Document:

Exhibit 10.2

 

STOCK
PURCHASE AGREEMENT

By and Among

SYMMETRY
MEDICAL INTERNATIONAL INC.

(Buyer)

and

CHRISTOPHER W. HUNTINGTON,

PHILLIP MILIDANTRI AND LEVI CITARELLA

(collectively,
the Seller)

AUGUST
31, 2006

 

STOCK
PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT
(this “Agreement”) is made and
entered into effective as of the 31st day of August, 2006, by and between SYMMETRY MEDICAL INTERNATIONAL INC., a duly
organized Delaware corporation (“Buyer”), CHRISTOPHER W.
HUNTINGTON (“Huntington”), PHILLIP MILIDANTRI (“Milidantri”), and LEVI CITARELLA
(hereinafter Huntington, Milidantri and Citarella are referred to collectively
as the “Seller”).

RECITALS

A.            The Seller owns all of the issued
and outstanding shares (“Shares”) of EVEREST
METAL INTERNATIONAL, LTD., an Ireland limited company with a principal place of business in
Cork, Ireland (the “Company”).

B.            The
Seller also owns all of the issued and outstanding shares of EVEREST METAL FINISHING, LLC, a New York
limited liability company with a
principal place of business in Airmont, New York (“Sister Company”).

C.            The
Buyer desires to purchase from Seller all of the Shares of the Company as well
as certain assets of the Sister Company, and the Seller desires to sell the
Shares of the Company and the assets of the Sister Company to the Buyer on the
terms and subject to the conditions set forth in this Agreement and in the
Asset Purchase Agreement, dated the same date herewith (“Asset Purchase
Agreement”).

D.            In
conjunction with the execution of this Agreement and the Asset Purchase
Agreement, the Buyer and Seller, along with the Sister Company and Symmetry
Medical USA, Inc., will enter into a certain Indemnification Agreement and
other certain Ancillary Agreements.

E.             Upon consummation of the purchase
and sale of the Shares pursuant to this Agreement, and the purchase and sale of
assets pursuant to the Asset Purchase Agreement, along with execution of all
Ancillary Agreements, including the Indemnification Agreement, the Buyer will
own the assets of the Sister Company along with all of the issued and
outstanding Shares of the Company.

AGREEMENT

In consideration
of the foregoing Recitals and the mutual promises contained in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and intending to be legally bound, the Buyer and the
Seller agree as follows:

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ARTICLE 1

DEFINITIONS

For purposes of this Agreement, the following terms
have the meanings specified:

“Accounts
Receivable” means (a) any trade accounts receivable and other rights to payment
from customers of the Company and (b) any other account or note receivable,
together with, in each case, the full benefit of any security interest therein.  Accounts Receivable explicitly excludes trade
account receivables of the following companies: Everest Industrial Equipment,
Inc., Everest Metal, Inc., Sonicor, Inc., Stratus Technologies, Inc., Technical
Metal Finishing Inc. and any other Affiliates of Company.

“Affiliate” means,
with respect to any specified Person, any other Person directly or indirectly
controlling, controlled by or under common control with such specified Person.

“Ancillary
Agreements” are all documents, instruments and agreements to be executed
and delivered by the Buyer, Seller, Company and Sister Company pursuant to this
Agreement and the Asset Purchase Agreement, including the Exhibits thereto.

“Applicable
Laws” or “Law” means any and all laws, ordinances, constitutions,
regulations, statutes, treaties, rules, codes, licenses, certificates,
franchises, Permits, requirements and injunctions adopted, enacted,
implemented, promulgated, issued, entered or deemed applicable by or under the
authority of any Governmental Body having jurisdiction over a specified Person
or any of such Person’s properties or assets. 
Applicable Laws also include any laws, regulations, ordinances,
constitutions, regulations, statutes, treaties, rules, codes, license,
certificates, franchises, Permits, or legal requirements governing the Company’s
Ireland operations.

“Authorization”
means any authorization, approval, consent, certificate, license, permit or
franchise of or from any Governmental Body or pursuant to any Applicable Laws.

 “Books and Records” means books of account,
general, financial, warranty and shipping records, invoices, supplier lists,
product specifications, product formulations, drawings, correspondence,
engineering, maintenance, operating and production records, advertising and
promotional materials and other documents, records and files, in each case
related to the Business, including books and records relating to Company
Intellectual Property and the employee and personnel records of the Employees.

“Business”
means the ownership and/or operation of facilities which provide “quick turn”
implant finishing; implant machining; robotic finishing and shot peening to
serve the market of Cork, Ireland.

“Business
Day” means a day other than a Saturday, Sunday or other day on which banks
located in New York City are authorized or required by Applicable Laws to
close.

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“Cash” means all cash as shown on the
Balance Sheet of the Company as either in-hand or accrued as of the Closing
Date.

“Closing Working Capital” means Current Assets minus
Current Liabilities.  Closing Working
Capital explicitly excludes trade account receivables of the following
companies: Everest Industrial Equipment, Inc., Everest Metal, Inc., Sonicor,
Inc., Stratus Technologies, Inc., Technical Metal Finishing Inc. and any other
Affiliates of Company.

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

“Competition
Act” means the Competition Act 2002;

“Confidential
Information” means any information or compilation of information not
generally known to the public or the industry or which the Company has not
disclosed to third parties without a written obligation of confidentiality,
which is proprietary to the Company, relating to the Company’s procedures,
techniques, methods, concepts, ideas, affairs, products, processes and
services, including, but not limited to, information relating to marketing,
merchandising, selling, research, development, manufacturing, purchasing,
accounting, engineering, financing, costs, customers, plans, pricing, billing,
needs of customers and products and services used by customers, all lists of
customers and their addresses, prospects, sales calls, products, services,
prices and the like as well as any specifications, formulas, plans, drawings,
accounts or sales records, sales brochures, code books, manuals, trade secrets,
knowledge, know-how, pricing strategies, operating costs, sales margins,
methods of operations, invoices or statements and the like.  Confidential Information shall not include
information which (i) becomes generally available to the public other than as a
result of a disclosure by a party to this Agreement, (ii) was available on a
non-confidential basis prior to its disclosure, or (iii) is independently
developed as evidenced by written records without making use of the
Confidential Information.

“Connected Person” means a person
connected with a director of any Group Company for the purposes of Section 26
of the Companies Act, 1990.

“Contaminant” means any
material, substance, chemical, gas, solid, liquid, waste, effluent, polluting
matter, noise or contaminant which is identified or defined in or regulated by
or pursuant to any Environmental Law or which upon release into the
Environment, presents a danger to the Environment or to the health or safety or
welfare of any person.

“Contract”
means any agreement, contract, license, lease, commitment, arrangement or
understanding, written or oral, including any sales order or purchase order.

“Current
Assets” means the sum of Accounts Receivable (net of allowances), prepaid
expenses, and other current assets of Company (excluding any Cash or Tax
refunds) as determined in accordance with Irish GAAP consistently applied.

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“Current
Liabilities” means the sum of accounts payable and accrued expenses of Company,
excluding accrued interest defined as Debt and as determined in accordance with
Irish GAAP consistently applied.

“Director
Indemnified Party” or “Director
Indemnified Parties” has the meaning set forth in Section 8.3(a) of
this Agreement.

“Disclose”
means to reveal, deliver, divulge, disclose, publish, copy, communicate, show
or otherwise make known or available to any other Person, or in any way to
copy, any of the Confidential Information of the Company.

 “Employee”
means any officer, director, former director or officer, employee or former
employee of the Company.

“Encumbrance” means and includes:

(i)            with respect to any personal property, any intangible
property or any property other than real property, any security or other
property interest or right, claim, lien, pledge, option, charge, security
interest, contingent or conditional sale, or other title claim or retention
agreement or lease or use agreement in the nature thereof whether voluntarily
incurred or arising by operation of law, and including any agreement to grant
or submit to any of the foregoing in the future; and

(ii)           with respect to any real property (including Leased Real
Property), any mortgage, lien, easement, interest, right-of-way, condemnation
or eminent domain proceeding, encroachment, any building, use or other form of
restriction, encumbrance or other claim (including adverse or prescriptive) or
right of third parties (including any Governmental Body), any lease or
sublease, boundary dispute, and agreements with respect to any real property
including: purchase, sale, right of first refusal, option, construction,
building or property service, maintenance, property management, conditional or
contingent sale, use or occupancy, franchise or concession, whether voluntarily
incurred or arising by operation of law, and including any agreement to grant
or submit to any of the foregoing in the future.

 “Equipment” means machinery, fixtures,
furniture, supplies, accessories, materials, equipment, parts, automobiles,
trucks, vehicles, tooling, tools, molds, office equipment, computers,
telephones and all other items of tangible personal property.

“Environment”
means: (i) any and all buildings, structures, fixtures, fittings,
appurtenances, pipes, conduits, valves, drains, servers, tanks, vessels and
containers whether above or below ground level; and (ii) all or any of the following media namely the air (including
without limitation the air within buildings and the air within other natural or
non-made structures above or below ground), water and land and any living
organisms or systems supported by those media.

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“Environmental
Laws” means all laws in so far as they
relate to the control and prevention of pollution of land, water, air,
habitats, ecological systems or living organisms due to the release, discharge,
spillage, entry, deposit, emission or other escape of substances and the
production, transportation, storage, treatment, recycling or disposal of waste,
and for this purpose “laws” shall mean all national and local statutes and
enactments and all legally binding instruments, rules, orders, regulations,
ordinances, codes, directions and judicial decisions made thereunder and all
European Community Directives, Regulations and all legally binding instruments,
rules, orders, regulations, ordinances, codes, directions and judicial
decisions made thereunder and included in the said laws are (for the avoidance
of doubt, but without limitation) the Planning and Development Act 2000, the
Local Government (Water Pollution) Acts 1977 to 1990, the Air Pollution Act
1987, The Fisheries Acts 2000, the Sea Pollution Act 1999 and the Environmental
Protection Agency Act 1992.

“Examiner” means an
Examiner appointed under Section 2 of the Companies (Amendment) Act, 1990.

“Governmental
Body” means any entity or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to United States or
Ireland federal, state, local, or municipal government, foreign, international,
multinational or other government, including any department, commission, board,
agency, bureau, subdivision, instrumentality, official or other regulatory,
administrative or judicial authority thereof, and any non-governmental
regulatory body to the extent that the rules and regulations or orders of such
body have the force of Applicable Laws.

 “Hazardous Materials” means any and
all (i) dangerous, toxic or hazardous pollutants, contaminants, chemicals,
wastes, materials or substances listed or identified in, or directly or
indirectly regulated by, any Environmental Laws, and (ii) any of the
following, whether or not included in the foregoing:  polychlorinated biphenyls, asbestos in any
form or condition, urea-formaldehyde, petroleum (including crude oil or any
fraction thereof), natural gas, natural gas liquids, liquefied natural gas,
synthetic gas usable for fuel or mixtures thereof, nuclear fuels or materials,
chemical wastes, man-made radioactive materials, explosives and known possible
carcinogens.

“Indebtedness”
or “Debt” means any of the
following: (a) any indebtedness for borrowed money, (b) any obligations
evidenced by bonds, debentures, notes or other similar instruments, (c) any
obligations to pay the deferred purchase price of property or services, except
trade accounts payable and other current Liabilities arising in the ordinary
course of the Business, (d) any obligations as lessee under capitalized leases,
(e) any indebtedness created or arising under any conditional sale or other
title retention agreement with respect to acquired property, (f) any
obligations, contingent or otherwise, under acceptance credit, letters of
credit or similar facilities, and (g) any guaranty of any of the foregoing.

“Indemnification
Agreement” means the agreement to be entered between Symmetry Medical USA,
Inc., Symmetry Medical International Inc., Everest Metal 

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Finishing, LLC,
Everest Metal International, Ltd., Christopher W. Huntington, Phillip Milidantri, and Levi Citarella.

“Intellectual
Property” means any and all: (i) inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations in part, revisions, extensions and
reexaminations thereof; (ii) trademarks, service marks, trade dress,
logos, trade names, assumed names and corporate names, together with all
translations, adaptations, derivations and combinations thereof and including
all goodwill associated therewith, and all applications, registrations and
renewals in connection therewith; (iii) copyrightable works, all
copyrights and all applications, registrations and renewals in connection
therewith; (iv) mask works and all applications, registrations and
renewals in connection therewith; (v) trade secrets and confidential
business information (including ideas, research and development, know-how,
technology, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information and business and marketing plans
and proposals); (vi) computer software and all related and necessary
licenses (including data and related software program documentation in computer-readable
and hard-copy forms other than for so-called off-the-shelf product); (vii) other
intellectual property and proprietary rights of any kind, nature or
description, including web sites, web site domain names and other e-commerce
assets and resources of any kind or nature; and (viii) copies of tangible
embodiments thereof (in whatever form or medium).

“Inventory”
means all raw materials, work-in-process, finished goods, supplies, spare parts
and other inventories, including all such items (a) located on the Real
Property, (b) in transit from suppliers, (c) held for delivery by suppliers, or
(d) held on consignment by third parties.

“Irish GAAP”
means generally accepted accounting principles in Ireland.

“Knowledge”
of Seller or any similar phrase means, with respect to any fact or matter, the
actual knowledge of each Seller and the Company’s directors, executive
officers, members and partners, together with such knowledge that such Sellers,
directors, executive officers, members and partners could be expected to
discover after reasonable investigation concerning the existence of the fact or
matter in question.

 “Lien” means, with respect to any property or
asset, any mortgage, lien, pledge, charge, security interest, adverse claim or
other encumbrance in respect of such property or asset.

“Liability”
or “Liabilities” means any and
all debts, liabilities and/or obligations of any type, nature or description
(whether known or unknown, asserted or unasserted, secured or unsecured,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and
whether due or to become due).

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“Material
Adverse Effect” or “Material
Adverse Change” means, in connection with the Company, with due
consideration to the size and complexity of the Business and transactions
contemplated by this Agreement, any event, change or effect that is materially
adverse, individually or in the aggregate, to the condition (financial or
otherwise), properties, assets, Liabilities, revenues, income, Business,
operations, results of operations of such Persons, taken as a whole; provided,
however, that in no event shall any of the following constitute a
Material Adverse Change, or be deemed to have a Material Adverse Effect, in the
Business, operations, assets, results of operations or condition of the
Company:  (i) any change or effect
resulting from conditions affecting the industry in which the Company operates
or from changes in general business or economic conditions, (ii) any
change or effect resulting from the announcement or pendency of any of the
transactions contemplated by this Agreement, (iii) any change or effect
resulting from compliance by the Company or the Sister Company with the terms
of, or the taking of any action contemplated or permitted by, this Agreement
and any Ancillary Agreement, or (iv) any change or effect resulting from
any change in Applicable Laws.  In
furtherance of the foregoing, and notwithstanding anything to the contrary set
forth in this Agreement, any Material Adverse Effect or any Material Adverse
Change with respect to the Company and/or the Sister Company shall be evaluated
on the basis of the Company and the Sister Company both individually and taken
as a whole (in the aggregate).

 “Ordinary Course of Business” means an
action taken by a Person only if:

(i)            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; and

(ii)           such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons constituting
a governing body of a Person exercising similar authority).

“Pension Schemes” means all
existing pension schemes of or operated by or in relation to the Company, full
particulars of which are set out in the Disclosure Schedules.

“Planning Acts” means the
Planning and Development Act 2000 and the Building Control Act, 1990.

 “Permits” means all permits, licenses,
consents, declarations, franchises, orders, certifications, registrations,
certificates of authority, variances, approvals, local sitting approvals,
qualifications and other authorizations obtained from, or filing with any
Governmental Body or other Person, or other similar rights, including, without
limitation, those listed on Schedule
4.21(b) of the Schedules.

“Permitted
Liens” means (a) Liens for current real or personal property Taxes not yet due
and payable and with respect to which Seller maintains adequate reserves, (b)
workers’, carriers’ and mechanics’ or other like Liens incurred in the ordinary
course of the Business with respect to which payment is not due and that do not
impair the conduct 

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of the Business or
the present or proposed use of the affected property and (c) Liens that are
immaterial in character, amount, and extent and which do not detract from the
value or interfere with the present or proposed use of the properties they
affect.

“Person”
means an individual, a corporation, a partnership, a limited liability company,
a trust, an unincorporated association, a Governmental Body or any other entity
or body.

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

“Release” means any spill, discharge, leak, emission,
escape, leaching, disposing, emptying, pouring, pumping, injection, dumping, or
other release or threatened release of any Hazardous Materials into the
environment, whether or not notification or reporting to any governmental
agency was or is required.

“Rights” means any and all outstanding subscriptions,
warrants, options, or other arrangements or commitments obligating or which may
obligate (with or without notice or passage of time or both) the Company to
issue or dispose of any of their respective (as opposed to third party)
securities.

“Target
Working Capital” means $253,577, which is the average monthly sum of Company’s
Inventory and Accounts Receivable for the twelve (12) calendar months ending
immediately preceding the month that includes the Closing Date, as reported by
Company on its Financial Statements in accordance with the Accounting
Principles.

“Tax”,
“Taxes” or “Taxation” means all
forms of taxation, duties, imposts, levies, withholding, rates and charges of whatsoever
nature whether of Ireland or elsewhere in any part of the world, wherever or
whenever created or imposed including, without prejudice to the generality of
the foregoing, income tax, corporation tax, advance corporation tax, capital
gains tax, capital acquisitions tax, inheritance tax, deposit interest
retention tax, dividend withholding tax, valued added tax, sales tax, customs
and other import and export duties, excise duties, stamp duty, capital duty,
wealth tax, property tax, rates, pay related social insurance, health levies,
youth employment levies or other similar contributions and generally all taxes,
duties, imposts, withholdings, levies, rates and charges whatsoever on or in
relation to income, profits, gains, sales, receipts, use or occupation and any
taxes, duties, imposts, withholdings, levies, rates and charges supplementing
or replacing any of the foregoing and any interest, charges, surcharges, fines,
penalties, costs and expenses in connection with any of the foregoing;

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

“Taxing
Authority” means any Governmental Body having jurisdiction with respect to any
Tax.

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“Threatened” means a claim,
Proceeding, dispute, action, or other matter for which any demand or statement
has been made, orally or in writing, or any oral or written notice has been
given, that would lead a reasonably prudent Person to conclude that such a
claim, Proceeding, dispute, action, or other matter may be asserted, commenced,
taken or otherwise pursued in the future.

“Use”
means to appropriate any of the Confidential Information of the Company for the
benefit of oneself or any other Person other than the Company.

“Vacation
Accrual” means the total value for all Employees of their outstanding vacation
hours valued by Employee at their current rate of pay.

“$”
means United States dollars.

“€”
means Euro, the currency for the time being of Ireland.

ARTICLE 2

PURCHASE
OF SHARES; PURCHASE PRICE

2.1.          Purchase and Sale of Shares.

(a)          In
reliance upon the representations, warranties and covenants contained in this
Agreement as of the date hereof and on the Closing Date, the Buyer agrees to
purchase the legal and beneficial ownership of the Shares from the Seller, and
the Seller as beneficial owner agrees to sell, transfer, convey, assign and
deliver the Shares to the Buyer on the terms and conditions set forth in this
Agreement.  Such sale, transfer,
conveyance, assignment and delivery of the Shares shall convey good and
marketable title to the Shares, free and clear of any and all Rights and
Encumbrances, and at such time the Shares will be fully paid and
non-assessable.  At the Closing the
Seller will deliver to the Buyer certificate(s) evidencing the Shares duly
endorsed in blank or with stock powers duly executed by the Seller.

(b)         The Buyer shall not be obliged to
complete the purchase of any of the Shares unless the purchase of all the
Shares is completed simultaneously in accordance with the provisions of this
Agreement.

(c)          The Seller waives all
rights of pre-emption over any of the Shares conferred upon it in any way and
shall procure that no later than Closing all rights of pre-emption and other
similar or comparable rights over and in respect of the Shares conferred upon
or held by any other person are waived so as to permit the sale and purchase of
such Shares hereunder.

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2.2.          Purchase Price.

(a)           The
purchase price to be paid to the Seller by the Buyer for the Shares shall be
Nine Hundred Eighty Three Thousand Six Hundred United States Dollars
($983,600.00) as may be adjusted at the Closing Date, and post-closing as
provided by this Agreement.  The purchase
price for the Shares shall be referred to as the “Interim  Purchase Price”.  The Interim Purchase Price shall be adjusted
to determine the Final Purchase Price, as provided in Section 2.3.

(b)           The
Interim Purchase Price shall be paid on the Closing Date by wire transfer of
immediately available funds to an account (or accounts) designated by the
Seller prior to the Closing.

(c)           The
Interim Purchase Price has been based on the assumption that the Company shall
be Cash-Free and Debt-Free as of the Closing Date except for 100,000€ cash
which shall remain with the Company.  To
the extent that the Company has Cash on their books as of the Closing Date in
excess of 100,000€, the Interim Purchase Price shall be increased on the
Closing Date by an amount corresponding to the excess (the “Cash Adjustment”).  To the extent that the Company has Debt as of
the Closing Date, the Interim Purchase Price shall be reduced on the Closing
Date by a corresponding amount (the “Debt
Adjustment”) and such Debt Adjustment shall be paid directly by the Buyer
to such creditor or creditors, but may be paid from Closing proceeds.

(d)           The
Interim Purchase Price shall be reduced by the total value of the Vacation
Accrual as of the Closing Date (the “Vacation Accrual
Adjustment”).

2.3.          Working Capital Adjustment.

(a)           The
Interim Purchase Price shall also be adjusted after the Closing Date by an
amount of dollars, positive or negative, as the case may be, equal to the
difference between the Target Working Capital and the Closing Working Capital
as shown on the audited Balance Sheet, which will be used to determine the
Final Purchase Price.

(b)           If
the Closing Working Capital on the audited Balance Sheet is:

(i)            less
than the Target Working Capital, an amount equal to the deficit shall be
payable from the Seller to the Buyer;

(ii)           greater
than the amount shown on the Target Working Capital, an amount equal to the
surplus shall be payable from the Buyer to the Seller;

(iii)          equal
to the amount shown on the Target Working Capital, no amount shall be due to
either party.

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The adjustment provided
for in this Section 2.3(b) shall be known as the “Working Capital Adjustment”. 
The Interim Purchase Price, after application of the Working Capital
Adjustment, the Vacation Accrual Adjustment and any Cash or Debt Adjustment shall
constitute the “Final Purchase Price”.

(c)           Within seventy-five
(75) calendar days following the
Closing Date, the Seller and Buyer, as applicable, shall cause the Company and
its auditor to prepare and deliver to the Buyer and Seller, in good faith, an audited
final balance sheet and closing statement setting forth the Working Capital
Adjustment in accordance with this Section 2.3 (the “Final
Closing Statement”).  This
audited final balance sheet and Final Closing Statement shall be prepared by
the Buyer, the cost of which shall be a Company expense, not chargeable back to
Seller.  Within thirty (30) calendar days
following the Buyer’s and Seller’s receipt of the Final Closing Statement, the
Buyer or Seller may object in good faith to the Working Capital Adjustment in
writing.  In the event of any such
objection, the Buyer and the Seller shall attempt to resolve their differences
by negotiation.  If such parties are
unable to do so within thirty (30) calendar days following receipt of the
objecting party’s objection, the Seller and the Buyer shall appoint a
regionally recognized accounting firm mutually acceptable to each of the Seller
and the Buyer, which shall, at the Seller’s and the Buyer’s joint expense,
review the Final Closing Statement and determine the Working Capital
Adjustment, if any, within thirty (30) calendar days of such appointment.  The Seller and the Buyer agree to cooperate
with such accounting firm and provide it with such information as it reasonably
requests to enable it to make such determination.  The finding of such accounting firm shall be
binding on the parties hereto.

(d)           Any amounts owed
hereunder shall be paid to the party owed the same by the party owing the same
by wire transfer of immediately available funds to an account designated by the
party owed the same no later than five (5) business days following the
determination by agreement of the Seller and the Buyer or by binding
determination of said accounting firm of the Working Capital Adjustment, and
such payment shall be accompanied by an additional payment of interest,
calculated with a 4% annual interest rate from the Closing Date to the date of
payment pursuant to this Section 2.3.

ARTICLE
III

CLOSING

3.1.          Closing Date.  The
closing of the transactions contemplated by this Agreement (the “Closing”) shall be held on August
31, 2006 at the offices of Barrett & McNagny LLP, 215 E. Berry Street, Fort
Wayne, Indiana 46802.

3.2           Closing Deliveries by the Seller.  At the Closing, each Seller shall execute,
where necessary or appropriate, and deliver to the Buyer each and all of the
following:

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(a)           duly executed share
transfer forms in respect of the Shares in favor of the Buyer or such person as
it may nominate, together with Share Certificates relative thereto or, in the
case of share certificates found to be missing, an indemnity in a form satisfactory
to the Buyer;

(b)           such waivers or
consents as are required to enable the Buyer and/or its nominees to be
registered as the holder of the Shares;

(c)           minutes of meetings
of the Boards of Directors of the Company which reflect the following:-

(i)            the share transfers
referred to at 3.2 (a) are approved (subject only to stamping);

(ii)           such persons as the
Buyer may nominate are appointed as directors, secretary and auditors of the
Company with immediate effect;

(iii)          all existing
mandates for the operation of bank accounts of the Company are revoked and new
mandates are issued giving authority to such person or persons as the Buyer may
nominate.

(iv)          the resignations
referred to at 3.2(e) are accepted;

(v)           the registered
office of the Company is changed to such address as the Buyer may specify to
the Seller in writing prior to Closing;

(d)           Reserved.

(e)           the written
resignations under seal of each Director and officer of the Company in a form
satisfactory to the Buyer confirming that such Director or officer has no
actual or contingent claim against the Company in respect of breach of
contract, compensation for loss of office or otherwise howsoever arising and
releasing the Company from any such claim now or in the future;

(f)            CG50A Clearance
Certificate under Section 980 of the Taxes Consolidation Act 1997;

(g)           a copy of the
Memorandum and Articles of Association of the Company certified by the
Secretary of the Company as a true, complete and accurate copy as at Closing;

(h)           the statutory books,
records and registers (complete and duly written up to date), common seal,
certificate of incorporation, certificates of incorporation on change of name,
if any, and all documents, contracts, licenses, agreements, insurance policies,
records, papers, correspondence files and books of trading and accounts of the
Company;

 12
 

 

(i)            all credit cards,
cheque-books, lodgement books and unused cheques of the Company;

(j)            copies of all
current bank mandates of the Company, together with the bank statements of the
Company as at the close of business on the last Business Day prior to Closing
and a reconciliation statement prepared by the Seller to show the position on
Closing, taking into account cheques unpresented and standing orders payable
since the date of such bank statements;

(k)           A duly executed written opinion
letter by counsel for the Seller, dated as of the Closing Date, addressed to
the Buyer;

(l)            Non-Disclosure and Non-Competition
Agreements for Christopher W. Huntington, Phillip Milidantri, and Levi Citarella;

(m)          Employment Agreement for Ed Kilgallen;

(n)           Escrow Agreement in the form of Exhibit
A, duly executed by each Seller;

(o)           Indemnification Agreement in the form
of Exhibit B, executed by each Seller;

(p)           all necessary third-party consents
necessary to operate the Business;

(q)           Asset Purchase Agreement executed by
Sister Company; 

(r)            Waiver and Release in the form of Exhibit
D, executed by each Seller and each director of Company; and

(s)           Title for automobile currently driven
by Ed Kilgallen; and

(t)            Such other documents and items as
are reasonably necessary or appropriate to effect the consummation of the
transactions contemplated hereby.

3.3           Closing Deliveries by the Buyer.  At the Closing, the Buyer shall execute,
where necessary or appropriate, and deliver to the Seller each and all of the
following:

(a)           Payment
of the Purchase Price in the manner set forth in Section 2.2 of this
Agreement;

(b)           Payment
to the Seller for any tax-related adjustments payable to Seller; 

 13
 

 

(c)           A
copy certified by the Secretary of the Buyer of the duly adopted resolutions of
the Board of Directors of the Buyer approving this Agreement, including the
Ancillary Agreements, and authorizing the execution and delivery of this
Agreement and the Ancillary Agreements, and the consummation of the
transactions contemplated hereby and thereby. 

(d)           Escrow
Agreement in the form of Exhibit A;

(e)           Indemnification Agreement in the form
of Exhibit B ;

(f)                                    Asset Purchase
Agreement executed by Sister Company; 

(g)           Such
other documents and items as are reasonably necessary or appropriate to effect
the consummation of the transactions contemplated hereby or which may be
customary under local law.

3.4                                 Post Closing.

(a)           The Buyer shall, as soon as practicable following Closing,
deliver to the Revenue Commissioners the share transfer forms referred to in
clause 3.2(a) above for assessment of stamp duty and shall pay the duty thus
assessed.   Prior to registration of such
duly stamped share transfer forms in the register of members of the Company,
the Seller shall co-operate in any manner required by the Buyer for the
convening, holding at short notice and conduct of general meetings of the
Company, shall execute promptly on request all proxy forms, appointments of a
representative, documents of consent to short notice and such like that the
Buyer may require and generally shall act in all respects as the nominee and at
the direction of the Buyer in relation to the Shares and all rights and
interests attaching thereto.  

(b)           The Seller and the Buyer shall, within five days of
Closing, give to the Company such notice as is required by Section 53 of the
Companies Act 1990.

ARTICLE 4

REPRESENTATIONS
AND WARRANTIES OF THE SELLER

As
an inducement for the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, each Seller jointly and severally represents
and warrants to the Buyer as of the date hereof and as of the Closing Date that
each and all of the following representations and warranties are true and
correct, except as fully and fairly set forth in the disclosure schedule dated
and delivered as of the date hereof by Seller to Buyer (the “Seller Disclosure
Schedule”), which is attached to this Agreement and is designated therein as
being the Seller Disclosure Schedule. The Seller Disclosure Schedule shall be
arranged in paragraphs corresponding to each representation and warranty set
forth in this Article IV. Each exception to a representation and warranty set
forth in the Seller Disclosure Schedule shall qualify the specific representation
and

 14
 

 

warranty which is
referenced in the applicable paragraph of the Seller Disclosure Schedule, and
no other representation or warranty.

4.1           Organization
and Good Standing.

(a)           The Company is an Ireland limited
company duly organized, validly existing and in good standing under the
Applicable Laws of the jurisdiction of its incorporation or formation, has all
requisite power to own, lease and operate its properties and to carry on its
business as now being conducted and as proposed to be conducted, and is duly
qualified to do business and is in good standing in each jurisdiction in which
it owns or leases property or conducts any business so as to require such
qualification.   The Company is licensed
or qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction in which, because of its business conducted
there or the nature of its assets or properties there, it could be required to
be so licensed or qualified, unless the lack of registration does not have a Material
Adverse Effect on the Business.

(b)           Seller has delivered to Buyer copies
of the organizational documents of the Company, as currently in effect.  All
documents and resolutions relating to the Company required to be filed by any
applicable legislation or regulation with the Registrar of Companies have been
duly filed, all statutory records required to be kept by the Company have been
properly kept and will be so kept until Closing and the Company has complied
with all provisions of the Companies Acts 1963-2001.

 (c)          Schedule 4.1(c) contains a complete and
accurate list for the Company of its jurisdiction of incorporation (or other
formation) and each foreign jurisdiction in which it is licensed or qualified
to transact business.

(d)           Schedule 4.1(d) contains a list of the
directors and officers of the Company.

(e)          
The Company does not own, directly or indirectly, any economic, voting or other
ownership interest in any Person.

(f)            The
ledger of the Company accurately and sufficiently records the Members from time
to time of the Company and the Company has received no notice of any intended
application or proceedings to rectify the said Register.

(g)           The minute books and
registers of the Company are accurate and up to date, with all necessary
signatures, and set forth all meetings and actions taken by the shareholders,
directors and any committees thereof, and properly record all corporate action
required by Applicable Laws to be reflected therein and no notice or allegation
that anything contained in the said minute books and registers is incorrect or
should be rectified has been received.

 15
 

 

(h)           No order has been
made or petition presented or resolution passed for the winding-up of the
Company, or to have an Examiner appointed thereto, no distress, execution,
sequestration, attachment or other process has been levied on any of its
assets, it has not stopped payment and is not insolvent, or unable to pay its
debts for the purposes of Section 214 of the Companies Act, 1963 or Section 2
of the Companies (Amendment) Act 1990, no encumbrancer has taken possession or
attempted to take possession or exercised or attempted to exercise any power of
sale in respect of the whole or any part of the undertaking, property, assets
or revenue of the Company, no receiver has been appointed or could be appointed
by any person over its business or assets or any part thereof, there is no
unfulfilled or unsatisfied judgment or court order outstanding against it and
there has been no delay by it in the payment of any obligation due for payment.

(i)            There are no
permanent or governing directors of the Company and the Company is not under
any liability to pay any sum whatsoever to any former director or governing
director.

(j)           With regard to the Companies Act
1990, the Company has not: (i) entered into any arrangement in breach of
Section 28 or Section 29 of the Act; (ii) made any loans or quasi loans (within
the meaning of Section 25 of the Act), entered into any credit transaction as
creditor or entered into any guarantee or indemnity or provided any security in
connection with a loan, quasi loan or credit transaction in breach of Section
31 of the Act; (iii)     been and is not
related to any other company for the purpose of Section 140 of the Act and is
not and will not at any time be liable to be subject to an order made under
that section by virtue of any Act (whether of commission or of omission) that
occurred prior to Closing; (iv) had a notice served on it by its auditors
pursuant to Section 185 or 194 of the Act; (v) been struck off and subsequently
restored to the Register pursuant to the provisions of Section 311(A) of the
1963 Act or otherwise pursuant to Companies Act, 1963-2001; (vi) entered into
any transaction or arrangement particulars whereof would, pursuant to Section
41 of the 1990 Act, require to be contained in the accounts prepared by such
company; or (vii) purchased or redeemed its own Shares or those of its holding
company or created treasury shares pursuant to the provisions of Part XI of the
Act.

4.2           Authority and Enforceability.

(a)           Each Seller has the right, requisite
power, capacity and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. 
Seller has duly executed and delivered this Agreement.  This Agreement constitutes the valid and
binding obligation of each Seller, enforceable against each Seller in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium or other similar Applicable Laws affecting
or relating to creditors’ rights generally, and (ii) the availability of
injunctive relief and other equitable remedies.

 16
 

 

(b)           Each Seller has the right, requisite
power, capacity and authority to enter into each Ancillary Agreement to which
he is, or specified to be, a party and to consummate the transactions
contemplated thereby.  Prior to the
Closing each Seller will have duly executed and delivered each Ancillary
Agreement to which he is, or specified to be, a party.  The Ancillary Agreements will constitute the
valid and binding obligation of each Seller thereto, enforceable against him in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium or other similar Applicable Laws affecting
or relating to creditors’ rights generally, and (ii) the availability of
injunctive relief and other equitable remedies.

4.3           No Conflicts; Consents.

(a)           Except as set forth on Schedule 4.3(a), the execution and
delivery of this Agreement by Seller does not, and the execution and delivery
of each Ancillary Agreement to which the Seller is, or specified to be, a
party, the performance by Seller of its obligations hereunder and thereunder
and the consummation by Seller of the transactions contemplated hereby and
thereby (in each case, with or without the giving of notice or lapse of time,
or both), will not, directly or indirectly,

(i)            contravene,
conflict with, or result in a violation of (A) any provision of the
organizational documents of the Company or (B) any resolution adopted by the
board of directors, the shareholders, or members of the Company, as the case
may be;

(ii)           contravene,
conflict with, or result in a breach or violation of, or constitute a default
under (or an event which, with or without notice, lapse of time or both, could
constitute a default) or result in the invalidity of, or accelerate the
performance required by or cause or give rise to any right of acceleration or
termination of any right or obligation pursuant to any agreement or commitment
to which any Seller or the Company is a party or is a beneficiary, or by which
any Seller or the Company (or any of their respective assets or properties) is
subject or bound;

(iii)          result
in the creation of, or give any third party the right to create, any
Encumbrance upon the Shares or any assets or properties of the Company;

(iv)          conflict
with any Applicable Laws to which any Seller, the Company or any assets or
properties of any of the foregoing are subject or give any Governmental Body or
other Person the right to challenge any of the transactions contemplated by
this Agreement or the Ancillary Agreements or to exercise any remedy, obtain
any relief under or revoke or otherwise modify any rights held under, any such
Applicable Laws;

 17
 

 

(v)           result
in the creation of any Liens upon any of the assets owned or used by the
Company, except for any such violations, defaults and events referred to in
Section 4.3(a)(ii) herein.

(vi)          terminate
or modify, or give any third party the right to terminate or modify, the
provisions or terms of any contract or agreement to which any Seller or the
Company is a party, or by which any Seller or the Company (or any of their
respective assets or properties) is subject or bound;

(vii)         result
in or give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under any contract or agreement
to which any Seller or the Company is a party or by which any of their
respective assets or Properties is subject or bound.

(b)           Schedule 4.3(b)
sets forth all consents, waivers, assignments and other approvals and actions
that are required in connection with the transactions contemplated by this
Agreement.  Except as set forth on Schedule 4.3(b) no authorization or
order of, registration, declaration or filing with, or notice to, any
Governmental Body or other Person, is required by or with respect to the
Company in connection with the execution and delivery of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated hereby
and thereby.

4.4           Financial Statements.

(a)           Schedule 4.4(a)
contains true and complete copies of the following financial statements of the
Company:

(i)       Audited Financial Statement for year
ended February 28, 2005 (the “Audited Financial Statements”); and

(ii)       Income
Statement and Balance Sheet dated July 31, 2006 (the “Interim Financial
Statements” and together with the Audited Financial Statements, the “Financial
Statements”).

(b)           The Financial Statements are true,
complete and correct and have been prepared in accordance with Companies Acts,
1963-2005 and other applicable statutes and
regulations and in accordance with Irish GAAP including (without limitation) the statements of standard accounting
practice of the Institute of Chartered Accountants in Ireland.  The Financial Statements have been applied
on a consistent basis throughout the periods involved, subject, in the case of
the Interim Financial Statements, to normal year-end adjustments (the effect of
which will not be materially adverse) and the absence of notes (that, if
presented, would not differ materially from those presented in the Audited
Financial Statements). The Financial Statements are based on the books and
records of the Company,

 18
 

 

and fairly present the financial condition of the Company as of the
respective dates they were prepared and the results of the operations of the
Company for the periods indicated.  The
balance sheet of the Company as of February 28, 2005 is referred to herein as
the “Balance Sheet” and the date thereof as the “Balance Sheet Date” and the
balance sheet of the Company as of July 31, 2006 is referred to herein as the “Interim
Balance Sheet” and the date thereof as the “Interim Balance Sheet Date.”  Seller maintains with respect to the Company
a standard system of accounting established and administered in accordance with
Irish GAAP.

(c)           True copies of the Financial
Statements and of the audited accounts for each financial year of the Company
preceding that which ended on the last accounts date have been laid before the
Company in general meeting and delivered to the Registrar of Companies in
compliance with the Companies Acts 1963-2001.

4.5           No Undisclosed Liabilities.  Except as set forth in Schedule 4.5, the Company has no liabilities, obligations or commitments of
any nature whatsoever, asserted or unasserted, known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured or otherwise (“Liabilities”),
except (a) those which are adequately reflected or reserved against in the
Balance Sheet as of the Balance Sheet Date, (b) those which have been incurred
in the ordinary course of the Business and consistent with past practice since
the Balance Sheet Date and which are not, individually or in the aggregate,
material in amount.  The prepaid expenses
on the Balance Sheet have been incurred solely for the benefit of the Company
and the Company will retain the benefits of such prepaid expenses after the
Closing Date.

4.6           Inventory.  Each item of Inventory (including, without
limitation, raw materials, supplies, work in process and finished goods) is (a)
free of any material defect or other deficiency, (b) of a quality, quantity and
condition useable and, as to finished goods, saleable in the ordinary course of
the Business and (c) properly stated on the Interim Balance Sheet (to the
extent existing on the date thereof) and on the books and records of the
Company at, the lesser of cost or fair market value.  None of such Inventory is obsolete and no
write-down of such Inventory has been made or should have been made in the
period since July 31, 2006.  The
quantities of each item of Inventory are not excessive and are reasonable in
the present circumstances of the Company. 
All of such Inventory is located at the facility of the Company and no
Inventory is held on a consignment basis.

4.7           Accounts Receivable.  The Accounts Receivable of the Business as
set forth on the Interim Balance Sheet or arising since the date thereof are,
to the extent not paid in full by the account debtor prior to the date hereof,
(a) valid and genuine, have arisen solely out of bona fide sales and deliveries
of goods, performance of services and other business transactions in the
ordinary course of the Business consistent with past practice, (b) not subject
to valid defenses, set-offs or counterclaims, and (c) collectible within 90
days after billing at the full recorded amount thereof less the recorded
allowance for collection losses on the Interim Balance Sheet or, in the case of
Accounts 

 19
 

 

Receivable arising
since the Interim Balance Sheet Date, the recorded allowance for collection
losses shown on the accounting records of the Business. The allowance for
collection losses on the Interim Balance Sheet and, with respect to Accounts
Receivable arising since the Interim Balance Sheet Date, the allowance for
collection losses shown on the accounting records of the Business, have been
determined in accordance with Irish GAAP and consistent with past practice. The
Accounts Receivable existing as of the Closing Date will be collectible within
90 days after billing at the full recorded amount thereof net of the reserves
shown on the accounting records of the Business as of the Closing Date (which
reserve shall be adequate and shall 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).

4.8           Taxes.

(a)           All Tax Returns required to have been
filed by or with respect to the Company have been duly and timely filed and
each such Tax Return correctly and completely reflects the Company’s Liability
for Taxes and all other information required to be reported thereon.  All Taxes owed by the Company (whether or not
shown on any Tax Return) have been timely paid.

(b)           There is no action or audit now
proposed, threatened or pending against, or with respect to, the Company in
respect of any Tax.  No Seller or
director or officer (or employee responsible for Tax matters) of the Company
expects any Governmental Body to assess any additional Taxes.  The Company is not the beneficiary of any
extension of time within which to file any Tax Return, nor has the Company made
(or had made on its behalf) any requests for such extensions.  No claim has ever been made by an authority
in a jurisdiction where the Company does not file Tax Returns that the Company
is or may be subject to taxation by that jurisdiction or that the Company must
file Tax Returns in any such jurisdiction. 
There are no Liens on any of the Shares or assets of the Company with
respect to Taxes.

(c)           The Company has withheld and timely
paid all Taxes required to have been withheld and paid and has complied with
all information reporting and backup withholding requirements incidental
thereto.

 20
 

 

(d)           Schedule 4.8(d)
lists all federal, state, local, and foreign income Tax Returns filed with
respect to each the Company for taxable periods ended on or after December 31,
2003 (ii) indicates those Tax Returns that have been audited, and (iii)
indicates those Tax Returns that currently are the subject of audit.   The Company has delivered to Buyer correct
and complete copies of all income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by the Company since
December 31, 2003.

(e)           The Company has not waived (or is not
subject to a waiver of) any statute of limitations in respect of Taxes nor has
it agreed to (nor is subject to) any extension of time with respect to a Tax
assessment or deficiency.

(f)            The Company’s unpaid Taxes (i) did
not, as of their Interim Balance Sheet Date, exceed their respective Liability
reserves for Taxes (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set forth on the face
of their respective Interim Balance Sheet (rather than in any notes thereto)
and (ii) do not exceed such reserves as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of
Sellers in filing their Tax Returns.

(g)           Reserved.

(h)           The Company is not a party to any Tax
allocation or sharing agreement. The Company (i) has not been a member of an
affiliated group filing a consolidated income Tax Return nor (ii) has no
Liability for the Taxes of any Person under Reg. §1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.  The Company is
not a party to any joint venture, partnership or other arrangement that is
treated as a partnership or similar entity for purposes of the applicable
income Tax Law.

(i)            The Company does not hold, and has
not at any time held, an investment in “United States Property” within the
meaning of Section 956(c) of the Code. 
The Company has not, nor at any time has been, a passive foreign
investment company within the meaning of Section 1297 of the Code and the
Company is not a shareholder, directly or indirectly, in a passive foreign
investment company.  The Company is not,
and has not at any time been, engaged in the conduct of a trade or business
within the United States, or treated as or considered to be so engaged.

(j)            The Company is not or at any time
has not been subject to (i) the overall foreign loss provisions of Section
904(f) of the Code or (ii) the recharacterization provisions of Section
952(c)(2) of the Code.

(k)           Each and all of the Irish tax
representations and warranties attached hereto as Annex “A,” incorporated
herein by reference, are true and correct, except as otherwise set forth in Schedule 4.8(k).

 21
 

 

4.9           Compliance with Law.

(a)           The Company has conducted, and is
conducting, the Business in compliance with all Applicable Laws.

(b)           No event has occurred and no
circumstances exist that (with or without the passage of time or the giving of
notice) may result in a violation of, conflict with or failure on the part of
the Company to conduct the Business in compliance with, any Applicable Law,
except for any such violations, conflicts or failures to comply that would not
in the aggregate be material to the Business taken as a whole.  The Company has not received notice regarding
any violation of, conflict with, or failure to conduct the Business in material
compliance with, any Applicable Law.

(c)           The Company has obtained and complied, in
all material respects, with all approvals necessary to conduct the Business and
be in compliance with Applicable Laws, including, but not limited to, all
permits and other approvals required to treat, transport, store, dispose of and
otherwise handle Hazardous Materials.

4.10         Business Authorizations.

(a)           The Company owns, holds or lawfully
uses in the operation of the Business all authorizations which are necessary
for it to conduct the Business as currently conducted or as proposed to be
conducted (the “Business Authorizations”) free and clear of all Liens, except
where the failure to own, hold or lawfully use any such Business Authorizations
would not in the aggregate be material to the Business taken as a whole.  Such Business Authorizations are valid and in
full force and effect.  All material
Business Authorizations, other than those listed in Schedule
4.21(b), are listed in Schedule 4.10(a).

(b)           No event has occurred and no
circumstances exist that (with or without the passage of time or the giving of
notice) may result in a violation of, conflict with, failure on the part of the
Company to comply with the terms of, or the revocation, withdrawal,
termination, cancellation, suspension or modification of any Business
Authorization. The Company has not received notice regarding any violation of,
conflict with, failure to comply with the terms of, or any revocation,
withdrawal, termination, cancellation, suspension or modification of, any
Business Authorization.  The Company is
not in default, nor has the Company received notice of any claim of default,
with respect to any Business Authorization.

4.11         Title to Personal Properties.

(a)           Except as otherwise set forth in Schedule 4.11(a), the Company has
good and transferable title to all Personal Property reflected as owned on the
Interim Balance Sheet (other than inventory sold in the ordinary course of the
Business since the date thereof), free and clear of all Liens.

 22

 

(b)           Schedule 4.11(b)
sets forth all leases under which Personal Property is leased.  All such leases are in full force and effect
and constitute valid and binding obligations of the other party(ies) thereto,
and to Seller’s Knowledge, none of the parties thereto, are in breach of any of
the terms of any such lease.

4.12         Condition of Tangible Assets.  All tangible property is structurally sound,
in good operating condition and repair (subject to normal wear and tear given
the use and age of such assets), are usable in the ordinary course of the
Business and conform to all Applicable Laws and Authorizations relating to
their construction, use and operation. 
There are no facts or conditions affecting such property that could
interfere in any material respect with the use or operation thereof as used or
operated for the 12 months preceding the date of this Agreement.

4.13         Real Property.

(a)           Schedule 4.13
contains (i) a list of all real property and interests in real property leased
by the Company (hereinafter referred to as the “Leased Real Property” or “Real
Property”), including a description of the lease terms (parties, term,
expiration date(s) and address).  There
are no interests in real property owned in fee by the Company.  The Real Property is in good and substantial repair and condition and fit for the purposes
for which it is presently used.

(b)           With
respect to Leased Real Property, Seller has delivered to Buyer a true and
complete copy of every lease and sublease pursuant to which the Company is a
party or by which it is bound (each, a “Lease”).  All statutory requirements as to registration
and stamp tax have been complied with. 
The Company has peaceful, undisturbed and exclusive possession of the
Leased Real Property.  The Company is not
in default in the performance of any material obligation under the Leases, nor
has an event occurred which, with the passage of time or the giving of notice
or both, would cause a material breach of or default under any such Lease.  Furthermore, to the Seller’s Knowledge, none
of the other parties to the Leases are in default in performance of its
material obligations thereunder.

(c)           The
uses for which the buildings, facilities and other improvements located on the
Real Property are zoned do not restrict, or impair, the use of the Real
Property for purposes of the Company or its Business.  There are not in force or required to be in
force any licenses required under any law which apply to the Real Property or
relate to or regulate any activities carried on therein which may adversely
affect the Buyer’s right to occupy and use the Real Property.

(d)           No Governmental Body having the power
of eminent domain over the Real Property has commenced or, to Seller’s
Knowledge, intends to exercise the power of eminent domain or a similar power
with respect to all or any part of the Real Property. There are no pending or,
to Seller’s Knowledge, threatened condemnation, fire, health, safety, building,
zoning or other land use regulatory proceedings, lawsuits or administrative
actions relating to any portion of the Real 

 23
 

 

Property or any other matters which do or may
adversely effect the current use, occupancy or value thereof.  Neither the Seller nor the Company has
received notice of any pending or threatened special assessment proceedings
affecting any portion of the Real Property.

(e)           The Real Property and all present
uses and operations of the Real Property comply in all material respects with
all Applicable Laws, covenants, conditions, restrictions, easements,
disposition agreements and similar matters affecting the Real Property and no
such use or operation is subject to planning conditions of an onerous or
unusual nature (including any of a personal or temporary nature).  The Real Property and its continued use,
occupancy and operation as used, occupied and operated in the conduct of the
Company do not constitute a nonconforming use and is not the subject of a
special use permit under any Applicable Law.

(f)            The Real Property is in suitable
condition for the conduct of the Business as currently conducted and as
proposed to be conducted.  The Company
has good and valid rights of ingress and egress to and from all Real Property
from and to the public street systems for all usual street, road and utility
purposes.

(g)           No Person other than the Company is
in possession of any of the Real Property or any portion thereof, and there are
no subleases, licenses, concessions or other agreements, written or oral,
granting to any Person other than the Company the right of use or occupancy of
the Real Property or any portion thereof. 
No easement, utility transmission line or water main located on the Real
Property adversely affects the use of the Real Property or any improvement on
the Real Property.

(h)           All water, sewer, gas, electric,
telephone and drainage facilities, and all other utilities required by any
Applicable Law or by the use and operation of the Real Property in the conduct
of the Business are installed to the property lines of the Real Property, are
connected pursuant to valid permits to municipal or public utility services or
proper drainage facilities, are fully operable and are adequate to service the
Real Property in the operation of the Business and to permit compliance with
the requirements of all Applicable Laws in the operation thereof.  No fact or condition exists which could
result in the termination or material reduction of the current access from the
Real Property to existing roads or to sewer or other utility services presently
serving the Real Property.

(i)            No planning contravention notices,
breach of condition notices, enforcement notices or stop notices have been
issued by any local planning authority in respect of the Real Property nor has
any other enforcement action (including the exercise of any right of entry)
been taken by any such authority and the Seller is not aware of any
circumstances which may lead to the same.

(j)            Compliance is being made and has at
all times been made with all applicable statutory and by-law requirements with
respect to the Real Property 

 24
 

 

and in particular (but without limitation) with
requirements as to fire precautions and means of escape in case of fire and
with requirements under legislation or common law, and to Seller’s Knowledge,
the Company will not be obliged to incur the expenditure of any substantial sum
of money within the next four years in connection with such compliance.

(k)           There are no compulsory purchase
notices, orders or resolutions affecting the Real Property and to the Seller’s
Knowledge, there are no circumstances likely to lead to any being made.

(l)            There are no closing demolition or
clearance orders affecting the Real Property and to the Seller’s Knowledge,
there are no circumstances likely to lead to any being made.

(m)          All premiums payable in respect of
insurance policies payable by the Company under any lease or other right to
occupy relating to the Real Property which have become due have been duly paid
and no circumstances have arisen which would vitiate or permit the insurers to
avoid such policies.

(n)           The Company does not have any
continuing liability in respect of any other property formerly owned or
occupied by the Company either as original contracting party or by virtue of
any direct covenant having been given on a sale or assignment to the Company or
as a guarantor of the obligations of any other person in relation to such
property.

(o)           The Company has duly discharged its
duties and performed its obligations under and in compliance with relevant
safety legislation including but not limited to the Safety Health and Welfare
at Work Act 1989 (the “SHW Act”) and all regulations, directions, notices and
orders made or served thereunder and has complied with any relevant code of
practice issued by the National Authority for Occupational Safety and Health
established pursuant to the SHW Act.

(p)           Neither the Company nor any of its
Real Properties are subject to any investigation or enquiry pursuant to the SHW
Act and no direction, notice or order has been served on the Company or any of
the Real Properties pursuant to the SHW Act and no application has been made to
court under the SHW Act for an order restricting or prohibiting the use of any
of the Real Properties or any part thereof, nor is any prosecution threatened
or pending in respect of any possible breach of the SHW Act or related
regulations.

4.14         Intellectual Property.

(a)           As used in this Agreement, “Intellectual
Property” means: (i) inventions (whether or not patentable), trade secrets,
technical data, databases, customer lists, designs, tools, methods, processes,
technology, ideas, know-how, source code, product road maps and other
proprietary information and materials (“Proprietary Information”); (ii)
trademarks and service marks (whether or not registered), trade names, logos,
trade dress and other proprietary indicia and all 

 25
 

 

goodwill associated therewith; (iii) documentation,
advertising copy, marketing materials, web-sites, specifications, mask works,
drawings, graphics, databases, recordings and other works of authorship,
whether or not protected by Copyright; (iv) computer programs, including any
and all software implementations of algorithms, models and methodologies,
whether in source code or object code, design documents, flow-charts, user
manuals and training materials relating thereto and any translations thereof
(collectively, “Software”); and (v) all forms of legal rights and protections
that may be obtained for, or may pertain to, the Intellectual Property set
forth in clauses (i) through (iv) in any country of the world (“Intellectual
Property Rights”), including all letters patent, patent applications,
provisional patents, design patents, PCT filings, invention disclosures and
other rights to inventions or designs (“Patents”), all registered and
unregistered copyrights in both published and unpublished works (“Copyrights”),
all trademarks, service marks and other proprietary indicia (whether or not
registered) (“Marks”), trade secret rights, mask works, moral rights or other
literary property or authors rights, and all applications, registrations, issuances,
divisions, continuations, renewals, reissuances and extensions of the
foregoing.

(b)           Schedule 4.14(b)
lists (by name, owner and, where applicable, registration number and
jurisdiction of registration, application, certification or filing) all Intellectual
Property that is owned by the Company (whether exclusively, jointly with
another Person or otherwise) (“Owned Intellectual Property”).  Except as otherwise described in Schedule 4.14(b), the Company owns
the entire right, title and interest to all Owned Intellectual Property free
and clear of all Liens.

(c)           Schedule 4.14(c)
lists all licenses, sublicenses and other agreements (“In-Bound Licenses”)
pursuant to which a third party authorizes the Company to use, practice any
rights under, or grant sublicenses with respect to, any Intellectual Property
owned by a third party, including the incorporation of any such Intellectual
Property into products of the Company and, with respect to each In-Bound
License, whether the In-Bound License is exclusive or non-exclusive.

(d)           Schedule 4.14(d)
lists all licenses, sublicenses and other agreements (“Out-Bound Licenses”)
pursuant to which the Company authorizes a third party to use, practice any
rights under, or grant sublicenses with respect to, any Owned Intellectual
Property or pursuant to which the Company grants rights to use or practice any
rights under any Intellectual Property owned by a third party and, with respect
to each Out-Bound License, whether the Out-Bound License is exclusive or
non-exclusive.

(e)           The Company (i) exclusively owns the
entire right, interest and title to each item of Intellectual Property as it is
currently conducted or as proposed to be conducted free and clear of Liens
(including the design, manufacture, license and sale of all products currently
under development or in production), or (ii) otherwise rightfully uses or
otherwise enjoys such Intellectual 

 26
 

 

Property pursuant to the terms of a valid and
enforceable In-Bound License that is listed in the Seller Disclosure
Schedule.  The Owned Intellectual
Property, together with the Company’s rights under the In-Bound Licenses listed
in the Disclosure Schedule (collectively, the “Company Intellectual Property”),
constitutes all the Intellectual Property used in or necessary for the operation
of the Business as it is currently conducted and as proposed to be conducted.

(f)            All registration, maintenance and
renewal fees related to Patents, Marks, Copyrights and any other
certifications, filings or registrations that are owned by the Company (“Registered
Items”) that are currently due have been paid and all documents and
certificates related to such Registered Items have been filed with the relevant
Governmental Body or other authorities in the United States, Ireland or other
foreign jurisdictions, as the case may be, for the purposes of maintaining such
Registered Items. There are no actions that must be taken by Buyer within 120
days after the date hereof, including the payment of any registration,
maintenance or renewal fees or the filing of any documents, applications or
certificates for the purposes of maintaining, perfecting or preserving or
renewing any Registered Items.  All
Registered Items are in good standing, held in compliance with all applicable
legal requirements and enforceable by the Company. All Patents that have been
issued to the Company are valid.

(g)           To Seller’s Knowledge there are no
challenges (or any basis therefore) with respect to the validity or
enforceability of any Owned Intellectual Property.  Schedule 4.14(g)
lists the status of any proceedings or actions before the United States Patent
and Trademark Office or any other Governmental Body anywhere in the world
related to any of the Owned Intellectual Property, including the due date for
any outstanding response by the Company in such proceedings.  The Company has not taken any action or
failed to take any action that could reasonably be expected to result in the
abandonment, cancellation, forfeiture, relinquishment, invalidation, waiver or
unenforceability of any Owned Intellectual Property.  Schedule 4.14(g) lists
all previously held Registered Items that the Company has abandoned, cancelled,
forfeited or relinquished during the 12 months prior to the date of this
Agreement.

(h)           None of the products or services currently
or formerly developed manufactured, sold, distributed, provided, shipped or
licensed by the Company, or which are currently under development, has
infringed or infringes upon, or otherwise unlawfully used or uses, the
Intellectual Property Rights of any third party.  The Company, by conducting the Business as
currently conducted or as proposed to be conducted, has not infringed or is not
currently infringing upon, or otherwise has not unlawfully used or is not
unlawfully using, any Intellectual Property Rights of a third party.  The Company has not received any
communication alleging that the Company has violated or, by conducting the
Business as currently conducted or as proposed to be conducted, would violate,
any Intellectual Property Rights of a third party nor, to Seller’s Knowledge,
is there any basis therefore.  No Action
has been instituted, or, to Seller’s 

 27
 

 

Knowledge, threatened, relating to any Intellectual
Property formerly or currently used by the Company and none of the Intellectual
Property is subject to any outstanding Order. To Seller’s Knowledge, no Person
has infringed or is infringing any Intellectual Property Rights of the Company
or has otherwise misappropriated or is otherwise misappropriating any
Intellectual Property.

(i)            With respect to the Proprietary
Information, the documentation relating thereto 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 special knowledge or memory of others.  The Company has taken commercially reasonable
steps to protect and preserve the confidentiality of all Proprietary
Information owned by the Company that is not covered by an issued Patent.  Any receipt or use by, or disclosure to, a
third party of Proprietary Information owned by the Company has been pursuant
to the terms of binding written confidentiality and non-use agreement between
the Company and such third party (“Nondisclosure Agreements”). True and
complete copies of the Nondisclosure Agreements, and any amendments thereto,
have been provided to Buyer. The Company is, and to Seller’s Knowledge, all
other parties thereto are, in compliance with the provisions of the
Nondisclosure Agreements.  The Company is
in compliance with the terms of all Contracts pursuant to which a third party
has disclosed to, or authorized the Company to use, Proprietary Information
owned by such third party.

(j)            All current and former employees,
consultants and contractors of the Company have executed and delivered, and are
in compliance with, enforceable agreements regarding the protection of
Proprietary Information and providing valid written assignments of all
Intellectual Property conceived or developed by such employees, consultants or
contractors in connection with their services for the Company (“Work Product
Agreements”). True and complete copies of the Work Product Agreements have been
provided to Buyer. No current or former employee, consultant or contractor or
any other Person has any right, claim or interest to any of the Owned
Intellectual Property.

(k)           No employee, consultant or contractor
of the Company has been, is or will be, by performing services for the Company,
in violation of any term of any employment, invention disclosure or assignment,
confidentiality or noncompetition agreement or other restrictive covenant or
any Order as a result of such employee’s or contractor’s employment with the
Company or any services rendered by such employee or contractor.

(1)           All Intellectual Property that has
been distributed, sold or licensed to a third party by the Company that is
covered by warranty conformed and conforms to, and performed and performs in
accordance with, the representations and warranties provided with respect to
such Intellectual Property by or on behalf of the Company for the time period
during which such representations and warranties apply.

 28
 

 

(m)          Except as set forth in Schedule 4.14(m), the execution and
delivery of this Agreement by Seller does not, and the consummation of the
transactions contemplated hereby (in each case, with or without the giving of
notice or lapse of time, or both), will not, directly or indirectly, result in
the loss or impairment of, or give rise to any right of any third party to
terminate or reprice or otherwise renegotiate the Company’s rights to own any
of its Intellectual Property or their respective rights under any Out-Bound
License or In-Bound License, nor require the consent of any Governmental Body
or other third party in respect of any such Intellectual Property.

4.15         Absence of Certain Changes or
Events.  Since the Balance Sheet Date:

(a)           there has not been any Material
Adverse Change in the condition (financial or otherwise), operations, prospects
or results of operations of the Company;

(b)           the Company has not amended or
changed, or proposed to amend or change, its organizational documents in a
manner that could be expected to delay the consummation of the transactions
contemplated by this Agreement;

(c)           the Company has not declared, set
aside or paid any dividend or other distribution (whether in cash, stock or
property) with respect to any equity security or debt security;

(d)           the Company has not (i) increased or
modified the compensation or benefits payable or to become payable by the
Company to any current or former directors, employees, consultants or
contractors of the Company, (ii) increased or modified any Pension Scheme made
to, for or with any current or former directors, employees or contractors of
the Company, or (iii) entered into any employment, severance or termination
agreement;

(e)           the Company has not sold, leased,
transferred or assigned any property or assets, except for (i) the sale of
Inventory, (ii) the grant of non-exclusive Out-Bound Licenses, and (iii) the
sale of obsolete Equipment, in each case in the ordinary course of the Business
consistent with past practice;

(f)            the Company has not incurred,
assumed or guaranteed any Indebtedness;

(g)           the Company has not mortgaged,
pledged or subjected to Liens any assets, properties or rights, except for
Liens arising under lease financing arrangements existing as of the Balance
Sheet Date;

(h)           the Company has not entered into,
amended, modified, canceled or waived any rights under, any Material Contract
and no Material Contract has been terminated or cancelled;

 29
 

 

(i)            the Company has not taken any action
outside the ordinary course of the Business;

(j)            there has not been any labor
dispute, other than individual grievances, or any activity or proceeding by a
labor union or representative thereof to organize any employees of the Company;

(k)           there has not been any violation of,
or conflict with, any Applicable Law or any Business Authorization;

(l)            the Company has not agreed, or
entered into any arrangement, to take any action which, if taken prior to the
date hereof, would have made any representation or warranty set forth in this
Article IV untrue or incorrect as of the date when made;

(m)          there has not been any material
damage, destruction or loss with respect to the assets, properties and rights
of the Company, whether or not covered by insurance;

(n)           the Company has not made any change
in the accounting practices;

(o)           the Company has not made any Tax
election, changed its method of Tax accounting or settled any claim for Taxes;

(p)           no
loan or advance or payment has been made or consideration given or transaction
effected falling within Sections 438 or 439 of the Taxes Consolidation Act
1997;

(q)           the Company has not disposed of or
acquired any asset in circumstances falling within Sections 547 or 550 of the Taxes
Consolidation Act, 1997, and is not entitled to any capital loss to which
Section 549 of the Taxes Consolidation Act 1997, will apply; and

(r)            the Company has not agreed,
whether in writing or otherwise, to do any of the foregoing.

4.16         Contracts.

(a)           Except as set forth in Schedule 4.16(a), the Company is
not party to, or bound by:

(i)            any Contract or series of related
Contracts for the purchase of materials, supplies, goods, services, equipment
or other assets that involves annual payments by the Company of $50,000 or
more;

(ii)           any Contract or series of related
Contracts for the sale by the Company of (A) materials, supplies, goods,
services, equipment or other assets, that involves a specified annual minimum
dollar sales amount

 30
 

 

of $50,000 or more, or (B) pursuant to which the
Company received payments of more than $50,000.

(iii)          any Contract that requires the Company
to purchase its total requirements of any product or service from a third party
or that contains “take or pay” provisions;

(iv)          any Contract or series of related
Contracts that (A) continues n over a period of more than six months from the
date hereof or a (B) involves payments to or by the Company exceeding $50,000,
other than arrangements disclosed pursuant to the preceding paragraphs (i) and
(ii);

(v)           any partnership, joint venture or
similar Contract;

(vi)          any distribution, dealer,
representative or sales agency Contract;

(vii)         any Lease;

(viii)        any Contract for the lease of personal
property which provides for payments to or by the Company;

(ix)           any Contract which provides for the
indemnification by the Company of any Person, the undertaking by the Company to
be responsible for consequential damages, or the assumption by the Company of
any Tax, environmental or other Liability;

(x)            any Contract with any Governmental
Body, including, but not limited to, state grants;

(xi)           any note, debenture, bond, equipment
trust, letter of credit, loan or other Contract for Indebtedness or lending of
money (other than to employees for travel expenses in the ordinary course of
the Business) or Contract for a line of credit or guarantee, pledge or
undertaking of the Indebtedness of any other Person;

(xii)          any Contract for any capital
expenditure or leasehold improvement in excess of $50,000;

(xiii)         any Contract which restrains the
ability of the Company to engage or compete in any manner or in any business;

(xiv)        any Out-Bound License or In-Bound
License;

(xv)         any Contract relating to the
acquisition or disposition of any material business (whether by merger, sale of
Shares, sale of assets or otherwise);

 31
 

 

(xvi)        any collective bargaining Contract or
other Contract with any labor organization, union or association;

(xvii)       that is an employment, consulting,
termination, service or severance Contract other than those that are terminable
at-will by the Company on less than 30 days’ notice; and

(xviii)      any Contract that is otherwise material to
the Company and not previously disclosed pursuant to this Section 4.16.

(b)           Each Contract required to be listed
in Schedule 4.16(a) (collectively, the
“Material Contract(s)”) is valid and enforceable in accordance with its
terms.  The Company has complied with and
is in compliance in all material respects with, and to Seller’s Knowledge, all
other parties thereto have complied with and are in compliance with, the
provisions of each Material Contract.

(c)           The Company is not, and to Seller’s
Knowledge, no other party thereto is, in material default in the performance,
observance or fulfillment of any obligation, covenant, condition or other term
contained in any Material Contract, and the Company has not given nor received
notice to or from any Person relating to any such alleged or potential default
that has not been cured.  No event has
occurred which with or without the giving of notice or lapse of time, or both,
may conflict with or result in a violation or breach of, or give any Person the
right to exercise any remedy under or accelerate the maturity or performance
of, or cancel, terminate or modify, any Material Contract.

(d)           The Company has delivered accurate
and complete copies of each Material Contract to Buyer.

(e)           All Contracts other than Material
Contracts (collectively, the “Minor Contracts”) are in all material respects
valid and enforceable in accordance with their terms.  The Company is not and, to Seller’s
Knowledge, no other party thereto is, in default in the performance, observance
or fulfillment of any obligation, covenant or condition contained therein, and
the Company has not given nor received notice to or from any Person relating to
any such alleged or potential default that has not been cured, except in either
case where such default would not and would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on operations,
prospects or results of operations of the Business or the Company.  No event has occurred which with or without
the giving of notice or lapse of time, or both, may conflict with or result in
a violation or breach of, or give any Person the right to exercise any remedy
under or accelerate the maturity or performance of, or cancel, terminate or
modify, any Minor Contract, except where such violation, breach, remedy,
acceleration, cancellation, termination or modification could not and could not
reasonably be expected to have, individually or in the aggregate, a material 

 32
 

 

adverse effect on the Purchased Assets or the
condition (financial or otherwise), operations, prospects or results of
operations of the Business or the Company.

4.17         Capitalization.

The capitalization and identity of each
shareholder of the Company, is as follows:

(a)           The authorized
Shares of the Company consists solely of One Hundred Thousand (100,000) shares
of common voting stock, €1 par value, of which One Hundred (100) shares are
issued and outstanding on the date hereof, and are owned beneficially and of
record by the Seller, free and clear of all Rights and Encumbrances.  Said Shares are divided as follows:  Fifteen (15) are owned by Christopher W.
Huntington, Fifteen (15) are owned by Phillip Milidantri and Seventy (70) are owned
by Levi Citarella.  The Shares are
validly issued and issued in compliance with Applicable Laws.  None of the Shares have been issued in
violation of the rights of any Person. 
Except as set forth on Schedule
4.17, (i) no preferred stock, bonds, debentures, notes, debt
instruments, evidences of Indebtedness or other securities of any kind, of the
Company is authorized, issued or outstanding, and (ii) there are no outstanding
or authorized options, warrants, rights, contracts, calls, preemptive rights,
other rights of any kind (absolute, contingent or otherwise), puts, rights to
subscribe, conversion rights or other agreements or commitments to which any Seller
is a party or which are binding upon any Seller providing for the issuance,
disposition or acquisition of any capital stock or securities of the
Company.  Except as set forth on Schedule 4.17, there are no
outstanding or authorized stock appreciation, phantom stock or similar rights
with respect to the Company.  Except as
set forth on Schedule 4.17,
there are no voting trusts, proxies or any other agreements or understandings
with respect to the voting of the Shares or ownership interests, as the case
may be, of the Company.  Except as set
forth on Schedule 4.17, the
Company is not subject to any obligation to repurchase or otherwise acquire or
retire any Shares or ownership interests, as the case may be.  There are no securities of the Company
reserved for issuance for any purpose.

(b)         A
copy of the memorandum and articles of association of the Company has been
furnished to the Buyer by or on behalf of the Seller and each said copy which
has been certified as a true copy is true and complete as of the date of this
Agreement and has embodied therein or annexed thereto a copy of every
resolution or agreement amending or modifying the same and fully sets out all
rights to each class of the share capital of the Company.

4.18         Litigation.

(a)           Except as set forth in Schedule 4.18, there is no action,
suit or proceeding, claim, arbitration, litigation or investigation (each, an “Action”),
(i) pending or, to Seller’s Knowledge, threatened against or affecting the
Company, or (ii) that challenges or seeks to prevent, enjoin or otherwise delay
the 

 33
 

 

transactions contemplated by this Agreement or the
Ancillary Agreements.  No event has
occurred or circumstances exist that may give rise or serve as a basis for any
such Action.  There is no Action against
any current or, to Seller’s Knowledge, former director or employee of the
Company with respect to which the Company has or is reasonably likely to have
an indemnification obligation.

(b)           There is no unsatisfied judgment,
penalty or award against or affecting the Company or any assets, properties or
rights.

4.19         Employee Benefits.

(a)           Except as set forth in Schedule 4.19(a),  the Company is not a
party to, and does not operate, any bonus, pension, profit sharing, share
option, deferred compensation, retirement, hospitalization insurance, medical
insurance or similar plan or practice, formal or informal, with respect to any
directors, officers, or employees or others and, is not bound by any agreement
whether written or oral with any director, officer or employee providing for a
specified period of notice of termination or providing for any fixed term of
employment, and the employment of each employee of the Company can be
terminated by the Company without notice and without liability for any
severance or termination pay or other similar payment.

(b)           There
are not in existence nor has any proposal been announced or commitment given to
promise made to establish any retirement, death or disability benefit scheme
for officers or employees (or any dependant of any of them) of the Company nor
is the Company under any obligation (whether or not legally binding,
established by custom or Approved) to or in respect of Employee (or any
dependant of any of them) of the Company with regard to retirement, death or
disability benefits pursuant to which the Company is or may become liable to
make payments and no pension or retirement or sickness gratuity is currently
being paid or has been promised by the Company to or in respect of any present
or former officer or employee (or any dependant of any of them) of the Company.

(c)           The consummation of the transactions
contemplated by this Agreement will not (i) entitle any current or former
director, employee or contractor of the Business to severance pay, unemployment
compensation, deferral compensation or any other payment, (ii) accelerate the
time of payment or vesting, or increase the amount of, compensation due to any
such director, employee, contractor or consultant, or result in the payment of
any other benefits to any Person or the forgiveness of any Indebtedness of any
Person.

4.20         Labor and Employment Matters.

(a)           Schedule 4.20(a)
sets forth (i) a list of all Employees (including title and position) and
contractors of the Company as of the date hereof, (ii) the compensation and
benefits of each such Employee and contractor, (iii) the length of service for
each Employee, including date of hire, (iv) the location of 

 34
 

 

employment for each Employee, (v) the gender and
citizenship of each Employee, (vi) the holiday entitlements of each Employee,
(vii) indication of whether the employee is on any type of leave, including,
but not limited to, medical or family leave (viii) dates of birth; (ix) job
description; and (x) particulars of remuneration;

(b)           There are not in existence any
service agreements with Directors or employees of the Company which cannot be
terminated by three months notice or less or (where not recorded in writing) by
reasonable notice without giving rise to any claim for damages or compensation
(other than the statutory redundancy payment or statutory compensation for
unfair dismissals).

(c)           There
are no amounts owing to any present or former officers or employees of the
Company, other than remuneration accrued (but not yet due for payment) in
respect of the calendar month in which this agreement is executed or for
reimbursement of business expenses incurred during such month, and none of them
is entitled to accrued holiday pay other than in respect of the Company’s
current holiday year.

(d)           The Company is not a party or subject
to any labor union or collective bargaining agreement in connection with the
Company.  There have not been since the
Company’s incorporation, and there are not pending or, to Seller’s Knowledge,
threatened, any labor disputes, work stoppages, requests for representation,
pickets, work slow-downs due to labor disagreements or any actions or
arbitrations that involve Employees. 
There is no unfair labor practice, charge or complaint pending,
unresolved or, to Seller’s Knowledge, threatened before the National Labor
Relations Board or Ireland’s equivalent. 
No event has occurred or circumstance exist that may provide the basis
of any work stoppage or other labor dispute in connection with the
Company.  The Company is not, and has not since its incorporation, been involved
in any labor, industrial or trade dispute or any dispute or negotiation with
any trade union or association of trade unions or organizations or body of
Employees.  The Company has complied with
all recommendations made by Industrial Relations Officers of the Labour
Relations Commission, by Equality Officers or by the Labour Court.

(e)           The Company has complied in all
material respects with each, and is not in violation in any material respect of
(i) any condition of service of its Employees; or (ii) any Applicable Law
relating to anti-discrimination and equal employment opportunities in
connection with the Company.  The Company
has maintained adequate and suitable records regarding the service of each
Employee and officer and there have been no violations of any Applicable Law
respecting the hiring, hours, wages, minimum notice or holiday entitlements,
occupational safety and health, employment, promotion, access to personal
retirement savings accounts, termination or benefits of any Employee or other
Person in connection with the Company. 
The Company has filed all reports, information and notices required
under any Applicable Law respecting the hiring, hours, wages, holiday
entitlements, occupational safety and health, employment, promotion, termination
or benefits of any Employee or other Person in connection with the Company, and

 35
 

 

will timely file prior to Closing all such reports,
information and notices required by any Applicable Law to be given prior to
Closing.

(f)            The Company has complied and is in
compliance in all material respects with the requirements of the Immigration
Reform and Control Act of 1986 and Ireland’s equivalent.  Schedule 4.20(f)
sets forth a true and complete list of all Employees working in Ireland who are
not Irish citizens, setting forth a description of the legal status under which
each such Employee is permitted to work in Ireland, and indicating which
Employees are required to have work permits. 
All Employees who are performing services for the Company in Ireland are
legally able to work in Ireland and will be able to continue to work for the
Company in Ireland following the consummation of the transactions contemplated
by this Agreement.  Copies of all work
permits required to be listed in Schedule 4.20(f) have been delivered to Buyer.

(g)           The Company has paid or properly
accrued in the ordinary course of the Business all wages and compensation due
to Employees, including all vacations or vacation pay, holidays or holiday pay,
sick days or sick pay, and bonuses.

(h)           Schedule 4.20(h)
sets out complete particulars of
negotiations and of present and former disputes between the Company and
Employees and of negotiations and of present and former disputes between such
Employees and the Seller.

(i)            The Company is not a party to any
Contract which restricts the Company from relocating, closing or terminating
any of its operations or facilities or any portion thereof.

 (j)           In
regards to employees receiving compensation in U.S. Dollars, the Company has
complied and is in compliance with Pay as You Earn (PAYE) and Pay Related
Social Insurance (PRSE) requirements.

(k)           No
liability has been incurred by the Company for breach of any contract of
service or for services or for compensation for wrongful or unfair dismissal or
discrimination or for failure to comply with an order for the reinstatement or
re-engagement of any employee or for failure to comply with a tribunal or court
order relating to an employee or former employee.

(l)            No gratuitous
payments have been made or promised by the Company in connection with the
actual or proposed termination or suspension of employment or variation of any
contract of employment of any present or former director or employee.

(m)          No Employment
Regulation Order affecting the terms of employment of any employees of the
Company has been made by the Labour Court under the Industrial Relations Acts,
1946 to 2001 or otherwise.

 36

 

(n)           Within a period of
one year preceding the date of this Agreement, the Company has not given notice
of any redundancies to the Minister for Enterprise Trade and Employment, or
started consultations with any trade union under Part II of the Protection of
Employment Act 1977 or Regulation 8 of the European Communities (Protection of
Employees on Transfer of Undertakings) Regulations 2003.

(o)           The
Company neither has introduced nor intends to introduce any short time working
scheme or any redundancy scheme or any similar scheme.

4.21         Environmental.

(a)           As used in this Agreement, the
following words and terms have the following definitions:

(i)            The term “Environmental Action”
means any claim, proceeding or other Action brought or threatened under any
Environmental Law or the assertion of any claim with respect to Pre-Closing
Environmental Liabilities.

(ii)           The term “Environmental Permit” means
any Authorization under Environmental Law and includes any and all Orders
issued or entered into by a Governmental Body under Environmental Law.

(iii)          The term “Hazardous Substances” means
all explosive or regulated radioactive materials or substances, hazardous or
toxic materials, wastes or chemicals, petroleum and petroleum products
(including crude oil or any fraction thereof), asbestos or asbestos containing
materials, and all other materials, chemicals or substances which are regulated
by, form the basis of liability or are defined as hazardous, extremely
hazardous, toxic or words of similar import, under any Environmental Law.

(iv)          The term “Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of Hazardous Substances into the
Environment.

(b)           To Seller’s Knowledge the Company has
obtained, and is in compliance with, all necessary permits, licenses,
certificates approvals and other authorizations (“Environmental Permits)
required for the lawful and safe conduct of the Business.  Each Environmental Permit, together with the
name of the Governmental Body issuing such Environmental Permit, is set forth
in Schedule 4.21(b).   All such Environmental Permits are valid and
in full force and effect and all renewal applications for such Environmental
Permits have been timely filed with the appropriate Governmental Body.  None of such Environmental Permits will be
terminated or impaired or become terminable as a result of the consummation of
the transactions contemplated by this Agreement.  The 

 37
 

 

Company has been, and is
currently, in compliance with all Environmental Laws and the Company has not
received notice alleging that the Company is not in such compliance with
Environmental Laws, in each case in connection with the Company.

(c)           There are no past, pending or, to
Seller’s Knowledge, threatened Environmental Actions against or affecting the
Company in connection with the Business, and Seller is not aware of any facts
or circumstances which could be expected to form the basis for any such
Environmental Action.

(d)           The Company has not entered into or
agreed to any Order, and is not subject to any Order, relating to compliance
with any Environmental Law or to investigation or cleanup of a Hazardous
Substance under any Environmental Law.

(e)           No Lien has been attached to, or
asserted against, any assets, Real Property or rights pursuant to any
Environmental Law, and, to Seller’s Knowledge, no such Lien has been
threatened.  To Seller’s Knowledge, there
are no facts, circumstances or other conditions that could be expected to give
rise to any Liens on or affecting the Real Property under Environmental Law.

(f)            To Seller’s Knowledge no part of the
Real Property has been contaminated to any degree (whether by the deposit
spillage disposal or leaching of any Hazardous Substance) and at present no
part appears nor is there any reason why it should appear on any register or
contaminated land maintained by any local authority and as a result of any
contamination no part of the Real Property represents a hazard to health or to
the environment and would not represent such a hazard were the Real Property
developed or otherwise put to use in ways differing from the current operations
carried on the Real Property.  There has
been no treatment, storage, disposal or Release of any Hazardous Substance at,
from, into, on or under any Real Property or any other property currently or
formerly owned, operated or leased by the Company.  No Hazardous Substances are present in, on,
about or migrating to or front any Real Property that could be expected to give
rise to an Environmental Action against the Company.

(g)           The Company has
properly disposed of all Hazardous Substances by delivering such substances to
a licensed hazardous waste removal contractor and has made all filings required
by federal, state or other governmental authorities relating to the storage,
use or disposal of Hazardous Substances, including, but not limited to, filings
relating to hazardous waste transportation or disposal.

(h)           There
are no circumstances which may give rise or have in the past given rise to any
liability whether under statute or at common law) in nuisance in respect of the
Properties or the operation of the said business and the carrying on of the
said business has not interfered in any way with the extraction and use of
ground water from aquifers and would not impede such extraction at any time in
the future.

 38
 

 

(i)            To Seller’s Knowledge there are no
aboveground tanks or underground storage tanks on, under or about the Real
Property.  Any aboveground or underground
tanks previously situated on the Real Property or any other real property
currently or formerly owned, operated or leased by the Company have been
removed in accordance with all Environmental Laws and no residual
contamination, if any, remains at such sites in excess of applicable standards.

(j)            To Seller’s Knowledge there are no
polychlorinated biphenyls (“PCBs”) leaking from any article, container or
equipment on, under or about the Real Property and there are no such articles,
containers or equipment containing PCBs in, at, on, under or within the Real
Property.

(k)           To Seller’s Knowledge there is no
asbestos containing material or lead based paint containing materials in at,
on, under or within the Real Property.

(l)            To Seller’s Knowledge the Company
has not transported or arranged for the treatment, storage, handling, disposal,
or transportation of any Hazardous Material to any off-site location which is
an Environmental Clean-up Site.

(m)          None of the Real Property is an
Environmental Clean-up Site.

(n)           Seller has provided to Buyer true and
complete copies of, or access to, all written environmental assessments,
materials, reports, data, analyses and compliance audits that have been
prepared by or on behalf of Seller with respect to the Real Property or any
other real property formerly owned, operated or leased by Seller in connection
with the Company.

(o)           Copies of all reports data
correspondence investigations surveys and other documents relevant to the
application of Environmental Law to the said business and the Real Property (including
without limitation environmental audits environmental impact assessments and
documents relating to hazardous or other waste) in the Company’s and the Seller’s
possession in whatever form or medium have been provided to the Buyer.

4.22         Insurance.

(a)           Schedule 4.22(a)(i) – (ii)
sets forth (i) an accurate and complete list of each insurance policy and
fidelity bond which covers the Business and the Company (the “Policies”) and
(ii) a list of all pending claims and the claims history for the Company during
the current year and the preceding three years (including with respect to
insurance obtained but not currently maintained).  There are no pending claims under any of such
Policies with respect to the Company as to which coverage has been questioned,
denied or disputed by the insurer or in respect of which the insurer has
reserved its rights.

 39
 

 

(b)           Schedule 4.22(b)
describes any self-insurance arrangement by or affecting the Company, including
any reserves thereunder, and describes the loss experience for all claims that
were self-insured in the current year and the preceding three years.

(c)           All Policies are issued by an insurer
that is financially sound and reputable, are in full force and effect and are
enforceable in accordance with their terms. 
Such Policies provide adequate insurance coverage for the Business, and
are sufficient for compliance with all Applicable Laws and Contracts to which
the Company is a party or by which it is bound.

(d)           All premiums due under the Policies
have been paid in full or, with respect to premiums not yet due, accrued.  The Company has not received a notice of
cancellation of any Policy or of any material changes that are required in the
conduct of the Business as a condition to the continuation of coverage under,
or renewal of, any such Policy. There is no existing default or event which,
with the giving of notice or lapse of time or both, would constitute a default
under any Policy or entitle any insurer to terminate or cancel any Policy with
respect to the Business.  The Company and
Seller have no Knowledge of any threatened termination of any Policy.

(e) The Company will keep
in place all existing policies thought the date of closing.

4.23         Product Warranty.

(a)           There are no warranties (express or
implied) outstanding with respect to any products currently or formerly
manufactured, sold, distributed, shipped or licensed (“Products”), or any
services rendered, by the Company, beyond that set forth in the standard
conditions of sale or service, copies of which are included in Schedule 4.23.

(b)           Each Product manufactured, sold,
distributed, shipped or licensed, or service rendered, by the Company have been
in conformity with all applicable contractual commitments and warranties. There
are no material design, manufacturing or other defects, latent or otherwise,
with respect to any Products and such Products are not toxic when used in
accordance with their intended use. Each Product that has been manufactured,
sold, distributed, shipped or licensed prior to Closing contains all, warnings
required by Applicable Law and such warnings are in accordance with reasonable
industry practice.

(c)           The Interim Balance Sheet reflects
adequate reserves (in accordance with Irish GAAP) for product design and
warranty claims and other damages in connection with any Product manufactured,
sold, distributed, shipped or licensed, or service rendered, by the Company on
or prior to the Interim Balance Sheet Date. The accounting records of the
Company will reflect adequate reserves (in accordance with Irish GAAP) for all
such claims in connection with 

 40
 

 

Products manufactured, sold, distributed, shipped or
licensed, or services rendered by, the Company on or prior to the Closing.

4.24         Suppliers and Customers.

(a)           Schedule 4.24
sets forth:

(i)            the Company’s 20 largest suppliers;

(ii)           each supplier who constitutes a sole
source of supply to the Business; and

(iii)          the Company’s 20 largest customers.

(b)           The relationships of the Business
with each supplier and customer required to be listed in Section 4.24 of the
Seller Disclosure are good commercial working relationships. No such supplier
or customer has canceled or otherwise terminated, or threatened to cancel or
otherwise terminate, its relationship with the Company.  The Seller or Company have not received
notice that any such supplier or customer may cancel, terminate or otherwise
materially and adversely modify its relationship with the Company or limit its
services, supplies or materials to the Company, either as a result of the
consummation of the transactions contemplated by this Agreement or otherwise.

4.25         Solvency.  The Company is not insolvent nor will it be
rendered insolvent by any of the transactions contemplated by this Agreement
and the Ancillary Agreements. “Insolvent” means, with respect to any Person,
that the sum of the debts and other probable Liabilities of such Person exceeds
the present fair saleable value of such Person’s assets.

4.26         Brokers or Finders.  Each Seller represents that no agent, broker,
investment banker or other firm or Person is or will be entitled to any broker’s
or finder’s fee or any other commission or similar fee in connection with any
of the transactions contemplated by this Agreement and the Ancillary
Agreements, except whose fees and expenses will be paid by Seller.

4.27         Completeness of Disclosure.  No representation or warranty by Seller in
this Agreement, and no statement made by Seller in the Seller Disclosure
Schedule, the Ancillary Agreements or any certificate or other document
furnished or to be furnished to Buyer pursuant hereto, or in connection with
the negotiation, execution or performance of this Agreement and the Ancillary
Agreements contains or will at the Closing contain any untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make any statement herein or therein
not misleading.  Except as specifically
set forth in this Agreement or the Seller’s Disclosure Schedule, there are no
facts or circumstances of which Seller is aware that have had or could be
expected to have, individually or in the aggregate, a material adverse effect
on the assets or the condition (financial or otherwise), operations, prospects
or results of operations of the Business or the Company.

 41
 

 

ARTICLE V

REPRESENTATIONS
AND WARRANTIES OF BUYER

Buyer
represents and warrants to Seller that each statement contained in this
Article V is true and correct as of the date hereof.

5.1           Organization and Good Standing.  Buyer is a corporation duly organized, validly
existing and in good standing under the Applicable Laws of the jurisdiction of
its incorporation and has the requisite corporate power to own, lease and
operate its properties and to carry on its business as now being conducted.

5.2           Authority and Enforceability.  Buyer has the requisite corporate power and
authority to enter into this Agreement and the Ancillary Agreements to which it
is a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Ancillary Agreements to
which Buyer is a party and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of Buyer. This Agreement has been, and the Ancillary: Agreements to
which Buyer is a party will be, duly executed and delivered by Buyer and,
assuming due authorization, execution and delivery by Seller constitutes the
valid and binding obligations of Buyer, enforceable against it in accordance
with their respective terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or other similar
Applicable Laws affecting or relating to creditors’ rights generally, and (b)
the availability of injunctive relief and other equitable remedies.

5.3           Litigation.  There is no Action pending or, to the
knowledge of Buyer, threatened against, Buyer which (a) challenges or seeks to
enjoin, alter or materially delay the consummation of the transactions
contemplated by this Agreement, or (b) would reasonably be expected to have a
material adverse effect on Buyer.

5.4           Brokers or Finders.  Buyer represents, as to itself and its
Affiliates, that no agent, broker, investment banker or other firm or Person is
or will be entitled to any broker’s or finder’s fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement and the Ancillary Agreements.

5.5.          Investment Representations. 
The Buyer
understands that the Shares have not been registered under the Securities Act
of 1933, as amended, or under the securities laws of any jurisdiction, by
reason of reliance upon certain exemptions.

ARTICLE
VI

COVENANTS
OF BUYER AND SELLER

6.1           Public Announcements.  Neither Buyer nor Seller shall issue any
press releases or otherwise make any public statements with respect to the
transactions contemplated by this Agreement; provided, however, that Buyer may,
without such 

 42
 

 

approval, make
such press releases or other public announcement as it believes are required by
the New York Stock Exchange or any other securities Laws.

6.2.          Non-Solicitation of Employees.  Each Seller agrees that for a period commencing on the Closing Date and
expiring on the second anniversary of the Closing Date, Seller will not, nor
will any of his Affiliates, without the written consent of Buyer, directly or
indirectly, for his own account or on behalf of any other Person, (i) hire any
person who is an officer or employee of the Company or (ii) induce or attempt
to induce any such officer or employee of the Company to leave his or her
employment with the Company.  Nothing in
this paragraph shall prohibit an individual Seller from hiring the other
individual Seller(s) as employees for any venture that does not compete with
Buyer, Company or the respective Affiliates of each.

6.3.          Non-Solicitation or Interference with Customers and
Suppliers.  Each Seller agrees that for the period
commencing on the Closing Date and expiring on the fifth anniversary of the
Closing Date, Seller will not, nor shall any of his Affiliates, without the
written consent of Buyer, directly or indirectly, for his own account or on
behalf of any other Person, solicit, accept orders from, divert, take away or
attempt to take away any of the customers or suppliers of the Company or the
business or patronage of any such customers or suppliers or in any way
interfere with, disrupt or attempt to disrupt any then existing relationships
between the Company, on the one hand, and any of its customers or suppliers or other
Persons with whom it deals, on the other.

6.4.          Non-Disclosure and Non-Competition. 
Each Seller will enter into a Non-Disclosure and Non-Competition
Agreement to be executed and delivered at Closing (“Non-Competition Agreements”).

6.5.          Confidential Information; Non-Disparagement.  The Seller shall not
at any time use or Disclose to or for the benefit of any Person other than
Buyer and the Company, any information, knowledge or data relating to the
business of Buyer or the Company (including, without limitation, information
relating to accounts, financial dealings, transactions, recipes, formulae,
know-how, distribution methods, intangibles, customer lists, pricing lists,
processes, plans, proposals and trade secrets) whether or not marked or
otherwise identified as confidential or secret. 
The Seller shall not, directly or indirectly, make any statements or
take any actions which in any way disparage or which could reasonably be
expected to harm the reputation and/or goodwill of Buyer or the Company.

6.6.          Preservation of and Access to Records.  The Buyer shall preserve or cause the Company to preserve all books and
records of the Company for a period of six (6) years after the later of Closing
Date, or the filing date of any Company tax return due post-closing or any
later date of retention required by Applicable Law; provided, however,
the Buyer may destroy any part or parts of such records upon obtaining written
consent of the Seller for such destruction, which consent may be withheld in
the Seller’s absolute discretion.  Such
records shall be made available to the Seller and its representatives at all
reasonable times during normal business hours of the Company 

 43
 

 

during said retention period
with the right at the Seller’s expense to make abstracts from and copies
thereof.

6.7.          Acknowledgments.  Each Seller acknowledges that, in view of
the nature of the business of the Company and the business objectives of Buyer
in entering into this Agreement and the contemplated transactions, the
provisions contained in this Agreement are reasonably necessary to protect the
legitimate business interests of Buyer and that any violation of such
provisions will result in irreparable injury to Buyer and the Company for which
damages will not be an adequate remedy. 
Each Seller therefore acknowledges that, if any such provisions are
violated, Buyer and the Company shall be entitled to preliminary and injunctive
relief against each Seller as well as to an equitable accounting of earnings,
profits and other benefits arising from such violation, this being in addition
to any other remedy to which they are entitled at law or in equity.

ARTICLE 7

TAX MATTERS

The following provisions shall govern the allocation
of responsibility as between the Buyer and the Seller for certain Tax matters
following the Closing Date:

7.1.          Tax Returns.

(a)           Seller shall pay all Taxes payable with respect to the
Company for all periods ending on or prior to the Closing Date or the portion
of a period up to the Closing Date that includes (but does not end on) the
Closing Date, including all Taxes (i) imposed on or payable by the Company with
respect to any taxable period or portion thereof that ends on or before the
Closing Date, (ii) imposed on or payable by the Company under Treas.
Reg. §1.1502-6 (or any similar state, local or foreign law) by reason of
the Company being included in any consolidated, affiliated, combined or unitary
group, and (iii) relating to any payments required to be made after the Closing
Date under any Tax indemnity, Tax sharing or Tax allocation agreement (whether
or not in writing) entered into prior to the Closing Date.  Seller shall be entitled to any refund of
Taxes of the Company with respect to Taxes of the Company for all periods ending
on or prior to the Closing Date.

(b)           Buyer shall prepare or cause to be prepared and file or
cause to be filed all Tax Returns for the Company for all periods ending on or
prior to the Closing Date which are filed after the Closing Date.  The costs associated with preparation shall
be split equally between Buyer and Seller. 
A reasonable time before any such Tax Return is due to be filed, Buyer
shall provide a draft to Sellers’ Representative for review.  If Sellers’ Representative disagrees with any
item on the return, Buyer and Sellers’ Representative shall confer and seek to
reach agreement, and, if they cannot agree, the matter shall be referred to an
independent certified public accounting firm jointly selected by Buyer and
Sellers’ Representative, and the decision of that firm shall be final and
binding on Buyer and Sellers.  The fees
and expenses of such independent 

 44
 

 

certified public accounting firm shall be
paid by the party whose aggregate estimate of the disputed amount or amounts,
as the case may be, differs most greatly from the determination of such
independent certified public accounting firm.

(c)           Buyer and Seller shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing
of Tax Returns and any audit, litigation or other proceeding with respect to
Taxes.  Such cooperation shall include
the retention and (upon the other party’s request and at the expense of the
requesting party) the provision of records and information reasonably relevant
to any such audit, litigation, or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. 
Buyer and Seller agree (A) to retain all books and records with respect
to Tax matters pertinent to the Company relating to any taxable period
beginning before the Closing Date until expiration of the statute of
limitations (and, to the extent notified by Buyer or Seller, any extensions
thereof) of the respective taxable periods, and to abide by all reasonable
record retention agreements entered into with any taxing authority, and (B) to
give the other party reasonable written notice prior to destroying or
discarding any such books and records and, if the other party so requests.  The Buyer or Seller, as the case may be,
shall allow the other party to take possession of such books and records.  Buyer and Seller further agree, upon request,
to use their best efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including with respect to
the transactions contemplated hereby).

(d)           Except as set forth in Section 3.4(a) herein, all
transfer, documentary, sales, use, stamp, registration and other such Taxes and
fees (including any penalties and interest) as a result of the consummation of
the transactions contemplated herein shall be paid by Seller when due, and
Seller shall, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees.

7.2.          Controversies.

(a)           The
Buyer shall promptly notify the Seller in writing upon receipt by the Buyer or
any Affiliate of the Buyer (including the Company after the Closing Date) of
written notice of any inquiries, claims, assessments, audits or similar events
with respect to Taxes relating to a taxable period ending prior to the Closing
Date for which the Seller may be liable under this Agreement (any such inquiry,
claim, assessment, audit or similar event, a “Tax Matter”).  The
Seller, at its sole expense, shall have the authority to represent the
interests of the Company with respect to any Tax Matter before any taxing
authority, any other governmental agency or authority or any court and shall
have the sole right to control the defense, compromise or other resolution of
any Tax Matter, including responding to inquiries, filing Tax Returns and
contesting, defending against and resolving any assessment for additional Taxes
or notice of Tax deficiency or other adjustment of Taxes of, or relating to, a
Tax Matter.  Neither the Buyer nor any of
its Affiliates shall enter into any settlement of or otherwise compromise any
Tax 

 45
 

 

Matter that affects or may affect the Tax Liability of the Seller and
the Company of the foregoing for any period ending after the Closing Date,
which includes a portion of a period beginning before the Closing Date and
ending after the Closing Date (the “Overlap
Period”), without the prior written consent of the Seller, which
consent shall not be unreasonably withheld, delayed or conditioned.  The parties hereto shall keep the other fully
and timely informed with respect to the commencement, status and nature of any
Tax Matter.

(b)           Except
as otherwise provided in this Section 7.2, the Buyer shall have the sole
right to control any audit or examination by any taxing authority, initiate any
claim for refund or amend any Tax Return, and contest, resolve and defend against
any assessment for additional Taxes, notice of Tax deficiency or other
adjustment of Taxes of, or relating to, the income, assets or operations of the
Company for all taxable periods; provided, however, that the
Buyer shall not, and shall cause its Affiliates (including the Company) not to,
enter into any settlement of any contest or otherwise compromise any issue with
respect to the portion of the Overlap Period ending on or prior to the Closing
Date without the prior written consent of the Seller, which consent shall not
be unreasonably withheld, delayed or conditioned.

ARTICLE 8

PERFORMANCE FOLLOWING THE CLOSING DATE

The following covenants and agreements are to be
performed after the Closing by the parties and shall continue in effect for the
periods respectively indicated or, where no indication is made, until
performed:

8.1.          Further Acts and Assurances.  Buyer and Seller shall execute such documents
and other instruments, and take such further actions as may be reasonably
required or desirable to carry out the provisions of this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. Upon the terms and subject to the conditions hereof, Buyer and Seller
shall each use its respective reasonable best efforts to take or cause to be
taken all actions and to do or cause to be done all other things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement and the Ancillary Agreements.  From time to time after the Closing, at Buyer’s
request, Seller shall execute, acknowledge and deliver to Buyer such other
instruments of conveyance and transfer and will take such other actions and
execute and deliver such other documents, certifications and further assurances
as Buyer may reasonably require.

8.2           Reserved.

8.3.          Indemnification of Officers and Directors of the Company.

(a)           Indemnification.  After the Closing, the Company will, and the
Buyer will cause the Company to: 
(i) indemnify, defend and hold harmless the 

 46
 

 

present officers and directors (collectively, the “Director Indemnified Parties” and individually, a “Director Indemnified Party”) in respect of acts or omissions
occurring on or prior to the Closing Date to the extent provided under
Applicable Law or under the organizational documents of the Company; and
(ii) advance expenses as incurred by such officers and directors to the
fullest extent permitted under Applicable Law or under the organizational
documents of the Company, whichever is greater, in each case as in effect on
the date hereof; provided, that such indemnification and advancement of
expenses shall be subject to any limitation imposed from time to time under
Applicable Law.

(b)           No
Claims.  There is not pending, nor,
to the Seller’s Knowledge Threatened claims as described in Section 8.3(a)
for indemnification by any Director Indemnified Party.

(c)           Insurance
Proceeds.  If the Company provides
indemnification and/or advancement of expenses as provided for in Section 8.3(a)
above, the Company shall be entitled to all of the proceeds of any insurance
providing coverage under any policies maintained by the Seller or the Company
for such acts or omissions prior to the Closing Date.

(d)           Third
Party Beneficiaries.  Notwithstanding
any contrary provision set forth in this Agreement or any Ancillary Agreement,
the provisions of this Section 8.3 are intended for the benefit of, and
shall be directly enforceable by, each of the Director Indemnified Parties,
their heirs and personal representatives.

8.4.          Continued Insurance Coverage.  The
Buyer will cause the Company to maintain general and product liability
insurance policies, reasonable in both scope and amount as determined in its
sole discretion, for a period of three (3) years from the Closing Date.

ARTICLE 9

MISCELLANEOUS

9.1.          Notices.  All notices, demands and other
communications provided for hereunder shall be in writing and shall be given
(i) by personal delivery, (ii) via e-mail or facsimile transmission
(receipt confirmed, with follow up transmittal within 48 hours by (iii) or (iv)
which follows), (iii) by nationally recognized overnight courier
(prepaid), or (iv) by certified or registered first class mail, postage
prepaid, return receipt requested, sent to each party, at its and its
representative’s address as set forth below or at such other address or in such
other manner as may be designated by such party or the respective
representative in a written notice to each of the other parties:

 47

 

If to the Buyer:                                                                Symmetry
Medical International Inc.

220 West Market Street

Warsaw, IN 46580

E-Mail:  fred.hite@symmetrymedical.com

Fax
No.:  574-267-4551

Attention:  Fred
L. Hite, Chief Financial Officer

With a copy to:                                                             Barrett
& McNagny LLP

215 East Berry Street

Fort Wayne, IN  46802

E-Mail:  sjt@barrettlaw.com

Phone:  260-423-8812

Fax
No.:  260-423-8920

Attention: 
Samuel J. Talarico, Jr., Esq.

If to the Seller:                                                                 Christopher W.
Huntington

P.O. Box 199

Highland Mills, New York
10930

E-Mail:  Chris@everest-metal.com

Fax No.: 845-369-8947 

Phillip Milidantri

11 Northern Trail

Ramsey, New Jersey 07448

E-Mail:
milidantri@yahoo.com

Fax No.:  845-369-8947

Levi Citarella

2 Chapel Road

Mahwah, New Jersey 07430

E-Mail:                                   

Fax No.: 845-369-8947

With a copy to:                                                             Huntington
Bailey, LLP 

312 Kinderkamack Road 

Westwood, New Jersey 07675 

E-Mail: rrh@huntingtonbailey.com

Phone (201) 666-8282 

Fax (201) 666-9625

Attention:
Russell R. Huntington, Esq.

 48
 

 

9.2.          Amendments and Waivers.

(a)           Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement, or
in the case of a waiver, by the party against whom the waiver is to be effective.

(b)           No failure or delay by any party in
exercising any right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

(c)           To the maximum extent permitted by
Applicable Law, (i) no waiver that may be given by a party shall be applicable
except in the specific instance for which it was given and (ii) no notice to or
demand on one party shall be deemed to be a waiver of any obligation of such
party or the right of the party giving such notice or demand to take further
action without notice or demand.

9.3           Expenses.  Each party shall bear its own costs and
expenses in connection with this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby, including all legal, accounting,
financial advisory, consulting and all other fees and expenses of third
parties, whether or not the transactions contemplated by this Agreement are
consummated.

9.4           Successors and Assigns.  This Agreement may not be assigned by either
party hereto without the prior written consent of the other party; provided
that, without such consent, Buyer may transfer or assign this Agreement, in
whole or in part or from time to time, to one or more of its Affiliates, but no
such transfer or assignment will relieve Buyer of its obligations hereunder.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective executors, heirs, personal representatives, successors and assigns.

9.5           Governing Law.  This Agreement and Schedules hereto shall be
governed by and interpreted and enforced in accordance with the Laws of the
State of Indiana, without giving effect to any choice of Law or conflict of
Laws rules or provisions (whether of the State of Indiana or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the State of Indiana.

9.6           Consent to Jurisdiction.  Each party irrevocably submits to the
exclusive jurisdiction of (a) United States District Court of the Northern
District of Indiana, Fort Wayne Division, and (b) the Allen County Superior Court
for the purposes of any Action arising out of this Agreement or any transaction
contemplated hereby.  Each party agrees
to commence any such Action either in the United States District Court of the
Northern District of Indiana, Fort Wayne Division or if such Action may not be
brought in such court for jurisdictional reasons, in the Allen County Superior
Court.  Each party further agrees that
service of any process, summons, notice or document by registered mail to 

 49
 

 

such party’s
respective address set forth above shall be effective service of process for
any Action in both the United States District Court of the Northern District of
Indiana, Fort Wayne Division, and the Allen County Superior Court with respect
to any matters to which it has submitted to jurisdiction in this Section
9.6.  Each party irrevocably and
unconditionally waives any objection to the laying of venue of any Action
arising out of this Agreement or the transactions contemplated hereby in (i)
the United States District Court of the Northern District of Indiana, Fort
Wayne Division, or (ii) the Allen County Superior Court, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such Action brought in any such court has been brought in
an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS OR THE
ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF AND THEREOF.

9.7           Counterparts.  This Agreement may be executed in any number
of counterparts, and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. The parties
agree that the delivery of this Agreement, and the delivery of the Ancillary
Agreements and any other agreements and documents at the Closing, may be
affected by means of an exchange of facsimile signatures with original copies
to follow by mail or courier service.

9.8           Third Party Beneficiaries.  No provision of this Agreement is intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.

9.9           Entire Agreement.  This Agreement, the Ancillary Agreements, the
Schedules and the other documents, instruments and agreements specifically
referred to herein or therein or delivered pursuant hereto or thereto set forth
the entire understanding of the parties hereto with respect to the transactions
contemplated by this Agreement. All Schedules referred to herein are intended
to be and hereby are specifically made a part of this Agreement. Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement, except for the Confidentiality Agreement which shall continue in
full force and effect in accordance with its terms.

9.10         Captions.  All captions contained in this Agreement are
for convenience of reference only, do not form a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.

9.11         Severability.  Any provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining 

 50
 

 

provisions hereof,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

9.12         Specific Performance.  Buyer and Seller each agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed by them in accordance with the terms hereof and that each
party shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at Law or equity.

9.13         Interpretation.

(a)           The meaning assigned to each term
defined herein shall be equally applicable to both the singular and the plural
forms of such term and vice versa, and words denoting either gender shall
include both genders as the context requires. Where a word or phrase is defined
herein, each of its other grammatical forms shall have a corresponding meaning.

(b)           The terms “hereof,” “herein” and “herewith”
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

(c)           When a reference is made in this
Agreement to an Article, Section, paragraph, Exhibit or Schedule, such
reference is to an Article, Section, paragraph, Exhibit or Schedule to this
Agreement unless otherwise specified.

(d)           The word “include”, “includes”, and “including”
when used in this Agreement shall be deemed to be followed by the words “without
limitation”, unless otherwise specified.

(e)           A reference to any party to this
Agreement or any other agreement or document shall include such party’s
predecessors, successors and permitted assigns.

(f)            Reference to any Law means such Law as
amended, modified, codified, replaced or reenacted, and all rules and
regulations promulgated thereunder.

(g)           The parties have participated jointly
in the negotiation and drafting of this Agreement and the Ancillary Agreements.
Any rule of construction or interpretation otherwise requiring this Agreement
or the Ancillary Agreements to be construed or interpreted against any party by
virtue of the authorship of this Agreement or the Ancillary Agreements shall
not apply to the construction and interpretation hereof and thereof.

[SIGNATURE
PAGE TO FOLLOW]

 51
 

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by duly authorized representatives as of the day,
month and year first above written.

	
  SELLER:

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  SYMMETRY MEDICAL

  
	
  By:

  	
  /s/ Christopher
  W. Huntington

  	
   

  	
  INTERNATIONAL INC.

  
	
  CHRISTOPHER W.
  HUNTINGTON

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Phillip
  Milidantri

  	
   

  	
  By:

  	
  /s/ Fred L. Hite

  
	
  PHILLIP
  MILIDANTRI

  	
  Name:

  	
  Fred L. Hite

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
  By:

  	
  /s/ Levi
  Citarella

  	
   

  	
   

  
	
  LEVI
  CITARELLA

  	
   

  
								

 

 52
 

 

ANNEX “A”

Irish Tax Warranties

1.             Returns

The Company has duly, and
within any appropriate time limits, made all returns, to all relevant tax
authorities and has maintained all records required to be maintained for tax
purposes; all such information was and remains complete and accurate in all
material respects and all such returns were and remain complete and accurate in
all material respects and were made on a proper basis and do not reveal any
transactions which may be the subject of any dispute with any tax
authority.  All amounts due on any such
returns have been paid.  Seller has
delivered copies of all such returns to Buyer.

2.             Disputes,
Investigations, Notices

The Company is not and has not been involved in any dispute with any tax
authority nor has it been the subject of any investigation, audit or other
visit by any tax authority.

To Seller’s Knowledge, in relation to the Company there is no planned
investigation, audit or other visit by any tax authority and there are no facts
which might cause such an investigation, audit or other visit to be instituted.
Neither the Company nor Seller has waived any statute of limitations or
otherwise agreed to extend any period for collection in respect of any amount
due any tax authority.

A relevant person has not communicated in writing particulars of any
offence or offences to the Company under section 1079 of the Taxes
Consolidation Act, 1997 (hereinafter referred as the “1997 Act”) or under
similar provisions of a relevant jurisdiction.

3.             Penalties,
interest

Since the date of
incorporation, neither the Company nor any director or officer of the Company
(in his capacity as such) has paid or become liable to pay, and there are no
circumstances by reason of which it or they may become liable to pay to any tax
authority, any penalty, fine, surcharge or interest in respect of tax
(including in respect of any failure to make any return, give any notice or
supply any information to any relevant tax authority, or any failure to pay tax
on the due date for payment).

4.                                       Consents, clearances

No transaction in respect of which any formal consent or clearance was
required or sought from any tax authority has been entered into or carried out
by the Company without such consent or clearance having first been properly 

 53
 

 

obtained and all information supplied to any tax authority or other
appropriate authority in connection with the obtaining of any such consent or
clearance fully and accurately disclosed.

Any transaction for which such consent or clearance was obtained has
been carried out only in accordance with the terms of such consent or clearance
and the application on which the consent or clearance was based and at a time
when such consent or clearance was valid and effective; and no facts or
circumstances have arisen since any such consent or clearance was obtained
which would cause the consent or clearance to become invalid or ineffective.

5.                                       Carry Forward of Losses

There
has been no change in the ownership of the Company nor any major change in the
nature of conduct of the trade or Business carried on by the Company nor has
any other event or series of events occurred before Closing which might cause
the disallowance of the carry forward or back of losses.

6.                                       Company Residence

The Company is and has at
all times been resident in the country in which it is incorporated for tax
purposes and is not and has not been treated as resident in any other
jurisdiction for any tax purpose (including any double taxation arrangement).

7.                                       No Tax avoidance

The Company has not committed any act nor made any omission which might
constitute an offence under s1078 of the 1997 Act or under similar provisions
in a relevant jurisdiction.

The Company has not entered into nor been a party to any schemes or
arrangements designed partly or wholly for the purpose of avoiding
taxation.  The Company has not been
involved in any “tax avoidance transaction” within the meaning of section 811
of the 1997 Act (or any other similar provisions of a relevant jurisdiction)
and no provisions of that section (or of the similar provisions in a relevant
jurisdiction) apply to the Company in respect of any event (whether or not
involving the Company) which took place before Closing or in respect of any
series of events (whether or not such events or any of them involve the
Company) taking place partly before Closing and partly after Closing.

None of the provisions of Part 33 Chapter 2 of the 1997 Act would apply
to any transactions entered into by the Company.

8.                                      Corporation Tax

All corporation tax returns have been properly prepared in accordance
with the provisions of the 1997 Act.

 54
 

 

All
amounts deducted by the Company in arriving at its profits for taxation
purposes, and included in its returns made to the Revenue Commissioners, were
incurred wholly and exclusively for the purposes of the Company’s trade.

All plant and machinery and industrial buildings in respect of which the
Company has claimed capital allowances have satisfied the requirements of the
relevant legislation entitling the Company to claim capital allowances thereon
and no circumstances have arisen which could result in any such allowance
previously made being withdrawn.

Any machinery or plant provided for use for the purposes of the trade of
the Company is used wholly and exclusively for the purposes of the trade of the
Company.

The provisions of section 317(3) of the 1997 Act do not apply to any
expenditure incurred by the Company.

The Company has not made nor received a payment for group relief, which
may be liable to be refunded in whole or in part.

The Company has not claimed a tax credit under section 766 or Section
766A of the 1997 Act, in respect of research and development expenditure.

The Company has not paid remuneration to its directors in excess of such
amount as will be deductible in computing the taxable profits of the Company.

9.                                       Dividend Withholding Tax (“DWT”)

The Company has complied
with all its obligations under Chapter 8A of the 1997 Act.

10.                                 Capital Gains Tax

The Company has not made any claim under
section 597 1997 Act.

The Company has not been a party to or involved in any share for share
exchange nor any scheme of reconstruction or amalgamation such as are mentioned
in sections 583 to 588 or section 615 of the 1997 Act under which shares or
debentures have been issued or any transfer of assets effected.

The Company has not entered into any transaction which has, will or may
give rise to a charge to tax under the provisions of the 1997 Act relating to
companies’ capital gains which have not been included in the Company’s tax
returns.

The Company has not entered into any transactions in the nature of
mergers, divisions, transfer of assets or exchanges of shares with a company of

 55
 

 

another member sate as a result of which it could be assessed to tax
under Part 21 of the 1997 Act.

The Company has not entered into any transaction as a result of which it
could be assessed to tax under Part 22 Chapter 1 or Chapter 2 of the 1997 Act.

There have been no claims under section 538 of
the 1997 Act.

No tax liability will arise in the Company under Section 623 1997 Act,
as a consequence of the Company ceasing to be part of a group of companies as
defined in Section 616 of the 1997 Act.

11.                                 Value added Tax

For the purposes of this
Warranty the expression “VAT” means value added tax or any similar sales or
turnover tax of any relevant jurisdiction, and “VAT legislation” means any
relevant enactments in relation to VAT (including enactments relating to
similar sales or turnover taxes in any relevant jurisdiction) and all notices,
provisions and conditions made or issued pursuant to same including the terms
of any agreement reached with any relevant tax authority, and any concession
referred to in the Disclosure Letter.

In relation to the
Company:

it is a taxable person for the purposes of the Value Added Tax Act 1972
and is registered for VAT. The Company has filed VAT returns and has accounted
for all liabilities in a timely manner and has kept all records required under
the VAT Act 1972.

The Company has no outstanding VAT liabilities and the Seller has no
Knowledge of the existence of any circumstances that would trigger the need for
a voluntary disclosure or result in an additional liability in the event of a
Revenue audit.

12.                                 PAYE/Social Welfare

For the purposes of this sub-paragraph, PAYE and social welfare means
tax imposed under the relevant legislation or regulations in Ireland or similar
enactments or regulations in a relevant jurisdiction.

The Company is not in arrears with its payments or returns required
under regulations made under section 986 of the 1997 Act (PAYE regulations) or
liable to any abnormal or non-routine payment or any forfeiture or penalty or
to the operation of any penal provisions due to non-compliance with the said
regulations.

 56
 

 

The Company has complied in all respects with Part II, Chapter II of the
Social Welfare (Consolidation) Act 1993, Health Contributions Act 1979, Youth
Employment Agency Act 1981 and any regulations made under those Acts or under
similar enactments of any relevant jurisdiction and has maintained full,
complete, correct and up to date records appropriate or requisite for the
purposes thereof and has not committed any offence under section 213 or section
214 of the Social Welfare (Consolidation) Act 1993 and has made all
notifications required to be made under the Social Welfare (Consolidation) Act
1993 and any other regulations and is not liable to any abnormal or other
payment or any forfeiture or penalty or to the operation of any penal
provisions due to non-compliance with the said Acts and/or regulations.

The
Company has not availed of the Income Tax (Employments) Regulations 1989 (S.I.
No. 58 of 1989) whereby an employer may make remittances of PAYE deducted from
his employees at longer intervals than the normal monthly remittance basis.

13.                                 Stamp/Capital Duty

For the purposes of this sub-paragraph, stamp duty or capital duty
refers to duties imposed under the Stamp Duties Consolidation Act 1999 and
similar provisions in a relevant jurisdiction.

All documents in the possession or under the control of the Company
which attract stamp duty have been properly stamped.

No relief, exemption or reduction has been obtained from companies’
capital duty or stamp duty which (i) has become liable to forfeiture or (ii)
may be forfeited in the future.

Except as set forth in Section 3.4(a) of the Agreement, all capital
and/or stamp duty howsoever arising or payable has been paid by the Company and
there is no outstanding liability or interest in respect of same.

14.                                 Capital Acquisitions Tax

       The Company has no
unsatisfied liability to Capital Acquisitions Tax.

       All returns required to be
filed by the Company under the provision of the Capital Acquisitions Tax
Consolidation Act, 2003 have been timely and accurately filed by the Company.

       The Company has not entered
into or taken any steps the object of which is a transaction which comes within
section 90 of the Finance Act 1989.

15.                                 U.S. Real Property Interest.  The
Company does not hold and has never held any U.S. real property interest, as
such is described in Treas. Reg. § 1.897-2(b)

 57
 

 

STOCK PURCHASE AGREEMENT

EXHIBITS AND
SCHEDULES

	
  Exhibits

  	
   

  
	
  Exhibit A

  	
  Escrow Agreement

  
	
  Exhibit B

  	
  Indemnification
  Agreement

  
	
  Exhibit C

  	
  Not Used

  
	
  Exhibit D

  	
  Waiver and Release

  
	
  Schedules

  	
   

  
	
  4.1(c)

  	
  Jurisdiction

  
	
  4.1(d)

  	
  Officers &
  Directors

  
	
  4.3(a)

  	
  Conflicts

  
	
  4.3(b)

  	
  Consents

  
	
  4.4(a)

  	
  Financial Statements:
  Audited & Interim

  
	
  4.5

  	
  Undisclosed Liabilities

  
	
  4.8(d)

  	
  Taxes

  
	
  4.8(k)

  	
  Irish Taxes

  
	
  4.10(a)

  	
  Business Authorizations

  
	
  4.11(a)

  	
  Personal Property:
  Liens

  
	
  4.11(b)

  	
  Personal Property:
  Leases

  
	
  4.13

  	
  Real Property

  
	
  4.14(b)

  	
  Intellectual Property

  
	
  4.14(c)

  	
  In-Bound Licenses

  
	
  4.14(d)

  	
  Out-Bound Licenses

  
	
  4.14(g)

  	
  IP
  Litigation/Previously Held

  
	
  4.14(m)

  	
  IP Conflict/Consent

  
	
  4.16(a)(i)

  	
  Contracts: Purchases

  
	
  4.16(a)(ii)

  	
  Contracts: Sales

  
	
  4.16(a)(iii)

  	
  Contracts: Requirements

  
	
  4.16(a)(iv)

  	
  Contracts: 6+ Months

  
	
  4.16(a)(v)

  	
  Contracts:
  Partnership/Joint Venture

  

 

 58
 

 

 

	
  4.16(a)(vi)

  	
  Contracts: Distribution/Dealer

  
	
  4.16(a)(vii)

  	
  Contracts: Lease

  
	
  4.16(a)(viii)

  	
  Contracts: Personal
  Property Leases

  
	
  4.16(a)(ix)

  	
  Contracts:
  Indemnification

  
	
  4.16(a)(x)

  	
  Contracts: Government

  
	
  4.16(a)(xi)

  	
  Contracts: Indebtedness

  
	
  4.16(a)(xii)

  	
  Contracts: Capital
  Expenditure

  
	
  4.16(a)(xiii)

  	
  Contracts:
  Non-Competition

  
	
  4.16(a)(xiv)

  	
  Contracts: Licenses

  
	
  4.16(a)(xv)

  	
  Contracts: Acquisition
  or Disposition

  
	
  4.16(a)(xvi)

  	
  Contracts: Collective
  Bargaining

  
	
  4.16(a)(xvii)

  	
  Contracts: Employment

  
	
  4.16(a)(xviii)

  	
  Contracts: Other
  Material

  
	
  4.17

  	
  Capitalization

  
	
  4.18

  	
  Litigation

  
	
  4.19(a)

  	
  Employee Benefits

  
	
  4.20(a)

  	
  Employees &
  Independent Contractors

  
	
  4.20(f)

  	
  Employee Citizenship

  
	
  4.20(h)

  	
  Worker’s Compensation
  Claims

  
	
  4.21(b)

  	
  Environmental Permits

  
	
  4.22(a)(i)

  	
  Insurance Policies

  
	
  4.22(a)(ii)

  	
  Insurance Claims

  
	
  4.22(b)

  	
  Self Insurance
  Arrangements

  
	
  4.23

  	
  Warranties

  
	
  4.24(a)(i)

  	
  Material Suppliers

  
	
  4.24(a)(ii)

  	
  Sole Source Suppliers

  
	
  4.24(a)(iii)

  	
  Material Customers

  

*All exhibits and
schedules have been omitted pursuant to Item 601(b)(2) of regulation S-K, but
will be furnished to staff upon request.

 59
 

 

 

	
  Exhibits

  

 

 60Exhibit 10.1

 

CONSULTING AGREEMENT

 

This Consulting Agreement
(this “Agreement”) is made on August 29th, 2006, by and
between WinWin Gaming, Inc., a Delaware corporation (“Client”), and
Calico Capital Management, LLC, a Delaware limited liability company (“Consultant”).

 

1.                                      Engagement
of Consultant. Client hereby engages
Consultant to render consulting services to Client on a non-exclusive basis and
on the terms and for the consideration specified herein. As such, Consultant
will familiarize itself to the extent it deems necessary and appropriate with
the business, operations, condition (financial and otherwise) and prospects of
the Client and will provide advice on the capital structure of the Client,
financing options, types of financial instruments to be offered, and the likely
market segment which the financial instruments are suitable. The Consultant may identify
possible investors interested in providing capital to the Client or otherwise
participating in a Transaction (as defined below) pursuant to terms to be
negotiated by and among such possible investors and the Client (without the
involvement of the Consultant), and, at the option of Consultant, will provide
consulting services with respect to any Transaction. If the Consultant, after
becoming familiar with potential transactions of the Client, declines to render
advice to the Client with respect to a particular Transaction, Consultant shall
not enter into any other engagement with a third party with respect to such
Transaction. Client understands that no particular result is promised or can be
guaranteed by Consultant in rendering the services for any particular matter or
with respect to any Transaction. Consultant undertakes to render the services
competently and with professional skill. Client will provide Consultant with
such factual information and materials as Consultant may require to perform such
consulting services. Client shall determine the scope of the work to be
performed, but after having agreed to perform such services, Consultant
shall determine the means, manner and method of performing these services. For
purposes of this Agreement, a “Capital Transaction” shall mean any
private placement of any securities of Client (including debt, equity or any
derivative or convertible securities) with investors identified by Consultant
and any other investors who participate in such transaction through the direct
or indirect efforts of Consultant (“Consultant Identified Investors”). For
purposes of this Agreement, an “M&A Transaction” shall mean (i) any
acquisition of outstanding capital stock or control of the outstanding capital
stock or all or substantially all of the assets of companies made by the Client
by one or more Consultant Identified Investors or (ii) any merger,
consolidation, tender or exchange offer, leveraged buyout, acquisition or sale
of substantially all of Client’s assets or equity interests, recapitalization
involving the distribution of cash, securities or property to Client’s equity
holders or similar transactions involving all or a substantial part of the
business, assets or equity interests of Client and/or its affiliates in one or
more transactions. A “Transaction” shall mean any Capital Transaction or
a M&A Transaction and any additional matters identified in advance and mutually
agreed to in writing by Consultant and Client.

 

Consultant is not a registered “broker” or “dealer” as such terms are
defined in Section 3(a)(4) and 3(a)(5) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and will not act to effect
any transactions in securities for the account of Client. With respect thereto
and notwithstanding anything set forth herein to the contrary, in connection
with any Transaction, Consultant will not engage in any of the following
activities: (a) participate in the negotiation of terms and conditions of
the sale and purchase of any securities of Client; (b) assist Client in
the distribution of materials relating to the sale of any securities of Client;
(c) prepare any analysis or provide any advice to any potential investors
regarding the benefits or potential return relating to the purchase of any
securities of Client; (d) directly assist Client or any prospective
investor of securities of Client with the completion of a Transaction; (e) facilitate
the sale, exchange or transfer of securities of Client or any handling of any
funds received from the potential investors for any securities of Client, (f) discuss
the details of a proposed Transaction with a potential investor, and (g) make
recommendations to a potential investor with respect to a Transaction.

 

 

Client understands and agrees that Consultant may retain a
broker/dealer to assist Consultant in certain aspects of a Transaction. In
addition, Client understands and agrees that if Client requests Consultant to
undertake services causing Consultant to become or to be deemed a “broker-dealer”,
then investors might have a right of rescission or an action for damages with
respect to Transactions in which the Consultant is deemed to be a
broker-dealer.

 

2.                                      Term;
Termination.

 

2.1.                              Term. The term of
this Agreement shall commence on the date hereof and shall continue until the twelve
month anniversary of the date set forth above (the “Initial Term”). This
Agreement will automatically renew for unlimited consecutive additional three (3) month
periods unless either party provides written notice of non-renewal to the other
party at least thirty (30) days prior to the expiration of the Initial Term or
any renewal period thereafter as the case may be (the Initial Term and
such renewal period, if any, shall be referred to herein as the “Term”).

 

2.2.                              Termination. Upon
termination of this Agreement, except as otherwise provided herein, Client’s
sole responsibility to Consultant shall be to pay Consultant for any unpaid
fees or other consideration earned pursuant to this Agreement.

 

3.                                      Compensation;
Reimbursement.

 

3.1.                              Signing Fee. Within ten (10) business
days of executing this Agreement, Client shall issue to Consultant 1.0 million
shares of its common stock. The Consultant shall have the right to allocate
this ownership stake as it finds necessary in the course of providing services
for Client.

 

3.2.                              Additional
Payments. To the extent that the Consultant successfully
assists in the closing of a Transaction, an additional payment, either in cash
or in additional shares of common stock or common stock warrants, will become due
to the Consultant (the “Milestone Payment”). It is understood that the Client
and Consultant will create a separate arrangement to this Agreement, mutually
agreed upon in good faith, to govern the size and form of the Milestone
Payment.

 

3.3.                              Registration of
Securities. If, at any time or from time to time, Client shall
determine to register any of its equity securities, either for its own account
or the account of a stockholder, Client shall promptly (but in no event less
than thirty (30) days prior to registration) give Consultant written notice
thereof; and shall include in such registration (and any related qualifications
including compliance with Blue Sky laws), and in any underwriting involved
therein, all shares of common stock held by Consultant, as specified in a
written response(s) by Consultant, made within 20 days after receipt of the
written notice of registration from Client. Notwithstanding any other provision
of this Section 3.5, if the registration by Client is for a registered
public offering involving an underwriting and the managing underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the percentage of shares of securities to be registered for
sale by Client and Consultant shall be equally reduced. If the registration by
Client is for a registered public offering involving an underwriting,
Consultant agrees that it shall (i) not effect any public sale or
distribution (including sales pursuant to Rule 144) of equity securities
of Client or any securities convertible into or exchangeable or exercisable for
such securities and (ii) provide upon request, customary lock-up agreements
for itself and its affiliates by which they agree not to sell any of their
shares of common stock for a period of 180 days from the effective date of the
registration statement, or for such other length of time determined by the
managing underwriter. In addition to the rights set forth above, Consultant
shall be entitled to request, at any time and in any number of requests, that
Client file a registration statement

 

2

 

on
Form S-3 (or any successor form to Form S-3) for an offering of
shares of common stock of Client held by Consultant having an aggregate market
value (net of underwriters’ discounts and commissions) of at least $500,000 and
the Client is a registrant entitled to use Form S-3 to register the shares
of common stock for such an offering, Client shall use its commercially
reasonable efforts to cause such shares of common stock to be registered for
the offering on such form and to cause such shares of common stock to be
qualified in such jurisdictions as Consultant may reasonably request. If
such offer is to be an underwritten offering, the underwriter shall be selected
by Consultant.

 

3.4.                              No Reduction
Due to Other Advisors. No fee payable to any other financial
advisor either by Client or any other entity shall reduce or otherwise affect
the compensation, fees, payments or reimbursements payable hereunder to
Consultant.

 

4.                                      Work
Product. Consultant shall promptly
and fully disclose to Client in writing all Work Products (as defined below),
and the entire right, title and interest to all such Work Products (including,
without limitation the entire right, title and interest to any renewals,
reissues, extensions, substitutions, continuations, continuations in part, or
divisions that may be filed with respect to the Work Products) shall be
Client’s exclusive property and all Work Products developed by Consultant are
hereby assigned to Client. Consultant will, at Client’s expense, give Client
all assistance reasonably required to perfect, protect, and use the Work
Products. The obligations of Consultant pursuant to this Section 4 shall
survive for the one (1) year period immediately following termination of
this Agreement. As used herein, “Work Product” means any work product,
improvement, discovery, design, work or idea (whether patentable or not and
including those which may be subject to copyright protection, trademark
protection or other intellectual property rights protection) generated,
conceived, created or reduced to practice by Consultant alone or in conjunction
with others, during or after working hours, that relates directly or indirectly
to Client’s or its subsidiaries’ businesses or to Client’s actual research or
development.

 

5.                                      Representations
and Warranties of Client. Client agrees to cooperate
with Consultant and will furnish to, or cause to be furnished to, Consultant
all information and data concerning the Client (the “Information”) which
Consultant reasonably deems appropriate in connection with the services to the
Client as provided herein and will provide Consultant with access to the Client’s
officers, directors, employees and advisors. The Client represents and warrants
that all Information made available to Consultant by the Client with respect to
any Transaction included or incorporated by reference into a related private
placement memorandum or prospectus will be complete and correct in all material
respects as of the date such Information is provided, and as of the closing
date of the related Transaction, and will not be misleading or violate the
anti-fraud provisions of the Exchange Act in any material respect, and that any
projections, forecasts or other Information provided by the Client to
Consultant will have been prepared in good faith and will be based upon
reasonable assumptions and projections. The Client agrees to promptly notify
Consultant if the Client believes that any Information which was previously
provided to Consultant has become materially misleading. The Client
acknowledges and agrees that in rendering its services hereunder, Consultant
will be using and relying on the Information (and information available from
public sources and other sources deemed reliable by Consultant) without
independent verification thereof or independent appraisal or evaluation of the Client
or any party to a Transaction. Consultant does not assume responsibility for
the accuracy or completeness of the Information. If all or any portion of the
business of the Client is engaged in through subsidiaries or other affiliates,
the references in this paragraph to the Client will, when appropriate, be
deemed also to include all such subsidiaries or other affiliates.

 

6.                                      Indemnification. Client agrees
to indemnify and hold harmless the Consultant and its affiliates and their
respective directors, officers, managers, attorneys, finders, agents,
representatives, advisors, stockholders, members and employees, and each
person, if any, who controls Consultant within the meaning of the Securities
Act of 1933, as amended (the “Securities Act”) and the Exchange Act
(collectively, the “Consultant Indemnified Parties”) in accordance with
the provisions for indemnification

 

3

 

and
contribution set forth in Attachment “A” hereto, which is incorporated
by reference in and made a part of this Agreement as if fully set forth
herein.

 

7.                                      Advertisements. With the prior
written consent of Client, which shall not be unreasonably withheld, Consultant
shall have the right to place advertisements in mailings and financial and
other newspapers and journals at its own expense describing its services
hereunder to Client relating to any consummated Transaction and using Client’s
logo, slogan, trademark, and/or service mark.

 

8.                                      Confidentiality.

 

8.1.                              Restrictions on
Consultant. Consultant recognizes that its relationship with
Client will give it access to non-public proprietary information, confidential
information and trade secrets. Consequently, during the Term of this Agreement
and for the two (2) year period immediately thereafter, Consultant will
not use or disclose for itself or for others (except persons specifically
designated by Client) any Confidential Information. “Confidential
Information” shall include but not be limited to, any information
concerning Client’s processes, products, services, inventions, purchasing,
accounting, marketing, selling methods and techniques, research and
development, computer programs, purchasing information, ideas and plans for
development, historical financial data and forecasts, long range plans and
strategies, customer lists, Information and any other information related to
Client’s customers, and any such other information concerning the business of
Client or its manner of operation which is not generally known in the industry.
Confidential Information shall not include any information that: (i) is or
subsequently becomes publicly available without Consultant’s breach of this
Agreement; (ii) was in the Consultant’s possession at the time of
disclosure and was not acquired from Client; (iii) is received from third
parties, and is rightfully in the possession of such third parties and not
subject to a confidentiality obligation of third parties; (iv) is required
by law to be disclosed (with prior notice to Client); or (v) is
intentionally disclosed without restriction by Client to a third party.

 

8.2.                              Restrictions on
Client. Client agrees that any advice or communication, written or oral,
provided by Consultant pursuant to this Agreement will be treated by Client as
confidential, will be solely for the information and assistance of Client in
connection with its consideration of a Transaction and will not be used,
circulated, quoted or otherwise referred to for any other purpose, nor will it
be filed with, included in or referred to, in whole or in part, in any
registration statement, proxy statement or any other communication, whether
written or oral, prepared, issued or transmitted by Client or any affiliate,
director, officer, employee, agent or representative of any thereof, without,
in each instance, Consultant’s prior written consent. Client further agrees
that it will not disclose the identity of Consultant, the existence of this
Agreement or the engagement created hereby or Consultant’s role with respect to
any Transaction without the prior written consent of Consultant, other than as may be
required by applicable law or regulations, including any requirements imposed
under the Securities Act or the Exchange Act; provided, that in the
event such disclosure is required under applicable law or regulation, Client
shall notify Consultant and provide Consultant with an opportunity to review
and provide comments with respect to such proposed disclosure not less than two
(2) business days prior to making such disclosure; provided, further,
that if Consultant fails to respond to Client within two (2) business days
of receipt of such proposed disclosure, Consultant shall be deemed to have
consented to such proposed disclosure and waived its right to review and
provided comments with respect to such disclosure.

 

8.3.                              Third Party
Information. Client recognizes that Consultant has received,
and in the future may receive, from third parties their confidential or
proprietary information subject to a duty on the Consultant’s part to
maintain the confidentiality of such information and to use it only for certain
limited purposes. Consultant agrees at all times during the Term of this
Agreement, not to commingle the Confidential Information with other third
parties’ confidential or proprietary information.

 

4

 

9.                                      Surrender
of Material upon Termination of Agreement. Upon termination of this
Agreement, Consultant shall return immediately to Client all Work Products
including, but not limited to, books, records, notes, data and information
relating to Client or its business, and will so certify in writing that it has
done so.

 

10.                               Conflicts. Client
acknowledges that Consultant and its affiliates have and will continue to have
other relationships with parties other than Client pursuant to which Consultant
may acquire information of interest to Client. Consultant shall have no
obligation to disclose such information to Client, or to use such information
in connection with any contemplated Transaction. Client recognizes that
Consultant is being engaged hereunder to provide the consulting services
described above only to Client and is not acting as an agent or a fiduciary of,
and shall have no duties or liability to, the equity holders of Client or any
third party in connection with its engagement hereunder, all of which are
hereby expressly waived. No one other than Client (and such other parties in
such capacities, if any) is authorized to rely upon the engagement of
Consultant hereunder or any statements, advice, opinions or conduct by
Consultant.

 

11.                               Miscellaneous.

 

11.1.                        Notices.
Any notices desired, required or permitted to be given hereunder shall
be delivered personally or mailed, certified or registered mail, return receipt
requested, or delivered by overnight courier service, to the following
addresses, or such other addresses as shall be given by notice delivered
hereunder, and shall be deemed to have been given upon delivery, if delivered
personally, three (3) business days after mailing, if mailed, or one (1) business
day after timely delivery to the overnight courier service, if delivered by
overnight courier service:

 

If to Consultant:

 

Calico Capital Management,
LLC

767
3rd Avenue, 38th Floor

New
York, NY 10017

Facsimile: (646) 514.4385

Attn: Michael L. Clofine

 

With a copy to

 

Reed Smith LLP

599 Lexington Avenue, 29th
Floor

New York, NY 10022

Facsimile: (212) 521.5450

Attn: Herbert F. Kozlov, Esq.

 

If to Client:

 

WinWin Gaming, Inc.

8687 West Sahara Avenue

Suite 201

Las Vegas, NV 89117

Facsimile: (702) 212.4553

Attn:  Pat Rogers

 

5

 

or
to such other address as such party may indicate by a written notice
delivered to the other party hereto.

 

11.2.                        Attorneys’
Fees. If any party to this Agreement brings an action or
proceeding directly or indirectly based upon this Agreement or the matters
contemplated hereby against another party, the prevailing party shall be
entitled to recover, in addition to any other appropriate amounts, its
reasonable costs and expenses in connection with such action or proceeding,
including, but not limited to, reasonable attorneys’ fees and court costs.

 

11.3.                        Governing
Law; Jurisdiction. It is the intention of the
parties that this Agreement shall be subject to and shall be governed by and
construed in accordance with the internal laws of the State of New York without
reference to its choice of law provisions. All actions and proceedings arising
out of or relating to this Agreement shall be heard and determined exclusively
in any New York state or federal court sitting in New York, New York (Borough
of Manhattan). The parties hereto hereby (a) submit to the exclusive
jurisdiction of any such court for the purpose of any claim, action, suit,
proceeding, arbitration, mediation or investigation (an “Action”)
arising out of or relating to this Agreement brought by any party hereto, and (b) irrevocably
waive, and agree not to assert by way of motion, defense, or otherwise, in any
such Action, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment
or execution, that the Action is brought in an inconvenient forum, that the
venue of the Action is improper, or that this Agreement or the transactions
contemplated hereby may not be enforced in or by any of the above-named
courts.

 

11.4.                        Entire
Agreement. This Agreement sets forth
the entire understanding of the parties relating to the subject matter hereof,
and supersedes and cancels any prior communications, understandings and
agreements between the parties with respect to the subject matter contemplated
herein.

 

11.5.                        Amendment;
Waiver. This Agreement may not
be amended or modified except by a writing executed by both of the parties
hereto. The waiver by any party hereto of any breach of any provision hereunder
shall not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provision hereunder.

 

11.6.                        Assignability. Neither party
to this Agreement may assign its rights and obligations under this
Agreement without the prior written consent of the other party.

 

11.7.                        Binding
Effect. This Agreement and any
amendment thereto, shall be binding upon and shall inure to the benefit of the
successors and assignees of the parties hereto.

 

11.8.                        Relationship. Nothing in this
Agreement shall be interpreted to provide that Consultant and Client are
partners, joint venturers, agents or assignees of the other. Consultant is and
shall remain an independent contractor providing services to Client, and is not
an employee or agent of Client, and neither party shall be entitled to bind the
other party in any way.

 

11.9.                        Headings. The section headings
herein are intended for reference and shall not by themselves determine the
construction or interpretation of this Agreement.

 

11.10.                  Severability. Should a court
or other body of competent jurisdiction determine that any provision in this
Agreement is invalid or unenforceable, the remaining provisions in this
Agreement nevertheless shall be deemed valid and enforceable, and continue in
full force and effect without being impaired or invalidated in any way.

 

6

 

11.11.                  Further
Assurances. The parties shall execute,
acknowledge and deliver any further documents, instruments, or other assurances
and shall take any other action consistent with the terms of this Agreement
that may be reasonably requested by any other party or its counsel for the
purpose of confirming or effectuating any of the actions contemplated by this
Agreement.

 

11.12.                  Remedies
Cumulative. Any termination of this
Agreement shall be without prejudice to any right or remedy to which a party may be
entitled either by law, or in equity, or under this Agreement.

 

11.13.                  Survival. Notwithstanding
any termination of this Agreement, Sections 2.2, 3, 4, 6, 8, 9 and this Section 11
shall survive and remain in full force and effect.

 

11.14.                  Counterparts. This Agreement may be
executed in one or more counterparts, all of which taken together shall
constitute one and the same Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

7

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the date first set forth above.

 

	
   

  	
  Consultant

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CALICO CAPITAL MANAGEMENT, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Michael L. Clofine

  	
   

  
	
   

  	
  By:

  	
  Michael L. Clofine

  	
   

  
	
   

  	
  Its:

  	
  Chief Executive Officer and President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Client

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WINWIN GAMING, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Patrick
  Rogers

  	
   

  
	
   

  	
  By:

  	
  Patrick Rogers

  	
   

  
	
   

  	
  Its:

  	
  Chief Executive Officer and President

  	
   

  

 

 

Attachment “A”

 

Indemnification and
Contribution

 

The Client shall indemnify and hold harmless
Consultant and each of its controlling persons, subsidiaries, affiliates,
directors, officers, and employees (“Indemnified Persons”), from and
against all losses, claims, damages and liabilities, and all suits, actions,
claims, proceedings and investigations in respect thereof, relating to or
arising out of the activities contemplated by Consultant’s engagement described
in the Consulting Agreement to which this Attachment “A” is attached. The
foregoing shall include the reasonable expenses incurred by Consultant and
Indemnified Persons in appearing as witnesses or being deposed, producing
documents or otherwise being involved in any suits, actions, proceedings or
investigations. The Client shall reimburse Consultant and each Indemnified
Person for all reasonable expenses, including attorneys’ fees and
disbursements, as they are incurred in connection with investigating, preparing
for or defending any suit, action, proceeding or investigation, whether or not
Consultant or such Indemnified Person shall be a party thereto, whether or not
the same shall involve or result in any liability on the part of
Consultant or such Indemnified Person; provided that the Client shall advance
such expenses only upon receipt of an undertaking by Consultant or such person
to repay such advances if it shall ultimately be determined that Consultant or
such person was not entitled to be indemnified. Notwithstanding the forgoing,
the Client shall not, however, be obligated to indemnify Consultant or any
Indemnified Person in respect of any loss, claim, damage, liability or expense
to the extent the same is found by a final judgment of a court of competent
jurisdiction to have resulted from gross negligence, willful misconduct or bad
faith on the part of Consultant or such Indemnified Person. Consultant
shall have no liability to the Client for any loss, claim, damage, liability or
expense related to or arising out of the activities contemplated by Consultant’s
engagement, except to the extent such loss, claim, damage, liability or expense
is found by a final judgment of a court of competent jurisdiction to have
resulted from gross negligence, willful misconduct or bad faith on the part of
Consultant.

 

If any suit, action, claim, proceeding or
investigation is instituted against Consultant or any Indemnified Person
aforesaid in respect of which indemnification may be sought hereunder,
Consultant or such person shall promptly notify the Client thereof in writing,
but the omission so to notify the Client shall not relieve the Client from any
liability except to the extent the Client shall have been materially prejudiced
by such omission. Neither Consultant nor any Indemnified Person shall be
required to provide notice to the Client with respect to any suit, action or
proceeding in which the Client is named a defendant. The Client shall be
entitled to assume the defense of any suit, action or proceeding with counsel
reasonably satisfactory to Consultant; provided, however, that if
the defendants in any such suit, action or proceeding include both Consultant
or an Indemnified Person and the Client or another indemnified person, and
counsel for Consultant or such Indemnified Person shall have advised in writing
that a conflict or potential conflict exists between Consultant or such
Indemnified Person and the Client or another indemnified person, or that there may be
one or more legal defenses available to Consultant or an Indemnified Person
which are different from or additional to those available to the Client or
another indemnified person, then the Client shall not have the right to assume
the defense of such suit, action or proceeding on behalf of Consultant or such
Indemnified Person, and Consultant and such Indemnified Person shall have the
right to select separate counsel to defend such suit, action or proceeding on
its behalf, with costs to be borne by Client. Subject to the foregoing, the
Client shall not be liable for the expenses of more than one separate counsel
(in addition to local counsel) for Consultant and all Indemnified Persons
similarly situated in any one suit, action or proceeding or substantially
similar suits, actions or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances. The Client shall not be liable
for the settlement of any suit, action, claim or proceeding by Consultant

 

 

or
any Indemnified Person without the Client’s prior written consent. The Client
agrees that it shall not settle any suit, action, claim or proceeding relating
to or arising out of the activities contemplated by Consultant’s engagement,
unless such settlement includes a provision unconditionally releasing
Consultant and each Indemnified Person from all liabilities in respect of the
matters which are the subject of such suit, action claim or proceeding. The
provisions hereof are in addition to all other existing rights to
indemnification on the part of Consultant and each Indemnified Person
aforesaid, and shall survive any termination of Consultant’s engagement
hereunder.

 

In order to provide for just and equitable
contribution, if a claim for indemnification hereunder is made, but it is found
in a final judgment of a court of competent jurisdiction that such
indemnification may not be enforced in such case, even though the express
provisions hereof provide for indemnification in such case, then the Client, on
the one hand, and Consultant, on the other hand, shall contribute to the
amounts paid, payable or suffered in respect of the losses, claims, damages,
liabilities or expenses for which indemnification is unavailable or
insufficient (i) in such proportion as appropriately reflects the relative
benefits to the Client, on the one hand, and Consultant, on the other hand,
from the transaction contemplated by Consultant’s engagement hereunder, or (ii) if
the allocation provided by clause (i) is not permitted by applicable law,
in such proportion as appropriately reflects not only the relative benefits
referred to in clause (i), but also the relative faults of the Client, on the
one hand, and Consultant, on the other hand, in connection with the statements,
acts or omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations. It is
agreed that it would not be just or equitable if the contribution provided for
herein were determined by pro rata allocation or any other method which does
not take into account the foregoing. The relative benefits to the Client and
Consultant shall be deemed to be in the proportion which (A) the total amount to be paid by the
Client from the transaction contemplated by Consultant’s engagement (whether or not consummated),
bears to (B) the fees actually received by Consultant for its
engagement (excluding any amounts received in reimbursement of expenses). In no
event shall Consultant’s share of any liability be in excess of the fees
actually received by Consultant for its engagement (excluding any amounts
received in reimbursement of expenses).

 

2

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