Document:

Unassociated Document

    

    
 

    STOCK
      PURCHASE AGREEMENT 

    

    BETWEEN

    

    AEROFLEX
      INCORPORATED

    (“Seller”)

    

    AND

    

    STAR
      DYNAMICS HOLDINGS, LLC

    AND
      

    TAZ
      VENTURES, LLC

    (“Buyers”)

    

    
 

    DATED
      AS
      OF MAY 15, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF CONTENTS

     

    
      	 	 	
              Page

            
	 	 	 
	
              ARTICLE
                I

            	
              Sale
                and Transfer of Shares; Closing

            	
              6

            
	
              Section

            	
              1.1.

            	
              Shares

            	
              6

            
	
              Section

            	
              1.2.

            	
              Purchase
                Price

            	
              6

            
	
              Section

            	
              1.3.

            	
              Closing

            	
              6

            
	 	 	 	 
	
              ARTICLE
                II

            	
              Representations
                and Warranties of Seller

            	
              6

            
	
              Section

            	
              2.1.

            	
              Organization;
                Power

            	
              6

            
	
              Section

            	
              2.2.

            	
              Capitalization

            	
              7

            
	
              Section

            	
              2.3.

            	
              Authority;
                No Violation

            	
              7

            
	
              Section

            	
              2.4.

            	
              Ownership
                of Shares

            	
              7

            
	
              Section

            	
              2.5.

            	
              Consents
                and Approvals

            	
              8

            
	
              Section

            	
              2.6.

            	
              No
                Sales or Options

            	
              8

            
	
              Section

            	
              2.7.

            	
              Financial
                Statements

            	
              8

            
	
              Section

            	
              2.8.

            	
              Litigation

            	
              9

            
	
              Section

            	
              2.9.

            	
              Absence
                of Changes or Events

            	
              9

            
	
              Section

            	
              2.10.

            	
              Compliance
                with Laws: No Default

            	
              9

            
	
              Section

            	
              2.11.

            	
              Real
                Property

            	
              9

            
	
              Section

            	
              2.12.

            	
              Material
                Contracts

            	
              10

            
	
              Section

            	
              2.13.

            	
              Licenses
                and Permits

            	
              10

            
	
              Section

            	
              2.14.

            	
              Intellectual
                Property and Information Technology

            	
              11

            
	
              Section

            	
              2.15.

            	
              Environmental
                Matters

            	
              11

            
	
              Section

            	
              2.16.

            	
              Labor
                Relations; Employees

            	
              12

            
	
              Section

            	
              2.17.

            	
              Employee
                Benefit Plans

            	
              13

            
	
              Section

            	
              2.18.

            	
              Tax
                Matters

            	
              13

            
	
              Section

            	
              2.19.

            	
              Subsidiaries

            	
              14

            
	
              Section

            	
              2.20.

            	
              Brokers’
                or Finders’ Fee

            	
              14

            
	
              Section

            	
              2.21.

            	
              Inventory

            	
              14

            
	
              Section

            	
              2.22.

            	
              Title
                to and Condition of Assets

            	
              14

            
	
              Section

            	
              2.23.

            	
              Affiliate
                Transactions

            	
              14

            
	
              Section

            	
              2.24.

            	
              Foreign
                Corrupt Practices Act

            	
              15

            
	
              Section

            	
              2.25.

            	
              Warranties

            	
              15

            
	
              Section

            	
              2.26.

            	
              Customers
                and Suppliers

            	
              15

            
	
              Section

            	
              2.27.

            	
              Disclosure

            	
              15

            
	
              Section

            	
              2.28.

            	
              Limitation
                of Representations and Warranties

            	
              16

            
	 	 	 	 
	
              ARTICLE
                III

            	
              Representations
                and Warranties of Buyer

            	
              16

            
	
              Section

            	
              3.1.

            	
              Organization;
                Power

            	
              16

            
	
              Section

            	
              3.2.

            	
              Authority;
                No Violation; Etc

            	
              16

            
	
              Section

            	
              3.3.

            	
              Consents
                and Approvals

            	
              17

            
	
              Section

            	
              3.4.

            	
              Litigation

            	
              17

            
	
              Section

            	
              3.5.

            	
              Buyer's
                Sophistication

            	
              17

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	
                Section

              	
                3.6.

              	
                Due
                  Diligence; Access to Information; Non-Reliance

              	
                17

              
	
                Section

              	
                3.7.

              	
                Investment
                  Intent

              	
                18

              
	
                Section

              	
                3.8.

              	
                Legend

              	
                18

              
	
                Section

              	
                3.9.

              	
                Brokers’
                  or Finders’ Fees

              	
                18

              
	
                Section

              	
                3.10.

              	
                Radar
                  Business Receivables

              	
                19

              
	
                Section

              	
                3.11.

              	Disclosure	19
	
                Section

              	
                3.12.

              	
                Limitation
                  of Representations and Warranties

              	
                19

              
	 	 	 	 
	
                ARTICLE
                  IV

              	
                Intentionally
                  Omitted

              	
                19

              
	 	 	 
	
                ARTICLE
                  V

              	
                Additional
                  Covenants and Agreements

              	
                20

              
	
                Section

              	
                5.1.

              	
                Confidentiality;
                  Non-Disparagement

              	
                20

              
	
                Section

              	
                5.2.

              	
                Public
                  Announcements

              	
                21

              
	
                Section

              	
                5.3..

              	
                Obligations
                  with Respect to Employees

              	
                21

              
	
                Section

              	
                5.4.

              	
                Certain
                  Costs

              	
                22

              
	
                Section

              	
                5.5.

              	
                Name
                  Changes of Acquired Company

              	
                22

              
	
                Section

              	
                5.6.

              	
                Honoring
                  of Existing Purchase Orders

              	
                22

              
	
                Section

              	
                5.7.

              	
                Further
                  Assurances

              	
                23

              
	
                Section

              	
                5.8.

              	
                Accounting
                  and Other Assistance

              	
                23

              
	
                Section

              	
                5.9.

              	
                Post-Closing
                  Tax Matters

              	
                24

              
	
                Section

              	
                5.10.

              	
                Seller
                  Guarantees and Existing Letters of Credit

              	
                28

              
	
                Section

              	
                5.11.

              	
                Contracts
                  of the Non-Radar Buisnesses

              	
                28

              
	
                Section

              	
                5.12.

              	
                Royalties;
                  Other Consideration

              	
                29

              
	
                Section

              	
                5.13.

              	
                Powell
                  Guarantees; Liens

              	
                .29

              
	
                Section

              	
                5.14.

              	
                Transition
                  Services

              	
                29

              
	
                Section

              	
                5.15.

              	Expenses	30
	
                Section

              	
                5.16.

              	Good
                Faith
                Performance	30
	 	 	 
	
                ARTICLE
                  VI

              	
                Non-Competition;
                  Non-Solicitation

              	
                30

              
	 	 	 
	
                ARTICLE
                  VII

              	
                Closing
                  Deliveries

              	
                32

              
	
                Section

              	
                7.1.

              	
                Deliveries
                  to Buyer at the Closing

              	
                32

              
	
                Section

              	
                7.2.

              	
                Deliveries
                  to Seller at the Closing

              	
                33

              
	 	 	 	 
	
                ARTICLE
                  VIII

              	
                Indemnification

              	
                33

              
	
                Section

              	
                8.1.

              	
                Survival
                  of Representations and Warranties

              	
                33

              
	
                Section

              	
                8.2.

              	
                Survival
                  of Covenants and Agreements

              	
                34

              
	
                Section

              	
                8.3.

              	
                Indemnification
                  by Seller

              	
                34

              
	
                Section

              	
                8.4.

              	
                Indemnification
                  by Buyer and the Acquired Company

              	
                34

              
	
                Section

              	
                8.5.

              	
                Procedure;
                  Notice of Claims

              	
                35

              
	
                Section

              	
                8.6.

              	
                Procedure-
                  Third Party Claims

              	
                36

              
	
                Section

              	
                8.7.

              	
                Remedies

              	
                37

              
	
                Section

              	
                8.8.

              	
                Certain
                  Limitations

              	
                38

              
	
                Section

              	
                8.9.

              	
                Knowledge

              	39
	 	 	 
	
                ARTICLE
                  IX

              	
                Miscellaneous
                  Provisions

              	
                39

              
	
                Section

              	
                9.1.

              	
                Entire
                  Agreement; Assignment; Amendments and Waivers

              	
                39

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

      
        	
                Section

              	
                9.2.

              	
                Validity

              	
                40

              
	
                Section

              	
                9.3.

              	
                Notices

              	
                40

              
	
                Section

              	
                9.4.

              	
                Governing
                  Law, Forum Selection, Jurisdiction

              	
                41

              
	
                Section

              	
                9.5.

              	
                Waiver
                  of Jury Trial

              	
                42

              
	
                Section

              	
                9.6.

              	
                Descriptive
                  Headings

              	
                42

              
	
                Section

              	
                9.7.

              	
                Parties
                  in Interest

              	
                42

              
	
                Section

              	
                9.8.

              	
                Specific
                  Performance

              	
                42

              
	
                Section

              	
                9.9.

              	
                Disclosure
                  Generally

              	
                42

              
	
                Section

              	
                9.10.

              	
                Counterparts

              	
                43

              
	
                Section

              	
                9.11.

              	
                Attorney's
                  Fees

              	
                43

              
	
                Section

              	
                9.12.

              	
                Interpretation

              	
                43

              
	 	 	 	 
	 	 	 	 
	
                Appendix
                  A.

              	
                Certain
                  Definitions

              	
                A-1

              

      

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    STOCK
      PURCHASE AGREEMENT

    

    This
      Stock
      Purchase Agreement
      (the
“Agreement”), dated as of May 15, 2008, is made by and between AEROFLEX
      INCORPORATED, a Delaware corporation (“Seller”), And STAR DYNAMICS HOLDINGS, LLC
      AND TAZ VENTURES, LLC, each a limited liability company under the laws of the
      State of Florida (hereinafter jointly and severally referred to herein as
“Buyer”).

    

    R
      E C I T A L S

    

    A.
       Aeroflex
      Powell, Inc., an Ohio corporation (“Powell” or the “Acquired Company”), is
      engaged in the development, manufacture, sale and service of certain radar
      systems (the "Radar Business").

    

    B.
       Powell
      was formerly engaged in certain other product lines and businesses including
      synthetic test systems and broadband systems (the “Non-Radar
      Businesses”).

    

    C.
       Prior
      to
      the execution of this Agreement, pursuant to a certain Assignment and Assumption
      Agreement, Powell transferred to Aeroflex High Speed Test Solutions, Inc.
      (“Solutions”), substantially all of its assets and liabilities relating to, and
      those of its employees (the “Retained Employees”) involved with, the Non-Radar
      Businesses as well as all such other assets not dedicated to the Radar Business
      (the “Powell Non-Radar Business Transfer”), and to the Seller, by way of a
      dividend or otherwise in respect of the inter-company indebtedness owed by
      Powell to the Seller (i) all of the Licensed Technology as described in the
      License Agreement (the “Radar IP Transfer”) and (ii) all of the issued and
      outstanding common stock of Solutions.

    

    D. 
      Seller
      is the sole and legal beneficial owner of 500 shares of the capital stock of
      Powell (the “Shares”), which Shares constitute all of the authorized, issued and
      outstanding capital stock of Powell. 

    

    E. Seller
      desires to sell the Shares to Buyer and Buyer desires to purchase the Shares
      from Seller for the consideration and on the terms set forth in this Agreement.
      

    

    F. Certain
      capitalized terms used in this Agreement shall have the meaning ascribed to
      such
      terms in Appendix A attached to this Agreement.

    

    A
      G R E E M E N TS

    

    In
      consideration of the mutual representations, warranties, covenants, agreements
      and conditions contained herein and in order to set forth the terms and
      conditions of the sale of the Shares (the “Transaction”) and the manner of
      effecting the Transaction, the parties hereto agree as follows:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      I

    Sale
      and Transfer of Shares; Closing

    

    Section
      1.1. Shares.
      Subject
      to the terms and conditions of this Agreement, at the Closing, Seller will
      sell
      and transfer the Shares to Buyer, and Buyer will purchase the Shares from
      Seller.

    

    Section
      1.2. Purchase
      Price.
      The
      purchase price to be paid by Buyer for the Shares shall be $750,000 USD (the
      “Purchase Price”). The Purchase Price shall be paid at the Closing by wire
      transfer in immediately available funds to an account designated in writing
      by
      Seller no less than two (2) days prior to the Closing. 

    

    Section
      1.3. Closing.
      The
      consummation of the Transaction (the “Closing”) shall take place simultaneously
      with the execution of this Agreement in the offices of Moomjian, Waite, Wactlar
      & Coleman, LLP, 100 Jericho Quadrangle, Jericho, New York (the date on which
      the Closing takes place being referred to as the “Closing Date”). All actions
      scheduled in this Agreement for the Closing Date shall be deemed to occur
      simultaneously. For federal income tax purposes the Closing shall be deemed
      to
      be effective at 11:59 p.m. Eastern time on the Closing Date.

     

    ARTICLE
      II

    Representations
      and Warranties of Seller

    

    Seller
      represents and warrants to Buyer as of the date hereof (except as otherwise
      expressly indicated) as follows:

    

    Section
      2.1. Organization;
      Power. 

    

    (a) The
      Acquired Company is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Ohio. 

    

    (b) The
      Acquired Company has all requisite corporate power and authority to own or
      use
      or lease its properties and assets that it owns or uses or leases and to carry
      on its business as it is now being conducted. The Acquired Company has all
      requisite power and authority to enter into, execute and deliver this Agreement
      and to consummate the Transaction.

    

    (c) The
      Acquired Company is duly qualified or licensed and in good standing in each
      jurisdiction where the nature of the activities conducted by it or the character
      of the property or assets owned, leased or operated by it makes such
      qualification or licensing necessary, except where the failure to be so
      qualified would not, individually or in the aggregate, have a Material Adverse
      Effect. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Section
      2.2 Capitalization.
      

    

    (a) The
      authorized capital stock of the Acquired Company is 500 shares of common stock,
      of which 500 shares are issued and outstanding, and comprise the Shares as
      defined in the Preamble. All of the Shares have been duly authorized and validly
      issued in accordance with Applicable Law, are fully paid and non-assessable,
      and
      have not been issued in violation of the certificate or articles of
      incorporation and bylaws of the Acquired Company or the preemptive rights of
      any
      Person.

    

    (b) Neither
      Seller nor the Acquired Company is a party to any outstanding subscriptions,
      contracts to purchase capital stock or other securities, conversion privileges,
      options, warrants or rights of any kind, with respect to the purchase, sale
      or
      voting of any securities of the Acquired Company or of the Shares.

    

    Section
      2.3. Authority;
      No Violation.

    

    (a) The
      execution and delivery of this Agreement and the Related Agreements and the
      consummation of the Transaction have been duly and validly authorized by all
      necessary corporate or other action on the part of Seller and the Acquired
      Company. This Agreement and the Related Agreements are valid and binding
      obligations of Seller, enforceable against Seller in accordance with their
      terms, except as the enforcement may be limited by bankruptcy, insolvency,
      reorganization, moratorium, fraudulent transfer or other laws relating to or
      limiting creditors’ rights generally or by general principles of equity,
      regardless of whether such enforceability is considered in a proceeding at
      law
      or in equity. 

    

    (b) Neither
      the execution nor delivery of this Agreement, nor the consummation of the
      Transaction, nor compliance by Seller with any of the provisions of the
      Agreement, will:

    

    (i) conflict
      with, violate, result in a breach of, constitute a default (or an event that,
      with notice or lapse of time, or both, would constitute a default) under, or
      give rise to any right of termination, cancellation or acceleration under any
      provision of the articles of incorporation or bylaws of Seller, or any of the
      terms, conditions or provisions of any Material Contract (assuming receipt
      of
      any necessary consents);

    

    (ii) violate
      any Order to which the Seller or the Acquired Company is subject;
      or

    

    (iii) to
      Seller’s Knowledge, violate any Applicable Law to which the Seller or the
      Acquired Company is subject.

    

    Section
      2.4. Ownership
      of Shares. 

    

    Seller
      has good and marketable title to the Shares, free and clear of any Liens, except
      Permitted Liens, and has the right, power and authority to sell and transfer
      the
      Shares to Buyer in the manner provided herein. The Shares are not subject to
      any
      voting trust or voting agreement, nor is any proxy in effect with respect
      thereto. At Closing, Seller shall transfer to Buyer good and marketable title
      to
      the Shares free and clear of any Liens except Permitted Liens. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    Section
      2.5. Consents
      and Approvals. 

    

    Except
      as
      set forth in Schedule 2.5, the execution, delivery and performance of this
      Agreement by Seller, and the consummation of the Transaction, will not require
      any notice to, action of, filing with, or consent, authorization, order or
      approval from, any Governmental Authority, or any third party under any Material
      Contract.

    

    Section
      2.6. No
      Sales or Options.

    

    Except
      for this Agreement, since the Latest Balance Sheet Date, the Acquired Company
      has not entered into any agreement for the sale of, or given any Person an
      option to purchase, all or any part of the assets of the Radar Business, other
      than sales of inventory items in the Ordinary Course of Business, sales of
      supplies in the Ordinary Course of Business, or the disposal of machinery or
      equipment in the Ordinary Course of Business. 

    

    Section
      2.7. Financial
      Statements. 

    

    (a) Attached
      as Schedule 2.7 are unaudited historical Financial Statements relating to
      the Radar Business prior to the Radar IP Transfer. The Financial Statements
      (i) were prepared in a manner consistent with Past Practice, (ii) the
      balance sheets included therein, respectively, present fairly in all material
      respects the financial condition of the Radar Business, as at the dates referred
      to therein, and (iii) the income statements included therein, respectively,
      present fairly in all material respects the results of operations of the Radar
      Business, for the periods referred to therein.

    

    (b) Other
      than to the extent (i) disclosed on Schedule 2.7(b), (ii) reflected or reserved
      against in the balance sheet as at February 29, 2008 (the “February 29, 2008
      Balance Sheet”), or (iii) disclosed elsewhere in this Agreement or any other
      Schedule hereto, there are no material Liabilities or obligations of the Radar
      Business except Liabilities and obligations incurred in the Ordinary Course
      of
      the Radar Business subsequent to February 29, 2008 (the “Latest Balance Sheet
      Date”). 

    

    (c) The
      financial records of the Acquired Company with respect to the Radar Business
      are
      complete and accurate in all material respects and have been properly maintained
      in all material respects in accordance with Applicable Law.

     

    (d)
       The
      books
      and stock records of the Acquired Company are complete and accurate in all
      material respects and have been maintained in accordance with sound business
      practices.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section
      2.8. Litigation.
      

    

    There
      is
      neither any suit, claim, action or proceeding pending by or against the Acquired
      Company before any Governmental Authority, nor to the Knowledge of Seller,
      is
      any such suit, claim, action, proceeding or investigation threatened against
      Seller before any Governmental Authority, in each case, (i) that individually,
      or in the aggregate, would (A) prevent, hinder or delay the execution and
      performance of this Agreement or the consummation of the transactions
      contemplated hereby or (B) result in this Agreement being declared unlawful
      or
      cause the rescission of any of the transactions contemplated hereby or (ii)
      that
      individually, or in the aggregate, if determined adversely, would be reasonably
      likely to have a Material Adverse Effect on the Radar Business. There are no
      Orders outstanding against the Acquired Company that have had or would be
      reasonably likely to have a Material Adverse Effect on the Radar
      Business.

    

    Section
      2.9. Absence
      of Changes or Events. 

    

    Except
      for the consummation of the Powell Non-Radar Business Transfer and the Radar
      IP
      Transfer or as otherwise described elsewhere in this Agreement or any schedule
      thereto, since the Latest Balance Sheet Date, the Acquired Company and,
      particularly, the Radar Business, have been conducted in the Ordinary Course,
      there has not been any event, circumstance or condition that has occurred that
      has caused or is reasonably likely to cause a Material Adverse Effect to the
      Radar Business, and there otherwise has been no change in the condition of
      the
      Radar Business other than changes in the Ordinary Course, none of which singly,
      and no combination of which, in the aggregate, have caused a Material Adverse
      Effect on the Radar Business. 

    

    Section
      2.10. Compliance
      with Laws: No Default. 

    

    The
      Acquired Company (i) is not in violation of any Order to which the Acquired
      Company is subject, and (ii) is not, and has not received written notice
      that the Acquired Company is, in violation of any Applicable Law to which the
      Acquired Company is subject.

    

    Section
      2.11. Real
      Property.

    

    (a) Schedule
      2.11(a) contains a list of all Leased Real Property of the Acquired Company
      which, except as set forth in Schedule 2.11(a), is used exclusively for or
      in
      connection with the Radar Business. A true copy of all leases (and all
      amendments thereto presently in effect) for the Leased Real Property have been
      delivered to Buyer.

    

    (b)
       All
      of
      the leases for Leased Real Property are valid and binding and in full force
      and
      effect.

    

    (c) The
      Acquired Company enjoys quiet possession under the leases for the Leased Real
      Property which are enforceable against the lessor, as applicable, in accordance
      with their terms. There is no default under any of the leases for the Leased
      Real Property on the part of the Acquired Company or, to Seller’s Knowledge, on
      the part of any other party thereto. To Seller’s Knowledge, no condition exists
      and no event has occurred which, with or without the passage of time or the
      giving of notice or both, would reasonably be expected to constitute such
      default.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (d) Schedule
      2.11 (d) sets forth a description of the real property owned by the Acquired
      Company which is used exclusively for or in connection with the Radar Business
      (the “Owned Real Property”).

    

    (e) A
      true
      copy of the deed for the Owned Real Property has been delivered to the Buyer.
      The Acquired Company is in actual possession of the Owned Real Property and
      has
      good, indefeasible and marketable title in fee simple to, and as of the Closing
      will own the Owned Real Property, free and clear of any Liens or exceptions
      other than (i) Permitted Liens, (ii) those listed on Schedule 2.11 (e), (iii)
      real property Taxes, if any, affecting the Owned Real Property only, not yet
      due
      and payable, and (iv) the state of facts shown on the latest survey as of the
      date of such survey, (v) Liens or exceptions which do not adversely impair
      materially the use or value of the Owned Real Property.

    

    Section
      2.12. Material
      Contracts. 

    

    Schedule
      2.12 sets forth a list of all Material Contracts of the Acquired Company that
      relate to the Radar Business. Seller has made available to Buyer true and
      complete copies of all such Material Contracts. Except where the same would
      not
      have a Material Adverse Effect, each such Material Contract is in full force
      and
      effect on the date hereof, and is legal, valid, binding and enforceable against
      the Acquired Company in accordance with its terms, except to the extent such
      enforceability may be limited by applicable bankruptcy or other laws affecting
      creditors' rights, or by general equity principles. Except as set forth on
      Schedule 2.12, the Acquired Company has performed all obligations required
      to be
      performed by it to date under, and is not in default in respect of, any such
      Material Contract, and no event has occurred which, with due notice or lapse
      of
      time or both, would constitute such a default, except where such a default
      would
      not have a Material Adverse Effect on the Radar Business. To the best of
      Seller's Knowledge, no other party to any such Material Contract is in default
      in respect thereto and no event has occurred which, with due notice or lapse
      of
      time or both would constitute such a default, except where such a default would
      not have a Material Adverse Effect. The Acquired Company has not received notice
      of the pending or threatened cancellation, revocation or termination of any
      of
      the Material Contracts, nor, to the Knowledge of the Seller, are there any
      facts
      or circumstances which are reasonably likely to result in any such cancellation,
      revocation or termination. Except as set forth in Schedule 2.12, the Acquired
      Company has not assigned, delegated or otherwise transferred any of its rights
      or obligations under or with respect to any Material Contract that relates
      to
      the Radar Business. 

    

    Section
      2.13. Licenses
      and Permits. 

    

    Except
      as
      listed in Schedule 2.13, the Acquired Company owns, holds, possesses or
      lawfully uses all licenses, permits, certificates, approvals, resolutions,
      consents and other authorizations (“Permits”) which are necessary in order to
      conduct the Radar Business as it is currently being conducted, except where
      the
      failure to have such Permits will not have a Material Adverse Effect on the
      Radar Business.

     

    
      
        
        

      

      
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    Section
      2.14. Intellectual
      Property and Information Technology. 

    

    (a) 
      After
      the consummation of the Radar IP Transfer, all of the remaining Radar
      Intellectual Property will be owned by the Acquired Company, free and clear
      of
      any and all Liens, except for Permitted Liens. Except for the license by Seller
      of the Licensed Technology to the Acquired Company pursuant to the License
      Agreement, no licenses for the use of any of the Radar Intellectual Property
      will have been granted to any third parties other than those that may have
      been
      given in the Ordinary Course to end-users of the Acquired Company’s products.
      None of the Radar Intellectual Property is subject to any outstanding Order.
      The
      Radar Intellectual Property, together with the Licensed Technology is sufficient
      and appropriate for the conduct of Radar Business as currently conducted and
      as
      conducted prior to the Radar IP Transfer and the Powell Non-Radar Business
      Transfer. To the Knowledge of Seller, the Radar Intellectual Property currently
      used in or in connection with the Radar Business does not infringe on, or
      conflict with, the intellectual property rights of any Person. No claim is
      pending or, to the Knowledge of Seller, is threatened, to the effect that any
      such infringement, interference, or misappropriation has occurred. To the
      Knowledge of Seller, there is no infringement or unlawful or unauthorized use
      by
      any Persons of any of the Radar Intellectual Property material to the conduct
      of
      the Radar Business. All required filings, if any, have been made, and all
      registration, renewal and other fees payable in respect of the registered Radar
      Intellectual Property, if any, have been paid except where the failure to do
      so
      will not have a Material Adverse Effect on the Radar Business.

    

    (b) All
      Information Technology currently used by or required to carry on the Radar
      Business is either owned by, or validly leased or licensed to, the Acquired
      Company or the Seller and its Affiliates.

    

    Section
      2.15. Environmental
      Matters.

    

    Except
      as
      described in Schedule 2.15: 

    

    (a) The
      Owned
      Real Property and the Leased Real Property are and have been in material
      compliance with all Environmental Laws, while owned, leased or operated by
      the
      Acquired Company; 

    

    (b) The
      Radar
      Business has been operated in material compliance with all Environmental Laws;
      

    

    (c) None
      of
      the assets and properties which have been or are now owned, leased or operated
      by the Acquired Company in connection with the Radar Business, have been used
      by
      the Acquired Company for the generation, storage, manufacture, use,
      transportation, disposal or treatment of Hazardous Materials, except in material
      compliance with Environmental Laws; 

    

    (d) To
      the
      Knowledge of Seller, there has not been a Hazardous Discharge on, in, under,
      from or to the Leased Real Property while the Acquired Company has been in
      possession thereof or on, in, under, from or to the Owned Real Property while
      owned by the Acquired Company; and

     

    
      
        
        

      

      
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    (e) 
      There
      are no Environmental Actions currently pending, or, to the Knowledge of Seller,
      threatened, against the Acquired Company, nor, to the Knowledge of Seller,
      any
      factual basis therefor.

     

    Section
      2.16. Labor
      Relations; Employees.

    

    (a) Except
      as
      described in Schedule 2.16(a):

    

    (i) the
      Acquired Company is not party to any collective bargaining agreement with
      respect to its work force; 

    

    (ii) no
      employee strike, work stoppage or lock-out is pending or, to Seller’s Knowledge,
      threatened against the Acquired Company; 

    

    (iii) no
      unfair
      labor practice charge or complaint is pending against the Acquired Company,
      or
      to Seller’s Knowledge, threatened;

    

    (iv) no
      collective bargaining agreement is being negotiated or is subject to negotiation
      or renegotiation by the Acquired Company with respect to those employees of
      the
      Acquired Company employed in the Radar Business (the “Radar
      Employees”);

    

    (v) no
      action, suit or complaint, by or before any Governmental Authority has been
      brought against the Acquired Company by or on behalf of any employee of the
      Acquired Company and is pending or, to Seller’s Knowledge, threatened;
      and

    

    (vi) the
      Acquired Company is in material compliance with Applicable Law with respect
      to
      the employment of individuals by, or the employment practices or work conditions
      of, the Acquired Company or their respective terms and conditions of employment,
      wages and hours.

    

    (b) 
      Except
      as set forth in Schedule 2.16(b): (i) each employee of the Acquired Company
      is employed on an at-will basis; and (ii) none of the Radar Employees of
      the Acquired Company has notified the Acquired Company that he or she plans
      to
      terminate his or her status as an employee of the Acquired Company (including
      upon or by reason of the consummation of the transactions contemplated hereby)
      and, to the Knowledge of the Seller, no such employee plans to do
      so.

    

    (c) Seller
      has provided Buyer with a true, complete and correct list of (i) all of the
      Radar Employees of the Acquired Company as of two (2) business days prior to
      the
      Closing Date, (ii) the base compensation and any bonus compensation
      received by each such employee in the immediately preceding fiscal year of
      the
      Acquired Company, (iii) current base compensation (or hourly rates) of each
      such employee and any bonuses paid or scheduled to be paid to any such employee
      since the end of the immediately preceding fiscal year of the Acquired Company,
      (iv) the current titles and the number of years of continuous service of
      each such employee, and (v) the unused and accrued vacation and personal days
      entitlements, and, as of the Latest Balance Sheet Date, deferred compensation
      owed to such employee.

     

    
      
        
        

      

      
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    Section
      2.17. Employee
      Benefit Plans. 

    

    (a)
       All
      Seller Employee Benefit Plans applicable to employees of the Acquired Company
      are listed in Schedule 2.17(a). Except as listed in Schedule 2.17(a), no
      Employee Benefit Plans are sponsored or maintained by the Acquired Company.
      All
      Employee Benefit Plans have been maintained and operated substantially in
      accordance with both their terms and the requirements of Applicable Law,
      including, without limitation, ERISA and the Code. All contributions required
      to
      be made to Employee Benefit Plans have been made. Seller, as and to the extent
      requested by Buyer, has made available to Buyer an accurate and complete
      description of each Employee Benefit Plan.

    

    (b) Each
      Seller Employee Pension Benefit Plan which is intended to be “qualified” within
      the meaning of Section 401(a) of the Code has been determined to be so qualified
      by the Internal Revenue Service. There are no actions, suits or other claims
      pending with respect to any Employee Benefit Plan listed on Schedule 2.17(a)
      as
      being sponsored by the Acquired Company, other than routine claims for benefits,
      qualified domestic relations orders (as defined in ERISA Section 206(d)) and
      qualified medical child support orders (as defined in ERISA Section 609).

     

    Section
      2.18. Tax
      Matters. 

    

    (a) Except
      as disclosed in Schedule 2.18(a): 

    

    (i) Seller
      and/or the Acquired Company have timely filed all federal income and other
      Tax
      Returns that it or they were required to file with respect to the Acquired
      Company. All such Tax Returns were correct and complete. All Taxes shown on
      such
      Tax Returns have been or will be paid, or are being contested in good faith.
      The
      Acquired Company is not currently the beneficiary of any extension of time
      within which to file any material Tax Return;

    

    (ii) There
      is
      no dispute or claim concerning any Tax liability of the Acquired Company
      asserted by any Governmental Authority in writing; and

     

    (iii) The
      Acquired Company has not waived any statute of limitations in respect of Taxes
      or agreed to any extension of time with respect to a Tax assessment or
      deficiency.

    

    (b) Schedule
      2.18(b) lists all federal, state, local, and foreign Tax Returns filed with
      respect to the Acquired Company for Taxable Periods ended on or after December
      31, 2006, indicates those Tax Returns that have been audited, and indicates
      those Tax Returns that currently are the subject of audit. Seller has made
      available to the Buyer correct and complete copies of all such federal, state,
      and local Tax Returns, examination reports, and statements of deficiencies
      assessed against, or agreed to by the Acquired Company since December 31,
      2006. 

     

    
      
        
        

      

      
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    Section
      2.19. Subsidiaries.
      

    

    The
      Acquired Company currently has no Subsidiaries.

    

    Section
      2.20. Brokers’
      or Finders’ Fee. 

    

    Except
      as
      set forth on Schedule 2.20, no agent, broker, investment banker or other person
      or firm acting on behalf of Seller, the Acquired Company, or any of their
      respective directors, officers or agents, or under the authority of any of
      them,
      is or will be entitled to any broker’s or finder’s fee or any other commission
      or similar fee, directly or indirectly, from Seller or the Acquired Company,
      in
      connection with the Transaction.

    

    Section
      2.21. Inventory.
      

    

    All
      of
      the inventory of the Radar Business on hand as of the Closing generally is
      of a
      quantity and quality usable and saleable in the Ordinary Course of Business
      of
      the Radar Business, subject to the applicable reserve on the February 29, 2008
      Balance Sheet. Since the Latest Balance Sheet Date, all additions to, and
      dispositions of, inventories were made consistent with Past Practice in the
      Ordinary Course of the Radar Business. The reserve reflected on the February
      29,
      2008 Balance Sheet for excess and obsolete inventory and for physical inventory
      losses of the Radar Business was established in a manner consistent with Past
      Practice.

    

    Section
      2.22. Title
      to and Condition of Assets. 

    

    The
      Acquired Company has good, valid and marketable title to all of the assets
      relating to the Radar Business owned by it, free and clear of all Liens except
      Permitted Liens. Except as set forth in Schedule 2.22, the Acquired Company
      owns
      or has the right to use all of the assets used to carry on the Radar Business
      as
      it is presently conducted and as it was conducted immediately prior to the
      Radar
      IP Transfer and the Powell Non-Radar Business Transfer. Schedule 2.22 lists
      or
      otherwise describes all of the material assets and properties owned, leased
      or
      licensed by the Acquired Company for or in connection with the Radar Business.
      As currently used by the Acquired Company in the Ordinary Course of the Radar
      Business, all of said assets are in a good state of maintenance, repair and
      operating condition, ordinary wear and tear excepted.

    

    Section
      2.23. Affiliate
      Transactions. 

    

    (a) With
      regard to the Radar Business, except for the License Agreement, the Acquired
      Company is not a party to, or bound by, any contract with any of its Affiliates,
      other than on arms-length terms which are no less favorable to the Acquired
      Company than those which could be obtained with a third party which is not
      an
      Affiliate of the Acquired Company and other than as set forth in this Agreement
      or any Schedule hereto. Copies of all such contracts with Affiliates, if any,
      have been provided to Buyer and are listed on Schedule 2.23(a).

    

    (b) Except
      for trade payables and trade receivables, all inter-company accounts providing
      for payment of any amount between Seller or any of its Affiliates (other than
      the Acquired Company), on the one hand, and the Acquired Company, on the other
      hand, have been settled or assumed prior to Closing. Except for transition
      arrangements pursuant to the Transition Services Agreement, as of the Closing
      there will be no agreements between the Seller or any of its Affiliates (other
      than the Acquired Company), on the one hand, and the Acquired Company on the
      other hand.

     

    
      
        
        

      

      
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    Section
      2.24. Foreign
      Corrupt Practices Act. 

    

    The
      Acquired Company has not received written notice, nor does Seller have Knowledge
      that, the Acquired Company has made any payments to the representatives of
      any
      foreign Governmental Authority for the purpose of keeping or obtaining business
      in violation of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
      or
      other comparable Applicable Law.

    

    Section
      2.25. Warranties.
      

    

    Except
      to
      the extent adequately covered by applicable reserves recorded on the February
      29, 2008 Balance Sheet, if any, to the Knowledge of Seller, with regard to
      the
      Radar Business, other than in the Ordinary Course, there are no product or
      service defects or deficiencies or any incidents that have occurred prior to
      the
      Closing Date which are reasonably likely to result in any material Losses,
      claims, damages or Liabilities based upon the breach of any express or implied
      warranties given in connection with such products sold and services provided
      by
      the Radar Business. All known product or service defect or warranty claims
      and
      those of which Seller has knowledge are threatened, are set forth on Schedule
      2.25.

    

    Section
      2.26. Customers and Suppliers

    

    (a) Schedule
      2.26(a) lists the five largest customers by dollar volume of the Acquired
      Company during the twelve (12) month period ended February 29, 2008, and all
      suppliers whose sales to the Acquired Company amounted to more than $100,000
      during the twelve (12) month period ended February 29, 2008. 

    

    (b) Except
      as
      set forth on Schedule 2.26(b), there exists no actual or, to the Knowledge
      of
      the Seller, threatened, termination or cancellation of, or any materially
      adverse change in, the business relationship that any of the customers or
      suppliers identified in Section 2.26(a) has with the Acquired
      Company.

    

    Section
      2.27. Disclosure

     

    The
      representations and warranties contained in this Article II (including the
      schedules thereto) do not contain any untrue statement of a material fact or
      omit to state any material fact necessary, in light of the circumstances in
      which they were made and taking into account the express limitations set forth
      in each such representation and warranty, including, but not limited to,
      materiality, Material Adverse Effect and Knowledge, to make such representation
      and warranty not misleading.

     

    
      
        
        

      

      
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    Section
      2.28. Limitation
      of Representations and Warranties. 

    

    EXCEPT
      FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE II, SELLER
      MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY,
      EXPRESS OR IMPLIED, CONCERNING THE SHARES, OR THE BUSINESS, ASSETS OR
      LIABILITIES OF THE ACQUIRED COMPANY OR THE RADAR BUSINESS. BUYER ACKNOWLEDGES
      THAT EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT SELLER HAS NOT MADE, AND
      SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY EXPRESSLY
      WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY
      STATUTE OR OTHERWISE RELATING TO, AND BUYER HEREBY EXPRESSLY WAIVES AND
      RELINQUISHES ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION AGAINST SELLER
      AND
      ITS REPRESENTATIVES IN CONNECTION WITH THE ACCURACY, COMPLETENESS OR MATERIALITY
      OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) HERETOFORE
      FURNISHED TO BUYER AND ITS REPRESENTATIVES BY OR ON BEHALF OF
      SELLER.

     

    ARTICLE
      III

    Representations
      and Warranties of Buyer

    

    Buyer
      represents and warrants to Seller as of the date hereof (except as otherwise
      expressly indicated) as follows:

    

    Section
      3.1. Organization;
      Power. 

    

    (a) Each
      of
      Gorlin, LLC and Becnel, LLC is limited liability company duly organized, validly
      existing and in good standing under the laws of the State of Florida. The
      members of each of Gorlin, LLC and Becnel, LLC, and their respective equity
      ownership interests, are set forth on Schedule 3.1(a).

    

    (b) Buyer
      has
      all the requisite corporate power and authority to own, lease and operate its
      assets, to carry on its business as it is now being conducted and to enter
      into,
      execute and deliver this Agreement, to consummate the Transaction, and to comply
      with and fulfill the terms and conditions of this Agreement.

    

    (c) The
      Buyer
      is duly qualified or licensed and in good standing in each jurisdiction where
      the nature of the activities conducted by it or the character of the property
      or
      assets owned, leased or operated by it makes such qualification or licensing
      necessary, except where the failure to be so qualified would not, individually
      or in the aggregate, have a Material Adverse Effect. 

    

    Section
      3.2. Authority;
      No Violation; Etc.

    

    (a) The
      execution and delivery of this Agreement and the Related Agreements and the
      consummation of the Transaction have been duly and validly authorized by all
      necessary action on the part of Buyer. This Agreement is a valid and binding
      obligation of Buyer, enforceable against Buyer in accordance with its terms,
      except as the enforcement may be affected by bankruptcy, insolvency,
      reorganization, moratorium, fraudulent transfer or other laws relating to or
      limiting creditors’ rights generally or by general principles of equity,
      regardless of whether such enforceability is considered in a proceeding at
      law
      or in equity. 

     

    
      
        
        

      

      
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    (b) Neither
      the execution and delivery of this Agreement, nor the consummation of the
      Transaction, nor compliance by Buyer with any of the provisions of the
      Agreement, will:

    

    (i) conflict
      with, violate, result in a breach of, constitute a default (or an event that,
      with notice or lapse of time, or both, would constitute a default) under, or
      give rise to any right of termination, cancellation or acceleration under any
      provision of the articles of incorporation or bylaws of Buyer, or any of the
      terms, conditions or provisions of any note, lien, bond, mortgage, indenture,
      license, lease, contract, commitment, agreement, understanding, arrangement,
      restriction or other instrument or obligation to which Buyer is a party or
      by
      which Buyer may be bound; 

    

    (ii) violate
      any Order to which the Buyer or its assets is subject; or

    

    (iii) to
      Buyer’s Knowledge, violate any Applicable Law to which the Buyer or its assets
      is subject.

    

    Section
      3.3. Consents
      and Approvals. 

    

    Except
      as
      set forth on Schedule 3.3, the execution, delivery and performance of this
      Agreement by Buyer, and the consummation of the Transaction, will not require
      any notice to, action of, filing with or consent, authorization, order or
      approval from, any Governmental Authority or any other third
      Person.

    

    Section
      3.4. Litigation.
      

    

    There
      is
      no suit, claim, action, proceeding or investigation pending or, to the Knowledge
      of Buyer, threatened before any Governmental Authority, in each case, (i) that
      questions the validity of this Agreement or any Related Agreements or any action
      to be taken by Buyer in connection with this Agreement or any Related
      Agreements, (ii) that, individually or in the aggregate, would (A) have a
      Material Adverse Effect on Buyer, (B) prevent, hinder or delay the execution
      and
      performance of this Agreement or the consummation of the transactions
      contemplated hereby or (C) result in this Agreement being declared unlawful
      or
      cause the rescission of any of the transactions contemplated hereby. There
      are
      no Orders against Buyer that have had or would have a Material Adverse Effect
      on
      Buyer.

     

    Section
      3.5.  Buyer’s
      Sophistication. 

    

    In
      connection with its decision to purchase the Shares, Buyer, on behalf of itself
      and its Affiliates and related parties, acknowledges, understands and agrees
      that Buyer and its members are sophisticated parties with such knowledge and
      experience in business matters that they appreciate the merits and risks of
      purchasing the Shares and consummating the Transaction on the terms and
      conditions set forth herein.

     

    
      
        
        

      

      
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    Section
      3.6.  
      Due Diligence; Access to Information; Non-Reliance. 

    

    Buyer
      and
      its representatives have reviewed or otherwise had full access to, all of the
      books, records, documents, contracts, properties, assets, and financial and
      other information and personnel of or pertaining to the Acquired Company and
      the
      Radar Business to the extent that Buyer deemed necessary in order to evaluate
      the same and make a considered determination to purchase the Shares and
      consummate this Transaction on the terms and conditions set forth herein. In
      electing to enter into this Agreement and consummate the Transaction, Buyer
      is
      neither relying upon, nor has it been induced by, any representations,
      warranties, forecasts, projections, statements and/or promises or assurances
      of
      any kind not expressly set forth in this Agreement or in any of the Related
      Agreements, and with respect to those representations and warranties set forth
      in Article II hereof, Buyer is relying upon only those which the Buyer does
      not
      actually know to be untrue in any material respect as of the Closing
      Date.

    

    Section
      3.7. Investment
      Intent. 

    

    Buyer
      is
      acquiring the Shares for its own account, for investment purposes only and
      not
      with a view to, or for sale or resale in connection with, any public
      distribution thereof or with any present intention of selling, distributing
      or
      otherwise disposing of the Shares. Buyer is an “accredited investor” as that
      term is defined in Rule 501 of Regulation D promulgated under the
      Securities Act of 1933, as amended.

    

    Section
      3.8. Legend.
      

    

    Buyer
      understands that the Shares are characterized as “restricted securities” under
      the federal securities laws inasmuch as they are being acquired from Seller
      in a
      transaction not involving a public offering and that under such laws and
      applicable regulations such securities may be resold without registration under
      the Securities Act of 1933, as amended, only in certain limited circumstances.
      The Buyer acknowledges and agrees that the certificates evidencing the Shares
      shall bear a restrictive legend in substantially the following
      form:

    

    “THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED
      FOR
      INVESTMENT ONLY AND MAY NOT BE TRANSFERRED, ASSIGNED OR SOLD EXCEPT AS PERMITTED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
      LAWS, PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM.” 

    

    Section
      3.9. Brokers’
      or Finders’ Fees. 

    

    No
      agent,
      broker, investment banker or other Person acting on behalf of Buyer or its
      directors, members, officers or agents, or under the authority of any of them,
      is or will be entitled to any broker’s or finder’s fee or any other commission
      or similar fee, directly or indirectly, from Seller in connection with the
      Transaction.

     

    
      
        
        

      

      
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    Section
      3.10. Radar Business Receivables.

    

    Buyer
      acknowledges that all of the receivables of the Radar Business except for those
      created on and after May 3, 2008 have been transferred to Solutions prior to
      the
      Closing Date pursuant to the Assignment and Assumption Agreement.

    

    

    Section
      3.11 Disclosure

     

    The
      representations and warranties contained in this Article III (including the
      schedules thereto) do not contain any untrue statement of a material fact or
      omit to state any material fact necessary, in light of the circumstances in
      which they were made and taking into account the express limitations set forth
      in each such representation and warranty, including, but not limited to,
      materiality, Material Adverse Effect and knowledge, to make such representation
      and warranty not misleading.

     

    Section
      3.12. Limitation
      of Representations and Warranties. 

    

    EXCEPT
      FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE III, BUYER
      MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY,
      EXPRESS OR IMPLIED. SELLER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY PROVIDED IN
      THIS AGREEMENT BUYER HAS NOT MADE, AND BUYER HEREBY EXPRESSLY DISCLAIMS AND
      NEGATES, AND SELLER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY,
      EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO, AND SELLER
      HEREBY EXPRESSLY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS, CLAIMS AND CAUSES
      OF ACTION AGAINST BUYER AND ITS REPRESENTATIVES IN CONNECTION WITH THE ACCURACY,
      COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN
      OR ORAL) HERETOFORE FURNISHED TO SELLER AND ITS REPRESENTATIVES BY OR ON BEHALF
      OF BUYER.

     

    ARTICLE
      IV

    (Intentionally
      Omitted)

     

    
      
        
        

      

      
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    ARTICLE
      V

    Additional
      Covenants and Agreements

    

    Section
      5.1. Confidentiality;
      Non-Disparagement.

    

    (a) 
       (i) The
      Seller acknowledges that it has had access to, and use of, Confidential
      Information of the Radar Business prior to the Closing. The Seller covenants
      that, without written authorization from the Acquired Company, it shall not
      at
      any time hereafter, directly or indirectly, use for its own purpose or for
      the
      benefit of any Person other than the Acquired Company, any of such Confidential
      Information, or disclose any of such Confidential Information to any Person,
      provided,
      however,
      Seller
      and its Affiliates (other than the Acquired Company) shall be entitled to use
      any of such Confidential Information that they are currently using or have
      used
      at any time in the past with respect to any product currently being made or
      made
      at any time during the twelve month period immediately prior to the Closing
      (including any future version of any such product) by the Seller or any of
      its
      Affiliates (other than the Acquired Company) or any service currently being
      provided or provided at any time during the twelve month period immediately
      prior to the Closing by the Seller or any of its Affiliates (other than the
      Acquired Company).

     

    (ii)
      The
      Buyer acknowledges that certain of the Radar Employees have had access to,
      and
      use of, Confidential Information of the Seller and the Non-Radar Businesses
      prior to the Closing. The Buyer covenants that, without written authorization
      from the Seller or the Non-Radar Businesses, neither it nor the Acquired Company
      shall at any time hereafter, directly or indirectly, use for their own purpose
      or for the benefit of any Person other than the Seller and the Non-Radar
      Businesses, any of such Confidential Information, or disclose any of such
      Confidential Information to any Person, provided,
      however,
      the
      Acquired Company (and Buyer) shall be entitled to use any of such Confidential
      Information that the Radar Business is currently using or has used at any time
      in the past with respect to any product currently being made or made at any
      time
      during the twelve month period immediately prior to the Closing (including
      any
      future version of any such product) by the Radar Business or any service
      currently being provided or provided at any time during the twelve month period
      immediately prior to the Closing by the Radar Business.

    

    (b) Nothing
      herein shall prevent any disclosure required by Applicable Law or any Order
      of a
      Governmental Authority, provided that the Party requested to make such
      disclosure (the “Disclosing Party”), prior to any such disclosure, shall give
      the other Party (the “Non-Disclosing Party”) prompt notice of any such
      requirement, shall cooperate with the Non-Disclosing Party in obtaining a
      protective order or other means of protecting the confidentiality of the
      Confidential Information at the Non-Disclosing Party’s cost, and shall disclose
      only that Confidential Information that is legally required to be
      disclosed.

    

    (c) To
      the
      extent that the same may be appropriate, either Party shall be entitled to
      seek
      injunctive relief from any court of competent jurisdiction restraining any
      threatened or further violation of the covenant contained in this Section 5.1
      in
      addition to any other rights or remedies at law, in equity or under this
      Agreement to which such Party may be entitled.

     

    
      
        
        

      

      
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    Section
      5.2. Public
      Announcements. 

    

    The
      Parties shall consult with each other before issuing any press releases or
      public announcements on or after the Closing Date with respect to this
      Agreement, the Transactions contemplated hereby and/or the performance of the
      obligations required to be performed by either or both of them hereunder, and
      none of the Parties shall issue any other press release or make any public
      statement pertaining to this Agreement or the Transactions contemplated hereby
      prior to obtaining the other Party’s written approval, which approval shall not
      be unreasonably withheld or delayed. 

    

    Section
      5.3. Obligations
      with Respect to Employees.

    

    (a) General
      Obligation.
      Except
      as otherwise provided in Section 5.3(b) hereof, the Closing of this
      Agreement shall not be deemed to cause a termination of employment of the Radar
      Employees of the Acquired Company.

    

    (b) Employee
      Pension Benefit Plans. Effective
      as of the Closing, the Acquired Company shall cease to be a participating
      employer under all Seller Employee Pension Benefit Plans, and all Radar
      Employees shall be deemed to have incurred a termination of employment for
      all
      purposes of such plans. As of the Closing Date, all Radar Employees shall cease
      to be active participants under all Seller Employee Pension Benefit Plans and
      continued employment with the Acquired Company shall not be credited for any
      purposes of such plans. The Radar Employees shall be entitled to a distribution
      of their vested benefits from such plans, only in accordance with the terms
      of
      such plans and Applicable Law, based upon their service with Seller, its ERISA
      Affiliates and the Acquired Company on or before the Closing Date. 

    

    (c
      ) Employee
      Welfare Benefit Plans and other Plans.
      Effective as of the Closing Date, all Radar Employees shall cease to be
      participants in all Seller Employee Welfare Benefit Plans. 

     

    The
      Seller shall remain responsible for all claims covered under the Seller’s Health
      Plans that are incurred prior to the last day of the month in which the Closing
      Date occurs (the “Coverage Termination Date”) by or relating to covered Radar
      Employees and their covered spouses and covered dependents. The Acquired Company
      and Buyer shall assume, retain and otherwise be fully responsible for all claims
      by or relating to the Radar Employees and their spouses and dependents that
      (i)
      were incurred prior to the Coverage Termination Date, to the extent not covered
      by the Seller’s Health Plans and/or (ii) are incurred subsequent to the Coverage
      Termination Date. 

     

    (d) Other
      Obligations.
      Buyer
      and the Acquired Company shall assume, retain and otherwise be fully responsible
      for all liability of the Acquired Company and/or the Seller for and in respect
      of accrued but unpaid salaries, wages, vacation pay, deferred compensation,
      bonuses, commissions and sick pay of the Radar Employees.

    

    (e) Enforceability.
      This
      Section 5.3 shall survive consummation of this Agreement and the Transaction,
      is
      intended to benefit Seller, Buyer and their respective Affiliates, and shall
      be
      binding on Seller, Buyer, the Acquired Company and their respective successors
      and assigns. No one shall be considered a third party beneficiary of this
      Section 5.3 (or any related provisions of this Agreement). Accordingly, no
      one
      other than the Parties to this Agreement shall have the right to enforce the
      provisions of this Section 5.3 (or any related provisions of this Agreement)
      or
      to maintain any other legal or equitable action of any kind with respect to
      such
      provisions. 

     

    
      
        
        

      

      
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    Section
      5.4. Certain
      Costs. 

    

    In
      connection with consummating the Transaction, Buyer shall pay, when due, and
      comply with all relevant formalities relating to, any conveyance, transfer,
      sales, use, stamp, registration, notarial, recording and other similar Taxes
      and
      fees, including any penalties and interest, arising out of or in connection
      with
      the transfer of the Shares and the assets of the Acquired Company to Buyer.
      

    

    Section
      5.5. Name
      Changes of Acquired Company. 

    

    (a) No
      later
      than five (5) business days after the Closing Date, Buyer shall amend the
      certificate of incorporation, bylaws and other organizational documents of
      the
      Acquired Company to exclude any reference to “Aeroflex,” alone or in combination
      with any other words or terms, or any variation of such words or terms.
      Contemporaneously with the amendment of the organizational documents as herein
      contemplated after the Closing Date, Buyer and Acquired Company shall cease
      doing business under or utilizing as a trademark, trade name, or service mark,
      any of the foregoing names.

    

    (b) Subject
      in all respects to Section 5.11, in connection with the obligations on the
      part
      of the Buyer as set forth in subsection (a) above, Buyer and Acquired Company
      shall remove or cover, or shall have caused to be removed or covered, within
      a
      period of one (1) month after the Closing Date, the trademarks and/or trade
      names “Aeroflex” alone or in combination with any other words or terms, or any
      variation of other words or terms; or any other words or terms owned by, used
      by, or associated with Seller or its Subsidiaries and Affiliates, or any
      derivative of such name or term, from labels, containers, signs, panels, flags,
      brochures, manuals, literature, real property signage, vehicles and other
      material or matter (regardless of medium) transferred to Buyer or used in the
      business of the Acquired Company.

    

    (c) For
      the
      avoidance of doubt, except as expressly provided in this Section 5.5 and as
      otherwise may be required by Section 5.11 regarding the performance of Non-Radar
      Business Agreements after the Closing, Buyer and the Acquired Company shall
      have
      no right to use any of Seller’s trademarks, trade names or service marks.

    

    Section
      5.6. Honoring of Existing Purchase Orders. 

    

    Following
      the Closing, Seller agrees to, and agrees to cause its Affiliates (other than
      the Acquired Company) to, honor the terms of all purchase orders between the
      Acquired Company, on the one hand, and the Seller and/or any of the Seller’s
      Affiliates (other than the Acquired Company), on the other hand, relating to
      the
      Radar Business and in existence immediately prior to Closing. Any invoices
      for
      products or services issued by the Acquired Company after Closing shall be
      exclusively for the account of Acquired Company and Seller shall have no rights
      thereto.

     

    
      
        
        

      

      
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    Section
      5.7. Further Assurances. 

    

    (a) From
      and
      after the Closing, upon reasonable request of Seller or Buyer, the other Party
      shall, at its own expense, do such further acts as may be reasonably necessary
      or appropriate to carry out the transactions contemplated by this Agreement,
      including, without limitation, obtaining consents from any third party.
      Notwithstanding the foregoing, from and after the Closing, upon reasonable
      request of Buyer, Seller shall execute, acknowledge and deliver all such further
      acts, assurances, deeds, assignments, transfers, conveyances, powers of attorney
      and other instruments and papers as may be reasonably required to sell, assign,
      transfer, convey and deliver to and vest in Buyer ownership of all the Shares
      consistent with the terms of this Agreement.

    

    (b) Each
      Party recognizes that the other Party may need financial or other data with
      respect to the Shares or assets of the Acquired Company and the Acquired
      Company’s business covering several fiscal periods prior to or after the Closing
      Date in order to comply with the rules and regulations of Governmental
      Authorities. The Parties shall render reasonable cooperation to each other
      and
      their auditors to provide such information. The Party requesting assistance
      shall bear all reasonable out-of-pocket costs and expenses incurred by such
      assisting Party (excluding salaries and wages and related costs of benefits
      of
      its employees) and such assistance shall be subject to compliance by the
      requesting Party with the assisting Party’s usual requirements regarding
      security and confidential treatment of information. No Party shall be liable
      to
      any other Party for any such information or data given, or for the accuracy
      or
      completeness thereof, except concerning information covered by the
      representations and warranties contained in this Agreement.

    

    Section
      5.8. Accounting and Other Assistance. 

    

    (a) Following
      the Closing, Buyer shall assist Seller and its Subsidiaries and Affiliates,
      where such assistance is reasonably required, in the completion of the
      accounting of the Acquired Company for any period preceding the Closing and,
      in
      connection therewith, shall use its commercially reasonable efforts to assist
      Seller and its Subsidiaries in the completion of the financial statements for
      any such period prior to the Closing and any audits that may be conducted in
      connection therewith or relating thereto.

    

    (b) From
      time
      to time, as may be reasonably required, in connection with claims or actions
      brought by or against third parties based upon events or circumstances of the
      Acquired Company’s business occurring prior to the Powell Non-Radar Business
      Transfer and/or the Closing Date, duly authorized representatives of Seller
      shall, upon reasonable prior notice to Buyer, have access to the Acquired
      Company during normal business hours at mutually agreed upon times, provided
      that the operations and business of such Acquired Company is not materially
      and
      adversely affected thereby. In addition to the rights of access provided in
      this
      Section 5.8, Buyer shall, at the request of Seller, provide reasonable
      information or documents (or reasonable assistance in collecting such
      information or documents) in Buyer’s possession necessary for the prosecution or
      defense of such claims or actions at mutually agreed upon times and will use
      reasonable efforts to make Buyer’s employees available as witnesses in
      connection with such claims or actions when reasonably requested by Seller.
      Seller shall reimburse Buyer for all reasonable out-of pocket costs and expenses
      incurred by Buyer (excluding salaries and wages and related costs of benefits
      of
      its employees) in providing such assistance.

     

    
      
        
        

      

      
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    Section
      5.9. Post-Closing Tax Matters. 

    

    (a) Buyer
      agrees that it will not make any election under section 338 of the Code (whether
      under section 338(g) of the Code or under section 338(h)(10) of the Code),
      or
      any comparable election under state or local law, with respect to the
      acquisition of the Shares of the Acquired Company.

    

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

    

    (i) Taxable
      Periods Ending on or Before the Closing Date.
      Seller,
      with Buyer’s assistance, where reasonably required, to be provided by Buyer upon
      request, shall timely prepare or cause to be prepared in a manner consistent
      with Past Practice and file or cause to be filed all Tax Returns that are
      required to be filed for the Acquired Company for all Taxable Periods ending
      on
      or prior to the Closing Date that are filed after the Closing Date. Seller
      shall
      provide to Buyer copies (or, in the case where the Acquired Company was part
      of
      a group of companies filing a consolidated, unitary or combined return, pro
      forma copies) of all such Tax Returns and any amendments thereto before such
      Tax
      Returns are required to be filed. Seller shall pay, or cause to be paid, all
      such Taxes due in connection with such Tax Returns, whether shown on such Tax
      Returns or determined subsequently on audit. For
      the
      avoidance of doubt, it is understood that any tax effect resulting from the
      Powell Non-Radar Business Transfer shall be deemed to be incurred by Seller
      as
      part of its consolidated Taxex prior to the Closing Date.

    

    (ii) Taxable
      Periods Beginning Before and Ending After the Closing Date. 

    

    (A)
       Buyer
      shall timely prepare or cause to be prepared and file or cause to be filed
      any
      Tax Returns of the Acquired Company that are required to be filed for Taxable
      Periods which begin before the Closing Date and end after the Closing Date.
      Buyer shall provide to Seller copies of all such Returns and any amendments
      thereto at least thirty (30) calendar days before such Tax Returns are required
      to be filed. Seller shall notify Buyer of any proposed revisions to such Tax
      Returns within fifteen (15) calendar days after receipt of such Tax Returns
      from
      Buyer. Buyer and Seller agree to attempt to resolve in good faith any dispute
      concerning the reporting of any item on such Tax Return. In the event Buyer
      and
      Seller are unable to resolve such dispute, Buyer and Seller shall engage the
      Accounting Firm to resolve such dispute and agree that the decision of such
      firm
      shall be binding and conclusive on both Buyer and Seller. The Accounting Firm
      shall allocate its costs associated with such decision equally between the
      parties. Seller shall pay to Buyer within fifteen (15) calendar days after
      the
      later of (i) the date on which Taxes are paid with respect to such periods,
      or
      (ii) the date on which such Tax Return is filed, an amount equal to the portion
      of such Taxes that relates to the portion of such Taxable Period ending on
      the
      Closing Date to the extent such Taxes are not reflected in any reserve for
      Tax
      liability accrued on the February 29, 2008 Balance Sheet. In the event that
      the
      Taxes reflected in any such reserve for Tax liability shall exceed the portion
      of such Taxes that relates to the portion of such Taxable Period ending on
      the
      Closing Date, Buyer shall pay such excess to Seller within fifteen (15) days
      after the later of (I) the date on which Taxes are paid with respect to such
      period or (II) the date on which such Tax Return is filed. Neither the Buyer
      nor
      any of its Affiliates shall file any amended Tax Returns for any periods (or
      portion thereof) ending on or before the Closing Date for or in respect of
      the
      Acquired Company without the prior written consent of the Seller, which consent
      shall not be unreasonably withheld or unduly delayed.

     

    
      
        
        

      

      
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    (B) For
      purposes of this Section 5.9, in the case of any Taxes for a Taxable Period
      that
      includes (but does not end on) the Closing Date, the portion of such Tax that
      relates to the portion of such Taxable Period ending on the Closing Date shall
      be determined as follows:

    

    (I) In
      the
      case of any Tax based upon or related to income, receipts or payroll, the
      pre-Closing Date portion of such Tax shall be deemed equal to the amount that
      would be payable if the relevant Taxable Period ended on the Closing
      Date.

    

    (II) Real
      and
      personal property Taxes with respect to any assets of the Acquired Company
      shall
      be prorated based on the ratio of the number of days in the pre-Closing Date
      period to the number of days in the actual taxable period with respect to which
      such Tax is due. Sales and use taxes shall be deemed to accrue as property
      is
      purchased, sold, used, or transferred. All other taxes (other than those
      specified in clause (I)) shall accrue in accordance with local generally
      accepted accounting principles.

    

    (C)
       Any
      credits relating to a Taxable Period that begins before and ends after the
      Closing Date shall be taken into account as though the relevant Taxable Period
      ended on the Closing Date. 

    

    (D) All
      determinations necessary to give effect to the foregoing allocations shall
      be
      made in a manner consistent with the Prior Practice of the Acquired
      Company.

    

    (iii) Refunds
      and Tax Benefits.
      Any Tax
      refunds that are received by Buyer or the Acquired Company, and any amounts
      credited against Tax to which Buyer or the Acquired Company becomes entitled,
      that relate to Taxable Periods or portions thereof ending on or before the
      Closing Date shall be for the account of Seller, and Buyer shall pay over to
      Seller any such refund or the amount of any such credit (net of any Taxes
      imposed with respect to the receipt or accrual of such refund and interest
      and
      reasonable expenses incurred in connection with obtaining the refund) within
      fifteen (15) days after receipt or entitlement thereto. In addition, to the
      extent that a claim for refund or a proceeding results in a payment or credit
      against Tax by a taxing authority to the Buyer or the Acquired Company for
      Taxable Periods ending on the Closing Date, the Buyer shall pay such amount
      to
      Seller within fifteen (15) days after receipt or entitlement thereto. Any Tax
      refunds that are received by Seller and any amounts credited against Tax to
      which Seller becomes entitled that relate to the assets, income or activities
      of
      the Acquired Company for Taxable Periods beginning after the Closing Date shall
      be for the account of Buyer, and Seller shall pay over to Buyer any such refund
      or the amount of any such credit (net of any Taxes imposed with respect to
      the
      receipt or accrual of such refund and interest and reasonable expenses incurred
      in connection with obtaining the refund) within fifteen (15) days after receipt
      or entitlement thereto.

     

    
      
        
        

      

      
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    (iv) Audits
      and Adjustments.

    

    (A) Seller
      will conduct and control all Tax audits of Tax Returns relating to the Acquired
      Company for all periods ending on or prior to the Closing Date. Seller shall
      be
      responsible for the payment of any deficiency resulting from such audit insofar
      and to the extent provided in this Section 5.9. Buyer shall reimburse
      Seller for any payments related to such deficiencies to the extent the expected
      liability for such deficiency was reflected in any reserve for Tax liability
      accrued on the February 29, 2008 Balance Sheet.

    

    (B) If
      (I)
      any deduction from income taken by Seller or the Acquired Company for (or
      related to) periods ending on or prior to the Closing Date is ultimately
      disallowed or the income for tax purposes of Seller or the Acquired Company
      is
      otherwise increased on audit by the Internal Revenue Service and (II) Buyer
      or
      the Acquired Company may realize either increased deductions or a reduction
      in
      gross income for or in periods ending subsequent to the Closing Date as a direct
      or indirect result of such action by the Internal Revenue Service, then Buyer
      shall reimburse Seller for the amount of any Tax Benefit. Such sum shall be
      paid
      to Seller within thirty (30) days of the realization by Buyer or its Affiliates
      of any Tax Benefit. Such amount shall be treated as a purchase price adjustment
      for U.S. income tax purposes.

    

    (v) Cooperation
      on Tax Matters.

    

    (A) Buyer,
      the Acquired Company, and Seller shall provide each other with such assistance,
      materials and relevant information, as and to the extent reasonably requested
      by
      the other party, in connection with the filing of Tax Returns pursuant to this
      Section (including the timely filing of Tax Returns prepared by the other Party)
      and any audit, litigation or other proceeding with respect to Taxes imposed
      on
      Buyer, Seller, any Subsidiary or any entity affiliated with any of the
      foregoing. Such cooperation shall include the retention and (upon the other
      Party's request and at the time and place mutually agreed upon by the parties)
      the provision of records and information which are reasonably relevant to any
      such Tax Return audit, litigation or other proceeding and making employees
      available on a mutually convenient basis to provide additional information
      and
      explanation of any material provided hereunder, to the extent such information
      and/or explanation is readily available and within the control of the party
      to
      which such request is made. The responsibility to retain records and information
      shall include the responsibility to (I) retain such records and information
      as
      are required to be retained by any applicable Tax authority and (II) retain
      such
      records and information in machine-readable format where appropriate such that
      the requesting party shall be able to readily access such records and
      information. The Acquired Company, Buyer and Seller agree (A) to retain all
      books and records with respect to Tax matters pertinent to the Acquired Company
      relating to any Taxable Period beginning before the Closing Date until the
      expiration of the statute of limitations (and, to the extent notified by Buyer
      or Seller, any extensions thereof) of the respective Taxable Periods plus 120
      days, and to abide by all record retention arrangements entered into with any
      taxing authority, and (B) to give the other Party reasonable written notice
      prior to transferring, destroying or discarding any such books and records
      and,
      if the other Party so requests, the Acquired Company, or Seller, as the case
      may
      be, shall allow the other Party to take possession of such books and records.
      The requesting Party shall reimburse the other Party for any reasonable
      out-of-pocket expenses, upon receipt of reasonable documentation of such
      expenses or costs. Any information or explanation obtained pursuant to this
      Section 5.9 shall be maintained in confidence, except (i) as may be legally
      required in connection with claims for refund or in conducting or defending
      any
      Tax audit or other proceeding or (ii) to the extent the disclosing Party
      provides written permission for such disclosure.

     

    
      
        
        

      

      
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    (B) Buyer
      and
      Seller further agree, upon request, to use their best efforts to obtain any
      consents, rulings, certificates or other documents from any Governmental
      Authority or any other Person as may be necessary to mitigate, reduce or
      eliminate any Tax that could be imposed (including, but not limited to, the
      transactions contemplated hereby).

    

    (C) Buyer
      and
      Seller further agree, upon request, to provide the other Party with all
      information that either Party may be required to report pursuant to Section
      6043
      of the Code and all Treasury Regulations promulgated thereunder.

    

    (vi) Tax
      Credits. In
      the
      event Seller or the Acquired Company has received the benefit of any Tax credit
      with respect to any taxable period ending before, or including, the Closing
      Date, and such credit is recaptured as a result of any action or inaction by
      Buyer or the Acquired Company that is taken (or not taken) subsequent to the
      Closing Date, such recapture shall be the responsibility of Buyer. Accordingly,
      (I) if Seller had previously received the benefit of such recaptured credit,
      Buyer shall promptly pay to Seller (on a grossed-up basis to reflect any Taxes
      owed by Seller on such payment if appropriate) the amount of the recaptured
      credit and (II) if the Acquired Company had previously received the benefit
      of
      such recaptured credit, Seller shall have no obligation to indemnify Buyer
      or
      the Acquired Company with respect to any Loss related to such recaptured credit.
      Those Tax credits of which the Seller is aware are listed on Schedule
      5.9(b)(vi).

    

    (vii) Tax
      Sharing Agreements. On
      the
      Closing Date, all Tax sharing agreements and arrangements between (a) the
      Acquired Company on one hand, and (b) the Seller and any of its Affiliates
      (other than the Acquired Company), on the other hand, shall be terminated
      effective as of the Closing and have no further effect for any taxable year
      or
      period (whether past, present, or future year or period), and no additional
      payments shall be made thereunder after the Closing Date with respect to any
      period in respect of the redetermination of Tax liabilities or
      otherwise.

    

    (viii) Buyer
      and Seller Covenants and Indemnity. Except
      as
      otherwise provided herein, Buyer agrees that it will pay when due, or shall
      cause the Acquired Company to pay when due, all Taxes that become due and
      payable after the Closing Date and to indemnify and hold Seller and its
      Affiliates harmless from and against any liability for any such Taxes, including
      any Losses associated therewith. In addition, Buyer agrees that neither Buyer
      nor the Acquired Company or any of Buyer’s Affiliates shall take any action, nor
      refrain from taking any action, to the extent that such action (or inaction)
      shall have the effect of causing Seller (or any entity that is controlled
      directly or indirectly by Seller) to become liable for the payment of any Taxes
      that it would not have been liable for in the absence of any such action or
      inaction. Except as otherwise provided herein, Seller agrees that it will pay
      when due all Taxes that become due and payable with respect to Taxable Periods
      ending on or prior to the Closing Date and to indemnify and hold Buyer and
      its
      Affiliates harmless from and against any liability for any such Taxes. Seller
      agrees that neither Seller nor any of Seller’s Affiliates (other than the
      Acquired Company) shall after the Closing Date take any action, nor refrain
      from
      taking any action (other than exercising any of Seller’s rights under this
      Agreement including, but not limited to, preparing any Tax Returns), to the
      extent that such action (or inaction) shall have the effect of causing Buyer
      (or
      any entity that is controlled directly or indirectly by Buyer) to become liable
      for the payment of any Taxes that it would not have been liable for in the
      absence of any such action or inaction.

     

    
      
        
        

      

      
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    (c) Except
      to
      the extent such treatment is inconsistent with other provisions of this
      Agreement, any payments made pursuant to the provisions of this Agreement shall
      be treated by both Buyer and Seller for income tax purposes as an adjustment
      to
      the Purchase Price.

    

    Section
      5.10. Seller
      Guarantees and Existing Letters of Credit. 

    

    (a) Buyer
      shall make all
      necessary arrangements to replace
      as of the Closing Date all of the letters of credit provided by, or issued
      on
      the basis of the credit or under the existing credit agreement of, Seller,
      that
      relate to the Radar Business and are (i) outstanding on the Closing Date and
      (ii) listed on Schedule 5.10(a) (the “Existing Letters of Credit”).
      Buyer
      also shall make all necessary arrangements to replace as of the Closing Date
      with its own guarantee (“Buyer Guarantee”) any outstanding guarantees (the
“Seller Guarantees”) of the obligations of the Acquired Company relating to the
      Radar Business that were issued or made by Seller or any of its Affiliates
      (other than the Acquired Company) as listed on Schedule 5.10(a).

     

    (b) In
      the
      event that after the Closing, Seller or any of its Affiliates is required to
      make any payment under any of the Existing Letters of Credit or the Seller
      Guarantees, then Buyer shall reimburse Seller within twenty (20) days after
      receipt of written demand by Seller for such amount.

    

    (c)
      Buyer
      is aware that because of the change of ownership of the Acquired Company which
      will occur upon the consummation of this Transaction, a condition to obtaining
      the consent of the Landlord as required under the terms of the lease for the
      premises located at 383 Liberty Road, Powell, Ohio (the “Powell Lease”), is the
      Seller’s unconditional guarantee of the Acquired Company’s performance under the
      Powell Lease for the balance of the current lease term (the “Seller’s Powell
      Lease Guarantee”). As security for the fulfillment of its and the Buyer’s
      indemnification obligations pursuant to Section 8.4 (d) (iii) in the event
      that
      the Seller is required to make any payments under or in connection with the
      Seller’s Powell Lease Guarantee, the Buyer shall cause the Acquired Company, at
      the Closing, to execute in favor of the Seller, a first mortgage and security
      instrument (the “Powell Mortgage”) on that certain land owned by the Acquired
      Company and described more fully in Schedule 2.11(d). 

    

    Section
      5.11. Contracts of the Non-Radar Businesses.

    

    If,
      as of
      the Closing Date, any contract (each, a “Non-Radar Business Agreement”) that is
      intended to be transferred in connection with the Powell Non-Radar Business
      Transfer (i) is not capable of transfer and/or assignment, or (ii) requires
      the
      consent of a third party in order to effect such assignment, and such consent
      has not been obtained, then, to the extent that there are obligations on the
      part of the Non-Radar Businesses to perform obligations under such Non-Radar
      Business Agreements, Seller and Buyer shall cooperate in an arrangement
      reasonably satisfactory to Buyer and Seller under which the Non-Radar Businesses
      would obtain, to the extent practicable, the claims, rights and benefits and
      assume the corresponding obligations under such Non-Radar Business Agreements
      including subcontracting, sub-licensing or sub-leasing to the Non-Radar
      Businesses, or under which the Acquired Company would enforce for the benefit
      of
      the Non-Radar Businesses, with the Non-Radar Businesses assuming the Acquired
      Company’s obligations, any and all claims, rights and benefits of the Non-Radar
      Businesses against a third party thereto and the Non-Radar Businesses would
      timely perform all obligations required to be performed by the Acquired Company
      thereunder, in each case until the transfer thereof to the Non-Radar Businesses
      (or a novation) occurs. The Acquired Company will promptly pay to the Non-Radar
      Businesses all monies received by the Acquired Company under any such Non-Radar
      Business Agreement or any claim, right or benefit arising thereunder until
      the
      transfer of such Non-Radar Business Agreement to the Non-Radar Businesses is
      actually consummated. In this regard, 

     

    
      
        
        

      

      
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    (i) the
      Buyer
      shall cause the Acquired Company to provide all reasonable facilities and
      assistance to enable the Non-Radar Businesses to discharge all of their
      obligations under the Non-Radar Business Agreements on terms set out in the
      Transitional Services Agreement, or, if not included therein, on comparable
      terms to other services provided by the Acquired Company to the Non-Radar
      Businesses thereunder; and 

     

    (ii)
       the
      Non-Radar Businesses and the Seller agree to provide services to the Acquired
      Company in relation to such Non-Radar Business Agreements on terms comparable
      to
      the terms on which other services, if any, are provided by the Non-Radar
      Businesses and Seller to the Acquired Company under the Transitional Services
      Agreement.

    

    Section
      5.12. License of Licensed Technology

    

    At
      the
      Closing, the Seller and the Acquired Company shall enter into the License
      Agreement pursuant to which, on the terms set forth therein, the Acquired
      Company shall pay Royalties (as defined therein) to the Seller in consideration
      of the license of the Licensed Technology (as defined therein) to the Acquired
      Company by Seller.

    

    Section
      5.13. Powell Guarantees; Liens 

    

    Seller
      shall make all necessary arrangements to have terminated or removed as of the
      Closing Date, those Liens on the assets of the Radar Business, including the
      mortgage on the Owned Property, listed on Schedule 5.13. Seller also shall
      arrange to have all those Guarantees of the Acquired Company (the “Powell
      Guarantees”) not given in connection with the obligations of the Radar Business,
      released as of the Closing Date.

    

    Section
      5.14. Transition Services.

    

    At
      the
      Closing, the Parties shall enter into a Transition Services Agreement pursuant
      to which the Parties shall provide or make available to each other for the
      periods therein provided, the services described at the rates or prices and
      on
      the terms and conditions set forth. 

     

    
      
        
        

      

      
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    Section
      5.15. Expenses.

    

    Unless
      otherwise expressly provided herein, and subject to Section 5.4, each of the
      Parties hereto shall bear its own expenses incurred in connection with this
      Agreement and the transactions contemplated hereby and in connection with all
      obligations required to be performed by such Party under this
      Agreement.

    

    Section
      5.16. Good Faith Performance 

    

    Buyer
      covenants that it will use its commercially reasonable best efforts to cause
      and
      enable the Acquired Company to perform all of its material and financial
      obligations under the Material Contracts, including the Powell
      Lease.

     

    ARTICLE
      VI

    Non-Competition;
      Non-Solicitation

    

    Section
      6.1. (a)
      Commencing on the Closing Date and continuing until the termination of the
      License Agreement (as the same may be extended), the Seller shall not, and
      shall
      cause each of its Affiliates not to, directly or indirectly, manufacture, sell,
      provide or offer to sell any products or services which the Radar Business
      currently manufactures, sells or provides or is in the process of developing
      or
      has manufactured, sold or provided during the three (3) year period immediately
      preceding the Closing (any such activity, a “Competitive Business”);
provided,
      however,
      that
      Seller or any of its Affiliates (including the Non-Radar Businesses) may
      continue to manufacture, sell, provide or offer to sell any products or services
      which the Seller or any of its Affiliates (other than the Acquired Company)
      currently manufactures, sells or provides or is in the process of developing
      or
      has manufactured, sold or provided at any time during the twelve month period
      immediately preceding the Closing, notwithstanding the fact that any such
      activity is included in the Competitive Business. Additionally, notwithstanding
      anything herein to the contrary, any of Seller and its Affiliates may acquire
      a
      business that is engaged in one or more Competitive Businesses (a “Seller
      Acquired Business”), provided that (i) the sales revenues of the Competitive
      Business portion of the Seller Acquired Business constitutes less than 25%
      of
      the aggregate sales revenues of the entire Seller Acquired Business for the
      twelve-month period immediately preceding such acquisition and (ii) Seller
      offers to Buyer a one-time option to purchase the Competitive Business portion
      of the Seller Acquired Business in connection with its acquisition of such
      Seller Acquired Business at the fair market value of such Competitive Business
      portion at the time of such acquisition, such option to expire thirty
      (30) days after the date of such offer. Such Seller Acquired Business shall
      be treated as an Affiliate of Seller for purposes of the provisions of this
      Subsection 6.1.

     

    
      
        
        

      

      
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    (b)
      Commencing on the Closing Date and continuing until the fifth anniversary of
      the
      Closing Date, the Buyer and the Acquired Company shall not, and shall cause
      each
      of their respective Affiliates not to, directly or indirectly, manufacture,
      sell, provide or offer to sell any products or services of the Non-Radar
      Businesses which the Non-Radar Businesses currently manufacture, sell or provide
      or are in the process of developing or have manufactured, sold or provided
      during the three (3) year period immediately preceding the Closing (any such
      activity, a “Competitive Business”), provided,
      however,
      that
      Acquired Company and the Buyer and any of their Affiliates may continue to
      manufacture, sell, provide or offer to sell any products or services which
      they
      currently manufacture, sell, or provide, or are in the process of developing
      or
      have manufactured, sold or provided at any time in the past notwithstanding
      the
      fact that any such activity is included in the Competitive Business.
      Additionally, notwithstanding anything herein to the contrary, Buyer or the
      Acquired Company may acquire a business that is engaged in one or more
      Competitive Businesses (a “Buyer Acquired Business”), provided that the Buyer
      and the Acquired Company do not use or make available, directly or indirectly,
      to such Buyer Acquired Business any of the Confidential Information of the
      Seller and/or the Non-Radar Businesses in derogation of the proscriptions in
      Section 5.1 (a) (ii). Such Buyer Acquired Business shall be treated as an
      Affiliate of Buyer for purposes of the provisions of this Subsection 6.1
      (b).

    

    Section
      6.2. (a)
      During the period commencing on the Closing Date and ending on the second
      anniversary of the Closing Date, the Seller shall not, and shall cause each
      of
      its Affiliates not to, directly or indirectly, on its account or for any other
      Person, solicit for hire or interfere with the employment of any Person who
      is
      an employee of the Acquired Company on the Closing Date without the written
      consent of the then President of the Buyer; provided, however,
      nothing
      herein shall prohibit the Seller and its Affiliates from soliciting for hire
      any
      such employee who has not been employed by the Acquired Company for a period
      of
      at least one month or hiring any employee of the Acquired Company at anytime
      in
      response to an unsolicited inquiry or approach by such employee. The use of
      general employment advertisements or employment agencies or search firms that
      are not specifically directed to recruit employees of the Acquired Company
      shall
      not be deemed to be a solicitation by Seller and its Affiliates
      hereunder.

    

    (b)
      During the period commencing on the Closing Date and ending on the second
      anniversary of the Closing Date, the Buyer and the Acquired Company shall not,
      and shall cause each of its Affiliates not to, directly or indirectly, on its
      account or for any other Person, solicit for hire or interfere with the
      employment of any Retained Employee without the written consent of the then
      President of the Seller; provided, however,
      nothing
      herein shall prohibit the Buyer or the Acquired Company and their respective
      Affiliates from soliciting for hire any Retained Employee who has not been
      employed by the Seller or a Non-Radar Business for a period of at least one
      month or hiring any Retained Employee at any time in response to an unsolicited
      inquiry or approach by such employee. The use of general employment
      advertisements or employment agencies or search firms that are not specifically
      directed to recruit Retained Employees shall not be deemed to be a solicitation
      by Buyer or the Acquired Company hereunder.

    

    Section
      6.3. Seller
      and Buyer each acknowledge that the violation of any of the covenants contained
      in Sections 6.1 and 6.2 could cause irreparable and continuing harm for which
      the aggrieved Party has no adequate remedy at law. Accordingly, as and to the
      extent the same may be appropriate, the Buyer or the Acquired Company, on the
      one hand, and the Seller or either of the Non-Radar Businesses on the other,
      as
      the case may be, shall be entitled to seek injunctive or other equitable relief
      from any court of competent jurisdiction restraining any threatened or further
      violation of such covenants, such injunctive relief to be cumulative and in
      addition to any other rights or remedies to which the aggrieved party may be
      entitled. To the extent permitted by Applicable Law, each of the Parties waives
      posting by the aggrieved Party of any bond necessary to secure such injunction
      or other equitable relief.

     

    
      
        
        

      

      
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    Section
      6.4. If
      any
      provision contained in this Article VI is for any reason held invalid, illegal
      or unenforceable in any respect, such invalidity, illegality or unenforceability
      will not affect any other provisions of such section or article, but such
      section and article each will be construed as if such invalid, illegal or
      unenforceable provision had never been contained herein. It is the intention of
      the parties that if any of the restrictions or covenants contained herein is
      held to cover a geographic area or to be for a length of time which is not
      permitted by Applicable Law, or in any way construed to be too broad or to
      any
      extent invalid, such provision will not be construed to be null, void and of
      no
      effect, but to the extent such provision would be valid or enforceable under
      Applicable Law, a court of competent jurisdiction will construe and interpret
      or
      reform this Article VI to provide for a covenant having the maximum enforceable
      geographic area, time period and other provisions (not greater than those
      contained herein) as will be valid and enforceable under such Applicable
      Law.

     

    ARTICLE
      VII

    Closing
      Deliveries

     

    Section
      7.1. Deliveries
      to Buyer at the Closing. 

    

    At
      the
      Closing and simultaneously with the deliveries to Seller specified in Section
      7.2, in addition to a fully executed counterpart of this Agreement, Seller
      shall
      execute and/or deliver, or cause to be executed and/or delivered, to Buyer
      or to
      such persons or entities as Buyer shall identify in writing, the following
      items:

    

    (a) The
      Transition Services Agreement and the License Agreement executed by
      Seller.

    

    (b) A
      certificate of valid existence and good standing of Seller and of the Acquired
      Company issued not earlier than twenty (20) days prior to the Closing
      Date.

    

    (c) The
      resignation of all of the directors and officers of the Acquired Company in
      each
      such person’s capacity as such, but not as an employee of the Acquired
      Company.

    

    (d) Delivery
      of the bylaws, minute books, stock record books, and all similar corporate
      or
      organizational records of the Acquired Company to the extent not relating to
      the
      Non-Radar Businesses.

     

    (e) Certificates
      evidencing all of the Shares duly endorsed by and in proper form for transfer
      to
      Buyer or accompanied by duly executed stock powers, evidencing all of the
      Shares.

    

    (f) Such
      approvals by Governmental Authorities or other consents as may be required
      hereunder.

    

    (g) Such
      other and further instruments, documents and other considerations as Buyer
      may
      reasonably deem necessary or desirable, or as may be required, to consummate
      the
      Transaction.

     

    
      
        
        

      

      
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    Section
      7.2. Deliveries
      to Seller at the Closing. 

    

    At
      the
      Closing, and simultaneously with the deliveries to Buyer specified in Section
      7.1, in addition to a fully executed counterpart of this Agreement, Buyer shall
      execute and/or deliver, or cause to be executed and/or delivered, to Seller
      or
      to such persons or entities as Seller shall identify in writing, the following
      items:

    

    (a) The
      Purchase Price.

    

    (b) The
      Transition Services Agreement and the License Agreement executed by
      Buyer.

    

    (c) A
      certificate of valid existence and good standing of Buyer issued not earlier
      than twenty (20) days prior to the Closing Date.

    

    (d) A
      receipt, executed by Buyer, acknowledging that it received the certificates
      evidencing all of the Shares.

     

    (e) true
      copies of any Buyer Guarantees and the irrevocable Letters of Credit (effective
      as the date and upon the condition of Closing), that Buyer has obtained and
      delivered to the customers or their respective designees, under, and as required
      by, the Material Contracts, to substitute, wherever necessary, for the Existing
      Letters of Credit and the Seller Guarantees, respectively; 

    

    (f)
       the
      Powell Mortgage executed by the Acquired Company;

    

    (g) Such
      other and further instruments, documents and other considerations as Seller
      may
      reasonably deem necessary or desirable, or as may be required, to consummate
      the
      Transaction. 

     

    ARTICLE
      VIII

    Indemnification

    

    Section 8.1.
      Survival of Representations and Warranties.

    

    Except
      as
      expressly provided in this Agreement, all representations and warranties made
      hereunder or pursuant hereto or in connection with the transactions contemplated
      hereby shall not terminate, but shall survive the Closing and continue in effect
      until twenty four (24) months following the Closing Date; provided,
      however,
      that
      representations and warranties under Section 2.18 (Tax Matters), and 2.15
      (Environmental Compliance) shall remain in effect until three (3) years
      following the Closing Date and Section 2.4 (Ownership of Shares) shall survive
      for so long as permitted by Applicable Law, and further provided, that any
      such
      representation or warranty as to which a claim shall have been asserted during
      such survival period shall continue in effect until such time as such claim
      shall have been resolved or settled.

     

    
      
        
        

      

      
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    Section
      8.2. Survival of Covenants and Agreements.

    

    Except
      as
      expressly provided in this Agreement, all covenants and agreements made
      hereunder or pursuant hereto or in connection with the transactions contemplated
      hereby shall not terminate but shall survive the Closing. 

    

    Section
      8.3. Indemnification by Seller. 

    

    Seller
      shall indemnify and hold harmless Buyer and its Affiliates and their respective
      officers, directors, successors and assigns (the “Buyer Indemnified Parties”)
      from and against any claims, Liabilities, losses, damages, actions, suits,
      proceedings, claims, demands, judgments, costs and expenses, including
      reasonable attorney’s fees (any one such item being herein called a “Loss”) and
      all such items being herein collectively called “Losses”) which are caused by or
      arise out of:

    

    (a) any
      breach or default in the performance by Seller of any covenant or agreement
      of
      Seller contained herein or in any certificate delivered pursuant hereto at
      the
      Closing; 

    

    (b) any
      breach of any warranty or representation made by Seller contained in Article
      II
      of this Agreement or in any certificate delivered pursuant hereto at the
      Closing; 

    

    (c) any
      severance or other claims made against the Acquired Company by the Retained
      Employees after or as a result of the Powell Non-Radar Business Transfers;
      

    

    (d) any
      claims made against the Acquired Company which exclusively arise from, or relate
      to, the pre closing or post closing operation of the Non-Radar Businesses;
      

    

    (e)
       any
      Tax
      liabilities that are the responsibility of Seller as contemplated by Section
      5.9(b)(viii); 

    

    (f)
       any
      breach of any representation or warranty made by Seller, as Licensor, in Article
      6 of the License Agreement; 

    

    (g)
       
      the
      Powell Guarantees or any of the Liens listed on Schedule 5.13; and 

    

    (h)
       
      the
      enforcement of this Section 8.3.

    

    Section
      8.4. Indemnification by Buyer and the Acquired Company.

    

    Buyer
      and
      the Acquired Company (after the consummation of the Transaction), jointly and
      severally, agree to indemnify and hold harmless Seller and its Affiliates and
      their respective officers, directors, successors and assigns (“Seller
      Indemnified Parties”) from and against any Losses which are caused by or arise
      out of:

    

    (a) any
      breach or default in the performance by Buyer of any covenant or agreement
      contained herein or in any certificate delivered pursuant hereto or thereto
      or
      at the Closing; 

     

    
      
        
        

      

      
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    (b) any
      breach of warranty or representation made by Buyer contained in Article III
      or
      in any certificate delivered pursuant hereto at the Closing; 

    

    (c) the
      conduct of business of the Acquired Company from and after the Closing Date;
      

    

    (d) (i)
      the
      Existing Letters of Credit; (ii) the Seller’s Guarantees; and/or (iii) the
      Seller’s Powell Lease Guaranty;

    

    (e)
       any
      Tax
      Liabilities that are the responsibility of the Buyer as contemplated by Section
      5.9(b)(viii); 

    

    (f) any
      severance or other claims against the Seller or any of the Non-Radar Businesses
      by any employee of the Acquired Company other than the Retained Employees after
      or as a result of the Powell Non-Radar Business Transfers or the consummation
      of
      this Transaction, including, but not limited to, all Liabilities assumed
      specifically by the Buyer and the Acquired Company pursuant to Sections 5.3(c)
      and 5.3(d).

    

     

    (g)
      the
      Practice (as defined in the License Agreement) by Licensee or its sublicensees
      of any Licensed Technology, including, without limitation, advertising injury,
      personal injury, and product liability, except to the extent such Losses result
      from any acts of Seller, as Licensor, for which Buyer, as Licensee, is entitled
      to indemnification under Section 8.3(f); 

     

    (h) the
      failure of the Licensee to pay to Seller (as Licensor), when due, Royalties
      under the License Agreement; and 

    

    (i) 
      the
      enforcement of this Section 8.4.

    

    Section
      8.5. Procedure; Notice of Claims.

    

    (a) Any
      indemnified party (the “Indemnified Party”) seeking indemnification hereunder
      shall, within the relevant limitation period provided for in Section 8.1 above,
      give to the party obligated to provide indemnification to such Indemnified
      Party
      (the “Indemnifying Party”) a notice (a “Claim Notice”) describing in reasonable
      detail the facts giving rise to any claims for indemnification hereunder and
      shall include in such Claim Notice (if then known) the amount or the method
      of
      computation of the amount of such claim, and a reference to the provision of
      this Agreement or any agreement, certificate or instrument executed pursuant
      hereto or in connection herewith upon which such claim is based; provided,
      that
      a
      Claim Notice in respect of any action at law or suit in equity by or against
      a
      third Person as to which indemnification will be sought shall be given promptly
      after the action or suit is commenced; and provided
      further, that
      failure to give such notice promptly shall not relieve the Indemnifying Party
      of
      its obligations hereunder except to the extent it shall have been prejudiced
      by
      such failure. 

     

    (b) The
      Indemnifying Party shall have twenty (20) days after the giving of any Claim
      Notice pursuant hereto to (i) agree to the amount or method of determination
      set
      forth in the Claim Notice and to pay such amount to such Indemnified Party
      in
      immediately available funds (the “Dispute Settlement”) or (ii) to provide such
      Indemnified Party with written notice that it disagrees (and the reasons
      therefor) with the amount or method of determination set forth in the Claim
      Notice (the “Dispute Notice”). Within a thirty (30) day period after the giving
      of the Dispute Notice or if no such notice is given, the expiration of the
      twenty (20) day period set forth above without a Dispute Settlement, a
      representative of each Indemnifying Party and such Indemnified Party shall
      negotiate in a bona
      fide attempt
      to resolve the matter without judicial intervention (the “Negotiation Period”).
      If, upon the expiration of the Negotiation Period, all of the Indemnified
      Party’s claims in the Claim Notice are not resolved, the Indemnified Party may
      commence at any time thereafter such legal action or proceedings as it deems
      appropriate to enforce the indemnification obligation of the Indemnifying Party
      pursuant to this Article VIII. 

     

    
      
        
        

      

      
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    Section
      8.6. Procedure - Third Party Claims.

    

    (a) Promptly
      after receipt by an Indemnified Party of notice of the commencement of any
      proceeding against it by a third Person (“Third Party Claim”), such Indemnified
      Party will, if a claim for indemnification is to be made against an Indemnifying
      Party, provide to the Indemnifying Party written notice of the commencement
      of
      such claim (together with copies of any legal papers served) but the failure
      to
      promptly notify the Indemnifying Party will not relieve the Indemnifying Party
      of any liability that it may have to any Indemnified Party, except to the extent
      that the Indemnifying Party demonstrates that the defense of such action is
      prejudiced by the Indemnified Party’s failure to give such notice. 

    

    (b) If
      any
      proceeding referred to in Section 8.6(a) is brought against an Indemnified
      Party
      and it gives notice to the Indemnifying Party of the commencement of such
      proceeding, the Indemnifying Party will be entitled to participate in such
      proceeding and, to the extent that it wishes (unless (i) the Indemnifying Party
      is also a party to such proceeding and the Indemnified Party upon the advice
      of
      counsel reasonably determines in good faith that a conflict or potential
      conflict exists such that joint representation would be inappropriate under
      applicable standards of professional conduct, or (ii) the Indemnifying Party
      fails to provide reasonable assurance to the Indemnified Party of its financial
      capacity to defend such proceeding and provide indemnification with respect
      to
      such proceeding), to assume the defense of such proceeding with counsel
      reasonably satisfactory to the Indemnified Party and, after notice from the
      Indemnifying Party to the Indemnified Party of its election to assume the
      defense of such proceeding, the Indemnifying Party will not, so long as it
      diligently conducts such defense, be liable to the Indemnified Party under
      this
      Article VIII for any fees of other counsel or any other expenses with respect
      to
      the defense of such proceeding, in each case subsequently incurred by the
      Indemnified Party in connection with the defense of such proceeding. If the
      Indemnifying Party assumes the defense of a Third Party Claim and subsequently
      determines that the Third Party Claim is not subject to indemnification by
      the
      Indemnifying Party hereunder, the Indemnifying Party shall give prompt notice
      of
      such fact to the Indemnified Party, after which the Indemnified Party shall
      have
      the right to reassume control of the defense of such claim; provided,
      that
      the failure by the Indemnifying Party to promptly notify the Indemnified Party
      of any such determination shall not result in any liability to the Indemnifying
      Party except to the extent that the Indemnified Party demonstrates that the
      defense of such action has been prejudiced by the Indemnifying Party’s failure
      to give such notice. If the Indemnifying Party assumes the defense of a Third
      Party Claim and subsequently determines that such claim is not subject to
      indemnification by the Indemnifying Party hereunder, the Indemnifying Party
      shall have the right, following its delivery of the notice contemplated by
      the
      immediately preceding sentence, to withdraw from such defense, and such
      withdrawal shall not result in any liability to the Indemnifying Party except
      to
      the extent that the Indemnified Party demonstrates that the defense of such
      action has been prejudiced by the timing of the Indemnifying Party’s withdrawal.
      If the Indemnifying Party assumes the defense of a proceeding, (x) no compromise
      or settlement of such claims may be effected by the Indemnifying Party without
      the Indemnified Party’s consent (which consent will not be unreasonably
      withheld, delayed or conditioned) unless (A) there is no finding or admission
      of
      any violation of law or any violation of the rights of any Person and no effect
      on any other claims that may be made against the Indemnified Party, and (B)
      the
      sole relief provided is monetary damages that are paid in full by the
      Indemnifying Party; and (y) the Indemnified Party will have no liability with
      respect to any compromise or settlement of such claims effected without its
      consent as may be required pursuant to clause (x) above. If notice is given
      to
      an Indemnifying Party of the commencement of any proceeding and the Indemnifying
      Party does not, within twenty (20) days after the Indemnified Party’s notice is
      given, give notice to the Indemnified Party of its election to assume the
      defense of such proceeding, the Indemnifying Party will be bound by any
      determination made in such proceeding or any compromise or settlement effected
      by the Indemnified Party to which the Indemnifying Party consents, which consent
      may not be unreasonably withheld, delayed or conditioned.

     

    
      
        
        

      

      
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    (c)
       Notwithstanding
      the foregoing, if the exclusive remedy sought under a Third Party Claim is
      for
      injunctive relief for which an Indemnified Party may be liable, the Indemnified
      Party may, by notice to the Indemnifying Party, assume the exclusive right
      to
      defend, compromise, or settle such proceeding, but the Indemnifying Party,
      although still liable for the payment of all reasonable legal fees, costs and
      expenses incurred in connection therewith, will not be bound by any
      determination of a proceeding so defended or any compromise or settlement
      effected without its consent which may not be unreasonably withheld, delayed
      or
      conditioned. In addition, if a Third Party Claim seeks both injunctive or other
      non-monetary relief and monetary damages, the Indemnified Party may, by notice
      to the Indemnifying Party, participate in the defense of such proceeding at
      its
      own cost. 

     

    (d) Notwithstanding
      anything to the contrary contained herein, the Indemnifying Party shall not
      be
      obligated to pay the fees and expenses of more than one counsel for the
      Indemnified Parties whenever the Indemnifying Party is required hereunder to
      pay
      the fees and expenses of counsel for the Indemnified Parties.

    

    Section
      8.7. Remedies.

    

    Except
      as
      otherwise specifically provided in this Agreement, the sole and exclusive remedy
      of the Parties hereunder shall be restricted to the indemnification rights
      set
      forth in this Article VIII; provided,
      however,
      that no
      Party hereto shall be deemed to have waived any rights, claims, causes of action
      or remedies if and to the extent such rights, claims, causes of action or
      remedies may not be waived under Applicable Law or actual fraud is proven on
      the
      part of a party by another party hereto.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

    Section
      8.8. Certain Limitations.

    

    (a) Notwithstanding
      any other provision in this Agreement to the contrary, the Parties to this
      Agreement shall only be liable to indemnify each other for compensatory damages,
      and, accordingly, in the absence of actual fraud, neither party shall be
      entitled to recover from the other special, indirect, punitive or consequential
      damages pursuant to this Article VIII unless and then only to the extent that
      the same are components of a Third Party Claim for which an Indemnified Party
      is
      seeking indemnification hereunder. 

    

    (b) the
      aggregate liability for indemnification under Sections 8.3(b) and 8.3(f) on
      the
      part of the Seller and Section 8.4(b) on the part of the Buyer shall not exceed
      an amount equal to $2,500,000 (“Liability Cap”); provided,
      however,
      the
      Liability Cap shall not apply to the following: (i) any Losses of any
      Indemnified Party resulting from actual fraud; and (ii) any claim by the Buyer
      pursuant to Section 8.3(f), but only by way of offset against Royalties that
      are
      due and owing to the Seller in excess of the Liability Cap.

    

    (c) no
      individual claim for indemnification under Sections 8.3(b) and 8.3(f) or Section
      8.4(b) shall be valid and assertable unless it is for an amount in excess of
      $10,000; provided that to the extent that individual claims are related to
      one
      another they may be aggregated for the purposes of meeting such $10,000
      threshold;

    

    (d) no
      claim
      for indemnification under Sections 8.3(b) and 8.3(f) or Section 8.4(b)
      shall be valid and assertable unless such claim, when aggregated with all other
      claims asserted against the Indemnifying Party on the same date, is for an
      amount in excess of $100,000 in the aggregate (the “Threshold”), it being
      understood, that once the Threshold is exceeded and subject to
      Section 8.8(e) or 8.8(f) as the case may be, the Indemnifying Party shall
      be liable to indemnify the Indemnified Party for the full amount of such Losses
      including the Threshold;

    

    (e) Seller
      shall be liable under Sections 8.3(b) and 8.3(f) for only that portion of the
      Losses under such sections which, in the aggregate, exceed $125,000 (the “Seller
      Basket Amount”) (it being understood that Seller shall not be liable, in any
      event, for that portion of the aggregate Losses which is equal to the Seller
      Basket Amount under such sections considered together);

    

    (f) Buyer
      and
      the Acquired Company shall be liable under Section 8.4(b) for only that portion
      of the Losses under such section which, in the aggregate, exceed $125,000 (the
      “Buyer Basket Amount”) (it being understood that Buyer and the Acquired Company
      shall not be liable, in any event, for that portion of the aggregate Losses
      which is equal to the Buyer Basket Amount under such section);

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    

    (g) The
      amount of any Losses recoverable by way of indemnification pursuant to Article
      VIII shall be calculated (a) net of any reserves or accruals for such Losses
      and
      (b) net of any insurance proceeds actually received by the Indemnified Party
      from a third party insurer with respect thereto or any indemnification or
      contribution from any third Person. To the extent of any indemnification payment
      made by an Indemnifying Party hereunder, the Indemnifying Party shall succeed
      to
      all corresponding claims that the Indemnified Party may have and otherwise
      shall
      be subrogated to the rights of the Indemnified Party against its insurers and
      any other person or security in respect of such claims, and the Indemnified
      Party shall reasonably cooperate with the Indemnifying Party in seeking recovery
      under such claims. The Indemnifying Party shall be entitled to receive (or
      retain) any and all recoveries resulting from the exercise of any rights to
      which it has been subrogated (the “Subrogated Rights”), other than any amounts
      in excess of the sum of the following: (i) the corresponding Losses actually
      paid by the Indemnifying Party to the Indemnified Party, (ii) the fees and
      expenses actually paid by the Indemnifying Party to any third parties in
      connection with the investigation or defense of the matters giving rise to
      such
      corresponding Losses and (iii) the fees and expenses actually paid by the
      Indemnifying Party to any third parties in connection with the investigation
      or
      prosecution of the Subrogated Rights. 

    

    (h) It
      is
      agreed that regardless of whether more than one representation is breached
      no
      party shall be entitled to make a claim for indemnification more than once
      on
      account of the same facts and circumstances.

    

    Section
      8.9. Knowledge. 

    

    It
      shall
      constitute a defense, and any Indemnified Party hereto shall be deemed to have
      waived or released, and otherwise shall be estopped from asserting, any claim
      for indemnification based upon an alleged breach of a representation, warranty,
      covenant, agreement or condition, if it can be shown that prior to Closing
      the
      Indemnified Party had Knowledge of such breach, default or condition or the
      facts on which such breach or default is predicated.

     

    ARTICLE
      IX

    Miscellaneous
      Provisions

    

    Section
       9.1. Entire Agreement; Assignment; Amendments and
      Waivers.

    

    (a) This
      Agreement (including the Schedules hereto) and the Related Agreements constitute
      the entire agreement between the Parties hereto with respect to the subject
      matter hereof and thereof and supersede all other prior agreements and
      understandings both written and oral between the Parties with respect to the
      subject matter hereof and thereof. No representation, warranty, promise,
      inducement or statement of intention has been made by any party that is not
      embodied in this Agreement or such other documents, and none of the Parties
      shall be bound by, or be liable for, any alleged representation, warranty,
      promise, inducement or statement of intention not embodied herein or
      therein.

    

    (b)
      This
      Agreement may not be assigned by operation of law or otherwise without the
      written consent of the other Parties hereto; provided,
      however,
      Seller
      may assign its rights to receive Royalties hereunder to any of its Affiliates
      without the consent of the Buyer.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    

    (c) This
      Agreement may not be amended or modified, and any of the terms, covenants,
      representations, warranties, or conditions hereof may not be waived, except
      by a
      written instrument executed by all of the Parties hereto, or in the case of
      a
      waiver, by the party waiving compliance. Any waiver by any Party of any
      condition, or of the breach of any provision, term, covenant, representation,
      or
      warranty contained in this Agreement, in any one or more instances, shall not
      be
      deemed to be nor construed as further or continuing waiver of any such
      condition, or of the breach of any other provision, term, covenant,
      representation, or warranty of this Agreement.

     

    Section
      9.2. Validity.

     

    If
      any
      provision of this Agreement or the application thereof to any person or
      circumstance is held invalid or unenforceable, then the remainder of this
      Agreement and the application of such provision to other persons or
      circumstances shall not be affected thereby and to such end the provisions
      of
      this Agreement are agreed to be severable.

     

    Section
      9.3. Notices. 

    

    All
      notices, requests, claims, demands and other communications hereunder shall
      be
      in writing and shall be given (and shall be deemed to have been duly given
      upon
      receipt) by delivery in person, by national overnight courier, by facsimile
      or
      by registered or certified mail (postage prepaid, return receipt requested)
      to
      each other party as follows:

    

    
      	 	
              If
                to Seller:

            	 	
              Aeroflex
                Incorporated

            

    

    35
      South
      Service Road

    Plainview,
      New York 11803

    Telecopier:
      (516) 694-4823

    Attention:
      Leonard Borow, President and

    Chief
      Executive Officer

    

    
      	
            	with
              a copy to:	
              Moomjian,
                Waite, Wactlar & Coleman, LLP

            

    

    100
      Jericho Quadrangle, Suite 225

    Jericho,
      York, NY 11753

    Telecopier:
      (516) 937-5050

    Attention:
      Edward S. Wactlar, Esq.

     

    
      	
            	If
              to Buyer to:	
              Star
                Dynamics Holdings, LLC and 

            

    

    TAZ
      Ventures, LLC 

    c/o
      Steve Gorlin

    1234
      Airport Road

    Suite
      105

    Destin,
      Florida 32541

    Telecopier:

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    
      	
            	with
              a copy to:	
              Womble,
                Carlyle, Sandridge & Ross 

              One
                Atlantic Center 

              1201
                Peachtree Street 

              Atlanta,
                Georgia 30309

            

    

    Telecopier:
      (404) 870-8478

    Attention:
      G. Donald Johnson, Esq.

    

    
      	
            	If
              to the Acquired Company	
              Star
                Dynamics Corporation

            

    

    383
      Liberty Road

    Powell,
      Ohio

    Attention:

    

    
      	
            	with
              a copy to:	
              Womble,
                Carlyle, Sandridge & Ross

              One
                Atlantic Center

              1201
                Peachtree Street

              Atlanta,
                Georgia 30309

              Telecopier:
                (404) 870-8478

              Attention:
                G. Donald Johnson, Esq.

            

    

    

    or
      to
      such other address as the person to whom notice is given may have previously
      furnished to the others in writing in the manner set forth above.

     

    Section 9.4.
      Governing Law; Forum Selection; Jurisdiction. 

    

    (a) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard or giving effect to that State’s principles of
      conflict of laws.

    

    (b) Each
      Party agrees that any action, proceeding or claim it commences against the
      other
      party pursuant to this Agreement must be brought in the United States District
      Court for the District of Delaware, or if there is no basis for jurisdiction
      in
      such court, then in any of the state courts of Delaware. Each party irrevocably
      and unconditionally commits to the in
      personam
      jurisdiction of such courts and waives, to the fullest extent permitted by
      law,
      any objections which it may now or hereafter have to the laying of the venue
      of
      any such suit, action or proceeding brought in such courts, any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum and the right to object, with respect to any such suit,
      action or proceeding brought in such court, that such court does not have
      jurisdiction over the person of such party. In any suit, action or proceeding,
      each party waives, to the fullest extent it may effectively do so, personal
      service of any summons, complaint or other process and agrees that the service
      thereof may be made by certified or registered mail, addressed to such party at
      its address set forth in Section 9.3 hereof. Each Party agrees that a final
      non-appealable judgment in any such suit, action or proceeding brought in such
      a
      court shall be conclusive and binding.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Section
      9.5. WAIVER OF JURY TRIAL. 

    

    TO
      THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF
      THE
      PARTIES HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER
      AS
      PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN RESPECT OF
      ANY
      ISSUE OR ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY RELATED
      AGREEMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR IN ANY WAY CONNECTED WITH
      OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
      WHETHER NOW EXISTING OR HEREAFTER ARISING. ANY PARTY HERETO MAY FILE AN ORIGINAL
      COUNTERPART OR A COPY OF THIS SECTION 9.5 WITH ANY COURT AS WRITTEN EVIDENCE
      OF
      THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY
      JURY.

    

    Section 9.6.
      Descriptive Headings. 

     

    The
      descriptive headings herein are inserted for convenience of reference only
      and
      are not intended to be part of or to affect the meaning or interpretation of
      this Agreement.

    

    Section 9.7.
      Parties in Interest. 

     

    This
      Agreement shall be binding upon and inure solely to the benefit of each Party
      hereto and its successors and permitted assigns and nothing in this Agreement
      express or implied is intended to or shall confer upon any other Person any
      rights, benefits or remedies of any nature whatsoever under or by reason of
      this
      Agreement.

     

    Section
      9.8. Specific
      Performance.

    

    The
      Parties hereby acknowledge and agree that the failure of any party to perform
      its agreements and covenants hereunder, including its failure to take all
      actions as are necessary on its part to the consummation of the transactions
      contemplated hereby, will cause irreparable injury to the other Parties, for
      which damages, even if available, will not be an adequate remedy. Accordingly,
      each Party hereby consents to the issuance of injunctive relief by any court
      of
      competent jurisdiction to compel performance of such party's obligations and
      to
      the granting by any court of the remedy of specific performance of its
      obligations hereunder without the necessity of posting a bond.

     

    Section
      9.9. Disclosure Generally. 

     

    If
      and to
      the extent any information required to be furnished in any Schedule is contained
      in this Agreement or disclosed in any other Schedule, such information shall
      be
      deemed to be included in any other Schedule only to the extent that such
      disclosure is specifically identified by reference in such other Schedule.
      

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    

    Section
      9.10. Counterparts.

    

    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original but all of which shall constitute one and the same
      agreement.

    

    Section
      9.11. Attorney’s Fees. 

    

    If
      any
      Party hereto initiates any legal action arising out of, or in connection with,
      this Agreement, the prevailing Party shall be entitled to recover from the
      other
      Party all reasonable attorneys’ fees, expert witness fees and expenses incurred
      by the prevailing Party in connection therewith.

    

    Section
      9.12. Interpretation.
      

    

    Buyer
      and
      Seller have each had this Agreement reviewed by experienced and qualified
      counsel and the opportunity to negotiate fully all of the provisions of this
      Agreement. This Agreement shall be construed and interpreted without regard
      to
      any maxim or principle of law which provides that any ambiguity in any provision
      in this Agreement should be construed against the Party whose counsel drafted
      the particular provision or any other part of the Agreement.

    

    

    [signatures
      on following page]

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly
      executed on its behalf as of the day and year first above written.

     

    
      	 	 	 
	 	AEROFLEX
              INCORPORATED
	 
 	 
 	 
 
	 	By:  	/s/ John
              Adamovich, Jr.
	 	
              Name:
                John Adamovich, Jr.

              Title:
                Senior Vice President

            

    

     

    
       

      
        	 	 	 
	 	STAR
                DYNAMICS HOLDINGS, LLC
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
                R.
                Becnel
	 	
                Name:
                  Thomas R. Becnel

                Title:
                  Manager

              

      

       

      
        
          	 	 	 
	 	TAZ
                  VENTURES, LLC.
	 
 	 
 	 
 
	 	By:  	/s/ Steve
                  Gorlin
	 	
                  Name:
                    Steve Gorlin

                  Title:
                    Manager

                

        

         

      

    

    Accepted
      and Agreed to in all

    Respects
      as of the date hereof with

    regard
      to
      Article VIII as

    applicable
      to the Acquired Company

    

    AEROFLEX
      POWELL, INC. (STAR DYNAMICS CORPORATION)

    

     

    
      	By:  	 R.
              Jerry Jost
	 	
              Name: R.
                Jerry Jost

              Title:
                 President
                and CEO

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      A

    

    Certain
      Definitions.

    

    “Accounting
      Firm”
shall
      mean the accounting firm mutually agreed upon by the Buyer and the
      Seller.

     

    “Acquired
      Company”
shall
      have the meaning defined in Recital A of the Agreement.

    

    “Affiliate”
shall
      mean, as applied to any Person, any other Person directly or indirectly
      controlling, controlled by, or under common control with, that Person. For
      the
      purposes of this definition, “control” (including, with correlative meanings,
      the terms “controlling”, “controlled by” and “under common control with”), as
      applied to any Person, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management and policies of that
      Person, whether through ownership of voting securities, by contract or
      otherwise. For purposes of this definition, a Person shall be deemed to be
      “controlled by” a Person if such Person possesses, directly or indirectly, power
      to vote 10% or more of the equity interests having ordinary voting power for
      the
      election of directors, managers or other similar positions of such Person,
      as
      applicable. 

     

    “Agreement”
shall
      have the meaning defined in the Preamble of the Agreement.

     

    “Applicable
      Law”
means,
      with respect to any Person, any domestic or foreign, federal, state or local
      statute, law, ordinance, policy, guidance, rule, administrative interpretation,
      regulation, order, writ, injunction, directive, judgment, decree or other
      requirement of any Governmental Authority applicable to such Person or any
      of
      its Affiliates or any of their respective properties, assets, officers,
      directors, employees, consultants or agents (in connection with such officer’s,
      director’s, employee’s, consultant’s or agent’s activities on behalf of such
      Person or any of its Affiliates).

     

    “Assignment
      and Assumption Agreement”
shall
      have the meaning defined in Recital C.

     

    “Business
      Days”
means
      any day that is not a Saturday, Sunday or a day on which the banks in New York,
      New York are required or permitted by law to be closed.

     

    “Buyer”
shall
      have the meaning defined in the Preamble of the Agreement.

     

    “Buyer
      Acquired Business”
shall
      have the meaning defined in Section 6.1(b) of the Agreement.

     

    “Buyer
      Basket Amount”
shall
      have the meaning defined in Section 8.8(f) of the Agreement.

     

    “Buyer
      Guarantee”
shall
      have the meaning defined in Section 5.10(a) of the Agreement.

     

    “Buyer
      Indemnified Parties”
shall
      have the meaning defined in Section 8.3 of the Agreement.

     

    “Claim
      Notice”
shall
      have the meaning defined in Section 8.5(a) of the Agreement.

     

    “Closing”
shall
      have the meaning defined in Section 1.3 of the Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Closing
      Date”
shall
      have the meaning defined in Section 1.3 of the Agreement.

     

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

     

    “Competitive
      Business”
      shall
      have the meaning defined in Section 6.1(b) of the Agreement.

     

    “Confidential
      Information”:
      (a)
      with regard to the Radar Business, means, as and to the extent existing on
      the
      Closing Date (or with regard to the Radar Technology, as of the date of the
      Radar IP Transfer) and used in or in connection with the Radar Business of
      the
      Acquired Company as then conducted, all financial, technical and strategic
      information owned or licensed by the Acquired Company and pertaining to the
      Radar Business of the Acquired Company and the products of the Radar Business
      which the Acquired Company treats as proprietary and confidential, including,
      without limitation, all computer software and database information, personnel
      information, financial information, customer lists, supplier lists, trade
      secrets, proprietary information, forms, information regarding operations,
      systems, services, know how, computer and any other processed or collated data,
      computer programs, pricing, marketing and advertising data, methods, systems,
      services, designs, marketing ideas, products or processes (whether or not
      capable of being trademarked, copyrighted or patented); provided,
      however,
      that
      Confidential Information shall not include: (i) any information that is or
      becomes publicly available other than as a result of a breach by Seller or
      any
      of its Affiliates of this Agreement; (ii) any information that is independently
      developed by the Seller or is obtained from any source other than the Acquired
      Company, provided that such source has not, to the Knowledge of the Seller,
      entered into a confidentiality agreement with the Acquired Company with respect
      to such information and obtained the information from a Person who is a party
      to
      a confidentiality agreement with the Acquired Company that prevents disclosure
      of such information; and (iii) any information that is disclosed by the
      Acquired Company to a third party without restriction. Information shall be
      deemed “publicly available” if it is or becomes a matter of public knowledge or
      is contained in materials available to the public.

     

    (b)
      with
      regard to the Seller and the Non-Radar Businesses, means as and to the extent
      existing on the date of the Powell Non-Radar Business Transfers, and used in
      or
      in connection with the business of the Non-Radar Businesses as then conducted,
      all financial, technical and strategic information owned by the Seller and
      pertaining to the Non-Radar Businesses and the products of the Non-Radar
      Businesses which the Seller (or the Non-Radar Businesses) treat as proprietary
      and confidential, including, without limitation, all computer software and
      database information, personnel information, financial information, customer
      lists, supplier lists, trade secrets, proprietary information, forms,
      information regarding operations, systems, services, know how, computer and
      any
      other processed or collated data, computer programs, pricing, marketing and
      advertising data, methods, systems, services, designs, marketing ideas, products
      or processes (whether or not capable of being trademarked, copyrighted or
      patented); provided,
      however,
      that
      Confidential Information shall not include: (i) any information that is or
      becomes publicly available other than as a result of a breach by Buyer or the
      Acquired Company or any of their Affiliates of this Agreement; (ii) any
      information that is independently developed by the Buyer or the Acquired Company
      (after the Closing) or is obtained from any source other than the Non-Radar
      Businesses or the Seller, provided that such source has not, to the Knowledge
      of
      the Buyer, entered into a confidentiality agreement with the Seller or the
      Non-Radar Businesses with respect to such information and obtained the
      information from a Person who is a party to a confidentiality agreement with
      the
      Seller or Non-Radar Businesses that prevents disclosure of such information;
      and
      (iii) any information that is disclosed by the Seller or the Non-Radar
      Businesses to a third party without restriction. Information shall be deemed
      “publicly available” if it is or becomes a matter of public knowledge or is
      contained in materials available to the public.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Coverage
      Termination Date”
shall
      have the meaning defined in Section 5.3(c).

     

    “Disclosing
      Party”
shall
      have the meaning defined in Section 5.1(b) of the Agreement.

     

    “Dispute
      Notice”
shall
      have the meaning defined in Section 8.5(b) of the Agreement.

     

    “Dispute
      Settlement”
shall
      have the meaning defined in Section 8.5(b) of the Agreement.

     

    “Employee
      Benefit Plan”
      includes a plan which is either an Employee Pension Benefit Plan or an Employee
      Welfare Benefit Plan.

     

    “Employee
      Pension Benefit Plan”
means
      a
      plan described in Section 3(2) of ERISA and subject to the requirements of
      Title
      I of ERISA.

     

    “Employee
      Welfare Benefit Plan”
      includes a plan described in Section 3(1) of ERISA and subject to the
      requirements of Title I of ERISA and any associated “cafeteria plan” that is
      designed to meet the requirements of Section 125 of the Code.

     

    "Environmental
      Actions"
      refers
      to any compliant, summons, citation, notice, directive, order, claim,
      litigation, investigation, proceeding, judgment, letter or other communication
      from any federal, state, local or municipal agency, department, bureau, office
      or other authority or any third party involving a Hazardous Discharge or any
      violation of any order, permit or Environmental Laws. 

     

    “Environmental
      Laws”
shall
      mean all applicable international, federal, state and local statutes, laws,
      regulations, ordinances, orders, common law, and similar provisions having
      the
      force or effect of law, concerning public health, or pollution or protection
      of
      the environment, including but not limited to, the Clean Air Act, 42 U.S.C.
      ‘7401 et. seq., the Clean Water Act 33 U.S.C. ‘1251 et seq., the Resource
      Conservation Recovery Act (“RCRA”), 42 U.S.C. ‘6901 et seq., the Toxic
      Substances Control Act, 15 U.S.C ‘2601 et seq., and the Comprehensive
      Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C.
‘9601 et seq. or which govern; (i) the existence, cleanup removal and/or
      remedy of contamination or threat of contamination on or about the Leased Real
      Property; (ii) the emission or discharge of Hazardous Materials; or (iv)
      the use, generation, transport, treatment, storage, disposal, removal,
      recycling, handling or recovery of Hazardous Materials, including building
      materials, provided that “Environmental Laws” shall not include laws governing
      worker health and safety or conditions inside structures or
      buildings.

     

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

     

    “ERISA
      Affiliate”
means
      any trade or business (whether or not incorporated) that is part of the same
      controlled group, or under common control with, or part of an affiliated service
      group that includes the Seller, within the meaning of Code Sections 414(b),
      (c),
      (m), or (o) and/or ERISA Section 4001(a)(14).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Existing
      Letters of Credit”
shall
      mean the letters of credit listed on Schedule 5.10(a) of the
      Agreement.

     

    “February
      29, 2008 Balance Sheet”
shall
      have the meaning defined in Section 2.7(b) of the Agreement.

     

    “Financial
      Statements”
shall
      mean (i) the unaudited balance sheets for the fiscal years 2006, 2007 and the
      February 29, 2008 Balance Sheet for the Radar Business, and (ii) the unaudited
      income statements for the Radar Business for the ten consecutive quarters ending
      December 31, 2007.

     

    “GAAP”
means
      the accounting principles generally accepted in the United States as in effect
      on the date and for the period with respect to which such principles are
      applied.

     

    “Governmental
      Authority”
means
      any foreign, domestic, federal, territorial, state or local governmental
      authority, instrumentality, court, government or self regulatory organization,
      commission tribunal or organization or any regulatory administrative or other
      agency, or any political or other subdivision, department or branch of any
      of
      the foregoing.

     

    "Hazardous
      Discharge"
      means
      any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
      discharging, injecting, escaping, leaching, disposing, or dumping of Hazardous
      Materials which violates Environmental Laws.

     

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

     

    “Indemnified
      Party”
shall
      have the meaning defined in Section 8.5(a) of the Agreement.

     

    "Indemnifying
      Party"
      shall
      have the meaning defined in Section 8.5(a) of the Agreement. 

     

    "Information
      Technology"
      means
      all computer hardware, software, networks, microprocessors, firmware and other
      information technology and communications equipment used in the operation of
      the
      information technology systems of the Acquired Company and the Radar
      Business.

     

    “Initial
      Royalty Period”
shall
      have the meaning defined in Section 5.12(a)(i) of the Agreement.

     

    “Knowledge,”
      “to
      the
      Knowledge of”
or
      words of like import mean that the party to which the statement is attributed
      is
      actually aware of the particular fact or other matter to which the statement
      refers and shall be deemed to include a representation that any identified
      individuals have made all usual and reasonable inquiries and all inquiries
      that
      would be reasonable in light of such Person’s Knowledge. Seller will be deemed
      to have “Knowledge” of a particular fact or other matter if Jerry Jost, Jerry
      Gilliland or Kevin Finnegan has Knowledge of such fact or other matter. Buyer
      will be deemed to have “Knowledge” of a particular fact or other matter if Steve
      Gorlin or Thomas Becnel has Knowledge of such fact or other matter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Latest
      Balance Sheet Date”
means
      February 29, 2008.

     

    “Leased
      Real Property”
means
      all of the Acquired Company’s leasehold interest in and to the real property
      described in Schedule 2.11(a) of the Agreement.

     

    "Liability"
      means,
      with respect to any Person, any liability or obligation of such Person of any
      kind, character or description, whether known or unknown, absolute or
      contingent, accrued or unaccrued, liquidated or unliquidated, secured or
      unsecured, joint or several, due or to become due, vested or unvested,
      executory, determined, determinable or otherwise.

     

    “Liability
      Cap”
shall
      have the meaning defined in Section 8.8(b) of the Agreement.

     

    "Lien"
      means,
      with respect to any asset, any mortgage, title defect or objection, lien,
      pledge, charge, security interest, hypothecation, restriction, encumbrance
      or
      charge of any kind in respect of such asset.

     

    “License
      Agreement”
shall
      have the meaning defined in Section 5.12(a) of the Agreement.

     

    “Licensed
      Technology”
shall
      have the meaning defined in the License Agreement.

     

    “Loss
      or Losses”
shall
      have the meaning defined in Section 8.3 of the Agreement.

     

    "Material
      Adverse Effect"
      or
      "Materially
      Adversely Affected"
      with
      respect to any Person means any material adverse change in the business
      properties, results of operations or financial condition of such Person or
      its
      business, taken as a whole;
      provided, however,
      that
      the foregoing definition excludes the effects of changes that are generally
      applicable to (i) the United States economy or securities markets or (ii) the
      world economy or international securities markets or result from the outbreak
      of
      war, other hostilities or terrorist activities.

     

    “Material
      Contracts”
shall
      mean those contracts and agreements of, or relating to, the Radar Business
      identified on Schedule 2.12 of the Agreement.

     

    “Negotiation
      Period”
shall
      have the meaning defined in Section 8.5(b) of the Agreement. 

     

    “Non-Disclosing
      Party”
shall
      have the meaning defined in Section 5.1(b) of the Agreement.

     

    “Non-Radar
      Businesses”
shall
      have the meaning defined in Recital B of the Agreement.

     

    “Non-Radar
      Business Agreements”
shall
      have the meaning defined in Section 5.11 of the Agreement.

     

    “Owned
      Real Property”
shall
      have the meaning defined in Section 2.11(d) of the Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Order”
means
      any order, judgment, award, ruling, decree, writ, injunction of any court,
      arbitrator or Governmental Authority.

     

    “Ordinary
      Course or Ordinary Course of Business”
means
      the ordinary course of business consistent with Past Practice (including,
      without limitation, with respect to quantity, quality and
      frequency).

     

    “Party”
or
      “Parties”
shall
      refer to Buyer and Seller, as the specific context requires.

     

    “Past
      Practice”
means
      with respect to the Acquired Company, and, particularly, the Radar Business,
      the
      practice and procedures utilized during the two years consistently prior to
      the
      year ended February 29, 2008.

     

    “Permits”
shall
      have the meaning defined in Section 2.13 of the Agreement.

     

    “Permitted
      Liens”
means
      (a) Liens for Taxes not yet due and payable; (b) non-monetary Liens that do
      not
      materially detract from the value of any asset of Acquired Company or materially
      interfere with Acquired Company’s ongoing business operations or its ownership
      of its assets; (c) inchoate mechanics’, carriers’, workers’, repairmen’s or
      other similar Liens arising or incurred in the Ordinary Course of Business
      and
      securing obligations incurred prior to Closing; (d) Liens that arise under
      zoning, land use and other similar laws, that do not materially detract from
      the
      value of any asset of Acquired Company or materially interfere with Acquired
      Company’s ongoing business operations or its ownership of its assets; (e) any
      easements, covenants, conditions or restrictions of record relating to or
      affecting the Leased Real Property; (f) Liens relating to deposits made in
      the Ordinary Course in connection with workers' compensation, unemployment
      insurance and other types of social security or to secure the performance of
      leases, trade contracts or other similar agreements; (g)  Liens relating to
      capitalized lease financings or purchase money financings that have been entered
      into in the Ordinary Course as disclosed in this Agreement or the Schedules
      hereto; (h) in the case of leased assets, Liens set forth in the lease agreement
      pertaining thereto; and (vi) Liens reflected on any Schedule hereto.

     

    “Person”
means
      any natural person, partnership, firm, corporation, Limited Liability Company,
      association, trust, unincorporated organization or other entity.

     

    “Powell”
shall
      have the meaning defined in Recital A of the Agreement.

     

    “Powell
      Guarantees”
shall
      have the meaning defined in Section 5.13.

     

    “Powell
      Lease”
shall
      have the meaning defined in Section 5.10(c).

     

    “Powell
      Mortgage”
shall
      have the meaning defined in Section 5.10(c).

     

    “Powell
      Non-Radar Business Transfer”
shall
      have the meaning defined in Recital C of the Agreement.

     

    “Purchase
      Price”
shall
      have the meaning defined in Section 1.2 of the Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Radar
      Business”
shall
      have the meaning defined in the Preamble of the Agreement.

     

    “Radar
      Employees”
shall
      have the meaning defined in Section 2.16(a)(iv) of the Agreement.

     

    “Radar
      Intellectual Property”
means
      all of the intellectual property pertaining to the Radar Business other than
      the
      Licensed Technology.

     

    “Radar
      IP Transfer”
shall
      have the meaning defined in Recital C of the Agreement.

     

    “Related
      Agreements”
means
      the Transition Services Agreement, the License Agreement and the Powell
      Mortgage.

     

    “Retained
      Employees”
shall
      have the meaning defined in Recital C of the Agreement.

     

    “Seller”
shall
      have the meaning defined in the Preamble of the Agreement. 

     

    “Seller
      Acquired Business”
shall
      have the meaning defined in Section 6.1 of the Agreement.

     

    “Seller
      Basket Amount”
shall
      have the meaning defined in Section 8.8(e) of the Agreement.

     

    “Seller
      Employee Benefit Plan”
      includes a plan which is either a Seller Employee Pension Benefit Plan or a
      Seller Employee Welfare Benefit Plan.

     

    “Seller
      Employee Pension Benefit Plan”
means
      an Employee Pension Benefit Plan which is established or maintained by Seller
      and/or an ERISA Affiliate of Seller.

     

    “Seller
      Employee Welfare Benefit Plan”
means
      an Employee Welfare Benefit Plan which is established or maintained by Seller
      and/or an ERISA Affiliate of Seller.

     

    “Seller
      Guarantees”
shall
      have the meaning defined in Section 5.10(a) of the Agreement.

     

    “Seller
      Indemnified Parties”
shall
      have the meaning defined in Section 8.4 of the Agreement.

     

    “Seller’s
      Powell Lease Guarantee”
shall
      have the meaning defined in Section 5.10(c).

     

    “Shares”
shall
      have the meaning defined in Recital D of the Agreement.

     

    “Solutions”
shall
      have the meaning defined in Recital C of the Agreement.

     

    “Subrogated
      Rights”
shall
      have the meaning defined in Section 8.8(g) of the Agreement.

     

    “Subsidiary”
means,
      as applied to any Person, a Person a majority of the outstanding voting
      securities of which is owned or controlled, directly or indirectly, by such
      Person, or by one or more other Subsidiaries of such Person. For the purposes
      of
      this definition, “voting securities” means equity interests having voting power
      for the election of directors, managers or other similar positions of such
      Person.

     

    “Tax”
means
      any federal, state, local, or foreign income, gross receipts, license, payroll,
      employment, excise, severance, stamp, occupation, premium, windfall profits,
      environmental, customs duties, capital stock, franchise, profits, withholding,
      social security (or similar), unemployment, disability, real property, personal
      property, sales, use, transfer, registration, value added, alternative or add-on
      minimum, estimated, or other tax of any kind whatsoever, including any interest,
      penalty, or addition thereto, whether disputed or not.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Taxable
      Period”
means
      any period for which Taxes are owed to a federal, state, local or foreign taxing
      authority, or for which a Tax Return is required to be filed by Seller, the
      Acquired Company or Buyer.

     

    “Tax
      Benefit”
means
      the economic benefit received by the Buyer and its Affiliates during any Taxable
      Period (or portion thereof) beginning on or after the Closing Date, in the
      form
      of an actual reduction in Tax liability of the Buyer or its Affiliates,
      attributable to any event described in the first sentence of
      Section 5.9(b)(iv)(B), computed in the case of any Taxable Period, or a
      portion thereof, that begins after the Closing Date.

     

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

     

    “Third
      Party Claim”
shall
      have the meaning defined in Section 8.6(a) of the Agreement.

     

    “Threshold”
shall
      have the meaning defined in Section 8.8(d) of the Agreement.

     

    “Transaction”
shall
      have the meaning defined in the Agreements section on Page 5 of the
      Agreement.

     

    “Transition
      Services Agreement”
shall
      mean the Transition Services Agreement between Buyer and Seller with respect
      to
      the provision of certain transition services from and after the Closing
      Date.Unassociated Document

    EXECUTION
      COPY

     

    Share
      Purchase Agreement

     

    between

    

    Aeroflex
      Incorporated

    

    and

    

    The
      Sellers named herein

     

    regarding
      the shares in 

    

    Gaisler
      Research AB

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    TABLE
      OF CONTENTS

     

    
      
        	
                Article
                  I

              	
                DEFINITIONS

              	
                3

              
	 	 	 
	
                Article
                  II

              	
                SALE
                  AND PURCHASE OF SHARES

              	
                9

              
	 	 	 
	
                Article
                  III

              	
                PURCHASE
                  PRICE

              	
                9

              
	 	 	 
	
                Article
                  IV

              	
                THE
                  CLOSING

              	
                13

              
	 	 	 
	
                Article
                  V

              	
                REPRESENTATIONS
                  AND WARRANTIES OF SELLERS

              	
                15

              
	 	 	 
	
                Article
                  VI

              	
                REPRESENTATIONS
                  AND WARRANTIES OF PURCHASER

              	
                32

              
	 	 	 
	
                Article
                  VII

              	
                COVENANTS

              	
                32

              
	 	 	 
	
                Article
                  VIII

              	
                NON-COMPETITION;
                  NON-SOLICITATION

              	
                33

              
	 	 	 
	
                Article
                  IX

              	
                SURVIVAL
                  OF REPRESENTATIONS & WARRANTIES; INDEMNIFICATION

              	
                35

              
	 	 	 
	
                Article
                  X

              	
                SETTLEMENT
                  OF CLAIMS AND ESCROW

              	
                39

              
	 	 	 
	
                Article
                  XI

              	
                MISCELLANEOUS

              	
                41

              

      

    

    

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    SHARE
      PURCHASE AGREEMENT

     

    This
      SHARE
      PURCHASE AGREEMENT
      is made
      as of the 30th
      day of
      June, 2008 (the “Agreement”),
      among
      Aeroflex Incorporated, a Delaware corporation having its principal place of
      business at 35 South Service Road, PO Box 6022, Plainview, NY 11803 (the
“Purchaser”),
      and
      Jiri Gaisler residing at Molinsgatan 19, 41133 Gothenburg, Sweden (“Gaisler”),
      Per
      Danielsson, residing at Första Långgatan 6, 41303 Gothenburg, Sweden
      (“Danielsson”)
      and
      Sandi Habinc, residing at Bassåsv’gen 24, 43655 Hovås, Sweden (“Habinc”,
      and
      together with Aktiebolaget Grundstenen 121346 changing name to Habinc Invest
      AB,
      reg.nr. 556755-0628 (“Habinc
      AB”)
      to whom
      Habinc conveyed his shares of Gaisler Research AB prior to the date hereof,
      jointly and severally, the “Habinc
      Group”),
      as
      the actual or putative owners of all of the issued and outstanding shares of
      Gaisler Research AB, reg.nr. 556660-0994, having its registered office at
      Gothenburg, Sweden (the “Company”).
      Gaisler, Danielsson and the Habinc Group (or where the context otherwise
      requires, Habinc) are collectively referred to herein as the “Sellers.”
The
      Purchaser and the Sellers are sometimes referred to herein as the “Parties”,
      and
      each of the Purchaser and the Sellers, respectively, as a “Party”
where
      the context requires. 

    

    BACKGROUND

    

    A. The
      Sellers are the owners of all of the issued and outstanding shares of the
      Company (the “Shares”).
      The
      Company is engaged in the business of developing, designing, engineering,
      producing and selling and/or licensing software, programs, operational systems,
      processors and other electronic products for the European aerospace and other
      related markets (the “Business”).

    

    B.
       The
      Purchaser is desirous of acquiring the Shares from the Sellers and the Sellers
      are desirous of selling the Shares to the Purchaser upon the terms and
      conditions hereinafter set forth;

    

    NOW,
      THEREFORE,
      the
      Parties do hereby agree as follows:

    

    ARTICLE
      I

    DEFINITIONS

    

    1.1 Certain
      Definitions.
      The
      following terms, as used herein, have the following meanings:

    

    “Accounting
      Principles” shall mean the accounting policies, practices and methods consistent
      with those applied in preparation of the Financial Statements and the Balance
      Statement to the extent that they are consistent with applicable law and Swedish
      GAAP.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Affiliate”
      means, in respect of any Person, a Person that, directly or indirectly, through
      one or more intermediaries controls, is controlled by or is under common control
      with the first-mentioned Person.

    

    “Business
      Day” means any day that is not a Saturday, Sunday or a day on which the banks in
      New York, New York are required or permitted to be closed.

    

    “Business
      Lease” means that certain lease agreement dated November 1, 2007 between the
      Company, as Lessee, and Elof Hansson Fastighets AB, org nr 556309-1289, as
      Lessor, by which the Company leased space located at Forsta Langgatan 19, 413,
      27 Gothenburg, for an initial term commencing on January 1, 2008 and ending
      on
      December 31, 2008, that is automatically renewable for successive one year
      periods thereafter in accordance with the terms of the lease agreement or as
      prescribed by applicable law.

    

    “Closing
      Date” shall mean such Business Day as the Parties may agree upon, but in no
      event later than June 30, 2008.

    

    “Confidential
      Information” means information not generally available to the public, including,
      without limitation, all computer software and database information, financial
      information, customer and supplier lists, trade secrets, proprietary
      information, information regarding operations, systems, services, Know How,
      computer and any other processed or collated data, computer programs, pricing,
      marketing data, methods, designs, products or processes.

    

    “Contracts”
      means all oral and written agreements, options, leases, licenses, orders,
      commitments, and other instruments of any kind. 

    

    “Copyrights”
      shall have the meaning set forth in the definition of Intellectual Property.
      

    

    “Domain
      Names” shall have the meaning set forth in the definition of Intellectual
      Property.

    

    “Due
      Diligence Information” shall mean (i) the documents and any other information
      made available by the Sellers for review by the Purchaser and its
      representatives prior to the Closing Date and described in Schedule 5.30, (ii)
      any information contained or referred to in this 

    Agreement
      and the Schedules hereto, and (iii) any information or documentation provided
      at
      any meetings held by Sellers with, or presentations by the Company’s management
      attended by, employees, consultants or other representatives of the Purchaser,
      but, with regard to (i), (ii) and (iii), only to the extent that such
      documentation and information was true, complete, accurate and otherwise not
      misleading. 

    

    “Earn
      Out
      Table” shall mean that table attached to this Agreement as Schedule 3.3
      (b).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “EBITDA”
      shall mean the income or earnings generated by the Company before interest,
      taxes, depreciation and amortization, calculated or adjusted in a manner
      consistent with the Past Practice of the Purchaser, i.e., exclusive of equity
      based compensation charges and management fee allocations.

    

    “EBITDA
      Profit Targets” shall have the meaning ascribed to it in the Earn Out
      Table.

    

    “Encumbrance”
      means any mortgage, title defect, pledge, security interest, restriction,
      encumbrance or charge of any kind in respect of any asset.

    

    “Environmental
      Laws” shall mean all applicable laws and regulations, statutes, directives,
      codes, ordinances, judgments, orders and any other measures imposed by a
      Governmental Authority in the country of operations of the Company concerning
      the pollution or the protection of the environment, human health or safety,
      and/or work environment and conditions in the workplace, or the generation,
      transportation, storage, treatment or disposal of hazardous
      substance.

    

    “Escrow
      Account” shall mean that portion of the Initial Purchase Price Payment deposited
      with the Escrow Agent at the Closing, together with all accrued interest
      thereon, as thereafter managed, administered and distributed by the Escrow
      Agent
      in accordance with the terms of the Escrow Agreement.

    

    “Escrow
      Agent” means Swedbank.

    

    “Escrow
      Agreement” means the Escrow Agreement, dated as of the date hereof, by and among
      the Sellers, Purchaser and the Escrow Agent. 

    

    “Fiscal
      Year” shall mean the yearly period ending on June 30.

    

    “Governmental
      Authority” means any foreign or domestic governmental authority, court,
      regulatory organization or commission, administrative or other agency, or any
      subdivision, department or branch of any of the foregoing.

    

    “Indebtedness”
      of any Person means all obligations of such Person (a) for borrowed money,
      (b) evidenced by notes, bonds, debentures or similar instruments and
      (c) in the nature of guarantees of the obligations described in
      clauses (a) and (b) above of any other Person.

    

    “Information
      Technology” means all computer hardware, software, networks, microprocessors,
      firmware and other information technology and communications equipment used
      in
      the operation of Information Technology systems of the Company.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Intellectual
      Property” means all intellectual property owned, used or licensed (as licensor
      or licensee) by the Company that is used or has been used in the Business,
      or in
      any Products, service, technology or process currently or formerly offered
      by
      the Company or in the Business, or currently under development by the Company
      for use in connection with the Business, including: (i) all domestic and foreign
      copyright interests in any original work of authorship, whether registered
      or
      unregistered, all rights under the Swedish Copyright Act, together with all
      other copyright interests accruing by reason of international copyright
      convention (collectively, “Copyrights”),
      (ii)
      all domestic and foreign patents (including certificates of invention and other
      patent equivalents), patent applications and patents issuing therefrom as well
      as any division, continuation or continuation in part, reissue, extension,
      reexamination, certification, revival or renewal of any patent, all Inventions
      and subject matter related to such patents, in any and all forms (collectively,
      “Patents”);
      (iii)
      all domestic and foreign trademarks, service marks, trade names, icons, logos,
      slogans, and any other indicia of source or sponsorship of goods and services,
      designs and logotypes related to the above, in any and all forms, all trademark
      registrations and applications for registration related to such trademarks
      (including, but not limited to intent to use applications), and all goodwill
      related to the foregoing (collectively, “Trademarks”);
      (iv)
      all domain name registrations (collectively “Domain
      Names”);
      (v)
      any formula, design, device or compilation, or other information which is used
      or held for use by a business, which gives the holder thereof an advantage
      or
      opportunity for advantage over competitors which do not have or use the same,
      and which is protected from disclosure to the public (“Trade
      Secrets”)
      -
      Trade Secrets can include, by way of example, formulas, algorithms, market
      surveys, market research studies, information contained on drawings and other
      documents, and information relating to research, development or testing; (vi)
      novel devices, processes, compositions of matter, methods, techniques,
      observations, discoveries, apparatuses, machines, designs, expressions, theories
      and ideas, whether or not patentable; (vii) scientific, engineering, mechanical,
      electrical, financial, marketing or practical knowledge or experience useful
      in
      the operation of the Business (“Know-How”);
      (viii) (A) any and all computer programs and/or software programs (including
      all
      source code, object code, firmware, programming tools and/or documentation),
      (B)
      machine readable databases and compilations, including any and all data and
      collections of data, and (C) all content contained on Internet site(s)
      (collectively, “Software”);
      (ix)
      all documentation and media constituting, describing or relating to the above,
      including memoranda, manuals, technical specifications and other records
      wherever created throughout the world; and (x) the right to sue for past,
      present, or future infringement and to collect and retain all damages and
      profits related to the foregoing.

    

    “Key
      Employees” shall mean Gaisler, Danielsson and Habinc.

    

    “Know-How”
      shall have the meaning set forth in the definition of Intellectual
      Property.

    

    “Knowledge
      of Sellers” means the actual knowledge of any Seller as well as the actual
      knowledge of the collective group of Sellers, and shall be deemed to include
      a
      representation that each of such individuals has made all usual and reasonable
      inquiries and all inquiries that would be reasonable in light of such
      individual’s knowledge.

    

    “Latest
      Balance Statement Date” shall mean May 31, 2008.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Liability”
      means, with respect to any Person, any liability or obligation of such Person
      of
      any kind, whether known or unknown, absolute or contingent, accrued or
      unaccrued, liquidated or unliquidated, secured or unsecured, joint or several,
      due or to become due, vested or unvested, executory, determined, determinable
      or
      otherwise.

    

    “Losses”
      means all demands, claims, actions, assessments, losses, damages, costs,
      expenses, liabilities, judgments, awards, fines, sanctions, penalties, charges
      and amounts paid in settlement, including reasonable costs and fees of attorneys
      and other agents incurred in investigating, preparing for and defending any
      thereof.

    

    “Material
      Adverse Effect” means any material adverse change in the business, properties,
      assets, Liabilities, results of operations, condition (financial or otherwise)
      or prospects of the Company or its Business taken as a whole.

    

    “Material
      Contracts” shall mean any Contract, agreement, obligation, commitment, promise
      or undertaking (whether written or oral, express or implied) that is legally
      binding between the Company and any other Person(s), or by which the assets
      and
      properties of the Company are bound, having a contract value of more than
      $50,000 or a remaining contract term of more than three (3) months or which
      otherwise has a material significance to the Business and/or the future business
      prospects of the Company, and all of which are listed on Schedule 5.18
      (a).

    

    “Net
      Working Capital” shall mean the amount by which the current assets exceed the
      current liabilities, as determined in accordance with the Accounting Principles,
      applied in a manner consistent with Past Practice.

    

    “New
      Business Lease” shall mean the certain lease agreement dated June 16, 2008
      between the Company as Lessee, and KB Inom Vallgraven 22:15, org nr 916445-7039,
      as Lessor, by which the Company leases space located at Kungsgatan 12,
      Gothenburg, for a term commencing on December 1, 2008 and ending on November
      30,
      2011, that is automatically renewable for successive three (3) year periods
      thereafter in accordance with the terms of the lease agreement or as prescribed
      by applicable law.

    

    “Ordinary
      Course of Business” shall mean the ordinary course of business consistent with
      Past Practice.

    

    “Past
      Practice” shall mean with respect to the Company or the Purchaser, as the case
      may be, the practice and procedures utilized consistently during the three
      years
      prior to the Latest Balance Statement Date.

    

    “Patents”
      shall have the meaning set forth in the definition of Intellectual Property.
      

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Person”
      shall mean an individual, corporation, partnership, limited liability company,
      association or other legal entity.

    

    “Related
      Documents” shall mean the Escrow Agreement and the Sellers Employment
      Agreements. 

    

    “Sellers’
      Allocations” shall mean Gaisler (56.65%), Danielsson (31.95%) and the Habinc
      Group (11.4%).

    

    “Software”
      shall have the meaning set forth in the definition of Intellectual
      Property.

    

    “Subsidiary”
      shall mean, with respect to any Person, (i) any corporation as to which
      more than 10% of the outstanding shares having ordinary voting rights or power
      is owned or controlled, directly or indirectly, by such Person and/or by one
      or
      more of such Person’s Subsidiaries and (ii) any partnership, joint venture
      or other similar relationship between such Person (or any Subsidiary thereof)
      and any other Person (whether pursuant to a written agreement or
      otherwise).

    

    “STIBOR”
      shall mean the Stockholm Interbank Offered Rate.

    

    “Swedish
      GAAP” shall mean generally accepted accounting principles in Sweden as in effect
      from time to time and applied consistently throughout the periods
      involved.

    

    “Taxes”
      shall mean all taxes, duties, charges and levies or other assessments,
      including, without limitation, income taxes, corporation tax, capital gain
      tax,
      transfer tax, social security fees, duties, sales tax, value added tax,
      withholding tax and any other taxes which may be payable to or imposed by any
      tax authority together with any interest, penalties or additions to such
      taxes.

    

    “Tax
      Return” shall mean all declarations, returns, reports, forms or other
      information required to be filed with respect to any Tax.

    

    “Three
      Year Total EBITDA Profit Target” shall have the meaning ascribed to such term in
      the Earn Out Table.

    

    “Three
      Year Total of Earn Out Payments” shall have the meaning ascribed to such term in
      the Earn Out Table.

    

    “Trade
      Secret” shall have the meaning set forth in the definition of Intellectual
      Property.

    

    “Trademark”
      shall have the meaning set forth in the definition of Intellectual
      Property.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    SALE
      AND PURCHASE OF SHARES

    

    2.1 In
      reliance on the representations and warranties contained herein and subject
      to
      all of the terms and conditions hereof, the Sellers hereby agree to sell and
      transfer to the Purchaser, and the Purchaser hereby agrees to purchase from
      the
      Sellers on the Closing Date, all of the Shares free from all Encumbrances and
      together with all accrued benefits and rights attaching thereto, including,
      but
      not limited to, accumulated but not distributed profits.

     

    2.2 Each
      of
      the Sellers, if applicable, hereby waives any rights of pre-emption or right
      of
      first refusal which it might have under the articles of association of the
      Company or conferred by any shareholders agreement.

    

    2.3 Title
      of
      ownership to the Shares shall transfer to the Purchaser on the Closing
      Date.

    

    ARTICLE
      III

    PURCHASE
      PRICE

     

    3.1 Purchase
      Price.
      In
      consideration of the sale of the Shares to the Purchaser, and subject to the
      terms and conditions hereinafter set forth, at Closing, the Purchaser shall
      deliver to the Sellers the sum of Fifteen Million ($15,000,000) USD (the
“Initial Purchase
      Price Payment”)
      (less
      Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000 USD)), which
      shall be delivered to, and administered by, the Escrow Agent as provided in
      the
      Escrow Agreement), by wiring to the separate accounts of each of the Sellers,
      pursuant to a letter of instruction signed by the Sellers and provided to the
      Purchaser prior to the Closing, the pro rata portion of the same to which each
      Seller is entitled based on Sellers’ Allocations.

    

    
      
        3.2
          Purchase
          Price Adjustment.

      

    

     

    (a) A
      post-Closing adjustment to the Initial Purchase Price Payment shall be made
      as
      follows: (i) any decrease to the Net Working Capital (as finally determined
      below), and/or (ii) any decrease in the amount of cash (as finally determined
      below), shall be subtracted from the Initial Purchase Price
      Payment.

    

    (b) Within
      sixty (60) days following the Closing, the Purchaser shall prepare and deliver
      to Sellers an unaudited balance statement of the Company as of the Closing
      Date
      immediately prior to Closing (the “Proposed
      Closing Balance Statement”),
      which
      shall (A) indicate the amount of cash available as of the Closing Date
      immediately prior to the Closing, and (B) include a statement of Net Working
      Capital as of the Closing Date immediately prior to Closing (the “Closing
      Working Capital Statement”)
      prepared in a manner consistent with (i) the balance statement of the
      Company as of May 31, 2008, attached as Exhibit
      A
      hereto
      (the “Balance
      Statement”),
      and
      (ii) the computation of the Net Working Capital as of May 31, 2008,
      attached as Exhibit
      B
      hereto.
      The Proposed Closing Balance Statement and the Closing Working Capital Statement
      shall be prepared in accordance with the Accounting Principles, subject to
      the
      exceptions thereto taken as provided in Schedule 3.2(b), and shall be consistent
      with Past Practice as employed in the preparation of the Company’s audited
      Financial Statements. The Proposed Closing Balance Statement shall present
      fairly in all material respects the financial condition of the Company as of
      that date. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c) Sellers
      and their auditors shall have the right to examine and make copies of the work
      papers and other documents generated or reviewed in connection with the
      preparation of the Proposed Closing Balance Statement and the Closing Working
      Capital Statement and to access the books and records of the Company relative
      to
      the preparation of the Proposed Closing Balance Statement and the Closing
      Working Capital Statement (the “Post-Closing
      Adjustment Documents”).

    

    (d) 
      (i)  Sellers
      shall have thirty (30) days after the receipt of the Proposed Closing Balance
      Statement and the Closing Working Capital Statement (the “Sellers’
      Review Period”)
      to
      review the Proposed Closing Balance Statement, the Closing Working Capital
      Statement, and the Post Closing Adjustment Documents. 

    

    (ii) 
      If
      the
      Sellers dispute any item(s) on the Proposed Closing Balance Statement or the
      Closing Working Capital Statement, Sellers shall give the Purchaser written
      notice of such disagreement prior to the expiration of the Sellers’ Review
      Period specifically identifying the item(s) and amount(s) in dispute and the
      basis for such dispute (the “Sellers’
      Notice”).
      The
      Parties shall use commercially reasonable efforts to reach agreement with
      respect to such disputed items within thirty (30) days following the delivery
      of
      the Sellers’ Notice, or such longer period as may be agreed upon by the Parties
      (the “Resolution
      Period”).

    

      (iii)
      If
      the
      Parties mutually agree upon the Proposed Closing Balance Statement and the
      Closing Working Capital Statement within the Resolution Period, such agreement
      shall be binding upon the Parties. Any item(s) on the Proposed Closing Balance
      Statement or the Closing Working Capital Statement not specifically identified
      in writing as a disputed item before the end of Sellers’ Review Period shall be
      deemed to have been accepted by Sellers and shall not be subject to any further
      dispute, review or change.

    

    (e) If
      the
      Parties fail to resolve any disputes with respect to the Proposed Closing
      Balance Statement and/or the Closing Working Capital Statement within the
      Resolution Period, the dispute(s) shall be submitted for resolution within
      ten
      (10) days after the expiration of the Resolution Period to, and definitely
      and
      finally determined by, the Arbitration Institute of the Stockholm Chamber of
      Commerce (the “Arbitration
      Tribunal”)
      in
      accordance with Section 11.5 hereof. The Arbitration Tribunal’s determination of
      such dispute(s) shall be made in a manner consistent with the principles set
      forth in this Section 3.2 in a written opinion delivered not later than thirty
      (30) days after the submission of the same to such Arbitration Tribunal. Any
      such determination shall be final and binding. The Proposed Closing Balance
      Statement and the Closing Working Capital Statement as mutually agreed to by
      the
      Parties or otherwise finally determined in the manner provided shall be referred
      to, respectively, as the “Closing
      Balance Statement”
and
      the
“Working
      Capital Determination”.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f) If
      (i)
      the amount of Net Working Capital determined pursuant to the Working Capital
      Determination is less than Two Million Three Hundred Thousand USD ($2,300,000)
      and/or (ii) the cash on the Closing Balance Statement is less than Two Million
      USD ($2,000,000), then the Initial Purchase Price Payment shall be reduced
      accordingly on a dollar for dollar basis by the aggregate amount of such
      deficiency. Such amount, with interest thereon calculated as indicated below
      (together, the “Reduction
      Amount”),
      shall
      be paid to Purchaser by wire transfer of immediately available funds to an
      account designated in writing by Purchaser, within five (5) business days
      following the date on which the Closing Balance Statement and the Working
      Capital Determination are finally determined (the “Determination
      Date”).
      The
      interest shall be calculated at an annual rate of STIBOR (30 days) plus two
      (2%)
      percent, as the same may change from time to time from the Closing Date through
      the payment date (the “Applicable
      Rate”).
      The
      Reduction Amount shall be treated for income tax purposes as an adjustment
      to
      the Initial Purchase Price Payment, and the Initial Purchase Price Payment,
      as
      adjusted, shall be referred to as the “Adjusted
      Initial Purchase Price Payment”.

    

    
      
        3.3
          Additional
          Purchase Price Payments.

      

    

    

    (a) Subject
      to whatever changes or modifications to the EBITDA Profit Targets or
      corresponding Earn Out Payments that the Parties, in the exercise of their
      reasonable business judgment, agree mutually it is appropriate to make from
      time
      to time to reflect or adjust for changed circumstances, i. e., acquisitions,
      added product lines, etc., or otherwise, the Sellers shall be afforded the
      opportunity to earn and be paid additionally for their Shares as hereinafter
      provided for each of Fiscal Years (“FY”)
      2009,
      2010 and 2011, respectively, an “Earn
      Out Payment”
based
      on the EBITDA of the Company for 2009 and the cumulative EBITDA for FY 2010
      and
      FY 2011.

    

    (b) More
      particularly, in accordance with the Earn Out Table attached as Schedule 3.3(b),
      for FY 2009, based on the Level 1 EBITDA Profit Target and the percentage of
      that EBITDA Profit Target achieved by the Company for that Fiscal Year (i.e.
      Levels 1 through 5 reflecting the percentage of the EBITDA Profit Target
      achieved from 100% to 80%) the Sellers will be entitled to be paid an Earn
      Out
      Payment for that Fiscal Year that corresponds on the Earn Out Table to the
      percentage of the EBITDA Profit Target achieved by the Company. Accordingly,
      if
      the Company were to achieve the Level 1 EBITDA Profit Target of $2,800,000
      USD
      for FY 2009, the Sellers would be entitled to be paid the Level 1 Earn Out
      Payment for that Fiscal Year in the amount of $4,000,000 USD, whereas, for
      example, if the Company were to achieve an EBITDA of 88% of the Level 1 EBITDA
      Profit Target for that Fiscal Year, the Sellers would only be entitled to
      receive 88% of the Level 1 Earn Out Payment, or $3,520,000 USD. On the other
      hand, if the EBITDA of the Company for FY 2009 is less than 80% of the Level
      1
      EBITDA Profit Target, Sellers would not be entitled to be paid any Earn Out
      Payment for that Fiscal Year.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c) In
      accordance with the Earn Out Table, the Earn Out Payment which the Sellers
      are
      entitled to be paid for FY 2010, if any, shall be equal to the greater of:
      (A)
      the
      percentage of the Level 1 Earn Out Payment on the Earn Out Table that
      corresponds to the percentage of the Level 1 EBITDA Profit Target actually
      achieved by the Company by reason of (x) its operations in FY 2010 plus
      (y)
      the
      amount, if any, by which the Company exceeded the Level 1 EBITDA Profit Target
      for 2009 (the “2009
      EBITDA Excess”)
      or
      (B)
      provided that the EBITDA for FY 2009 was not less than the Level 5 EBITDA Profit
      Target for such Fiscal Year on the Earn Out Table and
      that the
      EBITDA for FY 2010 was more than the Level 1 EBITDA Profit Target for such
      Fiscal Year on the Earn Out Table, (x) the percentage of the cumulative Earn
      Out
      Payment on the Earn Out Table that corresponds to the percentage of the Level
      1
      cumulative EBITDA Profit Target actually achieved by the Company by reason
      of
      its cumulative operations in FY 2009 and FY 2010 less
      (y) the
      aggregate amount of the Earn Out Payment, if any, which the Sellers were
      entitled to be paid (prior to any offsets pursuant to Section 3.3(f)) for FY
      2009. If the EBITDA of the Company for FY 2010 (after giving effect to the
      2009
      EBITDA Excess) is less than 80% of the Level 1 EBITDA Profit Target for FY
      2010,
      Sellers would not be entitled to be paid any Earn Out Payment for that Fiscal
      Year. 

       

    (d) In
      accordance with the Earn Out Table, the Earn Out Payment which the Sellers
      are
      entitled to be paid for FY 2011, if any, shall be equal to the greater of:
      (A)
      the
      percentage of the Level 1 Earn Out Payment on the Earn Out Table that
      corresponds to the percentage of the Level 1 EBITDA Profit Target actually
      achieved by the Company by reason of (x) its operations in FY 2011 plus
      (y)
      the
      amount, if any, by which the Company exceeded the Level 1 EBITDA Profit Target
      for 2010 after taking into effect the 2009 EBITDA Excess, if any (the
“2010
      EBITDA Excess”);
      or
      (B)
      provided that the EBITDA for each of FY 2009 and FY 2010 (after adding the
      2009
      EBITDA Excess, if any) was not less than the Level 5 EBITDA Profit Target for
      each such Fiscal Year on the Earn Out Table and
      that the
      EBITDA for FY 2011 was more than the Level 1 EBITDA Profit Target for such
      Fiscal Year on the Earn Out Table, (x) the percentage of the Three Year Total
      of
      Earn Out Payments on the Earn Out Table that corresponds to the percentage
      of
      the Level 1 Three Year Total EBITDA Profit Target actually achieved by the
      Company by reason of its cumulative operations in FY 2009, FY 2010 and FY 2011,
      less
      (y) the
      aggregate amount of the Earn Out Payments, if any, which the Sellers were
      entitled to be paid for FY 2009 and FY 2010 (prior to any offsets pursuant
      to
      Section 3.3(f)). If the total of the EBITDA actually achieved by the Company
      for
      FY 2009, FY 2010 and FY 2011 is less than 80% of the Three Year Total EBITDA
      Profit Target, and the EBITDA for FY 2011 (after giving effect to the 2010
      EBITDA Excess) is less than 80% of the Level 1 EBITDA Profit Target for FY
      2011,
      the Sellers would not be entitled to be paid any Earn Out Payment for that
      year.

    

    (e) In
      no
      event will the Sellers be entitled to be paid more than (i) the corresponding
      Level 1 Earn Out Payment on the Earn Out Table for FY 2009 or (ii) the
      corresponding Level 1 cumulative EBITDA Profit Target for FY 2010 or (iii)
      under
      this Section 3.3, Earn Out Payments aggregating more than $15,000,000
      USD.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (f) Any
      Earn
      Out Payment that is payable pursuant to this Section 3.3 shall be paid to each
      of the Sellers, commensurate with the Sellers’ Allocations, within 120 days
      after the end of the Fiscal Year for which such Earn Out Payment is payable.
      The
      Purchaser shall issue a statement to the Sellers setting forth the calculation
      of the EBITDA for that Fiscal Year and the amount of the Earn Out Payment,
      if
      any, to which the Sellers are entitled in accordance with the provisions of
      this
      Section 3.3 (the “Earn
      Out Payment Statement”).
      Notwithstanding anything herein to the contrary, any Earn Out Payment to be
      paid
      by the Purchaser hereunder shall in all events be subject to an offset for
      any
      outstanding claims for indemnification by the Purchaser pursuant to Article
      IX.

    

    (g) Absent
      manifest error, the determination of the Earn Out Payment for any Fiscal Year
      shall be final, conclusive and binding on the Parties unless within thirty
      (30)
      days after the receipt of the Earn Out Payment Statement, the Sellers shall
      notify the Purchaser in writing of any disagreement therewith, specifically
      identifying the item(s) and amount(s) in dispute and the basis for such dispute
      (the “Earn
      Out Dispute Notice”).
      The
      Parties shall use commercially reasonable efforts to reach agreement with
      respect to such disputed items within thirty (30) days following the delivery
      of
      the Earn Out Dispute Notice, or such longer period as may be agreed upon by
      the
      Parties (the “Earn
      Out Resolution
      Period”).

    

    (h)
       If
      the
      Parties fail to resolve any disputes with respect to the Earn Out Payment as
      identified in the Earn Out Dispute Notice within the Earn Out Resolution Period,
      the dispute(s) shall be submitted for resolution within ten (10) days after
      the
      expiration of the Earn Out Resolution Period to, and finally determined by,
      the
      Arbitration Tribunal in accordance with Section 11.5 hereof. The Arbitration
      Tribunal’s determination of such dispute(s) shall be made in a manner consistent
      with the principles set forth in this Section 3.3 in a written opinion delivered
      not later than thirty (30) days after submission to such Arbitration Tribunal.
      Any such determination shall be final, conclusive and binding on the
      Parties.

     

    ARTICLE
      IV

    THE
      CLOSING

    

    4.1. Place
      and Date.
      The
      closing of the transactions provided for in this Agreement (the “Closing”)
      shall
      take place on the Closing Date at the offices of Mannheimer Swartling
      Advokatbyrå AB, Gothenburg, Sweden (or at such other place or manner as the
      Parties may agree upon in writing) concurrently with the execution of this
      Agreement. 

    

    4.2 Documents
      to be Delivered and Actions to be Performed by the Sellers.

    

    At
      the
      Closing, the Sellers shall execute and deliver or cause the Company to execute
      and deliver to the Purchaser the following:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (i) duly
      issued certificates representing all of the Shares duly endorsed to the
      Purchaser together with any and all dividend coupons; 

    

    (ii) the
      entry
      of the Purchaser as a shareholder of the Shares into the shareholders’ register
      of the Company by the board of directors of the Company; 

    

    (iii) Employment
      Agreements (or amendments to the existing Employment Agreements) between Gaisler
      and the Company, Danielsson and the Company and Habinc and the Company, each
      effective as of the Closing Date (the “Sellers
      Employment Agreements”);
      

    

    (iv) the
      Escrow Agreement, dated effectively as of the Closing Date, among the Escrow
      Agent, Purchaser and the Sellers; 

    

    (v) waivers
      in relation to any and all preemption rights the Sellers may have as to purchase
      of the Shares prescribed in the articles of association of the Company or
      otherwise. 

    

    (vi) written
      resignations, effective as of the Closing Date, of such board members and/or
      auditors of the Company as the Purchaser may request prior to the Closing Date,
      and powers of attorney empowering the new board members to represent the Company
      for the period until such rights have been duly registered;

    

    (vii) a
      certificate dated the Closing Date executed by the Sellers confirming that,
      individually and collectively, they have duly performed and complied with all
      covenants, agreements and conditions required by this Agreement to be performed
      or complied with by them prior to or on the Closing Date; 

    

    (viii) all
      consents required under any of the Scheduled Contracts as a result of the
      transactions contemplated herein; 

     

    (ix) confirmations
      from each of the Sellers and, by way of an amendment to the employment
      agreements of each of the Company’s employees, confirmations from each of such
      employees, that for good and valuable consideration and compensation, each
      of
      them do not now have or otherwise have waived or effectively transferred to
      the
      Company any and all rights (including moral rights) each of them has or may
      have
      in or pertaining to the Intellectual Property currently or formerly used in
      the
      Business, including, but not limited to, used in or relating to the Company’s
      products. 

    

    (x) such
      other documents and instruments as may be reasonably requested by the Purchaser
      to vest in Purchaser title to the Shares and place Purchaser in possession
      and
      control of the Company and its assets.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    4.3 Documents
      to be Delivered and Actions to be Performed by the Purchaser.

    

    At
      the
      Closing, the Purchaser shall execute and deliver to the Sellers the
      following:

    

    (i) a
      copy of
      resolutions of the Board of Directors of Purchaser authorizing the execution,
      delivery and performance of this Agreement by Purchaser, and a certificate
      of
      its secretary or assistant secretary, dated the Closing Date, to the effect
      that
      such resolutions were duly adopted and are in full force and
      effect;

    

    (ii)
      the
      Escrow Agreement;

    

    
      
        (iii)
          the
          Sellers Employment Agreements;

      

    

    

    
      
        (iv)
          payment
          of the Initial Purchase Price Payment pursuant to Section 3.1; and

      

    

    

    (v) the
      Purchaser shall hold an extraordinary general shareholders meeting immediately
      following the Closing in order to appoint new members of the board of directors
      and auditors, if applicable, and shall make the required filings with the
      Swedish Company Registration Office accordingly. 

    

    4.4 Chronology
      of Closing Events.
      All of
      the above actions shall be deemed to have occurred simultaneously and the
      Closing shall not be deemed to have occurred until all such actions have been
      finalized.

     

    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF SELLERS

    

    The
      Sellers jointly and severally represent and warrant to the Purchaser as of
      the
      Closing Date, unless otherwise indicated, as follows:

    

    5.1. Organization
      and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of Sweden and has all corporate power and authority to own,
      lease
      and operate its properties and assets and to carry on the Business as now being
      conducted. The Company is duly qualified or licensed and in good standing in
      each country or jurisdiction where the activities conducted by it or the
      property or assets it owns, leases or operates, makes such qualification or
      licensing necessary. 

    

    5.2. Authorization
      of Agreements.
      The
      Sellers have the legal capacity and authority to execute and enter into this
      Agreement and the Related Documents and to perform their respective obligations.
      This Agreement and each of the Related Documents, respectively, (i) have been
      duly executed and delivered by the Sellers and (ii) constitute binding
      obligations of the Sellers enforceable against them in accordance with their
      respective terms.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    5.3. Subsidiaries.
      The
      Company has no Subsidiaries. The Company owns no interest, directly or
      indirectly, and has no commitment to purchase any interest, direct or indirect,
      in any other company or association.

    

    5.4. The
      Shares.
      The
      Shares constitute all of the issued capital stock of the Company. There are
      no
      other equity interests in the Company. There has not been any change in the
      share capital of the Company since the Latest Balance Statement Date. All of
      the
      outstanding shares of the Company have been duly authorized and are validly
      issued, fully paid and are owned by the Sellers. The Sellers have and on the
      Closing Date will convey to the Purchaser, valid title to the Shares, free
      and
      clear of any Encumbrances. There are no rights, subscriptions, options or
      agreements of any kind authorized or outstanding to purchase or otherwise
      acquire from the any of the Sellers, the Company or any other Person, any
      shares, or other securities of any kind convertible into shares or any other
      equity interest in the Company. There is no agreement or arrangement of any
      kind
      authorized or outstanding which restricts limits or otherwise affects the
      ability to transfer or the right to vote any of the Shares. True and complete
      copies of the registration certificate, articles of association and share
      register of the Company are attached as Schedule 5.4.

    

    5.5 No
      Conflicts.
      The
      execution by the Sellers of this Agreement, the Related Documents or any other
      documents in connection with it, and the performance by the Sellers of its
      obligations under this Agreement and the consummation of the transaction
      contemplated by this Agreement, do not and will not result in the breach of
      any
      term or provision of, constitute a default or result in the imposition of any
      financial penalties or other sanctions, under any applicable law, order,
      judgment, mortgage or any other agreement, to which any of the Sellers or the
      Company is a party or by which the Sellers or the Company or any of the
      Company’s assets is bound.

    

    5.6 Financial
      Statements.
      

    

    (a) Attached
      hereto as Schedule 5.6(a) are copies of (i) the Balance Statement and (ii)
      the
      audited balance statement and income statements for the Company for the years
      ended June 30, 2005, June 30, 2006, and June 30, 2007, which have been provided
      to Purchaser (together with the Balance Statement, the “Financial
      Statements”).
      

    

    (b) The
      Financial Statements (i) are complete, true and correct in all material
      respects; (ii) present fairly the financial position and results of operations
      of the Company as of the dates thereof and for the periods then ended; and
      (iii)
      have been prepared or derived from the financial books and records of the
      Company, and, except where specifically indicated, have been prepared in
      accordance with the Accounting Principles applied on a basis consistent with
      Past Practice. 

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    (c) Other
      than to the extent disclosed or reserved for in the Balance Statement, or
      otherwise disclosed in the Schedules to this Agreement, the Company has no
      Liabilities, commitments or obligations whatsoever except Liabilities,
      commitments and obligations incurred in the Ordinary Course of Business since
      the Latest Balance Statement Date which do not exceed, in the aggregate,
      $50,000.

    

    (d) The
      books
      of account and other financial records of the Company are complete and accurate
      in all material respects and have been properly maintained in all material
      respects in accordance with applicable law.

    

    5.7 Taxes.
      

    

    (a) True
      and
      correct copies of the Company’s Tax Returns for the income tax years 2005
      through 2007 have been delivered to, or made available for inspection by, the
      Purchaser. All Tax Returns of the Company have been timely filed, and each
      such
      Tax Return is true, correct and complete in all material respects.

    

    (b) All
      Liabilities of the Company to any jurisdiction for Taxes, fees or assessments
      payable to a Governmental Authority, including interest thereon and penalties
      with respect thereto and Taxes payable thereunder under applicable laws and
      regulations, have been timely paid by the Company or are accrued and provided
      for in accordance with the Accounting Principles in the Financial Statements
      for
      the period ended May 31, 2008. The Company has timely paid all Taxes due during
      the period from the Latest Balance Statement Date through the Closing
      Date.

    

    (c) The
      Tax
      Returns of the Company have not been audited by any Governmental Authority
      during the past three years. No Governmental Authority has proposed any
      additional Taxes with respect to the Company or for which the Company may be
      liable or with respect to the Business. There are no pending or, to the
      Knowledge of the Sellers, threatened, claims or assessment for Taxes,
      examinations or audits with respect to Taxes by any Governmental
      Authority.

    

    (d) The
      Company has not granted any waivers of any statutes of limitation with respect
      to any Taxes for any Fiscal Year. The Company has not requested any extension
      of
      time within which to file any currently unfiled Tax Returns or declarations.
       

    

    (e) There
      are
      no Encumbrances for Taxes (other than for current Taxes not yet due and payable)
      upon the properties or assets of the Company.

    

    (f) The
      Company is not liable for Taxes of any other Person and is neither currently
      under any contractual obligation nor a party to any tax sharing agreement or
      other agreement providing for payments by the Company with respect to
      Taxes.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (g) The
      Company, as of the Closing Date, has not agreed, and will not, to the Knowledge
      of the Sellers, be required, as a result of a change in method of accounting
      or
      otherwise, to include under applicable laws or regulations any adjustment in
      taxable income for any period after the Closing Date.

    

    (h) To
      the
      Knowledge of Sellers, Schedule 5.7(h) lists all of the jurisdictions where
      the
      Company has been required to file Tax Returns, and for the past three years,
      no
      written claim has been made by a Governmental Authority in a jurisdiction where
      the Company does not currently file Tax Returns that the Company may be subject
      to taxation by that jurisdiction.

    

    (i) The
      Company has collected and withheld on a timely basis all Taxes, social security
      fees and other like costs which the Company has been required to collect and
      withhold with respect to the Company and the employees of the Company under
      applicable laws and regulations and there is no dispute or any issue with regard
      to any of the foregoing. All Tax Returns and declarations, as required by
      applicable laws and regulations, have been filed by the Company for all periods
      for which returns were due with respect to employee Tax withholding and social
      security fees and charges, and all amounts shown thereon to be due and payable
      have been paid, together with any interest and penalties that are due as a
      result of the Company’s failure to file such returns when due, and pay, when
      due, the amounts shown thereon to be due.

    

    (j) The
      Company has not been involved in any transaction which was intended to evade
      Taxes or could reasonably be considered to be Tax evasion under applicable
      laws.

    

    5.8. Litigation.
      Except
      for normal debt collecting procedures, the Company is not a party to or
      otherwise engaged in any material litigation or arbitration, administrative
      or
      other legal proceedings or investigations and, to the Sellers’ Knowledge, no
      such material litigation, arbitration, administrative or other legal proceedings
      or investigations are pending or threatened against the Company and, to the
      Sellers’ Knowledge, there are no such material suits or proceedings pending or
      threatened by the Company against any other Person. For the purpose of this
      Section 5.8 “material” shall mean a disputed amount in excess of SEK 200,000 or
      which, if adversely determined, could reasonably be expected to have a Material
      Adverse Effect.

    

    5.9 Compliance
      with applicable laws and regulations.
      

    

    (a) The
      Company holds all permits, licenses, orders and authorizations of all
      Governmental Authorities necessary for the lawful conduct of the Business in
      the
      same manner and extent to which it is currently conducted. Within the last
      three
      (3) years, the Company has not been charged with, or received notice of, any
      material violation of any applicable laws or regulations, nor, to the Knowledge
      of the Sellers, is there any threatened claim of such violation or any basis
      therefore. Within the last three (3) years, the Company has conducted the
      Business in compliance in all material respects with applicable laws and
      regulations.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (b) The
      Company does not now, and has not during the past three (3) years, manufactured,
      supplied or exported “military equipment” as that term is defined under the
      Swedish Military Equipment Act and the Swedish Military Equipment Ordinance.
      Except as set forth on Schedule 5.9(b), the Company does not now, and has not
      during the past three years, manufactured, supplied or exported any “dual use”
items as that term is defined or understood pursuant to the Council Regulation
      (EC) No. 1334/2000, as supplemented by the Swedish Act on the Control of Dual
      Use Items and Technical Assistance. The Company has complied in all material
      respects during the past three (3) years with all applicable law and regulations
      governing or regulating the manufacture, sale, distribution and export of the
      Company’s products, and the Company has not received notice of any violation (or
      any investigation or proceeding involving an allegation of violation) of such
      laws or regulations by any Governmental Authority. To the Knowledge of Sellers,
      there are no facts or circumstances that could reasonably be deemed to
      constitute such a violation or which would require the Company to make a
      voluntary disclosure to any Governmental Authority regarding any past or current
      violation of such laws and regulations.

    

    5.10
       Employees
      and Pension Matters.
      

    

    (a) There
      are
      no pending or, to the Knowledge of the Sellers, threatened, charges or
      complaints before any Governmental Authority relating to a violation of
      applicable laws or regulation by the Company regarding employment and terms
      and
      conditions of employment with respect to any of the Company’s employees, nor to
      the Knowledge of the Sellers, is there any basis for any such charges or
      complaints. The Company is not a party to any collective bargaining agreement
      or
      other labor union contract applicable to the Company’s employees. To the
      Knowledge of the Sellers, no activities or proceedings of any labor union to
      organize any of the Company’s employees have occurred or are
      occurring.

    

    (b) No
      Key
      Employee or group of employees of the Company (A) has given written notice
      of
      resignation within 12 months after the Closing Date or, to the Knowledge of
      the
      Sellers, is intending to do so; or (B) would become entitled to any rights
      as a
      result of the Company entering into or the consummation of any of the
      transactions contemplated by this Agreement.

    

    (c) There
      are
      no outstanding orders or charges against the Company under any applicable laws
      and regulations and, to the Knowledge of the Sellers, none has been threatened.
      All material assessments and penalties made against the Company pursuant to
      any
      applicable laws and regulations as of the date hereof have been paid by the
      Company.

     

    (d)  All
      employees of the Company have been and are employed on terms and conditions
      which in all material respects are consistent with normal practices.
      Schedule
      5.10(d) lists all of the citizenships of each of the employees employed by
      the
      Company.

     

    (e)  To
      the
      extent required by applicable law and regulations and the Accounting Principles,
      full provisions have been made in the Financial Statements for the pension
      undertakings to be paid to current or former directors and employees of the
      Company. Except for a pension payment made to Habinc by the Company, there
      have
      been no pension payments, undertakings, or reservations in favor of any of
      its
      employees, and, under applicable law, none have been required.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
 

    (f)
       Each
      employee of the Company is employed pursuant to an employment agreement, true,
      complete and correct copies of which, including all amendments to date, have
      been provided to the Purchaser. Except for the Sellers Employment Agreements
      to
      be entered into effectively as of the Closing Date, the Company has not at
      any
      time otherwise promised or represented to any of the current or former
      directors, employees, consultants, agents or representatives of the Company
      that
      any of such Persons will be employed or engaged by or receive any particular
      benefits from (i) the Company or (ii) the Purchaser or any of its Affiliates,
      in
      each case that will become or remain effective on or after the Closing Date.
      To
      the Knowledge of the Sellers, no Key Employee and no group of employees of
      the
      Company has any plan to terminate or modify their employment at the Company
      after the Closing Date.

    

    (g) Schedule
      5.10 (g) sets forth a true, complete and correct list of all independent
      contractors and consultants of the Company as of the Closing Date. 

    

    (h) Except
      as
      set forth on Schedule 5.10 (h), to the extent required by applicable law or
      otherwise, all payments and other obligations to individuals who are or have
      been directors, employees, independent contractors, consultants, agents or
      representatives of the Company for compensations or benefits of any kind have
      been fulfilled, and all contributions required to be made in connection with
      any
      medical insurance or pension plans, have been paid, in the Ordinary Course
      of
      Business, through the Closing Date.

    

    (i) Schedule
      5.10 (i) sets forth a true, complete and correct list of all outstanding loans
      to the Sellers or any current or former employees of the Company as well as
      all
      dividends paid by the Company to the Sellers and any other shareholder of the
      Company for the three year period prior to the Balance Statement.

    

    (j) Each
      and
      every benefit plan or similar that the Company has established, maintains or
      otherwise contributes to in which its current and former directors and employees
      participate is fully and accurately described in detail on Schedule 5.10(j)
      (the
“Company Benefit Plans”). The Company does not have any policies or benefit
      plans for its current and former directors and employees other than the Company
      Benefit Plans. 

    

    (k) Each
      of
      the Company Benefit Plans complies with applicable laws, and for the past three
      (3) years the Company has materially complied, and is in material compliance
      currently, with all of the requirements of each of such Company Benefit Plans
      and there are no actions pending or, to the Knowledge of the Sellers,
      threatened, against the Company in connection with, or against, the Company
      Benefit Plans.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (l) N-either
      the execution and delivery of this Agreement nor the consummation of the
      transactions contemplated hereby will result in (a) any payment or other
      consideration of what ever kind becoming due to any former or current director
      or employee of the Company; (b) any increase in the amount of compensation,
      benefits or fees payable to any such individual; (c) the acceleration or
      creation of any other additional rights under any of the Company Benefit
      Plans.

    

    5.11. No
      Adverse Changes.
      Since
      the Latest Balance Statement Date (i) the Business has been conducted only
      in
      the Ordinary Course of Business; (ii) there has been no change in the condition,
      assets, liabilities, operations or prospects of the Company other than changes
      in the Ordinary Course of Business; and (iii) there has been no damage, loss
      or
      other occurrence or development, which, either singly or in the aggregate,
      has
      had a Material Adverse Effect, and, to the Knowledge of the Sellers, there
      is no
      threatened occurrence or development which could reasonably have a Material
      Adverse Effect.

    

    5.12. Conduct
      of Business.
      Since
      the Latest Balance Statement Date, except as set forth on Schedule 5.12, the
      Company has not: (i) created or incurred any Liability outside of the Ordinary
      Course of Business; (ii) mortgaged or pledged or subjected to any Encumbrances
      any of its properties or assets; (iii) discharged or satisfied any Encumbrance
      or paid any obligation or Liability other than current Liabilities shown on
      the
      Balance Statement that were paid in the Ordinary Course of Business, and Taxes
      and current Liabilities incurred since the Latest Balance Statement Date in
      the
      Ordinary Course of Business or under Contracts entered into in the Ordinary
      Course of Business; (iv) waived or released any claims or rights of material
      value under, or terminated or materially modified, any Material Contract; (v)
      entered into any settlement of any kind with respect to any claim, proceeding
      or
      investigation; (vi) sold, transferred, leased or otherwise disposed of any
      of
      its assets, or canceled any debts or claims except, in each case, for fair
      consideration in the Ordinary Course of Business; (vii) declared or paid any
      dividends, or made any other distribution, or directly or indirectly, purchased,
      or otherwise acquired any shares, or paid any amount or transferred any asset
      to
      any of the Sellers; (viii) made or become a party to any Contract or renewed,
      amended, modified or terminated any Contract which individually involved an
      amount in excess of $10,000 (or in the aggregate an amount in excess of $50,000,
      but excluding therefrom the amount of Material Contracts entered into in the
      Ordinary Course of Business); (ix) except as otherwise required by applicable
      laws or regulation, agreed to pay or paid, or entered into or modified any
      Contract requiring it to pay, other than pursuant to an existing written
      agreement, any bonus, extra compensation, pension or severance pay to any of
      its
      employees, or increased or altered the form of compensation of whatever kind,
      from that being paid during the calendar year ended December 31, 2007 to any
      of
      its directors or employees; (x) increased the compensation, fees or other
      remuneration payable or to become payable to any of its independent contractors,
      consultants or agents; (xi) issued or sold any shares or securities convertible
      into shares; (xii) announced or effected any material change of any of its
      products or services; (xiii) made deliveries or provided performance of services
      in connection with its backlog of orders other than in the Ordinary Course
      of
      Business; (xiv) made or effected any material change in the Company’s practice
      of pricing or invoicing customers and collecting receivables; (xv) materially
      changed any of its accounting methods or principles used in recording
      transactions on its books or records or in preparing the Financial Statements;
      (xvi) took or failed to take any action that could reasonably be expected to
      have a Material Adverse Effect except as may have been warranted in the Ordinary
      Course of Business; (xvii) incurred any Indebtedness for money borrowed; (xviii)
      entered into any Contract or commitment to do any of the foregoing; or (xix)
      entered into any other transaction or taken any other action not in the Ordinary
      Course of Business.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    5.13. Title
      to and Condition of Assets.
      The
      Company has good, valid and marketable title to all of the material assets
      owned
      by it and valid leasehold interests in all of the assets and all of the property
      leased by it, free and clear of all Encumbrances. None of the Company’s assets
      is subject to any sublease, sublicense or other agreement granting any other
      Person any right to the use such assets. Other than those of the Company’s
      assets which are leased or licensed as set forth on Schedule 5.13, there are
      no
      assets used by the Company which are owned by any third party. All of the
      assets, properties and specialized operating systems owned, leased or licensed
      by the Company (i) are sufficient and adequate to carry on the Business as
      conducted prior to the Closing Date, including the performance of all of the
      Material Contracts in effect on the Closing Date, (ii) have been maintained
      in
      accordance with applicable industry standards or as otherwise required by any
      lease of other agreement and currently are in a good operating condition as
      required for the operation and use thereof in the Ordinary Course of the
      Business; and (iii) to the knowledge of the Sellers, comply in all material
      respects with applicable laws and regulations and with the terms and conditions
      of all leases and other agreements affecting or relating to any such
      property.

    

    5.14 . Real
      Property.

     

    (a) The
      Company currently does not own any real property. As set forth on Schedule
      5.14(a), the premises used currently by the Company for the operation of the
      Business (the “Business
      Premises”)
      are
      leased by the Company pursuant to the Business Lease. The Company has recently
      entered into the New Business Lease for other Business Premises as set forth
      on
      Schedule 5.14(a). Under the Business Lease until 31 December 2008, and, as
      of 1
      December 2008, the New Business Lease, the Business Premises are and will be
      the
      only premises leased by the Company. 

    

    (b) The
      Sellers have delivered to Purchaser true, correct and complete copies of the
      Business Lease and the New Business Lease.

    

    (i) the
      Business Lease and the New Business Lease will continue to be legal, valid,
      binding, enforceable, and in full force and effect on identical terms following
      the consummation of the transactions contemplated hereby;

    

    (ii) all
      of
      the terms and conditions of the Business Lease have been observed or performed
      in all material respects and, to the Knowledge of the Sellers, no party to
      any
      such lease is in breach or default, and to the Knowledge of the Sellers, no
      event has occurred which would constitute a breach or default or permit
      termination or modification hereunder;

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (iii) the
      Company has maintained and operated the Business Premises in all material
      respects in accordance with applicable laws and regulations and the terms of
      the
      Business Lease and has all material approvals of Governmental Authorities that
      are required; and

    

    (iv) all
      improvements or alterations on the Business Premises have been made in
      accordance with the terms of the Business Lease and applicable laws and
      regulations and there is no obligation on the part of the Company to remove
      any
      of such alterations or improvements at the conclusion of the term of the
      Business Lease or otherwise.

    

    (c) The
      Business Premises is occupied solely by the Company and is being used
      exclusively for, and in connection with, the Business.

    

    (d) Upon
      the
      termination of the Business Lease on 31 December 2008, the Company will have
      no
      further Liabilities thereunder.

     

    5.15. Environmental
      Compliance.

    

    (a) To
      the
      Sellers’ Knowledge, the Company has obtained or, to the extent not yet obtained,
      filed applications for all permits necessary to be obtained from or filed with
      the Governmental Authorities under applicable laws relating to the Business.
      The
      Company has not been informed by any Governmental Authority that any such
      permits may be revoked or otherwise changed in a way adversely affecting the
      Company. 

    

    (b) The
      Company is not subject of any litigation or proceedings in any form involving
      a
      demand for damages, penalties, removal, remediation or other liability with
      respect to violation of any applicable Environmental Laws and, to the Seller’s
      Knowledge, no such litigation or proceedings may be expected.

    

    (c) To
      the
      Sellers’ Knowledge, the Business has not resulted in any unlawful emission of
      any hazardous substance capable of causing harm to any living organism or
      capable of damaging the environment in contravention of any Environmental
      Laws.

     

    5.16. Intellectual
      Property and Information Technology.

    

    Intellectual
      Property:

    

    (a) Schedule
      5.16(a) lists all of the following Intellectual Property (and the expiration
      dates thereof) owned by the Company: (i) all issued Patents, if any, and all
      pending applications for Patents; (ii) all registered Trademarks, if any, and
      all pending applications for Trademarks; and (iii) all registered Domain Names,
      if any. Except for the foregoing and other Intellectual Property identified
      on
      Schedule 5.16(a), the Company does not own any other Intellectual Property.
      

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b) Other
      than Material Contracts and Government Contracts entered into in the Ordinary
      Course of Business, Schedule 5.16(b) lists all licenses, sublicenses or
      agreements involving the Intellectual Property which are material to the
      Company’s business, including (i) licenses by the Company to any Person of any
      Intellectual Property other than licenses granted to customers in the Ordinary
      Course of Business, and (ii) all licenses by any other Person to the Company
      of
      any Intellectual Property which are necessary for the conduct of the Business
      (each, a “License”).
      Each
      License identified on Schedule 5.16(b) is a valid and binding agreement, in
      full
      force and effect and enforceable in accordance with its terms. With respect
      to
      each License, there is no default (or event that would constitute a default)
      by
      the Company, or, to the Knowledge of the Sellers, any other party thereto.
      There
      are no pending, or, to the Knowledge of the Sellers, threatened claims with
      respect to any License. True and complete copies of all Licenses have been
      made
      available to Purchaser.

     

    (c) The
      Company has good and valid title and full and unrestricted ownership rights
      to,
      or possesses by a written License or otherwise, the right and entitlement to
      lawfully use, exploit, sublicense and make changes to all Intellectual Property
      necessary for the conduct of the Business, as it is currently conducted,
      including, but not limited to, those Intellectual Property rights pertaining
      to
      the Company’s products. Except for (i) Intellectual Property owned by third
      parties and (ii) licenses granted to customers in the Ordinary Course of
      Business, to the Knowledge of the Sellers, no Person other than the Company
      has
      any right or interest of any kind in the Intellectual Property, or any portion
      thereof, or any rights to sell, license, lease, transfer or use or otherwise
      exploit the Intellectual Property or any portion thereof. The Company owns
      all
      Intellectual Property created by its current or former employees, including
      the
      Sellers, and/or any monies payable or other consideration due to any such
      employees or the Sellers for the creation by such employees or the Sellers.
      There is no money payable or other consideration due to any employee (or any
      of
      the Sellers) pursuant to applicable laws or regulations or otherwise, for the
      creation by such employee of any Intellectual Property. All independent
      contractors of the Company who have created Intellectual Property for the
      Company have executed an agreement under which all rights, title, interest
      and
      ownership in and to such Intellectual Property have been assigned to the
      Company. To the extent necessary under applicable laws and regulations, each
      of
      the consultants to, and each of the employees of, the Company, including the
      Sellers, who contributed to the design or development of the Intellectual
      Property has fully and finally (without any compensation remaining to be paid)
      assigned all rights to such Intellectual Property to the Company, and the
      Company has made all such agreements available to the Purchaser.

     

    (d) The
      Company has not received written notice that it has, or, to the Knowledge of
      the
      Sellers, has the Company infringed upon or misused any intellectual property
      or
      proprietary information of another Person. There are no pending or, to the
      Knowledge of the Sellers, threatened claims or proceedings challenging the
      Intellectual Property, or the Company’s use of the Intellectual Property owned
      by another Person. To the Knowledge of the Sellers, no Person is infringing
      upon
      or otherwise violating the Company’s rights in and to the Intellectual Property.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (e) Schedule
      5.16(e) contains a true and complete list of all of the Software included,
      embedded or incorporated in or developed for inclusion in the Company’s products
      or in websites of the Company, or used in the delivery of services or otherwise
      by the Company. The Company owns and has unrestricted ownership rights to,
      or
      has, by valid licenses, the right and entitlement to lawfully use, exploit,
      sublicense and make changes to, all Software identified on Schedule 5.16(e).
      No
      open source or GNU General Public License software is, in whole or in part,
      embodied or incorporated in the Software. The Company has not incorporated
      any
      Intellectual Property owned by another Person into the Company’s Software. The
      Company employs reasonable measures to ensure that the Company’s Software
      contain no “viruses” which, for the purposes of this Agreement, means any
      computer code intentionally designed to disrupt, disable or harm in any manner
      the operation of any Software or hardware, but does not include any of the
      Company’s intended features which limit a customer’s use of Software to the
      scope of the customer’s license.

     

    (f) The
      Company has taken reasonable measures under applicable laws and regulations
      or
      otherwise to protect the proprietary nature of, and all of its vested rights
      in
      and to, the Intellectual Property as the same may be incorporated in its
      products and systems and otherwise, and to maintain in confidence all Trade
      Secrets and other confidential Intellectual Property and information owned
      or
      used by the Company in connection with the Business. To the Knowledge of the
      Sellers, no material Trade Secret or other material confidential Intellectual
      Property or information of the Company owned or used in connection with the
      Business has been disclosed to any third party, other than pursuant to a
      confidentiality agreement or other conditional obligation intended to protect
      the Company’s proprietary interests in and to such Trade Secrets or confidential
      Intellectual Property. 

     

    (g) (i)
      Any
      registered Trademarks, and pending applications for Trademarks, are currently
      in
      compliance with all applicable laws and regulations; (ii) No Trademark has
      been
      or is now involved in any opposition, infringement, unfair competition or
      cancellation proceeding and, to the Knowledge of the Sellers, no such action
      is
      threatened with respect to any of the Trademarks; (iii) No Trademark is alleged
      to infringe any trade name, trademark or service mark of any other Person and,
      to the Knowledge of the Sellers, no Trademark is infringed; and (iv) Each of
      the
      Company’s products displaying a Trademark which has been registered with the
      appropriate Governmental Authority bears the proper registration
      notice.

     

    (h) The
      Intellectual Property is free and clear of any and all
      Encumbrances.

     

    (i) The
      Company uses reasonable practices to ensure the physical and electronic
      protection of its information assets from unauthorized disclosure or use. To
      the
      Knowledge of the Sellers, there has been no breach of security involving any
      websites or information assets of the Company. All data which has been
      collected, stored, maintained or otherwise used by the Company has been done
      so
      in accordance with applicable laws and regulations. The Company has not been
      notified of noncompliance with applicable laws or any pertinent guidelines
      or
      industry standards pertaining to information security.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (j) 
      Schedule
      5.16 (j) is a complete and accurate list of each and every license agreement
      that the Company has entered into since its inception in 2004 for or in
      connection with its IP core library, and otherwise provides, truly and
      accurately, the following information with regard to each such license listed:
      (i) the name of the licensee; (ii) the specific type of IP covered by the
      license; (iii) the date of the license agreement; (iv) the specific type of
      integrated circuit or device into which the IP can be instantiated under the
      license; (v) whether or not there has been a buyout of the royalty fee
      obligation and, if not, the license fee paid and royalty fees payable under
      the
      license; (vi) the format of the IP provided; and (vii) such other pertinent
      information regarding the terms of the license as would be relevant for the
      Purchaser to consider in evaluating the Company’s outstanding license agreements
      in connection with the acquisition of the Sellers’ stock pursuant to the terms
      of this Agreement.

    

    Information
      Technology:

    

    (k) All
      Information Technology used by the Company in the conduct of the Business and
      all material agreements or arrangements relating to the maintenance and support,
      security, disaster recovery management and utilization (including facilities
      management and computer bureau services agreements) of the Information
      Technology are described on Schedule 5.16(k).

    

    (l) The
      Company owns and has unrestricted ownership rights to, or otherwise, by valid
      lease or license, has the lawful right to use, all Information Technology
      currently used by the Company or required by it to conduct the Business in
      the
      Ordinary Course and fulfill the Material Contracts, and the Company has access
      to all of the source codes for all of such Information Technology owned by
      it.

    

    (m) The
      Information Technology owned or used by the Company in the conduct of the
      Business has the capacity and performance capability to fulfill the requirements
      of the Business as conducted currently. 

     

    (n) None
      of
      the records, systems, controls, and/or data used by the Company to conduct
      the
      Business is recorded, stored, maintained, operated or otherwise wholly or partly
      dependent on or held by any means whatsoever which are not under the exclusive
      ownership and control of the Company.

     

    General:

     

    (o) The
      consummation of the transactions contemplated by this Agreement and the change
      in control of the Company engendered thereby will not, by virtue of any
      contractual right or other contractual term or condition or otherwise under
      applicable law, result in the diminution, license, transfer, renegotiation,
      termination or forfeiture of the Company’s rights, title or interest in and to
      any of the Intellectual Property or the Information Technology currently used
      by
      the Company in the conduct of the Business.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    5.17. Brokers.
      No
      broker, finder or investment banker is entitled to any fee or commission in
      connection with the transactions contemplated by this Agreement. 

    

    5.18. Material
      Contracts.

    

    (a) Schedule
      5.18(a) lists all Material Contracts of the Company. A true, correct and
      complete copy of each such written Material Contract (or written summary of
      oral
      Material Contracts) has been made available to Purchaser. To the Knowledge
      of
      the Sellers, all of such Material Contracts are fully performable by the Company
      in accordance with their terms.

    

    (b) Except
      for the Material Contracts disclosed on Schedule 5.18(a), the Government
      Contracts listed on Schedule 5.19(a), the Licenses, leases and other Contracts
      identified in this Agreement and the Schedules hereto, there are no Contracts
      or
      other agreements that are material to or for the Company, the Business or the
      Company’s assets other than those disclosed on Schedule 5.18(b). 

    

    (c) Except
      as
      specifically set forth with regard to the Material Contracts listed on Schedule
      5.18(a) and those other Contracts and agreements listed on Schedule 5.18(b)
      (collectively with the Material Contracts, the “Scheduled
      Contracts”),
      the
      sale of the Shares to the Purchaser and the consummation of the other
      transactions contemplated by this Agreement will not violate, or constitute
      grounds for, the modification, renegotiation or cancellation of any of the
      Scheduled Contracts or for the imposition of any penalty or the default of
      any
      security interests thereunder.

    

    (d) To
      the
      Knowledge of the Sellers, all Scheduled Contracts are valid and binding
      agreements, in full force and effect and enforceable in accordance with their
      respective terms. There is not, under any Scheduled Contract, any existing
      default or breach by the Company, or, to the Knowledge of the Sellers, by any
      other Person, or any event, condition or act (including the consummation of
      the
      transactions contemplated by this Agreement and the change in control of the
      Company engendered thereby) which (i) would constitute a default under, or
      a
      breach of, any provision of any Scheduled Contract or (ii) would allow for
      the
      termination of any Scheduled Contract, or permit the acceleration of any
      obligation of any party to any Scheduled Contract or the creation of an
      Encumbrance upon any of the Company’s assets. The Company has not assigned or
      otherwise transferred any of its rights or obligations with respect to any
      Scheduled Contract except in the Ordinary Course of Business. No party thereto
      has notified the Company of its intention to terminate or cancel any Scheduled
      Contract.

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    5.19. Government
      Contracts.
      

    

    (a) Schedule
      5.19(a) sets forth a complete and accurate list of the Government Contracts,
      true, complete and correct copies of which have been made available to the
      Purchaser. “Government
      Contracts”
      shall
      mean all current Contracts, having a valuation of $50,000 or more (i) between
      the Company and any Governmental Authority; and (ii) between the Company and
      an
      entity which is a party to a Contract or other agreement with a Governmental
      Authority. 

     

    (b) The
      Company is not a party to any current material dispute relating to a Government
      Contract. The Company has not received notice that the Company has breached
      or
      violated any applicable laws, certification, clearance, authorization,
      representation, provision or requirement with respect to any Government
      Contract. There are no current or, to the Knowledge of the Sellers, threatened
      actions against the Company arising out of or relating to any Government
      Contract. The Company has not received any notice of any kind or a stop work
      order with respect to any Government Contract.

     

    (c) No
      Governmental Authority or any other Person has notified the Company that any
      of
      the Company’s directors, agents or employees have breached or violated any
      applicable laws, certification, clearance, authorization, representation,
      provision or requirement relating to any Government Contract.

     

    (d) With
      respect to each Government Contract, the Company has not been challenged by
      the
      Governmental Authority as to any cost incurred by the Company or has any cost
      incurred by the Company been disallowed by the Governmental Authority. No
      payment due to the Company relating to any Government Contract has been withheld
      or set off, nor has any claim been made by the Governmental Authority to
      withhold or set off money due to the Company under a Government
      Contract.

     

    (e) The
      Company has complied in all material respects with the terms and conditions
      of
      each Government Contract, including all provisions and requirements incorporated
      expressly, by reference or by law. The Company has, with respect to all
      Government Contracts, (x) complied in all material respects with all
      certifications and representations it has executed, acknowledged or set forth
      with respect to each such contract; and (y) submitted certifications and
      representations with respect to each such contract that were in all material
      respects accurate, current and complete when submitted, and were properly
      updated in all material respects to the extent required by applicable laws
      and
      regulations or the particular contract.

     

    (f) The
      Company has not been notified of any warranty claims relating to any Government
      Contract other than in the Ordinary Course of Business. 

     

    (g) 
      The
      Company has not received notice of any unfavorable past performance assessments,
      evaluations, or ratings relating to any Government Contract and the Company
      has
      not received any written notice that monies due under any Government Contract
      are or may be subject to withholding or set off.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (h) During
      the past three (3) years, the Company has not been or is not now being audited
      or investigated by any Governmental Authority in respect of any Government
      Contract for any reason.

     

    (i) To
      the
      Knowledge of the Sellers, neither the Company nor any of its directors or
      employees, has knowingly or recklessly provided materially false or misleading
      information with respect to the Company, or with respect to any of any of its
      directors, shareholders or employees, in connection with the procurement of,
      performance under, or renewal of, any Government Contract or security clearance.
      

    

    (j) No
      Government Contract has been totally or partially terminated for default or
      for
      the convenience of any Governmental Authority.

    

    (k) During
      the past three (3) years, the Company has not been suspended from doing business
      with any Governmental Authority, nor has any such suspension been threatened
      or
      commenced. The Sellers are not aware of any circumstances that could reasonably
      constitute the basis for such suspension.

    

    (l) To
      the
      Knowledge of the Sellers, no director, employee, agent, consultant or
      representative of the Company is in receipt or possession of any competitor’s or
      Governmental Authority’s confidential or proprietary information under
      circumstances where the Company would have reason to believe that such receipt
      or possession is unlawful or unauthorized. 

    

    (m)
       There
      is
      not, under any Government Contract, any existing default or breach by the
      Company, or any event, condition or act (including the consummation of the
      transactions contemplated by this Agreement and the change in control of the
      Company engendered thereby) which (i) would constitute a default under, or
      a
      breach of, any provision of such Government Contract or (ii) would permit the
      acceleration of the obligations of the Company, the creation of an Encumbrance
      upon any of the Company’s assets, or the suspension or termination of the whole
      or a portion of the Government Contract by the Governmental
      Authority.

    

    (n) To
      the
      Knowledge of the Sellers, the consummation of the transactions contemplated
      by
      this Agreement, including the change of control engendered thereby, will not
      have a Material Adverse Effect on the Company’s ability to procure new
      Government Contracts. 

    

    5.20. Inventory.
      All
      material inventories that are reflected in the books of the Company are in
      good
      and merchantable condition in all material respects and are suitable and usable
      in the Ordinary Course of the Business for the purposes for which they are
      intended.

     

    5.21. Accounts
      and Notes Receivable/Payable.
      All
      receivables reflected in the Financial Statements or arising from the date
      thereof until the Closing Date have been or will have been, generated by the
      Company in the Ordinary Course of Business consistent with Past Practice, and
      reflect or, on the Closing Date, will reflect, a bona fide obligation for the
      payment of goods or services provided by the Company.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    5.22. Insurance.
      Immediately prior to the Closing, the assets, properties and operations of
      the
      Company were insured under various policies of insurance. The Sellers have
      delivered or otherwise made available to Purchaser previously complete and
      correct copies of such insurance policies. All such policies are in full force
      and effect, no notice of cancellation has been received, and there is no
      existing material default or event which would constitute a material default,
      by
      any insured hereunder. To the Knowledge of the Sellers, there currently is
      no
      basis for an insurance claim by the Company under any of such
      policies.

    

    5.23. Product
      Warranties, Defects and Liabilities.
      There
      exists no pending or, to the Knowledge of the Sellers, threatened, action or
      investigation by any Governmental Authority, relating to any product developed,
      designed, distributed, sold or licensed by the Company and alleged to have
      been
      defective or produced in breach of any express or implied product warranty,
      and,
      to the Knowledge of the Sellers, there exists no latent defect in the design
      or
      manufacture of any of the products of the Business. There exists no pending
      or,
      to the Knowledge of the Sellers, threatened, product liability or warranty
      claims against the Company, except to the extent reserved for specifically
      on
      the Balance Statement, and to the Knowledge of the Sellers, there is no
      reasonable basis for any such inquiry, action, proceeding, investigation or
      claim. Except as set forth in Schedule 5.23, with regard to the Company’s IP
      Cores, operational systems and miscellaneous Software, there are no express
      product or service warranties relating to the Company’s products or
      services.

    

    5.24. Affiliate
      Transactions.
      Except
      for the Sellers’ Employment Agreements, the Company is not a party to, or bound
      by, any Contract with any Affiliate, including the Sellers, other than on
      arms-length terms which are no less favorable to the Company than those which
      could be obtained with a third party which is not an Affiliate. No Affiliate
      of
      the Company owns or otherwise has any rights to or interests in any of the
      Company’s properties and assets, including, without limitation, the Intellectual
      Property.

    

    5.25. Customers
      and Suppliers.
      Except
      as described in Schedule 5.25, there are no Contracts to which the Company
      is a
      party under the terms of which (i) the Company is obligated to purchase any
      product or services from, or sell any product or services to, any other Person
      on an exclusive basis with respect to any geographic area or group of potential
      customers; or (ii) any other Person is similarly obligated to the
      Company.

     

    5.26. Illegal
      Payments.
      Neither
      the Company nor any of its directors, or to the Knowledge of the Sellers, any
      of
      the Company’s employees or agents has (a) directly or indirectly given or agreed
      to give any illegal gift, payment or similar benefit to any supplier, customer,
      governmental official or employee or other Person to assist in connection with
      any actual or proposed transaction or made or agreed to make any illegal
      benefit, or reimbursed any illegal political benefit made by any other Person,
      to any candidate for public office (i) which violates any applicable laws,
      or
      reasonably could be expected to subject the Purchaser to any Losses or penalties
      for any reasons, or (ii) the non-continuation of which has had or might have
      a
      Material Adverse Effect (b) established or maintained any unrecorded fund or
      asset or made any false entries on any books or records for any
      purpose.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    5.27. Company
      Documents and Financial Records.
      The
      shareholder register, minutes from the shareholders’ meetings and board meetings
      of the Company and all financial records of the Company are complete and correct
      in all material respects and have been maintained by the Company in accordance
      with sound business practices, applicable laws and the Accounting Principles
      and
      requirements, and no notice has been received or allegation made that the
      shareholder register, minutes from the shareholders’ meetings and board meetings
      of the Company or financial records are incorrect or should be rectified.

    

    5.28. Backlog.
      Schedule 5.28 sets forth, truly and accurately, the backlog of orders for the
      products and services of the Company as of June 1, 2008. The backlog is based
      on
      valid and existing orders received from customers of the Company. None of the
      orders included in the backlog have been cancelled, and, to the Knowledge of
      the
      Sellers, no customer is intending to cancel any of such orders. 

    

    5.29. Disclosure.
      The
      representations and warranties contained in this Article V (including the
      Schedules and exhibits hereto) do not contain any untrue statement of a material
      fact or omit to state any material fact necessary,
      in light of the circumstances in which they were made and taking into account
      the express limitations set forth in each such representation and warranty,
      to
      make such representations and warranties not misleading.

    

    
      
        5.30
          Due
          Diligence Information.
          

      

    

    

    (a) The
      Due Diligence Information described in Schedule 5.30 has been compiled in good
      faith with a view to create a true, accurate and fair portrait of the Company
      and its prospects and to reflect the Sellers’ Knowledge that there are no facts
      and circumstances relating to the affairs of the Company that have not been
      disclosed to the Purchaser and which, if disclosed, would reasonably be expected
      to influence the decision of a prudent purchaser to purchase the Shares on
      the
      terms or for the purchase price set forth in this Agreement.

    

    (b) The
      Purchaser and its representatives and advisors have conducted a due diligence
      review of the Company and have been provided with, and have had the opportunity
      to review, the Due Diligence Information. The Purchaser shall not be entitled
      to
      bring an indemnification claim against the Sellers based on a breach of any
      of
      the Sellers’ representations in this Article V, and the Sellers shall not be
      obliged to be liable for such a claim, if, on the basis of the Due Diligence
      Information, the Purchaser, at the time of Closing, had knowledge that the
      representation on which such claim is based, was untrue or inaccurate in the
      manner and to the extent claimed by the Purchaser in its claim for
      indemnification. 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    ARTICLE VI

    REPRESENTATIONS
      AND WARRANTIES OF
      PURCHASER

    

    Purchaser
      hereby represents and warrants to Sellers as follows:

     

    6.1. Organization
      and Qualification.
      Purchaser is duly organized and validly existing under the laws of its
      jurisdiction of incorporation and has all requisite power and authority to
      own
      and operate its properties and to carry on its businesses as now being
      conducted. Purchaser is duly qualified or licensed to do business in those
      jurisdictions in which the property owned or operated by it makes such
      qualification or licensing necessary. 

    

    6.2. Authority
      Relative to this Agreement.
      Purchaser has
      the
      necessary corporate power and authority to execute and deliver this Agreement
      and the Related Documents and to consummate the transactions contemplated hereby
      and thereby. The execution and delivery of this Agreement and the Related
      Documents and the consummation of the transactions contemplated hereby have
      been
      duly and validly authorized by the Board of Directors of Purchaser and no other
      corporate proceedings on the part of Purchaser are necessary to authorize this
      Agreement or to consummate the transactions contemplated hereby. This Agreement
      has been duly and validly executed and delivered by Purchaser and constitutes
      a
      valid, legal and binding agreement of Purchaser enforceable against Purchaser
      in
      accordance with its terms.

     

    6.3. Consents
      and Approvals; No Violations.
      Neither
      the execution and performance of this Agreement by Purchaser nor the
      consummation by Purchaser of the transactions contemplated hereby will
      (i) conflict with or result in any breach of any provision of the
      Certificate of Incorporation or Bylaws of Purchaser or any of the terms or
      provisions of any Contract to which Purchaser is a party or (ii) violate
      any applicable laws binding on Purchaser except for breaches or defaults which
      would not have a material adverse effect on Purchaser or an adverse effect
      on
      the ability of Purchaser to enter into its obligations under this Agreement
      or
      any of the Related Documents.

     

    ARTICLE VII

    COVENANTS

     

    7.1. Reasonable
      Best Efforts.
      Subject
      to the terms and conditions herein provided, each of the Parties hereto agrees
      to use its commercially reasonable best efforts to take or cause to be taken
      all
      actions reasonably necessary under applicable laws to consummate and make
      effective the transactions contemplated by this Agreement. If at any time after
      the Closing Date any further action is necessary to carry out the purpose of
      this Agreement then the Sellers and proper representatives of the Purchaser,
      as
      the case may be, shall take all such necessary action.

     

    7.2 Tax
      Matters.
      The
      Purchaser shall have control over the Audit of any Tax Return of the Company
      for
      any period (or portion thereof) ending on or before the Closing Date at the
      Sellers’ expense; provided,
      however,
      that
      the Purchaser shall not compromise, settle or otherwise resolve any such Audit
      without the prior written consent of the Sellers (which consent shall not be
      unreasonably withheld). The Sellers shall cooperate with the Purchaser with
      respect of any such Audit. For purposes of this Section 7.2, “Audit”
shall
      mean any audit, examination or investigation of a Tax Return or with respect
      to
      Taxes, including any appeal therefrom and any litigation before any Governmental
      Authority relating thereto. 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    7.3. Access
      to Books and Records of the Company.
      After
      the Closing Date, the Purchaser shall permit the Sellers and their
      representatives reasonable access, during normal business hours without
      unreasonably interfering with the operations of the Company, to relevant books,
      records, contracts and documents of or pertaining to the Company and shall
      cooperate with the Sellers in connection with tax audits and investigations
      of
      the Sellers conducted by any Governmental Authority, and the preparation of
      Tax
      Returns by the Sellers relating to periods of time prior to the Closing Date.
      The Sellers will keep strictly confidential all such material and information
      that it receives from the Company and will not use such information except
      in
      connection with Audits, investigations and other tax related
      matters.

    

    
      
        7.4.
          Confidentiality.
          

      

    

    

    (a)
       For
      the duration of seven (7) years from the Closing Date or such longer period
      as
      may be prescribed in the Sellers Employment Agreements, the Sellers will keep
      secret and not otherwise use for their own benefit or the benefit of any Person
      all confidential information of the Company and its Businesses (to the extent
      the relevant circumstances are not publicly known or no statutory obligation
      for
      publication exists).

    

    (b)
       The
      Parties will keep strictly confidential all knowledge received in the context
      of
      the negotiation and the conclusion of this Agreement about each other and the
      respective related companies and will not disclose such knowledge to any third
      Person, except if such disclosure is absolutely required by law. 

    

    7.5 Company
      Documents.
      The
      share register shall be delivered to the Purchaser on or before the Closing,
      and
      the complete and correct minutes from shareholders’ meetings and meetings of the
      board of directors, financial and other corporate records of the Company shall
      be transferred to the Purchaser by the Sellers on or before the Closing Date.
      

     

    ARTICLE
      VIII

    NON-COMPETITION;
      NON-SOLICITATION

     

    8.1. Non-Competition
      and Non-Solicitation

    

    (a) Each
      of
      the Sellers agrees that in consideration of the payments made to him (or the
      Habinc Group) in connection with the sale of the Shares pursuant to this
      Agreement, for a period commencing on the Closing Date and continuing, at a
      minimum, until the longer of (A) four (4) years from the Closing Date or (B)
      twenty-four (24) months from the termination of his employment with the Company
      (the “Sellers’
      Restricted Period”),
      he
      shall not, directly or indirectly, without the prior written consent of the
      Purchaser (A) offer or sell any products or services, or participate in any
      business which offers or sells any products or services, which compete in any
      geographic area of the Territory (as defined in Section 8.1(c) below) with
      the
      products or services offered or sold by the Company now or in the future, or
      (B)
      induce or attempt to induce, directly or indirectly, any customer of the Company
      to cease doing business, in whole or in part, with the Company or solicit the
      business of any such customer for any products or services which compete with
      any of the products or services offered or sold by the Company. Participation
      in
      a business shall include, but not be limited to, serving as a director, officer,
      employee, consultant, advisor, agent or representative or having a direct or
      indirect interest in the business as a shareholder, partner, joint venturer
      or
      any other financial interest. 

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    Nothing
      herein shall preclude the Company at any time after the Closing Date from
      electing, in its sole discretion, to reduce or eliminate the restriction in
      this
      Section 8.1(a) with respect to any one or more of the Sellers who are then
      currently employed by the Company. 

    

    (b) Each
      of
      the Sellers agrees that, in consideration of the payments to him (or the Habinc
      Group) in connection with the sale of his Shares pursuant to this Agreement,
      for
      the Seller’s Restricted Period he shall not, either on his own account or for
      any Person, solicit, interfere with, or endeavor to cause any employee of the
      Company to leave his employment or induce or attempt to induce any such employee
      to breach his employment agreement with the Company.

    

    (c) For
      purposes of this Article VIII, a “Territory”
shall
      mean Europe, the United States and any other country or place where the Company
      is engaging or has engaged in business in any material respect at any time
      during the Sellers’ Restricted Period.

    

    (d) Each
      of
      the Sellers acknowledges that both the geographic scope and length of the
      restrictions imposed on him hereunder are fair and reasonable in the
      circumstances and are necessary and fundamental to the protection of the
      Business of the Company.

    

    8.2 Remedies.
      Each of
      the Sellers agrees that if he contravenes the prohibitions contained in Sections
      8.1(a) or 8.1(b), he shall pay as a penalty for each such violation an amount
      equal to the sum of $250,000 USD, and that if, as a consequence of the violation
      of such prohibitions, the Losses suffered by the Company exceed such penalty,
      the Purchaser and the Company shall be entitled, pursuant to the provisions
      of
      Article IX hereof, to recover additional compensation from the Sellers involved
      equal to such excess amount. 

    

    8.3. Injunctive
      Reliefs.
      Each of
      the Sellers acknowledges that the covenants contained in this Article VIII
      are a
      material and necessary inducement for the Purchaser to agree to the transactions
      contemplated hereby, that the Sellers have realized significant monetary benefit
      from these transactions, that violation of any of the covenants contained in
      this Article VIII will cause irreparable and continuing damage to the Purchaser,
      that the Purchaser shall be entitled to seek injunctive reliefs from any court
      of competent jurisdiction restraining any further violation of such covenants,
      and that such injunctive reliefs shall be cumulative and in addition to any
      other rights or remedies to which the Purchaser may be entitled as set forth
      in
      Section 8.2 or otherwise. 

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    8.4. Severability.
      In case
      any of the terms or provisions contained in this Article VIII shall for any
      reason be held invalid, illegal or unenforceable, it shall not affect any other
      terms or provisions hereof, but such term or provision shall be deemed modified
      or deleted to the extent required by applicable laws, and such modification
      or
      deletion shall not affect the validity of the other terms or provisions of
      this
      Article VIII. In addition, if any of the restrictions contained in this Article
      VIII shall for any reason be held to be unreasonable with regard to time,
      duration, geographic scope or activity, the Parties contemplate and agree that
      such restrictions shall be modified and shall be enforced to the full extent
      compatible with applicable laws.

    

    ARTICLE
      IX

    SURVIVAL
      OF REPRESENTATIONS & WARRANTIES;

    INDEMNIFICATION

    

    
      
        9.
          Survival
          of Representations and Warranties; Indemnification.

      

    

    

    9.1. Survival
      of Representations and Warranties.
      Except as otherwise expressly provided in this Agreement, all representations
      and warranties made hereunder or in connection with the transactions
      contemplated hereby shall not terminate, but shall survive the Closing and
      continue in effect until two (2) years following the Closing Date, except that
      the representations and warranties contained in: (a) Section 5.4 shall continue
      indefinitely; (b) Section 5.7 shall continue until three months after the date
      such Tax has been finally and irrevocably determined; (c) Section 5.16 shall
      continue for a period of four (4) years from the Closing Date; and (d) Section
      5.15 shall continue for a period of six (6) years from the Closing Date;
provided,
      however,
      that, in each case, any such representation or warranty as to which a claim
      shall have been asserted during such survival period shall continue in effect
      until such time as such claim shall have been resolved or settled. 

     

    9.2. Survival
      of Covenants and Agreements.
      Except as expressly provided in this Agreement, all covenants and agreements
      made hereunder or in connection with the transactions contemplated hereby shall
      not terminate but shall survive the Closing indefinitely, limited only by the
      applicable statutes of limitation governing the assertion of a claim for a
      breach thereof.

    

    9.3.
      General
      Indemnification by Sellers.
      Subject to Section 9.9 hereof, the Sellers, jointly and severally, agree to
      indemnify and hold harmless the Company and the Purchaser, and their respective
      successors and assigns from and against any Losses, including, where applicable,
      interest thereon determined at the Applicable Rate calculated from the earliest
      date permitted under applicable law until the date of payment, which are caused
      by or arise out of: (a) any breach or default in the performance by the
      Sellers of any covenant or agreement of the Sellers contained herein or in
      any
      document delivered pursuant hereto; (b) any breach of warranty or
      representation made by the Sellers contained herein, or in any document
      delivered pursuant hereto, without regard to materiality other than under
      Section 5.11, and (c) any and all actions, suits, proceedings, claims, demands,
      judgments, reasonable costs and expenses (including reasonable legal fees)
      incident to any of the foregoing. To the extent that the Company or the
      Purchaser receives an indemnification under any insurance policy, any amount
      to
      which the Purchaser or the Company otherwise would be entitled hereunder shall
      be reduced accordingly by the amount of such insurance indemnification payment.
      

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    9.4 General
      Indemnification by Purchaser.
      Subject to Section 9.9, Purchaser agrees to indemnify and hold harmless the
      Sellers and their respective heirs, successors and assigns from and against
      any
      Losses including, where applicable, interest thereon determined at the
      Applicable Rate calculated from the earliest date permitted under Applicable
      Law
      until the date of payment, which are caused by or arise out of: (a) any
      breach or default in the performance by Purchaser or the Company of any covenant
      or agreement of the Purchaser contained herein or in any certificate or
      instrument delivered pursuant hereto; (b) any breach of warranty or
      representation made by Purchaser contained herein or in any certificate or
      instrument delivered pursuant hereto; and (c) any and all actions, suits,
      proceedings, claims, demands, judgments, costs and expenses (including
      reasonable legal fees) incident to any of the foregoing. To the extent that
      the
      Sellers receive an indemnification under any insurance policy, any amount to
      which the Sellers otherwise would be entitled hereunder shall be reduced
      accordingly by the amount of such insurance indemnification payment

    

    9.5. Specific
      Indemnification by Sellers.
      Subject to Section 9.9 to the extent applicable, the Sellers shall indemnify
      and
      hold harmless the Purchaser and the Company from and against any and all Losses
      incurred or suffered by the Purchaser or the Company as a result of, or which
      relate to, or arise from, any of the following:

     

    (a) any
      Liabilities arising out of, or relating to, the resignation of Edwin Catovic
      and
      the sale of his equity interest in the Company in connection therewith;
      and

    

    (b) any
      Tax or other Liabilities arising out of, or relating to, any transfers of the
      Shares by any of the Sellers to Persons owned or controlled by
      them.

    

    
      
        9.6.
          Procedure;
          Notice of Claims.

      

    

    

    (a) Any
      indemnified party (the “Indemnified
      Party”)
      seeking indemnification hereunder shall, within the relevant limitation period
      provided for in Section 9.1, give to the party obligated to provide
      indemnification to such Indemnified Party (the “Indemnifying
      Party”)
      a notice (a “Claim
      Notice”)
      describing in reasonable detail the facts giving rise to any claims for
      indemnification hereunder and shall include in such Claim Notice (if then known)
      the amount or the method of computation of the amount of such claim, and a
      reference to the provision of this Agreement or any agreement or document
      executed in connection herewith upon which such claim is based; provided
      that
      a Claim Notice in respect of any legal action by or against a third party as
      to
      which indemnification will be sought shall be given promptly after the action
      is
      commenced; and provided
      further
      that failure to give such notice promptly shall not relieve the Indemnifying
      Party of its obligations hereunder except to the extent it shall have been
      prejudiced by such failure. 

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (b) The
      Indemnifying Party shall have thirty (30) days after the giving of any Claim
      Notice pursuant hereto (the “Waiting
      Period”)
      to (i) agree to the amount or method of determination of the claim set forth
      in
      the Claim Notice and to the payment of such amount to the Indemnified Party
      in
      immediately available funds or (ii) provide such Indemnified Party with written
      notice that it disagrees (and the reasons therefor) with the amount or method
      of
      determination set forth in the Claim Notice (the “Dispute
      Notice”).
      If the Indemnifying Party and the Indemnified Party are unable to reach an
      accord regarding all of the claims asserted in the Claim Notice within thirty
      (30) days after the Indemnified Party’s receipt of the Dispute Notice (the
“Negotiation
      Period”),
      the Indemnified Party may commence such action as it deems appropriate to
      enforce the indemnification obligation of the Indemnifying Party pursuant to
      the
      provisions of this Article IX subject to Section 11.5 of this Agreement. The
      failure to file a Dispute Notice within the time permitted shall be deemed
      to
      constitute an acknowledgement by the Indemnifying Party of its acquiescence
      to
      the amount and method of determination of the claim in the Claim Notice.

    

    9.7. Procedure
      - Third Party Claims.

    

    (a) Promptly
      after receipt by an Indemnified Party of notice of the commencement of any
      proceeding against it by a third party (“Third
      Party Claim”),
      such
      Indemnified Party will, if a claim for indemnification is to be made against
      an
      Indemnifying Party, provide to the Indemnifying Party written notice of the
      commencement of such claim (together with copies of any legal papers served),
      provided,
      however,
      that the
      failure to promptly notify the Indemnifying Party will not relieve the
      Indemnifying Party of any liability that it may have to any Indemnified Party,
      except to the extent that the rights of the Indemnifying Party are actually
      prejudiced by such failure.

    

    (b) The
      Indemnified Party shall take such action, at the Indemnifying Party’s expense,
      as the Indemnifying Party may reasonably request to avoid dispute, or appeal,
      settle or defend such Third Party Claim; provided,
      however,
      that the Indemnified Party shall not, and shall use commercially reasonable
      efforts to procure that the Company shall not, accept or pay or settle or make
      any submission in respect of such claims, without the Indemnifying Party’s prior
      consent thereto, which shall not be unreasonably withheld.

    

    (c) Provided
      that it acknowledges in writing its obligation to indemnify the Indemnified
      Party, the
      Indemnifying Party shall have the right to assume the defense of any
Third
      Party
      Claim at
      its expense, provided that (x) in the reasonable judgment of the Indemnified
      Party, the Indemnifying Party has adequate resources to undertake such defense
      and satisfy any indemnifiable Losses arising from such Third
      Party
      Claim
      and (y) the selection of counsel is approved by the Indemnified Party, which
      approval will not be unreasonably withheld. If the Indemnified Party determines
      that the Indemnifying Party does not have adequate resources or the Indemnifying
      Party fails to make such an election within twenty (20) days after it receives
      notice pursuant to Section 9.7(a), the Indemnified Party shall have the right
      to
      defend such Third
      Party
      Claim at
      the expense of the Indemnifying Party. The Indemnified Party, at its own
      expense, shall have the right to retain its own counsel and participate in
      the
      defense of a Third
      Party
      Claim
      defended by the Indemnifying Party. 

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    (d) If
      the
      Indemnifying Party assumes the defense of a Third Party Claim, (A) no compromise
      or settlement of such Third Party Claim may be effected by the Indemnifying
      Party without the Indemnified Party’s consent which will not be unreasonably
      withheld, unless (i) the sole relief provided is monetary damages that are
      paid
      in full by the Indemnifying Party, (ii) the compromise or settlement includes
      a
      complete release of the Indemnified Party, and (iii) there is no finding or
      admission of any violation of law or any violation of the rights of any Person
      by the Indemnified Party. 

     

    (e)
       Notwithstanding
      the foregoing, if a remedy sought under a Third Party Claim is for injunctive
      or
      other non-monetary relief for which an Indemnified Party may be liable, the
      Indemnified Party may, by notice to the Indemnifying Party, assume the exclusive
      right to defend or settle such proceeding at the Indemnifying Party’s cost and
      expense; provided, however,
      such
      Third Party Claim may not be settled without the Indemnifying Party’s consent,
      which will not be unreasonably withheld. 

    

    (f)
       With
      respect to any obligations of an Indemnifying Party and an Indemnified Party
      which arise pursuant to the provisions of this Article IX, the Indemnifying
      Party and the Indemnified Party agree to cooperate with each other as reasonably
      requested by the other.

    

    9.8
        Remedies.
      Except as otherwise may be provided in this Agreement, the sole and exclusive
      remedy of the parties for breach of representations and warranties contained
      in
      Articles V and VI of this Agreement shall be restricted to the indemnification
      rights set forth in this Article IX. Accordingly, the parties agree that the
      Swedish Sale of Goods Act (1990.931) shall not apply to this Agreement, and,
      except as otherwise provided in this Agreement, a deduction of the Purchase
      Price is the only consequence that can be claimed by the Purchaser due to the
      Sellers’ breach of the representations and warranties in Article V of this
      Agreement.

    

    
      
        9.9.
          Certain
          Limitations.
          

      

    

    

    (a) Each
      Party’s aggregate liability for indemnification for the breach of any
      representation or warranty made in this Agreement or in any Related Document
      shall not exceed an amount equal to fifty (50%) percent of the Purchase Price
      paid by the Purchaser including the amount of Earn Out Payments which the
      Sellers have earned and otherwise would be entitled to be paid (the
“Liability
      Cap”),
      with
      the exception of Section 5.7 (Taxes) where the Sellers’ liability is limited to
      the total Purchase Price.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (b) The
      Sellers shall not be liable for Losses under Section 9.3 (b) unless and until
      such Losses exceed $200,000 USD, in the aggregate, without taking into account
      materiality other than under Section 5.11 (the “Sellers
      Basket Amount”),
      it
      being understood that once the amount of the Loss (or Losses) equals or exceeds
      the Seller Basket Amount, the Purchaser shall be entitled to be indemnified
      on a
      dollar for dollar basis for the full amount of the Loss including the Sellers
      Basket Amount. For the avoidance of doubt, the Sellers Basket Amount shall
      not
      apply to any claims for indemnification other than those pursuant to Section
      9.3(b), including the breach or non-fulfillment of any covenant in this
      Agreement or any other breach of this Agreement that is not a breach of the
      representations and warranties in Article V, and any claims for indemnification
      pursuant to Section 9.5. No individual claim for indemnification under Section
      9.3 (b) shall be valid and assertable unless it is for an amount in excess
      of
      $20,000 USD; provided,
      however,
      that to
      the extent that individual claims are related to one another, they may be
      aggregated for the purposes of meeting such $20,000 threshold.

    

    (c) The
      Purchaser shall not be liable for Losses under Section 9.4(b) unless and until
      such Losses exceed $200,000 in the aggregate (the “Purchaser
      Basket Amount”),
      it
      being understood that once the amount of the Loss (or Losses) equals or exceeds
      the Purchaser Basket Amount, the Sellers Indemnified Parties shall be entitled
      to be indemnified on a dollar for dollar basis for the full amount of the Loss,
      including the Purchaser Basket Amount. For the avoidance of doubt, the Purchaser
      Basket Amount shall not apply to any claims for indemnification other than
      those
      pursuant to Section 9.4(b), including the breach or non-fulfillment of any
      covenant in this Agreement or any other breach of this Agreement that is not
      a
      breach of the representations and warranties in Article VI.

    

    (d)
       It
      is agreed that for the purpose of making a claim for indemnification, the
      expiration of any one survival period, as set forth in Section 9.1, of certain
      representations and warranties, shall not affect the ability to make any claim
      for indemnification hereunder under any other representations and warranties
      still surviving; provided,
      however,
      that no Party shall be entitled to make a claim for indemnification more than
      once on account of the same facts and circumstances.

     

    ARTICLE
      X

    SETTLEMENT
      OF CLAIMS AND ESCROW

    

    10.1.
       Priorities
      of Payment.
      Compensation for a claim by the Purchaser or the Company for breach of any
      of
      the warranties, covenants or agreements made or to be performed by the Sellers
      under this Agreement, shall be paid as follows: first, from the Escrow Account
      in accordance with the Escrow Agreement; second, should the amount available
      in
      the Escrow Account not be sufficient to settle the entire Loss due by the
      Sellers to the Purchaser Indemnified Parties, then by way of offset against
      any
      Earn Out Payments that the Sellers already have earned and are then actually
      entitled to but are not yet paid; and third, if there is still a deficiency,
      the
      Sellers shall pay the remainder of such Loss directly to the Purchaser upon
      demand. 

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    10.2. Escrow
      Claim Payments.

    

    (a) If
      the
      Purchaser has asserted a claim in accordance with Section 9.6 above that is
      agreed to or not timely disputed by the Sellers, the Purchaser and the Sellers
      shall upon the sooner of such agreement or within five (5) Business Days
      following the elapse of the Waiting Period, jointly instruct the Escrow Agent
      to
      pay the amount of such claim to the Purchaser (together with the interest that
      has accrued on such amount during the period it has been deposited on the Escrow
      Account) to the extent requisite funds are available in the Escrow Account
      to
      cover such claim and interest.

    

    (b)
       The
      Escrow Agent shall be entitled to act in accordance with any award made and
      entered by the Arbitration Tribunal which determines those of the Purchaser’s
      claims that have been disputed by the Sellers, and to authorize the making
      or
      withholding of the Escrow Account in accordance therewith. If Purchaser and
      Sellers should settle or resolve, in whole or in part, the dispute with respect
      to such claim or claims, a memorandum setting forth such accord shall be
      prepared and signed by each of the Parties and furnished to the Escrow Agent.
      The Escrow Agent shall be entitled to rely on any such memorandum and to
      distribute or deliver the Escrow Account in accordance with the terms
      thereof.

     

    10.3 Outstanding
      Claims.
      Once
      asserted, a claim shall be deemed to be an “Outstanding
      Claim”
until
      finally resolved in accordance with the terms of this Agreement.

    

    10.4 Distributions
      Out of the Escrow Account.

    

    (a) Upon
      the
      first anniversary of the Closing Date (the“First
      Distribution Date”),
      the
      Purchaser and the Sellers shall jointly instruct the Escrow Agent to release
      and
      return promptly to the Sellers in accordance with the Sellers’ Allocations, that
      amount of the Escrow Account which reduces the Escrow Account then to be held
      by
      the Escrow Agent to $2,500,000 USD plus such additional amounts as may be
      reasonably required to satisfy all of the Sellers’ liability in respect of any
      Outstanding Claims. If, on the First Distribution Date, the balance of the
      Escrow Account is less than the amount calculated pursuant to the preceding
      sentence, no distribution to Sellers shall be made.

    

    (b) After
      the
      elapse of eighteen (18) months from the Closing Date, (the
      “Second
      Distribution Date”),
      the
      Purchaser and the Sellers shall jointly instruct the Escrow Agent to release
      and
      return promptly to Sellers in accordance with the Sellers’ Allocations, that
      amount of the Escrow Account which reduces the Escrow Account then to be held
      by
      the Escrow Agent to $1,250,000 USD plus such additional amounts as may be
      reasonably required to satisfy all of the Sellers=
      liability in respect of any Outstanding Claims. If, on the Second Distribution
      Date, the balance of the Escrow Account is less than the amount calculated
      pursuant to the preceding sentence, no distribution to Sellers shall be
      made.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    (c) Upon
      the
      elapse of twenty-four (24) months from the Closing Date, the Purchaser and
      the
      Sellers shall jointly instruct the Escrow Agent to pay to the Sellers that
      amount of the remaining portion of the Escrow Account in excess of such amount
      as may be required
      to
      satisfy all of the Sellers=
      liability with respect to any Outstanding Claims. As soon as all Outstanding
      Claims have been resolved, the Purchaser and the Sellers shall jointly instruct
      the Escrow Agent to pay to the Sellers according to the Sellers’ Allocations,
      the remaining portion of the Escrow Account not required to satisfy the
      Sellers=
      liability under Article IX.

     

    10.5. Purchaser’s
      Right of Offset.
      The
      Purchaser always shall have the right to withhold and then set-off against
      any
      Earn Out Payments payable or to be paid to Sellers, the amount of any valid
      claim for indemnification asserted by the Purchaser to the extent that such
      claim exceeds the amount of the balance in the Escrow Account.

     

    ARTICLE XI

    MISCELLANEOUS

     

    11.1. Entire
      Agreement; Assignment; Amendments and Waivers. 

    

    (a) This
      Agreement and the Related Documents (together with all documents referencing
      to
      or referred to in it or otherwise executed at the Closing Date in relation
      hereto) constitute the entire agreement between the Parties in relation to
      its
      subject matter and replaces and extinguishes all prior agreements between the
      Parties with respect to such subject matter.

    

    (b) Neither
      Party shall have the right to assign this Agreement without the prior written
      consent of the other Party.

    

    (c) This
      Agreement may not be amended or modified, and any of the terms, covenants,
      representations, warranties, or conditions hereof may not be waived, except
      by a
      written instrument executed by all of the Parties hereto, or in the case of
      a
      waiver, by the Party waiving compliance. Any waiver by any Party of any
      condition, or of the breach of any provision, term, covenant, representation,
      or
      warranty contained in this Agreement, in any one or more instances, shall not
      be
      deemed to be nor construed as further or continuing waiver of any such
      condition, or of the breach of any other provision, term, covenant,
      representation, or warranty of this Agreement.

     

    11.2. Validity. If
      any
      provision of this Agreement or the application thereof to any Person or
      circumstance is held invalid or unenforceable by a Governmental Authority,
      then
      the remainder of this Agreement and the application of such provision to other
      Persons or circumstances shall not be affected thereby and to such end the
      provisions of this Agreement are agreed to be severable.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    11.3. Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      given (and shall be deemed to have been duly given upon receipt) by delivery
      in
      person, by facsimile or by registered or certified mail (postage prepaid, return
      receipt requested) to each other party as follows:

     

    
      
        	
                if
                  to Purchaser:

              	
                Aeroflex
                  Incorporated

              
	 	
                Att:
                  Leonard Borow, President and CEO

              
	 	
                35
                  South Service Road

              
	 	
                PO
                  Box 6022

              
	 	
                Plainview,
                  New York 11803

              
	 	
                Telecopier:
                  (516) 694-0658

              
	 	 
	
                with
                  copies to:

              	
                Moomjian,
                  Waite, Wactlar & Coleman, LLP 

              
	 	
                Attn:
                  Edward S. Wactlar, Esq.

              
	 	
                100
                  Jericho Quadrangle

              
	 	
                Jericho,
                  York, NY 11753

              
	 	
                Telecopier:
                  (516) 937-5050

              
	 	 
	 	
                Mannheimer
                  Swartling Advokatbyrå AB

              
	 	
                Attn:
                  Johan Ljungberg

              
	 	
                Box
                  2235, 

              
	 	
                SE-403
                  14 Göteborg

              
	 	
                Sweden

              
	 	
                Telecopier:
                  +46 31-355 16 01

              
	 	 
	
                if
                  to Sellers:

              	
                Jiri
                  Gaisler

              
	 	
                Molinsgatan
                  19

              
	 	
                41133
                  Gothenburg

              
	 	
                Sweden

              
	 	 
	 	
                Per
                  Danielsson

              
	 	
                Första
                  Långgatan 6

              
	 	
                41303
                  Gothenburg

              
	 	
                Sweden

              
	 	 
	 	
                Aktiebolaget
                  Grundstenen 121346 changing name

              
	 	
                to
                  Habinc Invest AB

              
	 	
                Bassåsv’gen
                  24

              
	 	
                43655
                  Hovås

              
	 	
                Sweden
                  

              

      

       

    

    or
      to
      such other address as the person to whom notice is given may have previously
      furnished to the others in writing in the manner set forth above.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    11.4.
       Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      Sweden, without regard or giving effect to the principles of conflicts of law
      thereof.

    

    11.5.
       Disputes.
      Any
      dispute arising out of or in connection with this Agreement shall be finally
      settled by arbitration in accordance with the Rules of the Arbitration Institute
      of the Stockholm Chamber of Commerce (the “Rules”)
      by
      three (3) arbitrators appointed in accordance with the said Rules; provided,
      however,
      that
      any disputes arising under Sections 3.2 or 3.3 shall be settled by only one
      (1)
      arbitrator pursuant to, and using, the Simplified Procedure of such Rules.
      The
      place of arbitration shall be Stockholm, Sweden, and the language of the
      proceedings shall be in English. Nothing herein shall prevent either Party
      from
      seeking injunctive relief or specific performance from any court of competent
      jurisdiction as contemplated by the terms of this Agreement, and/or otherwise
      as
      necessary to obtain execution of any arbitration decision or award.

     

    11.6. Expenses.
      All
      fees and expenses, including but not limited to legal fees and expenses,
      incurred by a Party in connection with the negotiations, preparation, execution
      and implementation of any documents necessary to give effect to the matters
      which are intended to take place under the terms of this Agreement and the
      Related Documents shall, unless otherwise agreed in writing, be borne by the
      incurring Party.

     

    11.7. Specific
      Performance. The
      Parties hereby acknowledge and agree that the failure of any Party to perform
      its agreements and covenants hereunder, including its failure to take all
      actions as are necessary on its part to the consummation of the transactions
      contemplated hereby, will cause irreparable injury to the other Parties, for
      which damages, even if available, will not be an adequate remedy. Accordingly,
      each Party hereby consents to the right of any other to seek the issuance of
      injunctive relief by any Governmental Authority having competent jurisdiction
      to
      compel performance of such Party’s obligations and to the granting by any such
      Governmental Authority of the remedy of specific performance of its obligations
      hereunder.

    

    _________________

     

    [Signature
      page follows]

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly
      executed on its behalf as of the day and year first above written.

    

    

    
      	
              AEROFLEX
                INCORPORATED

            	 	
              Aktiebolaget
                Grundstenen 121346 changing name to Habinc Invest
                AB

            

    

     

    
      	
              By:
                

            	
              /s/
                Charles Badlato

            	 	
              /s/
                Sandi Habinc

            
	
              Name:
                

            	
              Charles
                Badlato

            	 	
              By:
                

            	
              Sandi
                Habinc

            
	
              Title:
                

            	
              VP-Treasurer

            	 	 	 

    

    

    
      	/s/
              Per Danielsson 	 	
              /s/
                Sandi Habinc

            
	Per
              Danielsson	 	
              Sandi
                Habinc

            

    

     

    
      	
              /s/
                Jiri Gaisler

            	 
	
              Jiri
                Gaisler

            	 

    

     

    
      
        
        

      

      
        44

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