Document:

Exhibit 10.1

 

 

 

ASSET
PURCHASE AGREEMENT

 

dated as of

 

May 10, 2007

 

among

 

INFOLOGIX,
INC.,

 

INFOLOGIX
SYSTEMS CORPORATION,

 

AMTSYSTEMS,
INC.,

 

and

 

THE
SHAREHOLDERS OF

AMTSYSTEMS, INC.

 

ASSET PURCHASE
AGREEMENT

This ASSET
PURCHASE AGREEMENT (this “Agreement”)
is made and entered into as of May 10, 2007 by and among InfoLogix, Inc., a
Delaware corporation (“Parent”),
InfoLogix Systems Corporation, a Delaware corporation (“Buyer”),
AMTSystems, Inc., a Connecticut corporation (“Seller”),
and the shareholders of Seller identified on Schedule A to this
Agreement (the “Shareholders”).

RECITALS

WHEREAS, Seller is
engaged in the business of providing barcode and radio-frequency identification
(RFID) based products and solutions to a variety of industries including the
healthcare, life sciences, and distribution industries (the “Business”);

WHEREAS, the
Shareholders are the record and beneficial owners of all of the outstanding
capital stock of Seller;

WHEREAS, Parent is
the record and beneficial owner of all of the outstanding capital stock of
Buyer; and

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

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

AGREEMENT

ARTICLE 1.      DEFINITIONS

1.1           Definitions.  For convenience, this Agreement uses certain
defined terms, the meanings of which are specified or referred to in Schedule
1.1.

ARTICLE 2.      SALE OF ASSETS; PURCHASE PRICE

2.1           Purchase and Sale of Assets.  Subject to the terms of this Agreement, at
the Closing, Seller shall sell, convey, assign, transfer, and deliver to Buyer,
free and clear of any Encumbrances (other than Permitted Encumbrances), and
Buyer shall purchase from Seller, all of Seller’s right, title, and interest in
and to all of the assets, properties, contracts, instruments, rights, and
claims of every kind and description, real, personal and mixed, tangible and
intangible, known and unknown, actual and contingent, and wherever located,
which are then owned, held, or used by Seller in the conduct of the Business
(the “Purchased Assets”).  Without limiting the foregoing, the Purchased
Assets shall include the following as they exist on the Closing Date and to the
extent of Seller’s right, title, and interest therein:

(a)           all Contracts, including all of those
Contracts with the vendors and customers listed on Schedule 2.1(a);

(b)           all tangible personal property of the
Business, including all work in process, parts, furniture, furnishings, office
equipment, computer and other data processing equipment (including installed
software), and other equipment and fixed assets used in or related to the
Business and listed on Schedule 2.1(b);

(c)           all data and records related to the
Business, including all enterprise resource planning systems, lists of
customers, customer leads, suppliers, and vendors (each in Excel spreadsheet 

format), financial and accounting books and records (in
electronic or paper form as it currently exists), advertising materials,
promotional materials, files, indices, and market research studies,
correspondence, and, subject to applicable Law, copies of all personnel records
related to any Transferred Employees;

(d)           all of the intangible rights and
property of the Business, including all Intellectual Property (including the
Owned Software listed on Schedule 2.1(d)), goodwill, and the telephone and
telecopy numbers listed on Schedule 2.1(d));

(e)           all insurance benefits, including
rights and proceeds, arising from or relating to the Purchased Assets or the Assumed
Liabilities prior to the Effective Time, if any;

(f)            all claims against third parties
relating to the Purchased Assets, whether choate or inchoate, known or unknown,
contingent or non-contingent, if any;

(g)           all warranties and guaranties for the
benefit of Seller relating or with respect to the Business and/or the Purchased
Assets, if any;

(h)           all Governmental Authorizations and
registrations from or with all Governmental Bodies relating to the Business
and/or the Purchased Assets, if any;

(i)            all rights of Seller relating to
claims for refunds and rights to offset in respect thereof (other than claims
for refunds of Taxes arising out of taxable periods occurring prior to the
Closing Date and claims for other governmental charges relating to any period
prior to the Closing Date) relating or with respect to the Business and/or the
Purchased Assets; and

(j)            subject to proration pursuant to Section
2.12, all prepaid expenses, all advances and deposits made by Seller and
all other prepaid items, credits, and discounts for or toward the purchase of
goods, services, and Inventory relating to the Business which have not as of
the Closing Date been received in full by the Business (collectively, the “Prepaids”).

2.2           Nonassignability.  Notwithstanding anything in this Agreement to
the contrary, if any Contract or Governmental Authorization included in the
Purchased Assets may not be transferred without the consent, approval, or
waiver of a third party (each a “Nonassignable
Contract or Authorization”), such transfer or attempted transfer
would constitute a breach thereof or a violation of any Law, and such Contract
is listed on Schedule 2.2, nothing in this Agreement shall constitute a
transfer or attempted transfer thereof. 
If such consent, waiver, or approval is not obtained by the Effective
Time, Seller (a) shall cooperate with Buyer at its request in endeavoring to
obtain such consent, waiver, or approval promptly at no cost to Buyer and (b)
if any such consent, waiver, or approval is unobtainable notwithstanding Seller’s
best efforts, shall cooperate with Buyer in any reasonable arrangement designed
to provide for Buyer the benefits, claims, and rights under any such
Nonassignable Contract or Authorization as if such Nonassignable Contract or
Authorization had been duly assigned to Buyer, including enforcement for the
benefit of Buyer of any and all rights of Seller against any other party
thereto.  Buyer shall be responsible only
for the liabilities or obligations arising out of the Nonassignable Contracts
or Authorizations listed on Schedule 2.2 to the extent they are assigned
or transferred to Buyer pursuant to the terms of this Agreement or Buyer is
provided with the benefits, claims, and rights under such Nonassignable
Contracts or Authorizations.

2.3           Excluded Assets.  Notwithstanding anything to the contrary in Section
2.1 or elsewhere in this Agreement, the following rights, properties, and
assets (the “Excluded Assets”) are
not part of the sale and purchase contemplated in this Agreement and shall
remain the property of Seller after the Effective Time:

(a)           all cash and cash equivalents;

(b)           all accounts receivable of the
Business;

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(c)           all Inventory;

(d)           all rights with respect to any and
all assets of the Employee Plans;

(e)           Seller’s corporate seals, minute
books, stock books, Tax records, and personnel records required by Law to be
retained by Seller;

(f)            any claims and rights against third
parties to the extent they relate to Retained Liabilities (except to the extent
Buyer shall have incurred costs and expenses with respect to such claims and
rights);

(g)           the intellectual property that is
exclusively applicable to Seller’s horticultural business; and

(h)           the other assets that are related
exclusively to Seller’s horticultural business.

2.4           Assumed Liabilities.  At the Effective Time, Buyer shall assume and
agree to discharge, subject to Section 2.2, all liabilities, expenses,
and obligations to be performed or discharged after the Effective Time pursuant
to the Contracts included in the Purchased Assets (but excluding any liability
or obligation for breach or default which occurred before the Effective Time or
to pay money which accrued before the Effective Time) (collectively, the “Assumed Liabilities”).

2.5           Retained Liabilities.  Except for the Assumed Liabilities and
notwithstanding any other provision of this Agreement or the Disclosure
Statement and regardless of any disclosures made in this Agreement or otherwise
to Buyer or any Affiliate of Buyer, Buyer shall not assume or in any way be
liable or responsible for any liabilities, expenses, commitments, obligations,
or debts of any type or nature, known or unknown, contingent or otherwise,
whether or not related to the Business or the Purchased Assets (collectively,
the “Retained Liabilities”),
including:

(a)           any Environmental Liabilities arising
out of or related to the operation of Seller and the Business, or conditions,
events, facts, or circumstances, first occurring before Effective Time;

(b)           each trade account payable of the
Business incurred before the Effective Time;

(c)           any liability or obligation under any
Employee Plan or relating to payroll (other than accrued and unpaid salaries of
Transferred Employees), vacation and sick leave (other than earned and unused
vacation and sick leave of Transferred Employees), workers’ compensation,
unemployment benefits, pension benefits, employee stock option plans or profit
sharing plans (if any), health care plans or benefits, or any other employee
plans or benefits of any kind or under any other employment, severance,
retention, or termination agreement with any current or former employee of
Seller;

(d)           all liabilities for Taxes of any kind
(whether or not accrued, assessed, or currently due and payable);

(e)           any liability or obligation of Seller
to distribute to the Shareholders or otherwise to apply all or any part of the
consideration received under or pursuant to this Agreement;

(f)            any liability or obligation arising
out of any Indebtedness of Seller;

(g)           any liability or obligation which is
based on any act or omission of Seller or any Shareholder occurring on, before,
or after the Effective Time;

(h)           any liability or obligation relating
to or arising out of any violations of any Laws or any claims or Proceedings in
each case to the extent they are incurred, associated with or relate to any
period 

 3
 

prior to the Effective Time, or any other claims or
Proceedings relating to or arising out of an occurrence or event happening
before the Effective Time, including any product liability claim or other tort
claim of any nature; and

(i)            any other liability or obligation of
Seller or any Shareholder including any liability directly or indirectly
arising out of or relating to the operation of the Business or ownership of the
Purchased Assets before the Effective Time whether contingent or otherwise,
fixed or absolute, known or unknown, matured or unmatured, present, future, or
otherwise.

2.6           Certain Taxes.  Seller or the Shareholders shall be
responsible for the payment of all Taxes that are or may be imposed on Seller
or any Shareholder that are payable or arise as a result of this Agreement, any
transfer pursuant to this Agreement or any other Transaction Document,
notwithstanding the party upon which such Taxes are actually imposed.  Seller shall furnish to Buyer properly
completed exemption certificates for any Taxes from which Buyer claims to be
exempt.

2.7           Purchase Price.  The aggregate consideration under this
Agreement for the Purchased Assets, in addition to the assumption of the
Assumed Liabilities pursuant to Section 2.4, shall be $1,100,000 (the “Purchase Price”) and shall be satisfied as
follows:

(a)           Buyer shall pay $100,000 to Seller at
Closing (the “Closing Payment”).

(b)           Buyer shall pay $500,000 to Seller,
including interest thereon of 8% per annum, payable in 72 monthly installments
of $8,766.22 on the last day of each calendar month beginning on June 30, 2007,
with the final monthly installment due and payable on May 31, 2013 (the “Deferred Payment Obligations”), provided, that the unpaid
principal portion of the Deferred Payment Obligations shall be payable in full
upon a Change of Control.

(c)           At Closing, Buyer shall deliver to
Seller a stock certificate, registered in Seller’s name, representing $500,000
payable in common shares (the “Parent Shares”)
of Parent Common Stock, based on the closing price of each share valued at the
average closing price for the ten trading days prior to
the Closing Date.

Buyer’s cash payments
pursuant to this Sections 2.7(a) and (b) shall be made by wire
transfer of immediately available funds to an account or accounts designated by
Seller.

2.8           Restricted Stock.

(a)           The issuance of the Parent Shares is
intended to be exempt from registration under Section 4(2) of the Securities
Act, and the Parent Shares shall constitute “restricted securities” under the
Securities Act.

(b)           Neither the sale nor the resale of
the Parent Shares have been registered under the Securities Act.  For a two-year period following the Closing
Date (the “Lock-Up Period”), Seller shall not
sell, assign, transfer, or otherwise dispose of, or enter into any contract,
option, swap, hedge, derivative or other arrangement or understanding with
respect to the sale, assignment, pledge, or other disposition of (collectively,
“Transfer”) any of its Parent Shares or
any interest therein.  The foregoing
restriction has been expressly agreed to preclude Seller from engaging in any
hedging or other transaction during the Lock-Up Period that is designed to or
reasonably expected to lead to or result in a Transfer of the Parent
Shares.  Such prohibited hedging or other
transaction would include any short sale (whether or not against the box) or
any purchase, sale, or grant of any right (including any put or call option)
with respect to the Parent Shares or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from the Parent Shares.  Following the Lock-Up Period, Seller shall
not Transfer any of its Parent Shares unless (i) such sale, transfer, or
disposition has been registered under the Securities Act; or (ii) Seller
delivers to Parent a written opinion of counsel in form and substance
satisfactory 

 4
 

to Parent and stating
that the proposed sale, transfer, or other disposition of the Parent Shares is
exempt from registration under the Securities Act and any other applicable
securities laws.

(c)           Seller acknowledges and agrees that
the certificates representing Parent Shares shall bear the following
restrictive legends, and that appropriate “stop-transfer” instructions shall be
given to Parent’s stock transfer agent:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAWS.  THE SECURITIES
MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, OR OTHERWISE TRANSFERRED UNLESS
REGISTERED OR QUALIFIED PURSUANT TO THE PROVISIONS OF THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
OBTAINED BY THE HOLDER OF THIS CERTIFICATE STATING THAT SUCH OFFER, SALE,
ASSIGNMENT, PLEDGE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION OR
QUALIFICATION.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN ASSET PURCHASE AGREEMENT DATED
AS OF MAY 10, 2007, AS AMENDED FROM TIME TO TIME, AMONG INFOLOGIX, INC.,
INFOLOGIX SYSTEMS CORPORATION, AMTSYSTEMS, INC., AND THE SHAREHOLDERS OF
AMTSYSTEMS, INC.  COPIES OF SUCH
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.

Within 30 days following
the second anniversary of the Closing Date, upon written request from Seller,
Parent shall remove or use reasonable best efforts to cause to be removed the
restrictive legends set forth above and shall issue to Seller, as applicable,
certificates representing Parent Shares without such legends.

2.9           Allocation
of Purchase Price.  The allocation of
the Purchase Price shall be as set forth on Schedule 2.9.  After the Effective Time, to the extent
permitted by applicable Law, the parties shall make consistent use of the
allocation set forth on Schedule 2.9 for all Tax purposes and in all Tax
Returns.  With respect to the Purchased
Assets, Buyer shall prepare and deliver a properly completed IRS Form 8594
reflecting the allocation set forth in the preceding sentence to Seller within
75 calendar days after the Closing Date to be filed with the IRS.  In any Proceeding related to the
determination of any Tax, neither Seller nor Buyer shall contend or represent
that such allocation is not a correct allocation.  Seller and Buyer shall give prompt notice to
each other of the commencement of any Tax or reimbursement audit or the assertion
of any proposed deficiency or adjustment by any Governmental Body that
challenges such allocation.

2.10         Time and
Place of Closing.  The closing (the “Closing”) of the Contemplated Transactions
shall take place at the offices of Drinker Biddle & Reath LLP, One Logan
Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania 19103-6996, commencing at 10:00 A.M., local time, on May 10, 2007
(the “Closing Date”).  The Closing shall be effective as of 12:00
a.m. on the Closing Date (the “Effective Time”).

2.11         Closing
Deliveries.  In addition to any other
documents to be delivered under other provisions of this Agreement, at the
Closing:

(a)                                  Seller shall deliver the following:

 5
 

(i)            a Bill of
Sale, Assignment, and Assumption Agreement for all of the Purchased Assets and
the Assumed Liabilities substantially in the form attached to this Agreement as
Exhibit A (the “Bill of Sale”),
executed by Seller;

(ii)           a
Sublease for a portion of the real property located at  220 Realty
Drive, Cheshire, CT 06410  , Connecticut, in substantially the form attached to
this Agreement as Exhibit B (the “Sublease”),
executed by Seller;

(iii)          an
employment agreement between Buyer and Todd D. Stewart substantially in the
form attached to this Agreement as Exhibit C (the “Employment Agreement”), executed by Todd D.
Stewart;

(iv)          copies
of each Consent and Governmental Authorization identified in Section 3.3(b) of
the Disclosure Statement in form satisfactory to Buyer;

(v)           an
opinion of Parrett, Porto, Parese & Colwell, P.C., counsel to Seller, dated
as of the Closing Date, substantially in the form attached to this Agreement as
Exhibit D;

(vi)          a
certificate of the secretary of Seller in form and substance satisfactory to
Buyer, dated as of the Closing Date, attaching (A) a copy of the resolutions
duly adopted by the board of directors and shareholders of Seller, authorizing
and approving the execution, delivery, and performance of this Agreement and
the consummation of the Contemplated Transactions, (B) the certificate of
incorporation of Seller and all amendments thereto, certified as of a recent
date by the Secretary of State of the State of Connecticut; and (C) incumbency,
authority, and specimen signatures of each of the officers of Seller executing
this Agreement and any other Seller Transaction Document executed on behalf of
Seller and certifying the authenticity of such signatures;

(vii)         certificates
dated not more than five Business Days before the Closing Date as to the good
standing of Seller, certified by the Secretary of State of the State of
Connecticut and each state where Seller is qualified to do business as a
foreign corporation; and

(viii)        each
other document, certificate, and instrument of transfer and assignment as Buyer
determines to be necessary, desirable, or appropriate to effectuate or evidence
the Contemplated Transactions.

(b)                                 Buyer shall deliver the following:

(i)            to Seller, the Bill of
Sale, executed by Buyer;

(ii)           to Seller, the
Sublease, executed by Parent;

(iii)          to Todd D. Stewart, the
Employment Agreement, executed by Buyer;

(iv)          to Seller, the Closing
Payment;

(v)           to Seller, the
certificate representing the Parent Shares;

(vi)          a certificate of the
secretary or assistant secretary of each of Buyer and Parent in form and
substance satisfactory to Seller, dated as of the Closing Date, attaching (A) a
copy of the resolutions duly adopted by the board of directors of each of Buyer
and Parent, authorizing and approving the execution, delivery, and performance
of this Agreement and the consummation of the Contemplated Transactions, (B)
the certificate of incorporation of each of Buyer and Parent and all amendments
thereto, each certified as of a recent date by the Secretary of State of the
State of Delaware; and (C) incumbency, authority, and specimen signatures of
each of the officers of Buyer and Parent executing this Agreement and 

 6
 

any
other Buyer Transaction Document executed on behalf of Buyer or Parent, as
applicable, and certifying the authenticity of such signatures; and

(vii)         certificates dated not
more than five Business Days before the Closing Date as to the good standing of
each of Buyer and Parent, certified by the Secretary of State of the State of
Delaware.

2.12         Prorations.  Seller and Buyer shall prorate all Prepaids,
including any utility charges and all other similar customary adjustments,
Taxes and assessments levied against the Purchased Assets, between Seller and
Buyer with Seller being responsible for all such expenses attributable to
periods prior to the Effective Time and Buyer being responsible for all
expenses attributable to periods on or after the Effective Time.  With respect to any amounts that have not yet
been billed or otherwise determined, Seller and Buyer shall prorate such
amounts based on the most recent ascertainable bill, based on when such
Prepaids, Taxes, and assessments are due and payable.

ARTICLE 3.      REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Disclosure Statement, Seller and Shareholders,
jointly and severally, hereby represent and warrant to Buyer and Parent as
follows (unless otherwise stated in the applicable representation and warranty,
such representation and warranty is made only as of the Effective Time):

3.1           Organization
and Good Standing.  Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Connecticut and has all necessary corporate power and
authority to carry on its business as presently conducted and as contemplated
to be conducted, and to own, lease, and use the assets (including the Purchased
Assets) that it owns, leases, and uses. 
Seller is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each other jurisdiction in which the
character of the properties or assets owned, leased, or used by it (including
the Purchased Assets) or the nature of the activities conducted by it make such
qualification necessary.  Section 3.1 of
the Disclosure Statement identifies each jurisdiction in which Seller is
qualified to do business.

3.2           Power
and Authorization.  Seller has full
legal right, corporate power, and authority to enter into, execute, and perform
this Agreement and all other agreements, certificates, instruments, and other
documents required to be entered into by Seller in connection with this
Agreement (the “Seller Transaction Documents”),
to consummate the Contemplated Transactions, and to otherwise perform its
obligations under this Agreement and the other Seller Transaction
Documents.  The execution, delivery, and
performance by Seller of this Agreement and the other Seller Transaction
Documents and the consummation of the Contemplated Transactions have been duly
authorized by all necessary corporate and shareholder action.  This Agreement and the other Seller
Transaction Documents have been duly and validly executed and delivered by
Seller and constitute its legal, valid, and binding obligations, enforceable
against it in accordance with their respective terms, subject to bankruptcy,
insolvency, and other similar Laws affecting creditors’ rights generally.

3.3           Conflicts;
Consents and Approvals.

(a)           The
execution, delivery, and performance of this Agreement and the other Seller
Transaction Documents, and the consummation of the Contemplated Transactions by
Seller do not and will not (in each case, with or without the giving of notice
or the passage of time), directly or indirectly:

(i)            violate
or conflict with the certificate of incorporation or bylaws of Seller or in any
material respect any Laws to which Seller (or any of the Purchased Assets) is
subject;

(ii)           violate
or conflict with, result in a breach of any provision of, or constitute a
default, or otherwise cause any loss of benefit under any Contract or other
obligation to which Seller is a party or by which it or any of the Purchased
Assets are bound, or give to others any rights (including rights of 

 7
 

termination, foreclosure, cancellation, or acceleration), in
or with respect to any of the Purchased Assets, or the Business;

(iii)          give
any Governmental Body or other Person the right to challenge this Agreement or
any of the Contemplated Transactions or to exercise any remedy or obtain any
relief under any Law to which Seller may be subject; or

(iv)          result
in, require, or permit the creation or imposition of any Encumbrance upon or
with respect to any of the Purchased Assets.

(b)           Section
3.3(b) of the Disclosure Statement describes each Consent of or registration,
notification, filing, and/or declaration with, any Governmental Body, creditor,
lessor, and other Person required to be given or obtained by Seller in
connection with the execution, delivery, and performance of this Agreement and
the other Seller Transaction Documents or any of the Contemplated Transactions
or to transfer the Purchased Assets free and clear of any Encumbrances (other
than Permitted Encumbrances).  All
Consents and all registrations, notifications, filings, and declarations with
any Governmental Body, creditor, lessor, or other Person identified in Section
3.3(b) of the Disclosure Statement have been obtained as of the date of this
Agreement, and true, complete, and correct copies thereof have been delivered
to Buyer before the date of this Agreement. 
Seller has not received any request from any Governmental Body for
information with respect to the Contemplated Transactions.

3.4           Capitalization.

(a)           The
authorized capital stock of Seller consists of 5,000 shares of common stock, no
par value per share.  Schedule A
sets forth a complete and accurate capitalization table of Seller as of the
date of this Agreement, which capitalization table sets forth the names of all
holders of all of the issued and outstanding capital stock of Seller (the “AMT  Shares”).  The AMT Shares constitute all of the issued
and outstanding equity interests of Seller. 
The AMT Shares have been duly authorized, are validly issued, fully
paid, and nonassessable and have been issued in compliance with all applicable
Laws.

(b)           There are
no options, warrants, conversion privileges, preemptive rights, rights of first
refusal, or other rights (or agreements for any such rights) outstanding to
purchase or otherwise obtain from Seller any of its securities, nor are there
any commitments to issue or execute any such options, warrants, conversion
privileges, preemptive rights, rights of first refusal, or other rights.

3.5           Subsidiaries
and Investments.  The Business is and
always has been conducted solely by and through Seller and no other Person or
subsidiary.  Seller has no
predecessors.  Seller does not directly
or indirectly own, control, or have any investment or other interest in any
Person.  Seller has not agreed,
contingently or otherwise, to share any profits, losses, costs, or liabilities,
or to indemnify any Person or to guaranty the obligations of any Person.  Seller has not conducted the Business under
any name (i.e., “trading” or “doing business as”) other than AMTSystems, Inc.
and Asset Management Technologies, Inc.

3.6           Compliance
with Laws; Authorizations.

(a)           Seller is,
and has been at all times during the past three years, in compliance in all
material respects with all applicable Laws and all Governmental Authorizations;
and Seller has no basis to expect, and has not received during the last three
years, any notice, order, or other communication from any Governmental Body or
any other Person of any alleged, actual, or potential violation of or failure
to comply with any Law in any material respect. 
Seller currently has no Governmental Authorizations and no Governmental
Authorizations are required for the operation of the Business as currently
conducted, and as conducted during the last three years, or to own, lease, and
use the Purchased Assets in the manner in which they are currently owned,
leased, and used.

 8

(b)           Neither
Seller, any Shareholder, any officer, director, employee, or agent of Seller,
or to the Knowledge of Seller, any other Person acting on Seller’s behalf, has
directly or indirectly (i) made any (A) illegal contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other illegal payment to any
Person, private or public, regardless of form, whether in money, property, or
services (1) to obtain favorable treatment in securing or maintaining business;
(2) to obtain any Governmental Authorization; or (3) to obtain or maintain any
other special concessions or treatment for or in respect of Seller in violation
of any Law, or (B) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person, private or public,
regardless of form, whether in money, property, or services that, if not
continued, would reasonably be expected to adversely affect Seller or the
Business in any material respect; or (ii) established or maintained any fund or
asset that has not been recorded in the books and records of Seller.

3.7           Litigation.  During the last five years there have not
been, nor are there currently pending, or to the Knowledge of Seller,
threatened, any Proceedings (a) involving or affecting Seller, the Purchased
Assets, or the Business, or Seller’s directors, officers, or shareholders in
their capacities as such, or (b) that question any of the Contemplated
Transactions or the validity of this Agreement or any of the other Seller
Transaction Documents or which, if adversely determined, would have a material
adverse effect upon the ability of Seller to enter into or perform its
obligations under this Agreement or any of the other Seller Transaction
Documents; and no pending Proceeding, if determined adversely, would either
individually or in the aggregate have a Material Adverse Effect on Seller or
the Business.  To the Knowledge of Seller
and Shareholders, no such Proceeding is presently threatened or contemplated and
there are no facts which could reasonably serve as a basis for any such
Proceeding.  There are no unsatisfied
judgments, penalties, or awards against or affecting Seller, any of the
Purchased Assets, or the Business. 
During the last five years, no claims have been made under Seller’s
general liability insurance or worker’s compensation policies.

3.8           Financial
Statements and Related Matters.

(a)           Seller has
delivered to Buyer the compiled balance sheets of the Business as at September
30, 2006, 2005, and 2004, and the balance sheet of the Business as at March 31,
2007 (the “Interim Balance Sheet”)
(collectively, the “Balance Sheets”),
the related compiled statements of income for the years ended September 30,
2006, 2005, and 2004, and the related statements of income for the six  month period ended March 31, 2007 (the “Financial Statements”).  The Financial Statements accurately and
fairly reflect the business, assets, liabilities, financial condition, cash
flow, and results of operations of the Business as at the respective dates
thereof and for the periods therein referred to.  Each of the Financial Statements has been
prepared in accordance with GAAP subject, in the case of the interim Financial
Statements, to normal recurring adjustments.

(b)           The Balance
Sheets reflect all liabilities of the Business, whether absolute, accrued,  or contingent, as of the respective dates
thereof of the type required to be reflected or disclosed in a balance sheet
(or the notes thereto) prepared in accordance with GAAP.  The Business has no liabilities or obligations
of any nature, absolute, accrued, or contingent, matured or unmatured, known or
unknown, including any capital lease obligations, Tax liabilities, tort claims,
or other litigation that are not reflected on the Interim Balance Sheet, other
than current liabilities incurred since the date thereof in the Ordinary Course
of Business and which are neither material in amount nor inconsistent with any
of the representations and warranties contained in this Agreement.  There is no basis for the assertion against
the Business of any liability (other than current liabilities referred to
above) not fully reflected or reserved against in the Balance Sheets.

(c)           The Balance
Sheets do not reflect any reserves or other provisions regarding anticipated
liabilities, losses, and expenses of the Business as of the respective dates
thereof, including those with respect to income and other Taxes, warranty
claims, bad debts, unsaleable inventories, salaries, vacation pay, and plans
and programs (including medical and other benefits programs) for the benefit of
present and former employees.

3.9           Product
Design; Warranties.  (a) Seller has
not made any express warranties or guaranties or other similar undertaking to
third parties with respect to any products created, manufactured, sold,
distributed, 

 9
 

or licensed, or any
services rendered, by the Business; (b) each outstanding warranty specifically
excludes consequential damages and damages for personal injury, and there are
no claims pending or threatened in which consequential damages or damages for
personal injury have been or are threatened to be claimed against the Business;
(c) there is no warranty (express or implied) outstanding with respect to any
such products or services other than any such implied by law pursuant to Sections
2-312 and 2-314 of the Uniform Commercial Code; (d) Seller has no Knowledge of
any design, manufacturing, or other defects, latent or otherwise, with respect
to any such products; (e) there is no recall (voluntary or otherwise) of any of
Seller’s products related to the Business pending or any other action under
consideration by Seller or, to the Knowledge of Seller, any Governmental Body
that might result in such a recall of all or a part of any of Seller’s products
related to the Business; and (f) Seller has not modified or expanded its
warranty obligation to any customer of the Business beyond that set forth in
Seller’s standard warranties or extended any warranty or guaranty other than in
writing, or rendered services or made payments not required by a warranty as a
matter of policy or customer relations.

3.10         Ownership
of the Assets; Personal Property. 
Seller owns and has good, valid, and marketable title to each and all of
the Purchased Assets, free and clear of any Encumbrances (in each case, other
than Permitted Encumbrances).  There are
no agreements affecting the right of Seller to convey the Purchased Assets to
Buyer or any other right of Seller with respect to the Purchased Assets, and
Seller has the absolute right, authority, power, and capacity to sell, assign,
and transfer the Purchased Assets to Buyer free and clear of any Encumbrance
(other than Permitted Encumbrances). 
Upon execution and delivery of the Bill of Sale to Buyer, Buyer will
acquire good, valid, and marketable title to the Purchased Assets, free and
clear of any Encumbrances (other than Permitted Encumbrances).  The tangible Purchased Assets are in good
working condition and repair, subject to normal wear and tear, and the
Purchased Assets constitute all of the material assets that are necessary for
the conduct of the Business as it has been conducted by Seller before and as of
date of this Agreement.  All of the
Purchased Assets and all properties and assets (other than Real Property) leased
by Seller and used in the Business are in the possession of and under the
control of Seller.  All such properties
and assets are located at Cheshire, Connecticut.  No Purchased Asset has been purchased or
otherwise acquired by Seller from any Affiliate of Seller in anticipation of
the Contemplated Transactions.  No asset
or property with respect to the Business is owned or leased by any Person other
than Seller, except those assets leased by Seller pursuant to the Contracts
described in Section 3.12 of the Disclosure Statement.

3.11         Real Property.

(a)           Seller does
not own and has never owned or had an ownership interest in any real
property.  Section 3.11(a) of the
Disclosure Statement describes the real property currently used by Seller in
the conduct of the Business (the “Real
Property”), a complete and accurate description of the lease
relating thereto, including any amendments thereto (the “Lease”), the identity of the lessor
thereunder, and whether or not such lessor is an Affiliate.  Seller has delivered to Buyer a true,
correct, and complete copy of the Lease. 
The Lease constitutes the entire agreement to which Seller is a party
with respect to the Real Property demised pursuant thereto.  The Lease is in full force and effect and is
valid, binding, and enforceable against the parties thereto in accordance with
its respective terms.  No event or
condition that exists with or without the passage of time or the giving of
notice, would constitute a material default or breach by Seller or, to the
Knowledge of Seller, the lessor of the Lease and no material breach or default
on the part of Seller or, to the Knowledge of Seller, the lessor currently
exists under the Lease.  Seller is not a
party to any other lease or any sublease or other use or occupancy agreement
pursuant to which Seller derives its right to use any Real Property in the
Conduct of the Business.

(b)           Seller owns
all right, title, and interest in all leasehold estates and other rights
purposed to be granted to it by the Lease, in each case, free and clear of all
Encumbrances (other than Permitted Encumbrances).  To the Knowledge of Seller, all of the
buildings and structures to the extent of the Real Property are structurally
sound with no material defects, are in good operating condition in all material
respects and in a state of good maintenance, and Seller has adequate rights of
ingress and egress for the operation of the Business in the Ordinary Course of
Business consistent with past practice. 
No condemnation

 10
 

or eminent domain Proceeding is
pending or, to the Knowledge of Seller, threatened with respect to the Real
Property.

3.12         List of
Properties, Authorizations, Contracts, etc. 
Section 3.12 of the Disclosure Statement identifies the following:

(a)           each
vehicle, item of machinery, equipment, tools, and other tangible asset (other
than any Excluded Assets) used in the Business and the location thereof;

(b)           each
vehicle, item of machinery, equipment, tools, and other tangible asset (other
than any Excluded Assets) leased to or by Seller with respect to the Business
together with the location of such asset, the identities of the lessor and
lessee, the annual rental, and unexpired term of the lease;

(c)           each
existing Contract or other commitment not completely performed which involves
the performance of services or delivery of products or solutions by or to the
Business;

(d)           each form
of Contract used by the Business as a standard form in the Ordinary Course of
Business;

(e)           each
evidence of Indebtedness of Seller;

(f)            each
Encumbrance of any nature relating to or affecting any of the Purchased Assets
or the Real Property and all pledge, security, guaranty, and other agreements
relating thereto;

(g)           each
deferred compensation, severance, or other plan, arrangement or agreement with
or for the benefit of any current or former directors, officers, employees,
shareholders, or consultants of Seller;

(h)           each
management service, sales agency, sales representative, distributorship, or
other similar Contract;

(i)            each
Contract for the future purchase of fixed assets or the future purchase of
materials, supplies, or equipment (including any Contract relating to capital
expenditures or leasehold improvements);

(j)            each
Contract which restricts or purports to restrict any business activities or
freedom of the Business (or, to the Knowledge of Seller, any of its officers or
other employees) to engage in any business or to compete with any Person;

(k)           each
Contract pursuant to which Seller has agreed, contingently or otherwise, to
share any profits, losses, costs, or liabilities, or to indemnify any Person or
to guaranty the obligations of any Person; and

(l)            each other
Contract which is material to the business, operation, financial condition, or
prospects of the Business or which imposes material obligations or restrictions
on Seller or the Business.

Seller
has furnished to Buyer true and complete copies of each Contract, plan, and
other document required to be identified in Section 3.12 of the Disclosure
Statement.

3.13         Contracts.  Each Contract listed in Section 3.12 of the
Disclosure Statement was made in the Ordinary Course of Business, is in full
force and effect, and is valid, binding, and enforceable against the parties
thereto in accordance with its terms. 
Seller and, to the Knowledge of Seller, each other party thereto have
performed in all material respects, all obligations required to be performed by
it under each such 

 11
 

Contract and no
condition exists or event has occurred which with the giving of notice or the
passage of time would constitute a default or a basis for delay or non-performance
by Seller or, to the Knowledge of Seller, by any other party thereto.  Each other party to each such Contract has
consented or been given sufficient notice (where such consent or notice is
necessary) that the same shall remain in full force and effect following the
Closing.

3.14         Insurance.

(a)           Section
3.14 of the Disclosure Statement identifies each policy and binder of insurance
owned by, or maintained for the benefit of, or respecting which any premiums
are paid directly or indirectly by Seller or on behalf of the Business.  All such insurance policies are (i)
sufficient for compliance with all requirements of applicable Laws and each
Contract; (ii) provide insurance coverage against all risks customarily insured
against by a Person or entity carrying on the same or similar business as the
Business; (iii) provide reasonable coverage for all normal risks incident to
Seller’s assets, properties, and business operations related to the Business;
and (iv) will not be affected by, terminate, or lapse by reason of the
Contemplated Transactions.

(b)           Seller has
not received (i) any notice of cancellation of any policy or binder of
insurance required to be identified in Section 3.14 of the Disclosure Statement
or refusal of coverage thereunder; (ii) any notice that any issuer of such
policy or binder of insurance has filed for protection under applicable
bankruptcy or insolvency Laws or is otherwise in the process of liquidating or
has been liquidated; or (iii) any other indication that any such policy or binder
of insurance may no longer be in full force or effect or that the issuer of any
such policy or binder of insurance may be unwilling or unable to perform its
obligations thereunder.

3.15         Intellectual Property.

(a)           As used in
this Agreement, the term “Intellectual
Property” means:  (i) all
fictitious business names, trade names, trade dress, registered and
unregistered trademarks, service marks, logos, and other indications of origin,
and all domain names and corporate names, including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith in any jurisdiction; (ii) all patents, patent applications, and
inventions and discoveries whether patentable or unpatentable and whether or
not reduced to practice, all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof; (iii) all registered and material unregistered copyrights and works of
authorship (whether copyrightable or not), and all applications, registrations,
and renewals in connection therewith in any jurisdiction; (iv) all computer
software (including data, databases and related documentation), computer applications
software, owned or licensed (other than commercially available software which
may be readily purchased), or specific, unique-to-the-business usage (e.g.,
order processing, manufacturing, process control, shipping, etc.) and computer
operating, security or programming software, including all source codes and
supporting tools, libraries, and other elements necessary to create fully
executable applications and to maintain, update, and support such software as
required by the Business as currently conducted; (v) all know-how, trade secrets, confidential
information, customer lists, technical information,
manufacturing processes, data, database process technology, proprietary
formulae, plans, drawings, and blue prints (collectively, “Trade Secrets”), in each case owned, used,
or licensed by Seller in the conduct of the Business; (vi) all other
intellectual property and/or proprietary rights; (vii) all copies and tangible
embodiments thereof (in whatever form or medium); and (viii) all causes of
action for infringement, misappropriation or dilution of any of the
foregoing.  Section 3.15 of the
Disclosure Statement describes all Intellectual Property (other than
commercially available computer software programs licensed non-exclusively
under a “shrink wrap” or “off the shelf” or similar non-negotiated software
license agreement) and identifies each license or other Contract relating
thereto.  The Intellectual Property is
sufficient for the conduct of the Business as presently conducted and no
license or rights under any other intellectual property is necessary for the
conduct of the Business as presently conducted by Seller.

 12
 

(b)           Section
3.15(b) of the Disclosure Statement sets forth a true, complete and correct
list of all items of software that are (i) owned by Seller, and (ii) used or
useful in the conduct of the Business as presently conducted (the “Owned Software”).  The Owned Software includes all earlier or
predecessor versions of any of such software (whether or not released,
distributed, or untested) if and to the extent that such can be
identified.  The Owned Software does not
contain any portion that is or has been licensed under an open source
license.  Notwithstanding the foregoing,
the Owned Software is compliant with any and all open source licenses that
Seller has entered.  Further, the
non-open source portion(s) of the Owned Software maintain(s) proprietary status
and is not subject to open source status. 
Seller is the sole owner, with good and valid title, of the Owned
Software and all patents, trademark registrations, trade secrets, and copyright
registrations (if any) that are part of the Owned Software.

(c)           Seller owns
or has duly licensed all of the Intellectual Property free and clear of all
Encumbrances and Seller has all necessary power and authority to sell,
transfer, and assign to Buyer the Intellectual Property, free and clear of all
Encumbrances.  Upon the consummation of
the Contemplated Transactions, the rights of Buyer in and to the Intellectual
Property acquired by it under this Agreement will not be limited or otherwise
affected by reason of any of the Contemplated Transactions.  All patents, trademark registrations, and
copyright registrations that are part of the Intellectual Property are in good
standing, have been validly prosecuted or issued, duly maintained, are
subsisting, and are in full force and effect. 
Seller has the valid and legal right or license to use any Intellectual
Property currently used by it in the conduct of the Business, free and clear of
all Encumbrances.  Seller has not granted
or licensed to any Person any rights with respect to any Intellectual Property
and no other Person has any rights in or to any of the Intellectual Property
(including any rights to market or distribute any of the Intellectual Property).

(d)           Seller has
taken all reasonable precautions to preserve and document its Trade Secrets and
to protect the secrecy, confidentiality, and value of such Trade Secrets.  The documentation relating to each Trade
Secret is current and sufficient in detail and content to identify and explain
it and to allow its full and proper use without reliance on the knowledge or
memory of any individual.  Each current
employee of Seller has entered into written agreements requiring such employee
to maintain confidential all information related to the Intellectual Property.

(e)           The use of
the Intellectual Property by Seller does not, to the Knowledge of Seller,
conflict with, infringe upon, misappropriate, violate, or interfere with any
intellectual property right or asset of any other Person and there are no
allegations relating thereto.  There have
been no claims made, and neither Seller nor any Shareholder has received any
notice of a claim or otherwise knows that any of the Intellectual Property is
invalid or conflicts with the asserted rights of any other Person or has not
been used or enforced or has failed to be used or enforced in a manner that
would result in the abandonment, cancellation, or unenforceability of any of
the Intellectual Property.  To the
Knowledge of Seller, the products made and the services provided as part of the
Business do not infringe upon any intellectual property rights of any Person.

(f)            Each item
of Intellectual Property is valid and enforceable and there are, to the
Knowledge of Seller, no infringements of the Seller’s rights in and to the
Intellectual Property by any Person. 
Seller has not entered into any consent, indemnification, forbearance to
sue or settlement agreement with any Person relating to any item of
Intellectual Property or relating to any intellectual property rights or
proprietary rights of any Person.  The
rights to develop, make, license, use, have sold, have made, perform, copy,
make derivative works of, sell, distribute, modify and exploit Intellectual
Property held by Seller immediately prior to the Effective Time will not
adversely change or diminish as a result of the Contemplated Transactions.

(g)           All
employees of Seller and other Persons involved with the development,
implementation, use, or marketing of any Intellectual Property have entered
into written agreements assigning to Seller all rights to inventions,
improvements, discoveries, or information relating thereto, and are duly
obligated to assist Seller or Seller’s assignee(s) in obtaining protection for
such inventions, improvements, and discoveries for a period of time following
the consummation of the Contemplated Transactions, and no employee or former
employee of Seller, or any other Person, owns or has any proprietary, financial
or other interest, direct or indirect, in whole or in part, in any such
Intellectual Property.  Seller is and has
been in 

 13
 

material compliance with all
applicable statutes, regulations, and rules of any jurisdiction, relating to
the export and sale of computer software and technology, including U.S. Export
Administration Regulations.

(h)           Section
3.15(h) of the Disclosure Statement lists all material agreements that are
still in effect by which Seller has granted or obtained any right to use or
practice any rights under any Intellectual Property (other than under
commercially available off the shelf licensed software), as licensee or
licensor thereunder, including license agreements, settlement agreements, and
covenants not to sue (collectively, the “IP
License Agreements”).  Each IP
License Agreement is binding and in full force and effect and will continue to
be binding and in full force and effect immediately following the consummation
of the Contemplated Transactions.

3.16         Customers
and Suppliers.  Section 3.16 of the
Disclosure Statement lists:  (i) the 30
customers of the Business to whom Seller made the most sales during 2005, 2006,
and during 2007 through March 31, 2007 and the aggregate revenues attributable
to each in each such period, and (ii) the 30 suppliers and vendors of the
Business from whom Seller made the most purchases during 2005, 2006, and during
2007 through March 31, 2007 and the aggregate expenditures attributable to each
in each such period.  Seller is not aware
of any intention on the part of any such customer, supplier, or vendor, whether
or not in connection with the Contemplated Transactions, to terminate or
materially reduce the amount of business done with Seller.  There are no and since January 1, 2005 there
have not been any material disputes or controversies between Seller and any
customer, supplier, or vendor of the Business, or any other Person regarding
the quality, merchantability, or safety of, or involving a claim of breach of
warranty which has not been fully resolved with respect to, or defect in, any
product purchased, designed, manufactured, or sold by Seller with respect to
the Business.  Seller enjoys good working
relationships under all arrangements and agreements with the customers,
suppliers, and vendors of the Business. 
Alternative sources of supply, on substantially similar terms and
conditions, exist for all material goods or services purchased by or supplied
to Seller with respect to the Business.

3.17         Taxes.

(a)           All
federal, state, local, and foreign returns and reports relating to Taxes, or
extensions relating thereto, required to be filed on or before the Closing Date
by or with respect to Seller have been timely and properly filed, and all such
returns and reports are true, correct, and complete in all respects.

(b)           All Taxes
due with respect to taxable periods ending on or before, and the portion of any
interim period up to, the date of this Agreement have been fully and timely
paid or, in the case of Taxes not yet due, fully provided for on the Interim
Balance Sheet or, in the case of Taxes accruing after the date of such
financial statement, on the books of account of the Business.  There are no Encumbrances relating to Taxes
existing, threatened (to the Knowledge of Seller), or pending with respect to
any Purchased Asset.  No claim has been
raised by any taxing authority in a jurisdiction where Seller does not file Tax
Returns that Seller is or may be subject to Tax in that jurisdiction.

(c)           To the
Knowledge of Seller, no issues have been raised with any representative or
employee of Seller by the IRS or any other taxing authority in connection with
any of the Tax Returns referred to in Section 3.17(a) and no waivers of
statutes of limitations have been given or requested with respect to any such
Tax Returns or with respect to any Taxes.

(d)           Section
3.17(d) of the Disclosure Statement identifies all federal, state, local and
foreign Tax Returns of or with respect to Seller which have been examined since
December 31, 2001, or which are currently under examination, by the IRS or by
other taxing authorities, or with respect to which the applicable statute of
limitations (including all extensions and tolling periods) has not yet
run.  All deficiencies asserted or
assessments made as a result of such examinations have been fully paid, and there
are no other unpaid deficiencies asserted or assessments made by any taxing
authority against Seller.

 14
 

(e)           Seller has
withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any current or former employees,
independent contractors, or other third parties.

(f)            Seller is
not a party to any Tax allocation or sharing agreement and Seller is not
obligated to indemnify any other Person for Taxes pursuant to any agreement or
Law.

(g)           Seller has
always been a corporation that meets the requirements for and has made a proper
election to be taxed under Subchapter S of the IRC for federal and state Tax
purposes.

3.18         Employee Benefits.

(a)           Section
3.18 of the Disclosure Statement lists all of the Employee Plans of
Seller.  There is no other entity
required to be aggregated with Seller under Section 414(b), 414(c), 414(m), or
414(o) of the IRC and the regulations thereunder (“ERISA Affiliate”).

(b)           With
respect to each Employee Plan required to be listed in Section 3.18 of the
Disclosure Statement (i) such Employee Plan has been administered in all
material respects in accordance with its terms, and is in compliance with the
applicable provisions of ERISA, the IRC, and all other applicable Laws; and
(ii) full and timely payment has been made of all amounts that are required
under the terms of such Employee Plan to be paid as contributions with respect
to all periods prior to and including the last day of the most recent fiscal
year of such Employee Plan ended on or before the Closing Date.  Each Employee Plan which is intended to be “qualified”
within the meaning of Section 401(a) of the IRC is and has from its inception
been so qualified and the IRS has issued each such plan a favorable
determination letter or advisory letter which is effective with respect to the
plan as most recently amended covering all of the provisions applicable to the
Employee Plan for which determination letters are currently available that the
Employee Plan is so qualified.  No statement,
either written or oral, has been made by Seller or, to the Knowledge of Seller,
any representative thereof to any Person with regard to any Employee Plan or
other benefit obligation that was not in accordance with the plan or other
benefit obligation and that could have an adverse consequence to Seller or the
Business.  Seller is not bound by any
collective bargaining agreement or any other agreement or legally binding
arrangement to maintain, with respect to any employee, any Employee Plan.  Neither the Seller nor any ERISA Affiliate
have any liability or potential liability under Title IV of ERISA, including
with respect a “multiemployer plan” as defined in Section 3(37) of ERISA and
has not incurred any liability under Section 4201 of ERISA for any complete or
partial withdrawal from any multiemployer plan and has not assumed any
liability incurred by any prior owner of any of its assets or ERISA Affiliates.

(c)           The
consummation of the Contemplated Transactions will not, alone or together with
any other event, (i) entitle any Person to severance pay, unemployment
compensation, or any other similar payment; (ii) accelerate the time of payment
or vesting, or increase the amount of compensation due to any such Person;
(iii) result in any liability under Title IV of ERISA or otherwise; or (iv)
result in or satisfy a condition to the payment of compensation that would, in
combination with any other payment, result in an “excess parachute payment”
within the meaning of Section 280G of the IRC.

(d)           No written or
oral representations by Seller or any representative thereof have been made to
any current or former employee of Seller or any ERISA Affiliate promising or
guaranteeing any current or former employer payment or funding for the
continuation of medical, dental, life, or disability coverage for any period of
time beyond the end of the current plan year (except to the extent of coverage
required under COBRA).  No written or
oral representations by Seller or any representative thereof have been made to
any current or former employee of Seller concerning the employee benefits of
Buyer inconsistent with the terms of this Agreement.

3.19         Labor
Matters.  No employee of Seller is
represented by any union or other collective bargaining representative.  To the Knowledge of Seller, no union or other
collective bargaining representatives have attempted to organize any employee
of Seller during the past three years. 
There has not been and there is 

 15
 

not currently
pending any labor Proceeding in respect of the grievance of any employee, any
application, charge, or complaint filed by any employee or union with the
National Labor Relations Board or any comparable state or local agency, any
strike, slowdown, picketing, or work stoppage by any employees of Seller, any
lockout of any such employees, or any labor trouble or other labor related
controversy, occurrence, or condition. 
Seller has not during the past three years been cited for any material
violation of Occupational Safety and Health Act of 1970, 29 U.S.C. sec. 651 et
seq. (“OSHA”), any regulation
promulgated pursuant to OSHA, or any other Law establishing standards of
workplace health or safety, or paid any fines or penalties with respect to any
such citation.

3.20         Management,
Employees and Others.

(a)           Section
3.20(a) of the Disclosure Statement sets forth the number of employees of
Seller and the following information for each Business Employee and for each
consultant, agent, and independent contractor regularly retained by Seller in
connection with the Business (including each such Person on leave or layoff
status): (i) name and job title; (ii) current annual rate of compensation
(identifying bonuses separately) and any change in compensation since December
31, 2006; (iii) vacation accrued; (iv) service credited for purposes of vesting
and eligibility to participate in any employee benefit plans (as defined in
Section 3(3) of ERISA); and (v) any automobile leased or owned by Seller
primarily for use by any of the foregoing Persons.  Seller has entered into binding non-competition
agreements with each Business Employee, copies of which have been previously
provided to Buyer.

(b)           To the
Knowledge of Seller, no Business Employee is a party to, or is otherwise bound
by, any agreement or arrangement (including any confidentiality, employment,
non-competition, or proprietary rights agreement), with any Person that may
affect: (i) the performance of his or her duties; (ii) the ability of Seller to
conduct its business before the Effective Time; (iii) the ability of Buyer to conduct
the Business after the Effective Time; or (iv) his or her freedom to engage in
the Business.

(c)           There are
no employment, non-competition, severance, change of control, consulting,
agency, and representative agreement or arrangement to which Seller is a party
or is otherwise bound, including any agreements and commitments relating to
wages, hours, or other terms or conditions of employment (other than unwritten
employment arrangements terminable at will without payment of any contractual
severance or other amount).  All
employees of Seller are “employees at will.” 
Seller has not made any commitments to any current or former
shareholder, director, officer, employee, independent contractor, consultant,
or agent of Seller respecting any possible employment or pay increases by Buyer
following the Effective Time inconsistent with the terms of this
Agreement.  There are no retired or
former employees of Seller or dependents of any such retired or former
employees who are receiving, or are entitled to receive in the future, any
benefits from Seller (other than pursuant to COBRA).  Since December 31, 2006, Seller has not
terminated, laid off, or dismissed any of its employees who had been employed
by Seller for more than 30 days and no such employees have terminated their
employment with Seller.  Seller has
complied with all Laws related to the employment of employees, including those
relating to hours, wages, immigration, equal employment opportunity, employment
discrimination, and employee safety. 
Seller has not violated the WARN Act, or any similar state or local Law.

3.21         Affiliate
Agreements.  There are no Contracts
or understandings between Seller and any Affiliate of Seller or any
Shareholder.  No Affiliate of Seller
(including any Shareholder) or Affiliate of any Shareholder owns, or since
December 31, 2001 has, directly or indirectly (a) had any interest in any
property or services sold to or to be sold to or purchased by or otherwise used
in or pertaining to the Business; (b) owned any interest in any Person which is
a competitor, supplier, vendor, or customer of the Business; (c) had business
dealings, or a material financial interest in any transaction with Seller,
other than business dealings; or (iv) engaged in competition with Seller with
respect to any line of the products or services of Seller, except for passive
ownership of less than five percent of the outstanding capital stock of any
business that is publicly traded on any recognized exchange or in the
over-the-counter market that is in competition with any part of the Business.

 16

3.22         Environmental Matters.

(a)           The Seller
is, and has been at all times during the past five years, in compliance with,
and maintains all permits and Governmental Authorizations required for the
conduct of the Business under, all applicable Environmental Laws.  Seller has not caused, arranged or allowed,
or contracted with any party for, the transportation, treatment, storage, or
disposal or release of any Hazardous Substance, and there are no conditions on,
about, beneath, or arising from the Real Property which may (i) give rise to
liability, a restriction, or the imposition of a statutory lien under any
Environmental Law; or (ii) require Response, Removal, or Remedial Action or any
other action including, investigation, reporting, monitoring, cleanup, or
contribution.

(b)           Seller has
not received any notification, and is not otherwise aware of, any release or
threat of release of any Hazardous Substance with respect to any property or
location that relates, directly or indirectly, to Seller or the Business,
including the Real Property or any real property formerly owned, leased, or
used by Seller in the Business.  There
are no pending or, to the Knowledge of Seller, threatened Proceedings involving
Seller, the Business, the Real Property, or the Purchased Assets arising under
any Environmental Law.  There has been no
environmental sampling, remediation report, or Proceeding conducted by Seller
or, to the Knowledge of Seller, any other Person, of any business operation or
facility, or any real property currently or formerly leased or operated by
Seller or otherwise used in connection with the Business.

3.23         Certain
Changes and Events.  Since September
30, 2006, Seller has conducted the Business only in the usual and Ordinary
Course of Business and there has not been any:

(a)           change in
the accounting methods, principles, or practices followed by the Business,
except as required by GAAP, or any change in any of the assumptions underlying
methods of calculating, any bad debt, warranty, contingency, or other reserve;

(b)           change in
the certificate of incorporation or bylaws of Seller;

(c)           payment by
Seller of any bonus or increase of any compensation payable to any shareholder,
director, officer, or other Affiliate of Seller, or to any employee of Seller
(other than in the Ordinary Course of Business), or entry into (or amendment
of) any Employee Plan, labor policy, or similar agreement with any current or
former or employee, shareholder, director, officer, or Affiliate of Seller;

(d)           any
material damage, destruction, or loss to any asset or property of or used by
Seller with respect to the Business (including the Purchased Assets), whether
or not covered by insurance;

(e)           entry into,
amendment, termination, or receipt of notice of termination of any Contract or
commitment which is required to be disclosed in the Disclosure Statement, or
any material transaction with respect to the Business;

(f)            sale
(other than sales of inventory in the Ordinary Course of Business), assignment,
conveyance, lease, or other disposition of any asset or property of Seller
relating to the Business that is material, individually or in the aggregate;

(g)           imposition
of any Encumbrance on any of the Purchased Assets (except for Permitted
Encumbrances);

(h)           write down,
write off, or write up of the value of any asset, or any cancellation or waiver
of any other claims or rights of Seller;

(i)            incurrence
or assumption of any Indebtedness, or any other material liability or
obligation (whether absolute or contingent) to any Shareholder or other Affiliate
of Seller, or, other than current liabilities incurred and obligations under
agreements entered into in the Ordinary Course of Business, 

 17
 

to any other Person or any discharge
or satisfaction of any Encumbrance other than in the Ordinary Course of Business;

(j)            change in
the Business or in the manner of conducting the same or entry by Seller into
any transaction with respect to the Business, other than in the Ordinary Course
of Business;

(k)           Material
Adverse Effect; or

(l)            binding
agreement, whether or not in writing, to do any of the foregoing by Seller.

3.24         Books and
Records.  Copies of the certificate
of incorporation and bylaws of Seller, as currently in effect, and all other
books and records of Seller included in the Purchased Assets have been delivered
or made available to Buyer, and are true, correct, and complete and are in full
force and effect.  The books and records
of Seller included in the Purchased Assets accurately and fairly reflect its
income, expenses, assets, and liabilities, and Seller maintains internal
accounting controls which provide reasonable assurance that:  (a) transactions are executed in accordance
with management’s authorization; (b) transactions are recorded as necessary to
permit preparation of reliable financial statements and to maintain
accountability for earnings and assets; (c) the recorded accountability of all
assets is compared with existing assets at reasonable intervals; and (d) all
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.  All
inter-company transactions, charges, and expenses among or between Seller and
any Affiliate of Seller are accurately reflected at fair arms-length value in
the Financial Statements.  Seller
maintains no off-the-books accounts.

3.25         Securities
Laws Matters.

(a)           Seller
understands that the Parent Shares have not been registered under the
Securities Act, on the grounds that the issuance thereof to Seller in
connection with this Agreement is exempt from registration under Section 4(2)
of the Securities Act, and that reliance of Parent on such exemption is
predicated in part on the representations, warranties, and acknowledgements set
forth in this Section 3.25.

(b)           Seller:  (i) pursuant to Section 2.8(b), the Parent
Shares may not be sold, assigned, transferred, pledged, hypothecated, or
otherwise disposed of, for a period of two years following the Closing Date;
(ii) acknowledges that the Parent Shares are not registered under the
Securities Act and must be held indefinitely by Seller unless the Parent Shares
are subsequently registered under the Securities Act or an exemption from
registration is available; (iii) is aware that any sales of the Parent Shares
made under Rule 144 of the Securities Act may be only in limited amounts and in
accordance with the terms and conditions of that rule and that in such cases
where Rule 144 is not applicable, registration or compliance with some other
registration exemption is required; (iv) is aware that Rule 144 is not now and
for a period of at least one year following the Closing Date will not be,
available for use by Seller for resale of the Parent Shares; and (v) is aware
that Parent is not obligated to register any sale, transfer, or other
disposition of the Parent Shares.

(c)           Seller has
such knowledge and experience in financial and business matters that it is
fully capable of evaluating the risks and merits of its investment in the
Parent Shares.

(d)           Seller
acknowledges and confirms that:  (i)
Buyer has made available to it the opportunity to ask questions of and receive
answers from Parent’s officers and directors concerning the terms and
conditions of this Agreement, the issuance of the Parent Shares, and the
business and financial condition of Parent, (ii) it has had an opportunity to
review a copy of all of Parents filings with the SEC, and (ii) it has received
to its satisfaction, such additional information, in addition to that set forth
herein, about the business and financial condition of Parent and the terms of
this Agreement as it has requested.

(e)           Seller is a
resident of the State of Connecticut for state securities law purposes.

 18
 

3.26         Brokers.  No Person acting on behalf of any
Shareholder, Seller, or any of their respective Affiliates or under the
authority of any of the foregoing is or will be entitled to any brokers’ or
finders’ fee or any other commission or similar fee, directly or indirectly,
from any of such parties in connection with any of the Contemplated
Transactions.

3.27         Full
Disclosure.

(a)           No
representation or warranty or other statement made by Seller in this Agreement
or in connection with the Contemplated Transactions contains any untrue
statement or omits to state a material fact necessary to make any of them, in
light of the circumstances in which it was made, not misleading.

(b)           No notice
given by Seller pursuant to this Agreement will contain any untrue statement or
omit to state a material fact necessary to make the statements in such notice
or in this Agreement and in the Disclosure Statement, in light of the
circumstances in which they were made, not misleading.

(c)           Seller does
not have Knowledge of any fact that has specific application to Seller or the
Business (other than general economic or industry conditions) and that may
materially adversely affect the assets, business, prospects, financial
condition, or results of operations of Seller that has not been set forth in
this Agreement or the Disclosure Statement.

ARTICLE 4.          REPRESENTATIONS
AND WARRANTIES OF SHAREHOLDERS

Except as set forth in the Disclosure Statement, each Shareholder hereby
jointly and severally represents and warrants to Buyer as follows (unless
otherwise stated in the applicable representation and warranty in this Article
4, such representation and warranty is made only as of the Effective Time):

4.1           Authority.  Each Shareholder has full capacity, legal
right, power, and authority to enter into, execute, and perform this Agreement
and all other agreements, certificates, instruments, or other documents
required to be entered into by such Shareholder in connection with this
Agreement (the “Shareholder Transaction
Documents”), to consummate the Contemplated Transactions, and to
otherwise perform his or her obligations under this Agreement and the other
Shareholder Transaction Documents.  This
Agreement and the other Shareholder Transaction Documents constitute the legal,
valid, and binding obligations of each Shareholder, enforceable against him or
her in accordance with their respective terms, subject to bankruptcy,
insolvency, and other similar Laws affecting creditor’s rights generally.

4.2           No Conflicts; Consents and
Approvals.

(a)           The
execution, delivery, and performance of this Agreement and the other Shareholder
Transaction Documents, and the consummation of the Contemplated Transactions,
do not and will not (in each case, with or without the passage of time or the
giving of notice), directly or indirectly, violate or conflict with any Law
binding upon any Shareholder, or violate or conflict with, or result in any
breach of any provision of, or constitute a default or otherwise cause any loss
of benefit under any Contract or other obligation to which any Shareholder is a
party or by which any Shareholder or any of his or her assets is bound or give
to others any rights (including rights of termination, foreclosure,
cancellation, or acceleration) in or with respect to any Shareholder or the
Business.

(b)           No Consents
of or registrations, notifications, filings, or declarations with any court,
Governmental Body, creditor, lessor, or other Person are required to be given
or made by any Shareholder in connection with the execution, delivery, and
performance by the Shareholders of this Agreement and the other Shareholder
Transaction Documents, other than those that have been obtained before the
Closing, true, correct, and complete copies of which have been delivered to
Buyer before the Closing Date.  No
Shareholder has received any request from any Governmental Body for information
with respect to the Contemplated Transactions

 19
 

4.3           Ownership
of AMT Shares.  Each Shareholder owns
all of the AMT Shares set forth opposite such Shareholder’s name on Schedule
A, beneficially and of record, free and clear of any Encumbrances.

4.4           Full
Disclosure.

(a)           No
representation or warranty or other statement made by any Shareholder in this
Agreement or in connection with the Contemplated Transactions contains any
untrue statement or omits to state a material fact necessary to make any of
them, in light of the circumstances in which it was made, not misleading.

(b)           No notice
given by any Shareholder pursuant to this Agreement will contain any untrue
statement or omit to state a material fact necessary to make the statements in
such notice or in this Agreement and in the Disclosure Statement, in light of
the circumstances in which they were made, not misleading.

(c)           No
Shareholder has any knowledge of any fact that has specific application to
Seller or the Business (other than general economic or industry conditions) and
that may materially adversely affect the assets, business, prospects, financial
condition, or results of operations of Seller that has not been set forth in
this Agreement or the Disclosure Statement.

ARTICLE 5.      REPRESENTATIONS AND
WARRANTIES OF BUYER AND PARENT

Parent and Buyer each hereby represents and warrants to Seller and the
Shareholders as follows (unless otherwise stated in the applicable
representation and warranty, such representation and warranty is made only as
of the Effective Time):

5.1           Organization and Good Standing.

(a)           Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to carry on its business as presently conducted, to own, lease, and
use the assets that it owns, leases, or uses.

(b)           Parent is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to carry on its business as presently conducted, to own, lease, and
use the assets that it owns, leases, or uses.

5.2           Power
and Authorization.  Each of Buyer and
Parent has full legal right, corporate power, and authority to enter into,
execute, and perform this Agreement and all other agreements, certificates,
instruments, and other documents required to be entered into by Buyer or
Parent, as applicable, in connection with this Agreement (the “Buyer Transaction Documents”), to
consummate the Contemplated Transactions, and to otherwise perform its
respective obligations under this Agreement and the other Buyer Transaction
Documents.  The execution, delivery, and
performance by each of Buyer and Parent of this Agreement and the other Buyer
Transaction Documents to which it is a party, and the consummation of the
Contemplated Transactions have been duly authorized by all necessary
action.  No other corporate action on the
part of Buyer or Parent is, or will be, necessary to approve and authorize the
execution, delivery, and performance of this Agreement and the other Buyer
Transaction Documents or the consummation of the Contemplated
Transactions.  This Agreement and the
other Buyer Transaction Documents have been duly and validly executed and delivered
by each of Buyer and Parent and constitute its respective its legal, valid, and
binding obligation, enforceable against it in accordance with their respective
terms, subject to bankruptcy, insolvency, and similar laws affecting creditor’s
rights generally.

 20
 

5.3           No Conflicts; Consents and
Approvals.

(a)           The
execution, delivery, and performance of this Agreement and the other Buyer
Transaction Documents and the consummation of Contemplated Transactions by each
of Buyer and Parent, respectively, do not and will not (in each case, with or
without the passage of time or the giving of notice) directly or indirectly:

(i)            violate
or conflict with Buyer or Parent’s certificate of incorporation or bylaws or
any Laws to which Buyer or Parent is subject; or

(ii)           violate
or conflict with, result in a breach of any provisions of, or constitute a
default or otherwise cause any loss of benefit under any Contract or other
obligation to which Buyer or Parent is a party or by which any of their
respective assets are bound, or give to others any rights (including rights of
termination, foreclosure, cancellation, or acceleration), in or with respect to
Buyer or Parent; or

(iii)          to the
knowledge of Buyer and Parent, give any Governmental Body or other Person the
right to challenge this Agreement or any of the Contemplated Transactions.

(b)           No Consents
of, or registrations, notifications, filings or declarations with, any court,
Governmental Body, creditor, lessor, or other Person are required to be given
or made by Buyer or Parent in connection with the execution, delivery, and
performance by each of Buyer and Parent of this Agreement and the other Buyer
Transaction Documents, other than such as have been obtained before the
Closing.  Neither Buyer nor Parent has
received any request from any Governmental Body for information with respect to
the Contemplated Transactions.

5.4           Compliance
with Laws.

(a)           Except as
disclosed in the SEC Reports, each of Parent and Buyer is in compliance in all
material respects with all material Laws and all material Governmental
Authorizations; and neither Parent nor Buyer has any basis to expect, and has
not received during the last three years, any notice, order, or other
communication from any Governmental Body or any other Person of any alleged, actual,
or potential violation of or failure to comply with any material Law in any
material respect.

(b)           Neither
Parent or Buyer, any stockholder, officer, director, employee, or agent of
Parent or Buyer, or to the knowledge of Parent or Buyer, any other Person
acting on Seller’s behalf, has directly or indirectly (i) made any (A) illegal
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or
other illegal payment to any Person, private or public, regardless of form,
whether in money, property, or services (1) to obtain favorable treatment in
securing or maintaining business; (2) to obtain any Governmental Authorization;
or (3) to obtain or maintain any other special concessions or treatment for or
in respect of Parent or Buyer in violation of any Law, or (B) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or
other payment to any Person, private or public, regardless of form, whether in
money, property, or services that, if not continued, would reasonably be
expected to adversely affect Parent or Buyer or their business in any material
respect; or (ii) established or maintained any fund or asset that has not been
recorded in the financial statements of Parent contained in the SEC Reports.

5.5           Parent
SEC Filings.  Parent has filed all
forms, reports, and documents required to be filed by it with the SEC since
November 29, 2006 through the date of this Agreement (collectively, the “SEC Reports”).  As of the respective dates on which they were
filed, the SEC Reports were prepared in all material respects in accordance
with the Exchange Act and none of the SEC Reports contained any untrue
statement of a material fact or failed to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.

 21
 

5.6           Validity
of Parent Shares.  The Parent Shares,
when issued, sold and delivered in accordance with the terms of this Agreement,
shall be validly issued, fully paid, and nonassessable.

5.7           Absence
of Proceedings. There is no pending Proceeding that has been commenced
against Buyer or Parent that (a) challenges, or seeks damages in connection
with, or which may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions or (b)
questions any of the Contemplated Transactions or the validity of this
Agreement or any of the other Buyer Transaction Documents, or which if
adversely determined, would have a material adverse effect upon the ability of
Buyer to enter into or perform its obligations under this Agreement or any
other of the other Buyer Transaction Documents. 
To the knowledge of Buyer and Parent, no such Proceeding has been
threatened.  Except as disclosed in the SEC Reports, there is no
pending Proceeding, if determined adversely, that would either individually or
in the aggregate have a Material Adverse Effect on Parent or Buyer or their
business.

5.8      Brokers.  Except for Fairmount Partners, no Person
acting on behalf of Buyer, Parent or any of their Affiliates or under the
authority of any of the foregoing is or will be entitled to any brokers’ or
finders’ fee or any other commission or similar fee, directly or indirectly,
from any of such parties in connection with any of the Contemplated
Transactions.

ARTICLE 6.      COVENANTS OF THE PARTIES

6.1           Provisions Relating to Employees

(a)           Seller
shall, as of the Effective Time terminate all employees, consultants, and
independent contractors of Seller listed on Schedule 6.1 (the “Business Employees”).  Buyer, effective as of the Effective Date,
shall offer employment to all Business Employees of Seller (those employees who
accept such employment, the “Transferred
Employees”), and Buyer may enter into consulting or independent
contractor agreements with former consultants and independent contractors of
Seller, respectively; provided, that nothing set forth in this Section
6.1(a) or Section 6.1(b) shall create any duty or obligation on the
part of Buyer to continue the employment of any such employee or to provide any
particular benefits after the Effective Time. 
Each Transferred Employee shall cease to be employed by Seller effective
immediately and automatically upon the Effective Time.  Seller shall be responsible for all
liabilities, obligations, duties, and contingencies created or owing as a
consequence of the cessation of any Person’s employment with Seller before the
Effective Time (whether by agreement, policy, or Law), including:

(i)            all
liabilities, costs, claims, and other obligations under any Employee Plan
maintained by Seller (including any accelerated vesting or time of payment or
increase in compensation) and any liabilities resulting from any deficiency in
the administration or funding of any such plan;

(ii)           all
claims for health care and other welfare benefits, including any workers’
compensation claims and any duties, obligations, or liabilities under HIPAA;

(iii)          any
severance pay, transaction bonus, unemployment compensation, or other payment,
including all wages or other remuneration due to Transferred Employees or any
other employees of Seller who do not accept Buyer’s offer of employment with
respect to their service as employees of Seller through Effective Time; and

(iv)          any payments
required under the WARN Act or any similar Law.

(b)           Parent
shall, to the extent permitted by Law, allow the Transferred Employees to
participate in Parent’s benefit programs, subject in each and every case to
Parent’s right to modify or eliminate any benefit program maintained by it at
any time.  Parent  shall credit the Transferred Employees for
prior service to Seller for purposes of eligibility to participate and for the
purposes of calculating the percentage of a benefit in which any such employee
will be vested.  Neither this Section nor
any other Section of this 

 22
 

Agreement shall create any obligation
on the part of Parent  or any
Affiliate of Parent to continue to provide on or after the Effective Time any
benefits, terms, or conditions of employment, or to continue to pay any
salaries comparable to those previously paid or provided by Seller.  In addition, no Person shall be deemed a
third party beneficiary of this Section and no Person other than Seller shall
have any right to enforce its provisions.

(c)           The parties
agree, in accordance with IRS Revenue Procedure 2004-53, that Parent will be
the “successor employer” to Seller for purposes of federal income and
employment Tax withholding for Transferred Employees and that Parent and Seller
shall complete the required IRS withholding forms and schedules and any other
agreements, instruments, or other documents, to ensure that proper withholding
is done with respect to the Transferred Employees.  The parties agree that, as of the Effective
Time, pursuant to the “Alternate Procedure” provided in Section 5 of Rev. Proc.
2004-53 with respect to filing and furnishing IRS Forms W-2, W-3, W-4, W-5, and
941, (i) the parties shall report Forms W-2, W-3 and 941 on a “predecessor-successor”
basis as set forth therein; (ii) Seller shall be relieved from furnishing Forms
W-2 to Transferred Employees for the full 2007 calendar year; (iii) Parent
shall assume the obligations of Seller to furnish such forms to such employees
for the full 2007 calendar year; and (iv) Parent shall accept Forms W-4 and W-5
previously submitted by the Transferred Employees to Seller.

6.2           Transition
of Employees.  Seller and Buyer shall
cooperate to ensure an orderly transition of the Transferred Employees.

6.3           General
Employee Provisions.  Seller shall
give or cause to be given any notices required by Law, including, any notice
required to be given under the WARN Act. 
Seller shall provide Buyer with completed I-9 forms and attachments with
respect to all Transferred Employees, except for such Transferred Employees as
Seller shall certify in writing to Buyer are exempt from such requirement.

6.4           Payment
of Retained Liabilities.  Seller
shall pay, or make adequate provision for the timely payment in full of, all of
the Retained Liabilities in a manner which is not detrimental to the
relationship between Buyer and any customer, supplier, vendor, or other
creditor.  If the obligee of any Retained
Liability makes a claim against Buyer for the payment thereof, Seller shall
cooperate with Buyer to cause such Retained Liability to be discharged at
Seller’s sole cost and expense.

6.5           Remittance
of Payments.  From and after the
Effective Time, (a) Seller shall, and Shareholders shall cause Seller to, remit
to Buyer, in the form received within 30 calendar days after the receipt
thereof, any payments which Seller or any Affiliate of Seller may receive (such
as payments of accounts receivable) which properly belong to Buyer and that do
not relate to an Excluded Asset or a Retained Liability, and (b) Buyer shall
remit to Seller, in the form received within 30 calendar days after the receipt
thereof, any payments which Parent or Buyer may receive (such as payments of
accounts receivable) which properly belong to Seller and that do not relate to
a Purchase Asset or an Assumed Liability.

6.6           Confidentiality;
Non-Competition.

(a)           Seller and
each Shareholder shall keep confidential, and shall not directly or indirectly
disclose to any third party or use, any confidential or proprietary information
or trade secret relating to Seller, the Business, the Purchased Assets, Parent,  Buyer or any of Buyer’s Affiliates
(collectively, the “Buyer  Confidential Material”), including, by way
of example, customer lists, financial data, pricing, marketing policies or
plans, or other proprietary data except with the prior written consent of
Buyer; provided, however, that Buyer Confidential Material shall
not include any of the foregoing that is or becomes generally available to the
public without breach of any obligation of confidentiality owed by Seller or
any Shareholder to Buyer. 
Notwithstanding the foregoing, if Seller or any Shareholder is required
in the course of judicial or administrative proceedings or governmental
inquiries to disclose any Confidential Material, the disclosing party shall
give Buyer prompt notice thereof so that Buyer may seek an appropriate
protective order and/or waive the disclosing party’s compliance with the
confidentiality provisions of this Section 6.6(a).

 23
 

(b)           Buyer shall
keep confidential and shall not directly or indirectly disclose to any third
party or use, any confidential or proprietary information or trade secrets
relating to the Shareholders or the Excluded Assets (collectively, the “Seller/Shareholder Confidential Material”);
provided, however, that Seller/Shareholder Confidential Material
shall not include any of the foregoing that is or becomes generally available
to the public without breach of any obligation of confidentiality owed by Buyer
to Seller or the Shareholders. 
Notwithstanding the foregoing, if Buyer is required in the course of
judicial or administrative proceedings or governmental inquiries to disclose
any Seller/Shareholder Confidential Material, the disclosing party shall give
Seller or the Shareholders (as applicable) prompt notice thereof so that Seller
or the Shareholders (as applicable) may seek an appropriate protective order
and/or waive the disclosing party’s compliance with the confidentiality
provisions of this Section 6.6(b).

(c)           Seller and
Shareholders agree that during the period of four years beginning on the date
of this Agreement, neither it nor he or she shall, directly or indirectly,
through any Affiliate or otherwise, anywhere in the United States, (i) own,
manage, market, operate, control, consult with, participate in, or be connected
in any manner with the ownership, management, operation, or control of any
business that engages, directly or indirectly, in any business which is the
same or similar to the Business (the “Restricted
Business”); (ii) be or become a shareholder, partner, owner, agent
of, or a consultant to or give financial or other assistance to, any Person
considering engaging in or who is engaged in the Restricted Business; (iii)
seek, in competition with the Restricted Business, to do business with any
customer of Buyer or any of its Affiliates for which Seller has provided
services in connection with the Restricted Business at any time; (iv) solicit,
or contact with a view to the engagement or employment by, any Person who is an
employee or contractor of Buyer or its Affiliates; (v) seek to contract with or
engage (in such a way as to materially adversely affect or interfere with the
business of Buyer or its Affiliates) any Person who has been contracted with or
engaged to manufacture, assemble, supply, or provide products, goods,
materials, or services to Buyer or its Affiliates; and (vi) engage in or
participate in any effort or act to induce any of the customers, suppliers,
consultants, or employees of Buyer or any its Affiliates to take any action
which is materially disadvantageous to Buyer or its Affiliates; provided,
however, that nothing in this Agreement shall prohibit Seller or
Shareholders from owning, as passive investors, not more than five percent of
the outstanding publicly traded securities of any entity so engaged.

(d)           The parties
agree that in the event of a breach of Section 6.6(a), 6.6(b), or
6.6(c), the damage or imminent damage to Buyer will be inestimable and
that therefore any remedy at law or in damages shall be inadequate.  Accordingly, the parties agree that Buyer
shall, in addition to damages incurred by reason of any such breach, without
the necessity of posting any bond or security, be entitled to injunctive or
other equitable relief against Seller and Shareholders for breach of this Section
6.6.

(e)           It is the
intention of the parties to this Agreement that the non-competition covenants
contained in this Section 6.6 shall be enforced to the greatest extent
(but to no greater extent) in time, area, and degree of participation as is
permitted by the Law of that jurisdiction whose Law is applicable to any acts
allegedly in breach of such covenants. 
To this end, the parties to this Agreement agree that the
non-competition covenants contained in this Section 6.6 shall be construed
to extend in time and territory and with respect to degree of participation
only so far as they may be enforced in such jurisdiction, and that the
non-competition covenants contained in this Section 6.6 are to that end
hereby declared divisible and severable. 
It being the purpose of this Section 6.6 to govern competition by
Seller and the Shareholders, the non-competition covenants contained in this Section
6.6 shall be governed by and construed according to the Law of all the
jurisdictions in which competition in breach of this Agreement is alleged to
have occurred or to be threatened that best gives them effect.

6.7           Public
Announcements.  No press release or
announcement concerning this Agreement or the Contemplated Transactions shall
be issued by any party to this Agreement or any of their respective directors,
officers, shareholders, employees, agents, and other representatives and
Affiliates without the prior consent of the other parties; provided, however,
that, subject to the non-releasing parties’ right to review and comment, (a)
upon not less than 24 hours’ prior written notice to Seller, Parent may issue a
press release announcing the Contemplated Transactions; (b) nothing contained
in this Agreement shall prohibit any party 

 24
 

from making any
public announcement required by Law or the rules or regulations of any stock
exchange; and (c) nothing contained in this Agreement shall prohibit Parent
from making public disclosures to its investors and analysts customary in the
ordinary course of business.

6.8           Further
Assurances.  Each party to this
Agreement shall use its best efforts to comply with all requirements imposed by
this Agreement on such party and to cause the Contemplated Transactions to be
consummated and shall, from time to time and without further consideration,
execute such further instruments and take such other actions as any other party
to this Agreement shall reasonably request in order to fulfill its obligations
under this Agreement and to effectuate the purposes of this Agreement and to
provide for the orderly and efficient transition to Buyer of the ownership of
the Purchased Assets.  Each party to this
Agreement shall promptly notify the other parties of any event or circumstance
known to such party that could prevent or delay the consummation of
Contemplated Transactions or which would indicate a breach or non-compliance
with any of the terms, conditions, representations, warranties, or agreements
of each party.

ARTICLE 7.      INDEMNIFICATION

7.1           Indemnification
by Seller and Shareholders.  Subject
only to Section 7.5, Seller and Shareholders shall, jointly and
severally, indemnify, defend, and hold harmless Parent, Buyer, its Affiliates,
and their officers, directors, employees, stockholders, agents, and other
representatives (collectively, “Buyer
Indemnitees”) against and in respect of any and all losses, costs,
expenses, claims, damages, Proceedings, charges, complaints, demands,
injunctions, judgments, orders, decrees, rulings, directions, dues, penalties,
fines, amounts paid in settlement, Taxes, liens, losses, and fees, court costs,
obligations, and liabilities, including interest, penalties, and attorneys
fees, and disbursements (“Damages”),
arising out of, based upon or otherwise in respect of:

(a)           any
inaccuracy in or breach of any representation or warranty of Seller or any
Shareholder made in or pursuant to this Agreement or the Disclosure Statement;

(b)           any breach
or nonfulfillment of any covenant or obligation of Seller or any Shareholder
contained in this Agreement or any other Transaction Document;

(c)           any
liability arising out of the Business and the ownership or operation of the
Purchased Assets before the Effective Time, and any liabilities of Seller
arising after the Effective Time;

(d)           any
liability for or with respect to Taxes (whether or not reserved against or
contested) for taxable periods up to and including the Closing Date;

(e)           any
warranty or product liability claim for or with respect to any product or component
thereof manufactured or shipped, or any services provided by Seller with
respect to the Business, in whole or in part, before the Effective Time;

(f)            any
noncompliance with or liability under any bulk sales Laws or fraudulent
transfer law in respect of the any of the Contemplated Transactions or under
the WARN Act or any similar Law;

(g)           any
Environmental Liabilities; and

(h)           any
Retained Liabilities.

To the
extent that any claim for indemnification may be made under Section 7.1(a)
and any other provision of this Agreement, then Buyer and Parent shall have the
right, in their sole discretion, to treat such claim only under such other
provision and not under Section 7.1(a).

 25

7.2           Indemnification
by Buyer.  Buyer and Parent shall,
jointly and severally, indemnify, defend, and hold harmless Shareholders and
Seller, their Affiliates, agents, and other representatives, and the officers,
directors, and employees of Seller (collectively, “Seller Indemnitees”) against and in respect of any and all
Damages which Shareholders or Seller may suffer, incur or become subject to
arising out of, based upon, or otherwise in respect of:  

(a)           any
inaccuracy in or breach of any representation or warranty of Buyer or Parent
made in or pursuant to this Agreement; 

(b)           any breach
or nonfulfillment of any covenant or obligation of Buyer or Parent contained in
this Agreement, including the obligations of Buyer under Section 2.7(b)
and of Parent under Section 2.8(c) (subject to the right of set off in Section
7.5(d)); or 

(c)           any
liability or obligation to the extent arising from the operation of the
Business after the Effective Time (and not resulting from or related to a
breach of any representation, warranty, or covenant of Seller or any
Shareholder).

To the
extent that any claim for indemnification may be made under Section 7.2(a)
and any other provision of this Agreement, then Seller and Shareholders shall
have the right, in their sole discretion, to treat such claim only under such
other provision and not under Section 7.2(a).

7.3           Inter-Party
Claims.  Any party seeking
indemnification pursuant to this Article 7 (the “Indemnified Party”) shall notify the other
party or parties from whom such indemnification is sought (the “Indemnifying Party”) of the Indemnified
Party’s assertion of such claim for indemnification, describing the basis of
such claim.  The Indemnified Party shall
thereupon give the Indemnifying Party reasonable access to the books, records,
and assets of the Indemnified Party which evidence or support such claim or the
act, omission, or occurrence giving rise to such claim and the right, upon
prior notice during normal business hours, to interview any appropriate
personnel of the Indemnified Party related thereto.

7.4           Third Party Claims.

(a)           Each
Indemnified Party shall promptly notify the Indemnifying Party of the assertion
by any third party of any claim for which the indemnification set forth in this
Section relates (which shall also constitute the notice required by Section
7.3), but failure to give such notice within any particular time period
shall not adversely affect the Indemnified Party’s rights to indemnification.

(b)           The
Indemnifying Party shall have the right, upon written notice to the Indemnified
Party within 30 days after the receipt of any notice provided under Section
7.4(a), to undertake the defense of such claim.  The failure of the Indemnifying Party to give
such notice and to undertake the defense of such a claim shall constitute a
waiver of the Indemnifying Party’s rights under this Section 7.4 and in
the absence of gross negligence or willful misconduct on the part of the
Indemnified Party shall preclude the Indemnifying Party from disputing the
manner in which the Indemnified Party may conduct the defense of such claim or
the reasonableness of any amount paid by the Indemnified Party in satisfaction
of such claim.

(c)           Notwithstanding
subsection (b) above, absent the prior written consent of the Indemnified Party
to the contrary, the Indemnifying Party shall not have the right to assume
control of the defense of the claim, unless it has admitted to an
indemnification obligation under this Agreement with respect to such claim,
which admission shall constitute the Indemnifying Party’s undertaking to pay
directly all costs, expenses, damages, judgments, awards, penalties, and
assessments incurred in connection therewith. 
With the prior written consent of the Indemnified Party, the
Indemnifying Party may undertake the defense of a claim without admitting that
it has an indemnification obligation under this Agreement.  So long as the Indemnifying Party is
defending a claim actively and in good faith, the Indemnified Party shall not
settle such claim.  The Indemnified Party
shall make available to the Indemnifying Party and its representatives all
records and other materials reasonably required by them and in the possession
or under the control of the Indemnified Party for 

 26
 

the use by the Indemnifying Party and
its representatives in defending any such claim, and shall in other respects
give reasonable cooperation in such defense.

(d)           The
Indemnifying Party must obtain the prior written consent of the Indemnified
Party (which the Indemnified Party will not unreasonably withhold) before
entering into any settlement or compromise of such claim or proceeding or
ceasing to defend such claim or proceeding. 
Notwithstanding the foregoing, the Indemnifying Party may, without the
prior written consent of the Indemnified Party, settle or compromise any
third-party claim, which is paid entirely by the Indemnifying Party, or consent
to the entry of judgment with respect to a third-party claim, provided such
settlement, compromise, or judgment relates only to the payments of monetary
damages and includes, as an unconditional term thereof, a full and complete
release of all Indemnified Parties by the claimant or the plaintiff of all
liability with respect to such claim unless an Indemnified Party determines in
good faith that there is a reasonable probability that the proposed settlement
or compromise could adversely affect it or its Affiliates other than as a
result of monetary damages.

(e)           The
election by the Indemnifying Party pursuant to Section 7.4(b) to
undertake the defense of a third-party claim shall not preclude the party
against which such claim has been made also from participating or continuing to
participate in such defense, so long as such party bears its own legal fees and
expenses for so doing.

7.5           Limitations
and Requirements.

(a)           Seller and
Shareholders shall have no obligation to indemnify the Buyer Indemnitees
against Damages pursuant to Section 7.1(a) of this Agreement unless and
until the aggregate of all such Damages exceeds $10,000 (the “Indemnification
Basket”), in which event the Buyer Indemnitees shall be entitled to
indemnification for all Damages incurred; provided, however, that
the above limitation shall not be applicable to any claim for Damages based
upon any inaccuracy or breach of any representation or warranty made in or
pursuant to Sections 3.2,  3.9, 3.10, 3.15, 3.17,
3.18, 3.22, 3.25, or 4.1 (the “Fundamental Representations”) or Sections
7.1(b) through (h) or to matters arising out of any fraud or intentional
misrepresentation of Seller or any Shareholder. 
The maximum aggregate amount for which Seller and Shareholders shall be
obligated to indemnify the Buyer Indemnitees against Damages pursuant to Section
7.1(a) (excluding Damages in respect of any inaccuracy in or breach of any
Fundamental Representation or Sections 7.1(b) through (h), or in respect
of any matters arising out of any fraud or intentional misrepresentation of
Seller or any Shareholder) shall be limited to $600,000.    

(b)           No claim
pursuant to Section 7.1(a) or Section 7.2(a) or otherwise in respect
of any inaccuracy in or breach of a representation or warranty of this
Agreement (except to the extent that any such claim can be made for any other
reason under Section 7.1 or Section 7.2 or other provision of
this Agreement), shall be made unless written notice pursuant to Section 7.3
is delivered to the Indemnifying Party within two years after the Closing Date;
provided, that any such claim arising out of or based upon any
inaccuracy in or breach of any Fundamental Representation may be made at any
time before the expiration of the longest statute of limitations period
applicable to an action brought by any Person with respect to the matters
forming the basis for such a claim.

(c)           Buyer and
Parent shall have no obligation to indemnify Seller or Shareholders against
Damages pursuant to Section 7.2(a) unless and until the aggregate amount
of Damages for which Buyer would otherwise be obligated to indemnify Seller
Indemnitees shall exceed the Indemnification Basket, and then Buyer shall be
liable for all such Damages; provided, however, that the above
limitation shall not be applicable to any claim for Damages based upon any
inaccuracy or breach of any representation or warranty made in or pursuant to Section
5.2 or Sections 7.2(b) and (c) or to matters arising out of
any fraud or intentional misrepresentation of Parent or Buyer.  The maximum aggregate amount of the Buyer’s
obligation to indemnify Seller Indemnitees against Damages pursuant to Section
7.2(a) (excluding Damages in respect of any inaccuracy in or breach of any
representation or warranty made in or pursuant to Section 5.2 or Sections
7.2(b) and (c), or in respect of any matters arising out of any
fraud or intentional misrepresentation of Parent or Buyer) shall be limited to
$600,000.   

 27
 

(d)           Buyer or
Parent, on behalf of itself and any other Buyer Indemnitee and upon notice to
Seller and the Shareholders, may set off any amount to which it or any Buyer
Indemnitee may be entitled under any Transaction Document, including any
amounts owed by Seller or Shareholders pursuant to this Article 7,
against any of the Deferred Payment Obligations payable under Section 2.7(b).  Neither the exercise of nor the failure to
exercise such right of set off will consitute an election of remedies or limit
Buyer in any manner in the enforcement of any other remedies that may be
available to it.

(e)           For
purposes of this Article 7, in determining whether there has been a
breach of any representation or warranty set forth in this Agreement or any
other Transaction Document, or the amount of any Damages related to a breach of
such representation or warranty, the qualifications as to the materiality of
such matters or whether or not any breach results or may result in a Material
Adverse Effect (or words of similar import) set forth in such representation or
warranty shall be disregarded.

ARTICLE 8.      MISCELLANEOUS

8.1           Construction.  Within this Agreement, the singular shall
include the plural and the plural shall include the singular, and any gender
shall include all other genders, all as the meaning and the context of this
Agreement shall require.  The parties
have participated jointly in the negotiation and drafting of this
Agreement.  Except as otherwise
indicated, all agreements defined in this Agreement refer to the same as from
time to time amended or supplemented. 
The word “including” shall mean including without limitation.  All references to Articles, Sections,
Schedules, or Exhibits shall be deemed to refer to Articles, Sections,
Schedules, or Exhibits to this Agreement, unless specified to the contrary.  The parties intend that each representation,
warranty, and covenant contained in this Agreement shall have independent
significance.  If any party has breached
any representation, warranty, or covenant contained in this Agreement in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant.

8.2           Disclosure
Statement.  Concurrently with the
execution and delivery of this Agreement, Seller has delivered a “Disclosure
Statement,” which is incorporated in this Agreement by reference.  Each section of the Disclosure Statement is
referred to in this Agreement as a “Section of the Disclosure Statement,” the
number of which shall correspond to the same numbered Section of this
Agreement.  If there is any inconsistency
between the statements in this Agreement and those in the Disclosure Statement
(other than an exception expressly set forth as such in the Disclosure
Statement with respect to a specifically identified representation or
warranty), the statements in this Agreement shall control.  The statements in the Disclosure Statement,
and those in any supplement thereto, relate to the provisions in the Section of
this Agreement to which they expressly relate and to only such other Sections
of this Agreement to which it is apparent from a reading of such disclosure
that it also qualifies or applies to such other Sections.

8.3           Attorney-in-Fact.  Seller hereby constitutes and appoints Buyer
and its successors and assigns, as its attorney-in-fact, with full power of
substitution, in Seller’s name and stead, but on behalf of and for the benefit
of Buyer and its successors and assigns, to demand and receive any and all of
the Purchased Assets, and to do all things that Buyer and its successors or
assigns, may deem proper for the collection or reduction to possession of any
of the Purchased Assets or for the collection and enforcement of any claim or
right of any kind sold, conveyed, assigned, or transferred pursuant to this
Agreement, and to do all acts and things in relation to the Purchased Assets
that Buyer or its successors or assigns shall deem desirable.  Seller hereby declares that the foregoing
powers are coupled with an interest and are and shall be irrevocable by Seller
or any of its Affiliates, by dissolution or liquidation or in any other manner
or for any reason whatsoever.

8.4           Costs and
Expenses.  Except as otherwise
expressly provided in this Agreement, each party shall bear its own expenses in
connection with this Agreement.  Any and
all transfer, sales, use, documentary and similar Taxes and recording and
filing fees incurred in connection with the Contemplated Transactions shall be
borne by Seller (and not by Buyer).

 28
 

8.5           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 courier service (costs prepaid); (b) sent
by facsimile with confirmation of transmission by the transmitting equipment;
or (c) received or rejected by the addressee, if sent by certified mail, return
receipt requested; in each case to the following addresses or facsimile numbers
and marked to the attention of the person (by name or title) designated below
(or to such other address or facsimile number, or Person as a party may
designate in writing to the other parties):

To Parent:

InfoLogix, Inc.

101 East County Line Road

Suite 210

Hatboro, PA 19040

Attention:  Chief Financial Officer

Telephone:  (215) 604-0691

Fax:  (267) 681-0682

To Buyer:

InfoLogix Systems Corporation

101 East County Line Road

Suite 210

Hatboro, PA 19040

Attention:  Chief Financial Officer

Telephone:  (215) 604-0691

Fax:  (267) 681-0682

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

Drinker Biddle & Reath LLP

18th and Cherry
Streets

One Logan Square

Philadelphia, PA  19103-6996

Attention:  Scott B. Connolly

Telephone:  (215) 988-2700

Fax:  (215) 988-2757

To Seller:

AMTSystems, Inc.
 220 Realty Drive

Cheshire, CT 06410
 Attention:  David J. Stewart

Telephone: (203) 250-7226

Fax:  (203) 272-4389

To Shareholders, at the addresses set forth opposite their respective names
on Schedule A to this Agreement.

 29
 

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

Parrett, Porto, Parese & Colwell, P.C.

One Hamden Center

2319 Whitney Avenue

Suite 1-D

Hamden, CT 06518

Attention:  William S. Colwell

Telephone: (203) 281-2700

Fax: (203) 281-0700

 

A copy
of any and all notices and other communications sent by facsimile pursuant to
this Section 8.5 shall also be sent by United States mail to the
appropriate address in accordance with this Section 8.5.

8.6           Survival.  The representations and warranties made by
the parties in this Agreement and in the certificates, documents, and schedules
delivered pursuant to this Agreement shall survive the Closing, subject to Section
7.5(b).  If written notice of a claim
has been given before the expiration of a representation or warranty by a Buyer
Indemnitee to Seller or either Shareholder, or by a Seller Indemnitee to Buyer,
as applicable, then the relevant representation or warranty (and the right to
indemnification pursuant to Article 7 with respect thereto and to any
related or ancillary claims) shall survive as to such claim and to any related
or ancillary claims until such claim has been finally resolved pursuant to Article
7.  Anything in this Agreement to the
contrary notwithstanding, the representations and warranties of Seller and the
Shareholders in this Agreement, and the right of Buyer to indemnification for
breach thereof, shall not be affected by any investigation of Seller made by
Buyer or its agents or representatives.

8.7           Assignments,
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 to this Agreement, except that
Buyer may assign any of its rights and delegate any of its obligations under
this Agreement to any subsidiary of Buyer, and Parent and Buyer each may
collaterally assign its rights under this Agreement to any financial
institution providing financing thereto, or assign this Agreement to any Person
that becomes a successor in interest to Parent or Buyer (by purchase of assets
or stock or by merger or otherwise). 
This Agreement will apply to, be binding in all respects upon, and inure
to the benefit of, the successors and permitted assigns of the parties.  Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement, except such rights as
shall inure to a successor or permitted assignee pursuant to this Section
8.7.

8.8           Entire
Agreement; Modification.  This
Agreement supersedes all prior agreements, whether written or oral, between the
parties with respect to its subject matter and constitutes a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter.  This
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by each of the parties to this Agreement.  The failure of any party to this Agreement to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of any party
thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement
shall be held to be a waiver of any other or subsequent breach.

8.9           Governing
Law; Consent to Jurisdiction.  This
Agreement is made pursuant to, and shall be construed and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania (and United
States federal Law, to the extent applicable), irrespective of the principal
place of business, residence or domicile of the parties to this Agreement, and
without giving effect to otherwise applicable principles of conflicts of
law.  Any Proceeding arising out of or
relating to this Agreement or any other Transaction Document shall be
instituted in any federal court or in any state court in the Commonwealth of
Pennsylvania having jurisdiction over the parties and subject matter of such
dispute, and each party waives any objection which such party may now or
hereafter have to the laying of the venue of any such Proceeding, and 

 30
 

irrevocably submits
to the jurisdiction of any such court. 
Any and all service of process and any other notice in any Proceeding
shall be effective against any party if given as provided in this
Agreement.  Nothing contained in this
Agreement or in any other Transaction Document shall prevent or delay Buyer
from seeking, in any court of competent jurisdiction, specific performance or
other equitable remedies in the event of any breach or intended breach by
Seller or either Shareholder of any of its obligations under this Agreement.

8.10         WAIVER OF
JURY TRIAL.  TO THE FULLEST EXTENT
PERMITTED BY LAW, THE PARTIES TO THIS AGREEMENT HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY PROCEEDING BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE
CONTEMPLATED TRANSACTIONS.  THE PARTIES
TO THIS AGREEMENT ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND THAT
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTY.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  THE PARTIES TO THIS
AGREEMENT ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS.  THE
PARTIES TO THIS AGREEMENT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES HIS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS
AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE CONTEMPLATED
TRANSACTIONS.  IN THE EVENT OF
LITIGATION, THIS SECTION 8.10 MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

8.11         Section
Headings and Defined Terms.  The
section headings contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning and interpretation of this
Agreement.

8.12         Severability.  The invalidity or unenforceability of any
particular provision, or part of any provision, of this Agreement shall not
affect the other provisions or parts hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions or
parts were omitted.

8.13         Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.  For purposes of this Agreement, a document
(or signature page thereto) signed and transmitted by facsimile machine,
telecopier, or electronic mail shall be treated as an original document.  The signature of any party thereon, for
purposes hereof, shall be considered as an original signature, and the document
transmitted shall be considered to have the same binding effect as an original
signature on an original document.  At
the request of any party, any facsimile, telecopy, or scanned document shall be
re-executed in original form by the parties who executed the facsimile,
telecopy, or scanned document.  No party
may raise the use of a facsimile machine, telecopier, or electronic mail, or
the fact that any signature was transmitted through the use of a facsimile,
telecopier, or electronic mail as a defense to the enforcement of this
Agreement or any amendment or other document executed in compliance with this
Agreement.

[Signature page follows]

 31

IN WITNESS WHEREOF, each of the parties to this Agreement has duly executed
this Agreement as of the date first above written.

	
  

  	
  INFOLOGIX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: David T. Gulian

  
	
   

  	
   

  	
  Title: President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INFOLOGIX SYSTEMS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMTSYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: David J. Stewart

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SHAREHOLDERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  David J. Stewart

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Sandra A. Stewart

  

 

 [SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]

Schedule 1.1

Definitions

“Affiliate” — with respect to
any Person means, (i) each Person that, directly or indirectly, owns or
controls, whether beneficially, or as a trustee, guardian or other fiduciary,
5% or more of the stock having ordinary voting power in the election of
directors of such Person, (ii) each Person that controls, is controlled by or
is under common control with such Person or any Affiliate of such Person, (iii)
each of such Person’s officers, directors, joint venturers and partners, and (iv)
with respect to any natural person, each member of such Person’s immediate
family and any trust or family partnership for the benefit of such Person. For
the purpose of this definition, “control” of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise.

“Agreement” — as defined in
the introductory paragraph of this Agreement.

“AMT Shares” — as defined in
Section 3.4(a).

“Assumed Liabilities” — as
defined in Section 2.4.

“Balance Sheets” — as defined
in Section 3.8(a).

“Bill of Sale” — as defined in
Section 2.11(a)(i).

“Business” — as defined in the
Recitals to this Agreement.

“Business Day” —
means any day other than a Saturday, Sunday, or holiday on which banks in the
city of New York are or may elect to be closed.

“Business  Employees” — as defined in Section
6.1(a).

“Buyer” — as
defined in the introductory paragraph of this Agreement.

“Buyer Confidential
Material” — as defined in Section 6.6(a).

“Buyer Indemnitees” — as
defined in Section 7.1.

“Buyer Transaction Documents” —
as defined in Section 5.2.

“Change of Control” — means
any change in ownership of more than fifty percent of Buyer or the transfer or
sale of all or substantially all of Buyer’s assets or business, in each case
other than by or to a person that is and was an Affiliate of Buyer preceding
such change, sale, or transfer; provided, that such Affiliate transferee
is assigned the rights and delegated the obligations of Buyer under this
Agreement in connection with such change, sale, or transfer.

“Closing” — as defined in Section
2.10.

“Closing Date” — as defined in
Section 2.10.

“Closing Payment” — as defined
in Section 2.7(a).

“COBRA” — means the
Consolidated Omnibus Reconciliation Act of 1985, as amended.

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

“Contemplated Transactions” —
means this Agreement, the sale of the Purchased Assets, and each of the other
actions contemplated by this Agreement or any of the other Transaction
Documents.

“Contract” — means any
agreement, contract, open purchase order, obligation, commitment or undertaking
of the Business, whether written or oral, to which Seller is a party or is
bound or by which any of the Purchased Assets may be subject.

“Damages” — as defined in Section
7.1.

“Deferred Payment Obligations”
— as defined in Section 2.7(b).

“Effective Time” — as defined
in Section 2.10.

“Employee Plans” — means all “employee
benefit plans” as defined in section 3(3) of ERISA, all specified fringe
benefit plans as defined in section 6039(d) of the IRC, and all other bonus,
incentive compensation, deferred compensation, profit sharing, stock option,
stock appreciation right, stock bonus, stock purchase, employee stock
ownership, savings, severance, change in control, supplemental unemployment,
layoff, salary continuation, retirement, pension, health, life insurance,
disability, accident, educational assistance, vacation, holiday, sick leave,
fringe benefit or welfare plan, and any other plan, agreement, policy,
practice, commitment, contract, or understanding (whether qualified or
nonqualified, currently effective or terminated, written or unwritten, funded
or unfunded), and any trust, escrow or other agreement related thereto, that
(i) is maintained or contributed to by Seller or any ERISA Affiliate or with
respect to which Seller or any ERISA Affiliate has or may have any liability,
and (ii) provides benefits, or describes policies or procedures applicable to
any current or former director, officer, employee or service provider of Seller
or any ERISA Affiliate, or the dependents of any thereof, regardless of how (or
whether) liabilities for the provision of benefits are accrued or assets are
acquired or dedicated with respect to the funding thereof.

“Employment Agreement” — as
defined in Section 2.11(a)(iii).

“Encumbrance” — means any
mortgage, charge, claim, condition, equitable interest, lien, option, security
interest, right of first refusal, easement, right-of-way, encroachment, or
restriction of any kind, including any restriction on use, voting, transfer,
receipt of income, or exercise of any other attribute of ownership.

“Environmental Laws” — means
any Law or other legal requirement relating to the protection of the
environment, natural resources, or public or employee health or safety or the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling or discharge of Hazardous Materials including the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. §
1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42
U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Federal Insecticide and Fungicide, and Rodenticide Act (7 U.S.C. §
136 et seq.) as each has been or may be amended and the regulations promulgated
pursuant thereto.

“Environmental Liabilities” —
means any liability, obligation, or loss relating to or arising out of: any
Environmental Laws; any Response, Removal, or Remedial Action or any other
action, including investigation, reporting, monitoring, cleanup, or
contribution; or the release or threatened release of any Hazardous Substance.

“ERISA” — means the Employee
Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” — as defined
in Section 3.18(a).

 2
 

“Exchange Act” — means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

“Excluded Assets” — as defined
in Section 2.3.

“Financial Statements” — as
defined in Section 3.8(a).

“Fundamental Representations” —
as defined in Section 7.5(a).

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

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

“Governmental Body” — means
any:  (a) nation, state, county, city,
town, or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign, or other government; (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); (c)
multi-national organization or body; (d) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature; or (e) any official of
any of the foregoing.

“Hazardous Substance”  — means any waste, substance or material
that is governed, regulated, classified, or otherwise characterized under or
pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,”
“radioactive,” or words of similar meaning or effect, including petroleum and
its by-products, asbestos, polychlorinated biphenyls, radon, mold, medical
waste and urea formaldehyde insulation and any other substance or material that
could result in liability under any Environmental Law.

“HIPAA” — means the Health
Insurance Portability and Accountability Act of 1996, as amended.

“Indebtedness” — means (i) any
indebtedness for borrowed money or for the deferred purchase price of property
or services, capital lease obligations, conditional sale, or other title
retention agreements; (ii) any other indebtedness that is evidenced by a note,
advance, letter of credit, bond, debenture, or similar instrument, and all loan
and other agreements relating thereto; (iii) any obligations under leases that,
in accordance with GAAP, are reflected as liabilities on the Financial
Statements; (iv) any liabilities secured by any security interest or lien; (v)
any guarantee obligations; and (vi) any accrued interest, fees, or penalties in
respect of any of the foregoing, in each case, whether due or to become due,
accrued, absolute, contingent, or otherwise.

“Indemnification Basket” — as
defined in Section 7.5(a).

“Indemnified Party” — as
defined in Section 7.3.

“Indemnifying Party” — as
defined in Section 7.3.

“Intellectual Property” — as
defined in Section 3.15(a).

“Interim Balance Sheet” — as
defined in Section 3.8(a).

“Inventory” — means all assets
of Seller, wherever located, which are finished goods or work in process, or
raw materials, spare parts and all other materials and supplies which were
acquired for use or consumption by Seller in the production of finished goods.

“IP License Agreement” — as
defined in Section 3.15(h).

 3
 

“IRC” — means the Internal
Revenue Code of 1986, as amended, or any successor Law, and rules and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor Law.

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

“Knowledge” — of Seller
respecting a particular matter shall conclusively be deemed and presumed to
include, all facts, circumstances, and conditions known to or which should have
been reasonably known, after due inquiry, to any Shareholder, or to any other
officer or director of Seller regarding such matter.

“Law” — means any federal,
state, local, municipal, foreign, international, multinational, or other order,
constitution, law, ordinance, principle of common law, regulation, statute,
rule, treaty, permit, license, certificate, judgment, order, decree, award or
other decision or requirement of any arbitrator, court, or Governmental Body,
including any governmental health care programs.

“Lease” — as defined in Section
3.11(a).

“Lock-Up Period” — as defined
in Section 2.8(b).

“Material Adverse Effect” —
means any fact, event, change, violation, inaccuracy, circumstance, or effect
that is or could reasonably be expected to be, individually or in the
aggregate, materially adverse to the Business, taken as a whole, or Seller’s
condition (financial or otherwise), operating results, employee relations,
customer relations, supplier relations, assets, liabilities, operations, or
business prospects whether or not covered by insurance (including as a
consequence of the loss or pending or threatened loss, alone or in the
aggregate, of any customer, supplier, or right pursuant to any contract or
agreement) or the ability of Seller to consummate timely the Contemplated
Transactions.

“Nonassignable Contract or Authorization”
— as defined in Section 2.2.

“Ordinary Course of Business” —
means an action taken by Seller with respect to the Business or the Purchased
Assets that is consistent with past practices of Seller and would generally be
considered in the ordinary course of business of an enterprise engaged in
business similar to the Business, and was not taken in contemplation of any of
the Contemplated Transactions.

“OSHA” — as defined in Section
3.19.

“Owned Software” — as defined
in Section 3.15(b).

“Parent” — as defined in the
introductory paragraph of this Agreement.

“Parent Common Stock” — means
common stock, par value $0.0001 per share, of Parent.

“Parent Shares” — as defined
in Section 2.7(c).

“Permitted Encumbrance” —
means (i) liens for current property Taxes not yet due and payable, and (ii)
statutory liens of carriers, warehousemen, mechanics, materialmen, and
repairmen incurred in the Ordinary Course of Business and not yet delinquent.

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

“Prepaids”  — as defined in Section 2.1(j).

 4
 

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

“Purchase Price” — as defined
in Section 2.7(a).

“Purchased Assets” — as
defined in Section 2.1.

“Real Property” — as defined
in Section 3.11(a).

“Restricted Business” — as
defined in Section 6.6(c).

“Response,” “Removal” and “Remedial Action” shall have the meanings ascribed to them in Sections
101(23)-101(25) of the Comprehensive Environmental Response, Compensation
and Liability Act, as amended by the Superfund Amendments and Reauthorization
Act, 42 U.S.C. §§ 9601(23)-9601(25).

“Retained Liabilities” — as
defined in Section 2.5.

“SEC” — means the United
States Securities and Exchange Commission.

“SEC Reports”— as defined in Section
5.4.

“Securities Act” — means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

“Seller” — as defined in the
introductory paragraph of this Agreement.

“Seller Indemnitees” — as
defined in Section 7.2.

“Seller/Shareholder Confidential Material”
— as defined in Section 6.6(b).

“Seller Transaction Documents”
— as defined in Section 3.2.

“Shareholders” —
as defined in the introductory paragraph of this Agreement.

“Shareholder Transaction
Documents”- as defined in Section 4.1.

“Sublease” — as defined in Section
2.11(a)(ii).

“Tax” — means any charge
imposed by a Governmental Body pursuant to Laws which is denominated as a tax
(such as an income, gross receipts, use, sales or social security, unemployment
or other payroll tax); any fee payable to a Governmental Body for a right or
privilege or assessed on the value of an asset (such as a stamp, property,
license, vehicle or other title or registration fee, and a capital stock,
franchise, value added tax or charge); each other fee, assessment, charge,
customs duty, escheat obligation or duty of any kind whatsoever; and any
interest, penalty, addition or additional amount thereon, imposed, by or under
the authority of any Governmental Body or payable under any tax-sharing
agreement or any other Contract.

“Tax Return” — means any
return (including any information return), report, schedule, notice, form,
declaration, claim for refund, 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.

“Trade Secrets” — as defined
in Section 3.15(a).

 5
 

“Transaction Documents”
— means this Agreement,  the Buyer
Transaction Documents, Seller Transaction Documents and all other agreements,
contracts, instruments or documents required to be delivered in connection with
the Contemplated Transactions.

“Transfer” — as defined in Section
2.8(b).

“Transferred Employees”
— as defined in Section 6.1(a).

“WARN Act” — means, the Worker
Adjustment and Retraining Notification Act.

 

 6Exhibit
10.1

 

CHANGE
IN CONTROL SEVERANCE AGREEMENT

Paul B. Carousso

CHANGE IN CONTROL SEVERANCE
AGREEMENT (the “Agreement”) dated May 10, 2007 by and among Visant
Holding Corp., a Delaware corporation (the “Company”), Visant
Corporation, a Delaware corporation (the “Employer”) and Paul B.
Carousso (“Executive”).

The Company and Employer desire
to induce Executive to remain in employment by providing Executive protection
in the event of a termination of Executive’s employment in certain
circumstances, and Executive desires to continue to be employed by the Employer
and to accept such protection.

In consideration of the
promises and mutual covenants contained herein and for other good and valuable
consideration, the parties agree as follows:

1.                                       Term.  This Agreement shall be
effective for a period commencing on the date of this Agreement and ending at 11:59
p.m. on December 31, 2009 (the “Initial
Term”); provided, however, that commencing with January 1,
2010 and on each anniversary
thereof (each, an “Extension Date”), the Initial Term shall
automatically be extended for an additional twelve (12) month period, unless
the Company or Executive provides the other party hereto prior written notice 90
days  before the next Extension Date that
the term of this Agreement shall not be so extended (the Initial Term and any
annual extensions of the term of this Agreement, together, the “Term”).  Notwithstanding the foregoing, this Agreement
shall, if in effect on the date of a Change in Control (as defined in Section 3
below), remain in effect for two years following a Change in Control.

2.                                       Termination of Employment.

a.                                       Subject
to (A) Executive’s execution, delivery and non-revocation of a severance
agreement, including a general waiver and release of claims against the Company
and its Affiliates in a form reasonably acceptable to the Employer and (B)
continued compliance with the restrictive covenants to which Executive is
otherwise bound, if, during the Term,
Executive’s employment with the Employer is terminated at any time upon the
effectiveness of, or within two years following, a Change of Control by (x) the
Company or the Employer without Cause or (y) Executive for Good Reason (as each
such term is defined in Section 3 below),  Executive
shall be entitled to receive from  the
Employer:

(i)                                                  a
cash severance payment equal to one (1) times the sum of: (x) Executive’s
annual rate of base salary, as in effect immediately prior to the date on which
such termination occurs (without giving effect to any reduction giving rise to
Good Reason) and (y) an amount equal to the higher of (A) Executive’s annual
cash bonus for the fiscal year of termination assuming payment of the bonus at
the rate at which Executive would be entitled if the target threshold under the
bonus plan had been achieved (without giving effect to any reduction giving
rise to Good Reason) or (B) an amount equal to the average percentage bonus
rate actually earned by Executive in respect of the two fiscal years prior to
the fiscal year of termination applied to Executive’s annual rate of base
salary, as in effect immediately prior to the date on

 1
 

which such termination occurs (without giving effect to any reduction
giving rise to Good Reason), payable in equal installments in accordance with
the normal payroll practices of the Employer over the twelve (12) month period
following the last day Executive was actively employed by the Employer (such
twelve (12) month period, the “Severance Period”); provided, however,
that such payment shall be in lieu of notice or any other severance benefits to
which Executive might otherwise be entitled, except as may be required by
applicable law;

(ii)                                               an
amount equal to the annual cash bonus that Executive would have received in
accordance with the terms of the applicable bonus plan assuming the target threshold
under such plan had been achieved (without giving effect to any reduction
giving rise to Good Reason), if Executive had remained employed by the Employer
through the end of the fiscal year of the Employer in which such termination
occurs, paid at such time as the bonus would otherwise have been paid to
Executive under the terms of such plan; provided, however, that,
if Executive’s employment terminates prior to September 30 of a given year, such
amount shall be multiplied by the Pro-Rate Factor (as defined in Section
3 below) (as applicable to Executive’s employment with the Employer);

(iii)                                            all
earned and unpaid and/or vested, nonforfeitable amounts owing or accrued at the
date of Executive’s termination of employment (including any earned but unpaid
base salary, vacation, and any annual cash bonus that is earned by Executive
but unpaid as of the date of termination for any previously completed fiscal
year) under any compensation and benefit plans, programs, and arrangements of
the Company and its Affiliates in which Executive theretofor participated, including,
without limitation, as a result of a “change in control” (as may be defined
under the respective plan or program), payable in accordance with the terms and
conditions of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were
granted or accrued; and

(iv)                                           reimbursement
for any unreimbursed business expenses properly incurred by Executive in accordance
with the Employer’s policy prior to the termination date.

In
addition, the Employer shall permit Executive (and those of Executive’s dependents
enrolled at the time of Executive’s termination of employment, if any) to
continue the coverage of Executive’s group health benefits in accordance with
the terms and conditions of the applicable group health benefit plan(s), as
they may be replaced or changed from time to time, through the earlier of (i)
the end of the Severance Period and (ii) the date on which Executive receives
comparable group health benefits from any subsequent employer (such period, the
“Benefits Continuation Period”). 
Effective as of the first day of the month following the month of
Executive’s termination of employment, Executive (and those of Executive’s dependents
enrolled at the time of such termination of employment, if any) will have the
right to continue group health benefit coverage subject to and in accordance
with the terms and conditions of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”) by exercising the COBRA continuation
privileges, if any, as provided by law.

 2
 

During the
Benefits Continuation Period,  the Employer  agrees to pay the premium for such coverage over and above
the then-active employee contribution for group health benefits coverage (as
such premiums may change from time to time) for Executive and Executive’s enrolled
dependents (the “COBRA Subsidy”) and Executive shall be responsible for
paying the balance of the premium above the COBRA Subsidy (i.e.,
the active employee premium amount).  The
continued coverage will be subject to the terms and conditions of the group
health benefit plan(s) that apply to active employees generally, including  the Employer’s  right to amend
and terminate such plan(s).  Following
the Benefits Continuation Period, Executive and Executive’s dependents, to the
extent they are enrolled in the group health benefit plan(s) at the conclusion
of the Benefits Continuation Period, will have the right to continue their
coverage pursuant to and in accordance with the terms and conditions of COBRA
for the remainder of the applicable COBRA period, subject to, among other
things, payment of the full  COBRA premium
for Executive and/or Executive’s covered dependents.  Notwithstanding the foregoing, in the event that
(x) such continued coverage is not permissible under the terms of such plan(s)
or (y) such plan(s) are terminated, the Employer shall, in lieu of providing
such coverage, pay Executive (on an after-tax basis) an amount equal to the
COBRA Subsidy the Employer would have otherwise paid on Executive’s behalf for
such coverage during the Benefits Continuation Period.

b.                                      Following
Executive’s termination or resignation (as the case may be), except as set
forth in this Section 2 and Section 5 below, Executive shall have no further
rights to any other compensation or benefits under this Agreement or any other
severance plan or arrangement maintained by the Company or any of its Affiliates,
except as otherwise provided under any stock option or management stockholder’s
agreement entered into by and between Executive and the Company or any of its Affiliates.

3.                                       Definitions.
For purposes of this Agreement:

a.                                   “Affiliate”
shall mean with respect to any Person, any entity directly or indirectly
controlling, controlled by or under common control with such Person.

b.                                      “Board”
shall mean the Board of Directors of the Company.

c.                                       “Cause”
shall mean “Cause” as such term may be defined in any employment agreement
between Executive and the Employer or any of its Affiliates (the “Employment
Agreement”) or, if there is no such Employment Agreement, “Cause” shall
mean, as determined in the reasonable good faith judgment of the Employer or
any of its Affiliates, as applicable:

(i)                                 Executive’s
willful and continued failure to perform Executive’s material duties with
respect to the Company or any of its subsidiaries which continues beyond ten
(10) days after a written demand for substantial performance is delivered to
Executive by the Company or any of its subsidiaries (the “Cure Period”);

(ii)                              the willful or intentional
engaging by Executive in conduct that causes material and demonstrable injury,
monetarily or otherwise, to the Company, the Investors or their respective
Affiliates;

 3
 

(iii)                         the commission by Executive of a
crime constituting (A) a felony under the laws of the United States or any
state thereof or (B) a misdemeanor involving moral turpitude; or

(iv)                          a material breach of by
Executive of this Agreement or other agreements, including, without limitation,
engaging in any action in breach of restrictive covenants, herein or therein,
that continues beyond the Cure Period (to the extent that, in the Board’s
reasonable judgment, such breach can be cured).

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

e.                                       “Change
in Control” shall mean (i) the sale (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company to an
Unaffiliated Person (as defined below); (ii) a sale (in one transaction or
a series of transactions) resulting in more than 50% of the voting stock of the
Company being held by an Unaffiliated Person; (iii) a merger,
consolidation, recapitalization or reorganization of the Company with or into
an Unaffiliated Person; if and only if
any such event listed in clauses (i) through (iii) above results in the
inability of the Investors, or any member or members of the Investors, to
designate or elect a majority of the Board (or the board of directors of the
resulting entity or its parent company). 
For purposes of this definition, the term “Unaffiliated Person” means
any Person or “group” (as such term is defined in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended) who is not
(x) an Investor or any member of the Investors, (y) an Affiliate of
any Investor or any member of any Investor, or (z) an entity in which any
Investor, or any member of any Investor holds, directly or indirectly, a
majority of the economic interests in such entity.

f.                                         “Good
Reason” shall mean “Good Reason” as such term is defined in the Employment
Agreement, or if there is no such Employment Agreement, “Good Reason” shall
mean:

(i)                                 a
reduction in Executive’s base salary or annual incentive compensation (other than
a general reduction in base salary that affects all members of senior
management in substantially the same proportions, provided that Executive’s
base salary is not reduced by more than 10%);

(ii)                              a substantial reduction or
adverse change in Executive’s duties and responsibilities;

(iii)                           a transfer of Executive’s
primary workplace by more than fifty miles from the current workplace;

(iv)                            failure
of the Company or the Employer to comply with and satisfy Section 7(d) of this
Agreement; or

(v)                               failure
of the Company, the Employer or any successor to maintain the Agreement for a
two year period following a Change in Control.

 4
 

and provided,
further, that “Good Reason” shall cease to exist for any such event on
the 90th day following the later of its occurrence or Executive’s
knowledge thereof, unless Executive has given the Employer or any of its
Affiliates, as applicable, written notice of “Good Reason” prior to such date.

g.                                  “Investors”
shall mean Fusion Acquisition LLC, a Delaware limited liability company, and
DLJ Merchant Banking Partners III, L.P., DLJ Offshore Partners III-1, C.V., DLJ
Offshore Partners III-2, C.V., DLJ Offshore Partners III, C.V., DLJ MB Partners
III GmbH & Co. KG, Millennium Partners II, L.P. and MBP III Plan Investors,
L.P.

h.                                  “Person”
shall mean “person,” as such term is used for purposes of Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended.

i.                                      “Pro-Rate
Factor” shall mean a fraction, (i) the numerator of which is equal to the
number of days that Executive is employed by the Employer during the fiscal
year in which Executive’s employment terminates, and (ii) the denominator of
which is the number of days in such fiscal year.

4.                                       Notice of Termination.  Any
purported termination of employment by the Employer or any of its
Affiliates, as applicable, or by
Executive (other than due to Executive’s death) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 7(f) hereof.  For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
the date of termination, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment under
the provision so indicated.

5.                                       Arbitration.  Any dispute arising out of or asserting
breach of this Agreement shall be exclusively resolved by binding statutory
arbitration in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association.  Such
arbitration process shall take place in New York, New York.  A court of competent jurisdiction may enter
judgment upon the arbitrator’s award. 
Each party shall pay the costs and expenses of arbitration (including
fees and disbursements of counsel) incurred by such party in connection with
any dispute arising out of or asserting breach of this Agreement.

6.                                       Section 409A.  If any
provision of this Agreement (or of any award of compensation, including equity
compensation or benefits) would cause Executive to incur any additional tax or
interest under Section 409A of the Code or any regulations or Treasury
guidance promulgated thereunder, the Company shall, after consulting with
Executive, reform such provision to comply with Section 409A of the Code; provided
that the Company agrees to maintain, to the maximum extent practicable, the
original intent and economic benefit to Executive of the applicable provision
without violating the provisions of Section 409A of the Code.

Notwithstanding anything herein to the contrary, if at
the time of Executive’s termination of employment with the Employer or any of
its Affiliates Executive is a “specified employee” as defined in Section 409A
of the Code and the deferral of the commencement of any payments or

 5
 

benefits otherwise
payable hereunder as a result of such termination of employment is necessary in
order to prevent any accelerated or additional tax under Section 409A of the
Code, then the Employer  will defer the
commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to
Executive) until the date that is six months following Executive’s termination
of employment with the Employer or any of its Affiliates (or the earliest date
as is permitted under Section 409A of the Code).

7.                                       Miscellaneous.

a.                                       Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of New
York for agreements fully performed within the State.

b.                                      Entire Agreement/Amendments.  This
Agreement contains the entire understanding of the parties with respect to the
subject matter contained herein, and during the Term supersedes all prior
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein. 
This Agreement may not be altered, modified, or amended except by
written instrument signed by the parties hereto.

c.                                       No Waiver; Severability.  The
failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver of such party’s
rights or deprive such party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.  In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby and shall
remain in full force and effect.

d.                                      Successor; Binding Agreement.  This
Agreement shall inure to and be binding upon any successor or assign of the
Company or the Employer (and such successor or assign shall hereafter be deemed
the “Company” or “Employer” as the case may be).  The Company and the Employer shall assign
this Agreement and its respective obligations hereunder to any successor or
assign thereof, whether by merger, consolidation, sale of substantially all of
the Company’s assets or capital stock or otherwise, and the Company and the
Employer shall require any successor or assign to expressly assume and agree to
perform the respective obligations of the Company and the Employer hereunder in
the same manner and to the same extent that the Company and the Employer would
be required to perform it if no such transfer or assignment had taken
place.  Any assignment or transfer of
this Agreement not in compliance with the foregoing shall be void and of no
force and effect. This Agreement shall inure to the benefit of and be
enforceable by Executive and Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If Executive should die while
any amount would still be payable to Executive hereunder had Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee or other designee or, if there is no such designee, to Executive’s
estate.

 6
 

e.                                       Spendthrift
Provision.  No right or interest of
Executive under this Agreement may be assigned, transferred or alienated, in
whole or in part, either directly or by operation of law, and no such right or
interest shall be liable for or subject to any debt, obligation or liability of
Executive.

f.                                         Notice.  For the purpose of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
by hand or overnight courier or three days after it has been mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below in this Agreement, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

If to the Company or the
Employer:

Visant Holding Corp.

357 Main Street

Armonk, New York 10504

Attention: General
Counsel

If to Executive:

To the most recent
address of Executive set forth in the personnel records of the Company and its
subsidiaries.

g.                                      Withholding Taxes.  The
Employer may withhold from any amounts payable under this Agreement such
Federal, state and local taxes as may be required to be withheld pursuant to
any applicable law or regulation.

h.                                      No Mitigation. 
Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Agreement be
reduced by any compensation earned by Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by Executive to the Company or any of its Affiliates or otherwise,
except to the extent expressly provided in Section 2(a) with respect to the
provision of group health benefits.

i.                                          Survival.  Any provision hereunder that requires
performance beyond the termination of this Agreement, and the Company’s, the
Employer’s and Executive’s obligations thereunder, shall survive any
termination of this Agreement.

j.                                          Employment
At Will.  Notwithstanding anything to
the contrary contained herein, Executive’s employment with the Employer or any
of its Affiliates is not for any specified term and may be terminated by
Executive or the Employer or any of its Affiliates at any time, for any reason,
without liability except as provided herein or as required by law.

 7
 

i.                                          Counterparts.  This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.

[Signatures on next page]

 8

IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement as of the day and year first
above written.

 

	
  VISANT HOLDING CORP.

  
	
   

  
	
   

  
	
  By:

  	
    /s/
  Marc L. Reisch

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  
	
   

  
	
  VISANT CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
    /s/
  Marc L. Reisch

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  
	
    /s/ Paul
  B. Carousso

  	
   

  
	
  Paul B. Carousso

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