Document:

ex10-1.htm

    
      
        

      

    

    Exhibit
10.1

    EIGHTH
MODIFICATION AGREEMENT

    (Increase)

     

    THIS EIGHTH MODIFICATION AGREEMENT
(this “Agreement”),
effective as of the 17th day
of March 2010, is by and between UNITED BANK, a Virginia banking corporation
(the “Bank”);
and VERSAR, INC. a Delaware corporation (“Versar”), GEOMET
TECHNOLOGIES, LLC, a Maryland limited liability company (“Geomet”), VERSAR
GLOBAL SOLUTIONS, INC., a Virginia corporation (“VGS”), VEC CORP., a
Pennsylvania corporation and successor to Versar Environmental Company, Inc.
(“VEC”), VERSAR
INTERNATIONAL, INC., a Delaware corporation, formerly known as VIAP, Inc.
(“Versar
International”) and ADVENT ENVIRONMENTAL, INC., a Kentucky corporation
(“Advent” and,
together with Versar, Geomet, VGS, VEC and Versar International, individually
and collectively, the “Borrower”).

     

    WITNESSETH
THAT:

     

    WHEREAS, the Bank is the owner and
holder of that certain Revolving Commercial Note dated September 26, 2003, in
the original principal amount of Five Million and No/100 Dollars
($5,000,000.00), made by the Borrower payable to the order of the Bank and
bearing interest and being payable in accordance with the terms and conditions
therein set forth (the “Note”);
and

    

    WHEREAS, the Note is issued pursuant
to the terms of a certain Loan and Security Agreement dated September 26, 2003,
between the Borrower and the Bank (as modified in accordance with that certain
First Modification Agreement dated as of May 12, 2004, that certain Third
Modification Agreement dated as of November 30, 2005 (a second modification
having been drafted but never executed and delivered), that certain Fourth
Modification Agreement dated as of September 28, 2006, as increased to Seven
Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00) pursuant to
that certain Fifth Modification Agreement dated as of September 24, 2007, that
certain Sixth Modification Agreement dated September 30, 2009, and that certain
Seventh Modification Agreement dated January 5, 2010, and as otherwise amended,
extended, increased, replaced and supplemented from time to time, the “Loan
Agreement”);

     

                            
WHEREAS, the Borrower is in violation of Section VI(C)(16) of the Loan
Agreement for failing to add Versar International as a co-borrower (the “Versar
International Default”);

     

                            
WHEREAS, on or about the effective date hereof, Versar entered into that certain
Stock Purchase Agreement with Advent and the shareholders of Advent (the “Purchase Agreement”),
in which Versar, on the Closing Date (as defined in the Purchase
Agreement), will purchase and acquire from the
Shareholders (as defined in the Purchase Agreement) all or substantially all of
the share capital and voting ownership interests of Advent, free and clear of
all Liens, for the Purchase Price (as said terms are defined in the Purchase
Agreement) (the “Acquisition”).  Upon the Closing Date, Advent will become
a wholly-owned subsidiary of Versar.  As part of the Purchase Price of
Advent, Versar will issue Seller Notes (as defined in the Purchase Agreement) to
the Shareholders in the aggregate principal amount of One Million Seven Hundred
Fifty Thousand and No/100 Dollars ($1,750,000.00), subject to adjustment
pursuant to the Purchase Agreement.  Unless consented to by the Bank,
the Acquisition would violate the provisions of Sections VI(C)(7), (12)
and (16) of the Loan Agreement; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    WHEREAS,
in furtherance of the Acquisition, the Bank and each Borrower are entering into
that certain Joinder Agreement (the “Joinder Agreement”)
dated as of the date hereof to add Versar International and Advent as
co-borrowers under the Loan Agreement.  Moreover, the Borrower has requested that the Bank (i) consent to
the Acquisition, (ii) waive the Versar International Default, (iii)
increase the principal amount of the Note
and (iv) make certain other modifications to the Loan Agreement as more fully
set forth herein, and the Bank has consented to such requests subject to the
execution of this Agreement and the satisfaction of the conditions specified
herein.

     

    NOW, THEREFORE, for Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

    

    1.           Definitions.  All
capitalized terms used in this Agreement will have the respective meanings
assigned thereto in the Loan Agreement unless otherwise defined in this
Agreement.

     

    2.           Consent and
Waiver.  Subject to the satisfaction of the terms and
conditions of Sections 3 and 10 below, the Bank hereby (i) consents to the
Acquisition, the Purchase Agreement and the transactions contemplated thereby
and agrees that neither the Acquisition, nor the Purchase Agreement, nor the
transactions contemplated thereby, shall constitute a Default under Sections
VI(C)(7), (12) and (16) of the Loan Agreement and (ii) waives the Versar International
Default.  Additionally, notwithstanding anything to the contrary in
the Loan Agreement, Bank hereby agrees that Advent Environmental Puerto
Rico, Inc. (the “Dissolving Puerto Rican
Subsidiary”) is not subject to the
requirements of Section VI(C)(16) of the Loan Agreement, which among other
things, requires that any Subsidiary of Versar be added as a Borrower and become
jointly and severally liable with each other Borrower for the payment in full of
the Obligations.  The consent and waiver as set forth above
shall not be deemed or otherwise construed to constitute a waiver of any
provisions of the Loan Agreement in connection with any other transaction, and
the waivers contained herein are otherwise subject to Sections VIII(B) and (E)
of the Loan Agreement.

     

    3.           Dissolution of Puerto Rican
Subsidiary.  The Borrower hereby acknowledges and agrees (a)
that Advent is in the process of dissolving the Dissolving Puerto Rican
Subsidiary, (b) that the Dissolving Puerto Rican Subsidiary is neither an
operating entity or owns any material property or assets, (c) that no Borrower
shall cause or permit any property or assets to be conveyed, sold or otherwise
transferred to the Dissolving Puerto Rican Subsidiary, and (d) the dissolution
of the Dissolving Puerto Rican Subsidiary shall be completed on or before May
31, 2010.

     

    4.           Amendments to Loan
Agreement.  Subject to the satisfaction of the terms and
conditions of Section 10 below, from and after the date of this Agreement, the
Loan Agreement and Loan Documents are hereby amended as follows:

     

     
(a)         The definition of
“Eligible Accounts” in Section I(A) of the Loan Agreement is hereby amended by
adding the following subsection after section (xi):

     

          
 (xii)        accounts of any
Account Debtor if 50% or more of such accounts are unpaid more than 90 days
after the date of the original bill.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

     
(b)         Section II(E) of the
Loan Agreement is hereby amended by replacing it with the
following:

     

     
(E)         Fees.

    

    (1)         Administrative
Fee.  During the Commitment Period, the Borrower shall pay to
the Bank an administration fee of $1,000.00 per month, commencing on the same
day of the month following the Effective Date, and on the Date of
Maturity.

    

    (2)         Letter of Credit
Fee.  The Borrower shall pay to
the Bank a non-refundable letter of credit fee in the amount equal to the
greater of (a) two percent (2.0%) per annum of the outstanding amount of each
Letter of Credit or (b) $450.00.  For each Letter of Credit, said fee
shall be payable in advance on the date a Letter of Credit is issued, and on
each anniversary of the issuance thereof, for the number of days the
Letter of Credit is to be outstanding (calculated on the basis of a year of 360
days).

     

     
(c)         Section II(F)(1) of the
Loan Agreement is hereby amended by replacing it with the
following:

    

    (1)        As
a subfeature under the Commitment, the Bank agrees, on the terms and conditions
set forth in this Agreement and in the applicable Applications, to make loans to
the Borrower by issuing Letters of Credit for the account of any Borrower
(“Letter of Credit Loans”); provided, that the
amount allocated to the Letter of Credit Loans is a permissive use of such
amount, and not a mandatory allocation of the proceeds of the
Commitment.  At no time shall the Outstanding Letter of Credit Balance
exceed the lesser of (i) $5,000,000.00 and (ii) Commitment minus the outstanding
principal balance of Advances at such time (the “Letter of Credit
Commitment”).  Each Letter of Credit shall be issued for a term not to
exceed one (1) year, although any Letter of Credit may be automatically renewed
in accordance with the terms and conditions of said Letter of Credit and the
related Application.  A Letter of Credit may be denominated only in
U.S. Dollars.  Each draft paid by the Bank under a Letter of Credit
shall, if such amount is available under the Letter of Credit Commitment, be
deemed an Advance and shall accrue interest at the rate then applicable under
the Note.  To the extent the amount of a draft paid by the Bank as
aforesaid is unavailable under the Letter of Credit Commitment, said amount
shall be payable by the Borrower ON DEMAND and until paid in full shall accrue
interest at the rate then applicable under the Note.  Subject to the
foregoing, the Borrower may borrow under this Section II(F)(1), prepay and
re-borrow.

     

     
(d)         Section VI(A)(4) of the
Loan Agreement is hereby amended by replacing “$22,500,000.00” with
“$17,500,000.00”.

    

    5.           Increase in Principal Sum of
Note.  The maximum principal amount of the Note is hereby
increased from Seven Million Five Hundred Thousand and no/100 Dollars
($7,500,000.00) to Ten Million and no/100 Dollars
($10,000,000.00).  The definition of “Principal Sum” in the Note is
hereby changed to “Ten Million and no/100 Dollars
($10,000,000.00)”.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    6.           Field
Examinations.  The Borrower shall allow the Bank to audit the
Borrower’s Collateral at the Borrower’s expense if required by the Bank in its
sole discretion.

     

    7.           BB&T Bank Accounts; Bank
of Deposit.  On or before April
30, 2010, Advent shall close all of its accounts at Branch Banking and Trust
Company (the “BB&T Bank
Accounts”) and move all funds in such
BB&T Bank Accounts to an account maintained with Bank.  Pursuant
to the terms of Section III(C)(2) of the Loan Agreement, all Account
Debtors of Advent shall be notified to make payments under Receivables directly
to the Bank, in accordance with the Bank’s standard lockbox
agreement.  Each Borrower shall at all
times maintain its primary deposit accounts with Bank.

     

    8.           Post-Closing
Conditions.  Bank shall have
received, in form and substance satisfactory to Bank, the
following:

     

     
(i)      evidence that the insurance policies of
Advent, as required by the Loan Agreement, are in full force and effect,
together with appropriate evidence showing loss payable and/or additional
insured clauses or endorsements in favor of the Bank on or before March 26,
2010; and

     

     
(ii)      a favorable opinion of counsel for
Advent addressed to the Bank on or before April 2,
2010.

     

    9.           Purchase
Agreement.  Attached hereto as Exhibit A is a true,
correct and complete copy of the Purchase Agreement, which will be executed in
connection with the Acquisition.  The Purchase Agreement has not been
modified, changed, supplemented, canceled, amended or otherwise altered or
affected; and neither the Purchase Agreement nor any of the Seller Notes will be
modified, changed, supplemented, canceled, amended or otherwise altered, waived
or affected without the Bank’s prior written consent.  The Acquisition
will be effected, closed and consummated pursuant to, and in accordance with,
the terms and conditions of the Purchase Agreement and with all applicable
laws.  Versar promptly notify the Bank when the Purchase Agreement has
been executed and is effective.

     

    10.         Limitation of Consent,
Waiver and Amendments.  The
consent, waiver and amendments set forth in Sections 2 through 6, above, are
effective for the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to (a) be a waiver of any existing or
future Default or a consent to amend or modify any other term or condition of
any Loan Documents, other than as necessary to the consummation of the
transactions contemplated by the Purchase Agreement, or (b) otherwise
prejudice any right or remedy which the Bank may now have or may have in the
future under or in connection with any Loan Documents.  The Bank’s
agreement to consent to the Acquisition and the consent, waiver and amendments
set forth herein shall in no way obligate the Bank to make any other
modifications to the Loan Agreement or to waive the Borrower’s continued
compliance with any other terms of the Loan Documents, and shall not limit or
impair the Bank’s right to demand strict performance of all other terms and
covenants as of any date.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    11.           Representations and
Warranties of the Borrower.  The Borrower represents and
warrants to the Bank that:

     

    (a)           It
has the power and authority to enter into and to perform this Agreement, to
execute and deliver all documents relating to this Agreement, and to incur the
obligations provided for in this Agreement, all of which have been duly
authorized and approved in accordance with the Borrower’s organizational
documents;

     

    (b)           This
Agreement, together with all documents executed pursuant hereto, shall
constitute when executed the valid and legally binding obligations of the
Borrower and all guarantors, if any, as the case may be, in accordance with
their respective terms;

     

    (c)           Except
with respect to events or circumstances occurring subsequent to the date thereof
and known to the Bank, all representations and warranties made in the Loan
Agreement are true and correct as of the date hereof, with the same force and
effect as if all representations and warranties were fully set forth
herein;

     

    (d)           The
Borrower’s obligations under the Loan Documents remain valid and enforceable
obligations;

     

    (e)           As
of the date hereof, the Borrower has no offsets or defenses against the payment
of any of the Obligations and no claims against the Bank; and

     

    (f)           As
of the date hereof, no Default exists, other that the Versar International
Default.

     

    12.           Waiver of
Claims.  As a specific inducement to the Bank without which the
Borrower acknowledges the Bank would not enter into this Agreement and the other
documents executed in connection herewith, the Borrower hereby waives any and
all claims that it may have against the Bank, as of the date hereof, arising out
of or relating to the Loan Agreement or any Loan Document whether sounding in
contract, tort or any other basis.

     

    13.           Conditions of
Effectiveness.  This Agreement shall become effective when, and
only when, the Bank shall have received:

     

    (i)          this
Agreement, executed by each Borrower;

     

    (ii)         the
Joinder Agreement substantially in the form attached hereto as Exhibit B, executed
by each Borrower;

     

    (iii)        the
Subordination Agreement substantially in the form attached hereto as Exhibit C, executed
by each Borrower and each Junior Creditor named therein;

     

    (iv)        true
and complete copies of the organizational documents and governing documents and
all recorded amendments thereto of Versar International and Advent for its
respective jurisdiction of organization;

     

    (v)         good
standing certificate of Versar International and Advent for its respective
jurisdiction of organization and for each jurisdiction in which Versar
International and Advent conducts business as of a date no earlier than thirty
(30) days prior to the date of this Agreement;

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    (vi)        a
certificate dated as of the date of this Agreement by the Secretary of Versar
International and Advent covering:

     

    (A)           true
and complete copies of Versar International and Advent’s organizational and
governing documents and all amendments thereto;

     

    (B)           true
and complete copies of the resolutions of its respective Board of Directors
authorizing (1) the execution, delivery and performance of the Loan Documents to
which it is a party, (2) the borrowings under the Loan Documents, and (3) the
granting of the Liens contemplated by the Loan Agreement and the Loan Documents
to which Versar International and Advent is a party;

     

    (C)           the
incumbency, authority and signatures of the officers of Versar International and
Advent authorized to sign this Agreement and the other Loan Documents to which
Vesar International and Advent is a party; and

     

    (D)           the
identity of current directors, common stock holders and other equity holders of
Versar International and Advent, as well as their respective percentage
ownership interests;

     

    (vii)        certified
copies, dated as of a recent date, of financing statement searches of Versar
International and Advent, as the Bank shall request, accompanied by written
evidence (including any termination statements) that the Liens indicated in any
such financing statements either constitute Permitted Liens or have been or,
will be terminated or released;

     

    (viii)        evidence satisfactory to
the Bank that financing statements in form and substance reasonably
satisfactory to the Bank have been properly
filed in each office where necessary to perfect the security interest of the
Bank in the Collateral of Versar International and
Advent;

     

    (ix)        evidence
satisfactory to the Bank that the insurance policies of Versar International, as
required by the Loan Agreement, are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements in favor of the Bank;

     

    (x)        the
favorable opinion of counsel for Versar International addressed to the
Bank; and

     

    (xi)       payment
of the Bank’s attorneys’ fees and expenses regarding this Agreement, the Joinder
Agreement and the review of the Acquisition Agreement.

     

    14.           Loan
Documents.  The other “Loan Documents”, as defined in the Note,
are hereby modified to the extent necessary to carry out the purposes of this
Agreement.

     

    15.           Outstanding
Balance.  The Borrower hereby acknowledges and agrees that, as
of the effective date hereof, the unpaid principal balance of the Note is Zero
Dollars ($0.00) and that there are no set-offs or defenses against the Note, the
Loan Agreement, or the other Loan Documents.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    16.           No
Impairment.  This Agreement shall become a part of the Loan
Agreement by reference and nothing herein contained shall impair the security
now held for the Obligations, nor waive, annul, vary or affect any provision,
condition, covenant or agreement contained in the Loan Agreement except as
herein amended, nor affect or impair any rights, powers or remedies under the
Loan Agreement as hereby amended.  Furthermore, the Bank does hereby
reserve all rights and remedies it may have as against all parties who may be or
may hereafter become primarily or secondarily liable for the repayment of the
Obligations.

     

    17.           No
Novation.  The parties to this Agreement do not intend that
this Agreement be construed as a novation of the Note, the Loan Agreement, or
any of the other Loan Documents.

     

    18.           Ratification.  Except
as hereby expressly modified, the Note and Loan Agreement shall otherwise be
unchanged, shall remain in full force and effect, and are hereby expressly
approved, ratified and confirmed.  A legend shall be placed on the
face of the Note indicating that its terms have been modified hereby, and the
original of this Agreement shall be affixed to the original of the
Note.

     

    19.           Applicable Law; Binding
Effect.  This Agreement shall be governed in all respects by
the laws of the Commonwealth of Virginia and shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and
assigns.

     

    20.           Counterparts; Telecopied
Signatures.  This Agreement may be executed in any number of
counterparts and by different parties to this Agreement on separate
counterparts, each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute one and the same
instrument.  Any signature delivered by a party by facsimile
transmission shall be deemed to be an original signature to this
Agreement.

     

    [Signatures
Appear on the Following Pages]

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    WITNESS
the following signatures and seals.

    

    
      	 
      	
              UNITED
      BANK

            	
              [SEAL]

            
	 
      	 
      	 
      	 
      	 
      
	 
      	
              By: 

            	 
      	/s/
      E.
      Allen Schirmer	 
      
	 
      	 
      	 
      	
              E.
      Allen Schirmer

            	 
      
	 
      	 
      	 
      	
              Senior
      Vice President

            	 
      

       

      [Signature Page to 8th
Modification Agreement]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                VERSAR,
      INC.

              	
                [SEAL]

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By: 

              	 
      	/s/
      James Charles Dobbs	 
      
	 
      	 
      	 
      	
                Name:
      James Charles Dobbs

              	 
      
	 
      	 
      	 
      	
                Title:
      Senior Vice President

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                GEOMET
      TECHNOLOGIES, LLC

              	
                [SEAL]

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	/s/
      James Charles Dobbs	 
      
	 
      	 
      	 
      	
                Name:
      James Charles Dobbs

              	 
      
	 
      	 
      	 
      	
                Title:
      Vice President

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                VERSAR
      GLOBAL SOLUTIONS, INC.

              	
                [SEAL]

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	/s/
      James Charles Dobbs	 
      
	 
      	 
      	 
      	
                Name:
      James Charles Dobbs

              	 
      
	 
      	 
      	 
      	
                Title:
      Vice President

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                VEC
      CORP.

              	
                [SEAL]

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	/s/
      James Charles Dobbs	 
      
	 
      	 
      	 
      	
                Name:
      James Charles Dobbs

              	 
      
	 
      	 
      	 
      	
                Title:
      Vice President

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                VERSAR
      INTERNATIONAL, INC.

              	
                [SEAL]

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	/s/
      James Charles Dobbs	 
      
	 
      	 
      	 
      	
                Name:
      James Charles Dobbs

              	 
      
	 
      	 
      	 
      	
                Title:
      Vice President

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                ADVENT
      ENVIRONMENTAL, INC.

              	
                [SEAL]

              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	/s/
      Jeffrey C. Smoak	 
      
	 
      	 
      	 
      	
                Name:
      Jeffrey C. Smoak

              	 
      
	 
      	 
      	 
      	
                Title:
      President

              	 
      

      

    

     

    [Signature Page to 8th
Modification Agreement]ex10-2.htm

    
      
        

      

    

    Exhibit 10.2

     

    STOCK
PURCHASE AGREEMENT

     

    by and
among

     

    VERSAR,
INC.,

     

    ADVENT
ENVIRONMENTAL, INC.

     

    and

     

    THE
SHAREHOLDERS OF ADVENT ENVIRONMENTAL, INC.

     

    DATED
MARCH 17, 2010

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          	 
      	 
      	
                  Page

                
	 	 
	ARTICLE
      I
                      DESCRIPTION
      OF TRANSACTION	
                  1

                
	 	 
	
                  Section
      1.1

                	
                  Agreement
      to Purchase and Sell

                	
                  1

                
	 	 	 
	
                  Section
      1.2

                	
                  Purchase
      Price

                	
                  1

                
	 	 	 
	
                  Section
      1.3

                	
                  Statement
      of Closing Date Indebtedness

                	
                  1

                
	 	 	 
	
                  Section
      1.4

                	
                  Payment
      of Purchase Price

                	
                  1

                
	 	 	 
	
                  Section
      1.5

                	
                  Adjustment
      of Purchase Price

                	
                  2

                
	 	 	 
	
                  Section
      1.6

                	
                  Contingent
      Consideration

                	
                  3

                
	 	 	 
	ARTICLE
      II                Representations
      and Warranties of the Company and the Shareholders	
                  5

                
	 	 
	
                  Section
      2.1

                	
                  Organization;
      Standing and Power; Subsidiaries

                	
                  5

                
	 	 	 
	
                  Section
      2.2

                	
                  Certificate
      of Incorporation and Bylaws; Records

                	
                  5

                
	 	 	 
	
                  Section
      2.3

                	
                  Authority;
      Binding Nature of Agreement

                	
                  6

                
	 	 	 
	
                  Section
      2.4

                	
                  Absence
      of Restrictions and Conflicts; Required Consents

                	
                  6

                
	 	 	 
	
                  Section
      2.5

                	
                  Capitalization

                	
                  7

                
	 	 	 
	
                  Section
      2.6

                	
                  Company
      Financial Statements; Undisclosed Liabilities

                	
                  8

                
	 	 	 
	
                  Section
      2.7

                	
                  Absence
      of Changes

                	
                  9

                
	 	 	 
	
                  Section
      2.8

                	
                  Title
      to and Sufficiency of Assets

                	
                  10

                
	 	 	 
	
                  Section
      2.9

                	
                  Inventory

                	
                  10

                
	 	 	 
	
                  Section
      2.10

                	
                  Bank
      Accounts; Receivables

                	
                  10

                
	 	 	 
	
                  Section
      2.11

                	
                  Real
      Property

                	
                  11

                
	 	 	 
	
                  Section
      2.12

                	
                  Personal
      Property

                	
                  12

                
	 	 	 
	
                  Section
      2.13

                	
                  Intellectual
      Property

                	
                  12

                
	 	 	 
	
                  Section
      2.14

                	
                  Contracts

                	
                  13

                
	 	 	 
	
                  Section
      2.15

                	
                  Compliance
      with Laws; Governmental Authorizations

                	
                  18

                
	 	 	 
	
                  Section
      2.16

                	
                  Tax
      Matters

                	
                  18

                
	 	 	 
	
                  Section
      2.17

                	
                  Employee
      Benefit Plans

                	
                  21

                
	 	 	 
	
                  Section
      2.18

                	
                  Employee
      Matters

                	
                  23

                
	 	 	 
	
                  Section
      2.19

                	
                  Labor
      Matters

                	
                  24

                
	 	 	 
	
                  Section
      2.20

                	
                  Environmental
      Matters

                	
                  25

                
	 	 	 
	
                  Section
      2.21

                	
                  Insurance

                	
                  26

                

        

         

        
          
             

          

          
            i

            
              

            

          

          
             

          

        

         

        
          
            	
                    Section
      2.22

                  	
                    Related
      Party Transactions

                  	
                    27

                  
	 	 	 
	
                    Section
      2.23

                  	
                    Legal
      Proceedings; Orders

                  	
                    27

                  
	 	 	 
	
                    Section
      2.24

                  	
                    Customers
      and Suppliers

                  	
                    27

                  
	 	 	 
	
                    Section
      2.25

                  	
                    Product
      and Service Warranties

                  	
                    27

                  
	 	 	 
	
                    Section
      2.26

                  	
                    Finder’s
      Fee

                  	
                    28

                  
	 	 	 
	
                    Section
      2.27

                  	
                    Certain
      Payments

                  	
                    28

                  
	 	 	 
	
                    Section
      2.28

                  	
                    Full
      Disclosure

                  	
                    28

                  
	 	 	 
	ARTICLE
      III              Representations
      and Warranties of the Purchaser	
                    29

                  
	 	 
	
                    Section
      3.1

                  	
                    Corporate
      Existence and Power

                  	
                    29

                  
	 	 	 
	
                    Section
      3.2

                  	
                    Authorization;
      Binding Nature of Agreement

                  	
                    29

                  
	 	 	 
	
                    Section
      3.3

                  	
                    Absence
      of Restrictions; Required Consents

                  	
                    29

                  
	 	 	 
	ARTICLE
      IV              Certain
      Covenants and Agreements	
                    30

                  
	 	 	 
	
                    Section
      4.1

                  	
                    Tax
      Matters

                  	
                    30

                  
	 	 	 
	
                    Section
      4.2

                  	
                    Non-Competition

                  	
                    31

                  
	 	 	 
	
                    Section
      4.3

                  	
                    Release

                  	
                    32

                  
	 	 	 
	
                    Section
      4.4

                  	
                    Maintenance
      of Insurance

                  	
                    32

                  
	 	 	 
	ARTICLE
      V                Conditions
      Precedent to the Obligations of the Purchaser	
                    33

                  
	 	 
	
                    Section
      5.1

                  	
                    Accuracy
      of Representations

                  	
                    33

                  
	 	 	 
	
                    Section
      5.2

                  	
                    Consents

                  	
                    33

                  
	 	 	 
	
                    Section
      5.3

                  	
                    Ancillary
      Agreements and Deliveries

                  	
                    33

                  
	 	 	 
	
                    Section
      5.4

                  	
                    Payoff
      Letters

                  	
                    33

                  
	 	 	 
	
                    Section
      5.5

                  	
                    Release
      of Encumbrances

                  	
                    33

                  
	 	 	 
	
                    Section
      5.6

                  	
                    No
      Restraints

                  	
                    33

                  
	 	 	 
	
                    Section
      5.7

                  	
                    No
      Litigation

                  	
                    34

                  
	 	 	 
	
                    Section
      5.8

                  	
                    Employee
      Matters

                  	
                    34

                  
	 	 	 
	
                    Section
      5.9

                  	
                    Related
      Party Transactions

                  	
                    34

                  
	 	 	 
	ARTICLE
      VI               Conditions
      Precedent to Obligations of the Company and the Shareholders	
                    34

                  
	 	 	 
	
                    Section
      6.1

                  	
                    Accuracy
      of Representations

                  	
                    34

                  
	 	 	 
	
                    Section
      6.2

                  	
                    Ancillary
      Agreements and Deliveries

                  	
                    34

                  
	 	 	 
	
                    Section
      6.3

                  	
                    No
      Restraints

                  	
                    34

                  
	 	 	 
	
                    Section
      6.4

                  	
                    Consents

                  	
                    35

                  

          

           

          
            
               

            

            
              ii

              
                

              

            

            
               

            

          

           

          
            	ARTICLE
      VII             Closing	
                    35

                  
	 	 
	
                    Section
      7.1

                  	
                    Closing

                  	
                    35

                  
	 	 	 
	
                    Section
      7.2

                  	
                    Shareholder
      and Company Closing Deliveries

                  	
                    35

                  
	 	 	 
	
                    Section
      7.3

                  	
                    Purchaser
      Closing Deliveries

                  	
                    36

                  
	 	 	 
	ARTICLE
      VIII            Indemnification	
                    36

                  
	 	 
	
                    Section
      8.1

                  	
                    Indemnification
      Obligations of the Shareholders

                  	
                    36

                  
	 	 	 
	
                    Section
      8.2

                  	
                    Indemnification
      Obligations of the Purchaser

                  	
                    37

                  
	 	 	 
	
                    Section
      8.3

                  	
                    Indemnification
      Procedure

                  	
                    37

                  
	 	 	 
	
                    Section
      8.4

                  	
                    Survival
      Period

                  	
                    39

                  
	 	 	 
	
                    Section
      8.5

                  	
                    Liability
      Limits

                  	
                    39

                  
	 	 	 
	
                    Section
      8.6

                  	
                    Investigations

                  	
                    40

                  
	 	 	 
	
                    Section
      8.7

                  	
                    Offset
      Against Seller Notes and Contingent Consideration

                  	
                    40

                  
	 	 	 
	
                    Section
      8.8

                  	
                    Exclusive
      Remedy

                  	
                    40

                  
	 	 	 
	ARTICLE
      IX              Miscellaneous
      Provisions	
                    40

                  
	 	 
	
                    Section
      9.1

                  	
                    Further
      Assurances

                  	
                    40

                  
	 	 	 
	
                    Section
      9.2

                  	
                    Fees
      and Expenses

                  	
                    41

                  
	 	 	 
	
                    Section
      9.3

                  	
                    Waiver;
      Amendment

                  	
                    41

                  
	 	 	 
	
                    Section
      9.4

                  	
                    Entire
      Agreement

                  	
                    41

                  
	 	 	 
	
                    Section
      9.5

                  	
                    Execution
      of Agreement; Counterparts; Electronic Signatures

                  	
                    41

                  
	 	 	 
	
                    Section
      9.6

                  	
                    Governing
      Law

                  	
                    41

                  
	 	 	 
	
                    Section
      9.7

                  	
                    WAIVER
      OF JURY TRIAL

                  	
                    42

                  
	 	 	 
	
                    Section
      9.8

                  	
                    Assignment
      and Successors

                  	
                    42

                  
	 	 	 
	
                    Section
      9.9

                  	
                    Parties
      in Interest

                  	
                    42

                  
	 	 	 
	
                    Section
      9.10

                  	
                    Notices

                  	
                    42

                  
	 	 	 
	
                    Section
      9.11

                  	
                    Construction;
      Usage

                  	
                    43

                  
	 	 	 
	
                    Section
      9.12

                  	
                    Enforcement
      of Agreement

                  	
                    44

                  
	 	 	 
	
                    Section
      9.13

                  	
                    Severability

                  	
                    44

                  
	 	 	 
	
                    Section
      9.14

                  	
                    Schedules
      and Exhibits

                  	
                    44

                  

          

        

      

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

    

     

    EXHIBITS

     

    
      
        	
                Exhibit
      A

              	
                 -

              	
                Definitions

              
	
                Exhibit
      B

              	
                 -

              	
                Form
      of Seller Note

              
	
                Exhibit
      C

              	
                 -

              	
                Allocation
      of Purchase Price to Shareholders

              
	
                Exhibit
      7.2(e)(2) 

              	
                 - 

              	
                Employees
      Party to Employment/Retention
Agreements

              

      

    

     

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

     

    STOCK
PURCHASE AGREEMENT

     

    THIS STOCK PURCHASE
AGREEMENT is made and entered into as of March 17, 2010, by and
among Versar, Inc., a Delaware corporation (the “Purchaser”), Advent
Environmental, Inc., a Kentucky corporation (the “Company”), and the
shareholders of the Company set forth on the signature pages hereto
(collectively the “Shareholders” and
individually, a “Shareholder”).  For
purposes of this Agreement, the terms contained in Exhibit A shall have
the respective meanings set forth therein.

     

    RECITALS

     

    WHEREAS,
the Shareholders own all of the issued and outstanding shares of capital stock
of the Company (the “Shares”);
and

     

    WHEREAS,
upon the terms and conditions set forth herein, the Shareholders propose to sell
to the Purchaser and the Purchaser proposes to purchase from the Shareholders,
all of the Shares in exchange for the consideration set forth
herein;

     

    NOW,
THEREFORE, in consideration of the respective covenants, agreements and
representations and warranties set forth herein, the parties to this Agreement,
intending to be legally bound, agree as follows:

     

    ARTICLE
I

    DESCRIPTION
OF TRANSACTION

     

    Section
1.1                    Agreement to Purchase and
Sell.  Subject to the terms and conditions hereof, at the
Closing, the Shareholders shall sell, assign, transfer and deliver to the
Purchaser, and the Purchaser shall purchase and acquire from the Shareholders,
all right, title and interest in and to the Shares, free and clear of all
Encumbrances.

     

    Section
1.2                    Purchase
Price.  Subject to adjustment pursuant to Section 1.5, the
aggregate amount to be paid for the Shares shall equal a maximum of $5,000,000,
minus the Closing Date Indebtedness (the “Purchase
Price”).

     

    Section
1.3                  
Statement of Closing
Date Indebtedness.  Not less than two (2) Business Days prior
to the Closing Date, the Company shall deliver to the Purchaser a statement (the
“Closing Date
Indebtedness Statement”), signed by an officer of the Company, which sets
forth, by creditor, the aggregate amount of the Closing Date
Indebtedness.  Copies of the Payoff Letters, delivered in accordance
with Section 5.4(e) hereof, shall be attached to the Closing Date Indebtedness
Statement.

     

    Section
1.4                    Payment of Purchase
Price.

     

    (a)           On
the Closing Date, the Purchaser shall:

     

    (i)         repay
or cause to be repaid the Closing Date Indebtedness, as set forth in the Closing
Date Indebtedness Statement;

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (ii)         pay
or cause to be paid to the Shareholders a cash amount equal to $1,150,000 minus the Closing
Date Indebtedness (as set forth in the Closing Date Indebtedness
Statement);

     

    (iii)           retain
$350,000 as a holdback (the “Holdback Amount”) to
secure any payment obligation of the Shareholders upon completion of the
adjustment of the Purchase Price as set forth in Section 1.5 below;
and

     

    (iv)           issue
promissory notes to the Shareholders with an aggregate principal amount of
$1,750,000 pursuant to the form of promissory note set forth on Exhibit B
hereto (the “Seller
Notes”).

     

    (b)           The
remainder of the Purchaser Price shall be paid through the Contingent
Consideration payment provisions set forth in Section 1.6
hereof.

     

    (c)           All
payments required under this Section 1.4 or any other provision of this
Agreement, if payable to the Shareholders, shall be allocated among the
Shareholders as set forth on Exhibit C to this Agreement and shall be made
in cash by wire transfer of immediately available funds to such bank account as
shall be designated in writing by the Person to which the applicable payment is
due.

     

    Section
1.5                    Adjustment of Purchase
Price.

     

    (a)           Within
sixty (60) days following the Closing Date, the Purchaser shall prepare and
deliver to the Shareholders the Net Book Value Schedule and its calculation of
the Net Book Value Deficit or Net Book Value Surplus, if any, based
thereon.  The Net Book Value Schedule shall be prepared in accordance
with GAAP.

     

    (b)           The
Shareholders shall have thirty (30) days following receipt of the Net Book
Value Schedule delivered pursuant to Section 1.5(a) during which to notify the
Purchaser of any dispute of any item contained therein, which notice shall set
forth in detail the basis for such dispute.  The Purchaser and the
Shareholders shall cooperate in good faith to resolve any such dispute as
promptly as possible.  Upon such resolution, the Final Net Book Value
Schedule shall be prepared in accordance with the agreement of the Purchaser and
the Shareholders and the calculation of the Net Book Value Deficit or the Net
Book Value Surplus, if any, based thereon shall be final and binding on the
parties.  In the event the Shareholders do not notify the Purchaser of
any such dispute within such thirty (30)-day period or notify the Purchaser
within such period that they do not dispute any item contained therein, the Net
Book Value Schedule delivered pursuant to Section 1.5(a) shall constitute the
Final Net Book Value Schedule and the Purchaser’s calculation of the Net Book
Value Deficit or Net Book Value Surplus, if any, based thereon shall be final
and binding upon the parties.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (c)           In
the event the Purchaser and the Shareholders are unable to resolve any dispute
regarding the Net Book Value Schedule delivered pursuant to Section 1.5(a)
within thirty (30) calendar days following the Purchaser’s receipt of notice of
such dispute, such dispute shall be submitted to, and all issues having a
bearing on such dispute shall be resolved by, Ernst & Young LLP (the “Accounting
Referee”).  In resolving any such dispute, the Accounting
Referee shall consider only those items or amounts in the Net Book Value
Schedule as to which the Shareholders have disagreed.  The Accounting
Referee’s determination of the Net Book Value Schedule and the Net Book Value
Deficit or Net Book Value Surplus, if any, based thereon shall be
final and binding on the parties to this Agreement.  The Accounting
Referee shall use commercially reasonable efforts to complete its work within
thirty (30) days following its engagement.  All fees and expenses of
the Accounting Referee shall be shared equally by the Shareholders on the one
hand and the Purchaser on the other hand.

     

    (d)           Within
five (5) Business Days following the determination of the Final Net Book Value
Schedule, if there is a Net Book Value Deficit, the Purchaser shall deduct the
amount of such deficit from the Holdback Amount and shall pay any remainder of
the Holdback Amount allocated pro-rata to the Shareholders pursuant to the
allocations set forth on Exhibit C to this Agreement.  If the
Holdback Amount is not sufficient to cover the amount of such deficit, the
Seller Notes shall be reduced by the amount of such excess deficit, such
reduction to be allocated pro rata among the Seller Notes in accordance with the
allocations set forth on Exhibit C to this Agreement.  If there
is a Net Book Value Surplus, the Purchaser shall pay to the Shareholders the
Holdback Amount together with an additional amount equal to the Net Book Value
Surplus.

     

    Section
1.6                    Contingent
Consideration.

     

    (a)           Entitlement to Contingent
Consideration.  The Shareholders shall be entitled to receive
additional earn-out consideration if the Company’s earnings before interests,
taxes, depreciation or amortization (“EBITDA”) for the
twelve month period commencing April 1, 2010 and ending, March 31, 2011
(the “Earn-out
Period”) exceeds $775,000.  Such earn-out payment, if any,
shall be equal to 4x each dollar of EBITDA for such period over $775,000,
subject to an aggregate earn-out payment cap of $1.75 million plus the amount of
any Net Book Value Deficit determined pursuant to Section 1.5 above (the “Contingent
Consideration”).

     

    (b)           Calculation of Contingent
Consideration.

     

    (i)         Within
sixty (60) calendar days following the end of the Earn-Out Period, Purchaser
shall prepare or cause to be prepared and delivered to the Shareholders, a
statement (the “EBITDA
Statement”) setting forth the EBITDA of the Company for the earn-out
period, together with supporting documentation, and a calculation of the
Contingent Consideration payable to the Shareholders.

     

    (ii)         In
the event that the Shareholders object to Purchaser’s calculation of Contingent
Consideration set forth in such EBITDA Statement, then within thirty (30) days
after the latest date of receipt by a Shareholder (subject to verification of
date of receipt) of the EBITDA Statement, they shall deliver to Purchaser a
written notice describing in reasonable detail their objections to Purchaser’s
calculation of such Contingent Consideration.  If the Shareholders do
not deliver a notice of objection to Purchaser timely, then Purchaser’s
calculation of the amounts set forth in the EBITDA Statement shall be final,
binding and conclusive on Purchaser and the Shareholders and any payments owed
shall be made within ten (10) calendar days thereafter.  If the
Shareholders deliver a notice of objection accompanied by a statement setting
forth a calculation of Contingent Consideration to Purchaser timely, and if the
Shareholders and Purchaser are unable to agree upon the calculation of the
amounts set forth in the EBITDA Statement within thirty (30) calendar days
thereafter, the dispute shall be finally settled by the Accounting
Referee.  The determination by the Accounting Referee of the disputed
calculation of Contingent Consideration, if any, shall be final, conclusive and
binding on Purchaser and the Shareholders.  The fees and other
expenses of such Accounting Referee shall be paid by the party whose
determination of Contingent Consideration payable most diverges (on an absolute
dollar basis) from the determination of the Accounting Referee.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (iii)         During
the Earn-Out Period, the Purchaser and the Shareholders shall meet quarterly to
review the status of the business, progress toward achievement of the EBITDA
target set forth above and projected Contingent Consideration.

     

    (iv)         During
the Earn-Out Period, Purchaser shall use commercially reasonable efforts to
conduct projects for which Purchaser has been using, or would in the ordinary
course of business use, a prime contractor by using the Company as the prime
contractor.  To the extent Purchaser is able to use the Company as
prime contractor, one percent (1%) of the gross revenue earned by Purchaser on
such projects during the Earn-Out Period will be included in the calculation of
EBITDA and the Contingent Consideration pursuant to this Section
1.6.  Further, to the extent that the Company fails to win contracts
for sole-source work during the Earn-Out Period as a result of the conflict of
interest created by ownership of the Company by Purchaser, Purchaser shall use
its commercially reasonable efforts to find the Company replacement, equivalent
project work under contracts existing within Purchaser’s portfolio during the
Earn-Out Period.

     

    (v)       
  If the Company loses an engagement or is unable to be engaged to
perform Title II work at Andrews Airforce base on a sole-source basis as a
result of an actual or potential conflict of interest created by ownership or
proposed ownership of the Company by Purchaser, a credit of $200,000 (subject to
reduction as set forth below) shall be added to EBITDA determined pursuant to
Section 1.6(a) for purposes of the calculation of Contingent
Consideration.  Such $200,000 credit shall be reduced (i) by any
EBITDA of the Company attributable to equivalent project work provided to the
Company in replacement for such Andrews Airforce base Title II work pursuant to
the last sentence of Section 1.6(b)(iv) and (ii) pro rata for any portion of the
Andrews Airforce base contract that would have been performed on or after March
31, 2011, based on the number of months of the contract performed prior to such
date compared to the number of months of the contract to be performed after such
date.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
II

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND THE 

    SHAREHOLDERS

     

    Except as
set forth on the Shareholder Disclosure Schedule, the Company and the
Shareholders hereby, jointly and severally, represent and warrant to the
Purchaser, as of the date hereof and as of the Closing Date, as set forth
below.

     

    Section
2.1                    Organization; Standing and Power;
Subsidiaries.

     

    (a)           The
Company is a corporation duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation, has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction listed in Section 2.1(a) of the Shareholder Disclosure
Schedule, which jurisdictions constitute as of the date hereof the only
jurisdictions in which the character of the properties it owns, operates or
leases or the nature of its activities makes such qualification necessary or
advisable.

     

    (b)          Except
as set forth in Section 2.1(b) of the Shareholder Disclosure Schedule, the
Company has no Subsidiaries.  The Company does not own, nor has it
ever owned, beneficially or otherwise, any shares or other securities of, or any
direct or indirect equity or other financial interest in, any
Entity.  The Company has not agreed and is not obligated to make any
future investment in or capital contribution to any Entity.  Neither
the Company nor any of the Shareholders has ever approved, or commenced any
proceeding or made any election contemplating, the dissolution or liquidation of
the business or affairs of the Company.  Advent Environmental Puerto
Rico, Inc. (“Advent
PR”) was formed for a special purpose relating to work in Puerto Rico,
the work for which Advent PR was formed has been completed and the Company is in
the process of dissolving Advent PR.  There are no liabilities or
obligations of Advent PR of any kind whatsoever (absolute, accrued, contingent,
determined, determinable or otherwise), whether known or unknown, and there is
no existing condition, situation or set of circumstances that could reasonably
be expected to result in such a liability or obligation, except as set forth in
Section 2.1(b) of the Shareholder Disclosure Schedule.

     

    Section
2.2                    Certificate of Incorporation
and Bylaws; Records. The Company has
delivered to the Purchaser true, correct and complete copies of its
(a) certificate of incorporation and bylaws, including all amendments
thereto, (b) stock records and (c) the minutes and other records of
the meetings and other proceedings (including any actions taken by written
consent or otherwise without a meeting) of the Shareholders, the board of
directors of the Company and all committees of the board of directors of the
Company (the items described in (a), (b) and (c) above, collectively, the “Company Constituent
Documents”).  There have been no formal meetings or other
proceedings of the Shareholders, the board of directors of the Company or any
committee of the board of directors of the Company that are not fully reflected
in the Company Constituent Documents.  There has not been any
violation of the Company Constituent Documents, and the Company has not taken
any action that is inconsistent with the Company Constituent
Documents.  The books of account, stock records, minute books and
other records of the Company are accurate and complete in all material respects,
and have been maintained in accordance with all applicable Laws and prudent
business practices.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Section
2.3                    Authority; Binding Nature of
Agreement.  The Company has the absolute and unrestricted
right, power and authority to enter into and perform its obligations under this
Agreement and any Shareholder Related Agreement to which it is a party, and the
execution, delivery and performance by the Company of this Agreement and any
Shareholder Related Agreement to which it is a party have been duly authorized
by all necessary action on the part of the Company.  Each Shareholder
has the absolute and unrestricted, right, power, authority and capacity to enter
into and perform its obligations under this Agreement and any Shareholder
Related Agreement to which it is a party.  This Agreement constitutes
the legal, valid and binding obligation of the Company and each Shareholder,
enforceable against the Company and each Shareholder in accordance with its
terms, subject to (a) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (b) rules of law governing specific
performance, injunctive relief and other equitable remedies (the “Bankruptcy and Equity
Exception”). Upon the execution and
delivery by or on behalf of the Company or a Shareholder of each Shareholder
Related Agreement to which it is a party, such Shareholder Related Agreement
will constitute the legal, valid and binding obligation of the Company or such
Shareholder, as applicable, enforceable against the Company or such Shareholder,
as applicable, in accordance with its terms, subject to the Bankruptcy and
Equity Exception.

     

    Section
2.4                    Absence of Restrictions and
Conflicts; Required Consents.  Neither the execution, delivery
or performance by the Company or any of the Shareholders of this Agreement or
any of the Shareholder Related Agreements, nor the consummation of the
transactions contemplated by this Agreement or any of the Shareholder Related
Agreements, will directly or indirectly (with or without the giving of notice or
the lapse of time or both):

     

    (a)           contravene,
conflict with or result in a violation of any provision of any Company
Constituent Document;

     

    (b)           contravene,
conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the transactions contemplated by this
Agreement or any of the Shareholder Related Agreements or to exercise any remedy
or obtain any relief under, any Law or any order, writ, injunction, judgment or
decree to which the Company or Shareholders, or any of the assets owned, used or
controlled by the Company, are subject;

     

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

     

    (d)           except
as set forth in Section 2.4(d) of the Shareholder Disclosure Schedule,
contravene, conflict with or result in a violation or breach of, or result in a
default under, any provision of any Company Contract, or give any Person the
right to (i) declare a default or exercise any remedy under any such
Company Contract, or (ii) modify, terminate, or accelerate any right,
liability or obligation of the Company under any such Company Contract, or
charge any fee, penalty or similar payment to the Company under any such Company
Contract; or

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (e)           result
in the imposition or creation of any Encumbrance upon or with respect to any
asset owned or used by the Company.

     

    No filing with, notice to or consent from any Person is
required in connection with (i) the execution, delivery or performance
by the Company or any of the Shareholders
of this Agreement or any of the Shareholder Related Agreements, or (ii) the
consummation of any of the other transactions contemplated by this Agreement or
any of the Shareholder Related Agreements.

     

    Section
2.5                    Capitalization.

     

    (a)           The
authorized capital stock of the Company consists of 2,000 shares of Company
Common Stock, of which 1,860 shares have been issued and are
outstanding.  All of the outstanding shares of Company Common Stock
have been duly authorized and validly issued, and are fully paid and
non-assessable and are owned by the Shareholders.  Each Shareholder
has good and valid title to, and record and beneficial ownership of, the number
of shares of capital stock set forth next to such Shareholder’s name in Section
2.5(a) of the Shareholder Disclosure Schedule, and such shares are free and
clear of all Encumbrances.  Other than the shares of capital stock
listed in Section 2.5 of the Shareholder Disclosure Schedule, none of the
Shareholders own any shares of capital stock or other equity security of the
Company or any option, warrant, right, call, commitment or right of any kind to
have any such share of capital stock or equity security
issued.   All of the outstanding shares of Company Common Stock
have been issued and granted in compliance with (i) all applicable securities
laws and other applicable Laws, and (ii) all requirements set forth in the
Company Constituent Documents and applicable Contracts.

     

    (b)           The
Company has no (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire any shares of capital stock or
other securities of the Company, (ii) outstanding security, instrument or
obligation that is or may become convertible into or exchangeable for any shares
of capital stock or other securities of the Company, (iii) Contract under which
the Company is or may become obligated to sell or otherwise issue any shares of
its capital stock or any other securities of the Company, or (iv) condition or
circumstance that may give rise to or provide a basis for the assertion of a
claim by any Person to the effect that such Person is entitled to acquire or
receive any shares of capital stock or other securities of the
Company.  The Company has not issued any debt securities which grant
the holder thereof any right to vote on, or veto, any actions by the
Company.

     

    (c)           The
Company is not a party to or bound by any, and to the Knowledge of the Company,
there are no, agreements or understandings with respect to the voting (including
voting trusts and proxies) or sale or transfer (including agreements imposing
transfer restrictions) of any shares of capital stock or other equity interests
of the Company.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    Section
2.6                    Company Financial
Statements; Undisclosed Liabilities.

     

    (a)           Section
2.6(a) of the Shareholder Disclosure Schedule includes true, correct and
complete copies of the following financial statements and notes thereto
(collectively, the “Company Financial
Statements”):

     

    (i)         The
audited consolidated balance sheet of the Company as of September 30, 2009
(the “Balance
Sheet”), and the related audited consolidated statements of income,
shareholders’ equity and cash flow for the period then ended, together with the
unqualified review report of Legare, Bailey Hinske relating thereto;
and

     

    (ii)         the
unaudited consolidated balance sheet of the Company as of December 31, 2009
(the “Unaudited
Interim Balance Sheet”) and the related unaudited consolidated statements
of income, shareholders’ equity and cash flow for the three months then
ended.

     

    (b)           Each
Company Financial Statement:  (i) is complete in all material respects
and has been prepared in conformity with (A) the books and records of
the Company and (B) GAAP applied on a consistent basis throughout the
periods covered thereby (except as may be indicated in the notes to such Company
Financial Statement); and (ii) fairly presents, in all material respects,
the consolidated financial position of the Company as of such dates and the
consolidated results of operations, changes in shareholders’ equity and cash
flows of the Company for the periods then ended.  No financial
statement of any Person is required by GAAP to be included in the Company
Financial Statements.

     

    (c)           The
books and records of the Company (i) reflect all items of income and
expense and all assets and liabilities required to be reflected in the Company
Financial Statements in accordance with GAAP and (ii) are in all material
respects complete and correct.  The Company maintains proper and
adequate internal accounting controls which provide assurance that (i)
transactions are executed in accordance with management’s authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and (iii) accounts, notes and other
receivables and inventory are recorded accurately, and proper and adequate
procedures are implemented to effect the collection thereof on a current and
timely basis.

     

    (d)           There
are no liabilities or obligations of the Company of any kind whatsoever
(absolute, accrued, contingent, determined, determinable or otherwise), whether
known or unknown, and there is no existing condition, situation or set of
circumstances that could reasonably be expected to result in such a liability or
obligation, except such liabilities or obligations (i) that are fully
reflected or provided for in the Balance Sheet or the Unaudited Interim Balance
Sheet or the notes thereto, or (ii) that have arisen in the ordinary course
of business, consistent with past practice, since the date of the Unaudited
Interim Balance Sheet and of a type reflected or provided for in the Unaudited
Interim Balance Sheet.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    Section
2.7                    Absence of
Changes. Since the date of the
Balance Sheet:

     

    (a)           no
Material Adverse Effect has occurred, and no event, occurrence, development or
state of circumstances or facts has occurred that will, or could reasonably be
expected to, have a Material Adverse Effect;

     

    (b)           the
Company has not entered into any transaction or taken any other action outside
the ordinary course of business or inconsistent with its past practices, other
than entering into this Agreement and the agreements and transactions
contemplated hereby;

     

    (c)           the
Company not taken or authorized the taking of any of the following:

     

    (i)         formed
any subsidiary or acquired any equity interest or other interest in any other
Entity;

     

    (ii)         made
any capital expenditure outside the ordinary course of business or made any
single capital expenditure in excess of $10,000 or capital expenditures
exceeding $25,000 in the
aggregate;

     

    (iii)         except
in the ordinary course of business and consistent with past practice, entered
into or become bound by, or permitted any of the assets owned or used by it to
become bound by, any Company Contract, or amended or terminated, or waived any
right under any Company Contract;

     

    (iv)         acquired,
leased or licensed any right or other asset from any other Person or sold or
otherwise disposed of, leased, licensed or encumbered, any right or other asset
to any other Person (except in each case for assets acquired, leased, licensed,
encumbered or disposed of by the Company in the ordinary course of business and
not having a value, or not requiring payments to be made or received, in excess
of $5,000 individually, or $10,000 in the aggregate), or
waived or relinquished any claim or right;

     

    (v)         repurchased,
repaid, or incurred any indebtedness or guaranteed any indebtedness of another
Person, guaranteed any debt securities of another Person, entered into any “keep
well” or other agreement to maintain any financial statement condition of
another Person or entered into any arrangement having the economic effect of any
of the foregoing;

     

    (vi)         granted,
created, incurred or suffered to exist any Encumbrance on the assets of the
Company or written down the value of any asset or investment on the books or
records of the Company, except for depreciation and amortization in the ordinary
course of business and consistent with past practice;

     

    (vii)         made
any loans, advances or capital contributions to, or investments in, any other
Person;

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (viii)         except
as required to comply with applicable Laws or any Contract or Employee Benefit
Plan in effect on the date hereof, (A) paid to any Employee, officer, director
or independent contractor of the company any benefit not provided for under any
Contract or Employee Benefit Plan in effect on the date hereof, (B) granted any
awards under any Employee Benefit Plan, (C) taken any action to fund or in any
other way secure the payment of compensation or benefits under any Contract or
Employee Benefit Plan, (D) taken any action to accelerate the vesting or payment
of any compensation or benefit under any Contract or Employee Benefit Plan, (E)
adopted, entered into or amended any Employee Benefit Plan other than offer
letters entered into with new Employees in the ordinary course of business
consistent with past practice that provide, except as required by applicable
Laws, for “at will employment” with no severance benefits or (F) made any
material determination under any Employee Benefit Plan that is inconsistent with
the ordinary course of business consistent with past practice; or

     

    (ix)         except
as required by GAAP or applicable Laws, changed its fiscal year, revalued any of
its material assets or made any changes in financial or tax accounting methods,
principles or practices;

     

    (d)           none
of the Company has agreed to take, or committed to take, any of the actions
referred to in clauses “(b)” or “(c)” above.

     

    Section
2.8                    Title to and Sufficiency of
Assets.

     

    (a)           The
Company has good, valid, transferable and marketable title to, or valid
leasehold interests in, all of its properties and assets, in each case free and
clear of all Encumbrances, except for Permitted Encumbrances.

     

    (b)           The
property and other assets owned by the Company or used under enforceable
Contracts constitute all of the properties and assets (whether real, personal or
mixed and whether tangible or intangible) necessary and sufficient to permit the
Company to conduct its business after the Closing in accordance with its past
practice and as presently planned to be conducted.

     

    Section
2.9                    Inventory.  All
of the inventory of the Company (a) was acquired and is sufficient for the
operation of its business in the ordinary course consistent with past practice,
(b) is of a quality and quantity usable or saleable in the ordinary course
of business, and (c) is valued on the books and records of the Company at the
lower of cost or market with the cost determined under the first-in-first-out
inventory valuation method consistent with past practice.  No
previously sold inventory is subject to returns in excess of those historically
experienced by the Company.

     

    Section
2.10                  Bank Accounts;
Receivables.

     

    (a)           Section 2.10(a)
of the Shareholder Disclosure Schedule provides accurate information with
respect to each account maintained by or for the benefit of the Company at any
bank or other financial institution including the name of the bank or financial
institution, the account number and the balance as of the date
hereof.

     

    (b)           All
accounts receivable of the Company (i) are valid, existing and collectible in a
manner consistent with the Company’s past practice, without resort to legal
proceedings or collection agencies, (ii) represent monies due for goods sold and
delivered or services rendered in each case in the ordinary course of business
and (iii) are current and will be collected in full when due, and are not
subject to any refund or adjustment or any defense, right of set-off,
assignment, restriction, security interest or other
Encumbrance.  There are no disputes regarding the collectibility of
any such accounts receivable.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Section
2.11                  Real
Property.

     

    (a)           The
Company does not own and has never owned any real property.  The
Company is not obligated and does not have an option to acquire an ownership
interest in any real property.

     

    (b)           Section
2.11(b) of the Shareholder Disclosure Schedule includes a true, correct and
complete list of the Leased Real Property and the leases under which such Leased
Real Property is leased, subleased or licensed, including all amendments or
modifications to such leases (the 

“Leases”).  The
Company has made available to the Purchaser complete copies of all
Leases.  The Company is not a party to any lease, sublease, license,
assignment or similar arrangement under which it is a lessor, sublessor,
licensor or assignor of, or otherwise makes available for use by any third party
of, any portion of the Leased Real Property, and the Company is not in violation
of any zoning, building, safety or environmental ordinance, acquisition or
requirement or Law applicable to such Leased Real Property.  With
respect to each Lease, (i) the Lease is legal, valid, binding, enforceable
according to its terms and in full force and effect, (ii) neither the
Company nor, to the Knowledge of the Company, any other party to such Lease, is
in breach or default under such Lease, and no event has occurred which, with
notice or lapse of time or both, would constitute a material breach or default
under such Lease, (iii) each Lease will continue to be legal, valid,
binding, enforceable in accordance with its terms and in full force and effect
immediately following the Closing, except as may result from actions that may be
taken following the Closing and (iv) the Company does not owe any brokerage
commissions or finder’s fees with respect to any such Lease which is not paid or
accrued in full.

     

    (c)           No
damage or destruction has occurred with respect to any of the Leased Real
Property for which the Company may be liable.  The improvements and
fixtures on the Leased Real Property are in good operating condition and in a
state of good maintenance and repair, ordinary wear and tear
excepted.

     

    (d)           The
premises leased pursuant to each Lease are supplied with utilities and other
services necessary for the operation of such premises.

     

    (e)           Except
for the Permitted Encumbrances, no Leased Real Property is subject to (i) any
Encumbrances, (ii) any decree or order of a Governmental Body (or, to the
Knowledge of the Company, threatened or proposed decree or order of a
Governmental Body), or (iii) any rights of way, building use restrictions,
exceptions, variances, reservations or limitations of any nature
whatsoever.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Section
2.12                  Personal
Property.

     

    (a)           All
items of tangible personal property and assets of the Company (i) are free of
defects and in good operating condition and in a state of good maintenance and
repair, subject to ordinary wear and tear and (ii) were acquired and are usable
in the regular and ordinary course of business.  Except as set forth
in Section 2.12(a) of the Shareholder Disclosure Schedule, all of the
tangible personal property and assets of the Company are located at the Real
Property.

     

    (b)           No
Person other than the Company owns any equipment or other tangible personal
property or asset that is necessary to the operation of the Company’s business,
except for the leased equipment, property or assets listed on Section 2.12(b) of
the Shareholder Disclosure Schedule.

     

    (c)           Section
2.12(c) of the Shareholder Disclosure Schedule sets forth a true, correct and
complete list and general description of each item of tangible personal property
of the Company having a book value of more than $5,000.

     

    Section
2.13                  Intellectual
Property.

     

    (a)           Section
2.13(a) of the Shareholder Disclosure Schedule contains a true, correct and
complete list of all Company Registered Intellectual Property and all material
unregistered Company Intellectual Property.  All necessary
registration, maintenance and renewal fees currently due in connection with
Company Registered Intellectual Property have been made and all necessary
documents, recordations and certifications in connection with such Company
Registered Intellectual Property have been filed with the relevant Governmental
Bodies for the purpose of maintaining such Company Registered Intellectual
Property.  The licensing by the Company of any Company Registered
Intellectual Property has been subject to commercially reasonable quality
control.

     

    (b)           The
Company owns, or is licensed or otherwise have the right to use, free and clear
of any Encumbrances (other than Permitted Encumbrances), all Intellectual
Property used in connection with the operation and conduct of its
business.

     

    (c)           Section
2.13(c) of the Shareholder Disclosure Schedule sets forth a true, correct and
complete list of the Company Proprietary Software.  The Company has
all right, title and interest in and to all intellectual property rights in the
Company Proprietary Software, free and clear of all Encumbrances, except
Permitted Encumbrances.  No portion of the Company Proprietary
Software contains, embodies, uses, copies, comprises or requires the work of any
third party.

     

    (d)           All
Company Intellectual Property which the Company purports to own was developed by
(i) an Employee working within the scope of his or her employment at the time of
such development, or (ii) agents, consultants, contractors, or other Persons who
have executed appropriate instruments of assignment in favor of the Company as
assignee that have conveyed to the Company ownership of all Intellectual
Property rights in the Company Intellectual Property.  To the extent
that any Company Intellectual Property has been developed or created by a third
party for the Company, the Company has a written agreement with such third party
with respect thereto and the Company thereby either (i) has obtained
ownership of and are the exclusive owner of, or (ii) has obtained a license
(sufficient for the conduct of its business as currently conducted) to, all of
such third party’s Intellectual Property in such work, material or invention by
operation of law or by valid assignment.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (e)           Neither
the Company nor any of its products or services has infringed upon or otherwise
violated, or is infringing upon or otherwise violating, the Intellectual
Property of any third party.  To the Knowledge of the Company, no
Person has infringed upon or violated, or is infringing upon or violating, any
Company Intellectual Property.

     

    (f)           The
Company is not subject to any proceeding or outstanding decree, order, judgment,
agreement or stipulation (i) restricting in any manner the use, transfer or
licensing by the Company of any of the Company Intellectual Property or (ii)
that may affect the validity, use or enforceability of the Company Intellectual
Property or any product or service of the Company related thereto.

     

    (g)           None
of the source code of the Company has been published or disclosed by the
Company, except pursuant to a written non-disclosure agreement that is in the
standard form used by the Company or similar agreement requiring the recipient
to keep such source code or trade secrets confidential, or, to the Knowledge of
the Company, by any third party to any other third party except pursuant to
licenses or other Contracts requiring such third party to keep such trade
secrets confidential.  The current standard form of non-disclosure
agreement used by the Company has been provided to the Purchaser prior to the
date of this Agreement.

     

    (h)           The
Company has taken reasonable steps to protect its rights in the Confidential
Information and any trade secret or confidential information of third parties
used by the Company, and, except under confidentiality obligations, there has
not been any disclosure by the Company of any Confidential Information or any
such trade secret or confidential information of third parties.

     

    Section
2.14                  Contracts.

     

    (a)           Section 2.14(a)
of the Shareholder Disclosure Schedule sets forth a true, correct and complete
list of the following Contracts currently in force to which the Company is a
party or under which the Company has continuing liabilities and/or
obligations:

     

    (i)          
each Contract relating to the employment of, or the performance of services by,
any Person, including any Employee, consultant or independent
contractor;

     

    (ii)         
each Contract relating to the acquisition, transfer, use, development, sharing
or license of any technology or any Intellectual Property;

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (iii)         all
Contracts that (A) limit, or purport to limit, the ability of the Company,
or any officers, directors, Employees, shareholders or other equity holders,
agents or representatives of any of the Company (in their capacities as such) to
compete in any line of business or with any Person or in any geographic area or
during any period of time, (B) would by their terms purport to be binding
upon or impose any obligation upon the Purchaser or any of its Affiliates (other
than the Company), (C) contain any so called “most favored nation”
provisions or any similar provision requiring any of the Company to offer a
third party terms or concessions (including levels of service or content
offerings) at least as favorable as offered to one or more other parties or
(D) provide for “exclusivity,” preferred treatment or any similar
requirement or under which any of the Company is restricted with respect to
distribution, licensing, marketing, co-marketing or development;

     

    (iv)         each
Contract creating or involving any agency relationship, distribution arrangement
or franchise relationship;

     

    (v)         
each Contract relating to the acquisition, issuance or transfer of any
securities;

     

    (vi)         bonds,
debentures, notes, credit or loan agreements or loan commitments, mortgages or
other similar Contracts relating to the borrowing of money or the deferred
purchase price of property or binding upon any properties or assets (real,
personal or mixed, tangible or intangible) of the Company;

     

    (vii)        each
Contract relating to the creation of any Encumbrance with respect to any asset
of the Company;

     

    (viii)       each
Contract involving or incorporating any guaranty, any pledge, any performance or
completion bond, any indemnity or any surety arrangement;

     

    (ix)         
each Contract creating or relating to any partnership or joint venture or any
sharing of revenues, profits, losses, costs or liabilities;

     

    (x)          
each Contract relating to the purchase or sale of any product or other asset by
or to, or the performance of any services by or for, any Related
Party;

     

    (xi)         
each Contract constituting or relating to a Government Contract
or  Government Bid, including task orders and proposals;

     

    (xii)         each
Contract that is a teaming agreement;

     

    (xiii)        each
Contract providing for “earn outs,” “performance guarantees” or other similar
contingent payments, by or to the Company;

     

    (xiv)        Contracts
for capital expenditures or the acquisition or construction of fixed assets
requiring the payment by the Company of an amount in excess of
$10,000;

     

    (xv)         Contracts
for the cleanup, abatement or other actions in connection with any Materials of
Environmental Concern, the remediation of any existing environmental condition
or relating to the performance of any environmental audit or study;

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (xvi)   
    Contracts granting any Person an option or a right of
first refusal, first-offer or similar preferential right to purchase or acquire
any assets of the Company;

     

    (xvii)       Contracts
for the granting or receiving of a license, sublicense or franchise or under
which any Person is obligated to pay or has the right to receive a royalty,
license fee, franchise fee or similar payment;

     

    (xviii)      Contracts
with customers or suppliers;

     

    (xix)        each
Contract that provides for confidentiality or non-disclosure of information by
the Company;

     

    (xx)         outstanding
powers of attorney empowering any Person to act on behalf of the
Company;

     

    (xxi)        each
Contract that was entered into outside the ordinary course of business or was
inconsistent with the Company’s past practice; and

     

    (xxii)       any
other Contract that (A) contemplates or involves (x) the payment or delivery of
cash or other consideration in an amount or having a value in excess of $10,000
in the aggregate, or (y) the purchase or sale of any product, or performance of
services by or to the Company having a value in excess of $10,000 in the aggregate, (B)
has a term of more than sixty (60) days and that may not be terminated by the
Company (without penalty) within sixty (60) days after the delivery of a
termination notice by the Company, or (C) is material to the Company,
individually or in the aggregate.

     

    (b)           The
Company has delivered to the Purchaser true, correct and complete copies of all
written Company Contracts.  Section 2.14(b) of the Shareholder
Disclosure Schedule provides a true, correct and complete description of the
terms of each Company Contract that is not in written form.  Each
Company Contract is valid and in full force and effect, is enforceable by the
Company in accordance with its terms, and after the Closing will continue to be
legal, valid, binding and enforceable on identical terms.  Except as
set forth in Schedule 2.14(b) of the Shareholder Disclosure Schedule, the
consummation of the transactions contemplated hereby shall not (either alone or
upon the occurrence of additional acts or events) result in any payment or
payments becoming due from the Company, the Purchaser or any of its Affiliates
to any Person or give any Person the right to terminate or alter the provisions
of any Company Contract.

     

    (c)           The
Company has not violated or breached, or committed any default under, any
Company Contract, and, to the Knowledge of the Company, no other Person has
violated or breached, or committed any default under, any Company
Contract.

     

    (d)           No
event has occurred, and no circumstance or condition exists, that (with or
without notice or lapse of time) will, or could reasonably be expected to,
(i) result in a violation or breach of any of the provisions of any Company
Contract, (ii) give any Person the right to declare a default or exercise
any remedy under any Company Contract, (iii) give any Person the right to
accelerate the maturity or performance of any Company Contract or (iv) give any
Person the right to cancel, terminate or modify any Company
Contract.  The Company has not received any notice or other
communication regarding any actual or possible violation or breach of, or
default under, any Company Contract.  The Company has not waived any
of its rights under any Company Contract.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (e)           No
Person is renegotiating, or has a right pursuant to the terms of any Company
Contract to renegotiate, any amount paid or payable to the Company under any
Company Contract or any other material term or provision of any Company
Contract.

     

    (f)           
Section 2.14(j) of the Shareholder Disclosure Schedule identifies and
provides a brief description of each proposed Contract as to which any bid,
offer, award, written proposal, term sheet or similar document has been
submitted or received by the Company.

     

    (g)           (i)
The Company has complied with the terms and conditions of each Government
Contract and Government Bid; (ii) the Company has complied with all requirements
of Law pertaining to each Government Contract or Government Bid; (iii) all
representations and certifications made by the Company with respect to any
Government Contract or Government Bid were complete and accurate as of their
effective date and the Company has fully complied with all such representations
and certifications; (iv) no termination for convenience, termination for
default, cure notice or show cause notice is currently in effect, has been
issued and remains unresolved, or  is expected with respect to any
Government Contract or Government Bid; (v) other than pursuant to Government
Contract requirements for withholding of fees under cost plus fixed fee
contracts and labor withholdings under time and materials/labor hour contracts,
no money due to the Company pertaining to any Government Contract or Government
Bid has been withheld or set off nor has any claim been made to withhold or set
off money, and the Company is entitled to all progress payments received with
respect thereto; (vi) no stop work order has been issued with respect to any
Government Contract or Government Bid; (vii) no material cost incurred by the
Company pertaining to any Government Contract or Government Bid has been
formally questioned or challenged, is the subject of any investigation or has
been disallowed by any Governmental Body; (viii) there have not been any written
notices challenging, questioning or disallowing any costs with respect to any
Government Contract or Government Bid; and (ix) in the past six (6) years, there
have not been any claims or equitable adjustments by the Company against any
Governmental Body or any third party in excess of $20,000.

     

    (h)           (i)
Neither the Company nor any of the Company’s directors, officers, employees,
consultants or agents is (or during the last five (5) years has been) under
administrative, civil or criminal investigation, indictment or writ of
information by any Governmental Body, or any audit or investigation by any
Governmental Body, with respect to any alleged irregularity, misstatement,
omission or noncompliance arising under or relating to any Government Contract
or Government Bid or Laws applicable thereto; (ii) no such audit or
investigation been threatened; and (iii) during the last five (5) years, the
Company has not conducted or initiated any internal investigation or made any
voluntary disclosure to any Governmental Body with respect to any alleged
irregularity, misstatement, omission or noncompliance arising under or relating
to a Government Contract or Government Bid or any Law applicable
thereto.  To the Company’s Knowledge, there exists no irregularity,
misstatement, omission or noncompliance arising under or relating to any
Government Contract or Government Bid or any Law applicable thereto that has led
or could lead to any of the consequences set forth in the immediately preceding
sentence or any other damage, penalty assessment, recoupment of payment or
disallowance of cost.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    (i)       
    There are (i) no outstanding claims or notices of
violation against the Company, by any Governmental Body or by any prime
contractor, subcontractor, vendor or other third party arising under or relating
to any Government Contract or Government Bid, and (ii) except as set forth in
Section 2.14(i) of the Shareholder Disclosure Schedule, no outstanding
disputes between the Company, on the one hand, and any Governmental Body, on the
other hand, under the Contract Disputes Act or any other Federal statute or
between the Company, on the one hand, and any prime contractor, subcontractor,
vendor or other third party, on the other hand, arising under or relating to any
such Government Contract or Government Bid.

     

    (j)         
  [intentionally left blank]

     

    (k)           To
the Company’s Knowledge, the Company has not submitted to any Governmental Body
any inaccurate, untruthful or misleading cost or pricing data, certification,
bid, proposal, report, claim or any other information relating to a Government
Contract or Government Bid.

     

    (l)         
  None of the Company or any of its directors, officers or employees
has ever been (i) debarred or suspended from participation in, or the award of,
Contracts with any Governmental Body, or (ii) subject to any debarment or
suspension inquiry.  To the Company’s Knowledge, there exist no facts
or circumstances that would warrant the institution of suspension or debarment
proceedings or the finding of nonresponsibility or ineligibility on the part of
the Company with respect to any prior, current, or future Government Contract or
Government Bid. To the Company’s Knowledge, no payment or other benefit has been
made or conferred by the Company or by any Person on behalf of the Company in
connection with any Government Contract or Government Bid in violation of
applicable Laws (including procurement Laws, the Foreign Corrupt Practices Act
(15 U.S.C. 78dd-1 et. seq.) and international anti-bribery conventions and local
anti-corruption and bribery Laws in jurisdictions in which the Company is
operating).  The Company has not received any communication that
alleges that the Company or any agent thereof is in violation of, or has
liability under any such Laws.

     

    (m)          The
Company is in compliance with all national security obligations, including those
specified in the National Industrial Security Program Operating Manual, DOD
5220.22-M (January 1995).  The Company has not been subject to any
security audit or inspection by the United States government during the past
three (3) years.  To the Company’s Knowledge, no facts currently exist
that could reasonably be expected to give rise to the revocation of any security
clearance of the Company or any employee of the Company.

     

    (n)           Section
2.14(n) of the Shareholder Disclosure Schedule identifies by description or
inventory number and contract all property, equipment, fixtures and software
loaned, bailed or otherwise furnished to or held by the Company (or by
subcontractors on behalf of Company) by or on behalf of the U.S. Government as
of the date stated therein (said property, equipment, fixtures and software are
herein referred to as the “GFE”).  As may be required, the Company has
certified to the U.S. Government in a timely manner that all GFE is in good
working order, reasonable wear and tear excepted, and otherwise meets the
requirements of the applicable contract and all applicable Laws.  To
the Company’s Knowledge, there are no outstanding loss, damage or destruction
reports that have been or should have been submitted to any Governmental Body in
respect of any GFE.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    Section
2.15                  Compliance with Laws;
Governmental Authorizations.

     

    (a)           The
Company is, and has at all times been, in substantial compliance with all
applicable Laws.  The Company has not received any notice or other
communication from any Governmental Body regarding any actual or possible
violation of, or failure to comply with, any Law.

     

    (b)           Section 2.15(b)
of the Shareholder Disclosure Schedule identifies each Governmental
Authorization held by the Company, and the Company and the Shareholders have
delivered, or caused to be delivered, to the Purchaser true, correct and
complete copies of all such Governmental Authorizations.  The
Governmental Authorizations held by the Company are valid and in full force and
effect, and collectively constitute all Governmental Authorizations necessary to
enable the Company to conduct its business in the manner in which its business
is currently being conducted and as presently planned to be
conducted.  The Company is in compliance with the terms and
requirements of the respective Governmental Authorizations held by
it.  The Company has not received any notice or other communication
from any Governmental Body regarding (i) any actual or possible violation
of or failure to comply with any term or requirement of any Governmental
Authorization, or (ii) any actual or possible revocation, withdrawal,
suspension, cancellation, termination or modification of any Governmental
Authorization.  Section 2.15(b) of the Shareholder Disclosure Schedule
identifies with an asterisk each Governmental Authorization set forth therein
which by its terms cannot be transferred to the Purchaser at
Closing.

     

    Section
2.16                  Tax
Matters.

     

    (a)           All
Tax Returns due to have been filed by the Company through the date hereof in
accordance with all applicable Laws (pursuant to an extension of time or
otherwise) have been duly filed and are true, correct and complete in all
respects.  Section 2.16(a) of the Shareholder Disclosure Schedule
contains a true, correct and complete list of all jurisdictions (whether foreign
or domestic) in which the Company does or is required to file Tax
Returns.  No claim has ever been made by a Governmental Body in a
jurisdiction where the Company does not file Tax Returns that it is or may be
subject to taxation or to a requirement to file Tax Returns in that
jurisdiction.

     

    (b)           All
Taxes, deposits and other payments for which the Company has liability (whether
or not shown on any Tax Return) have been paid in full or are accrued as
liabilities for Taxes on the books and records of the Company.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    (c)           The
amounts so paid, together with all amounts accrued as liabilities for Taxes
(including Taxes accrued as currently payable but excluding any accrual to
reflect timing differences between book and Tax income) on the books of the
Company, shall be adequate based on the tax rates and applicable Laws in effect
to satisfy all liabilities for Taxes of the Company in any jurisdiction through
the Closing Date, including Taxes accruable upon income earned through the
Closing Date.

     

    (d)           There
are not now any extensions of time in effect with respect to the dates on which
any Tax Returns were or are due to be filed by the Company.

     

    (e)           All
Tax deficiencies asserted as a result of any examination by a Governmental Body
of a Tax Return of the Company have been paid in full, accrued on the books of
the Company, as applicable, or finally settled, and no issue has been raised in
any such examination that, by application of the same or similar principles,
reasonably could be expected to result in a proposed Tax deficiency for any
other period not so examined.

     

    (f)         
  No claims have been asserted and no proposals or deficiencies for
any Taxes of the Company are being asserted, proposed or, to the Knowledge of
the Company, threatened, and no audit or investigation of any Tax Return of the
Company is currently underway, pending or threatened.

     

    (g)           The
Company has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any Employee, independent
contractor, creditor or shareholder thereof or other third party.

     

    (h)           There
are no outstanding waivers or agreements between any Governmental Body and the
Company for the extension of time for the assessment of any Taxes or deficiency
thereof, nor are there any requests for rulings, outstanding subpoenas or
requests for information, notices of proposed reassessment of any property owned
or leased by the Company or any other matter pending between the Company and any
Governmental Body.

     

    (i)         
  There are no Encumbrances for Taxes with respect to the Company or
the assets or properties of the Company, nor is there any such Encumbrance that
is pending or, to the Knowledge of the Company, threatened.

     

    (j)         
  The Company is not a party to or bound by any Tax allocation or
sharing agreement.

     

    (k)           The
Company has not constituted either a “distributing corporation” or a “controlled
corporation” in a distribution of stock qualifying for tax free treatment under
Section 355 of the Code (i) in the two years prior to the date of this Agreement
or (ii) in a distribution which could otherwise constitute part of a “plan” or
“series of related transactions” (within the meaning of Section 355(e) of the
Code) in connection with the transactions contemplated by this
Agreement.

     

    (l)       
    The Company does not have any net operating losses or
other tax attributes presently subject to limitation under Sections 382, 383 or
384 of the Code or the federal consolidated return regulations (or any
corresponding or similar provision of state, local or foreign income Tax
Law).

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (m)          The
Company is not, and has not been, a member of an “affiliated group” of
corporations (within the meaning of Code § 1504) filing a consolidated
federal income tax return (other than a group the common parent of which was the
Company).

     

    (n)           The
Company does not have any liability for the Taxes of any Person (other than for
itself) under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign Law), as a transferee or successor, by contract or
otherwise.

     

    (o)           None
of the Tax Returns described in Subsection (a) of this Section 2.16 contains any
position which is or would be subject to penalties under Section 6662 of the
Code (or any similar provision of provincial, state, local or foreign law) and
the Treasury Regulations issued thereunder.

     

    (p)           The
Company has not made any payments, is not obligated to make any payments, and is
not a party to any Contract that could obligate it to make any payments that
will not be deductible under Section 280G of the Code (or any similar provision
of provincial, state, local or foreign Law).

     

    (q)           The
Company is, and has at all times been, in compliance with the provisions of
Section 6011, 6111 and 6112 of the Code relating to tax shelter disclosure,
registration and list maintenance and with the Treasury Regulations
thereunder.

     

    (r)      
     The Company has not, at any time, engaged in or
entered into a “listed transaction” within the meaning of Treasury Regulation
Sections 1.6011-4(b)(2) or 301.6111-2(b)(2), and no IRS Form 8886 has been filed
with respect to the Company nor has the Company entered into any tax shelter or
listed transaction with the sole or dominant purpose of the avoidance or
reduction of a Tax liability with respect to which there is a significant risk
of challenge of such transaction by a Governmental Body.

     

    (s)           The
Company has not, directly or indirectly, transferred property to or acquired
property from a Person with whom it was not dealing at arm’s length for
consideration other than consideration equal to the fair market value of the
property at the time of the disposition or acquisition thereof.

     

    (t)         
  The Company will not be required to include any item of income in,
or exclude any item of deduction from, taxable income for any Tax period after
the Closing Date as a result of any (i) change in method of accounting for a Tax
period ending on or prior to the Closing Date, (ii) “closing agreement” as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law) executed on or prior to the Closing
Date, (iii) installment sale or open transaction disposition made on or prior to
the Closing Date or (iv) prepaid amount received on or prior to the Closing
Date.

     

    (u)           The
Company has not been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    Section
2.17                  Employee Benefit
Plans.

     

    (a)           Section
2.17(a) of the Shareholder Disclosure Schedule contains a true, correct and
complete list of each Company Benefit Plan and ERISA Affiliate
Plan.  Any special tax status or tax benefits for plan participants
enjoyed or offered by a Company Benefit Plan or ERISA Affiliate Plan is noted on
such schedule.

     

    (b)           With
respect to each Company Benefit Plan and ERISA Affiliate Plan identified on
Section 2.17(a) of the Shareholder Disclosure Schedule, the Company has
heretofore delivered to the Purchaser true, correct and complete copies of the
plan documents and any amendments thereto (or, in the event the plan is not
written, a written description thereof), any related trust, insurance contract
or other funding vehicle, any reports or summaries required under all applicable
Laws, including ERISA or the Code, the most recent determination or opinion
letter received from the Internal Revenue Service (“IRS”) with respect to
each current Company Benefit Plan or ERISA Affiliate Plan intended to qualify
under Code Section 401, nondiscrimination and coverage tests for the most recent
three (3) full plan years, the three (3) most recent annual reports (Form 5500)
filed with the IRS and financial statements (if applicable), the three (3) most
recent actuarial reports or valuations (if applicable) and such other
documentation with respect to any Company Benefit Plan or ERISA Affiliate Plan
(whether current or not) as is reasonably requested by the
Purchaser.

     

    (c)           The
records of the Company accurately reflect the employment or service histories of
its Employees, independent contractors, contingent workers and leased employees,
including their hours of service.

     

    (d)           With
respect to each Company Benefit Plan, (i) there has not occurred any non-exempt
“prohibited transaction” within the meaning of Section 4975(c) of the Code or
Section 406 of ERISA that would subject the Company or the Purchaser to any
material liability, and (ii) no fiduciary (within the meaning of Section 3(21)
of ERISA) of any Company Benefit Plan that is subject to Part 4 of Title I of
ERISA has committed a breach of fiduciary duty that would subject the Company or
the Purchaser to any liability.  The Company has not incurred any
excise taxes under Chapter 43 of the Code and nothing has occurred with respect
to any Company Benefit Plan that would reasonably be expected to subject the
Company or the Purchaser to any such taxes.  The transactions
contemplated by this Agreement will not trigger any Taxes under Section 4978 of
the Code.  No Company Benefit Plan or ERISA Affiliate Plan is or was
subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code,
and no Company Benefit Plan or ERISA Affiliate Plan is or was a “multiemployer
plan” (as defined in Section 3(37) of ERISA), a “multiple employer plan” (within
the meaning of Section 413(c) of the Code), or a “multiple employer welfare
arrangement” (as defined in Section 3(40)(A) of ERISA), nor have the Company or
any of its ERISA Affiliates ever sponsored, maintained, contributed to, or had
any liability or obligation with respect to, any such Company Benefit Plan or
ERISA Affiliate Plan.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    (e)           Each
Company Benefit Plan or ERISA Affiliate Plan has been established, registered,
qualified, invested, operated and administered in all respects in accordance
with its terms and in compliance with all Applicable Benefit
Laws.  The Company have performed and complied in all respects with
all of their obligations under or with respect to the Company Benefit
Plans.  The Company has not incurred, and no fact exists that
reasonably could be expected to result in, any liability to the Company with
respect to any Company Benefit Plan or any ERISA Affiliate Plan, including any
liability, tax, penalty or fee under any Applicable Benefit Law (other than to
pay premiums, contributions or benefits in the ordinary course of business
consistent with past practice).  There are no current or, to the
Knowledge of the Company, threatened or reasonably foreseeable Encumbrances on
any assets of any Company Benefit Plan or ERISA Affiliate Plan.

     

    (f)         
  No fact or circumstance exists that could adversely affect the
tax-exempt status of a Company Benefit Plan or ERISA Affiliate Plan that is
intended to be tax-exempt.  Further, each such plan intended to be
“qualified” within the meaning of Section 401(a) of the Code and the trusts
maintained thereunder that are intended to be exempt from taxation under Section
501(a) of the Code has received a favorable determination or opinion letter with
respect to all Applicable Benefits Laws on which the IRS will issue a favorable
determination letter on its qualification, and nothing has occurred subsequent
to the date of such favorable determination letter that could adversely affect
the qualified status of any such plan.

     

    (g)           There
is no pending or, to the Knowledge of the Company, threatened (i) complaint,
claim, charge, suit, proceeding or other action of any kind with respect to any
Company Benefit Plan or ERISA Affiliate Plan (other than a routine claim for
benefits in accordance with such Company Benefit Plan’s or ERISA Affiliate
Plan’s claims procedures and that have not resulted in any litigation) or (ii)
proceeding, examination, audit, inquiry, investigation, citation, or other
action of any kind in or before any Governmental Body with respect to any
Company Benefit Plan or ERISA Affiliate Plan and there exists no state of facts
that after notice or lapse of time or both reasonably could be expected to give
rise to any such claim, investigation, examination, audit or other proceeding or
to affect the registration of any Company Benefit Plan or ERISA Affiliate Plan
required to be registered. All benefit claims will be paid in accordance with
Applicable Benefit Laws and the terms of the applicable Company Benefit Plan or
ERISA Affiliate Plan.

     

    (h)           All
contributions and premium payments (including all employer contributions and
employee salary reduction contributions) that are due with respect to each
Company Benefit Plan have been made within the time periods prescribed by ERISA
and the Code, and all contributions and premium payments for any period ending
on or before the Closing Date that are an obligation of the Company and not yet
due have either been made to such Company Benefit Plan, or have been accrued on
the Company Financial Statements.

     

    (i)     
      With respect to each Company Benefit Plan
that is an employee welfare benefit plan (within the meaning of Section 3(1) of
ERISA), all claims incurred by the Company are (i) insured pursuant to a
contract of insurance whereby the insurance company bears any risk of loss with
respect to such claims, (ii) covered under a contract with a health maintenance
organization (an “HMO”), pursuant to
which the HMO bears the liability for claims, or (iii) reflected as a liability
or accrued for on the Company Financial Statements.  Except as set
forth on Section 2.17(i) of the Shareholder Disclosure Schedule, no Company
Benefit Plan provides or has ever provided benefits, including death, medical or
health benefits (whether or not insured), after an Employee’s termination of
employment, and the Company has no liabilities (contingent or otherwise) with
respect thereto other than (A) continuation coverage required pursuant to
Section 4980B of the Code and Part 6 of Title I of ERISA, and the regulations
thereunder, and any other Applicable Benefit Laws, (B) death benefits or
retirement benefits under any employee pension benefit plan, (C) deferred
compensation benefits, reflected as liabilities on the Company Financial
Statements, or (D) benefits the full cost of which is borne by the current or
former Employee (or the Employee’s beneficiary).

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    (j)          
 The transactions contemplated by this Agreement will not result (either
alone or in combination with any other event) in (i) any payment of, or increase
in, remuneration or benefits, to any Employee, officer, director or consultant
of the Company, (ii) any cancellation of indebtedness owed to the Company by any
Employee, officer, director or consultant of the Company, (iii) the acceleration
of the vesting, funding or time of any payment or benefit to any Employee,
officer, director or consultant of the Company or (iv) any “parachute payment”
within the meaning of Section 280G of the Code (whether or not such payment is
considered to be reasonable compensation for services rendered).

     

    (k)           The
Company has not announced or entered into any plan or binding commitment to (i)
create or cause to exist any additional Company Benefit Plan, or (ii) adopt,
amend or terminate any Company Benefit Plan, other than any amendment required
by Applicable Benefit Laws.  Each Company Benefit Plan may be amended
or terminated in accordance with its terms without liability to the Company or
the Purchaser.

     

    (l)          
 Section 2.17(l) of the Shareholder Disclosure Schedule identifies each
Company Benefit Plan that is a “nonqualified deferred compensation plan” within
the meaning of Section 409A of the Code and associated Treasury Department
guidance, including IRS Notice 2005-1 (each a “NQDC
Plan”).  With respect to each NQDC Plan, it either (A) has been
operated in compliance with Code Section 409A since January 1, 2005, or (B) does
not provide for the payment of any benefits that have or will be deferred or
vested after December 31, 2004 and since October 3, 2004, it has not been
“materially modified” within the meaning of Section 409A of the Code and
associated Treasury Department guidance, including IRS Notice 2005-1, Q&A
18.

     

    Section
2.18                  Employee
Matters.

     

    (a)           Section 2.18(a)(1)
of the Shareholder Disclosure Schedule contains a true, correct and complete
list of all Employees as of the date hereof, and accurately reflects their
salaries, any other compensation payable to them (including compensation payable
pursuant to bonus, deferred compensation or commission arrangements), their
dates of employment and their positions.  All of the Employees are “at
will” employees.  Section 2.18(a)(2) of the Shareholder Disclosure
Schedule lists all Employees who are not citizens of the United States and
identifies the visa or other similar permit under which such Employee is working
and the dates of issuance and expiration of such visa or other similar
permit.

     

    (b)           Section 2.18(b)
of the Shareholder Disclosure Schedule identifies each Employee who is not fully
available to perform work because of disability or other leave and sets forth
the basis of such leave and the anticipated date of return to full
service.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (c)           Section
2.18(c) of the Shareholder Disclosure Schedule contains a true, correct and
complete list of all independent contractors used by the Company as of the date
hereof, specifying the name of the independent contractor, type of labor, fees
paid to such independent contractor for calendar year 2008 and from January 1,
2009 through November 30, 2009, work location and
address.  Each independent contractor listed on Section 2.18(c) has
the requisite Governmental Authorizations required to provide the services such
independent contractor provides the Company.

     

    (d)           To
the Company’s Knowledge, the Company is, and has at all times been, in
compliance with all applicable Laws and Contracts relating to employment,
employment practices, wages, bonuses and terms and conditions of employment,
including Laws for job applicants and employee background checks, meal and rest
period for Employees, accrual and payment of vacation pay and paid time off,
classifying Employees as exempt or non-exempt, crediting all non-exempt
Employees for all hours worked, deductions from final pay of all terminated
Employees and classifying independent contractors.

     

    (e)           Neither
the Company nor the Shareholders have made any written or verbal commitments to
any officer, employee, former employee, consultant or independent contractor of
the Company with respect to compensation, promotion, retention, termination,
severance or similar matter in connection with the transactions contemplated
hereby or otherwise.

     

    Section
2.19                  Labor
Matters.

     

    (a)           No
Employee, since becoming an Employee, has been, or currently is, represented by
a labor organization or group that was either certified or voluntarily
recognized by any labor relations board (including the NLRB) or certified or
voluntarily recognized by any other Governmental Body.  The Company is
not or has never been a signatory to a collective bargaining agreement with any
trade union, labor organization or group.  No representation election
petition or application for certification has been filed by employees of the
Company or is pending with the NLRB or any other Governmental Body and no union
organizing campaign or other attempt to organize or establish a labor union,
employee organization or labor organization or group involving employees of the
Company has occurred, is in progress or, to the Knowledge of the Company, is
threatened.

     

    (b)           The
Company is not and has never been engaged in any unfair labor practice and there
is no pending or, to the Knowledge of the Company, threatened labor board
proceeding of any kind.  The Company is in compliance with all Labor
Laws.  No citations, claims, complaints, grievances, charges,
disputes, proceedings, examinations, audits, inquiries, investigations or other
actions have been issued or filed or are pending or, to the Knowledge of the
Company, threatened under the Labor Laws with respect to the
Company.  The Company has good labor relations, and the Company has no
reason to believe that (i) the consummation of the transactions contemplated by
this Agreement will have a material adverse effect on its labor relations, or
(ii) any of the Employees intends to terminate his or her employment with the
Company.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (c)           Since
January 1, 2007, the Company has not effectuated (i) a “plant closing”
(as defined in the WARN) affecting any site of employment or one or more
facilities or operating units within any site of employment or facility of the
Company or (ii) a “mass layoff” (as defined in the WARN) affecting any site
of employment or facility of the Company.  Since January 1, 2007,
the Company has not been affected by any transaction or engaged in layoffs,
terminations or relocations sufficient in number to trigger application of any
state, local or foreign law or regulation similar to the WARN.  None
of the Employees has suffered an “employment loss” (as defined in the WARN) in
the ninety (90) days prior to the date hereof and the Purchaser will not incur
any liability or obligation under the WARN if, during the ninety (90) day period
immediately following the Closing Date, only terminations in the normal course
occur.  No wrongful discharge, retaliation, libel, slander or other
claim, complaint, charge or investigation that arises out of the employment
relationship between the Company and any of its employees has been filed or is
pending or, to the Knowledge of the Company, threatened against the Company
under any applicable Law.

     

    (d)           The
Company has maintained and currently maintains adequate insurance as required by
applicable Law with respect to workers’ compensation claims and unemployment
benefits claims.  The Company has provided the Purchaser with a copy
of its policies of for providing leaves of absence under FMLA and their FMLA
notices.

     

    Section
2.20                  Environmental
Matters.

     

    (a)           The
Company is in material compliance with all applicable Environmental Laws, which
compliance includes the possession by the Company of all Governmental
Authorizations required under applicable Environmental Laws, and compliance with
the terms and conditions thereof.  All Governmental Authorizations
currently held by any of the Company pursuant to Environmental Laws are
identified in Section 2.20(a) of the Shareholder Disclosure
Schedule.

     

    (b)           The
Company has not received any notice or other communication (in writing or
otherwise), whether from a Governmental Body, citizens group, Employee or
otherwise, that alleges that the Company is not in compliance with any
Environmental Law, and, to the Knowledge of the Company, there are no
circumstances that may prevent or interfere with the Company’s compliance with
any Environmental Law in the future.

     

    (c)           To
the Knowledge of the Company, no current or prior owner of any property leased
or controlled by the Company has received any notice or other communication (in
writing or otherwise), whether from a Governmental Body, citizens group,
employee or otherwise, that alleges that such current or prior owner or the
Company is not in compliance with any Environmental Law.

     

    (d)           Section
2.20(d) of the Shareholder Disclosure Schedule sets forth a true, correct and
complete list of all documents (whether in hard copy or electronic form) that
contain any environmental reports, investigations and/or audits relating to
premises currently or previously owned or operated by the Company (whether
conducted by or on behalf of the Company or a third party, and whether done at
the initiative of the Company or directed by a Governmental Body or other third
party) which were issued or conducted during the past five years and which the
Company has possession of or access to.  A complete and accurate copy
of each such document has been provided to the Purchaser.  The Company
has provided to the Purchaser true, correct and complete copies of all reports,
correspondence, memoranda, computer data and the complete files relating to
environmental matters.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (e)           The
Company has not entered into or agreed to enter into, nor has any present intent
to enter into, any consent decree or order, and the Company is not subject to
any judgment, decree or judicial or administrative order relating to compliance
with, or the cleanup of Materials of Environmental Concern under, any applicable
Environmental Law.

     

    (f)        
   The Company has not at any time been subject to any
administrative or judicial proceeding pursuant to, or paid any fines or
penalties pursuant to, applicable Environmental Laws.  The Company is
not subject to any claim, obligation, liability, loss, damage or expense of any
kind or nature whatsoever, contingent or otherwise, incurred or imposed or based
upon any provision of any Environmental Law or arising out of any act or
omission the Company or the employees, agents or representatives thereof or
arising out of the ownership, use, control or operation by the Company of any
plant, facility, site, area or property (including any plant, facility, site,
area or property currently or previously owned or leased by the Company) from
which any Material of Environmental Concern was Released.

     

    (g)           No
improvement or equipment included in the property or assets of the Company
contains any asbestos, polychlorinated biphenyls, underground storage tanks,
open or closed pits, sumps or other containers on or under any property or
asset.  The Company has not imported, received, manufactured,
produced, processed, labeled, or shipped, stored, used, operated, transported,
treated or disposed of any Materials of Environmental Concern other than in
compliance with all Environmental Laws.

     

    Section
2.21                  Insurance. Section 2.21 of the
Shareholder Disclosure Schedule sets forth a true, correct and complete list of
all insurance policies and fidelity bonds for the current policy year relating
to the Company and its respective Employees, officers and
directors.  The Company maintains, and has maintained, policies of
insurance covering such risk and events, including personal injury, property
damage and general liability, in amounts that are adequate, in light of
prevailing industry practices, for its business and operations.  The
Company has not received notice of termination or cancellation of any such
policy.  The Company has not reached or exceeded its policy limits for
any insurance policy in effect at any time during the past five (5)
years.  All premiums required to be paid with respect thereto covering
all periods up to and including the Closing Date have been or will be paid in a
timely fashion.  There has been no lapse in coverage under such
policies or failure of payment that will cause coverage to lapse.  The
Company does not have any obligation for retrospective premiums for any period
prior to the Closing Date.  All such policies are in full force and
effect and will remain in full force and effect up to and including the Closing
Date, unless replaced with comparable insurance policies having comparable or
more favorable terms and conditions.  There are no claims pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds or in respect
of which such underwriters have reserved their rights.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    Section
2.22                  Related Party
Transactions.  No Related Party has, and no Related Party has
at any time had, any direct or indirect interest in any asset used in or
otherwise relating to the business of any of the Company.  No Related
Party is, or has been, indebted to any of the Company.  Except as set
forth in Section 2.22 of the Shareholder Disclosure Schedule, no Related
Party has entered into, or has had any direct or indirect financial interest in,
any Company Contract, transaction or business dealing involving any of the
Company.  No Related Party is competing, or has at any time competed,
directly or indirectly, with any of the Company.  No Related Party has
any claim or right against any of the Company (other than rights to receive
compensation for services performed as an Employee).

     

    Section
2.23                  Legal Proceedings;
Orders.

     

    (a)           There
is no pending Legal Proceeding, and to the Knowledge of the Company, no Person
has threatened to commence any Legal Proceeding (i) that involves any of the
Shareholders, (ii) that involves the Company or any of the assets owned, used or
controlled by the Company, or (iii) that challenges, or that may have the effect
of preventing, delaying, making illegal or otherwise interfering with, the
transactions contemplated by this Agreement or any of the Shareholder Related
Agreements.  No event has occurred, and no claim, dispute or other
condition or circumstance exists, that will, or that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding.

     

    (b)           There
is no order, writ, injunction, judgment or decree to which the Company, or any
of the assets owned or used by the Company, is subject.  To the
Knowledge of the Company, no officer or other Employee is subject to any order,
writ, injunction, judgment or decree that prohibits such officer or other
Employee from engaging in or continuing any conduct, activity or practice
relating to the business of the Company.

     

    Section
2.24                  Customers and
Suppliers.  Section 2.24 of the Shareholder Disclosure Schedule
contains a true, correct and complete list of the names and addresses of the
customers and suppliers.  The Company maintains good commercial
relations with each of its customers and suppliers and, to the Knowledge of the
Company, no event has occurred that could materially and adversely affect the
Company’s relations with any such customer or supplier.  No customer
(or former customer) or supplier (or former supplier) during the prior twelve
(12) months has canceled, terminated or, to the Knowledge of the Company, made
any threat to cancel or otherwise terminate any of such customer’s or supplier’s
Contracts with the Company or to decrease such customer’s usage of the Company’s
services or products or such supplier’s supply of services or
products.  The Company has not received any notice and the Company
does not have any Knowledge to the effect that any current customer or supplier
may terminate or materially alter its business relations with the Company,
either as a result of the transactions contemplated hereby or
otherwise.

     

    Section
2.25                  Product and Service
Warranties.

     

    (a)           The
Company does not make any warranty or guaranty as to goods manufactured, sold,
leased, licensed or delivered or services provided by it, except as set forth in
Section 2.25(a) of the Shareholder Disclosure Schedule, and there is no pending
or, to the Knowledge of the Company, threatened claim alleging any breach of any
such warranty or guaranty.  All goods manufactured, sold, leased,
licensed or delivered, or services provided by the Company have been in
conformity with all applicable contractual commitments and all express and
implied warranties.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    (b)           Adequate
reserves for any expense to be incurred by the Company as a result of any
express or implied warranty or guaranty as to goods sold, leased or licensed, or
services provided by, the Company prior to the Closing will be reflected on the
Final Net Book Value Schedule.

     

    Section
2.26                  Finder’s Fee.  No
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with this Agreement or any of the other
transactions contemplated hereby based upon arrangements made by or on behalf of
the Company, or officer, member, director or employee of the Company, or any
Affiliate of the Company.

     

    Section
2.27                  Certain
Payments.  Neither the Company, nor any manager, officer,
Employee, agent or other Person associated with or acting for or on behalf of
any of the Company, has at any time, directly or indirectly:

     

    (a)           used
any corporate funds (i) to make any unlawful political contribution or gift or
for any other unlawful purpose relating to any political activity, (ii) to make
any unlawful payment to any governmental official or employee, or (iii) to
establish or maintain any unlawful or unrecorded fund or account of any
nature;

     

    (b)           made
any false or fictitious entry, or failed to make any entry that should have been
made, in any of the books of account or other records of the
Company;

     

    (c)           made
any payoff, influence payment, bribe, rebate, kickback or unlawful payment to
any Person;

     

    (d)           performed
any favor or given any gift which was not deductible for federal income tax
purposes;

     

    (e)           made
any payment (whether or not lawful) to any Person, or provided (whether lawfully
or unlawfully) any favor or anything of value (whether in the form of property
or services, or in any other form) to any Person, for the purpose of obtaining
or paying for (i) favorable treatment in securing business, or (ii) any other
special concession; or

     

    (f)           agreed,
committed, offered or attempted to take any of the actions described in clauses
“(a)” through “(e)” above.

     

    Section
2.28                  Full Disclosure. To the Company’s
Knowledge, neither this Agreement nor the Shareholder Disclosure Schedule (i)
contains any representation, warranty or information that is false or misleading
with respect to any material fact, or (ii) omits to state any material fact
necessary in order to make the representations, warranties and information
contained herein and therein, in the light of the circumstances under which such
representations, warranties and information were or will be made or provided,
not false or misleading.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

     

    The
Purchaser represents and warrants to the Company and each of the
Shareholders, as of the
date hereof and as of the Closing Date, as set forth below.

     

    Section
3.1                    Corporate Existence and
Power.  The Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
and has all corporate power required to conduct its business as now conducted,
and is duly qualified to do business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Purchaser’s business,
financial condition or results of operations.

     

    Section
3.2                    Authorization; Binding
Nature of Agreement.  The Purchaser has the absolute and
unrestricted right, power and authority to perform its obligations under this
Agreement and under each Purchaser Related Agreement to which it is a party, and
the execution, delivery and performance by the Purchaser of this Agreement and
the Purchaser Related Agreements have been duly authorized by all necessary
action on the part of the Purchaser and its board of directors.  This
Agreement constitutes the legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject to the
Bankruptcy and Equity Exception.  Upon the execution and delivery by
or on behalf of the Purchaser of each Purchaser Related Agreement, such
Purchaser Related Agreement will constitute the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to the Bankruptcy and Equity Exception.

     

    Section
3.3                    Absence of Restrictions;
Required Consents.  Neither (1) the execution, delivery or
performance by the Purchaser of this Agreement or any of the Purchaser Related
Agreements, nor (2) the consummation of transactions contemplated by this
Agreement or any of the Purchaser Related Agreements, will directly or
indirectly (with or without notice or lapse of time):

     

    (a)           contravene,
conflict with or result in a violation of any of the provisions of the Purchaser
Constituent Documents;

     

    (b)           contravene,
conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the transactions contemplated by this
Agreement or any of the Purchaser Related Agreements or to exercise any remedy
or obtain any relief under, any Law or any order, writ, injunction, judgment or
decree to which the Purchaser, or any of the assets owned, used or controlled by
the Purchaser, is subject; or

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

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

     

    ARTICLE
IV

    CERTAIN
COVENANTS AND AGREEMENTS

     

    Section
4.1                    Tax
Matters.

     

    (a)           Tax Periods Ending on or
Before the Closing Date.  The Purchaser shall prepare or cause
to be prepared and timely file or cause to be timely filed all Tax Returns for
the Company for all Tax periods ending on or prior to the Closing Date which are
filed after the Closing Date (“Pre-Closing Tax
Periods”).

     

    (b)           Tax Periods Beginning Before
and Ending After the Closing Date.  The Purchaser shall prepare
or cause to be prepared and timely file or cause to be timely filed any Tax
Returns of the Company for Tax periods which begin before the Closing Date and
end after the Closing Date (“Straddle Tax
Periods”).

     

    (c)           Payment of
Taxes.  The Shareholders shall be responsible for and shall
indemnify the Purchaser from and against, any Tax with respect to the Company
that is attributable to a Pre-Closing Tax Period or to that portion of Straddle
Tax Period that ends on the Closing Date, in each case to the extent that such
Tax exceeds the amount (if any) reflected as a current liability for such Tax in
the Final Net Book Value Schedule.  Within five (5) days prior to the
due date for the payment of any such Tax, if the amount of such Tax for which
the Shareholders are responsible pursuant to this Section 4.1 exceeds the
amount reflected as a current liability for such Tax in the Final Net Book Value
Schedule, the Shareholders shall pay to the Purchaser an amount equal to such
excess.  For purposes of this Section  4.1, in the case of any
Taxes that are imposed on a periodic basis and are payable for a Straddle Tax
Period, the portion of such Tax which relates to the portion of such Taxable
period ending on the Closing Date shall (i) in the case of any Taxes other than
Taxes based upon or related to income or receipts, be deemed to be the amount of
such Tax for the entire Tax period multiplied by a fraction the numerator of
which is the number of days in the Tax period ending on the Closing Date and the
denominator of which is the number of days in the entire Tax period, and (ii) in
the case of any Tax based upon or related to income or receipts be deemed equal
to the amount which would be payable if the relevant Tax period ended on the
Closing Date.

     

    (d)           Cooperation on Tax
Matters.  The Purchaser, the Company and the Shareholders shall
cooperate as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to this Section 4.1 and
any audit, litigation or other proceeding with respect to Taxes.  Such
cooperation shall include the retention and (upon the other party’s request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder.

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    (e)           Transfer
Taxes.  Any Taxes or recording fees payable as a result of the
purchase and sale of the Shares or any other action contemplated hereby (other
than any federal, state, local or foreign Taxes measured by or based upon income
or gains imposed upon the Purchaser) shall be paid by the
Shareholders.  The parties shall cooperate in the preparation,
execution and filing of all returns, questionnaires, applications and other
documents regarding Taxes and all transfer, recording, registration and other
fees that become payable in connection with the transactions contemplated hereby
that are required or permitted to be filed at or prior to the
Closing.

     

    Section
4.2                    Non-Competition.

     

    (a)           Confidential
Information.  The Company and each Shareholder shall hold in
confidence at all times following the date hereof all Confidential Information
and shall not disclose, publish or make use of Confidential Information at any
time following the date hereof without the prior written consent of the
Purchaser.

     

    (b)           Noncompetition.

     

    (i)         Each
Shareholder hereby acknowledges that (A) the Company conducts the Business
and/or has current plans to expand the Business throughout the Territory and (B)
to protect adequately the interest of the Purchaser in the business and goodwill
of the Company, it is essential that any noncompetition covenant with respect
thereto cover all of the Business and the entire Territory.

     

    (ii)         No
Shareholder shall, during the Noncompete Period, in any manner, either directly,
indirectly, individually, in partnership, jointly or in conjunction with any
Person, (A) engage in the Business within the Territory, or (B) have an equity
or profit interest in, advise or render services (of an executive, marketing,
manufacturing, research and development, administrative, financial, consulting
or other nature) or lend money to any Person that engages in the Business within
the Territory.  Notwithstanding the foregoing, the continued ownership
of SERES Engineering Services, LLC, formerly Advent Services, LLC (“SERES”)  by
the Shareholders, SERES’s continued pursuit of the Business within the Territory
and Kenna Sellers’ expenditure of up to eight hours per week on the financial
management process for SERES (but not marketing for or operational management of
SERES) shall not constitute a violation of this Section 4.2(b); provided, that,
such ownership is passive in nature other than Ms. Sellers’ services described
above.

     

    (c)           Nonsolicitation.  No
Shareholder shall, during the Noncompete Period, in any manner, directly,
indirectly, individually, in partnership, jointly or in conjunction with any
Person including through SERES: (i) (A) recruit or solicit or attempt to recruit
or solicit, on any of their behalves or on behalf of any other Person, any
employee of the Company or an Affiliate thereof, (B) encourage any Person (other
than the Purchaser or one of its Affiliates) to recruit or solicit any employee
of the Company or an Affiliate thereof, or (C) otherwise encourage any employee
of the Company or an Affiliate thereof to discontinue his or her employment by
the Company or one of its Affiliates; (ii) solicit any customer of the Company
or an Affiliate thereof who is or has been a customer on or prior to the Closing
Date for the purpose of providing, distributing or selling products or services
similar to those sold or provided by the Company; or (iii) persuade or attempt
to persuade any customer or supplier of the Company (or any of its Affiliates)
to terminate or modify such customer’s or supplier’s relationship with the
Company (or any of its Affiliates).

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    (d)           Severability.  In
the event a judicial or arbitral determination is made that any provision of
this Section 4.2 constitutes an unreasonable or otherwise unenforceable
restriction against the Shareholders, the provisions of this Section 4.2 shall
be rendered void only to the extent that such judicial or arbitral determination
finds such provisions to be unreasonable or otherwise unenforceable with respect
to the Shareholders.  In this regard, any judicial authority
construing this Agreement shall be empowered to sever any portion of the
Territory, any prohibited business activity or any time period from the coverage
of this Section 4.2 and to apply the provisions of this Section 4.2 to the
remaining portion of the Territory, the remaining business activities and the
remaining time period not so severed by such judicial or arbitral
authority.  Moreover, notwithstanding the fact that any provision of
this Section 4.2 is determined not to be specifically enforceable, the Purchaser
shall nevertheless be entitled to recover monetary damages as a result of the
breach of such provision by any Shareholder.  The time period during
which the prohibitions set forth in this Section 4.2 shall apply shall be tolled
and suspended for a period equal to the aggregate time during which a
Shareholder violates such prohibitions in any respect.

     

    (e)           Injunctive
Relief.  Any remedy at law for any breach of the provisions
contained in this Section 4.2 shall be inadequate and the Purchaser shall be
entitled to injunctive relief in addition to any other remedy the Purchaser
might have hereunder.

     

    Section
4.3                    Release.  In
consideration for the Purchase Price, as of and following the Closing Date, each
Shareholder knowingly, voluntarily and unconditionally releases, forever
discharges, and covenants not to sue the Company from or for any and all claims,
causes of action, demands, suits, debts, obligations, liabilities, damages,
losses, costs and expenses (including attorneys’ fees) of every kind or nature
whatsoever, known or unknown, actual or potential, suspected or unsuspected,
fixed or contingent, that such Shareholder has or may have, now or in the
future, arising out of, relating to, or resulting from any act or omission,
error, negligence, breach of contract, tort, violation of law, matter or cause
whatsoever from the beginning of time to the Closing Date; provided, however,
that the foregoing release shall not apply to any claims arising out of this
Agreement.

     

    Section
4.4                    Maintenance of
Insurance.  Following the Closing, Purchaser will establish and
maintain (on an ongoing basis) coverage under Purchaser’s insurance programs for
all of such of Company’s risks and liabilities existing prior to the Closing
Date on terms (including retroactive dates to 1992 for professional liability)
in an amount at least equal to the insurance coverages maintained by the Company
as of the Closing Date as reflected on Section 2.21 of the Shareholder
Disclosure Schedule.  In connection therewith, the officers,
directors, employees and subcontractors of the Company will be insured under
such coverages for such pre-closing date liabilities and risks to the same
extent reflected in such pre-Closing Company coverage, provided that the
Shareholders shall be responsible for the payment of any and all deductibles or
self-insured retentions relating to any covered claims; provided that such
Shareholders responsibility shall not exceed deductible and retention amounts
calculated based on the terms in effect under the Company’s policies immediately
prior to the Closing Date.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    ARTICLE
V

    CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER

     

    The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement and the Purchaser Related Agreements are subject to the satisfaction
(or written waiver by the Purchaser), at or prior to the Closing, of each of the
following conditions:

     

    Section
5.1                    Accuracy of
Representations.  Each of the representations and warranties of
the Company and the Shareholders contained in this Agreement that are qualified
as to materiality shall be true and correct in all respects, and each of the
representations and warranties of the Company and the Shareholders contained in
this Agreement that are not qualified shall be true and correct in all material
respects, in each case, as of the date of the Closing Date.

     

    Section
5.2                    Consents.  All
consents, approvals, orders or authorizations of, or registrations, declarations
or filings with any Person required in connection with the execution, delivery
or performance hereof shall have been obtained or made and shall be in full
force and effect, in each case in form and substance reasonably satisfactory to
the Purchaser.

     

    Section
5.3                    Ancillary Agreements and
Deliveries.  The Shareholders shall have delivered, or caused
to be delivered, to the Purchaser the documents listed in Section 7.2, each of
which shall be in full force and effect.

     

    Section
5.4                    Payoff
Letters.  The Shareholders shall have delivered, or caused to
be delivered, to the Purchaser payoff letters (the “Payoff Letters”),
reasonably satisfactory to the Purchaser, evidencing that the Closing Date
Indebtedness shall be repaid in full by such disbursement of a portion of the
Purchase Price, including a Payoff Letter for the Company’s line of
credit.

     

    Section
5.5                    Release of
Encumbrances.  The Shareholders shall have delivered, or caused
to be delivered, to the Purchaser evidence reasonably satisfactory to the
Purchaser that all Encumbrances (other than Permitted Encumbrances) affecting
any of the assets of the Company have been released, or will be released upon
repayment of the Closing Date Indebtedness pursuant hereto.

     

    Section
5.6                    No
Restraints.  No temporary restraining order, preliminary or
permanent injunction or other Order preventing the consummation of the
transactions contemplated hereby shall have been issued by any Governmental
Body, and there shall not be any Law enacted or deemed applicable that makes the
Closing illegal.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    Section
5.7                    No
Litigation.  There shall not be pending or threatened any Legal
Proceeding by or before any Governmental Body against the Purchaser, a
Shareholder or the Company (a) seeking to restrain or prohibit the Purchaser’s
direct or indirect ownership or operation of all or a significant portion of the
business and assets of the Company, or to compel the Purchaser or any of its
Affiliates to dispose of or hold separate any significant portion of the
business or assets of the Company, (b) seeking to restrain or prohibit or make
materially more costly the consummation of the transactions contemplated by this
Agreement, or seeking to obtain from the Purchaser or the Company any material
damages, (c) seeking to impose limitations on the ability of the Purchaser to
acquire or hold, or exercise full rights of ownership of the Shares, or (d)
which otherwise could reasonably be expected to have a Material Adverse
Effect.

     

    Section
5.8                    Employee
Matters.  The Company shall have made, or caused to be made,
all contributions and paid all premiums under each Company Benefit Plan and
ERISA Affiliate Plan, other than a pension benefit plan within the meaning of
ERISA § 3(2), with respect to periods ending on or prior to the Closing
Date.  If and as requested by the Purchaser, the Company shall have
terminated certain or all of the Company Benefit Plans and shall bear all the
expenses of terminating such plans.

     

    Section
5.9                    Related Party
Transactions.  The Company shall caused to be paid to the
Company all amounts owed to such the Company by any Shareholder or any Related
Party.  At and as of the Closing Date, any debts of the Company owed
to any of the Shareholders or to any Related Party shall be canceled, except
those obligations owed to any such Shareholder or Related Party in respect of
his or her employment with the Company.

     

    ARTICLE
VI

    CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE 

    SHAREHOLDERS

     

    The
obligations of the Company and the Shareholders to consummate the transactions
contemplated by this Agreement and the Shareholder Related Agreements are
subject to the satisfaction (or written waiver), at or prior to the Closing, of
the following conditions:

     

    Section
6.1                    Accuracy of
Representations.  Each of the representations and warranties of
the Purchaser contained in this Agreement shall be true and correct in all
material respects as of the Closing Date.

     

    Section
6.2                    Ancillary Agreements and
Deliveries.  The Purchaser shall have delivered, or caused to
be delivered, to the Shareholders the items listed in Section 7.3, each of
which, in the case of agreements and documents, shall be in full force and
effect.

     

    Section
6.3                    No
Restraints.  No temporary restraining order, preliminary or
permanent injunction or other Order preventing the consummation of the
transactions contemplated hereunder shall have been issued by any Governmental
Body and shall remain in effect, and there shall not be any Law enacted or
deemed applicable to the transactions contemplated hereunder that makes the
Closing illegal.

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    Section
6.4                    Consents.  All
consents approvals, orders or authorizations of, or registrations, declarations
or filings with, any Governmental Body shall have been obtained or made on terms
and conditions reasonably satisfactory to the Shareholders.

     

    ARTICLE
VII

    CLOSING

     

    Section
7.1                    Closing.  Unless
otherwise mutually agreed in writing between the Purchaser and the Shareholders,
the Closing shall take place at the offices of Paul, Hastings, Janofsky &
Walker LLP, 600 Peachtree Street, N.E., Suite 2400, Atlanta, Georgia 30308
promptly upon signing of this Agreement.

     

    Section
7.2                    Shareholder and Company
Closing Deliveries.  At the Closing, the Shareholders and the
Company, as applicable, shall deliver, or cause to be delivered, to the
Purchaser the following:

     

    (a)           certificates
representing the Shares, duly endorsed in blank or accompanied by duly executed
stock powers or other instruments of assignment  requested by and
reasonably satisfactory in form and substance to the Purchaser;

     

    (b)           the
Closing Date Indebtedness Statement in accordance with Section 1.3;

     

    (c)           the
organizational record books, minute books and corporate seal of the
Company;

     

    (d)           a
Payoff Letter showing satisfaction in full of the Company’s line of credit upon
disbursement of a portion of the Purchase Price in repayment of amounts owed
under such line and the full release of any related Encumbances;

     

    (e)          
the employment agreements attached hereto as Exhibits 7.2(e)(1) and
(2) with Jeffrey Smoak and Kenna Sellers, respectively, and the retention
agreements in the form attached hereto as Exhibit 7.2(e)(3)
executed by Richard Coomes, Todd Moody, Rodney Truman, Mark Stoker and Larry
Fowler;

     

    (f)           written
resignations of the directors and officers of the Company, effective as of the
Closing Date;

     

    (g)          a
certificate, dated as of the Closing Date, signed by the Secretary of the
Company (i) attaching copies of the certificate of incorporation and bylaws, and
any amendments thereto, of the Company, (ii) attaching a true, correct and
complete copy of the stock ledger of the Company from the date of its
incorporation through the Closing Date, (iii) certifying that attached thereto
are true, correct and complete copies of action by written consent or
resolutions duly adopted by the Board of Directors of the Company which
authorize and approve the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby, (iv) certifying
the good standing of the Company in its jurisdiction of incorporation and in
each other jurisdiction in which it is qualified to do business, and that there
are no proceedings for the dissolution or liquidation of the Company, and (v)
certifying the incumbency, signature and authority of the officers of the
Company authorized to execute, deliver and perform this Agreement and all other
documents, instruments or agreements related thereto executed or to be executed
by the Company; and

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    (h)           all
other documents required to be entered into by the Company and the Shareholders
pursuant hereto or reasonably requested by the Purchaser to convey the Shares to
the Purchaser or to otherwise consummate the transactions contemplated hereby,
including the documents listed in Section 7.2.

     

    Section
7.3                    Purchaser Closing
Deliveries.  At the Closing, the Purchaser shall deliver, or
cause to be delivered, to the Shareholder Representative the
following:

     

    (a)           the
portion of the Purchase Price to be paid at the Closing pursuant to Section
1.4(a)(ii), and shall pay the Closing Date Indebtedness pursuant to
Section 1.4(a)(i), paid and delivered in accordance with each such
Section;

     

    (b)           the
Seller Notes; and

     

    (c)           and
all other documents required to be entered into or delivered by the Purchaser at
or prior to the Closing pursuant hereto.

     

    ARTICLE
VIII

    INDEMNIFICATION

     

    Section
8.1                    Indemnification Obligations
of the Shareholders.  From and after the Closing, the Shareholders shall,
jointly and severally, indemnify and hold harmless the Purchaser Indemnified
Parties from and against, and compensate, reimburse and pay the Purchaser
Indemnified Parties for, any and all Losses arising out of or relating
to:

     

    (a)           any
inaccuracy in or breach of any representation or warranty of the Company or the
Shareholders set forth in this Agreement or any other Shareholder Related
Agreement (without giving effect to any materiality qualification contained in
such representation or warranty), provided, that, with respect to the
representations set forth in Sections 2.1 through 2.5, 2.7, 2.9 through 2.13,
2.19, 2.21, 2.22 and 2.24 through 2.28 any inaccuracy in or breach of any such
representation or warranty as to which the Company or Shareholder making such
representation or warranty had Knowledge;

     

    (b)           any
breach of any covenant, agreement or undertaking made by the Company or the
Shareholders in this Agreement or in any Shareholder Related
Agreement;

     

    (c)           any
of the Company Benefit Plans in respect of or relating to any period ending on
or prior to the Closing Date, including the termination thereof pursuant to
Section 5.8, if termination is requested by Purchaser;

     

    (d)           any
liability or obligation of the Company for (i) any Taxes that are the
responsibility of the Shareholders pursuant to Section 4.1, (ii) any Taxes
incurred in any Tax period beginning after the Closing Date but arising from the
settlement or other resolution with any Governmental Body of an asserted Tax
liability which relates to any Tax period or portion thereof ending on or before
the Closing Date, or (iii) the unpaid Taxes of any Person under Treasury
Regulations Section 1.1502-6 (or any similar provision of other federal,
provincial, state, local or foreign Law), as a transferee or successor, by
Contract or otherwise, in each case whether or not disclosed to the Purchaser in
any Schedules to this Agreement, the Company Financial Statements or
otherwise;

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    (e)           the
Closing Date Indebtedness; or

     

    (f)      
     a claim by Mr. Viebrock regarding ownership of
Company Common Stock as discussed in Section 2.5 of the Shareholder Disclosure
Schedule.

     

    The
Losses of the Purchaser Indemnified Parties described in this Section 8.1 as to
which the Purchaser Indemnified Parties are entitled to indemnification are
collectively referred to as “Purchaser
Losses.”

     

    Section
8.2                    Indemnification Obligations
of the Purchaser.  From and after the Closing, the Purchaser
shall indemnify and hold harmless the Shareholder Indemnified Parties from and
against, and  compensate, reimburse and pay the Shareholder
Indemnified Parties for, any and all Losses arising out of or relating
to:

     

    (a)           any
inaccuracy in or breach of any representation or warranty of the Purchaser set
forth in this Agreement or in any Purchaser Related Agreement (without giving
effect to any materiality qualification or contained in such representation or
warranty); or

     

    (b)           any
breach of any covenant, agreement or undertaking made by the Purchaser in this
Agreement or in any Purchaser Related Agreement.

     

    The
Losses of the Shareholder Indemnified Parties described in this Section 8.2 as
to which the Shareholder Indemnified Parties are entitled to indemnification are
collectively referred to as “Shareholder
Losses.”

     

    Section
8.3                    Indemnification
Procedure.

     

    (a)           Promptly
following receipt by an Indemnified Party of notice by a third party (including
any Governmental Body) of any complaint, dispute or claim or the commencement of
any audit, investigation, action or proceeding with respect to which such
Indemnified Party may be entitled to indemnification pursuant hereto (a “Third-Party Claim”),
such Indemnified Party shall provide written notice thereof to the party
obligated to indemnify under this Agreement (the “Indemnifying Party”),
provided, however, that
the failure to so notify the Indemnifying Party shall relieve the Indemnifying
Party from liability hereunder with respect to such Third-Party Claim only if,
and only to the extent that, such failure to so notify the Indemnifying Party
results in the forfeiture by the Indemnifying Party of rights and defenses
otherwise available to the Indemnifying Party with respect to such Third-Party
Claim.  The Indemnifying Party shall have the right, upon written
notice delivered to the Indemnified Party within twenty (20) days thereafter
assuming full responsibility for any Purchaser Losses or Shareholder Losses (as
the case may be) resulting from such Third-Party Claim, to assume the defense of
such Third-Party Claim, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of the fees and
disbursements of such counsel.  In the event, however, that the
Indemnifying Party declines or fails to assume the defense of such Third-Party
Claim on the terms provided above or to employ counsel reasonably satisfactory
to the Indemnified Party, in either case within such twenty (20)-day period,
then any Purchaser Losses or any Shareholder Losses (as the case may be), shall
include the reasonable fees and disbursements of counsel for the Indemnified
Party as incurred.  In any Third-Party
Claim for which indemnification is being sought hereunder the Indemnified Party
or the Indemnifying Party, whichever is not assuming the defense of such
Third-Party Claim, shall have the right to participate in such matter and to
retain its own counsel at such Party’s own
expense.  The Indemnifying Party or the Indemnified Party (as the case
may be) shall at all times use reasonable efforts to keep the Indemnifying Party
or Indemnified Party (as the case may be) reasonably apprised of the status of
the defense of any matter the defense of which it is maintaining and to
cooperate in good faith with each other with respect to the defense of any such
matter.

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    (b)           No
Indemnified Party may settle or compromise any Third-Party Claim or consent to
the entry of any judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party (which may
not be unreasonably withheld or delayed), unless (i) the Indemnifying Party
fails to assume and maintain diligently the defense of such Third-Party Claim
pursuant to Section 8.3(a) or (ii) such settlement, compromise or consent
includes an unconditional release of the Indemnifying Party and its officers,
directors, employees and Affiliates from all liability arising out of, or
related to, such Third-Party Claim and such release does not contain any
admission or statement acknowledging any wrongdoing or liability on behalf of
the Indemnifying Party.  An Indemnifying Party may not, without the
prior written consent of the Indemnified Party, settle or compromise any
Third-Party Claim or consent to the entry of any judgment with respect to which
indemnification is being sought hereunder unless such settlement, compromise or
consent (i) includes an unconditional release of the Indemnified Party and its
officers, directors, employees and Affiliates from all liability arising out of,
or related to, such Third-Party Claim, (ii) does not contain any admission or
statement suggesting any wrongdoing or liability on behalf of the Indemnified
Party, and (iii) does not contain any equitable order, judgment or term that in
any manner affects, restrains or interferes with the business of the Indemnified
Party or any of the Indemnified Party’s Affiliates.

     

    (c)           In
the event an Indemnified Party claims a right to payment pursuant hereto with
respect to any matter not involving a Third Party Claim (a “Direct Claim”), such
Indemnified Party shall send written notice of such claim to the appropriate
Indemnifying Party (a “Notice of
Claim”).  Such Notice of Claim shall specify the basis for such
Direct Claim.  The failure by any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to such Indemnified Party with respect to any Direct Claim made
pursuant to this Section 8.3(c), it being understood that Notices of Claim in
respect of a breach of a representation or warranty must be delivered prior to
the expiration of the survival period for such representation or warranty under
Section 8.4.  In the event the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days following its receipt of such Notice
of Claim that the Indemnifying Party disputes its liability to the Indemnified
Party under this Article VIII or the amount thereof, the Direct Claim specified
by the Indemnified Party in such Notice of Claim shall be conclusively deemed a
liability of the Indemnifying Party under this Article VIII, and the
Indemnifying Party shall pay the amount of such liability to the Indemnified
Party on demand or, in the case of any notice in which the amount of the Direct
Claim (or any portion of the Direct Claim) is estimated, on such later date when
the amount of such Direct Claim (or such portion of such Direct Claim) becomes
finally determined.  In the event the Indemnifying Party has timely
disputed its liability with respect to such Direct Claim as provided above, as
promptly as reasonably practicable, such Indemnified Party and the appropriate
Indemnifying Party shall establish the merits and amount of such Direct Claim
(by mutual agreement, litigation or otherwise) and, within five (5) Business
Days following the final determination of the merits and amount of such Direct
Claim, the Indemnifying Party shall pay to the Indemnified Party immediately
available funds in an amount equal to such Direct Claim as determined
hereunder.

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    Section
8.4                    Survival
Period.  The representations and warranties made by the parties
herein shall not be extinguished by the Closing, but shall survive the Closing
for, and all claims for indemnification in connection therewith shall be
asserted not later than, the two-year anniversary of the Closing Date; provided, however, that (a)
each of the representations and warranties contained in  Section 2.1
(Organization; Standing and Power; Subsidiaries), Section 2.3 (Authority;
Binding Nature of Agreement), Section 2.5 (Capitalization), Section 3.1
(Corporate Existence and Power) and Section 3.2 (Authorization), and any claim
for fraud or intentional misconduct shall survive the Closing without limitation
as to time, and the period during which a claim for indemnification may be
asserted in connection therewith shall continue indefinitely, and (b) each of
the representations and warranties contained in Section 2.16 (Tax
Matters),  Section 2.17 (Employee Benefit Plans), Section 2.18
(Employee Matters), Section 2.19 (Labor Matters) and Section 2.20 (Environmental
Matters) shall survive the Closing until, and all claims for indemnification in
connection therewith shall be asserted not later than the date of expiration of
any statute of limitations applicable to the rights of any Person to bring any
claim with respect to such matters.  The covenants and agreements of
the parties hereunder shall survive without limitation as to time, and the
period during which a claim for indemnification may be asserted in connection
therewith shall continue indefinitely.  Notwithstanding the foregoing,
if, prior to the close of business on the last day a claim for indemnification
may be asserted hereunder, an Indemnifying Party shall have been properly
notified of a claim for indemnity hereunder and such claim shall not have been
finally resolved or disposed of at such date, such claim shall continue to
survive and shall remain a basis for indemnity hereunder until such claim is
finally resolved or disposed of in accordance with the terms
hereof.

     

    Section
8.5                    Liability
Limits.

     

    (a)           Notwithstanding
anything to the contrary set forth herein, the Purchaser Indemnified Parties
shall not make a claim against the Shareholders for indemnification under
Section 8.1(a) for Purchaser Losses unless and until the aggregate amount of
such Purchaser Losses exceeds $25,000 (the “Purchaser Basket”),
in which event the Purchaser Indemnified Parties may claim indemnification for
all Purchaser Losses, including the initial $25,000.  The total
aggregate liability of the Shareholders for Purchaser Losses with respect to any
claims made pursuant to Section 8.1(a) shall be limited to 35% of the aggregate
Purchase Price (the “Purchaser
Cap”).  Notwithstanding the foregoing, the limitations set
forth in this Section 8.5 shall not apply to any Purchaser Losses arising out of
or related to fraud or willful misconduct or a breach of any representations and
warranties contained in Sections 2.1, 2.3, 2.5, or 2.16, and the Shareholders
shall be liable for all Purchaser Losses with respect thereto.

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

    (b)           Notwithstanding
anything herein to the contrary any Loss otherwise indemnifiable hereunder shall
be reduced by any amount recovered in connection therewith under any insurance
policy.

     

    Section
8.6                    Investigations.  The
respective representations and warranties of the parties contained in this
Agreement or any certificate or other document delivered by any party at or
prior to the Closing and the rights to indemnification set forth in this Article
VIII shall not be deemed waived or otherwise affected by any investigation made,
or Knowledge acquired, by a party.

     

    Section
8.7                    Offset Against Seller Notes
and Contingent Consideration.  In the event Purchaser shall
suffer any Losses for which Purchaser is entitled to recovery under this
Article VIII, Purchaser shall, subject to compliance with the procedures
set forth in Section 8.3 set off an amount equal to such finally determined
Losses first by offsetting an amount equal to the aggregate amount of such
Losses against the total principal and accrued interest outstanding under the
Seller Notes pro-rata among such notes and, second, from any Contingent
Consideration that becomes payable pursuant to
Section 1.6.  Purchaser shall not be entitled to set off more
than once for the same Losses.  To the extent that the above rights of
set off are not sufficient to satisfy a claim for Losses, Purchaser should be
entitled to recover for such Losses directly from the Shareholders giving such
indemnification.

     

    Section
8.8                    Exclusive
Remedy.  Except for actions grounded in fraud, from and after
the Closing, the indemnities provided in this Article VIII shall constitute the
sole and exclusive remedy of any Indemnified Party for damages arising out of,
resulting from or incurred in connection with any claims related to this
Agreement or arising out of the transactions contemplated hereby; provided,
however, that this exclusive remedy for damages does not preclude a party from
bringing an action for specific performance or other equitable remedy to require
a party to perform its obligations under this Agreement or any agreement entered
into in connection herewith.

     

    ARTICLE
IX

    MISCELLANEOUS
PROVISIONS

     

    Section
9.1                    Further
Assurances.  Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

     

    Section
9.2                    Fees and
Expenses.  Each party to this Agreement shall bear and pay all
fees, costs and expenses (including legal fees and accounting fees) that have
been incurred or that are incurred by such party in connection with the
transactions contemplated by this Agreement; provided, however, that the
Shareholders shall be responsible for all Transaction Expenses.

     

    Section
9.3                    Waiver;
Amendment.  Any agreement on the part of a party to any
extension or waiver of any provision hereof shall be valid only if set forth in
an instrument in writing signed on behalf of such party.  A waiver by
a party of the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or
warranty.  A waiver by any party of the performance of any act shall
not constitute a waiver of the performance of any other act or an identical act
required to be performed at a later time.  This Agreement may not be
amended, modified or supplemented except by written agreement of the
parties.

     

    Section
9.4                    Entire
Agreement.  This Agreement, the Seller Notes and the
confidentiality agreement between the Purchaser and the Company dated
May 11, 2009 constitute the entire agreement among the parties to this
Agreement and supersedes all other prior agreements and understandings, both
written and oral, among or between any of the parties with respect to the
subject matter hereof and thereof.

     

    Section
9.5                    Execution of Agreement;
Counterparts; Electronic Signatures.

     

    (a)           This
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same instrument, and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties; it being understood that all parties need
not sign the same counterparts.

     

    (b)           The
exchange of copies of this Agreement and of signature pages by facsimile
transmission (whether directly from one facsimile device to another by means of
a dial-up connection or whether mediated by the worldwide web), by electronic
mail in “portable document format” (“.pdf”) form, or by any other electronic
means intended to preserve the original graphic and pictorial appearance of a
document, or by combination of such means, shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes.  Signatures of the parties
transmitted by facsimile shall be deemed to be their original signatures for all
purposes.

     

    Section
9.6                    Governing
Law.  This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of New York (without
giving effect to principles of conflicts of laws).

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

     

    Section
9.7                    WAIVER OF JURY
TRIAL.  EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN THE PARTIES ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

     

    Section
9.8                    Assignment and
Successors.  No party may assign any of its rights or delegate
any of its obligations under this Agreement without the prior written consent of
the other parties, except that the Purchaser may assign any of its rights and
delegate any of its obligations under this Agreement to any Affiliate of the
Purchaser.  If Purchaser assigns its obligations under the Seller
Notes or otherwise under this Agreement to an Affiliate, such Affiliate’s
obligations shall be unconditionally guaranteed by Purchaser.  Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon and inure to the benefit of the successors and permitted assigns
of the parties.

     

    Section
9.9                    Parties in
Interest.  Except for the provisions of Article VIII, none
of the provisions of this Agreement is intended to provide any rights or
remedies to any Person other than the parties hereto and their respective
successors and assigns (if any).

     

    Section
9.10                  Notices.  All
notices, consents, waivers and other communications required or permitted by
this Agreement shall be in writing and shall be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid), or (b) sent by facsimile or e-mail
with confirmation of transmission by the transmitting equipment confirmed with a
copy delivered as provided in clause (a), in each case to the following
addresses, facsimile numbers or e-mail addresses and marked to the attention of
the person (by name or title) designated below (or to such other address,
facsimile number, e-mail address or person as a party may designate by notice to
the other parties):

     

    The
Company (prior to the Closing) and the Shareholders:

    1780
James Basford Place

    Mt
Pleasant, SC 29466

    Attention:  Kenna
Sellers

    E-mail address: kesellers@adventenv.com

     

    The Company (prior to the Closing) and
the Shareholders:

    50 Pelican Reach

    Isle of Palms, SC 29451

    Attention:  Jeffrey C.
Smoak

    E-mail address: jcsmoak@adventenv.com

     

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

    Dr. Karl J. Duff, PhD,
J.D.

    Professional Liability Consultants,
LLC

    2205 Riverstone Blvd.

    Suite 108

    Riverstone Professional
Building

    Canton, GA 30114

    Fax no.:  (770)
345-3573

    E-mail
address:  kduff@tempus-plc.com

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    Purchaser:           
 Versar, Inc.

    6850 Versar Center

    Springfield VA 22151

    Attention:             
James C. Dobbs

    Fax
no.:                  
(703) 642-6942

    E-mail
address:      jdobbs@versar.com

     

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

    Paul Hastings, Janofsky & Walker
LLP

    600 Peachtree Street,
N.E.

    Suite 2400

    Atlanta, GA 30308

    Attention:              Elizabeth
H. Noe

    Fax
no.:          
        (404) 685-5287

    E-mail
address:     elizabethnoe@paulhastings.com

     

    Section
9.11                  Construction;
Usage.

     

    (a)           Interpretation.  In
this Agreement, unless a clear contrary intention appears:

     

    (i)      
    the singular number includes the plural number and vice
versa;

     

    (ii)      
   reference to any Person includes such Person’s successors and
assigns but, if applicable, only if such successors and assigns are not
prohibited by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;

     

    (iii)      
  reference to any gender includes each other gender;

     

    (iv)       
 reference to any agreement, document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof;

     

    (v)         
reference to any Law means such Law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time, including rules
and regulations promulgated thereunder, and reference to any section or other
provision of any Law means that provision of such Law from time to time in
effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision;

     

    (vi)       
 “hereunder,” “hereof,” “hereto,” and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular
Article, Section or other provision hereof;

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

     

    (vii)       “including”
means including without limiting the generality of any description preceding
such term; and

     

    (viii)      references
to documents, instruments or agreements shall be deemed to refer as well to all
addenda, exhibits, schedules or amendments thereto.

     

    (b)           Legal Representation of the
Parties.  This Agreement was negotiated by the parties with the
benefit of legal representation and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any
party shall not apply to any construction or interpretation hereof.

     

    (c)           Headings.  The
headings contained in this Agreement are for the convenience of reference only,
shall not be deemed to be a part of this Agreement and shall not be referred to
in connection with the construction or interpretation of this
Agreement.

     

    Section
9.12                  Enforcement of
Agreement. The parties acknowledge
and agree that the Purchaser would be irreparably damaged if any of the
provisions of this Agreement are not performed in accordance with their specific
terms and that any breach of this Agreement by the Company or the Shareholders
could not be adequately compensated in all cases by monetary damages
alone.  Accordingly, in addition to any other right or remedy to which
the Purchaser may be entitled, at law or in equity, it shall be entitled to
enforce any provision of this Agreement by a decree of specific performance and
temporary, preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.

     

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

     

    Section
9.14                  Schedules and
Exhibits.  The Schedules and Exhibits (including the
Shareholder Disclosure Schedule) are hereby incorporated into this
Agreement and are hereby made a part hereof as if set out in full
herein.

     

    *       *       *

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed, as
of the date first above written.

     

    
      
        	 
      	
                PURCHASER:

              
	 
      	 
      
	 
      	
                VERSAR,
      INC.

              
	 
      	 
      
	 
      	
                By: 

              	/s/
      Michael J. Abram
	 
      	 
      	
                Name: 
      

              	Michael
      J. Abram
	 
      	 
      	
                Title:

              	Senior
      Vice President
	 
      	 
      	 
      	 
      
	 
      	
                COMPANY:

              
	 
      	 
      
	 
      	
                ADVENT
      ENVIRONMENTAL, INC.

              
	 
      	 
      
	 
      	
                By: 

              	/s/ Jeffrey C. Smoak
	 
      	 
      	
                Name:

              	Jeffrey
      C. Smoak
	 
      	 
      	
                Title:

              	President
	 
      	 
      	 
      	 
      
	 
      	
                SHAREHOLDERS:

              
	 
      	/s/
      Kenna E. Sellers	 
      
	 
      	
                Kenna
      E. Sellers

              
	 
      	/s/
      Jeffrey C. Smoak	 
      
	 
      	
                Jeffrey
      Smoak

              
	 
      	Margaret
      M. Spicher by Kenna Sellers attorney in fact	 
      
	 
      	
                The
      Mark A. Sellers Revocable Life Insurance Trust, through Margaret Mitchum
      Spicher, Trustee

              
	 
      	Kenna
      E. Sellers	 
      
	 
      	
                The
      Mark A. Sellers Revocable Life Insurance Trust, through Kenna E. Sellers,
      Trustee

              

      

       

    

    [SIGNATURE
PAGE TO STOCK PURCHASE AGREEMENT]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

     

    DEFINITIONS

     

    For
purposes of the Agreement (including this Exhibit A):

     

    “Accounting Referee”
has the meaning set forth in Section 1.5(c).

     

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

     

    “Agreement” means this
Stock Purchase Agreement, as amended from time to time.

     

    “Applicable Benefit
Laws” mean all Laws applicable to any Company Benefit Plan or ERISA
Affiliate Plan.

     

    “Balance Sheet” has
the meaning set forth in Section 2.6(a).

     

    “Bankruptcy and Equity
Exception” has the meaning set forth in Section 2.3.

     

    “Business” means
environmental and compliance consulting including munitions response, pollution
prevention, restoration, and engineering support for these aforementioned
services.

     

    “Business Day” means
any day except Saturday, Sunday or any day on which banks are generally not open
for business in the City of New York, New York.

     

    “Closing” means the
consummation of the purchase and sale of the Shares, as set forth in Article VII
of this Agreement.

     

    “Closing Date” means
the date on which the Closing occurs.

     

    “Closing Date
Indebtedness” means any indebtedness
of any of the Company with respect to (a) borrowed money and (b) notes
payable, as of the Closing Date.

     

    “Closing Date Indebtedness
Statement” has the meaning set forth in Section 1.3.

     

    “Code” means the
United States Internal Revenue Code of 1986.

     

    “Company” has the
meaning set forth in the Preamble.

     

    “Company Benefit
Plan” means each Employee Benefit
Plan sponsored or maintained or required to be sponsored or maintained at any
time by the Company or to which the Company makes or has made, or has or has had
an obligation to make, contributions at any time, or with respect to which the
Company has any liability or obligation.

     

    “Company Constituent
Documents” has the meaning set forth in Section 2.2.

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

    “Company Common
Stock” means the common stock, no
par value per share, of the
Company.

     

    “Company
Contract” means any Contract, including any
amendment or supplement thereto, (a) to which any of the Company is a party, (b) by which any of the Company or any of their respective assets is or may become bound
or under which any of the Company has, or
may become subject to, any obligation or (c) under which any of the Company has
or may acquire any right or interest.

     

    “Company Financial
Statements” has the meaning set forth in Section 2.6(a).

     

    “Company Intellectual
Property” means all Intellectual Property owned by, licensed to or used
by any of the Company.

     

    “Company Losses” has
the meaning set forth in Section 8.2.

     

    “Company Proprietary
Software” means all Software owned by the Company.

     

    “Company Registered
Intellectual Property” means all of the Registered Intellectual Property
owned by, filed in the name of, or licensed to the Company.

     

    “Confidential
Information” means any data or information concerning the Company
(including trade secrets), without regard to form, regarding (for example and
including) (a) business process models, (b) proprietary software, (c)
research, development, products, services, marketing, selling, business plans,
budgets, unpublished financial statements, licenses, prices, costs, Contracts,
suppliers, customers, and customer lists, (d) the identity, skills and
compensation of employees, contractors, and consultants, (e) specialized
training or (f) discoveries, developments, trade secrets, processes,
formulas, data, lists, and all other works of authorship, mask works, ideas,
concepts, know-how, designs, and techniques, whether or not any of the foregoing
is or are patentable, copyrightable, or registrable under any intellectual
property Laws or industrial property Laws in the United States or
elsewhere.  Notwithstanding the foregoing, no data or information
constitutes “Confidential Information” if such data or information is publicly
known and in the public domain through means that do not involve a breach by the
Company or a Shareholder of any covenant or obligation set forth in this
Agreement.

     

    “Contingent
Consideration” has the meaning set forth in Section 1.6(a).

     

    “Contract” means any
written, oral or other agreement, contract, subcontract, task or delivery order,
lease, understanding, instrument, note, warranty, license, sublicense, insurance
policy, benefit plan or legally binding commitment or undertaking of any nature,
whether express or implied.

     

    “Direct Claim” has the
meaning set forth in Section 8.3(c).

     

    “EBITDA” has the
meaning set forth in Section 1.6(a).

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    “EBITDA Statement” has
the meaning set forth in Section 1.6(b).

     

    “Employee” means an
employee of any of the Company.

     

    “Employee Benefit
Plan” means with respect to any
Person, each plan, fund, program, agreement, arrangement or scheme, including
each plan, fund, program, agreement, arrangement or scheme maintained or
required to be maintained under applicable Laws, that is at any time sponsored
or maintained or required to be sponsored or maintained by such Person or to
which such Person makes or has made, or has or has had an obligation to make,
contributions providing benefits to the current and former employees, directors,
managers, officers, consultants, independent contractors, contingent workers or
leased employees of such Person or the dependents of any of them (whether
written or oral), or with respect to which such Person has any liability or
obligation, including (a) each deferred compensation, bonus, incentive
compensation, pension, retirement, employee stock ownership, stock purchase,
stock option, profit sharing or deferred profit sharing, stock appreciation,
phantom stock plan and other equity compensation plan, “welfare” plan (within
the meaning of Section 3(1) of ERISA, determined without regard to whether such
plan is subject to ERISA), (b) each “pension” plan (within the meaning of
Section 3(2) of ERISA, determined without regard to whether such plan is either
subject to ERISA or is tax-qualified under the Code), (c) each severance plan or
agreement, and each other plan providing health, vacation, supplemental
unemployment benefit, hospitalization insurance, medical, dental, disability,
life insurance, death or survivor benefits, fringe benefits or legal benefits,
and (d) each other employee benefit plan, fund, program, agreement or
arrangement.

     

    “Encumbrance” means
any lien, pledge, hypothecation, charge, mortgage, security interest,
encumbrance, claim, infringement, interference, option, right of first refusal,
preemptive right, community property interest or restriction of any nature
affecting property, real or personal, tangible or intangible, including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset, any restriction
on the possession, exercise or transfer of any other attribute of ownership of
any asset, any lease in the nature thereof and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or equivalent
statute of any jurisdiction).

     

    “Entity” means any
corporation (including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization or entity.

     

    “Environmental Law”
means any federal, state, local or foreign Law relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata), including any law or
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern.

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

     

    “ERISA” means the
United States Employee Retirement Income Security Act of 1974.

     

    “ERISA Affiliate”
means any Person that together with the Company would be deemed a “single
employer” within the meaning of Section 414 of the Code.

     

    “ERISA Affiliate Plan”
means each Employee Benefit Plan sponsored or maintained or required to be
sponsored or maintained at any time by any ERISA Affiliate, or to which such
ERISA Affiliate makes or has made, or has or has had an obligation to make,
contributions at any time, or with respect to which such ERISA Affiliate has any
liability or obligation.

     

    “Final Net Book Value
Schedule” means the Net Book Value Schedule, as finally determined
pursuant to Section 1.5.

     

    “FMLA” means the
United States Family and Medical Leave Act.

     

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

     

    “Governmental
Authorization” means any (a) approval,
permit, license, certificate, franchise, permission, clearance, registration,
qualification or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Law or (b) right under any Contract
with any Governmental Body.

     

    “Government Bid” means
any quotation, bid or proposal submitted to any Governmental Body or any
proposed prime contractor or higher-tier subcontractor of any Governmental
Body.

     

    “Governmental
Body” means any (a) nation, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature,
(b) federal, state, local, municipal,
foreign, supranational or other government or (c) governmental, self-regulatory or
quasi-governmental authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official, organization, unit,
body or Entity and any court or other tribunal).

     

    “Government Contract”
means any prime contract, subcontract, letter contract, purchase order, task
order or delivery order executed or submitted to or on behalf of any
Governmental Body or any prime contractor or higher-tier subcontractor, or under
which any Governmental Body or any such prime contractor or subcontractor
otherwise has or may acquire any right or interest.

     

    “HMO” has the meaning
set forth in Section 2.17(i).

     

    “Holdback Amount” has
the meaning set forth in Section 1.4(a)(iii).

     

    “Indemnified Party”
means a Purchaser Indemnified Party or a Shareholder Indemnified
Party.

     

    “Indemnifying Party”
has the meaning set forth in Section 9.3(a).

     

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

     

    “Intellectual
Property” means any or all of the following and all rights, arising out
of or associated therewith: (a) all patents and applications therefor and
all reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (b) all inventions (whether patentable or
not), invention disclosures, improvements, proprietary information, know-how,
technology, technical data and customer lists, and all documentation relating to
any of the foregoing; (c) all copyrights, copyright registrations and
applications therefor, and all other rights corresponding thereto; (d) all
industrial designs and any registrations and applications therefor; (e) all
internet uniform resource locators, domain names, trade names, logos, slogans,
designs, common law trademarks and service marks, trademark and service mark
registrations and applications therefor; (f) all Software, databases and
data collections and all rights therein; (g) all moral and economic rights
of authors and inventors, however denominated; and (h) any similar or
equivalent rights to any of the foregoing.

     

    “IRS” has the meaning
set forth in Section 2.17(b).

     

    “Knowledge.”  An
individual shall be deemed to have “Knowledge” of a particular fact or other
matter if:

     

    (a)           such
individual is actually aware of such fact or other matter; or

     

    (b)           such
individual would have had knowledge of such fact following a reasonable
investigation, if under the circumstances a reasonable person would have
determined such investigation was required or appropriate in the normal course
of fulfillment of such individual’s duties.

     

    The
Company shall be deemed to have “Knowledge” of a particular fact or other matter
if any of Kenna Sellers, Jeffrey Smoak and Rich Coomes, as applicable, has
Knowledge of such fact or other matter.

     

    “Labor Laws” means all
Laws governing or concerning labor relations, unions and collective bargaining,
conditions of employment, employee classification, employment discrimination and
harassment, wages, hours or occupational safety and health, including ERISA, the
United States Immigration Reform and Control Act of 1986, the United States
National Labor Relations Act, the United States Civil Rights Acts of 1866 and
1964, the United States Equal Pay Act, the United States Americans with
Disabilities Act, the United States Age Discrimination in Employment Act, FMLA,
WARN, the Occupational Safety and Health Act of 1970, the United States Davis
Bacon Act, the United States Walsh-Healy Act, the United States Service Contract
Act, United States Executive Order 11246, the United States Fair Labor Standards
Act and the United States Rehabilitation Act of 1973.

     

    “Law” means any federal, state, local, municipal, foreign or
international, multinational other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental
Body.

     

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

     

    “Leased Real
Property” means the parcels of real
property of which the Company is the lessee or sublessee (together with all
fixtures and improvements thereon).

     

    “Leases” has the
meaning set forth in Section 2.11(b).

     

    “Legal Proceeding”
means any ongoing or threatened action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
court or other Governmental Body or any arbitrator or arbitration
panel.

     

    “Losses” means any and all claims, liabilities,
obligations, damages, losses, penalties, fines, judgments, costs and expenses
(including amounts paid in settlement, costs of investigation and attorney’s
fees and expenses), whenever arising or incurred, and whether arising out of a
third party claim.

     

    “Material Adverse
Effect” means any state of facts, change, event, effect, occurrence or
circumstance that, individually or in the aggregate (considered together with
all other state of facts, change, event, effect, occurrence or circumstance)
has, has had or could reasonably be expected to have or give rise to a material
adverse effect on (a) the business, financial condition, prospects,
capitalization, assets, liabilities, operations or financial performance of any
of the Company, (b) the ability of the Company or a Shareholder to
consummate the transactions contemplated by this Agreement or to perform any of
its obligations under this Agreement prior to the Termination Date, or
(c) the Purchaser’s ability to vote, receive dividends with respect to or
otherwise exercise ownership rights with respect to the stock of the
Company.

     

    “Materials of Environmental
Concern” means any chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum and petroleum products and any other substances that are
now or hereafter regulated by any Environmental Law or that are otherwise a
danger to health, reproduction or the environment.

     

    “Net Book Value” means
the total assets of the Company less total
liabilities of the Company less intangible
assets of the Company, all calculated in accordance with GAAP as reflected on
the Net Book Value Schedule, provided that total liabilities shall be adjusted
to exclude up to $25,000 of legal costs for a protest related to the Company’s
AFCEE-ECOS contract.

     

    “Net Book Value
Deficit” means the amount by which the Net Book Value is less than the
Target Net Book Value.

     

    “Net Book Value
Schedule” means a statement of the total assets of the Company, the total
liabilities of the Company and total intangible assets of the Company as of the
close of business on the Closing Date.

     

    “Net Book Value
Surplus” means the amount by which the Net Book Value is greater than the
Target Net Book Value.

     

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

     

    “NLRB” means the
United States National Labor Relations Board.

     

    “Noncompete Period”
means (i) the period beginning on the Closing Date and continuing for a period
of two years after the Closing Date or (ii) one year following termination of
employment with the Company as to any shareholder who is an employee of the
Company following the Closing.

     

    “Notice of Claim” has
the meaning set forth in Section 8.3(c).

     

    “NQDC Plan” has the
meaning set forth in Section 2.17(l).

     

    “Order” means any
decree, permanent injunction, order or similar action.

     

    “OSHA” means the
United States Occupational Safety and Health Administration.

     

    “Payoff Letters” has
the meaning set forth in Section 5.4(e).

     

    “Permitted
Encumbrance” means any (a)
Encumbrance for Taxes not yet due and payable (excluding Encumbrances arising
under ERISA or the Code), (b) Encumbrances of carriers, warehousemen, mechanics,
materialmen and repairmen incurred in the ordinary course of business consistent
with past practice and not yet delinquent and (c) in the case of the Leased Real
Property, zoning, building, or other restrictions, variances, covenants, rights
of way, encumbrances, easements and other minor irregularities in title, none of
which, individually or in the aggregate, (i) interfere in any material respect
with the present use of or occupancy of the affected parcel by the Company, (ii)
have more than an immaterial effect on the value thereof or its use, or (iii)
would impair the ability of such parcel to be sold for its present
use.

     

    “Person” means any
individual, corporation, partnership, joint venture, limited liability company,
trust, Governmental Body or other organization.

     

    “Pre-Closing Tax
Periods” has the meaning set forth in Section 4.11(a).

     

    “Purchase Price” has
the meaning set forth in Section 1.2.

     

    “Purchaser” has the
meaning set forth in Section Preamble.

     

    “Purchaser Basket” has
the meaning set forth in Section 8.5.

     

    “Purchaser Cap” has
the meaning set forth in Section 8.5.

     

    “Purchaser Constituent
Documents” means the certificate of incorporation and the bylaws,
including all amendments thereto, of the Purchaser.

     

    “Purchaser Indemnified
Parties” means the Purchaser and its Affiliates (including the Company),
their respective officers, directors, employees, agents and representatives and
the heirs, executors, successors and assigns of any of the
foregoing.

     

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

     

    “Purchaser Losses” has
the meaning set forth in Section 8.1.

     

    “Purchaser Related
Agreement” means any certificate, agreement, document or other
instrument, other than this Agreement, to be executed and delivered by the
Purchaser in connection with the transactions contemplated hereby.

     

    “Receivables” means
the accounts receivable, notes receivable and other receivables of any of the
Company as of the close of business on the Closing Date.

     

    “Registered Intellectual
Property” means all (a) patents and patent applications (including
provisional applications), (b) registered trademarks and service marks,
applications to register trademarks and service marks, intent-to-use
applications, or other registrations or applications related to trademarks and
service marks, (c) registered copyrights and applications for copyright
registration, (d) domain name registrations and (e) any other Intellectual
Property that is the subject of an application, certificate, filing,
registration or other document issued, filed with, or recorded with or by any
Governmental Body.

     

    “Related Agreements”
means the Purchaser Related Agreements and the Shareholder Related
Agreements.

     

    “Related Party” means
(a) each Shareholder, (b) each individual who is, or who has at any time been,
an officer or director of the Company, (c) each member of the immediate family
of each of the individuals referred to in clause (a) or (b) above and (d) any
trust or other Entity (other than the Company) in which any one of the
individuals referred to in clauses (a), (b) and (c) above holds (or in which
more than one of such individuals collectively hold), beneficially or otherwise,
a material voting, proprietary, equity or other financial interest.

     

    “Release” means with respect to any Materials of
Environmental Concern, any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
any surface or ground water, drinking water supply, soil, surface or subsurface
strata or medium or the ambient air.

     

    “Shareholder Disclosure
Schedule” means the disclosure schedule
(dated as of the date of the Agreement) delivered to the Purchaser on behalf of
Shareholders and the Company on the date of this Agreement.

     

    “Shareholder Indemnified
Parties” means the Shareholders and their respective heirs, executors,
successors and assigns.

     

    “Shareholder Related
Agreement” means any certificate, agreement, document or other
instrument, other than this Agreement, to be executed and delivered by the
Company or a Shareholder in connection with the transactions contemplated
hereby.

     

    “Shareholders” has the
meaning set forth in the Preamble.

     

    “Shares” has the
meaning set forth in the Recitals.

     

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

     

    “Shareholder Losses”
has the meaning set forth in Section 8.2.

     

    “Software” means any
computer software program, together with any error corrections, updates,
modifications, or enhancements thereto, in both machine-readable form and human
readable form, including all comments and any procedural code.

     

    “Straddle Tax Periods”
has the meaning set forth in Section 4.1(b).

     

    “Subsidiary.”  Any
Entity shall be deemed to be a “Subsidiary” of another Person if such Person
directly or indirectly (a) has the power to direct the management or policies of such Entity
or (b) owns, beneficially or of record, (i) an amount of voting
securities or other interests in such Entity that is sufficient to enable such
Person to elect at least a majority of the members of such Entity’s board of directors or other governing body, or
(ii) at least 50% of the outstanding equity or financial interests of such
Entity.

     

    “Target Net Book
Value” means an amount equal to $1,232,260.

     

    “Tax” means any (a)
tax (including income, franchise, business, corporate, capital, excise, gross
receipts, ad valorem, property, sales, use, turnover, value added, stamp and
transfer taxes), deduction, withholding, levy, charge, assessment, tariff, duty,
impost, deficiency or other fee of any kind imposed by any Governmental Body,
(b) all interest, penalties, fines, additions to tax or additional amounts
imposed by any Governmental Body in connection with any item described in clause
(a) or for failure to file any Tax Return, (c) any successor or transferee
liability in respect of any items described in clauses (a) and/or (b) under
Treasury Regulation 1502-6 (or any similar provision of state, local or foreign
Law) and (d) any amounts payable under any tax sharing agreement or other
contractual arrangement.

     

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

     

    “Territory” means any
jurisdiction in which the Business was operated by the Company within the last
five years.

     

    “Third-Party Claim”
has the meaning set forth in Section 8.3(a).

     

    “Transaction
Expenses” means the sum of all fees, costs
and expenses (including legal fees and
accounting fees and including the amount of all special bonuses and other amounts
that may become payable to any officers of the Company or other Persons in
connection with the consummation of the transactions contemplated by this
Agreement) that are incurred by the Company for
the benefit of the Company or a Shareholder in connection with the transactions
contemplated by this Agreement.

     

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

     

    “Treasury Regulations”
means the temporary and final income Tax regulations promulgated under the
Code.

     

    “Unaudited Interim Balance
Sheet” has the meaning set forth in Section 2.6(a).

     

    “WARN” means the
United States Worker Adjustment and Retraining Notification Act and similar
state Laws.

     

     

    A-10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]