalties in relation thereto whether of a direct or indirect
nature.

    

    “Tax Return” means any
return (including any information return), report, statement, schedule, notice,
form, or other document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection, or payment of any Tax or in connection
with the administration, implementation, or enforcement of or compliance with
any Legal Requirement relating to any Tax.

     

    “Threat of Release”
means a substantial likelihood of a Release that may require action in order to
prevent or mitigate damage to the Environment that may result from such
Release.

     

    “Threatened” a claim,
Proceeding, dispute, action, or other matter will be deemed to have been
“Threatened” if any demand or statement has been made (orally or in writing) or
any notice has been given (orally or in writing), or if any other event has
occurred or any other circumstances exist, that would lead a prudent Person to
conclude that such a claim, Proceeding, dispute, action, or other matter is
likely to be asserted, commenced, taken, or otherwise pursued in the
future.

     

    “Transaction Costs”
means any and all outstanding and unpaid costs, whether payable at the Closing
or otherwise, incurred by the Seller or CDT related to or in connection with the
consummation by the Seller and CDT of the transactions contemplated hereby,
including, without limitation, the fees and expenses of consultants, investment
bankers and other financial advisors, brokers and finders, legal counsel and
accountants.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              2  

            	
              SALE AND TRANSFER OF
      SHARES; CLOSING

            

    

     

    2.1           Shares.                                Subject
to the terms and conditions of this Agreement, at the Closing, Seller will sell
and transfer the Shares to Buyer, and Buyer will purchase the Shares from
Seller, free from all encumbrances whatsoever.

     

               2.2           Purchase Price and
Payment.                                                                  The
purchase price (the “Purchase Price”) for
the Shares to be paid at Closing is $1,200,000 (subject to adjustment as set
forth below), of which (i) $870,000 is payable directly to Seller to supplement
the $90,000 currently held be Seller as an earnest money deposit previously
delivered by Buyer, and (ii) $240,000 (the “Escrow Deposit”)
shall be deposited with the Escrow Agent (such amount, together with interest
earned thereon, “Escrow
Fund”).

     

    2.3           Closing.                      The
purchase and sale of the Shares (the “Closing”) provided
for in this Agreement will take place at the offices of Seller at 1:00 p.m.
(local time) on March 28, 2008, or (ii) or at such other time and place as
the parties may agree (the “Closing
Date”).

     

    2.4           Post Closing
Adjustment.  Within 105 days after the Closing Date, the Buyer
and Seller jointly shall prepare statements of Accounts Receivable, net of
reserves (“Net Closing AR”) and Inventory, net of reserves (“Net Closing
Inventory”), in each case as at the Closing Date.  Such statements
shall be prepared in accordance with GAAP and otherwise in a manner consistent
with Seller’s established practices. Buyer shall use its best reasonable
commercial efforts to collect all Net Closing AR.  The aggregate
amount of Net Closing AR which is not collected within 105 days following
closing (“Uncollected AR”), and any items of Net Closing Inventory that is still
owned by CDT/Buyer as at the first anniversary of the Closing Date shall be
deemed an adjustment to the Purchase Price, and distributed to Buyer from the
Escrow Fund; provided, that if any portion of the Uncollected AR is collected
after the expiration of 105 days following the Closing Date and prior to the
first anniversary of the Closing, such collected amount of Uncollected AR shall
be credited to the Seller; and such collected amount of Uncollected AR shall be
paid over to Seller or shall reduce the amount otherwise chargeable against the
Escrow Fund as a Purchase Price reduction in favor of the Seller.

     

    
      	
               
      

            	
              2.5

            	
              Closing
      Obligations.

            	
              At
      the Closing:

            

    

     

    (a)           Seller
will deliver or cause the delivery to Buyer:

     

    
      	
              (i)  

            	
                 A
      certificate or certificates representing the Shares, duly endorsed (or
      accompanied by duly executed stock powers) in blank for transfer to
      Buyer;

            

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              (ii)  

            	
              a
      certificate executed by Seller representing and warranting to Buyer that
      each of Seller’s representations and warranties in this Agreement was
      accurate in all respects as of the date of this Agreement and is accurate
      in all respects as of the Closing Date as if made on the Closing Date
      (giving full effect to any supplements to the Disclosure Statement that
      were delivered by Seller to Buyer prior to the Closing Date in accordance
      with Section 5.5); and

            

    

     

    
      	
               
      

            	
              (b)

            	
              Buyer
      will deliver or cause to be delivered to Seller and to the Escrow
      Agent:

            

    

     

    
      	
              (i)  

            	
              the
      Closing Payment by wire transfer or cashiers check to
    Seller;

            

    

     

    
      	
              (ii)  

            	
              the
      Escrow Deposit by wire transfer or cashiers check to Escrow Agent;
      and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              a
      certificate executed by Buyer to the effect that, except as otherwise
      stated in such certificate, each of Buyer’s representations and warranties
      in this Agreement was accurate in all respects as of the date of this
      Agreement and is accurate in all respects as of the Closing Date as if
      made on the Closing Date.

            

    

     

    
      	
              3  

            	
              REPRESENTATIONS
      AND WARRANTIES OF SELLER AND CDT

            

    

     

    Seller
and CDT represent and warrant to Buyer as follows:

     

    
      	
               
      

            	
              3.1

            	
              Organization and Good
      Standing.

            

    

     

    
      	
              (a)  

            	
              CDT
      is a corporation organized, validly existing, and in good standing under
      the laws of the State of Minnesota, with full corporate power and
      authority to conduct its business as it is now being conducted, to own or
      use the properties and assets that it purports to own or use, and to
      perform all its obligations under Applicable Contracts.  CDT is
      duly qualified to do business as a foreign corporation and is in good
      standing under the laws of each state or other jurisdiction in which
      either the ownership or use of the properties owned or used by it, or the
      nature of the activities conducted by it, requires such
      qualification.

            

    

     

    
      	
              (b)  

            	
              Seller
      has delivered or made available to Buyer copies of the Organizational
      Documents of CDT, as currently in
effect.

            

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.2

            	
              Authority; No
      Conflict.

            

    

     

    
      	
              (a)  

            	
              This
      Agreement constitutes the legal, valid, and binding obligation of Seller
      and CDT, enforceable against Seller and CDT in accordance with its
      terms.  Seller and CDT have the right, power, authority, and
      capacity to execute and deliver this Agreement and to perform their
      obligations hereunder.

            

    

     

    
      	
              (b)  

            	
              Neither
      the execution and delivery of this Agreement nor the consummation or
      performance of any of the transactions contemplated hereby will, directly
      or indirectly (with or without notice or lapse of
  time):

            

    

     

    
      	
              (i)  

            	
              contravene,
      conflict with, or result in a violation of (A) any provision of the
      Organizational Documents of CDT, or (B) any resolution adopted by the
      board of directors or the stockholders of either CDT or the
      Seller;

            

    

     

    
      	
              (ii)  

            	
              contravene,
      conflict with, or result in a violation of, or give any Governmental Body
      or other Person the right to challenge any of the Contemplated
      Transactions or to exercise any remedy or obtain any relief under, any
      Legal Requirement or any Order to which CDT or Seller, or any of the
      assets owned or used by CDT, may be
subject;

            

    

     

    
      	
              (iii)  

            	
              contravene,
      conflict with, or result in a violation of any of the terms or
      requirements of, or give any Governmental Body the right to revoke,
      withdraw, suspend, cancel, terminate, or modify, any
      Governmental  Authorization that is held by CDT or that
      otherwise relates to the business of, or any of the assets owned or used
      by, CDT;

            

    

     

    
      	
              (iv)  

            	
              cause
      Buyer or CDT to become subject to, or to become liable for the payment of,
      any Tax;

            

    

     

    
      	
              (v)  

            	
              cause
      any of the assets owned by CDT to be reassessed or revalued by any taxing
      authority or other Governmental
Body;

            

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              (vi)  

            	
              contravene,
      conflict with, or result in a violation or breach of any provision of, or
      give any Person the right to declare a default or exercise any remedy
      under, or to accelerate the maturity or performance of, or to cancel,
      terminate, or modify, any Applicable Contract;
  or

            

    

     

    
      	
              (vii)  

            	
              result
      in the imposition or creation of any Encumbrance upon or with respect to
      any of the assets owned or used by
CDT.

            

    

     

    Neither
Seller nor CDT is or will be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the transactions
contemplated hereby.

     

    3.3           Capitalization.                                 As of the date of this
Agreement:

     

    
      	
               
      

            	
              (a)

            	
              the
      authorized capital stock of CDT consists of 2,500,000 shares of Common
      Stock, $.01 par value per share, of which 955,162.5 shares are issued and
      outstanding (the “Shares”). Seller is and will be on the Closing Date the
      record and beneficial owner and holder of the Shares, free and clear of
      all Encumbrances.  No legend or other reference to any purported
      Encumbrance appears upon any certificate representing the Shares, and all
      of the Shares have been duly authorized and validly issued and are fully
      paid and nonassessable.  There are no Contracts relating to the
      issuance, sale, or transfer of any equity securities or other securities
      of CDT.  None of the Shares was issued in violation of the
      Securities Act or any other Legal Requirement.  CDT neither
      owns, nor has any Contract to acquire, any equity securities or other
      securities of any Person or any direct or indirect equity or ownership
      interest in any other business.

            

    

     

    
      	
               
      

            	
              (b)

            	
              CDT
      has no outstanding, or has had outstanding any securities registered (or
      required to be registered) under the Securities Act of 1933 or the
      Securities Exchange Act of 1934 or has or has had any reporting obligation
      thereunder. CDT is not subject to any filing or reporting requirements
      under the Securities Act of 1933 or the Securities Exchange Act of
      1934.

            

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    3.4           Financial
Statements.

     

    
      	
               
      

            	
              (a)

            	
              Seller
      has delivered to Buyer: (a) the unaudited balance sheet of CDT as at
      March 31, 2007 (the “Balance Sheet”)
      and as at March 31, 2006, and the related statements of operations and
      cash flow for each of the fiscal years then ended, (b) the unaudited
      balance sheet of CDT as at December 31, 2007 (the “Interim Balance
      Sheet”), and the related statements of operations and cash flow for
      the nine months then ended.  Such financial statements fairly
      present the financial condition and the results of operations and cash
      flow of CDT as at the respective dates of and for the periods referred to
      in such financial statements, all in accordance with GAAP, subject, in the
      case of interim financial statements, to normal recurring year-end
      adjustments (the effect of which will not, individually or in the
      aggregate, be materially adverse) and the absence of notes.  The
      financial statements referred to in this Section 3.4 reflect the
      consistent application of such accounting principles throughout the
      periods involved.  Within 105 days following the Closing Date,
      Seller will deliver to Buyer an unaudited balance sheet and related
      statements of operations and cash flow for CDT as of the Closing Date, in
      which all income and costs, from whatever source, relating to CDT will be
      fully and properly included in accordance with
  GAAP.

            

    

     

    
      	
               
      

            	
              (b)

            	
              CDT
      has no liabilities or obligations of any nature (absolute, accrued,
      contingent or otherwise) of the type required to be reflected or disclosed
      on a balance sheet (or the notes thereto) in accordance with GAAP that
      were not fully reflected or reserved against in the Balance Sheet and the
      Interim Balance Sheet, except for liabilities and obligations incurred in
      the Ordinary Course of Business since the respective dates thereof as set
      forth in the Disclosure Schedule hereto; the reserves reflected in the
      Balance Sheet and the Interim Balance Sheet are adequate, appropriate and
      reasonable under GAAP, and consistent with past practice with regard to
      CDT.

            

    

     

    3.5           Books And
Records.                                                      The
books of account, minute books, stock record books, and other records of CDT,
all of which have been made available to Buyer, are complete and correct and
have been maintained in accordance with sound business practices and in
accordance with applicable Legal Requirements. The minute books of the CDT
contain accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders and the Board of Directors of CDT, and no
meeting of any such stockholders or Board of Directors has been held for which
minutes have not been prepared and are not contained in such minute
books.  At the Closing, all of those books and records will be in the
possession of CDT.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    3.6           Title to Properties;
Encumbrances.                                                                           

     

    
      	
               
      

            	
              (a)

            	
              Part
      3.6 of the Disclosure Schedule contains a complete and accurate list of
      all real property, leaseholds, or other interests therein owned by CDT as
      at the Interim Balance Sheet date.  CDT owns (with good and
      marketable title in the case of real property, subject only to the matters
      permitted by the following sentence) all the properties and assets
      (whether real, personal, or mixed and whether tangible or intangible) that
      it purports to own, including all of the properties and assets reflected
      in the Balance Sheet and the Interim Balance Sheet (except for assets held
      under capitalized leases disclosed or not required to be disclosed in Part
      3.6 of the Disclosure Schedule and personal property sold since the date
      of the Balance Sheet and the Interim Balance Sheet, as the case may be, in
      the Ordinary Course of Business), and all of the properties and assets
      purchased or otherwise acquired by CDT since the date of the Balance Sheet
      (except for personal property acquired and sold since the date of the
      Balance Sheet in the Ordinary Course of Business and consistent with past
      practice), other than Inventory and short-term investments, are listed in
      Part 3.6 of the Disclosure Schedule.  All properties and assets
      reflected in the Balance Sheet and the Interim Balance Sheet are free and
      clear of all Encumbrances and are not, in the case of real property,
      subject to any rights of way, building use restrictions, exceptions,
      variances, reservations, or limitations of any nature except, with respect
      to all such properties and assets, (a) mortgages or security
      interests shown on the Balance Sheet or the Interim Balance Sheet as
      securing specified liabilities or obligations, with respect to which no
      default (or event that, with notice or lapse of time or both, would
      constitute a default) exists, (b) mortgages or security interests
      incurred in connection with the purchase of property or assets after the
      date of the Interim Balance Sheet (such mortgages and security interests
      being limited to the property or assets so acquired), with respect to
      which no default (or event that, with notice or lapse of time or both,
      would constitute a default) exists, (c) liens for current taxes not
      yet due, and (d) with respect to real property, (i) minor
      imperfections of title, if any, none of which is substantial in amount,
      detracts from the value or impairs the use of the property subject
      thereto, or impairs the operations of CDT, and (ii) zoning laws and
      other land use restrictions that do not impair the present or anticipated
      use of the property subject
thereto.

            

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Neither
      Seller nor CDT has received notice that the whole nor any portion of the
      property or leaseholds owned or held by CDT is subject to any governmental
      decree or order to be sold or is being condemned, expropriated or
      otherwise taken by any Governmental Body or other Person with or without
      payment of compensation therfor, nor to the knowledge of Seller and CDT,
      has any such condemnation, expropriation or taking been
      proposed.

            

    

     

    3.7           Condition and Sufficiency of
Assets.                                                                                                The
buildings, plants, structures, and equipment of CDT are structurally sound, are
in good operating condition and repair, normal wear and tear excepted, and are
adequate for the uses to which they are being put, and none of such buildings,
plants, structures, or equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost. The building, plants, structures, and equipment of CDT are sufficient for
the continued conduct of the businesses of CDT after the Closing in
substantially the same size, scope and manner as conducted prior to the
Closing.

     

    3.8           Accounts
Receivable.                                                                All
accounts receivable of CDT that are reflected on the Balance Sheet or the
Interim Balance Sheet or on the Closing Balance Sheet (in each case, the “Accounts Receivable”)
represent or will represent valid obligations arising from sales actually made
or services actually performed in the Ordinary Course of
Business.  Unless paid prior to the Closing Date, the Accounts
Receivable are or will be as of the Closing Date current and collectible net of
the respective reserves shown on the Closing Balance Sheet or the Interim
Balance Sheet or on the accounting records of CDT as of the Closing Date (which
reserves are adequate and calculated consistent with past practice and, in the
case of the reserve as of the Closing Date, will not represent a greater
percentage of the Accounts Receivable as of the Closing Date than the reserve
reflected in the Interim Balance Sheet represented of the Accounts Receivable
reflected therein and will not represent a material adverse change in the
composition of such Accounts Receivable in terms of aging).  Subject
to such reserves, each of the Accounts Receivable either has been or will be
collected in full, without any set-off.  There is no contest, claim,
or right of set-off, other than returns in the Ordinary Course of Business,
under any Contract with any obligor of an Accounts Receivable relating to the
amount or validity of such Accounts Receivable.  Part 3.8 of the
Disclosure Schedule contains a complete and accurate list of all Accounts
Receivable as of the date of the Interim Balance Sheet, which list sets forth
the aging of such Accounts Receivable.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    3.9           Inventory.

     

    
      	
               
      

            	
              (a)

            	
              All
      Inventory, whether or not reflected in the Balance Sheet or the Interim
      Balance Sheet, consists of a quality and quantity usable and salable in
      the Ordinary Course of Business, except for obsolete items and items of
      below-standard quality, which have been written off or written down to net
      realizable value in the Balance Sheet or the Interim Balance Sheet or the
      accounting records of CDT as of the Closing Date, as the case may be, in
      each case consistent with GAAP.  All inventories not written off
      have been priced at the lower of cost or net realizable
      value.  The quantities of each item of inventory are reasonable
      in the present circumstances of
CDT.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      aggregate of all agreements or commitments for the purchase of inventory,
      materials and supplies by CDT as of the date of this Agreement does not
      exceed $200,000, all of which orders, agreements and commitments were made
      in the Ordinary Course of Business. There are no claims against CDT to
      return in excess of an aggregate of $10,000 of merchandise by reason of
      alleged over shipments, defective merchandise or otherwise, or of
      merchandise in the hands of customers under an understanding that such
      merchandise would be returnable.

            

    

     

    
      	
               
      

            	
              3.10

            	
              Taxes

            

    

     

    
      	
              (a)  

            	
              CDT
      has filed or caused to be filed (on a timely basis since April 30, 2001)
      all Tax Returns that are or were required to be filed by or with respect
      to it pursuant to applicable Legal Requirements.  Seller has
      delivered or made available to Buyer copies of all such Tax
      Returns.  The Seller and/or CDT have paid, or made provision for
      the payment of, all Taxes that have or may have become due pursuant to
      those Tax Returns or otherwise, or pursuant to any assessment received by
      Seller or CDT, except such Taxes, if any, as are listed in Part 3.10 of
      the Disclosure Schedule and are being contested in good faith and as to
      which adequate reserves (determined in accordance with GAAP) have been
      provided in the Balance Sheet and the Interim Balance
    Sheet.

            

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              Part
      3.10 of the Disclosure Schedule contains a complete and accurate list of
      all audits, if any, of all such Tax Returns, including a reasonably
      detailed description of the nature and outcome of each
      audit.  All deficiencies proposed as a result of such audits
      have been paid, reserved against, settled, or, as described in Part 3.10
      of the Disclosure Schedule, are being contested in good faith by
      appropriate proceedings.  Neither Seller nor CDT has given or
      been requested to give waivers or extensions (or is or would be subject to
      a waiver or extension given by any other Person) of any statute of
      limitations relating to the payment of Taxes of CDT or for which CDT may
      be liable.

            

    

     

    
      	
              (c)  

            	
              The
      charges, accruals, and reserves with respect to Taxes on the books of CDT
      are adequate (determined in accordance with GAAP) and are at least equal
      to CDT’s liability for Taxes.  There exists no proposed tax
      assessment against CDT except as disclosed in the Balance Sheet or in Part
      3.10 of the Disclosure Schedule.  All Taxes that CDT is or was
      required by Legal Requirements to withhold or collect have been duly
      withheld or collected and, to the extent required, have been paid to the
      proper Governmental Body or other
Person.

            

    

     

    
      	
              (d)  

            	
              All
      Tax Returns filed by or on behalf of CDT are true, correct, and
      complete.  There is no tax sharing agreement that will require
      any payment by CDT after the date of this Agreement.  CDT is
      not, or within the five-year period preceding the Closing Date has been,
      an “S” corporation.

            

    

     

    
      	
              (e)  

            	
              CDT
      has paid and discharged all liabilities with respect to Taxes and has
      provided cash reserves for the payment of any contingent liabilities with
      respect to Taxes for the period up to and including the Closing
      Date.  CDT confirms that on the Closing Date it has no
      outstanding liability for Taxes and no unpaid contingent liability for
      Taxes.

            

    

    

    3.11           No Material Adverse
Change.     Since the date of the
Interim Balance Sheet, there has not been any Material Adverse Change in the
business, operations, properties, prospects, assets, or condition of CDT, and to
the Knowledge of Seller and CDT, no event has occurred or circumstance exists
that reasonably may be expected to result in such a Material Adverse
Change.  Without limiting the generality of the foregoing, there has
been no complaint from any material customer of CDT and no notice of breach or
of termination under any contract with a material customer of
CDT.  Ongoing monthly losses will not be considered a Material Adverse
Change, provided that CardioTech continues to support the losses (negative cash
flows) through the intercompany accounts, and that upon Closing, CardioTech will
waive the right to recover such amounts due and receivable from
CDT.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    3.12           Labor and Employment
Matters.

     

    
      	
               
      

            	
              (a)

            	
              CDT
      is in compliance in all material respects with all applicable laws,
      agreements and contracts relating to employment, employment practices,
      immigration, wages, hours, and terms and conditions of employment,
      including, but not limited to, employee compensation matters, and has
      correctly classified employees as exempt employees and non-exempt
      employees under the Fair Labor Standards Act and applicable state laws. A
      list of all employees, officers and consultants of CDT and their current
      title and/or job description, current compensation rates, bonuses paid
      during the last fiscal year, and accrued vacation and sick leave for all
      employees is set forth in Part 3.12 of the Disclosure
      Schedule.  Except as set forth in Part 3.12 of the Disclosure
      Schedule, CDT does not have any employment contracts or consulting
      agreements currently in effect that are not terminable at will (other than
      agreements with the sole purpose of providing for the confidentiality of
      proprietary information or assignment of
  inventions).

            

    

    

    
      	
               
      

            	
              (b)

            	
              CDT
      (a) is not now, nor has it ever been, subject to a union organizing
      effort, (b) is not subject to any collective bargaining agreement
      with respect to any of its employees, (c) is not subject to any other
      contract, written or oral, with any trade or labor union, employees’
      association or similar organization, and (d) has no current labor
      disputes.  Neither Seller nor CDT has knowledge (a) of any
      facts indicating that the consummation of the transactions contemplated by
      this Agreement will have a Material Adverse Effect on the employment
      relations of CDT, or (b) that any of CDT’s employees intends to leave
      CDT’s employ.  All of CDT’s employees are legally permitted to
      be employed by CDT in the United States in their current job capacities
      under applicable laws.

            

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              (c)

            	
              Part
      3.12 of the
      Disclosure Schedule lists (i) all “employee benefit plans” within the
      meaning of Section 3(3) of ERISA, and (ii) all other employee
      benefit, bonus or other incentive compensation, stock option, stock
      purchase, stock appreciation, severance pay, lay-off or reduction in
      force, change in control, sick pay, vacation pay, salary continuation,
      retainer, leave of absence, educational assistance, service award,
      employee discount, fringe benefit plans, arrangements, policies or
      practices, to which CDT contributes to or has any obligation to or
      liability for (collectively, the “Employee
      Plans”).  Each Employee Plan provides that it may be
      amended or terminated at any time and, except for benefits protected under
      Section 411(d) of the IRC or Section 204(g) of ERISA or benefits to
      which a plan participant or beneficiary has accrued a vested right, all
      benefits payable to current or terminated employees or any beneficiary may
      be amended or terminated by CDT at any time without
      liability.  None of the Employee Plans is subject to Section 302
      or Title IV of ERISA or Section 412 of the Code (a “Defined Benefit
      Plan”) or is a “multiemployer plan” within the meaning of Section
      3(37) of ERISA (a “Multiemployer
      Plan”) and CDT has never (i) sponsored, maintained or
      contributed to, or been obligated to contribute to, a Defined Benefit Plan
      or (ii) contributed to, or been obligated to contribute to, a
      Multiemployer Plan.  The Employee Plans are based only on
      employee contributions and CDT has no obligation to make any contribution
      to and of the Employee Plans.  CDT does not maintain or
      contribute to any welfare benefit plan that provides health benefits to an
      employee after the employee’s termination of employment or retirement
      except as required under Section 4980B of the IRC and
      Sections 601 through 608 of ERISA (“COBRA”) or other applicable legal
      requirements. All expenses and liabilities relating to all of the Employee
      Plans described in Part 3.12 of the Disclosure Schedule have been, and
      will on the Closing be, fully and properly accrued on CDT’s books and
      records and are disclosed on the Balance Sheet or Interim Balance Sheet
      and such Employee Plans have no unfunded liabilities not reflected on the
      Balance Sheet or Interim Balance
Sheet.

            

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              (d)

            	
              Persons
      performing or, who in the past have performed, contract labor for CDT, are
      not subject to written agreements with CDT, all such services being the
      subject of invoices submitted to CDT for payment by agencies which provide
      such contract labor.  All such contract laborers and/or the
      agencies who have provided such contract labor have been fully paid all
      amounts owing to them by CDT through the date hereof, and there are no
      disputes or controversies between any such contract laborer (or agency)
      and CDT whatsoever, including without limitation, disputes regarding
      amounts owed or ownership of CDT intellectual
      property.   

            

    

    

    
      	
              (f)  

            	
              There
      is no agreement, plan, arrangement or other Contract covering any employee
      that, considered individually or considered collectively with any other
      such agreements, plans, arrangements or other Contracts, will, or could
      reasonably be expected to, give rise directly or indirectly to the payment
      of any amount that would be characterized as a “parachute payment” within
      the meaning of Section 280G(b)(1) of the IRC.  There is no
      agreement, plan, arrangement or other Contract by which CDT is bound to
      compensate any employee for excise taxes paid pursuant to
      Section 4999 of the
Code.  

            

    

     

    
      	
              (g)  

            	
              No
      “nonqualified deferred compensation plan” (as such term is defined in
      Section 409A(d)(1) of the IRC) is sponsored or maintained by
      CDT.

            

    

     

    
      	
               
      

            	
              3.13

            	
              Compliance with Legal
      Requirements; Governmental
Authorizations

            

    

     

    (a)           Except
as set forth in Part 3.13 of the Disclosure Schedule:

     

    
      	
              (i)  

            	
                 CDT
      is, and at all times has been, in compliance with each Legal Requirement
      that is or was applicable to it or to the conduct or operation of its
      business or the ownership or use of any of its
  assets;

            

    

     

    
      	
              (ii)  

            	
                 no
      event has occurred or circumstance exists that (with or without
      notice  or lapse of time) (A) may constitute or result in a
      violation by CDT of, or a failure on the part of CDT to comply with, any
      Legal Requirement, or (B) may give rise to any obligation on the part of
      CDT to undertake, or to bear all or any portion of the cost of, any
      remedial action of any nature; and

            

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
              (iii)  

            	
                CDT
      has not received, at any time since April 30, 2001, any notice or other
      communication (whether oral or written) from any Governmental Body or any
      other Person regarding (A) any actual, alleged, possible, or potential
      violation of, or failure to comply with, any Legal Requirement, or (B) any
      actual, alleged, possible, or potential obligation on the part of CDT to
      undertake, or to bear all or any portion of the cost of, any remedial
      action of any nature.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Part
      3.13 of the Disclosure Schedule contains a complete and accurate list of
      each Governmental Authorization that is held by CDT or that otherwise
      relates to the Business, or to any of the assets owned or used by,
      CDT.  Each Governmental Authorization listed or required to be
      listed in Part 3.13 of the Disclosure Schedule is valid and in full force
      and effect.  Except as set forth in Part 3.13 of the Disclosure
      Schedule:

            

    

     

    
      	
              (i)  

            	
                 CDT
      is, and at all times has been, in full compliance with all of the terms
      and requirements of each Governmental Authorization identified or required
      to be identified in Part 3.13 of the Disclosure
  Schedule;

            

    

     

    
      	
              (ii)  

            	
                 no
      event has occurred or circumstance exists that may (with or without notice
      or lapse of time) (A) constitute or result directly or indirectly in a
      violation of or a failure to comply with any term or requirement of any
      Governmental Authorization listed or required to be listed in Part 3.13 of
      the Disclosure Schedule, or (B) result directly or indirectly in the
      revocation, withdrawal, suspension, cancellation, or termination of, or
      any modification to, any Governmental Authorization listed or required to
      be listed in Part 3.13 of the Disclosure
  Schedule;

            

    

     

    
      	
              (iii)  

            	
                 CDT
      has not received, at any time since April 30, 2001, any notice or other
      communication (whether oral or written) from any Governmental Body or any
      other Person regarding (A) any actual, alleged, possible, or potential
      violation of or failure to comply with any term or requirement of any
      Governmental Authorization, or (B) any actual, proposed, possible, or
      potential revocation, withdrawal, suspension, cancellation, termination
      of, or modification to any Governmental Authorization;
  and

            

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
              (iv)  

            	
                 all
      applications required to have been filed for the renewal of the
      Governmental Authorizations listed or required to be listed in Part 3.13
      of the Disclosure Schedule have been duly filed on a timely basis with the
      appropriate Governmental Bodies, and all other filings required to have
      been made with respect to such Governmental Authorizations have been duly
      made on a timely basis with the appropriate Governmental
      Bodies.

            

    

     

    The
Governmental Authorizations listed in Part 3.13 of the Disclosure Schedule
collectively constitute all of the Governmental Authorizations necessary to
permit CDT to lawfully conduct and operate its Business  in the manner
it currently conducts and operates such business and to permit the CDT to own
and use its assets in the manner in which it currently owns and uses such
assets.

     

    
      	
               
      

            	
              3.14

            	
              Legal Proceedings;
      Orders

            

    

     

    
      	
              (a)  

            	
              Except
      as set forth in Part 3.14 of the Disclosure Schedule, there is no pending
      or Threatened Proceeding:

            

    

     

    
      	
              (i)  

            	
                 that
      has been commenced by or against CDT or that otherwise relates to or may
      affect the business of, or any of the assets owned or used by, CDT;
      or

            

    

     

    
      	
              (ii)  

            	
                 that
      challenges, or that may have the effect of preventing, delaying, making
      illegal, or otherwise interfering with, any of the Contemplated
      Transactions.

            

    

     

    To the
Knowledge of Seller and CDT, (1) no such Proceeding has been Threatened, and (2)
no event has occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding.  Seller and CDT
have delivered to Buyer copies of all pleadings, correspondence, and other
documents relating to each Proceeding listed in Part 3.14 of the Disclosure
Schedule.

     

    (b) Except as
set forth in Part 3.14 of the Disclosure Schedule:

     

    
      	
              (i)  

            	
                 there
      is no Order to which CDT, or any of the assets owned or used by CDT, is
      subject;

            

    

     

    
      	
              (ii)  

            	
                 neither
      CDT nor Seller is subject to any Order that relates to the business of, or
      any of the assets owned or used by, CDT;
and

            

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	
              (iii)  

            	
                 to
      the Knowledge of Seller and CDT, no officer, director, agent, or employee
      of CDT is subject to any Order that prohibits such officer, director,
      agent, or employee from engaging in or continuing any conduct, activity,
      or practice relating to the business of
CDT.

            

    

     

    (c) Except as
set forth in Part 3.14 of the Disclosure Schedule:

     

    
      	
               
      

            	
              (i)

            	
              CDT
      is, and at all times since April 30, 2001 has been, in full compliance
      with all of the terms and requirements of each Order to which it, or any
      of the assets owned or used by it, is or has been
  subject;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              no
      event has occurred or circumstance exists that may constitute or result in
      (with or without notice or lapse of time) a violation of or failure to
      comply with any term or requirement of any Order to which Seller, CDT, or
      any of the assets owned or used by CDT, is subject;
  and

            

    

    

    
      	
               
      

            	
              (iii)

            	
              CDT
      has not received, at any time since April 30, 2001, any notice or other
      communication (whether oral or written) from any Governmental Body or any
      other Person regarding any actual, alleged, possible, or potential
      violation of, or failure to comply with, any term or requirement of any
      Order to which CDT, or any of the assets owned or used by CDT, is or has
      been subject.

            

    

    

    
      	
               
      

            	
              3.15

            	
              Absence of Certain
      Changes and Events

            

    

     

    Except as
set forth in Part 3.15 of the Disclosure Schedule, since the date of the Balance
Sheet, CDT has conducted its businesses only in the Ordinary Course of Business
and there has not been any:

     

    
      	
              (a)  

            	
              change
      in CDT’s authorized or issued capital stock; grant of any stock option or
      right to purchase shares of capital stock of  CDT; issuance of
      any security convertible into such capital stock; grant of any
      registration rights; purchase, redemption, retirement, or other
      acquisition by CDT of any shares of any such capital stock; or declaration
      or payment of any dividend or other distribution or payment in respect of
      shares of capital stock;

            

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              amendment
      to the Organizational Documents of
CDT;

            

    

     

    
      	
               
      

            	
              (c)

            	
              payment
      of any bonuses, salaries, or other compensation to any stockholder,
      director, officer, or (except in the Ordinary Course of Business) employee
      or entry into any employment, severance, or similar Contract with any
      director, officer, or employee;

            

    

    

    
      	
              (d)  

            	
              adoption
      of, or increase in the payments to or benefits under, any profit sharing,
      bonus, deferred compensation, savings, insurance, pension, retirement, or
      other employee benefit plan for or with any employees of
    CDT;

            

    

     

    
      	
              (e)  

            	
              damage
      to or destruction or loss of any asset or property of CDT, whether or not
      covered by insurance, materially and adversely affecting the properties,
      assets, business, financial condition, or prospects of the CDT, taken as a
      whole;

            

    

     

    
      	
              (f)  

            	
              entry
      into, termination of, or receipt of notice of termination of (i) any
      material license, distributorship, dealer, sales representative, joint
      venture, credit, or similar agreement, or (ii) any Contract or transaction
      involving a total remaining commitment by or to CDT of at least
      $5,000;

            

    

     

    
      	
              (g)  

            	
              sale
      (other than sales of inventory in the Ordinary Course of Business), lease,
      or other disposition of any material asset or property of CDT or mortgage,
      pledge, or imposition of any lien or other encumbrance on any material
      asset or property of  CDT, including the sale, lease, or other
      disposition of any of the Intellectual Property
  Assets;

            

    

     

    
      	
              (h)  

            	
              cancellation
      or waiver of any claims or rights with a value to CDT in excess of
      $5,000;

            

    

     

    (i) material
change in the accounting methods used by CDT; or

     

    
      	
              (j)  

            	
              agreement,
      whether oral or written, by CDT to do any of the
  foregoing.

            

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.16

            	
              Contracts; No
      Defaults

            

    

     

    
      	
              (a)  

            	
              Part
      3.16(a) of the Disclosure Schedule contains a complete and accurate list,
      and Seller and CDT have delivered to Buyer true and complete copies,
      of:

            

    

     

    
      	
              (i)  

            	
                 each
      Applicable Contract that involves performance of services or delivery of
      goods or materials by CDT of an amount or value in excess of
      $25,000;

            

    

     

    
      	
              (ii)  

            	
                 each
      Applicable Contract that involves performance of services or delivery of
      goods or materials to CDT of an amount or value in excess of
      $25,000;

            

    

     

    
      	
              (iii)  

            	
                 each
      Applicable Contract that was not entered into in the Ordinary Course of
      Business and that involves expenditures or receipts of CDT in excess of
      $25,000;

            

    

     

    
      	
              (iv)  

            	
                 each
      lease, rental or occupancy agreement, license, installment and conditional
      sale agreement, and other Applicable Contract affecting the ownership of,
      leasing of, title to, use of, or any leasehold or other interest in, any
      real or personal property (except personal property leases and installment
      and conditional sales agreements having a value per item or aggregate
      payments of less than $5,000 and with terms of less than one
      year);

            

    

     

    
      	
              (v)  

            	
                 each
      licensing agreement or other Applicable Contract with respect to patents,
      trademarks, copyrights, or other intellectual property, including
      agreements with current or former employees, consultants, or contractors
      regarding the appropriation or the non-disclosure of any of the
      Intellectual Property Assets;

            

    

     

    
      	
              (vi)  

            	
                 each
      collective bargaining agreement and other Applicable Contract to or with
      any labor union or other employee representative of a group of
      employees;

            

    

     

    
      	
              (vii)  

            	
                 each
      joint venture, partnership, and other Applicable Contract (however named)
      involving a sharing of profits, losses, costs, or liabilities by CDT with
      any other Person;

            

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
              (viii)  

            	
                 each
      Applicable Contract containing covenants that in any way purport to
      restrict the business activity of CDT or limit the freedom of CDT to
      engage in any line of business or to compete with any
    Person;

            

    

     

    
      	
              (ix)  

            	
                 each
      Applicable Contract providing for payments to or by any Person based on
      sales, purchases, or profits, other than direct payments for
      goods;

            

    

     

    
      	
              (x)  

            	
                 each
      power of attorney that is currently effective and
    outstanding;

            

    

     

    
      	
              (xi)  

            	
                 each
      Applicable Contract entered into other than in the Ordinary Course of
      Business that contains or provides for an express undertaking by CDT to be
      responsible for consequential
damages;

            

    

     

    
      	
              (xii)  

            	
                 each
      Applicable Contract for capital expenditures in excess of
      $50,000;

            

    

     

    
      	
              (xiii)  

            	
                 each
      written warranty, guaranty, and or other similar undertaking with respect
      to contractual performance extended by CDT other than in the Ordinary
      Course of Business; and

            

    

     

    
      	
              (xiv)  

            	
                 each
      amendment, supplement, and modification (whether oral or written) in
      respect of any of the foregoing.

            

    

     

    Part
3.16(a) of the Disclosure Schedule sets forth reasonably complete details
concerning such Contracts that are not written, if any, including the parties to
such Contracts, the amount of the remaining commitment of CDT under such
Contracts, and the other material terms respecting such Contracts.

     

    (b)           Except
as set forth in Part 3.16(b) of the Disclosure Schedule:

     

    (i)   Seller
does not have any rights or obligations or liabilities under, any Contract that
relates to the business of, or any of the assets owned or used by, CDT;
and

     

    (ii)   to
the Knowledge of Seller and CDT, no officer, director, agent, employee,
consultant, or contractor of CDT is bound by any Contract that purports to limit
the ability of such officer, director, agent, employee, consultant, or
contractor to (A) engage in or continue any conduct, activity, or practice
relating to the Business, or (B) assign to  CDT or to any other Person
any rights to any invention, improvement, or discovery.

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (c)           Except
as set forth in Part 3.16(c) of the Disclosure Schedule, each Contract
identified or required to be identified in Part 3.16(a) of the Disclosure
Schedule is in full force and effect and is valid and enforceable in accordance
with its terms.

     

    (d)           Except
as set forth in Part 3.16(d) of the Disclosure Schedule:

     

    (i)   CDT
is, and at all times since inception of each Contract, has been
in  compliance in all material respects with all applicable terms and
requirements of such Contract under which CDT has or had any obligation or
liability or by which CDT or any of the assets owned or used by CDT is or was
bound;

     

    (ii)   each
other Person that has or had any obligation or liability under any Contract
under which CDT has or had any rights is, to the Knowledge of Seller and CDT, in
compliance in all material respects with all applicable terms and requirements
of such Contract;

     

    (iii)   no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may contravene, conflict with in any material respect, or result in a
material violation or breach of, or give CDT or other Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Applicable Contract;
and

     

    (iv)   CDT
has not given to or received from any other Person, any notice or other
communication (whether oral or written) regarding any actual, alleged, possible,
or potential violation or breach of, or default under, any
Contract.

     

    (e)           There
are no renegotiations of, attempts to renegotiate, or outstanding rights to
renegotiate any amounts paid or payable to CDT under current or completed
Contracts with any Person and, to the Knowledge of Seller and CDT, no such
Person has made written demand for such renegotiation.

     

    (f)           The
Contracts relating to the sale, design, manufacture, or provision of products or
services by CDT have been entered into in the Ordinary Course of Business and
have been entered into without the commission of any act alone or in concert
with any other Person, or any consideration having been paid or promised, that
is or would be in violation of any Legal Requirement.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.17

            	
              Insurance

            

    

     

    (a) Seller
and CDT have delivered to Buyer:

     

    
      	
              (i)  

            	
                 true
      and complete copies of all policies of insurance to which CDT is a party
      or under which CDT, or any director of CDT, is or has been covered at any
      time within the three (3) years preceding the date of this Agreement;
      and

            

    

     

    
      	
              (ii)  

            	
                 true
      and complete copies of all pending applications for policies of
      insurance.

            

    

     

    (b) Part
3.17(b) of the Disclosure Schedule describes:

     

    
      	
              (i)  

            	
                 any
      self-insurance arrangement by or affecting CDT, including any reserves
      established thereunder;

            

    

     

    
      	
              (ii)  

            	
                 any
      contract or arrangement, other than a policy of insurance, for the
      transfer or sharing of any risk by CDT;
and

            

    

     

    
      	
              (iii)  

            	
                 all
      obligations of CDT to third parties with respect to insurance (including
      such obligations under leases and service agreements) and identifies the
      policy under which such coverage is
provided.

            

    

     

    
      	
              (c)  

            	
              Neither
      Seller nor CDT has received (A) any refusal of coverage or any notice that
      a defense will be afforded with reservation of rights, or (B) any notice
      of cancellation or any other indication that any insurance policy is no
      longer in full force or effect or will not be renewed or that the issuer
      of any policy is not willing or able to perform its obligations
      thereunder.

            

    

     

    
      	
              (d)  

            	
              CDT
      and/or Seller have paid all premiums due, and have otherwise performed its
      obligations, under each policy to which CDT is a party or that provides
      coverage to CDT or any director or officer of
  CDT.

            

    

     

    
      	
              (a)  

            	
              CDT
      has given timely notice to the insurer of all claims that may
      be  insured thereby.

            

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.18

            	
              Environmental
      Matters

            

    

     

    
      	
               
      

            	
              Except
      as set forth in part 3.18 of the Disclosure
  Schedule:

            

    

     

    
      	
              (a)  

            	
              To
      the Knowledge of Seller and CDT’s management team, CDT is, and at all
      times has been, in full compliance with, and has not been and is not in
      violation of or liable under, any Environmental Law.  Neither
      Seller nor CDT has any basis to expect, nor has any of them or any other
      Person for whose conduct they are or may be held to be responsible
      received, any actual or Threatened order, notice, or other communication
      from (i) any Governmental Body or private citizen acting in the public
      interest, or (ii) the current or prior owner or operator of any
      Facilities, of any actual or potential violation or failure to comply with
      any Environmental Law, or of any actual or Threatened obligation to
      undertake or bear the cost of any Environmental, Health, and Safety
      Liabilities with respect to any of the Facilities or any other properties
      or assets (whether real, personal, or mixed) in which Seller or CDT has
      had an interest, or with respect to any property or Facility at or to
      which Hazardous Materials were generated, manufactured, refined,
      transferred, imported, used, or processed by Seller, CDT, or any other
      Person for whose conduct they are or may be held responsible, or from
      which Hazardous Materials have been transported, treated, stored, handled,
      transferred, disposed, recycled, or
received.

            

    

     

    
      	
               
      

            	
              (b)

            	
              There
      are no pending or, to the Knowledge of Seller and CDT, Threatened claims,
      Encumbrances, or other restrictions of any nature, resulting from any
      Environmental, Health, and Safety Liabilities or arising under or pursuant
      to any Environmental Law, with respect to or affecting any of the
      Facilities or any other properties and assets (whether real, personal, or
      mixed) in which Seller or CDT has or had an
  interest.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Neither
      Seller nor CDT has Knowledge of any basis to expect, nor has any of them
      or any other Person for whose conduct they are or may be held responsible,
      received, any citation, directive, inquiry, notice, Order, summons,
      warning, or other communication that relates to Hazardous Activity,
      Hazardous Materials, or any alleged, actual, or potential violation or
      failure to comply with any Environmental Law, or of any alleged, actual,
      or potential obligation to undertake or bear the cost of any
      Environmental, Health, and Safety Liabilities with respect to any of the
      Facilities or any other properties or assets (whether real, personal, or
      mixed) in which Seller or CDT had an interest, or with respect to any
      property or facility to which Hazardous Materials generated, manufactured,
      refined, transferred, imported, used, or processed by Seller, CDT, or any
      other Person for whose conduct they are or may be held responsible, have
      been transported, treated, stored, handled, transferred, disposed,
      recycled, or received.

            

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (d)       Neither
      Seller nor CDT, or any other Person for whose conduct they are or may be
      held responsible, has any Environmental, Health, and Safety Liabilities
      with respect to the Facilities or, to the Knowledge of Seller and CDT,
      with respect to any other properties and assets (whether real, personal,
      or mixed) in which Seller or CDT, has or had an
  interest.

            

    

     

    
      	
              (e)  

            	
              There
      are no Hazardous Materials present on or in the Environment at the
      Facilities, including any Hazardous Materials contained in barrels, above
      or underground storage tanks, landfills, land deposits, dumps, equipment
      (whether moveable or fixed) or other containers, either temporary or
      permanent, and deposited or located in land, water, sumps, or any other
      part of the Facilities, or incorporated into any structure therein or
      thereon.  Neither Seller, CDT, or any other Person for whose
      conduct they are or may be held responsible, or to the Knowledge of Seller
      and CDT, any other Person, has permitted or conducted, or is aware of, any
      Hazardous Activity conducted with respect to the Facilities or any other
      properties or assets (whether real, personal, or mixed) in which Seller or
      CDT has or had an interest except in full compliance with all applicable
      Environmental Laws.

            

    

     

    
      	
              (f)  

            	
              There
      has been no Release or, to the Knowledge of Sellers and CDT, Threat of
      Release, of any Hazardous Materials at or from the Facilities or at any
      other locations where any Hazardous Materials were generated,
      manufactured, refined, transferred, produced, imported, used, or processed
      from or by the Facilities, or from or by any other properties and assets
      (whether real, personal, or mixed) in which CDT has an
      interest.

            

    

     

    
      	
              (g)  

            	
              Neither
      Seller nor CDT is aware of any report, study, analysis, test, or
      monitoring possessed or initiated by Seller or CDT pertaining to Hazardous
      Materials or Hazardous Activities in, on, or under the Facilities, or
      concerning compliance by CDT or any other Person for whose conduct CDT is
      responsible, with Environmental
Laws.

            

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.19

            	
              Employees

            

    

     

    
      	
              (a)  

            	
              Part
      3.19 of the Disclosure Schedule contains a complete and accurate list of
      the following information for each CDT employee, including each employee
      on leave of absence or layoff status: name; job title; current
      compensation paid or payable and any change in compensation since December
      31, 2007; vacation accrued; and service credited for purposes of vesting
      and eligibility to participate under CDT’s pension, retirement,
      profit-sharing, thrift-savings, deferred compensation, stock bonus, stock
      option, cash bonus, employee stock ownership (including investment credit
      or payroll stock ownership), severance pay, insurance, medical, welfare,
      or vacation plan, other Employee Pension Benefit Plan or Employee Welfare
      Benefit Plan, or any other employee benefit plan or any Director
      Plan.

            

    

     

    
      	
              (b)  

            	
              No
      employee or director of CDT is a party to, or is otherwise bound by, any
      agreement or arrangement, including any confidentiality, noncompetition,
      or proprietary rights agreement, between such employee or director and any
      other Person (“Proprietary Rights
      Agreement”) that in any way adversely affects or will affect (i)
      the performance of his duties as an employee or director of CDT, or (ii)
      the ability of CDT to conduct its business.  To Seller’s
      Knowledge, no officer or other key employee of CDT intends to terminate
      his employment with CDT.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Part
      3.19 of the of Disclosure Schedule identifies the stock options granted by
      Seller to the employees of CDT (the “CDT Optionees”).  From and
      after the Closing Date, neither CDT nor Buyer will have any financial or
      other obligation to compensate the CDT Optionees in respect of the loss of
      any actual or potential value of such stock options based upon the
      expiration of such stock options as a consequence of the acquisition of
      CDT by Buyer or otherwise.

            

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              3.20

            	
              Labor Relations;
      Compliance

            

    

     

    CDT is
not, and since its inception has not been, a party to any collective bargaining
or other labor Contract.  Since January 1, 2005, there has not been,
there is not presently pending or existing, and to the Knowledge of Seller and
CDT there is not Threatened, (a) any strike, slowdown, picketing, work stoppage,
or employee grievance process, (b) any Proceeding against or affecting CDT
relating to the alleged violation of any Legal Requirement pertaining to labor
relations or employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable Governmental Body, organizational
activity, or other labor or employment dispute against or affecting CDT or its
premises, or (c) any application for certification of a collective bargaining
agent.  To the Knowledge of Seller and CDT no event has occurred or
circumstance exists that could provide the basis for any work stoppage or other
labor dispute.  There is no lockout of any employees by CDT, and no
such action is contemplated by  CDT.  CDT has complied in
all material respects with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining, the payment of social security and similar taxes,
occupational safety and health, and plant closing. CDT is not liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing Legal
Requirements.

     

    
      	
               
      

            	
              3.21

            	
              Intellectual
      Property

            

    

     

    (a) The term
“Intellectual Property
Assets” includes:

     

    
      	
              (i)  

            	
                 all
      patents, patent applications, and inventions and discoveries that may be
      patentable (collectively, “Patents”)

            

    

     

    
      	
              (ii)  

            	
                 fictional
      business names, trading names, registered and unregistered trademarks,
      service marks, and applications (collectively, “Marks”);

            

    

     

    
      	
              (iii)  

            	
                 all
      copyrights in both published works and unpublished works (collectively,
      “Copyrights”);

            

    

     

    
      	
              (iv)  

            	
                 all
      URLs, including without limitation www.cdt-inc.com/engineering.html,
      www.cdt-inc.com/manufacturing.html, and
  www.cdt-inc.com.

            

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	
              (v)  

            	
                 all
      know-how, trade secrets, confidential information, customer lists,
      software, technical information, data, process technology, plans,
      drawings, and blue prints (collectively, “Trade
      Secrets”); owned, used, or licensed by CDT as licensee or
      licensor.

            

    

     

    
      	
              (b)  

            	
              Part
      3.21(b) of the Disclosure Schedule contains a complete and accurate list
      and summary description, including any royalties paid or received by the
      CDT, of all Contracts relating to the Intellectual Property Assets to
      which CDT is a party or by which CDT is bound, except for any license
      implied by the sale of a product and perpetual, paid-up licenses for
      commonly available software programs under which CDT is the
      licensee.  There are no outstanding and, to Seller’s Knowledge,
      no Threatened disputes or disagreements with respect to any such
      agreement.

            

    

     

    (c) Know-How
Necessary for the Business.

     

    
      	
              (i)  

            	
                 The
      Intellectual Property Assets are those necessary for the operation of the
      Business as it is currently conducted.  Except as set forth in
      Part 3.21(c) of the Disclosure Schedule, CDT is the owner of all right,
      title, and interest in and to each of the Intellectual Property Assets,
      free and clear of all liens, security interests, charges, encumbrances,
      equities, and other adverse claims, and has the right to use without
      payment to a third party all of the Intellectual Property
      Assets.

            

    

     

    
      	
              (ii)  

            	
                 Except
      as set forth in Part 3.21(c) of the Disclosure Schedule,
      all  employees of CDT have executed written Contracts with CDT
      that assign to CDT all rights to any inventions, improvements,
      discoveries, or information relating to the Business.  No
      employee of CDT has entered into any Contract that restricts or limits in
      any way the scope or type of work in which the employee may be engaged or
      requires the employee to transfer, assign, or disclose information
      concerning his work to anyone other than the
  CDT.

            

    

     

    (d) Patents.  CDT
does not own any Patents.

     

    (e) Trademarks.   CDT
does not own any trademarks.

     

    (f) Copyrights

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
              (i)  

            	
              Part
      3.21(f) of the Disclosure Schedule contains a complete and accurate list
      and summary description of all Copyrights.  CDT is the owner of
      all right, title, and interest in and to each of the Copyrights, free and
      clear of all liens, security interests, charges, Encumbrances, equities,
      and other adverse claims.

            

    

     

    
      	
              (ii)  

            	
              All
      the Copyrights have been registered and are currently in compliance with
      formal legal requirements, are valid and enforceable, and are not subject
      to any maintenance fees or taxes or actions falling due within ninety (90)
      days after the date of this
Agreement.

            

    

     

    
      	
              (iii)  

            	
              To
      Seller’s’ Knowledge, no Copyright is infringed or has been challenged or
      threatened in any way.  None of the subject matter of any of the
      Copyrights  infringes or is alleged to infringe any copyright of
      any third party or is a derivative work based on the work of a third
      party.

            

    

     

    
      	
              (iv)  

            	
              All
      works encompassed by the Copyrights have been marked with the proper
      copyright notice.

            

    

     

    (g) Trade
Secrets.

     

    
      	
              (i)  

            	
              With
      respect to each Trade Secret, the documentation relating to such Trade
      Secret is current, accurate, and sufficient in detail and content to
      identify and explain it and to allow its full and proper use without
      reliance on the knowledge or memory of any
  individual.

            

    

     

    
      	
              (ii)  

            	
              To
      Seller’s Knowledge, CDT has taken reasonable precautions to protect the
      secrecy, confidentiality, and value of its Trade
  Secrets.

            

    

     

    
      	
              (iii)  

            	
              CDT
      has good title and (not necessarily exclusive) right to use the Trade
      Secrets.  The Trade Secrets are not part of the public knowledge
      or literature, and, to Seller’s Knowledge, have not been used, divulged,
      or appropriated either for the benefit of any Person (other
      than  CDT) or to the detriment of CDT.  No Trade
      Secret is subject to any adverse claim or, to the Knowledge of the
      Sellers, has been challenged or threatened in any
  way.

            

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (h)

            	
              CDT
      has taken reasonable steps and customary measures and precautions
      necessary to protect the Intellectual Property Assets.  All
      current and to the Seller’s and CDT’s Knowledge, former employees and
      consultants of CDT have executed an agreement regarding confidentiality
      and proprietary information and copies of such agreements for current
      employees have been delivered to Buyer.  To the Knowledge of
      Seller and CDT, no employee or consultant of CDT is in violation thereof,
      any Intellectual Property Assets of any of the CDT’s employees made prior
      to their employment by CDT, which are necessary or useful in the Business,
      have been assigned to CDT.  To the Seller’s and CDT’s Knowledge,
      CDT is not infringing and has not at any time infringed or received any
      notice or other communication (in writing or otherwise) of any actual,
      alleged, possible or potential infringement of any registered US Patent or
      Trade Mark.  To the Knowledge of CDT no person is infringing or
      no proprietary asset owned or used by any other Person infringes or
      conflicts with, any Intellectual Property Asset owned or used by
      CDT.

            

    

    

    3.22           Certain
Payments                                           Since
January 1, 2005, neither CDT nor any director, officer, agent, or employee
of  CDT, or to Seller’s Knowledge any other Person associated with or
acting for or on behalf of CDT, has directly or indirectly (a) made any
contribution, gift, bribe, payoff, influence payment, kickback, or other payment
to any Person, private or public, regardless of form, whether in money,
property, or services (i) to obtain favorable treatment in securing business,
(ii) to pay for favorable treatment for business secured, (iii) to obtain
special concessions or for special concessions already obtained, for or in
respect of CDT, or (iv) in violation of any Legal Requirement, (b) established
or maintained any fund or asset that has not been recorded in the books and
records of CDT.  Specifically, neither CDT nor any director, officer,
agent, employee or other Person acting on behalf of CDT, has given or agreed to
give any gift or similar benefit with a value greater than $500 to any customer,
supplier, or governmental employee or official or any other Person who is or may
be in a position to help or hinder CDT or assist CDT in connection with any
proposed transaction, which gift or similar benefit, if not given in the past,
might have materially and adversely affected the business or prospects of CDT,
or which, if not continued in the future, might materially and adversely affect
the business or prospects of CDT, or used any corporate or other funds for
unlawful contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of
section 30A of the Securities Exchange Act of 1934. Neither CDT nor any
director, officer, agent, employee or other Person acting on behalf of CDT, has
accepted or received any unlawful contributions, payments, gifts, or
expenditures.

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    3.23.                      Customers and
Suppliers                                                      Part
3.23 of the Disclosure Schedule sets forth a list of (a) the 25 largest
customers of CDT in terms of sales during the period April 1, 2007 through
February 29, 2008; and (b) the 25 largest suppliers of CDT in terms of purchases
during such period.  To the Knowledge of Seller and CDT the business
relationships of CDT with the customers or suppliers named in said Part 3.23 are
good.   Except for the customers and suppliers named in Part 3.23
of the Disclosure Schedule, CDT did not have any customer who accounted for more
than five percent (5%) of the sales of CDT during the period April 1, 2007
through February 29, 2008, or any supplier from whom CDT purchased more than
five percent (5%) of the goods or services that CDT purchased during that
period.  Except for casual purchases by CDT from Seller in aggregate
amount of less that $10,000 since April 1, 2007, no Affiliate has been a
supplier to or a customer of CDT since April 1, 2007.  Part 3.23 of
the Disclosure Schedule also sets forth, as of the close of business on the date
preceding the date of this Agreement, CDT’s open sales orders, including those
with respect to which CDT has collected deposits from customers.

    

    3.24           Transactions with
Affiliates.  Except as described in Section 3.23
above,  (a) during the period April 1, 2007 through February 29, 2008,
there have been no transactions between CDT and any Affiliate or any payment
(however characterized) by CDT to any Affiliate or by any Affiliate to CDT
(other than the payment of regular compensation for services rendered by
employees of CDT in their capacities as such), and (b) except for the guaranty
by Seller of the obligations of CDT under the Lease Agreement between CDT and
Duke Weeks Realty Limited Partnership dated May 31, 2001, as amended, there is
no lease, agreement or commitment between CDT and any Affiliate. As used in the
preceding sentence, the term "transaction" includes, without limitation, any
sale or other transfer of property or assets, the lease or other use of property
or assets, the provision of services and the furnishing of personnel, whether or
not for consideration. No Affiliate has any material interest in any property,
real or personal, tangible or intangible, including, without limitation,
inventions, patents, trademarks, service marks or trade names, used in or
pertaining to the Business of CDT, no Affiliate is indebted to CDT, and (iii)
CDT is not indebted to any Affiliate.

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    

    3.25           Liabilities,
etc.                                

    

    
      	
               
      

            	
              (a)

            	
              CDT's
      Liabilities as of the date of this Agreement shall not exceed $450,000.
      For purposes of this Section 3.25, "Liabilities" means the aggregate of
      (i) trade accounts payable, (ii) purchases clearing, (iii) all accruals,
      and (iv) customer deposits.  Notwithstanding the foregoing,
      Liabilities shall not be deemed to include intercompany obligations of CDT
      or any other accruals for (i) income, franchise and sales and use taxes,
      (ii) audit fees and (iii) legal fees (collectively, “Intercompany
      Obligations”).  Further, the Buyer has no obligation or
      responsibility for the “Investment in CDT” account balance identified in
      the stockholder’s equity section of CDT’s balance
      sheet.  Neither CDT nor Buyer shall have any obligation to pay
      or reimburse Seller, and Seller shall have no right to collect, any of the
      Intercompany Obligations or the Investment in CDT, as the same may
      increase or decrease between December 31, 2007 and the Closing Date and
      from and after the Closing no such Intercompany Obligations and Investment
      in CDT shall be deemed liabilities of CDT or
  Buyer.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Part
      3.25 of the Disclosure Schedule sets forth (i) a breakdown and aging of
      CDT’s existing accounts payable as of February 29, 2008, (ii) a breakdown
      of all customer deposits and other deposits held by CDT as of the date of
      this Agreement, and (iii) a breakdown of CDT’s long term
      indebtedness.

            

    

    

    3.26           Competing
Businesses                                                      After
giving effect to the transactions described in this Agreement, neither Seller
nor any Affiliate of Seller will compete with or conduct any business similar to
the Business as conducted or as Seller contemplates conducting the Business as
of the date of this Agreement.  Nothing herein shall limit or restrict
the right of Seller and its Affiliates, subsequent to the Closing, to engage
with third parties in the development of products or services (whether or not
incorporating Seller’s proprietary polymer materials) which may be deemed
competitive with the Business.

    

    3.27           Products
Liability                                           There
is no action, suit, inquiry, proceeding or investigation by or before any court
or Governmental Body pending or, to the best Knowledge of Seller and CDT,
threatened against or involving CDT relating to any product alleged to have been
manufactured or sold by CDT and alleged to have been defective, or improperly
designed or manufactured, nor, to the Knowledge of Seller or CDT is there any
valid basis for any such action, proceeding or investigation

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              3.28

            	
              Disclosure

            

    

     

    
      	
              (a)  

            	
              No
      representation or warranty of Seller or CDT in this Agreement and no
      statement in the Disclosure Schedule omits to state a material fact
      necessary to make the statements herein or therein, in light of the
      circumstances in which they were made, not
  misleading.

            

    

     

    
      	
              (b)  

            	
              No
      notice given pursuant to Section 5.5 will contain any untrue statement or
      omit to state a material fact necessary to make the statements therein or
      in this Agreement, in light of the circumstances in which they were made,
      not misleading.

            

    

     

    
      	
               
      

            	
              (c)

            	
              There
      is no fact known to Seller that has specific application to CDT (other
      than general economic or industry conditions) and that materially
      adversely affects or, as far as Seller can reasonably foresee, materially
      threatens, the assets, business, prospects, financial condition, or
      results of operations of CDT that has not been set forth in this Agreement
      or the Disclosure Schedule.

            

    

    

    3.29           Brokers or
Finders                                           Except
as set forth on Part 3.29 of the Disclosure Schedule,  Seller and its agents
have incurred no obligation or liability, contingent or otherwise, for brokerage
or finders’ fees or agents’ commissions or other similar payment in connection
with this Agreement.

     

    
      	
              4  

            	
              REPRESENTATIONS
      AND WARRANTIES OF BUYER

            

    

     

    Buyer
represents and warrants to Sellers as follows:

     

    
      	
               
      

            	
              4.1

            	
              Organization and Good
      Standing

            

    

     

    Buyer is
a corporation duly organized, validly existing, and in good standing under the
laws of California, and is qualified to do business in the State of
Minnesota.

     

    
      	
               
      

            	
              4.2

            	
              Authority; No
      Conflict

            

    

     

    
      	
              (a)  

            	
              This
      Agreement constitutes the legal, valid, and binding obligation of Buyer,
      enforceable against Buyer in accordance with its terms.  Upon
      the execution and delivery by Buyer of this Agreement and the agreements
      contemplated hereby,  this Agreement (and such other agreements)
      will constitute the legal, valid, and binding obligations of Buyer,
      enforceable against Buyer in accordance with their respective
      terms.  Buyer has the absolute and unrestricted right, power,
      and authority to execute and deliver this Agreement and to perform its
      obligations under this Agreement.

            

    

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              Neither
      the execution and delivery of this Agreement by Buyer nor the consummation
      or performance by Buyer of any of the transactions contemplated hereby
      will give any Person the right to prevent, delay, or otherwise interfere
      with the performance of the transactions contemplated hereby pursuant
      to:

            

    

     

    
      	
              (i)  

            	
                 any
      provision of Buyer’s Organizational
Documents;

            

    

     

    
      	
              (ii)  

            	
                 any
      resolution adopted by the board of directors or the stockholders of
      Buyer;

            

    

     

    
      	
              (iii)  

            	
                 any
      Legal Requirement or Order to which Buyer may be subject;
    or

            

    

     

    
      	
              (iv)  

            	
                 any
      Contract to which Buyer is a party or by which Buyer may be
      bound.

            

    

     

    Buyer is
not and will not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation or
performance of any of the transactions contemplated hereby.

     

    4.3           Certain
Proceedings.                                                                There
is no pending Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, this Agreement or any of the transactions
contemplated hereby.  To Buyer’s Knowledge, no such Proceeding has
been Threatened.

     

    4.4           Brokers or
Finders.                                                      Buyer
and its officers and agents have incurred no obligation or liability, contingent
or otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement and will indemnify and hold
Seller harmless from any such payment alleged to be due by or through Buyer as a
result of the action of Buyer or its officers or agents.

     

    
      	
              5  

            	
              NOT
      APPLICABLE 

            

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    

     

    
      	
              6  

            	
              COVENANTS
      OF BUYER

            

    

     

    
      	
               
      

            	
              6.1

            	
              Covenants Prior to
      Closing Date

            

    

     

    
      	
               
      

            	
              (a)

            	
              As
      promptly as practicable after the date of this Agreement, Buyer will, and
      will cause each of its Affiliates to, make all filings required by Legal
      Requirements to be made by them to consummate this Agreement and the
      transactions contemplated hereby.  Between the date of this
      Agreement and the Closing Date, Buyer will, and will cause each Affiliate
      to, cooperate with Seller and CDT with respect to all filings that Seller
      or CDT is required by Legal Requirements to make in connection with the
      execution, delivery and performance of this Agreement, and (ii) cooperate
      with Seller in obtaining all consents identified in Part 3.2 of the
      Disclosure Schedule; provided that this Agreement will not require Buyer
      to dispose of or make any change in any portion of its business or to
      incur any other burden to obtain a Governmental
    Authorization.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Except
      as set forth in the proviso to Section 6.1(a), between the date of this
      Agreement and the Closing Date, Buyer will use its Best Efforts to cause
      the conditions in Sections 7 and 8 to be
  satisfied.

            

    

     

    6.2           Notification.  Between
the date of this Agreement and the Closing Date, Buyer will promptly notify the
Seller in writing if Buyer becomes aware of any fact or condition that causes or
constitutes a Breach of any of Buyer’s representations and warranties as of the
date of this Agreement, or if Buyer becomes aware of the occurrence after the
date of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition.  During
the same period, Buyer will promptly notify the Seller of the occurrence of any
Breach of the occurrence of any event that may make the satisfaction of the
conditions in Section 8 impossible or unlikely.

     

    
      	
              7  

            	
              CONDITIONS
      PRECEDENT TO BUYER’S OBLIGATION TO
CLOSE

            

    

     

    Buyer’s
obligation to purchase the Shares and to take the other actions required to be
taken by Buyer at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Buyer, in whole or in part):

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    7.1           Accuracy Of
Representations                                                                All of the representations and
warranties of Seller and CDT in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), must
have been accurate in all material respects as of the date of this Agreement,
and must be accurate in all material respects as of the Closing Date as if made
on the Closing Date, without giving effect to any supplement to the Disclosure
Schedule.

     

    7.2           Seller’s
Performance

     

    
      	
              (a)  

            	
              All
      of the covenants and obligations that Seller is required to perform or to
      comply with pursuant to this Agreement at or prior to the Closing
      (considered collectively), and each of these covenants and obligations
      (considered individually), must have been duly performed and complied with
      in all material respects.

            

    

     

    
      	
              (b)  

            	
              Each
      document required to be delivered pursuant to Section 2.5 must have been
      delivered, and each of the other covenants and obligations in Section 5
      must have been performed and complied with in all material
      respects.

            

    

     

    
      	
               
      

            	
              7.3

            	
              Consents

            

    

     

    No
Consents are required as a condition to complete the transactions described in
this Agreement.

     

    
      	
               
      

            	
              7.4

            	
              Additional
      Documents

            

    

     

    Each of
the following documents must have been delivered to Buyer:

     

    
      	
              (a)  

            	
              an
      opinion of counsel to the Seller, dated the Closing Date, as to such
      matters as customarily are the subjects of opinions of Seller’s counsel
      in  transactions of the type contemplated by this Agreement,
      such opinion to be subject to the reasonable expectations of Buyer and its
      counsel; and

            

    

     

    
      	
              (b)  

            	
              such
      other documents as Buyer may reasonably request for the purpose of
      (i)  evidencing the accuracy of any of Sellers’ representations
      and warranties, (ii) evidencing the performance by Seller or CDT of, or
      the compliance by Seller or CDT with, any covenant or obligation required
      to be performed or complied with by Seller or CDT, (iii) evidencing the
      satisfaction of any condition referred to in this Section 7, or (iv)
      otherwise facilitating the consummation or performance of any of the
      transactions contemplated by this
Agreement.

            

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    7.5           No
Proceedings                                           Since
the date of this Agreement, there must not have been commenced or Threatened
against Buyer or any of its Affiliates, any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, this
Agreement or the transactions contemplated hereby, or (b) that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with
the performance of this Agreement or the transactions contemplated
hereby.

     

    7.6           No Claim Regarding Stock
Ownership or Sale
Proceeds                                                                                                                     There
must not have been made or Threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, the Shares or any stock of, or any
other voting, equity, or ownership interest in, CDT, or (b) is entitled to all
or any portion of the Purchase Price payable for the Shares.

     

    7.7           No
Prohibition                                           Neither
the consummation nor the performance of this Agreement or any of the
transactions contemplated hereby will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause Buyer or any of its Affiliates to suffer any
material adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been published,
introduced, or otherwise formally proposed by or before any Governmental
Body.

     

    
      	
              8  

            	
              CONDITIONS
      PRECEDENT TO SELLER’S OBLIGATION TO
CLOSE

            

    

     

    Seller’s
obligation to sell the Shares and to take the other actions required to be taken
by Seller at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Seller, in whole or in part):

     

    8.1           Accuracy of
Representations                                                                           All
of Buyer’s representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.

     

    
      	
               
      

            	
              8.2

            	
              Buyer’s
      Performance

            

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              All
      of the covenants and obligations that Buyer is required to perform or to
      comply with pursuant to this Agreement at or prior to the Closing
      (considered collectively), and each of these covenants and obligations
      (considered individually), must have been performed and complied with in
      all material respects.

            

    

     

    
      	
              (b)  

            	
              Buyer
      must have delivered each of the documents required to be delivered by
      Buyer pursuant to Section 2.5 and must have made the cash
      payments  required to be made pursuant to Section
      2.5(b).

            

    

     

    8.3           Consents                      Each
of the Consents identified in Part 3.2 of the Disclosure Schedule must have been
obtained and must be in full force and effect.

     

    8.4           Additional
Documents                                                      Buyer
must have caused to be delivered to Seller such other documents as Seller may
reasonably request for the purpose of (i) evidencing the accuracy of any
representation or warranty of Buyer, (ii) evidencing the performance by Buyer
of, or the compliance by Buyer with, any covenant or obligation required to be
performed or complied with by Buyer, (iii) evidencing the satisfaction of any
condition referred to in this Section 8, or (iv) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.

     

    8.5           No
Proceedings.  Since the date of this Agreement, there must not
have been commenced or Threatened against CDT or Seller, or against any of their
respective Affiliates, any Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, this Agreement or any of the
transactions contemplated hereby, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with this Agreement or any of
the transactions contemplated hereby.

     

    8.6           No
Prohibition.  Neither the consummation nor the performance this
Agreement or of any of transactions contemplated hereby will, directly or
indirectly (with or without notice or lapse of time), materially contravene, or
conflict with, or result in a material violation of, or cause Seller or CDT or
any of their respective Affiliates to suffer any material adverse consequence
under, (a) any applicable Legal Requirement or Order, or (b) any Legal
Requirement or Order that has been published, introduced or otherwise formally
proposed by or before any Governmental Body.

     

    
      	
              9  

            	
              TERMINATION

            

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              9.1

            	
              Termination
      Events

            

    

     

    This
Agreement may, by notice given prior to or at the Closing, be
terminated:

     

    
      	
              (a)  

            	
              by
      either Buyer or Seller if a material Breach of any provision of this
      Agreement has been committed by the other party and such Breach has not
      been waived;

            

    

     

    
      	
              (b)  

            	
              (i)
      by Buyer if any of the conditions in Section 7 has not been satisfied as
      of the Closing Date or if satisfaction of such a condition is or becomes
      impossible (other than through the failure of Buyer to comply with its
      obligations under this Agreement) and Buyer has not waived such condition
      on or before the Closing Date; or (ii) by Seller, if any of the conditions
      in Section 8 has not been satisfied of the Closing Date or if satisfaction
      of such a condition is or becomes impossible (other than through the
      failure of Seller or CDT to comply with their
      respective  obligations under this Agreement) and Seller has not
      waived such condition on or before the Closing
  Date;

            

    

     

    (c) by mutual
consent of Buyer and Seller; or

     

    
      	
              (d)  

            	
              by
      either Buyer or Seller if the Closing has not occurred (other than through
      the failure of any party seeking to terminate this Agreement to comply
      fully with its obligations under this Agreement) on or before March 31,
      2008, or such later date as the parties may agree
  upon.

            

    

     

    9.2           Effect of
Termination                                                      Each
party’s right of termination under Section 9.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies.  If this
Agreement is terminated pursuant to Section 9.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Sections 11.1 and 11.3 will survive; provided, however, that if this Agreement
is terminated by a party because of the Breach of the Agreement by the other
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 other
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.

     

    
      	
              10  

            	
              INDEMNIFICATION;
      REMEDIES

            

    

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.1

            	
              Survival; Right to
      Indemnification Not Affected by
Knowledge

            

    

     

    All
representations, warranties, covenants, and obligations in this Agreement, the
Disclosure Schedule, the supplements to the Disclosure Schedule, the
certificates delivered pursuant to Sections 2.5(a)(ii) and 2.5(b)(iii), and any
other certificate or document delivered pursuant to this Agreement will survive
the Closing.  The right to indemnification, payment of Damages or
other remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted with respect to,
or any Knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation.  The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.

     

    
      	
               
      

            	
              10.2

            	
              Indemnification And
      Payment Of Damages By Seller

            

    

     

    Seller
will indemnify and hold harmless Buyer and CDT, and their respective
Representatives and Affiliates (collectively, the “Indemnified Persons”)
for, and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable attorneys’ fees) or
diminution of value, whether or not involving a third- party claim
(collectively, “Damages”), arising,
directly or indirectly, from or in connection with:

     

    
      	
              (a)  

            	
              any
      Breach of any representation or warranty made by Seller or CDT in this
      Agreement, the Disclosure Schedule, the supplements to the Disclosure
      Schedule, or any other certificate or document delivered by Seller or CDT
      pursuant to this Agreement;

            

    

     

    
      	
              (b)  

            	
              any
      Breach of any representation or warranty made by Seller or CDT in this
      Agreement as if such representation or warranty were made on and as of the
      Closing Date without giving effect to any supplement to the Disclosure
      Schedule, other than any such Breach that is disclosed in a supplement to
      the Disclosure Schedule and is expressly identified in the certificate
      delivered pursuant to Section 2.5(a)(ii) as having caused the condition
      specified in Section 7.1 not to be
satisfied;

            

    

     

    
      	
              (c)  

            	
              any
      Breach by Seller of any of its covenants or obligations in this
      Agreement;

            

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)  

            	
              any
      claim by any Person for brokerage or finder’s fees or commissions or
      similar payments based upon any agreement or understanding alleged to have
      been made by any such Person with Seller (or any Person acting on its
      behalf) in connection with this Agreement or the transactions contemplated
      hereby.

            

    

     

    10.3           Indemnification and Payment
of Damages by Buyer

     

    Buyer
will indemnify and hold harmless Seller, and will pay to Seller the amount of
any Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any Person for brokerage or finder’s fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the Contemplated Transactions.

     

    
      	
               
      

            	
              10.4

            	
              Time
      Limitations

            

    

     

    If the
Closing occurs, Seller will have no liability (for indemnification or otherwise)
with respect to any representation or warranty, or covenant or obligation to be
performed and complied with prior to the Closing Date, other than those in
Sections 3.3, 3.10, 3.12(c), and 3.18, unless on or before the first anniversary
of the Closing Date, Buyer notifies Seller in writing of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by
Buyer; a claim with respect to Section 3.3, 3.10, 3.12(c), or 3.18 may be made
at any time within the applicable statute of limitations.  If the
Closing occurs, Buyer will have no liability (for indemnification or otherwise)
with respect to any representation or warranty, or covenant or obligation to be
performed and complied with prior to the Closing Date, unless on or before the
first anniversary of the Closing Sellers notify Buyer in writing of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by Sellers.

     

    
      	
               
      

            	
              10.5

            	
              Limitations On
      Amount--Seller

            

    

     

    Seller
will have no liability (for indemnification or otherwise) with respect to the
matters described in clause (a), clause (b) or, to the extent relating to any
failure to perform or comply prior to the Closing Date, clause (c) of Section
10.2 until the total of all Damages with respect to such matters exceeds
$50,000, at which time Seller shall be obligated to indemnify Buyer for the full
amount of such losses, subject to the limitations set forth in this Section
10.  However, this Section 10.5 will not apply to any Breach of any of
Seller’s representations and warranties of which Seller had Knowledge at any
time prior to the date on which such representation and warranty is made or any
intentional Breach by Seller of any covenant or obligation under this Agreement,
and Seller will be liable for all Damages with respect to such
Breaches.

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    The
maximum amount of Damages (other than Damages due to fraud or intentional
misrepresentation) with respect to which Seller shall be obligated to pay
Indemnified Persons under this Agreement shall not exceed an amount equal to the
Escrow Fund.

     

    
      	
               
      

            	
              10.6

            	
              Limitations On
      Amount--Buyer

            

    

     

    Buyer
will have no liability (for indemnification or otherwise) with respect to the
matters described in clause (a) or (b) of Section 10.3 until the total of all
Damages with respect to such matters exceeds $50,000, at which time Buyer shall
be obligated to indemnify Seller for the full amount of such losses, subject to
the limitations set forth in this Section 10.  However, this Section
10.6 will not apply to any Breach of any of Buyer’s representations and
warranties of which Buyer had Knowledge at any time prior to the date on which
such representation and warranty is made or any intentional Breach by Buyer of
any covenant or obligation, and Buyer will be liable for all Damages with
respect to such Breaches.

     

    
      	
               
      

            	
              10.7

            	
              Procedure For
      Indemnification--Third Party
Claims

            

    

     

    
      	
              (a)  

            	
              Promptly
      after receipt by an indemnified party under Section 10.2 or 10.3 of notice
      of the commencement of any Proceeding against it, such indemnified party
      will, if a claim is to be made against an indemnifying party under such
      Section, give notice to the indemnifying party of the commencement of such
      claim, but the failure to notify the indemnifying party will not relieve
      the indemnifying party of any liability that it may have to any
      indemnified party, except to the extent that the indemnifying party
      demonstrates that the defense of such action is prejudiced by the
      indemnifying party’s failure to give such
  notice.

            

    

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              If
      any Proceeding referred to in Section 10.7(a) is brought against an
      indemnified party and it gives notice to the indemnifying party of the
      commencement of such Proceeding, the indemnifying party will, unless the
      claim involves Taxes, be entitled to participate in such Proceeding and,
      to the extent that it wishes (unless (i) the indemnifying party is also a
      party to such Proceeding and the indemnified party determines in good
      faith that joint representation would be inappropriate, or (ii) the
      indemnifying party fails to provide reasonable assurance to the
      indemnified party of its financial capacity to defend such Proceeding and
      provide indemnification with respect to such Proceeding), to assume the
      defense of such Proceeding with counsel reasonably satisfactory to the
      indemnified party and, after notice from the indemnifying party to the
      indemnified party of its election to assume the defense of such
      Proceeding, the indemnifying party will not, as long as it diligently
      conducts such defense, be liable to the indemnified party under this
      Section 10 for any fees of other counsel or any other expenses with
      respect to the defense of such Proceeding, in each case subsequently
      incurred by the indemnified party in connection with the defense of such
      Proceeding, other than reasonable costs of investigation.  If
      the indemnifying party assumes the defense of a Proceeding, (i) it will be
      conclusively established for purposes of this Agreement that the claims
      made in that Proceeding are within the scope of and subject to
      indemnification; (ii) no compromise or settlement of such
      claims  may be effected by the indemnifying party without the
      indemnified party’s consent unless (A) there is no finding or admission of
      any violation of Legal Requirements or any violation of the rights of any
      Person and no effect on any other claims that may be made against the
      indemnified party, and (B) the sole relief provided is monetary damages
      that are paid in full by the indemnifying party; and (iii) the indemnified
      party will have no liability with respect to any compromise or settlement
      of such claims effected without its consent.  If notice is given
      to an indemnifying party of the commencement of any Proceeding and the
      indemnifying party does not, within ten (10) days after the indemnified
      party’s notice is received by the indemnifying party, give notice to the
      indemnified party of its election to assume the defense of such
      Proceeding, the indemnifying party will be bound by any determination made
      in such Proceeding or any compromise or settlement effected by the
      indemnified party.

            

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              Notwithstanding
      the foregoing, if an indemnified party determines in good faith that there
      is a reasonable probability that a Proceeding may adversely affect it or
      its affiliates other than as a result of monetary damages for which it
      would be entitled to indemnification under this Agreement, the indemnified
      party may, by notice to the indemnifying party, assume the exclusive right
      to defend, compromise, or settle such Proceeding, but the indemnifying
      party will not be bound by any determination of a Proceeding so defended
      or any compromise or settlement effected without its consent (which may
      not be unreasonably withheld).

            

    

     

    10.8           Procedure for
Indemnification--Other
Claims                                                                                                A
claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is
sought.

     

    
      	
              11  

            	
              GENERAL
      PROVISIONS

            

    

     

    
      	
               
      

            	
              11.1

            	
              Expenses

            

    

     

    Except as
otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of agents, representatives, counsel, and
accountants.   In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another
party.

     

    
      	
               
      

            	
              11.2

            	
              Public
      Announcements

            

    

     

    Any
public announcement or similar publicity with respect to this Agreement will be
issued, if at all, at such time and in such manner as Buyer and Seller jointly
determine in advance; provided, however, that Seller may issue a press release
or make a public filing respecting the execution of this Agreement or the
Closing if it determines that such disclosure is necessary or prudent under
applicable Legal Requirements.  Except as set forth in this Section
11.2, prior to the Closing each party shall keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any
Person.  Seller and Buyer will consult with each other concerning the
means by which CDT’s employees, customers, and suppliers and others having
dealings with CDT will be informed of this Agreement or the transactions
contemplated hereby.

     

    
      	
               
      

            	
              11.3

            	
              Confidentiality

            

    

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    Between
the date of this Agreement and the Closing Date, Buyer and Seller will maintain
in confidence, and will cause the directors, officers, employees, agents, and
advisors of Buyer and CDT to maintain in confidence, and not use to the
detriment of another party or CDT any written, oral, or other information
obtained in confidence from another party or CDT in connection with this
Agreement or transactions contemplated hereby, unless (a) such information is
already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party,
(b) the use of such information is necessary or appropriate in making any filing
or obtaining any consent or approval required for the consummation of this
Agreement, or (c) the furnishing or use of such information is required in
connection with legal proceedings.

     

    If the
Contemplated Transactions are not consummated, each party will return or destroy
as much of such written information as the other party may reasonably
request.

     

    
      	
               
      

            	
              11.4

            	
              Notices

            

    

     

    All
notices, consents, waivers, and other communications under this Agreement must
be in writing and will be deemed to have been duly given when (a) delivered by
hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):

     

    Seller

     

    CardioTech
International, Inc.

    229
Andover Street

    Wilmington,
MA  01887

    Attention:
Michael Adams, Chief Executive Officer

    Facsimile No. 978 657
0074

    

    With a
copy to:

    

    Seyfarth
Shaw LLP

    Two
Seaport Lane

    Boston,
MA 02210

    Attention:
David E. Dryer

    Facsimile
No. 617 946 4801

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    

    Buyer:

     

    Tacpro,
Inc.

    1353 Dell
Ave

    Campbell,
CA 95008

    Attention:
Nitin Matani, President/CEO

    Facsimile
No. 408 871 2425

    

    With a
copy to:

    

    Essel
Propack Limited

    Times
Tower, 10th
Floor,

    Kamala
Mills Compound,

    Lower
Parel, Mumbai 400 013

    Attention:
Mr. Ajay Nagle

    Company
Secretary & Head Legal

    Facsimile
No.: 022-24963137 / 2481964

    

    11.5           Jurisdiction; Service of
Process                                                                           Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in the
courts of the Commonwealth of Massachusetts, or, if it has or can acquire
jurisdiction, in the United States District Court for Massachusetts, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein.  Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the
world.

    

    11.6           Further
Assurances                                           The
parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    11.7           Waiver                                The
rights and remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.  To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this
Agreement.

     

    11.8           Entire Agreement and
Modification                                                                           This
Agreement supersedes all prior agreements between the parties with respect to
its subject matter, and constitutes a complete and exclusive statement of the
terms of the agreement between the parties with respect to its subject
matter.  This Agreement may not be amended except by a written
agreement executed by the party to be charged with the amendment.

     

    11.9           Disclosure
Schedule                                           In
the event of any inconsistency between the statements in the body of this
Agreement and those in the Disclosure Schedule (other than an exception
expressly set forth as such in the Disclosure Schedule with respect to a
specifically identified representation or warranty), the statements in the body
of this Agreement will control.

     

    11.10                      Assignments, Successors, and
No Third-Party
Rights                                                                                                           Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, which will not be unreasonably withheld, except
that Buyer may assign any of its rights under this Agreement to any wholly owned
Affiliate.  Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties.  Nothing expressed or
referred to in this Agreement will be construed to give any Person other than
the parties to this Agreement any legal or equitable right, remedy, or claim
under or with respect to this Agreement or any provision of this
Agreement.  This Agreement and all of its provisions and conditions
are for the sole and exclusive benefit of the parties to this Agreement and
their successors and assigns.

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    11.11                      Severability                                If
any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect.  Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.

     

    11.12                      Section Headings,
Construction                                                                The
headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation.  All references to
“Section” or “Sections” refer to the corresponding Section or Sections of this
Agreement.  All words used in this Agreement will be construed to be
of such gender or number as the circumstances require.  Unless
otherwise expressly provided, the word “including” does not limit the preceding
words or terms.

     

    11.13                      Time Of
Essence                                           With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.

     

    11.14                      Governing
Law                                           This
Agreement will be governed by the laws of the Commonwealth of Massachusetts
without regard to conflicts of laws principles.

     

    11.15                      Counterparts                                This Agreement may be executed in one
or more counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

     

    11.16                      Force
Majeure                                           No
party to this Agreement shall be responsible for any loss, damage, delay or
failure of performance resulting directly or indirectly from any cause which is
beyond its reasonable control (“Force Majeure”), including but not limited
to:  delay in obtaining or failure to obtain or loss of any approvals,
permits, licenses or rights-of-way (or any renewals thereof), except to the
extent that any such delay or failure is caused by the responsible party’s
failure to comply with any covenant or agreement contained in this Agreement;
acts of God or of the public enemy; acts or failure to act of any governmental
authority not caused by any act or omission of such Party; unanticipated changes
in government codes, ordinances, laws, rules, regulations or restrictions,
unless any such restriction applies only to the responsible party because of any
act or omission of such party, and not generally to providers of similar
services; or war or warlike operations, civil war or commotion, mobilizations or
military call-up, and acts of similar nature; revolution, rebellions, sabotage,
acts of terrorism, insurrections or riots; fires, floods, epidemics or
quarantine restrictions; strikes, and other labor actions; material shortages or
unavailability or other delay hot resulting from the responsible party’s failure
to place timely orders; freight embargoes; unworkable weather; or acts or
omissions of transporters or contractors.  If any Force Majeure causes
an increase in the time required for performance of any party’s obligations
hereunder, the parties shall in good faith determine a mutually acceptable and

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    equitable
extension of time to for such party complete such obligations in each case equal
to at least one day for each day of delay resulting from the Force
Majeure.

    

    

    [Signature
page follows]

    
      
        
          BO1
15903178.7

        

         

      

      
        54

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.

     

    
      	 
      	 
      
	
              BUYER:

              TACPRO,
INC.

              By:  /s/
      Nitin P.
      Matani                                                    

                    Name:
      Nitin P. Matani

                    Title:
      President/CEO

            	
              SELLER:

              CARDIOTECH
      INTERNATIONAL INC.

              By:
      /s/ Eric G. Walters

                     Name: Eric
      G. Walters

                     Title: VP
      & CFO

            
	 
      	
              CATHETER
      AND DISPOSABLE TECHNOLOGY, INC.

              By:  /s/
      Michael F.
      Adams                                                    

                     Name:
      Michael F. Adams

                     Title:
      President & Treasurer

               

               

            

    

    
      	
              BO1
      15903178.5

            

    

    
      	
              BO1
      15903178.4

            

    

    
      	
              BO1
      15903178.3

            

    

    
      	
              BO1
      15903178.2

            

    

    
      	
              BO1
      15903178.1

            

    

    
      	 
      

    

    

     

    
      
        
          BO1
15903178.7JOHNSON, KILLEN & SEILER
STEVEN J. SEILER         ------------------------        DIANA BOUSCHOR DODGE
THOMAS A. CLURE                  ATTORNEYS               JESSICA L. DURBIN
JOHN N. NYS                                              MICHELE L. MILLER
STEVEN C. FECKER
ROBERT J. ZALLAR                                         JOHN J. KILLEN, Retired
ROBERT C. PEARSON          A TRADITION OF TRUST
JAMES A. WADE                                            JOSEPH B. JOHNSON
JOSEPH J. ROBY, JR.       230 West Superior Street       (1919-2000)
NICHOLAS OSTAPENKO               Suite 800
RICHARD J. LEIGHTON       Duluth, Minnesota 55802
JOSEPH V. FERGUSON           www.duluthlaw.com
ALOK VIDYARTHI            Telephone: 218-722-6331
LAURA S. WEINTRAUB        Facsimile: 218-722-3031
PAUL W. WOJCIAK
ROY J. CHRISTENSEN
                                April 7, 2008

LocatePlus Holdings Corporation
Attn: Corporate Secretary
100 Cummings Center, 235 M
Beverly, MA 01915
                                                              Via Certified Mail
                                                              ------------------
         Re:  Inspection of Books and Records
              Our File No.: 22546-6

Dear Sir or Madam:

Our office  represents Dawn Rose Martinson Green, the beneficial owner of record
(with Carl Green as her  attorney-in-fact of record) of 521,174 shares of common
stock,  $0.01%  par  value,  of  LocatePlus  Holdings  Corporation,  a  Delaware
Corporation   ("Company").   This  letter  follows  and   supplements  my  prior
correspondence  to James C. Fields,  CEO of the  Company,  dated March 13, 2008,
February 19, 2008 and January 18, 2008.

On  behalf  of Carl  Green  and Dawn Rose  Martinson  Green,  we hereby  demand,
pursuant to Section 220 of the Delaware  General  Corporation Law and the common
law of the State of Delaware,  during the usual hours for  business,  to inspect
the  following  books and  records of the Company and to make copies or extracts
therefrom:

(1) Stockholder Lists:
    -----------------

    (a) A complete list of the Company's  stockholders  of record,  certified by
        the transfer agent(s) and/or registrar(s), showing the name, address and
        number of shares registered in the name of each stockholder.

    (b) A magnetic  (or  comparable)  computer  tape list of the  holders of the
        common stock,  showing the name, address and number of shares registered
        in the name of each such holder,  such  computer  processing  data as is
        necessary to make use of such magnetic (or  comparable)  computer  tape,
        and hard a copy printout of such magnetic (or comparable)  computer tape
        for verification purposes.

    (c) All daily  transfer  sheets now or  hereafter  in the  Company's  or its
        transfer  agent's  possession  or control,  or which can  reasonably  be

<PAGE>

                            JOHNSON, KILLEN & SEILER

LocatePlus Holdings Corporation
Attn: Corporate Secretary
April 7, 2008
Page 2

        obtained  from  brokers,   dealers,  banks,  clearing  agencies,  voting
        trustees  or  their  nominees,  showing  the  changes  in  the  list  of
        stockholders of the Company referred to in item 1(a) above from the data
        hereof (or another  recently  practicable  date) through the Record Date
        (as defined below).

    (d) All  information and listings now or hereinafter in the Company's or its
        transfer  agent's  possession  or control,  or which can  reasonably  be
        obtained form nominees of any central certificate  depository systems or
        their nominees,  brokers,  dealers,  banks,  respondent banks,  clearing
        agencies, voting trusts and their nominees or other nominees, concerning
        the number, identity of, and shares held by the actual beneficial owners
        of the common stock,  including,  without  limitation,  banks,  brokers,
        dealers and other financial  institutions who own common stock for their
        own or their customers' account, any holdings in the respective names of
        Charles  Schwab & Co., and other  similar  depositories  or nomineees as
        well as any material  request list provided by omnibus proxies issued by
        such entities and all Depository Trust Company participant listings, and
        all such  listings,  or other  information  which is in electronic  form
        shall be provided to the  undersigned as soon as it is made available to
        the Company or its agents,  and further if the Company or its agents are
        authorized  to  have  online  access  to the  Depository  Trust  Company
        security listing, then the undersigned,  as Carl Green's agent, shall be
        given equivalent access.

    (e) All  information no or hereinafter in the Company's  position or control
        or which can  reasonably  be  obtained  from  brokers,  dealers,  banks,
        clearing  agencies,  voting trustees or their nominees,  relating to the
        names  of  the  non-objecting  beneficial  owners  of the  common  stock
        (commonly  referred to as "NOBO"  list) whose shares are held by owners,
        dealers,  in the format of a magnetic (or  comparable)  computer tape or
        cartridge file of such owners showing the name,  address,  and number of
        shares registered in the name of each such owners in descending  balance
        order, such computer processing data as is necessary to make use of such
        magnetic (or  comparable)  computer tape or  cartridge,  and a hard copy
        printout of such magnetic (or comparable) computer tape or cartridge for
        verification  purposes  (such  information  with  respect to brokers and
        dealers  should be  available to the Company  under Rule 14.1b-1  and/or
        Rule 14b-2 of the  Securities  Exchange  Act of 1934,  as  amended  (the
        "Exchange Act").

    (f) All "respondent bank" lists and omnibus proxies for such lists, pursuant
        to Rule 14b-2 of the Exchange Act.

    (g) A list  of  stockholders  of the  Company  who are  participants  in any
        Company  employee  stock  ownership,   stock  purchase,   stock  option,
        retirement,   401(k),  restricted  stock,  incentive,   profit  sharing,
        dividend  reinvestment  or any  similar  plan in which  voting of common
        stock under the plan is controlled directly or indirectly,  individually
        or collectively,  by such plan's participants,  showing (i) the name and

<PAGE>

                            JOHNSON, KILLEN & SEILER

LocatePlus Holdings Corporation
Attn: Corporate Secretary
April 7, 2008
Page 3

        address  of each such  participant,  (ii) the number of shares of common
        stock  attributable to each such  participant in any such plan and (iii)
        the method by which to communicate with each such participant.

(2) Organizational Documents:
    ------------------------

A  complete  and  correct  copy  of  the  bylaws  and   articles/certificate  of
incorporation of the Company, as in effect now and as amended from time to time.

Each item is  requested  to be  complete  and  correct as of the date hereof (or
another recently practicable date). In addition,  Carl Green hereby demands that
modifications, additions and deletions to any and all information referred to in
items  1  and  2  above  be  furnished  to  the  undersigned  as  soon  as  such
modifications,  additions and deletions  become  available to the Company or its
agent or representatives. This letter shall also serve as Carl Green's demand to
inspect and copy each item set forth above  reflecting the data as of the Record
Date for the Company's next annual meeting of  stockholders,  as the same may be
amended by the Company's board of directors, by applicable law or otherwise (the
"Record Date").

Carl Green will bear the  reasonable  cost  incurred by the  Company,  including
those  of  its  transfer  agent(s)  or  registrar(s),  in  connection  with  the
production of the information demanded herein.

The  purpose  of this  demand is to enable  Carl Green to  communicate  with the
Company's   stockholders   regarding  matters  relating  to  their  interest  as
stockholders including,  without limitation,  in connection with the election of
directors at the Company's  next annual  meeting of  stockholders  and any other
matters that may properly  come before such meeting in the event that Carl Green
elects to solicit proxies to elect directors at such meeting.

It is requested that the information  identified above be made available as soon
as it is  available  to the Company  and, in any event,  no later than April 16,
2008.

                           Yours very truly,

                           /s/ Alok Vidyarthi

                           Alok Vidyarthi
AV/prs

cc: Via Certified Mail

Jon Latorella
Chairman of the Board
LocatePlus Holdings Corporation
100 Cummings Center, 235M
Beverly, MA  01915

<PAGE>

                            JOHNSON, KILLEN & SEILER

LocatePlus Holdings Corporation
Attn: Corporate Secretary
April 7, 2008
Page 4

James Field
President and Chief Executive Officer
100 Cummings Center, 235M
Beverly, MA  01915

Geoffrey Chalmers, Esq.
33 Broad Street
Suite 1100
Boston, MA 02109

Mr. Carl Green (via e-mail and mail)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]