Document:

EXHIBIT
10.2

EXECUTION
COPY

 

STOCK PURCHASE
AGREEMENT

among

DATAMARK INC.,

eCOLLEGE.COM

and

DATAMARK PARTNERS, LLC

 

 

 

May 14, 2007

TABLE OF CONTENTS

	
  ARTICLE I PURCHASE AND SALE OF SHARES

  	
   

  	
  1

  
	
  1.01

  	
   

  	
  Purchase and Sale of Shares. Upon the terms and
  subject to the conditions set forth in this Agreement, Seller shall sell,
  assign, transfer and convey to Buyer, and Buyer shall purchase and acquire
  from Seller, all of the Shares against payment by Buyer of an amount in cash
  equal to the Final Purchase Price (as defined in Section 1.02(a)). The
  portion of the Final Purchase Price to be paid at the Closing to Seller for the
  Shares will be an amount in cash equal to the Closing Purchase Price (as
  defined in Section 1.02(b)).

  	
   

  	
  1

  
	
  1.02

  	
   

  	
  Calculation of Final and Closing Purchase Price.

  	
   

  	
  1

  
	
  1.03

  	
   

  	
  Payment for and Surrender of Shares

  	
   

  	
  1

  
	
  1.04

  	
   

  	
  Estimated Net Working Capital and Estimated Net
  Indebtedness Calculations

  	
   

  	
  2

  
	
  1.05

  	
   

  	
  Final Net Working Capital and Net Indebtedness
  Calculations.

  	
   

  	
  2

  
	
  1.06

  	
   

  	
  Post-Closing Adjustment Payment

  	
   

  	
  3

  
	
  1.07

  	
   

  	
  The Closing

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II CONDITIONS TO CLOSING

  	
   

  	
  3

  
	
  2.01

  	
   

  	
  Conditions to Buyer’s Obligations

  	
   

  	
  3

  
	
  2.02

  	
   

  	
  Conditions to Seller’s Obligations

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES RELATING
  TO SELLER

  	
   

  	
  7

  
	
  3.01

  	
   

  	
  Organization and Authority

  	
   

  	
  7

  
	
  3.02

  	
   

  	
  Execution and Delivery; Valid and Binding Agreement

  	
   

  	
  7

  
	
  3.03

  	
   

  	
  Noncontravention

  	
   

  	
  7

  
	
  3.04

  	
   

  	
  Ownership of Capital Stock

  	
   

  	
  7

  
	
  3.05

  	
   

  	
  Brokers Fees

  	
   

  	
  7

  
	
  3.06

  	
   

  	
  Litigation

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV
  REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY

  	
   

  	
  8

  
	
  4.01

  	
   

  	
  Organization and Corporate Power

  	
   

  	
  8

  
	
  4.02

  	
   

  	
  Authorization; No Breach; Valid and Binding
  Agreement

  	
   

  	
  8

  
	
  4.03

  	
   

  	
  Capital Stock

  	
   

  	
  8

  
	
  4.04

  	
   

  	
  Financial Statements; Undisclosed Liabilities

  	
   

  	
  9

  
	
  4.05

  	
   

  	
  Absence of Certain Developments

  	
   

  	
  9

  
	
  4.06

  	
   

  	
  Title to Properties.

  	
   

  	
  10

  
	
  4.07

  	
   

  	
  Tax Matters

  	
   

  	
  11

  
	
  4.08

  	
   

  	
  Contracts and Commitments.

  	
   

  	
  11

  
	
  4.09

  	
   

  	
  Intellectual Property

  	
   

  	
  12

  
	
  4.10

  	
   

  	
  Litigation

  	
   

  	
  13

  
	
  4.11

  	
   

  	
  Consents.

  	
   

  	
  13

  
	
  4.12

  	
   

  	
  Employee Benefit Plans.

  	
   

  	
  13

  
	
  4.13

  	
   

  	
  Reserved.

  	
   

  	
  14

  
	
  4.14

  	
   

  	
  Compliance with Laws

  	
   

  	
  14

  

 

 i
 

 

	
  4.15

  	
   

  	
  Environmental Matters

  	
   

  	
  14

  
	
  4.16

  	
   

  	
  Sufficiency of Assets

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  	
  15

  
	
  5.01

  	
   

  	
  Organization and Power

  	
   

  	
  15

  
	
  5.02

  	
   

  	
  Authorization; Valid and Binding Agreement

  	
   

  	
  15

  
	
  5.03

  	
   

  	
  No Breach

  	
   

  	
  15

  
	
  5.04

  	
   

  	
  Consents, etc.

  	
   

  	
  15

  
	
  5.05

  	
   

  	
  Litigation

  	
   

  	
  15

  
	
  5.06

  	
   

  	
  Brokerage

  	
   

  	
  16

  
	
  5.07

  	
   

  	
  Investment Representation

  	
   

  	
  16

  
	
  5.08

  	
   

  	
  Equity Commitment. Buyer has received commitments to
  provide equity financing in connection with the transactions provided for
  herein of not less than $18 million, copies of which have been provided to
  Seller.

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI PRE-CLOSING COVENANTS/SUPERIOR OFFER

  	
   

  	
  16

  
	
  6.01

  	
   

  	
  Conduct of the Business.

  	
   

  	
  16

  
	
  6.02

  	
   

  	
  Access to Books and Records

  	
   

  	
  16

  
	
  6.03

  	
   

  	
  Regulatory Filings

  	
   

  	
  16

  
	
  6.04

  	
   

  	
  Conditions

  	
   

  	
  17

  
	
  6.05

  	
   

  	
  Notification

  	
   

  	
  17

  
	
  6.06

  	
   

  	
  Superior Offer

  	
   

  	
  17

  
	
   

  	
   

  	
  Nothing herein shall prohibit Seller from soliciting
  a Superior Offer or furnishing any party indicating a bona fide
  intention (in the reasonably determination of the Board of Directors of
  Seller (or a special committee thereof) to make a Superior Offer with all
  information heretofore made available to potential bidders for the Company
  (and supplements thereto and updates thereof) or engaging in negotiations
  with respect to any possible Superior Offer. In the event that Seller
  receives a Superior Offer, it shall promptly (but in any case no later than
  within one business day) provide a copy of the Superior Offer to Buyer. On or
  before 5:00 p.m. Eastern time on the fifth business day following its receipt
  of a copy of such Superior Offer, Buyer may notify Seller of its intention to
  match the material terms of such Superior Offer. If Buyer indicates its
  intention to match such terms and executes by such time an amendment to this
  Agreement reflecting the matching terms, Seller shall reject such Superior
  Offer and this Agreement shall continue in full force and effect, with any inconsistent
  material term contained in such Superior Offer substituted for the analogous
  term in this Agreement. If Buyer notifies Seller of its intention not to
  match such terms, or if it fails to notify Seller of its intention to match
  such terms on or before 5:00 p.m. on the fifth business day following its
  receipt of a copy of the Superior Offer, Seller may, not later than the close
  of business on the next succeeding business day, accept such Superior Offer
  and terminate this Agreement by written notice to Buyer. If Seller accepts
  such Superior Offer and terminates this Agreement in accordance with this
  Section 6.06, neither party shall have any obligation to the other with
  respect hereto, except that Seller shall, upon receipt from Buyer of an
  itemized invoice therefor, reimburse Buyer up to $300,000 for its expenses
  relating to the transaction contemplated hereby and the financing thereof
  including without limitation investment banking, legal, accounting, placement
  agent, and similar fees and expenses.

  	
   

  	
  17

  

 

 ii
 

 

	
  ARTICLE VII COVENANTS OF BUYER

  	
   

  	
  18

  
	
  7.01

  	
   

  	
  Access to Books and Records

  	
   

  	
  18

  
	
  7.02

  	
   

  	
  Notification

  	
   

  	
  18

  
	
  7.03

  	
   

  	
  Director and Officer Liability and Indemnification

  	
   

  	
  18

  
	
  7.04

  	
   

  	
  Regulatory Filings

  	
   

  	
  18

  
	
  7.05

  	
   

  	
  Conditions

  	
   

  	
  18

  
	
  7.06

  	
   

  	
  Contact with Customers and Suppliers

  	
   

  	
  18

  
	
  7.07

  	
   

  	
  Employee Benefits

  	
   

  	
  19

  
	
  7.08

  	
   

  	
  Financing. Buyer shall use its reasonable best
  efforts to obtain debt financing in an amount at least sufficient to
  consummate the transactions contemplated by this Agreement by the Closing
  Date on commercially reasonable terms and conditions; provided that Buyer
  shall accept and enter into such debt financing arrangements offered on
  commercially reasonable terms and conditions.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII TERMINATION

  	
   

  	
  19

  
	
  8.01

  	
   

  	
  Termination

  	
   

  	
  19

  
	
  8.02

  	
   

  	
  Effect of Termination

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX INDEMNIFICATION

  	
   

  	
  20

  
	
  9.01

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  20

  
	
  9.02

  	
   

  	
  Indemnification for the Benefit of Buyer.

  	
   

  	
  20

  
	
  9.03

  	
   

  	
  Indemnification by Buyer for the Benefit of Seller

  	
   

  	
  21

  
	
  9.04

  	
   

  	
  Mitigation

  	
   

  	
  22

  
	
  9.05

  	
   

  	
  Defense of Third Party Claims

  	
   

  	
  22

  
	
  9.06

  	
   

  	
  Determination of Loss Amount

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X ADDITIONAL COVENANTS AND AGREEMENTS

  	
   

  	
  23

  
	
  10.01

  	
   

  	
  Disclosure Generally

  	
   

  	
  23

  
	
  10.02

  	
   

  	
  Acknowledgment by Buyer

  	
   

  	
  23

  
	
  10.03

  	
   

  	
  Tax Matters.

  	
   

  	
  24

  
	
  10.04

  	
   

  	
  Further Assurances

  	
   

  	
  25

  
	
  10.05

  	
   

  	
  Provision Respecting Legal Representation

  	
   

  	
  25

  
	
  10.06

  	
   

  	
  Intercompany Accounts. Effective immediately prior
  to the Closing, all intercompany receivables “due from corporate” and
  intercompany payables “due to corporate” on the Company’s balance sheet shall
  be eliminated in the manner most tax efficient as agreed by the parties; all
  intercompany receivables “due from eLearning” and intercompany payables “due
  to eCollege” on the Company’s balance sheet shall remain in effect.

  	
   

  	
  25

  

 

 iii
 

 

	
  ARTICLE XI DEFINITIONS

  	
   

  	
  26

  
	
  11.01

  	
   

  	
  Definitions

  	
   

  	
  26

  
	
  11.02

  	
   

  	
  Cross-Reference of Other Definitions

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII MISCELLANEOUS

  	
   

  	
  29

  
	
  12.01

  	
   

  	
  Press Releases and Communications

  	
   

  	
  29

  
	
  12.02

  	
   

  	
  Expenses

  	
   

  	
  30

  
	
  12.03

  	
   

  	
  Knowledge Defined

  	
   

  	
  30

  
	
  12.04

  	
   

  	
  Notices

  	
   

  	
  30

  
	
  12.05

  	
   

  	
  Assignment

  	
   

  	
  31

  
	
  12.06

  	
   

  	
  Severability

  	
   

  	
  31

  
	
  12.07

  	
   

  	
  References

  	
   

  	
  31

  
	
  12.08

  	
   

  	
  No Strict Construction

  	
   

  	
  31

  
	
  12.09

  	
   

  	
  Amendment and Waiver

  	
   

  	
  32

  
	
  12.10

  	
   

  	
  Complete Agreement

  	
   

  	
  32

  
	
  12.11

  	
   

  	
  Schedules

  	
   

  	
  32

  
	
  12.12

  	
   

  	
  Counterparts

  	
   

  	
  32

  
	
  12.13

  	
   

  	
  Governing Law; Submission to Jurisdiction

  	
   

  	
  32

  
	
  12.14

  	
   

  	
  Waiver of Trial by Jury

  	
   

  	
  32

  
	
  12.15

  	
   

  	
  Buyer Deliveries

  	
   

  	
  33

  

 

 iv
 

 

EXHIBITS

Exhibit A                Form
of Closing Certificate of the Company

Exhibit B                Form
of Closing Certificate of Seller

Exhibit C                Form
of Closing Certificate of Buyer

 v
 

SCHEDULES

	
  

  	
   

  	
  Section Reference

  
	
  Assets Schedule

  	
   

  	
  4.16

  
	
   

  	
   

  	
   

  
	
  Authorization Schedule

  	
   

  	
  4.02

  
	
   

  	
   

  	
   

  
	
  Capitalization Schedule

  	
   

  	
  4.03

  
	
   

  	
   

  	
   

  
	
  Conduct of Business Schedule

  	
   

  	
  6.01

  
	
   

  	
   

  	
   

  
	
  Contracts Schedule

  	
   

  	
  4.08

  
	
   

  	
   

  	
   

  
	
  Developments Schedule

  	
   

  	
  4.05

  
	
   

  	
   

  	
   

  
	
  Employee Benefits Schedule

  	
   

  	
  4.12(a)

  
	
   

  	
   

  	
   

  
	
  Environmental Matters Schedule

  	
   

  	
  4.15

  
	
   

  	
   

  	
   

  
	
  Financial Statements Schedule

  	
   

  	
  4.04

  
	
   

  	
   

  	
   

  
	
  Intellectual Property Schedule

  	
   

  	
  4.09

  
	
   

  	
   

  	
   

  
	
  Leased Real Property Schedule

  	
   

  	
  4.06(b)

  
	
   

  	
   

  	
   

  
	
  Liabilities Schedule

  	
   

  	
  4.04(b)

  
	
   

  	
   

  	
   

  
	
  Liens Schedule

  	
   

  	
  4.06(a)

  
	
   

  	
   

  	
   

  
	
  Litigation Schedule

  	
   

  	
  4.10

  
	
   

  	
   

  	
   

  
	
  Noncontravention Schedule

  	
   

  	
  3.03

  
	
   

  	
   

  	
   

  
	
  Seller Litigation Schedule

  	
   

  	
  3.06

  
	
   

  	
   

  	
   

  
	
  Taxes Schedule

  	
   

  	
  4.07

  

 

 vi

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”)
is made as of May 14, 2007, by and among Datamark Partners, LLC, a Delaware
limited liability company  (“Buyer”),
Datamark Inc., a Delaware corporation (the “Company”), and eCollege.com,
a Delaware corporation (“Seller”). 
Capitalized terms used and not otherwise defined herein have the
meanings set forth in Article XI.

WHEREAS, Seller owns all of the issued and outstanding
shares of capital stock of the Company (the “Shares”), which as of the
date hereof consists of 38,898 shares of Common Stock, par value $0.01 per
share (the “Common Stock”), and 66,728 shares of Series A Preferred
Stock, par value $1.00 per share (the “Preferred Stock”); and

WHEREAS, subject to the terms and conditions of this
Agreement, Buyer desires to acquire from Seller all of the Shares and Seller
desires to sell to Buyer all of the Shares.

NOW, THEREFORE, in consideration of the premises,
representations and warranties and mutual covenants contained herein and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE
OF SHARES

1.01         Purchase and Sale
of Shares.  Upon the terms and
subject to the conditions set forth in this Agreement, Seller shall sell,
assign, transfer and convey to Buyer, and Buyer shall purchase and acquire from
Seller, all of the Shares against payment by Buyer of an amount in cash equal
to the Final Purchase Price (as defined in Section 1.02(a)).  The portion of the Final Purchase Price to be
paid at the Closing to Seller for the Shares will be an amount in cash equal to
the Closing Purchase Price (as defined in Section 1.02(b)).

1.02         Calculation of
Final and Closing Purchase Price.

(a)           For purposes of this
Agreement, “Final Purchase Price” shall mean an amount equal to (i)
$41,000,000 (the “Base Consideration”), plus (ii) the amount, if
any, by which the Net Working Capital exceeds $0.00, minus (iii) the
amount, if any, by which Net Working Capital is less than $0.00, minus
(iv) Net Indebtedness (which amount may be negative).

(b)           For purposes of this
Agreement, “Closing Purchase Price” shall mean an amount equal to (i)
the Base Consideration, plus (ii) the amount, if any, by which the Estimated
Net Working Capital (as defined in Section 1.04) exceeds $0.00, minus
(iii) the amount, if any, by which Estimated Net Working Capital is less than
$0.00, minus (iv) Estimated Net Indebtedness (which amount may be
negative).

1.03         Payment for and Surrender of Shares.  At the Closing, Seller shall receive payment
by Buyer of an amount in cash as calculated in Section 1.01 in exchange
for the delivery to Buyer of stock certificates evidencing the Shares duly
endorsed for transfer or 

accompanied by
appropriate transfer documents.  Payment
for the Shares shall be made by wire transfer of immediately available funds to
an account specified by Seller.

1.04         Estimated Net Working Capital and
Estimated Net Indebtedness Calculations. 
At least one (1) day prior to the Closing Date, Seller shall deliver to
Buyer its good faith calculation of its estimates of the Net Working Capital
(the “Estimated Net Working Capital”) and Net Indebtedness (the “Estimated
Net Indebtedness”).

1.05         Final Net Working
Capital and Net Indebtedness Calculations.

(a)           As promptly as
possible, but in any event within 45 days after the Closing Date, Buyer will
deliver to Seller a balance sheet of the Company (the “Closing Balance Sheet”)
and a statement showing the calculation of the Net Working Capital and Net
Indebtedness derived from the Closing Balance Sheet (together with the Closing
Balance Sheet, the “Preliminary Closing Statement”).  The Closing Balance Sheet shall be prepared
in accordance with GAAP using the same accounting methods, policies,
principles, practices and procedures, with consistent classifications,
judgments and estimation methodology, as were used in preparation of the
audited balance sheet of the Company as of the fiscal year ended December 31,
2006 (the “2006 Balance Sheet”), and shall not include any changes in
assets or liabilities as a result of purchase accounting adjustments or other
changes arising from or resulting as a consequence of the transactions
contemplated hereby.  The parties agree
that the purpose of preparing the Closing Balance Sheet and determining the Net
Working Capital and the related purchase price adjustment contemplated by this Section
1.05 is to measure changes in Net Working Capital, and such processes are
not intended to permit the introduction of different judgments, accounting
methods, policies, principles, practices, procedures, classifications or
estimation methodologies for the purpose of preparing the Closing Balance Sheet
or determining the Net Working Capital. 
After delivery of the Preliminary Closing Statement, Seller and its
accountants shall be permitted full access to review the Company’s books and
records and work papers related to the preparation of the Preliminary Closing
Statement.  Seller and its accountants
may make inquires of Buyer, the Company and their respective accountants
regarding questions concerning or disagreements with the Preliminary Closing
Statement arising in the course of their review thereof, and Buyer shall use
its, and shall cause the Company to use its, commercially reasonable efforts to
cause any such accountants to cooperate with and respond to such
inquiries.  If Seller has any objections
to the Preliminary Closing Statement, Seller shall deliver to Buyer a statement
setting forth its objections thereto (an “Objections Statement”).  If an Objections Statement is not delivered
to Buyer within 45 days after delivery of the Preliminary Closing Statement,
the Preliminary Closing Statement shall be final, binding and non-appealable by
the parties hereto.  Seller and Buyer
shall negotiate in good faith to resolve any such objections, but if they do
not reach a final resolution within 15 days after the delivery of the
Objections Statement, Seller and Buyer shall submit such dispute to a
nationally recognized accounting firm without a substantial relationship to any
party hereto (the “Dispute Resolution Auditor”).  Any further submissions to the Dispute
Resolution Auditor must be written and delivered to each party to the
dispute.  The Dispute Resolution Auditor
shall consider only those items and amounts which are identified in the
Objections Statement as being items which Seller and Buyer are unable to
resolve.  The Dispute Resolution Auditor’s
determination will be based solely on the definition of Net Working Capital and
Net Indebtedness contained herein. 
Seller and Buyer shall use their commercially reasonable efforts to
cause the Dispute 

 2
 

Resolution
Auditor to resolve all disagreements as soon as practicable.  Further, the Dispute Resolution Auditor’s determination
shall be based solely on the presentations by Buyer and Seller which are in
accordance with the terms and procedures set forth in this Agreement (i.e., not
on the basis of an independent review). 
The resolution of the dispute by the Dispute Resolution Auditor shall be
final, binding and non-appealable on the parties hereto.  The costs and expenses of the Dispute
Resolution Auditor shall be allocated between Buyer, on the one hand, and
Seller, on the other hand, based upon the percentage which the portion of the
contested amount not awarded to each party bears to the amount actually
contested by such party.  For example, if
Seller claims the Net Working Capital is $1,000 greater than the amount
determined by Buyer’s accountants, and Buyer contests only $500 of the amount
claimed by Seller, and if the Dispute Resolution Auditor ultimately resolves
the dispute by awarding Seller $300 of the $500 contested, then the costs and
expenses of arbitration will be allocated 60% (i.e., 300 ÷ 500) to Buyer and
40% (i.e., 200 ÷ 500) to Seller.

(b)           If the Net Working
Capital and Net Indebtedness as finally determined pursuant to Section
1.05(a) above results in the Final Purchase Price being greater than the
Closing Purchase Price, Buyer shall pay to Seller such excess. If the Net
Working Capital and Net Indebtedness as finally determined pursuant to Section
1.05(a) above results in the Final Purchase Price being less than the
Closing Purchase Price, Seller shall pay to Buyer such shortfall.  Payments to be made pursuant to this Section
1.05 shall be made in accordance with Section 1.06.

1.06         Post-Closing Adjustment Payment.  Buyer shall promptly (but in any event within
five business days) deliver to Seller any amounts determined pursuant to Section
1.05 to be due by Buyer by wire transfer of immediately available funds to
an account designated by Seller.  Seller
shall promptly (but in any event within five business days) deliver to Buyer
any amounts determined pursuant to Section 1.05 to be due by Seller by
wire transfer of immediately available funds to an account designated by Buyer.

1.07         The Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of
Kirkland & Ellis LLP located at 200 East Randolph Drive, Chicago,
Illinois at 10:00 a.m., local time, on or prior to the third business day
following satisfaction or waiver of all of the conditions to the Closing set
forth in Article II (other than those to be satisfied at the Closing) or
on such other date as is mutually agreeable to Buyer and Seller.  The date and time of the Closing are referred
to herein as the “Closing Date.”

ARTICLE II

CONDITIONS TO CLOSING

2.01         Conditions to Buyer’s Obligations.  The obligation of Buyer to consummate the
transactions contemplated by this Agreement is subject to the satisfaction of
the following conditions as of the Closing Date:

(a)           The representations
and warranties set forth in Article III and Article IV
(other than those representations and warranties that address matters as of
particular dates which 

 3
 

shall remain
true and correct as of such dates) shall be true and correct as of the Closing
Date as though then made and as though the Closing Date were substituted for
the date of this Agreement throughout such representations and warranties
(without giving effect to materiality, Material Adverse Effect, or similar
phrases in the representations and warranties) except where the failure of such
representations and warranties to be so true and correct would not, in the
aggregate, have a Material Adverse Effect;

(b)           The Company and
Seller shall have performed and complied with in all material respects all of
the covenants and agreements required to be performed or complied with by them
under this Agreement at or prior to the Closing;

(c)           Reserved;

(d)           No judgment, decree
or order shall have been entered which would prevent the performance of this
Agreement or the consummation of any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement or cause such
transactions to be rescinded;

(e)           Reserved;

(f)            The Company or
Seller, as the case may be, shall have delivered to Buyer each of the
following:

(i)            a
certificate of the Company in the form set forth in Exhibit A, dated the
Closing Date, stating that the preconditions specified in subsections (a), (b)
and (d), as they relate to the Company, have been satisfied;

(ii)           a certificate of Seller in the form
of Exhibit B, dated the Closing Date, stating that the preconditions
specified in subsections (a), (b), and (d), as they relate to Seller, have been
satisfied;

(iii)          the stock certificates representing
the Shares, in each case duly endorsed for transfer or accompanied by duly
executed stock powers or transfer documents;

(iv)          all minute books, stock books, ledgers
and registers, corporate seals, if any, and other corporate records relating to
the organization, ownership and maintenance of the Company, if not already
located on the premises of the Company;

(v)           resignations effective as of the
Closing Date from such officers and directors of the Company as Buyer shall
have requested in writing and delivered to Seller not less than five days prior
to the Closing Date;

(vi)          a copy of the certificate of
incorporation of the Company, certified by the Secretary of State of Delaware
and a certificate of good standing from Delaware and each jurisdiction in which
it is duly qualified to transact business, in each case, dated within ten days
of the Closing Date;

 4
 

(vii)         certified copies of the resolutions
duly adopted by the Company’s board of directors authorizing its execution,
delivery and performance of this Agreement and the other agreements to which it
is a party;

(viii)        certified copies of the resolutions duly
adopted by Seller’s board of directors authorizing its execution, delivery and
performance of this Agreement and the other agreements to which it is a party;

(ix)           a certified copy of the Company’s
by-laws, with all amendments thereto;

(x)            a certificate, duly completed and
executed pursuant to Section 1.1445-2(b)(iv)(B) of the Treasury Regulations,
issued by Seller certifying that Seller is not a foreign person within the
meaning of Section 1445 of the Code;

(xi)           evidence reasonably satisfactory to
Buyer that all of the Company’s transaction costs, including out-of-pocket
legal, accounting, investment banking and other expenses, including those in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and all
other such costs or expenses incidental to this Agreement and the transactions
contemplated by this Agreement have been fully discharged prior to Closing, or
such indebtedness shall be discharged at Closing out of the Closing Purchase
Price;

(xii)          evidence reasonably satisfactory to
Buyer that the Company shall have discharged all of the Company’s indebtedness
for borrowed money prior to Closing or that such indebtedness shall be
discharged at Closing out of the Closing Purchase Price to be received
hereunder; and

(xiii)         UCC-3 termination statements or other
evidence reasonably satisfactory to Buyer that Silicon Valley Bank has released
each lien, security interest or other encumbrance on the Company assets.

(g)           No federal, state,
local or foreign law, statute, rule, regulation, executive order, decree,
ruling, judgment, injunction, legal requirement, or other order (whether
temporary, preliminary or permanent) shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits, restrains
or enjoins the consummation of the transaction contemplated hereby; there shall
be no pending suit, action or proceeding by any Governmental Entity seeking to
restrain or prohibit the making or consummation of the transaction contemplated
hereby or seeking to obtain material damages with respect thereto; and there
shall be no failure of the conditions set forth in Section 7.1(b) or Section
7.2(e) of the Merger Agreement (unless each such failure has been waived by all
necessary parties).

(h)           Buyer shall have
received commitments to provide debt financing in an amount not less than $26
million on commercially reasonable terms and conditions;

(i)            The transactions
contemplated by that certain Agreement and Plan of Merger (the “Merger
Agreement”), dated as of May 14, 2007, by and among Pearson Education,
Inc., Epsilon Acquisition Corp. and eCollege.com shall have been consummated or
shall be consummated simultaneously with the Closing; and

 5
 

(j)            There shall not
have occurred a Material Adverse Effect.

If the Closing occurs, all closing conditions set
forth in this Section 2.01 which have not been fully satisfied as of the
Closing shall be deemed to have been fully waived by Buyer.

2.02         Conditions to Seller’s Obligations.  The obligations of Seller to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions as of the Closing Date:

(a)           The representations
and warranties set forth in Article V (other than those representations
and warranties that address matters as of particular dates which shall remain
true and correct as of such dates) shall be true and correct at and as of the
Closing Date as though then made and as though the Closing Date were
substituted for the date of this Agreement throughout such representations and
warranties (without giving effect to materiality, Material Adverse Effect, or
similar phrases in the representations and warranties) except where the failure
to be so true and correct would not have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated hereby;

(b)           Buyer shall have
performed and complied with in all material respects all the covenants and
agreements required to be performed and complied with by it under this
Agreement at or prior to the Closing;

(c)           Reserved;

(d)           No judgment, decree
or order shall have been entered which would prevent the performance of this
Agreement or the consummation of any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement or cause such
transactions to be rescinded;

(e)           Buyer shall have
delivered to Seller certified copies of the resolutions duly adopted by Buyer’s
board of directors (or its equivalent governing body) authorizing its
execution, delivery and performance of this Agreement and the other agreements
contemplated hereby to which it is a party;

(f)            Reserved;

(g)           Buyer shall have
delivered to Seller a certificate in the form set forth as Exhibit C,
dated the Closing Date, stating that the preconditions specified in subsections
(a), (b) and (d) have been satisfied;

(h)           Buyer shall have
delivered the consideration set forth in Section 1.01; and

(i)            The transactions
contemplated by the Merger Agreement shall have been consummated or shall be
consummated simultaneously with the Closing;

If the Closing occurs, all closing conditions set
forth in this Section 2.02 which have not been fully satisfied as of the
Closing shall be deemed to have been fully waived by Seller.

 6
 

ARTICLE III

REPRESENTATIONS AND 

WARRANTIES RELATING TO SELLER

Seller represents and warrants to Buyer as follows:

3.01         Organization and Authority.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.  Seller has all requisite power
and authority and full legal capacity to execute and deliver this Agreement and
to perform Seller’s obligations hereunder.

3.02         Execution and Delivery; Valid and
Binding Agreement.  This Agreement
has been duly executed and delivered by Seller, and assuming that this
Agreement is the valid and binding agreement of Buyer, this Agreement
constitutes the valid and binding obligation of the other parties hereto,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy laws, other similar laws affecting creditors’ rights and
general principles of equity affecting the availability of specific performance
and other equitable remedies.

3.03         Noncontravention.  Except as set forth on the attached Noncontravention
Schedule or as otherwise would not reasonably be expected to have a
material adverse effect on the ability of Seller to enter into and perform its
obligations under this Agreement, neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, law, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Seller is subject or any
provision of its charter or bylaws or equivalent organizational documents or
(b) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material agreement,
contract, lease, license, instrument, or other material arrangement to which
Seller is a party or by which Seller is bound.

3.04         Ownership of Capital Stock.  Seller is the record and beneficial owner of
the Shares.  On the Closing Date, Seller
shall transfer to Buyer good title to the Shares, free and clear of all claims,
pledges, security interests, liens, charges, encumbrances, options, proxies,
voting trusts or agreements and other restrictions and limitations of any kind,
other than applicable federal and state securities law restrictions.

3.05         Brokers Fees.  Seller has no liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Buyer or the Company could become
liable or obligated.

3.06         Litigation.  Except as set forth on the attached Seller
Litigation Schedule or as otherwise would not reasonably be expected to
have a material adverse effect on the ability of Seller to enter into and
perform its obligations under this Agreement, there are no actions, suits or
proceedings pending or, to Seller’s knowledge, overtly threatened against
Seller, at law or in equity, or before or by any federal, state, municipal or
other governmental department, 

 7
 

commission,
board, bureau, agency or instrumentality, domestic or foreign, and Seller is
not subject to any outstanding judgment, order or decree of any court or
governmental body.

ARTICLE IV

REPRESENTATIONS
AND WARRANTIES RELATING TO THE COMPANY

Seller represents and warrants to Buyer that:

4.01         Organization and Corporate Power.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and the Company has all requisite corporate power and authority and all
authorizations, licenses and permits necessary to own and operate its
properties and to carry on its businesses as now conducted, except where the
failure to hold such authorizations, licenses and permits would not have a
Material Adverse Effect.  The Company is
qualified to do business in every jurisdiction in which its ownership of
property or the conduct of  its
businesses as now conducted requires it to qualify, except where the failure to
be so qualified would not have a Material Adverse Effect.  The Company has no Subsidiaries.

4.02         Authorization; No Breach; Valid and
Binding Agreement.  This Agreement
has been duly authorized, executed and delivered by the Company. Except as set
forth on the attached Authorization Schedule and except where the
failure of any of the following to be true would not have a Material Adverse
Effect, the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby do not
conflict with or result in any material breach of, constitute a material
default under, result in a material violation of, result in the creation of any
material lien, security interest, charge or encumbrance upon any material
assets of the Company, or require any material authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Company’s certificate of
incorporation or bylaws or any material indenture, mortgage, lease, loan
agreement or other material agreement or instrument to which the Company is
bound, or any law, statute, rule or regulation or order, judgment or decree to
which the Company is subject.  Assuming
that this Agreement is a valid and binding obligation of Buyer, this Agreement
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy laws, other similar laws affecting creditors’ rights and general
principles of equity affecting the availability of specific performance and
other equitable remedies.

4.03         Capital Stock.  The authorized number of shares of capital
stock of the Company consists of 500,000 shares of Common Stock and 500,000
shares of Preferred Stock, of which 38,898 and 66,728 shares, respectively, are
issued and outstanding and owned of record by Seller.  All Shares have been duly authorized and are
validly issued, fully paid and nonassessable. 
The Company does not have any other capital stock, equity securities or
securities containing any equity features authorized, issued or outstanding,
and there are no agreements, options, warrants or other rights or arrangements
existing or outstanding which provide for the sale or issuance of any of the
foregoing by the Company.  There are no
rights, subscriptions, warrants, options, conversion rights or agreements of
any kind outstanding to purchase or otherwise acquire any shares of capital
stock or other equity securities of the 

 8
 

Company of any
kind.  There are no agreements or other
obligations (contingent or otherwise) which require the Company to repurchase
or otherwise acquire any shares of the Company’s capital stock or other equity
securities.

4.04         Financial Statements; Undisclosed
Liabilities.

(a)           Attached to the Financial
Statements Schedule are true and correct copies of (i) the unaudited
balance sheet of the Company as of March  31, 2007 (the “Latest Balance Sheet”), and the
related statement of income for the three-month period
then ended and (ii) unaudited balance sheet and statement of income of the
Company as of and for the fiscal year ended December 31, 2006.  Except as set forth on the attached Financial
Statements Schedule, such financial statements have been based upon the
information concerning the Company contained in the Company’s books and
records, and present fairly in all material respects the financial condition
and results of operations of the Company (taken as a whole) as of the times and
for the periods referred to therein in accordance with GAAP (subject, in the
case of the unaudited financial statements, to normal year-end audit
adjustments, absence of footnotes and other presentation items, none of which
were or are expected to be material in amount or effect).

(b)           Except as set forth
on the attached Liabilities Schedule or as otherwise would not
reasonably be expected to have a Material Adverse Effect, the Company has no
liabilities that are of a nature that would be required to be disclosed on a
balance sheet of the Company (or the footnotes thereto) prepared in accordance
with GAAP, other than (i) liabilities reflected on the Latest Balance
Sheet, (ii) current liabilities incurred in the ordinary course of business
consistent with past practice since the date of the Latest Balance Sheet and
(iii) liabilities incurred after the date hereof in accordance with the terms
of this Agreement.

4.05         Absence of Certain Developments.  Since the date of the Latest Balance Sheet,
there has not occurred any Material Adverse Effect.  Except as set forth on the attached Developments
Schedule or except as expressly contemplated by this Agreement, since the
date of the Latest Balance Sheet, the Company has not:

(a)           borrowed any amount
or incurred or become subject to any material liabilities (other than
liabilities incurred in the ordinary course of business, liabilities under
contracts entered into in the ordinary course of business and borrowings from
banks (or similar financial institutions) necessary to meet ordinary course
working capital requirements);

(b)           mortgaged, pledged
or subjected to any material lien, charge or other encumbrance, any material
portion of its assets, except Permitted Liens;

(c)           sold, assigned or
transferred any material portion of its tangible assets, except in the ordinary
course of business;

(d)           sold, assigned or
transferred any material Intellectual Property, except in the ordinary course
of business;

(e)           suffered any
material extraordinary losses or waived any rights of material value;

 9
 

(f)            made any material
capital investment in, or any material loan to, any other Person, except in the
ordinary course of business;

(g)           made any material
capital expenditures or commitments therefor, except (i) in the ordinary course
of business and (ii) for such capital expenditures or commitments therefor that
are reflected in the Company’s budget for the fiscal year ending December 31,
2007;

(h)           made any  loan to, or entered into any other
material transaction with, any of its
directors, officers, and employees outside the ordinary course of business;

(i)            entered into any employment contract
with payments exceeding $100,000 per year or any collective bargaining
agreement, or modified the terms of any such existing contract or agreement;

(j)            made any other material change in employment terms (including
compensation) for any of its directors or officers or made any other
material change in employment terms
(including compensation) for any employees having employment contracts with
annual payments exceeding $100,000
per year, in each case,
outside the ordinary course of business; or

(k)           entered into any
other material transaction, except in the ordinary course of business.

4.06         Title to
Properties.

(a)           Except as set forth
on the Liens Schedule, the Company owns good and marketable title to, or
holds pursuant to valid and enforceable leases, all of the assets, properties,
businesses and rights of the Company of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued
or contingent, or otherwise relating to or utilized in the Company’s business,
directly or indirectly, in whole or in part, whether or not carried on the
books and records of the Company, and whether or not owned in the name of the
Company and wherever located, free and clear of all liens, security interests
and other encumbrances, except for Permitted Liens.

(b)           The real property
demised by the leases described on the attached Leased Real Property
Schedule (the “Leased Real Property”) constitutes all of the real
property leased by the Company.  Except
as set forth on the attached Leased Real Property Schedule, the Leased
Real Property leases are in full force and effect, subject to proper
authorization and execution of such lease by the other party and the
application of any bankruptcy or creditor’s rights laws or general principles
of equity.  The Company has delivered or
made available to Buyer complete and accurate copies of each of the leases
described on the Leased Real Property Schedule, and none of the leases
has been modified in any material respect, except to the extent that such
modifications are disclosed by the copies delivered or made available to
Buyer.  To the Company’s knowledge, the
Company is not in default in any material respect under any of such leases.

(c)           The Company does not
own any freehold estate in any real property.

 

 10

4.07         Tax Matters.  Except as set forth on the attached Taxes
Schedule:  (a) the Company has filed
all material Tax Returns it is required to have filed (taking into account any
extensions of time to file which have been duly perfected), and each such Tax Return
as so filed reflects all material Taxes required to be paid with respect to the
period covered thereby, (b) all material Taxes owed by the Company have been
fully paid on or before the due date for payment thereof, (c) the provision for
Taxes on the Latest Balance Sheet is sufficient in all material respects for
all accrued and unpaid Taxes as of the date thereof, (d) all material Taxes
which the Company is obligated to withhold from amounts owing to any employee,
creditor or third party have been fully paid or properly accrued, (e) the
Company has not waived any statute of limitations in respect of any material
Taxes or agreed to any extension of time with respect to any material Tax
assessment or deficiency, (f) since October 31, 2003, the Company has not been
a member of an Affiliated Group filing a consolidated federal income Tax Return
(other than a group the common parent of which was the Seller), (g) there are
no Liens for Taxes (other than Taxes not yet due and payable) upon any of the
assets of the Company, (h) to the knowledge of the Company there is no dispute
or claim concerning any Tax liability of the Company either claimed, raised or
threatened by any authority, (i) the Company is not a party to any agreement,
arrangement , or plan that has resulted or would result, separately or in the
aggregate, in the payment of any “excess parachute payment” within the meaning
of Code §280G (or any corresponding provision of state, local or foreign Tax
law) or would not be fully deductible under Code §162(m), (j) the Company has
not been a United States real property holding company within the meaning of
Code §897(c)(2) during the applicable period specified in Code
§897(c)(1)(A)(ii), (k) the Company is not a party to or bound by any tax
allocation or sharing agreement, (l) the Company will not be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing
Date as a result of any (A) change in method of accounting for a taxable period
ending on or prior to the Closing date, (B) “closing agreement” as described in
Code §7121 (or any corresponding or similar provision of state, local or
foreign income Tax law) executed on or prior to the Closing Date, (C))
installment sale or open transaction disposition made on or prior to the
Closing Date, or (D) prepaid amount received on or prior to the Closing Date,
(m) the Company has not distributed stock in a transaction that was purported
or intended to be governed in whole or in part by Code §355 or Code §361, (n)
the Company has not requested or received any written ruling or entered into
any agreement with a Taxing Authority related to Taxes and the Company has not
entered into any closing agreements related to Taxes, and (o) the Company has
not participated in a transaction that is described as a “reportable
transaction” within the meaning of Treasury Regulation §1.6011-4(b)(1),
including a “listed transaction.”.

4.08         Contracts and
Commitments.

(a)           Except as set forth
on the attached Contracts Schedule, the Company is not party to
any:  (i) purchase agreement to any
completed material business acquisition by the Company within the last two  years; (ii) collective bargaining agreement or contract
with any labor union; (iii) written bonus, pension, profit sharing, retirement
or other form of deferred compensation plan, other than as described in Section
4.12 or the schedules relating thereto; (iv) stock purchase, stock
option or similar plan; (v) material written contract for the employment of any
officer, individual employee or other person on a full-time or consulting
basis; (vi) material sales representative or distributor agreement; (vii)
agreement or indenture 

 11
 

relating to
the borrowing of money or to mortgaging, pledging or otherwise placing a lien
on any material portion of the Company’s assets other than Permitted Liens;
(viii) guaranty of any obligation for borrowed money or other material
guaranty; (ix) lease or agreement under which it is lessee of, or holds or
operates any personal property owned by any other party, for which the annual
rental exceeds $250,000; (x) lease or agreement under which it is lessor of or
permits any third party to hold or operate any property, real or personal, for
which the annual rental exceeds $250,000; (xi) contract or group of related
contracts with the same party for the purchase of products or services, under
which the undelivered balance of such products and services has a selling price
in excess of $500,000 (other than purchase orders entered into in the ordinary
course of business); (xii) contract or group of related contracts with the same
party that provides annual revenues (based on the annual revenues for the
calendar year ending December 31, 2006) to the Company in excess of $500,000
(other than purchase orders entered into in the ordinary course of business);
or (xiii) contract which prohibits the Company from freely engaging in business
anywhere in the world.

(b)           Buyer either has
been supplied with, or has been given access to, a true and correct copy of all
written contracts which are referred to on the Contracts Schedule,
together with all material amendments, waivers or other changes thereto.

(c)           Except as set forth
on the Contracts Schedule, (i) each contract listed on the Contracts
Schedule is in full force and effect and is legal, valid and binding on the
Company, and, to the Company’s knowledge, each other party thereto, enforceable
against such parties in accordance with their terms, except to the extent that enforcement
of the rights and remedies created thereby is subject to bankruptcy,
insolvency, reorganization, moratorium, and other similar laws of general
application affecting the rights and remedies of creditors and to general
principles of equity; (ii) the Company is not in breach of any material
provision of any contract listed on the Contracts Schedule; (ii) the
Company has not repudiated or waived any provision of any contract listed on
the Contracts Schedule; and (iv) to the Company’s knowledge, no other
party to any contract listed on the Contracts Schedule is in breach in
any respect, or has repudiated or waived any provision thereunder.

4.09         Intellectual Property.  The Intellectual Property Schedule
contains a true and complete list of all of the registered Intellectual
Property and material unregistered Intellectual Property in each case owned by
the Company and used in the conduct of the Company’s respective businesses and a list of all of the corporate names and brands
used in the conduct of the Company’s respective businesses. The Intellectual
Property Schedule sets forth a true and complete list of all material
Intellectual Property as to which the Company holds a valid and enforceable
license to use such Intellectual Property, including using, including or
incorporating such Intellectual Property in or in connection with the Company’s
business and/or products (other than off-the-shelf Intellectual Property
licensed by the Company on a non-exclusive basis). Except as set forth on the Intellectual
Property Schedule or as would not have a Material Adverse Effect: (i) the
Company owns and possesses all right, title and interest in and to, or
possesses the valid right and enforceable right to use, the Intellectual
Property set forth on the Intellectual Property Schedule; (ii) during
the two-year period prior to the date of this Agreement, the Company has not
received (A) any unsolicited offer to license any registered or unregistered
Intellectual Property from any third party or (B) any written notices of
infringement or misappropriation from any third party with respect to the Company’s use of any Intellectual 

 12
 

Property;
(iii) to the Company’s knowledge, no third party is materially infringing or
misappropriating any registered Intellectual
Property owned by the Company; (iv) the Intellectual Property set forth
on the Intellectual Property Schedule does not infringe, misappropriate
or otherwise violate the rights of any third party; and (v) no proceedings have
been asserted or are pending or, to the Company’s knowledge, threatened against
the Company (A) based upon, challenging, or seeking to deny or restrict the use
by the Company of any of the Intellectual Property set forth on the Intellectual
Property Schedule, or (B) alleging that any of the Intellectual Property
set forth on the Intellectual Property Schedule is being used by the
Company in conflict with the terms of any agreement relating to such
Intellectual Property. Except as set forth on the Intellectual Property
Schedule, every employee of the Company is a party to a contract which
requires such employee to assign any interest in any Intellectual Property
developed in the course and scope of his or her employment to the Company, and
to keep confidential any trade secrets, proprietary data, customer information
or other business information of the Company, and, to the Company’s knowledge,
as of the date hereof no violation of or non-compliance with any such
agreements has occurred.

4.10         Litigation.  Except as set forth on the attached Litigation
Schedule, there are no actions, suits or proceedings pending or, to the
Company’s knowledge, threatened against the Company, at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which if determined adversely to the Company would have a Material Adverse
Effect, and neither the Company nor any of its assets is subject to any
outstanding judgment, order or decree of any court or governmental body.

4.11         Consents.  No material permit, consent, approval or
authorization of, or declaration to or filing with, any governmental or
regulatory authority or any other party or Person is required in connection
with any of the execution, delivery or performance of this Agreement by the
Company or the consummation by the Company of any other transaction
contemplated hereby.

4.12         Employee Benefit
Plans.

(a)           Except
as listed on the attached Employee Benefits Schedule, with respect to
employees of the Company, the Company does not maintain or contribute to any “pension
plans” (as defined under Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) (the “Pension Plans”)
or “welfare plans” (as defined under Section 3(1) of ERISA) (the “Welfare
Plans”).  The Pension Plans and the
Welfare Plans are collectively referred to as the “Plans.”

(b)           Each
of the Pension Plans that is intended to be qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the “Code”), has received
a favorable determination letter from the Internal Revenue Service.  The Plans comply in form and in operation in
all material respects with the requirements of the Code and ERISA.

(c)           With
respect to the Plans, all required contributions and premium payments have been
made or properly accrued. Each Plan (and each related trust, insurance
contract, or fund) has been maintained, funded and administered in all material
respects in 

 13
 

accordance
with the terms of such Plan and complies in form and in operation in all
material respects with the applicable requirements of ERISA, the Code and other
applicable laws (including compliance with IRS Form 5500 reporting and all
other reporting requirements under applicable law).  Each such Employee Benefit Plan that is
intended to meet the requirements of a “qualified plan” under Code Section 401
has received a determination from the IRS that such Plan is so qualified as to
form, and nothing has occurred since the date of such determination or opinion
letter that could reasonably be expected to adversely affect the qualified
status of such Plan.  Each Plan has been
timely amended to comply with all applicable changes made by GUST and EGTRRA,
and each has been or will be submitted to the IRS for a favorable determination
letter on the GUST and EGTRRA requirements within the applicable remedial
amendment period.

(d)           The
Company does not have any liability under Title IV of ERISA.

(e)           With
respect to each Plan, the Company has furnished to Buyer true and complete
copies of, as applicable, (i) the most recent determination letter received
from the Internal Revenue Service, (ii) a copy of the Plan document and summary
plan description, (iii) a copy of the most recent Form 5500, and (iv) a copy of
the latest financial statements.

4.13         Reserved.Compliance with Laws.  To the Company’s knowledge, the Company is in
compliance with all applicable laws and regulations of foreign, federal, state
and local governments and all agencies thereof, except where the failure to
comply would not have a Material Adverse Effect.

4.15         Environmental Matters.  Except
as set forth on the attached Environmental Matters Schedule:

(a)           To the Company’s
knowledge, the Company is in compliance with all Environmental Requirements,
except for such noncompliance as would not have a Material Adverse Effect.

(b)           To the Company’s
knowledge, the Company has obtained all material permits, licenses and other
authorizations required under Environmental Requirements, and are in material
compliance with such permits, licenses and authorizations, except where the
failure to obtain or comply would not have a Material Adverse Effect.

(c)           To the Company’s
knowledge, the Company has not received any written notice of violation of
Environmental Requirements or any liability arising under Environmental
Requirements, including any investigatory, remedial or corrective obligation,
relating to the Company or its facilities, the subject of which is unresolved,
and which would have a Material Adverse Effect.

(d)           This Section 4.15
constitutes the sole and exclusive representations and warranties of the
Company with respect to any environmental, health or safety matters, including
without limitation any arising under Environmental Requirements.

4.16         Sufficiency of Assets.  Except as set forth on the attached Assets
Schedule, the assets of the Company are sufficient to conduct and operate
the Company’s business immediately 

 14
 

following the
Closing in substantially the same manner and to the extent the Company’s
business is currently being conducted. 
Except as set forth on the attached Asset Schedule, Seller does
not own, utilize or have any interest in any material assets of, or perform any
material services for, or on behalf of, the Company.

ARTICLE V

REPRESENTATIONS
AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that:

5.01         Organization and Power.  Buyer is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware, with full company power and authority to enter into this Agreement
and perform its obligations hereunder.

5.02         Authorization; Valid and Binding
Agreement.  The execution, delivery
and performance of this Agreement by Buyer and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
requisite action, and no other proceedings on its part are necessary to
authorize the execution, delivery or performance of this Agreement.  This Agreement has been duly executed and
delivered by Buyer and assuming the due authorization, execution and delivery
by the other parties hereto constitutes a legal, valid and binding obligation
of Buyer, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy laws, other similar laws affecting creditors’
rights and general principles of equity affecting the availability of specific
performance and other equitable remedies.

5.03         No Breach.  Buyer is not subject to or obligated under
its certificate of incorporation, its bylaws, or equivalent organizational
documents, any applicable law, or rule or regulation of any governmental
authority, or any material agreement or instrument, or any license, franchise
or permit, or subject to any order, writ, injunction or decree, which would be
breached or violated in any material respect by Buyer’s execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby.

5.04         Consents, etc.  Buyer is not required to submit any notice,
report or other filing with any governmental authority in connection with the
execution, delivery or performance by it of this Agreement or the consummation
of the transactions contemplated hereby. 
No consent, approval or authorization of any governmental or regulatory
authority or any other party or Person is required to be obtained by Buyer in
connection with its execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.

5.05         Litigation.  There are no actions, suits or proceedings
pending or, to Buyer’s knowledge, threatened against or affecting Buyer at law
or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would adversely affect Buyer’s performance under
this Agreement or the consummation of the transactions contemplated hereby.

 15
 

5.06         Brokerage.  There are no claims for brokerage
commissions, finders’ fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Buyer.

5.07         Investment Representation.  Buyer is purchasing the Shares for its own
account with the present intention of holding such securities for investment
purposes and not with a view to or for sale in connection with any public
distribution of such securities in violation of any federal or state securities
laws.  Buyer is an “accredited investor”
as defined in Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act. 
Buyer acknowledges that it is informed as to the risks of the
transactions contemplated hereby and of ownership of the Shares.  Buyer acknowledges that the Shares have not
been registered under the Securities Act or the Exchange Act or any state or
foreign securities laws and that the Shares may not be sold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of unless such
sale, transfer, offer, pledge, hypothecation or other disposition is pursuant
to the terms of an effective registration statement under the Securities Act
and are registered under any applicable state or foreign securities laws or
pursuant to an exemption from registration under the Securities Act or the Exchange
Act and any applicable state or foreign securities laws.

5.08         Equity Commitment.  Buyer has received commitments to provide
equity financing in connection with the transactions provided for herein of not
less than $18 million, copies of which have been provided to Seller.

ARTICLE
VI

PRE-CLOSING
COVENANTS/SUPERIOR OFFER

6.01         Conduct of the Business.  From the date hereof until the Closing Date,
the Company shall use its commercially reasonable efforts to carry on its
business in the ordinary course of business and substantially in the same
manner as previously conducted except (i) as set forth on the attached Conduct
of Business Schedule, (ii) as contemplated by this Agreement, or (iii) as
consented to by Buyer (which consent will not be unreasonably withheld or
delayed).

6.02         Access to Books and Records.  From the date hereof until the Closing Date,
the Company shall provide Buyer and its authorized representatives (“Buyer’s
Representatives”) with full access during regular business hours and upon
reasonable notice to the offices, properties, personnel, books and records of
the Company in order for Buyer to have the opportunity to make such
investigation as it shall reasonably desire to make of the affairs of the
Company (except that neither Buyer nor Buyer’s Representatives shall conduct
environmental sampling or testing of the sort commonly referred to as a Phase
II Environmental Investigation).  Buyer
acknowledges that it remains bound by the Confidentiality Agreement, dated May 8, 2007, with Seller (the “Confidentiality
Agreement”).

6.03         Regulatory Filings.  The Company shall make or cause to be made
all filings and submissions under material laws or regulations applicable to
the Company for the consummation of the transactions contemplated herein.  The Company shall coordinate and cooperate
with Buyer in exchanging such information and assistance as Buyer may
reasonably request in connection with all of the foregoing.

 16
 

6.04         Conditions.  The Company shall use commercially reasonable
efforts to cause the conditions set forth in Section 2.01 to be
satisfied and to consummate the transactions contemplated herein.

6.05         Notification.  From the date hereof until the Closing Date,
the Company or Seller, as applicable, shall disclose to Buyer in writing in
reasonable detail (in the form of updated Schedules) any material variances
from the representations and warranties contained in Article III and Article IV
and of any other fact or event that would cause or constitute a breach of the
covenants in this Agreement made by the Company or any Seller, in each case
promptly upon discovery thereof.  Should
any such fact or condition require any change in the Schedules if the Schedules
were dated the date of the occurrence or discovery of any such fact or
condition, the Company will promptly deliver to Buyer a supplement to the
Schedules specifying such change.  During
the same period, the Company will promptly notify Buyer of the occurrence of
any breach of any covenant of the Company in this Section 14.7(b).  Notwithstanding any provision of this
Agreement to the contrary, information disclosed by the Company pursuant to
this Section 6.05 shall not be deemed to amend or supplement the Schedules
attached hereto or to prevent or cure any misrepresentation, breach of warranty
or breach of covenant unless such disclosure is consented to by Buyer in a
writing executed by Buyer making specific reference to this Section 6.05, and
Buyer shall retain all of its rights and remedies under this Agreement as if
such information had not been disclosed by the Company.

6.06         Superior Offer.  Nothing herein shall prohibit Seller from
soliciting a Superior Offer or furnishing any party indicating a bona fide intention (in the reasonably determination of the
Board of Directors of Seller (or a special committee thereof) to make a
Superior Offer with all information heretofore made available to potential
bidders for the Company (and supplements thereto and updates thereof) or
engaging in negotiations with respect to any possible Superior Offer.  In the event that Seller receives a Superior
Offer, it shall promptly (but in any case no later than within one business
day) provide a copy of the Superior Offer to Buyer.  On or before 5:00 p.m. Eastern time on the fifth
business day following its receipt of a copy of such Superior Offer, Buyer may
notify Seller of its intention to match the material terms of such Superior
Offer.  If Buyer indicates its intention
to match such terms and executes by such time an amendment to this Agreement
reflecting the matching terms, Seller shall reject such Superior Offer and this
Agreement shall continue in full force and effect, with any inconsistent
material term contained in such Superior Offer substituted for the analogous
term in this Agreement.  If Buyer
notifies Seller of its intention not to match such terms, or if it fails to
notify Seller of its intention to match such terms on or before 5:00 p.m. on
the fifth business day following its receipt of a copy of the Superior Offer,
Seller may, not later than the close of business on the next succeeding
business day, accept such Superior Offer and terminate this Agreement by
written notice to Buyer. If Seller accepts such Superior Offer and terminates
this Agreement in accordance with this Section 6.06, neither party shall have
any obligation to the other with respect hereto, except that Seller shall, upon
receipt from Buyer of an itemized invoice therefor, reimburse Buyer up to
$300,000 for its expenses relating to the transaction contemplated hereby and
the financing thereof including without limitation investment banking, legal,
accounting, placement agent, and similar fees and expenses.

 17
 

ARTICLE VII

COVENANTS OF BUYER

7.01         Access to Books and Records.  From and after the Closing, Buyer shall, and
shall cause the Company to, provide Seller and its authorized representatives
with reasonable access (for the purpose of examining and copying), during
normal business hours, to the books and records of the Company with respect to
periods prior to the Closing Date in connection with any matter whether or not
relating to or arising out of this Agreement or the transactions contemplated
hereby.  Unless otherwise consented to in
writing by Seller, Buyer shall not permit the Company, for a period of seven
years following the Closing Date, to destroy, alter or otherwise dispose of any
books and records of the Company, or any portions thereof, relating to periods
prior to the Closing Date without first giving reasonable prior written notice
to Seller and offering to surrender to Seller such books and records or such
portions thereof.

7.02         Notification.  From the date hereof until the Closing Date,
Buyer shall disclose to the Company and Seller in writing in reasonable detail
any material variances from Buyer’s representations and warranties contained in
Article V, and of any other fact or event that would cause or constitute
a breach of the covenants in this Agreement made by Buyer, in each case,
promptly upon discovery thereof.

7.03         Director and Officer Liability and
Indemnification.  For a period of six
years after the Closing, Buyer shall not, and shall not permit the Company to
amend, repeal or modify any provision in the Company’s certificate of
incorporation or bylaws relating to the exculpation or indemnification of any
officers and directors (unless required by law), it being the intent of the
parties that the officers and directors of the Company shall continue to be
entitled to such exculpation and indemnification to the full extent of the law.

7.04         Regulatory Filings.  Buyer shall make or cause to be made all
filings and submissions under laws or regulations applicable to Buyer as may be
required of Buyer for the consummation of the transactions contemplated herein,
and Buyer shall be responsible for all filing fees under such laws or
regulations as are applicable to Buyer. 
Buyer shall comply with any additional requests for information,
including requests for production of documents and production of witnesses for
interviews or depositions by any governmental authorities.  In addition, Buyer shall cooperate in good
faith with the governmental authorities and undertake promptly any and all
action required (including divestitures of its assets) to complete lawfully the
transactions contemplated by this Agreement.

7.05         Conditions.  Buyer shall use commercially reasonable
efforts to cause the conditions set forth in Section 2.02 to be
satisfied and to consummate the transactions contemplated herein.

7.06         Contact with Customers and Suppliers.  Buyer is not authorized to and shall not (and
shall not permit any of its employees, agents, representatives or Affiliates
to) contact any officer, director, employee, franchisee, customer, supplier,
distributor, vendor or other material business relation of the Company prior to
the Closing without the prior written consent of Seller which shall not be
unreasonably withheld; provided that any employee, agent, representative or 

 18
 

Affiliate of
Buyer may contact any such person for the purpose of performing or otherwise
fulfilling its obligations to Seller or the Company.

7.07         Employee Benefits.  From the Closing Date until the later of six
(6) months following the Closing Date or the last day of the calendar year in
which the Closing occurs, Buyer shall provide employees of the Company as of
the Closing Date with at least the same total compensation and benefits (taking
into account base pay, bonus, and other incentive compensation) as were in
effect immediately prior to the Closing Date. 
In addition, Buyer shall cause the Company to provide severance benefits
to each employee of the Company who is terminated within 12 months after the
Closing Date that are at least as favorable as those that exist for such
employee under current Company policies and plans.

7.08         Financing.  Buyer shall use its reasonable best efforts
to obtain debt financing in an amount at least sufficient to consummate the
transactions contemplated by this Agreement by the Closing Date on commercially
reasonable terms and conditions; provided that Buyer shall accept and enter
into such debt financing arrangements offered on commercially reasonable terms
and conditions.

ARTICLE VIII

TERMINATION

8.01         Termination.  This Agreement may be terminated at any time
prior to the Closing:

(a)           by the mutual
written consent of Buyer and Seller;

(b)           by Buyer, if there
has been a material violation or breach by the Company or Seller of any
covenant, representation or warranty contained in this Agreement which would
prevent the satisfaction of any condition to the obligations of Buyer at the
Closing and, if such violation or breach is of a character that is capable of
being cured, such violation or breach has not been cured by the Company or
Seller within 30 days after written notice thereof from Buyer;

(c)           by Seller, if there
has been a material violation or breach by Buyer of any covenant,
representation or warranty contained in this Agreement which would prevent the
satisfaction of any condition to the obligations of Seller at the Closing and,
if such violation or breach is of a character that is capable of being cured,
such violation or breach has not been cured by Buyer within 30 days after
written notice thereof from Seller;

(d)           by Buyer or Seller
if the transactions contemplated hereby have not been consummated on or before
the sixth month anniversary of the date of this Agreement; provided, however,
that the right to terminate this Agreement pursuant to this Section 8.01(d)
shall not be available to any party whose breach of a covenant of this
Agreement has been the cause of, or resulted in, the failure of the
consummation to occur on or before such date; or

(e)           by Seller pursuant
to Section 6.06.

8.02         Effect of Termination.  In the event of termination of this Agreement
by either Buyer or Seller as provided above, the provisions of this Agreement
shall immediately become 

 19
 

void and of no
further force and effect (other than Section 6.06, this Section 8.02
and Article XII and the Confidentiality Agreement which shall survive
the termination of this Agreement). 
Notwithstanding any other provision of this Agreement to the contrary,
upon termination of this Agreement pursuant to Section 8.01(c), Buyer will
remain liable to Seller for any misrepresentation or breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement of Buyer
existing at the time of such termination, and upon termination of this
Agreement pursuant to Section 8.01(b), Seller will remain liable to Buyer for
any misrepresentation or breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement of Seller or the Company existing at the time
of such termination, and, in any such event the terminating party(ies) may seek
such remedies including payment for Losses (as defined in Section 9.02(a)
below, but without any limitation as set forth in Article IX) against the
breaching party with respect to any such breach as are provided in this
Agreement or as are otherwise available at law or in equity.

ARTICLE IX

INDEMNIFICATION

9.01         Survival of Representations and
Warranties.  The representations and
warranties and the covenants, agreements and other provisions in this Agreement
which require performance on or prior to the Closing Date shall survive the
Closing and shall terminate on June 30, 2008 (the “Survival Period
Termination Date”); provided that the representations and warranties set
forth in Sections 4.03 and 4.07 shall survive until the expiration of the
applicable statute of limitations.  No
claim for indemnification hereunder for breach of any such representations,
warranties, covenants, agreements and other provisions may be made after the
expiration of such survival period; provided  that any
representation, warranty, covenant, agreement or other provision in respect of
which indemnity may be sought under Section 9.02 or under Section 9.03,
and the indemnity with respect thereto, shall survive (with respect to any
claim that has been made) the time at which it would otherwise terminate
pursuant to this Section 9.01 if notice of a claim of breach or
potential breach thereof giving rise to such right or potential right of
indemnity shall have been given to the Person against whom such indemnity may
be sought prior to such time.

9.02         Indemnification for the Benefit of
Buyer.

(a)   From
and after the Closing (but subject to the provisions of this Article IX),
Buyer shall be entitled to assert, as its sole and exclusive remedy for any
action relating (directly or indirectly) to this Agreement and the transactions
contemplated hereby, claims in respect of any loss, liability, damage or
expense (“Losses”) suffered or incurred by Buyer or any of its
Affiliates, officers, directors, employees or agents to the extent arising from
any nonfulfillment or breach of any representation, warranty, covenant,
agreement or other provision set forth herein by the Company or Seller; provided
that (except with respect to the matters covered by Article I or Sections
10.03 or 12.02) no claims by Buyer shall be so asserted unless and
until the aggregate amount of Losses that would otherwise be payable hereunder
exceeds on a cumulative basis an amount equal to $410,000  (the “Deductible”),
and then only to the extent such Losses exceed the Deductible.  Further, Seller shall have no liability for
any Loss after the aggregate amount paid by Seller with respect to claims hereunder
exceeds $4,100,000.  Notwithstanding

 

 20

anything in this Section 9.02 to the contrary, any Loss suffered,
accrued, incurred or paid as a result of a breach of Section 4.07 of this
Agreement shall not be subject to the Deductible and Buyer shall be indemnified
for all such Losses beginning from the first dollar of such Loss.  In determining whether a representation,
warranty or covenant has been breached or in calculating any and all instances
of Losses, any and all qualifications in this Agreement as to materiality or
Material Adverse Effect or any similar word or phrase shall be disregarded,
except with regard to determining the matters required to be included in the
Schedules.

(b)   Reserved.

(c)   Buyer
may not avoid the limitations on liability set forth in this Article IX by
seeking damages for breach of contract, tort or pursuant to any other theory of
liability and the Buyer hereby waives, from and after the Closing, to the
fullest extent permitted under applicable law, and agrees to indemnify Seller
from and against any and all rights, claims and causes of action it may have
against Seller relating (directly or indirectly) to the subject matter of this
Agreement arising under or based upon any federal, state, local or foreign
statute, law or ordinance or otherwise, including without limitation, any
rights, claims or causes of action with respect to any environmental, health or
safety matters (including without limitation all matters arising under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, or any other Environmental Requirements).  Notwithstanding anything to the contrary
contained in this Agreement, Buyer shall have no right to indemnification
hereunder with respect to any Loss or alleged Loss to the extent such Loss or
alleged Loss is included in the calculation of the Net Working Capital or Net
Indebtedness or if Buyer shall have received a reduction in the Preliminary
Closing Statement on account of any matter forming the basis for such Loss or
alleged Loss.

(d)   In
the event that there is any Loss arising as a result of claims made by Arthur
Benjamin against the Company and Seller, Seller and Buyer agree to apportion
such Loss with Buyer bearing an amount of such Losses equal to the total Loss
multiplied by a fraction, the numerator of which is the Closing Purchase Price
as adjusted pursuant to Section 1.05 hereof, and the denominator of which is
the aggregate “Merger Consideration” and “Equity Incentive Consideration” as
such terms are defined in the Merger Agreement, and Seller bearing the balance
of such Losses.  Seller shall be entitled
to control the defense of any any such claim and otherwise exercise the rights
of an “Indemnitor” under Section 9.05 with respect thereto.

9.03         Indemnification by Buyer for the
Benefit of Seller.  Buyer shall indemnify
Seller and its Affiliates, and their respective officers, directors, partners,
members, employees, agents, representatives, successors and permitted assigns
(collectively, the “Indemnified Parties”) and hold them harmless against
any Losses which the Indemnified Parties may suffer or sustain, as a result
of:  (a) any breach of any representation
or warranty of Buyer under this Agreement, (b) any nonfulfillment or breach of
any covenant, agreement or other provision by Buyer, (c) any claim or suit against
any of the Indemnified Parties under the Worker Adjustment Retraining and
Notification Act or any federal, state, local, municipal, foreign,
international, multinational or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute or treaty which relates
to actions taken by Buyer or the Company at any time after the Closing Date,
with regard to any site of employment or one or more facilities or operating
units within any site of employment of the Company, (d) any claims by any
employee of the Company 

 21
 

against any of the Indemnified Parties relating to any breach or
violation of, or noncompliance with (i) any employment agreement or contract or
similar arrangement between the Company on the one hand, and such employee, on
the other, or (ii) any other bonus or incentive or similar plan or arrangement,
in each case if and to the extent that the same related to actions taken by the
Buyer or the Company after the Closing Date, (e) any claim or suit brought against
any of the Indemnified Parties at any time on or after the Closing Date
relating to actions taken by Buyer or the Company on or after the Closing Date
other than any claim or action by Buyer pursuant to Section 9.02
relating to any breach by any of the Indemnified Parties and (f) any Loss
relating to sales and use tax liabilities described in the first paragraph of
the Taxes Schedule attached hereto.

Any indemnification of Seller pursuant to this Section
9.03 shall be effected by wire transfer of immediately available funds to
an account or accounts designated by Seller within 15 days after the
determination thereof.

9.04         Mitigation.  Each Person entitled to indemnification
hereunder shall take all reasonable steps to mitigate all losses, costs,
expenses and damages after becoming aware of any event which could reasonably
be expected to give rise to any losses, costs, expenses and damages that are
indemnifiable or recoverable hereunder or in connection herewith.

9.05         Defense of Third Party Claims.  Any Person making a claim for indemnification
under Section 9.02 or Section 9.03 (an “Indemnitee”) shall
notify the indemnifying party (an “Indemnitor”) and Seller, if
applicable, of the claim in writing promptly after receiving written notice of
any action, lawsuit, proceeding, investigation or other claim against it (if by
a third party), describing the claim, the amount thereof (if known and
quantifiable) and the basis thereof, provided that the delay or failure to give
such notification will not release or discharge the indemnification obligations
except to the extent, if any, that such delay or failure has actually
prejudiced the party required to indemnify. 
Any Indemnitor shall be entitled to participate in the defense of such
action, lawsuit, proceeding, investigation or other claim giving rise to an
Indemnitee’s claim for indemnification at such Indemnitor’s expense, and at its
option shall be entitled to assume the defense thereof by appointing a
reputable counsel reasonably acceptable to the Indemnitee to be the lead
counsel in connection with such defense; provided  that any
Indemnitor shall continue to be entitled to assert any limitation on any claims
contained herein; provided  further that the Indemnitee shall be
entitled to participate in the defense of such claim and to employ counsel of
its choice for such purpose; provided  however, that the fees and
expenses of such separate counsel shall be borne by the Indemnitee unless the
named parties to such claim include both the Indemnitor and the Indemnitee and
the Indemnitee shall have been advised by counsel that there may be one or more
defenses available to it which are different from or in addition to those
available to the Indemnitor and that the assertion of such defenses may create
a conflict of interest such that it would be inappropriate for counsel to the
Indemnitor to also represent the Indemnitee. 
If the Indemnitor shall control the defense of any such claim then the
Indemnitor shall be entitled to settle such claim; provided  that
the Indemnitor shall obtain the prior written consent of the Indemnitee (which
consent shall not be unreasonably withheld or delayed) before entering into any
settlement of a claim or ceasing to defend such claim if, pursuant to or as a
result of such settlement or cessation, injunctive or other equitable relief
will be imposed against the Indemnitee or if such settlement does not expressly
and unconditionally release the Indemnitee from all liabilities and obligations
with respect to such 

 22
 

claim, without prejudice except for payments that would be required to
be paid by Buyer representing the Deductible.

9.06         Determination of Loss Amount.  The Indemnitee shall seek full recovery under
all insurance policies covering any Loss to the same extent as they would if
such Loss were not subject to indemnification hereunder.

ARTICLE X

ADDITIONAL
COVENANTS AND AGREEMENTS

10.01       Disclosure Generally.  All disclosure schedules attached hereto (the “Schedules”) are
incorporated herein and expressly made a part of this Agreement as though
completely set forth herein.  All
references to this Agreement herein or in any of the Schedules shall be deemed
to refer to this entire Agreement, including all Schedules.

10.02       Acknowledgment by Buyer.  Buyer acknowledges that it has conducted to
its satisfaction, an independent investigation and verification of the
financial condition, results of operations, assets, liabilities, properties and
projected operations of the Company and, in making its determination to proceed
with the transactions contemplated by this Agreement, Buyer has relied on the
results of its own independent investigation and verification and the
representations and warranties of Seller expressly and specifically set forth
in this Agreement, including the Schedules (and updated Schedules).  SUCH
REPRESENTATIONS AND WARRANTIES BY SELLER CONSTITUTE THE SOLE AND EXCLUSIVE
REPRESENTATIONS AND WARRANTIES TO BUYER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY, AND BUYER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL
OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESS OR IMPLIED
(INCLUDING, BUT NOT LIMITED TO, ANY RELATING TO THE FUTURE OR HISTORICAL
FINANCIAL CONDITION, RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OF THE
COMPANY) ARE SPECIFICALLY DISCLAIMED BY THE COMPANY AND SELLER.  No claim shall be brought or
maintained by the Company or Buyer or their respective successors or permitted
assigns against any officer, director or employee (present or former) of the
Company or Seller, and no recourse shall be sought or granted against any of
them, by virtue of or based upon any alleged misrepresentation or inaccuracy
in, or breach of any of the representations, warranties or covenants of the
Seller set forth or contained in, this Agreement; except to the extent provided
in Section 9.02 hereof or except to the extent that the same shall
have been the result of fraud by any such Person (and in the event of such
fraud, such recourse shall be sought or granted solely against the Person or
Persons committing such fraud).  In
connection with Buyer’s investigation of the Company, Buyer has received
certain projections, including projected statements of operating revenues and
income from operations of the Company and certain business plan
information.  Buyer acknowledges that there
are uncertainties inherent in attempting to make such estimates, projections
and other forecasts and plans, that Buyer is familiar with such uncertainties
and that Buyer is taking full responsibility for making its own evaluation of
the adequacy and accuracy of all estimates, projections and other forecasts and
plans so furnished to it, including, without limitation, the reasonableness of
the assumptions underlying such estimates, projections and forecasts.  Accordingly, Buyer hereby acknowledges that neither
the 

 23
 

Company nor Seller is making any representation or warranty with
respect to such estimates, projections and other forecasts and plans,
including, without limitation, the reasonableness of the assumptions underlying
such estimates, projections and forecasts.

10.03       Tax Matters.

(a)           Tax-Sharing
Agreements.  Any Tax-sharing
agreement between Seller and the Company is terminated as of the Closing Date
and shall have no further effect for any taxable year (whether the current
year, a future year, or a past year).

(b)           Taxes of Other
Persons.  Seller agrees to indemnify
Buyer from and against any liability of the Company for Taxes of any Person
under section 1.1502-6 of the Treasury Regulations (or any similar provision of
state, local or foreign law).

(c)           Responsibility
for Filing Tax Returns for Periods through Closing Date. Seller shall
include the income of the Company (including any deferred items triggered into
income by section 1.1502-13 of the Treasury Regulations and any excess loss
account taken into income under section 1.1502-19 of the Treasury Regulations)
on Seller’s consolidated federal income Tax Returns for all periods through the
Closing Date and pay any federal income Taxes attributable to such income.  For all taxable periods ending on or before
the Closing Date, Seller shall cause the Company to join in Seller’s
consolidated federal income Tax Return and, in jurisdictions requiring separate
reporting from Seller, to file separate company state and local income Tax
Returns.  All such Tax Returns shall be
prepared and filed in a manner consistent with prior practice, except as
required by a change in applicable law. 
Buyer shall cause the Company to furnish information to Seller as
reasonably requested by Seller to allow Seller to satisfy its obligations under
this section in accordance with past custom and practice.  The Company and Buyer shall consult and
cooperate with Seller as to any elections to be made on Tax Returns of the
Company for periods ending on or before the Closing Date.

(d)           Cooperation on
Tax Matters.   Buyer, the Company and
Seller shall cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns pursuant to this Section
10.03 and any audit, litigation or other proceeding with respect to
Taxes.  Such cooperation shall include
the retention and (upon the other party’s request) the provision of records and
information that are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.  The Company and Seller agree
(i) to retain all books and records with respect to Tax matters pertinent to
the Company relating to any taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent notified
by Buyer or Seller, any extensions thereof) of the respective taxable periods,
and to abide by all record retention agreements entered into with any taxing
authority, and (ii) 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 Company or Seller, as the case may be, shall allow
the other party to take possession of such books and records.  Seller shall not settle any audit of a Seller
consolidated federal income Tax Return to the extent that such return relates
to the Company in a manner that would adversely affect the Company after the
Closing Date unless such settlement would be reasonable in the case of a Person
that owned the Company both before 

 24
 

and after the Closing Date.  At
Seller’s request, Buyer shall cause the Company to make or join with Seller in
making any election if the making of such election is not reasonably expected
to have a material adverse impact on Buyer or the Company for any Tax period
beginning after the Closing Date.

(e)           Post-Closing
Transactions not in Ordinary Course.  
Buyer and Seller agree to report all transactions not in the ordinary
course of business occurring on the Closing Date after Buyer’s purchase of the
Company’s stock on Buyer’s federal income Tax Return to the extent permitted by
Reg. §1.1502-76(b)(1)(ii)(B).  Buyer
agrees to indemnify Seller for any additional tax owed by Seller (including Tax
owed by Seller due to this indemnification payment) resulting from any
transaction engaged in by the Company not in the ordinary course of business
occurring on the Closing Date after Buyer’s purchase of the Company’s stock.

(f)            Transfer Taxes.  Seller will pay, and will indemnify and hold
Buyer harmless against, any real property sale and transfer or gains Tax, stamp
Tax, stock transfer Tax, or other similar Tax imposed on the Company or Seller
as a result of the transactions contemplated by this Agreement (collectively, “Transfer
Taxes”), and any penalties or interest with respect to the Transfer
Taxes.  Seller agrees to cooperate with
Buyer in the filing of any returns with respect to the Transfer Taxes,
including promptly supplying any information in their possession that is
reasonably necessary to complete such returns.

10.04       Further Assurances.  From time to time, as and when requested by
any party hereto and at such party’s expense, any other party shall execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions as the requesting party may reasonably deem necessary or desirable to
evidence and effectuate the transactions contemplated by this Agreement.

10.05       Provision Respecting Legal
Representation.  Each of the parties
to this Agreement hereby agrees, on its own behalf and on behalf of its
directors, members, partners, officers, employees and Affiliates, that Kirkland
& Ellis LLP may serve as counsel to Seller and its Affiliates (individually
and collectively, the “Seller Group”), on the one hand, and the Company,
on the other hand, in connection with the negotiation, preparation, execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and that, following consummation of the transactions
contemplated hereby, Kirkland & Ellis LLP (or any successor) may serve as
counsel to Seller Group or any director, member, partner, officer, employee or
Affiliate of the Seller Group, in connection with any litigation, claim or
obligation arising out of or relating to this Agreement or the transactions
contemplated by this Agreement notwithstanding such representation, and each of
the parties hereto hereby consents thereto and waives any conflict of interest
arising therefrom and each of such parties shall cause any Affiliate thereof to
consent to waive any conflict of interest arising from such representation.

10.06       Intercompany Accounts. Effective
immediately prior to the Closing, all intercompany receivables “due from
corporate” and intercompany payables “due to corporate” on the Company’s
balance sheet shall be eliminated in the manner most tax efficient as agreed by
the parties; all intercompany receivables “due from eLearning” and intercompany
payables “due to eCollege” on the Company’s balance sheet shall remain in
effect.

 25
 

ARTICLE XI

DEFINITIONS

11.01       Definitions.  For purposes hereof, the following terms,
when used herein with initial capital letters, shall have the respective
meanings set forth herein:

“Affiliate” of any particular Person means any
other Person controlling, controlled by or under common control with such
particular Person.  For the purposes of
this definition, “control” means the possession, directly or indirectly, of the
power to direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise.

“EGTRRA” means the Economic Growth and Tax
Relief Reconciliation Act of 2001.

“Environmental Requirements” means all federal,
state, local and foreign statutes, regulations, and ordinances enacted and in
effect on or prior to the Closing Date, concerning pollution or protection of
the environment, including without limitation all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous materials,
substances or wastes.

“Exchange Act” means the Securities Exchange
Act of 1934, as amended.

“GAAP” means United States generally accepted
accounting principles applied in a manner consistent with that used in
preparing the 2006 Balance Sheet.

“GUST” means changes to the Code and ERISA made
by the Uruguay Round Agreements Act, Pub. Law. 103-465, the Small Business Job
Protection Act of 1996, Public Law 104-188, the Uniformed Services Employment
and Reemployment Rights Act of 1994, Public Law 103-353, the Taxpayer Relief
Act of 1997, Public Law 105-34, the Internal Revenue Service Restructuring and
Reform Act of 1998, Public Law 105-206, and the Community Renewal Tax Relief
Act of 2000, Public Law 106-554.

“Intellectual Property” means patents, domain
names, trademarks, service marks, copyrights and registrations and applications
for the registration of any of the foregoing.

“Material Adverse Effect” means any change,
effect, event, occurrence, state of facts or development that, individually or
together with any other change, effect, event, occurrence, state of facts or
development, has, or could reasonably be expected to have, a material adverse
impact or effect on (i) the ability of Seller or the Company to consummate the
transactions contemplated hereby or perform their respective obligations
hereunder or (ii) the financial position, condition, business assets,
properties, liabilities or results of operations of the Company; provided,
however, that none of the following shall be taken into account in
determining whether there has been or will be, a Material Adverse Effect: (a)
any failure by the Company to meet internal projections or forecasts or
published revenue or earnings predictions for any period ending (or for which
revenues or earnings are released) on or after the date of this 

 26
 

Agreement; (b) any adverse change, effect, event, occurrence, state of
facts or development attributable to conditions affecting the industry in which
the Company participates, the U.S. economy as a whole or the capital markets in
general or the markets in which the Company operates, except to the extent such
change, effect, event, occurrence, state of facts or development has a material
disproportionate effect on the Company; (c) any adverse change, effect, event,
occurrence, state of facts or development resulting from or relating to
compliance with the terms of, or the taking of any action required by, this
Agreement; (d) any adverse change, effect, event, occurrence, state of facts or
development arising from or relating to any change in accounting requirements
or principles or any change in applicable laws, rules or regulations or the
interpretation thereof, except to the extent such change, effect, event,
occurrence, state of facts or development has a material disproportionate
effect on the Company; or (e) any adverse change, effect, event, occurrence,
state of facts or development arising from or relating to the commencement,
continuation or escalation of a war, material armed hostilities or other
material international or national calamity or act of terrorism directly or
indirectly involving the United States of America, except to the extent such
change, effect, event, occurrence, state of facts or development has a material
disproportionate effect on the Company.

“Net Indebtedness” means, without duplication,
the excess of (i) the sum of (a) all principal and accrued (but
unpaid) interest owing by the Company for debt for borrowed money owed to any
third party, (b) all obligations of the Company as lessee under any lease
that is required to be recorded as a capital lease in accordance with GAAP,
(c) any indebtedness secured by a lien on the assets of the Company, and
(d) all unpaid interest, guarantees, prepayment premiums or penalties related
to any of the foregoing, less (ii) the amount of cash and cash equivalents
of the Company; in each case with respect to clauses (i) and (ii) above, as of
the close of business on the Closing Date as reported by the Company using
accounting policies and procedures consistent with the 2006 Balance Sheet.    Notwithstanding anything to the contrary,
in no event shall clause (i) above include (I) any liabilities related to
intercompany balances, and (II) any contingent reimbursement obligations
for any letters of credit, performance bonds, surety bonds and similar
obligations of the Company.

“Net Working Capital” means (i) all current
assets of the Company (excluding cash (and cash equivalents), deferred Tax
assets and any current assets related to intercompany balances) as of the close
of business on the Closing Date as reported by the Company using accounting
policies and procedures consistent with the 2006 Balance Sheet minus
(ii) all current liabilities of the Company (excluding deferred Tax liabilities
and any current liabilities related to intercompany balances) as of the close
of business on the Closing Date as reported by the Company using accounting
policies and procedures consistent with the 2006 Balance Sheet.

“Permitted Liens” means (i) statutory liens for
current Taxes or other governmental charges not yet due and payable or the
amount or validity of which is being contested in good faith by appropriate
proceedings by the Company and for which appropriate reserves have been established
in accordance with GAAP; (ii) mechanics’, carriers’, workers’, repairers’ and
similar statutory liens arising or incurred in the ordinary course of business
for amounts which are not delinquent and which are not, individually or in the
aggregate, significant; (iii) zoning, entitlement, building and other land use
regulations imposed by governmental agencies having jurisdiction over the
Leased Real Property which are not violated by the current use and operation of
the Leased Real Property; (iv) covenants, conditions, restrictions, easements 

 27
 

and other similar matters of record affecting title to the Leased Real
Property which do not materially impair the occupancy or use of the Leased Real
Property for the purposes for which it is currently used or proposed to be used
in connection with the Company’s businesses; (v) public roads and highways;
(vi) liens arising under worker’s compensation, unemployment insurance, social
security, retirement and similar legislation; (vii) liens on goods in transit
incurred pursuant to documentary letters of credit; (viii) purchase money liens
and liens securing rental payments under capital lease arrangements; and (ix)
other liens arising in the ordinary course of business and not incurred in
connection with the borrowing of money.

“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

“Securities Act” means the Securities Act of
1933, as amended.

“Superior Offer” means an all cash offer to
purchase 100% of the equity of the Company for a purchase price in excess of
$41 million with respect to which the Board of Directors of Seller (or a
special committee thereof) (i) determines in good faith that such offer, if
accepted, is reasonably likely to be consummated on a timely basis, taking into
account all legal, financial, regulatory and other relevant aspects of such
offer and the identity of the offeror.

“Tax” or “Taxes” means any federal,
state, local or foreign income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer, real property gains,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, special assessment, personal property, capital stock, social
security, unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the
foregoing.

“Tax Returns” means any return, report,
information return or other document (including schedules or any related or
supporting information) filed or required to be filed with any governmental
entity or other authority in connection with the determination, assessment or
collection of any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.

11.02       Cross-Reference of Other Definitions.  Each capitalized term listed below is defined
in the indicated Section of this Agreement:

	
  Term

  	
   

  	
  Section No.

  
	
  2006 Balance
  Sheet

  	
   

  	
  1.05(a)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Base
  Consideration

  	
   

  	
  1.02(a)

  
	
  Buyer

  	
   

  	
  Preamble

  
	
  Buyer’s
  Representatives

  	
   

  	
  6.02

  
	
  Common Stock

  	
   

  	
  Recitals

  

 

 28
 

 

	
  Closing

  	
   

  	
  1.07

  
	
  Closing Balance
  Sheet

  	
   

  	
  1.05(a)

  
	
  Closing Purchase
  Price

  	
   

  	
  1.02(b)

  
	
  Closing Date

  	
   

  	
  1.07

  
	
  Code

  	
   

  	
  4.12(b)

  
	
  Company

  	
   

  	
  Preamble

  
	
  Confidentiality
  Agreement

  	
   

  	
  6.02

  
	
  Deductible

  	
   

  	
  9.02(a)

  
	
  Dispute
  Resolution Auditor

  	
   

  	
  1.05(a)

  
	
  ERISA

  	
   

  	
  4.12(a)

  
	
  Estimated Net
  Indebtedness

  	
   

  	
  1.04

  
	
  Estimated Net
  Working Capital

  	
   

  	
  1.04

  
	
  Final Purchase
  Price

  	
   

  	
  1.02(a)

  
	
  Indemnified
  Parties

  	
   

  	
  9.03

  
	
  Indemnitee

  	
   

  	
  9.05

  
	
  Indemnitor

  	
   

  	
  9.05

  
	
  Latest Balance
  Sheet

  	
   

  	
  4.04(a)

  
	
  Leased Real
  Property

  	
   

  	
  4.06(b)

  
	
  Losses

  	
   

  	
  9.02(a)

  
	
  Merger Agreement

  	
   

  	
  2.01(i)

  
	
  Objections
  Statement

  	
   

  	
  1.05(a)

  
	
  Pension Plans

  	
   

  	
  4.12(a)

  
	
  Plans

  	
   

  	
  4.12(a)

  
	
  Preferred Stock

  	
   

  	
  Recitals

  
	
  Preliminary Closing
  Statement

  	
   

  	
  1.05(a)

  
	
  Schedules

  	
   

  	
  10.01

  
	
  Seller Group

  	
   

  	
  10.05

  
	
  Seller

  	
   

  	
  Preamble

  
	
  Shares

  	
   

  	
  Recitals

  
	
  Survival Period
  Termination Date

  	
   

  	
  9.01

  
	
  the Company’s
  Knowledge

  	
   

  	
  12.03

  
	
  Transfer Taxes

  	
   

  	
  10.03(f)

  
	
  Welfare Plans

  	
   

  	
  4.12(a)

  

 

ARTICLE XII

MISCELLANEOUS

12.01       Press Releases and Communications.  No press release or public announcement
related to this Agreement or the transactions contemplated herein, or prior to
the Closing, any other announcement or communication to the employees,
customers, independent contractors or suppliers of the Company, shall be issued
or made by any party hereto without the joint approval of Buyer and Seller,
unless required by law in which case Buyer and Seller shall have the right to
review such press release, announcement or communication prior to its issuance,
distribution or publication.

 29
 

12.02       Expenses.  Except as otherwise expressly provided
herein, Seller and Buyer shall pay all of their own expenses (including
attorneys’ and accountants’ fees and expenses) in connection with the
negotiation of this Agreement, the performance of their obligations hereunder
and the consummation of the transactions contemplated by this Agreement.

12.03       Knowledge Defined.  For purposes of this Agreement, the term “the
Company’s knowledge” as used herein shall mean the actual knowledge of
Thomas Dearden, Don Bailey and Kristine Rasmussen.

12.04       Notices.  All notices, demands and other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered, one day after deposit with Federal Express or similar overnight
courier service or three days after being mailed by first class mail, return
receipt requested.  Notices, demands and
communications to Buyer, the Company and Seller shall, unless another address
is specified in writing, be sent to the addresses indicated below:

Notices to Buyer:

Datamark Partners, LLC

c/o Thorndale Farm, LLC

270 E. Westminster

Lake Forest, IL

Attn:  Oakleigh Thorne

with a copy to:

Patterson Belknap Webb & Tyler LLP

1133 Avenue of the Americas

New York, NY  10036

Attn:  John P. Schmitt, Esq.

Notices to Seller:

eCollege.com

c/o Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004-1980

Attention: Arthur Fleisher, Esq.

with a copy to:

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attn:       Jon A. Ballis, P.C.
                 Jody S. Gale

 30
 

Notices to Company:

Datamark Inc.

c/o eCollege.com

One N. LaSalle Street

Suite 1800

Chicago, Illinois  60602

Attn:  Margee Elias, Senior Vice
President and General Counsel

with a copy to:

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attn:       Jon A. Ballis, P.C.
                 Jody S. Gale

12.05       Assignment.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned or delegated (a) by Buyer without the prior written consent of
the Seller except that Buyer may assign to any beneficial owner of Buyer the
right to purchase directly a portion of the equity of the Company or
(b) by Seller (other than with respect to its rights and interests
hereunder) without the prior written consent of Buyer.

12.06       Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

12.07       References.  The table of contents and the section and
other headings and subheadings contained in this Agreement and the exhibits
hereto are solely for the purpose of reference, are not part of the agreement
of the parties hereto, and shall not in any way affect the meaning or
interpretation of this Agreement or any exhibit hereto.  All references to days or months shall be
deemed references to calendar days or months. 
All references to “$” shall be deemed references to United States
dollars.  Unless the context otherwise
requires, any reference to a “Section,” “Exhibit,” or “Schedule” shall be
deemed to refer to a section of this Agreement, exhibit to this Agreement or a
schedule to this Agreement, as applicable. 
The words “hereof,” “herein” and “hereunder” and words of similar import
referring to this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
English shall be the governing language of this Agreement.

12.08       No Strict Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any Person.

 31
 

12.09       Amendment and Waiver.  Any provision of this Agreement or the
schedules (except as contemplated by Section 6.05) or exhibits may be
amended or waived only in a writing signed by Buyer, the Company and
Seller.  No waiver of any provision
hereunder or any breach or default thereof shall extend to or affect in any way
any other provision or prior or subsequent breach or default, and no failure or
delay to enforce, or partial enforcement of, any provision hereof shall operate
as a waiver of such provision or of any other provision.

12.10       Complete Agreement.  This Agreement and the documents referred to
herein (including the Confidentiality Agreement and the schedules and exhibits
hereto) contain the complete agreement among the parties hereto and supersede
any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.

12.11       Schedules.  Any disclosure under a particular section of
this Agreement will be made in the Schedules under the heading of the relevant
topic of such section.  A disclosure of
an item for a particular section or topic of the Schedules will be deemed
disclosure for purposes of any other section or topic of the Schedules, but
only to the extent that such cross-disclosure is clearly apparent. The inclusion
of information in any of such Schedules hereto shall not be construed as an
admission that such information is material to the Company.  In addition, matters reflected in the
Schedules are not necessarily limited to matters required by the Agreement to be
reflected in such Schedules.  Such
additional matters are set forth for informational purposes only and do not
necessarily include other matters of a similar nature.

12.12       Counterparts.  This Agreement may be executed in multiple
counterparts (including by means of facsimile signature pages), any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same instrument.

12.13       Governing Law; Submission to
Jurisdiction.  All matters relating
to the interpretation, construction, validity and enforcement of this Agreement
shall be governed by and construed in accordance with the domestic laws of the
State of Delaware without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of laws of any jurisdiction other than the
State of Delaware.   The parties hereto
hereby irrevocably and unconditionally consent to the exclusive jurisdiction of
the federal and state courts located in Cook County in the State of Illinois
for any action, suit or proceeding arising out of or related hereto.  The parties hereto further hereby irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of or relating to this Agreement in the federal
and state courts located in Cook County in the State of Illinois, and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in any inconvenient forum.

12.14       Waiver of Trial by Jury.  THE PARTIES HERETO WAIVE THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT OR ANY ACTION OR
PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF
WHICH PARTY INITIATES SUCH ACTION OR PROCEEDING.

 32
 

12.15       Buyer Deliveries.  Buyer agrees and acknowledges that all
documents or other items delivered or made available to Buyer’s representatives
shall be deemed to be delivered or made available, as the case may be, to Buyer
for all purposes hereunder.

*      *      *     
*

 33
 

IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement on the day and year first above written.

	
  

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DATAMARK INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas H. Kelsall

  
	
   

  	
  Name:

  	
  Douglas H. Kelsall

  
	
   

  	
  Its:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
  eCOLLEGE.COM

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas H. Kelsall

  
	
   

  	
  Name:

  	
  Douglas H. Kelsall

  
	
   

  	
  Its:

  	
  President and Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
   

  	
  DATAMARK PARTNERS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Oakleigh Thorne

  
	
   

  	
  Name:

  	
  Oakleigh Thorne

  
	
   

  	
  Its:

  	
  Authorized Officer

  

 

 

 34EXHIBIT 10.19

LICENSE AGREEMENT

This
License Agreement (“Agreement”) is made as of April 1, 2007, (the “Effective  Date”), between
CrownBeav, LLC an Oregon limited liability company with its
principal place of business at 895 Country Club Road, Suite B-100, Eugene,
Oregon 97401 (“Licensor”), and American Medical Technology, Inc. a Delaware
corporation with its principal place of business at 5655 Bear Lane, Corpus
Christi, TX 78405 (“AMT”).

RECITALS

A.            Licensor manufactures and sells certain
proprietary dental products.

B.            AMT is a global leading distributor of dental
and other products.

C.            Licensor and AMT desire that Licensor appoint
AMT as a distributor of such Licensor products in a designated territory,
subject to and in accordance with the terms and conditions of this Agreement.

NOW
THEREFORE, in consideration of the terms, covenants, and conditions expressed
in this Agreement to be kept and performed by the parties to this Agreement,
and for other good and valuable consideration, the receipt, adequacy, and
sufficiency of which is hereby acknowledged, and based on the foregoing
recitals which each party acknowledges to be true, and which are hereby
incorporated into this Agreement, the parties mutually agree as follows:

1.             APPOINTMENT AND LICENSES.

1.1           Appointment.  Subject to AMT’s compliance
with the terms and conditions of this Agreement and subject to any limitations
in this Agreement, Licensor appoints AMT, and AMT accepts such appointment, as
the independent exclusive distributor of the products listed in Exhibit A (“Products”)
in and limited to the territory specified in Section 1.2 (“the Exclusive
Territory”) and appointment as an independent nonexclusive distributor of
products listed in Exhibit A in and limited to the territory specified in
Section 1.3 (“the Nonexclusive Territory”). 
The Exclusive Territory and the Nonexclusive Territory may be jointly
referred to as “the Territories”. 
Subject to AMT’s compliance with the terms and conditions of this
Agreement, during the term of this Agreement, Licensor will not appoint another
distributor of the Products in the Exclusive Territory.

1.2           Exclusive Territory.  The
Exclusive Territory is the world except for the United States and Canada.  AMT will distribute the Products in the
Exclusive Territory only to dealers for resale to dental professional
customers. AMT will have an exclusive license to sell the Products in the
Exclusive Territory.

1.3           Nonexclusive Territory.  The
Nonexclusive Territory is the United States and Canada.  AMT will distribute the Products in the
Nonexclusive Territory only to dealers for resale to dental professional
customers.  AMT will have a nonexclusive
license to sell the Products in the Nonexclusive Territory.

1.4           Technology License. 
Licensor shall manufacture, or have manufactured, and supply all
Products to which this Agreement applies. 
Licensor shall deliver to AMT, promptly after the Effective Date, such
packaging instructions and written specifications reasonably required to enable
AMT to distribute the Products within the Territories (the “Specifications”).  Licensor and AMT understand and acknowledge
that the Products are manufactured through the use of

 1
 

those
certain processes, know-how, and related materials proprietary to Licensor (“the
Technology”) and made available to AMT in a limited way hereunder.  Licensor hereby grants AMT a worldwide,
exclusive (in the Exclusive Territory) and nonexclusive (in the Nonexclusive
Territory), non-transferable license during the term of this Agreement to use
the Technology solely for the purpose of selling, offering to sell, exporting,
distributing, marketing and supporting the Products as to the Territories.  Except for the limited right to appoint other
distributors (including distributors who may market, distribute and sell to other
distributors) to market and distribute the Products as contemplated herein, AMT
shall have no right to sublicense the rights set forth herein.

1.5           Supply
and Manufacturing:  AMT acknowledges that Licensor has not
granted manufacturing rights, (using the Technology or otherwise) to AMT and
that AMT shall purchase the Products from Licensor pursuant to a Manufacturing
Agreement between both parties.  Should
future business conditions dictate the need for AMT to manufacture Products,
such manufacturing rights can only be assigned under a separate Manufacturing
Agreement between both parties.  
Licensor shall manufacture, package, label and ship the Products on
behalf of AMT to AMT’s customers. 
Licensor will provide packaging, labeling, product assembly, labor,
shipping, and other services requested by AMT at cost plus fifteen percent
(15%).  Services and products provided by
Licensor will be provided at location(s) and by personnel determined by
Licensor at its sole discretion.  AMT may
choose to order bulk shell units at the agreed unit prices without the
aforementioned handling fees except for shipping charges.  In the event that AMT makes such a decision,
then AMT shall be responsible for packaging, labeling, shipping and any other
services related to the distribution of such shell units in conformance with
the Specifications and subject to the prior approval of the Licensor.

1.6           Trademark
License.  Subject to AMT’s compliance with the terms
and conditions of this Agreement, Licensor grants to AMT an exclusive (in the
Exclusive Territory) and nonexclusive (in the Nonexclusive Territory),
non-transferable license to use the trade names, trademarks, logos and
designations in or associated with the Products, as specified in Exhibit A (“Marks”),
during the term of this Agreement, solely in connection with AMT’s marketing,
promotion, distribution and sale of the Products within the Territories.  Any such use of a Mark by AMT must correctly
attribute ownership of such mark to Licensor and must be in accordance with
applicable law and Licensor’s then-current trademark usage guidelines.  AMT will not remove or obscure any Marks on
or in the Products, and will not attach any additional trademarks, logos, or
trade designations on or to the Products. 
For the avoidance of doubt, the preceding language will not prohibit AMT
from noting AMT as the exclusive distributor of the Products (in the Exclusive
Territory), not prohibit AMT from noting that AMT is a non-exclusive
distributor of the Products (in the Non-exclusive Territory), or providing
contact information of AMT for questions and problems relating to the Products.

1.7           Limitations.  No
grant, right, license, or immunity is conveyed or granted to AMT by implication
or otherwise under this Agreement with respect to the Products, the Technology,
or any other actual or inchoate property right of Licensor except as expressly
set forth in this Agreement.

Except as expressly set forth herein, neither
the granting of the licenses herein, nor the acceptance of Royalties hereunder,
shall constitute an approval of or acquiescence in AMT’s practices with respect
to trademarks, trade names, corporation names, advertising, or similar
practices with respect to the Products, nor does the granting of such licenses
constitute an authorization or approval of, or acquiescence in the use of
Licensor’s name or any trade name or trademark of Licensor or its affiliates in
connection with the manufacturer, advertising, or sale of the Products, and
Licensor hereby expressly reserves all rights with respect thereto.

2.             AMT’S OBLIGATIONS.

2.1           Promotion
and Distribution.  AMT will promote and advertise the Products
in

 2
 

accordance
with Licensor’s reasonable policies, as announced from time to time.  AMT will obtain Licensor’s prior approval of
any promotional or advertising materials relating to the Products to be used in
the Nonexclusive Territory before publishing or distributing such
material.  Licensor understands the
complexities of promotion and advertising in the international marketplace especially
with regards to foreign languages and local standards.  As such Licensor shall not require prior
approval for promotional materials and advertising conducted in the Exclusive
Territory.  AMT agrees to submit copies
of all international promotions and advertising to Licensor for reference and
archiving.  Licensor shall manufacture
the Products, but in the event that the parties may agree in the future that
AMT shall manufacture, assemble or repackage all or a portion of the Products,
AMT agrees that the nature and the quality of the Products it manufactures,
assembles or repackages shall conform to the quality standards of Licensor, as
set forth in the Specifications as may be updated by Licensor from time to
time.  In no event shall the Products
fail to meet applicable widely-accepted industry standards, including any laws
or regulations governing the Products. 
If AMT manufactures, assembles or repackages the Products, AMT agrees to
furnish Licensor from time to time with representative samples of the Products
for purposes of determining that such Products conform to the Specifications,
and agrees to permit Licensor to inspect, from time to time and with reasonable
notice, the facilities at which AMT manufactures assembles or repackages the
Products, as applicable.

2.2           Minimum
Commitments.  AMT will market and sell at least the minimum
quantities of each Product for each of the periods specified in Exhibit B.  If AMT does not market and sell the minimum
quantities specified in Exhibit B during any such period, then, upon Licensor’s
request, AMT will promptly provide Licensor with a written report explaining
AMT’s failure to sell the minimum quantity, and Licensor will have the right,
in its sole discretion, to do any of the following: (i) revise the minimum
quantities specified in Exhibit B for future periods; or (ii) terminate this
Agreement for cause, effective immediately upon notice to AMT, in the event
that AMT does not cure such breach within ninety  (90) days after notice from Licensor by
selling the minimum quantities during such ninety  (90) day period.

2.3           AMT
Personnel.  AMT will maintain sufficient technical and
sales personnel having the knowledge and skills necessary to: (i) inform
customers about the features and capabilities of the Products and, to the
extent necessary, competitive products; (ii) service and support the Products
in accordance with AMT’s obligations under this Agreement; and (iii) otherwise
perform its obligations under this Agreement.

2.4           Support.  AMT
will provide prompt and comprehensive pre-sales and post-sales support services
for the Products to AMT’s customers in the Territories.

2.5           Packaging.  AMT
will distribute the Products unmodified and with all packaging and proprietary
rights statements intact as provided in the Specifications, and any changes to
such packaging or marking shall require Licensor’s pre-approval, which approval
shall not be unreasonably withheld. 
Additionally, AMT will be responsible for providing any limited license
agreements or limited warranty statements to customers, and all such agreements
shall be between AMT and the customer. 
Licensor shall not be a party to such agreements.

2.6           Business
Conduct.  AMT will: (i) not engage in any business
practice or conduct that will result in the disparagement of the Products
and/or the good name, goodwill, and reputation of Licensor; (ii) make no false
or misleading representations or advertisements with regard to Licensor or the
Products; and (iii) make no representations, warranties or guarantees to customers
or to the trade with respect to the specifications, features, or capabilities
of the Products that are inconsistent with the literature distributed, created,
or approved by Licensor.

2.7           Maintenance
of Regulatory Approvals, Licenses, Certifications and CE Mark.

2.7.1  AMT shall be fully
responsible for obtaining all necessary recertification and

 3
 

registration
for AMT to sell Products in the Exclusive Territory.  AMT shall also maintain in good standing all
necessary regulatory approvals, licenses, ISO certifications and CE Markings
currently issued under Licensor’s name in countries previously listed by
Licensor and for notifying the issuing parties and/or governmental agencies in
each country where such regulatory approvals, licenses, ISO certifications and
CE Markings have been issued under Licensor’s name.  Licensor shall, at no cost to Licensor,
provide any assistance reasonably requested by AMT with respect to AMT
obtaining regulatory approvals, licenses, ISO certifications and CE Markings.

2.7.2  AMT will be solely
responsible for ensuring that the promotion, marketing, sales and distribution
of Products is conducted in compliance with all regulations applicable to
Products in each country where AMT undertakes such activities.  AMT commits to ensure that all regulatory
approvals, licenses, ISO certifications and CE Markings are properly maintained
or obtained, as applicable, such that there is no impairment of the good name
and goodwill of Licensor.  Licensor
shall, at no cost to Licensor, provide any assistance reasonably requested by
AMT in order for AMT to ensure that all regulatory approvals, licenses, ISO
certifications and CE Markings are properly maintained or obtained, as
applicable.

2.7.3  AMT will be solely
responsible for communicating with pertinent governmental agencies or other
regulating bodies with respect to all regulatory approvals, licenses, ISO
certifications and CE Markings currently issued under Licensor’s name in the
Exclusive Territory.

2.8           Costs
for Maintaining Registered Trademarks.  AMT agrees to reimburse
Licensor for Licensor’s reasonable costs relating to the maintenance of the
Product’s trademarks in all applicable jurisdictions.

3.             RECORDS AND REPORTS.

3.1           Reports. 
Commencing with the second calendar quarter of 2007, and within thirty
(30) calendar days after the end of each calendar quarter thereafter, AMT will
provide Licensor with a written report that includes: (i) AMT’s net sales and
shipments of each Product for that calendar quarter, by dollar volume and
number of units (a “unit” being defined for this Agreement as an individual
crown shell or individual bridge shell or comparable item), both in the
aggregate and for such categories as Licensor may reasonably designate from
time to time; and (ii) any other information reasonably requested by
Licensor.  AMT’s report will comply in
form and substance with Licensor’s reporting requirements, as they are
reasonably determined by Licensor and communicated to AMT from time to time.

3.2           Notification.  AMT
will promptly notify Licensor of any: (i) claim, allegation, or proceeding of
any kind or nature involving the Products, or any of them; or (ii) claimed or
suspected Product defects.

3.3           Records. 
During the term of this Agreement and for a period of two (2) years
after the termination or expiration thereof, AMT will maintain complete and
accurate books, records and accounts relating to the distribution of the
Products, and will permit Licensor’s authorized representatives to examine them
on reasonable prior notice.

4.             CONSIDERATION.

4.1           Royalty.  AMT
shall pay to Licensor, as provided in Exhibit B to this Agreement, the sum or
sums due for sale of the Products (“the Royalty”).  AMT shall pay for all orders placed for
Products and/or services under net 30 day terms.  If the Royalty amount, or other amount due,
is unknown at the time of placement of the Product Order Licensor shall issue
an invoice for the amount due when known. 
Any outstanding invoices for Products or services must be paid within
thirty (30) days from the receipt of such invoices by AMT in accordance with
Section 9.6 of this Agreement.  Violation
of these payment terms by AMT shall result in non-fulfillment of orders until
deficiencies are rectified.  If such
deficiencies continue for a period of ninety (90) days, Licensor has the right
to terminate the Agreement for cause without the payment of compensation as referenced
in Section 5.3 of this

 4
 

Agreement.
If the Agreement is terminated and payment deficiencies have been rectified by
AMT, Licensor agrees to pay AMT for any open Product sales-related compensation
that may be owed.  AMT shall be liable
for interest on any overdue Royalty payments commencing on the date such
Royalty becomes due at the annual rate of one percent (1%) over the prime
interest rate quoted by Licensor’s bank on the date such Royalty becomes
due.  If such interest rate exceeds the
legal rate in the jurisdiction where a claim therefore is being asserted, the
interest rate shall be reduced to the maximum rate that is legal in such
jurisdiction.

4.2           Option.  In
addition to amounts due to Licensor under the provisions of Agreement, as
consideration for the license granted by Licensor to AMT hereunder, AMT grants
to Licensor an option, as set forth in that certain Option Agreement, attached
hereto as Exhibit C.

5.             TERM AND TERMINATION.

5.1           Term.  This
Agreement commences on the Effective Date and, unless it is terminated earlier
or the term is modified in accordance with the terms of this Agreement, will
remain in effect for a term of ten (10) years thereafter.  At the end of such ten (10) year term, this
Agreement will renew for an additional ten (10) years if the terms and
conditions of such renewal are agreed upon by the parties prior to the
expiration of the initial term of this Agreement, and thereafter shall
automatically renew for additional five (5) year terms unless the parties
mutually agree in writing to cancel this Agreement at least thirty (90) days
prior to such automatic renewal.

5.2           Termination
For Cause.  Either party may terminate this Agreement for
cause at any time if the other party breaches any material term of this
Agreement and fails to cure that breach within sixty (60) days (except that if
the breach is for nonpayment under Section 4.1, no additional time for cure
shall be allowed beyond the ninety (90) days set forth in Section 4.1) after
notice thereof from the non-breaching party, assuming such breach is capable of
being cured.  Licensor may also terminate
this Agreement, at any time, if any one of the following occurs:

(i) AMT becomes the subject of a voluntary or involuntary petition in
bankruptcy or proceeding relating to insolvency, receivership, or liquidation
for the benefit of creditors;

(ii) the common stock of AMT is no longer trading, or permitted to be
traded, in any domestic securities market, or AMT is not in compliance with
applicable securities laws;

(iii) outstanding invoices from Licensor to AMT are not paid within
sixty (60) days of the dates on which they are due.

(iv) AMT changes substantially the nature of its business as presently
conducted; or,

(v)  AMT experiences sales
decreases in the Products of more than five percent (5%) per month in four (4)
consecutive months.

In
the event of a breach by AMT described in subsections (i) through (v), Licensor
shall not fill orders for Products until any such breach is cured.  If any such breach continues uncured for a
period of sixty (60) days, Licensor has the right to terminate this Agreement “with
cause” and therefore without payment of compensation owed to AMT as provided in
Section 5.3 labeled “termination without cause”.  If AMT cures such breach within sixty (60)
days, Licensor agrees to pay AMT any Product sales-related compensation that
may be due.

5.3           Termination
without Cause.  AMT shall have the right to terminate this
Agreement at any time, for any reason, during the term of this Agreement, by
providing to Licensor a thirty (30) day notice. 
If AMT terminates this Agreement “without cause”, AMT shall pay Licensor
twenty-five thousand US Dollars ($25,000), in cash as liquidated damages,
payable immediately upon termination. 
Licensor shall have the same right to terminate this Agreement at any
time, for any reason, during the term of this Agreement, by providing to AMT a
thirty (30) day notice.  If Licensor
terminates this Agreement “without cause”, Licensor shall pay AMT twenty-five
thousand US Dollars ($25,000), as liquidated damages, payable immediately upon
termination.

 5
 

5.4           Effect
of Termination.  Upon the termination or expiration of this
Agreement: (i)  each party will promptly
return to the other party or destroy all Confidential Information (as defined
in Section 6.1) of the other party in its possession or control, and will
provide the other party with a certification, signed by one of its officers,
certifying the return or destruction of all such Confidential Information; (ii)
AMT will cease using the Marks and other intellectual property of Licensor and
promoting and advertising the Products and (iii) all of the licenses granted
hereunder shall terminate.  Termination
of this Agreement for any cause whatsoever shall in no manner interfere with,
affect, or prevent the collection by Licensor of any and all sums of money or
option rights due it under this Agreement or prevent the collection by AMT of
any and all sums of money due it under this Agreement  Upon termination of this Agreement for any
reason, payments required by this Agreement, but not yet due, shall become due
and payable within 30 days, and the Royalties due on AMT’s inventory of Products
for which payments are not yet required may be offset against payments for
Products due to AMT as though sales of the AMT inventory of Products had taken
place prior to termination of this Agreement.

6.             CONFIDENTIALITY.

6.1           Definition.  “Confidential
Information” means: (i) any non-public information of a party, including,
without limitation, any information relating to a party’s current and planned
products and services, technology, techniques, know-how, research, engineering,
designs, finances, accounts, procurement requirements, manufacturing, customer
lists, business forecasts and marketing plans, including without limitation the
Specifications and the Technology; (ii) any other information of a party that
is disclosed in writing and is conspicuously designated as “Confidential” at
the time of disclosure or that is disclosed orally and is identified as “Confidential”
at the time of disclosure, and is summarized in a writing sent by the
disclosing party to the receiving party within thirty (30) days of any such
disclosure; and (iii) the specific terms and pricing set forth in this
Agreement.

6.2           Exclusions.  The
obligations in Section 6.3 will not apply to the extent any Confidential
Information: (i) is or becomes generally known to the public through no fault
of or breach of this Agreement by the receiving party; (ii) was rightfully in
the receiving party’s possession at the time of disclosure, without an
obligation of confidentiality; (iii) is independently developed by the
receiving party without use of the disclosing party’s Confidential Information;
or (iv) is rightfully obtained by the receiving party from a third party
without restriction on use or disclosure.

6.3           Obligations.  Each
party will not use the other party’s Confidential Information, except as
necessary for the performance of this Agreement, and will not disclose such
Confidential Information to any third party, except to those of its employees
and subcontractors that need to know such Confidential Information for the
performance of this Agreement, provided that each such employee and
subcontractor is subject to a written agreement that includes binding use and
disclosure restrictions that are at least as protective as those set forth
herein.  Each party will use all
reasonable efforts to maintain the confidentiality of all of the other party’s
Confidential Information in its possession or control, but in no event less
than the efforts that it ordinarily uses with respect to its own confidential
information of similar nature and importance. 
The foregoing obligations will not restrict either party from disclosing
the other party’s Confidential Information or the terms and conditions of this
Agreement: (i) pursuant to the order or requirement of a court, administrative
agency, or other governmental body, provided that the party required to make
such a disclosure gives reasonable notice to the other party to enable it to
contest such order or requirement; (ii) on a confidential basis to its legal or
professional financial advisors; (iii) as required under applicable securities
regulations; or (iv) on a confidential basis to present or future providers of
venture capital and/or potential private investors in or acquirers of such
party.

7.             INDEMNITIES.

7.1           Licensor
Indemnity.  Licensor will defend or settle, indemnify,
and hold AMT harmless

 6
 

from
any liability, damages and expenses (including court costs and reasonable
attorneys’ and expert witness fees) arising out of or resulting from any
lawsuit brought against AMT, and only AMT, to the extent that it is based upon
a third-party claim that Licensor’s use of the Technology, as provided by
Licensor to AMT under this Agreement, infringes any United States patent or any
copyright or misappropriates any trade secret, and will pay any costs and damages
made in settlement or awarded against AMT in final judgment  resulting from any such claim, provided
that AMT: (i) gives Licensor prompt notice of any such claim; (ii) gives
Licensor sole control of the defense and any related settlement of any such
claim; and (iii) gives Licensor, at Licensor’s expense, all reasonable
information, assistance, cooperation and authority in connection with the
foregoing.  Licensor will not be bound by
any settlement or compromise that AMT enters into without Licensor’s express
prior consent.  Licensor shall not effect
any such settlement without the prior written consent of AMT, which consent
shall not be unreasonably withheld.

7.2           Injunctions.  If
AMT’s rights to use the Technology under the terms of this Agreement is, or in
Licensor’s opinion is likely to be, enjoined due to the type of claim specified
in Section 7.1, then Licensor may, at its sole option and expense: (i) procure
for AMT the right to continue to use and distribute such Technology under the
terms of this Agreement; (ii) replace or modify such Technology so that it is
non-infringing; or (iii) if options (i) and (ii) above cannot be reasonably
accomplished, then Licensor may terminate AMT’s rights and Licensor’s
obligations hereunder with respect to such Technology.  A
termination of this Agreement by AMT under Section 7.2(iii) shall be deemed to
be a termination with cause for purposes of this Agreement.

7.3           Indemnity
Exclusions.  Licensor will have no obligation under
Sections 7.1 or 7.2 for any claim of infringement or misappropriation to the
extent that it results from: (i) the combination, operation or use of the
Technology with or in equipment, products, or processes not provided by
Licensor or authorized in the Specifications; or (ii) modifications to a Product
other than as authorized in the Specifications or otherwise approved by
Licensor.  The foregoing clauses (i) and
(ii) are referred to collectively as “Indemnity  Exclusions”.

7.4           AMT
Indemnity.  AMT will defend or settle, indemnify, and
hold Licensor harmless from any liability, damages and expenses (including
court costs and reasonable attorneys’ and expert witness fees) arising out of
or resulting from any third-party claim based on or otherwise attributable to:
(i) AMT’s negligence or intentional conduct; (ii) any misrepresentations made
by AMT with respect to Licensor or the Products; or (iii) an Indemnity
Exclusion.

8.             LIABILITY.

8.1           Exclusion
of Certain Damages.  IN NO EVENT WILL LICENSOR BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS OR REVENUE, LOSS OF USE, LOST BUSINESS OPPORTUNITIES
OR LOSS OF GOODWILL), OR FOR THE COSTS OF PROCURING SUBSTITUTE PRODUCTS,
ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OR
PERFORMANCE OF ANY PRODUCTS OR SERVICES PROVIDED BY LICENSOR, WHETHER SUCH
LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT, WARRANTY, TORT (INCLUDING
NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE, WHETHER OR NOT LICENSOR HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE.  THE PARTIES HAVE AGREED THAT THESE
LIMITATIONS WILL SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS
AGREEMENT IS FOUND TO HAVE FAILED ITS ESSENTIAL PURPOSE.

9.             GENERAL.

9.1           Assignment.  AMT  may not assign or transfer this Agreement, in whole or in
part, by operation of law or otherwise, without Licensor’s

 7
 

prior
written consent; provided that AMT shall have the right to transfer this
Agreement to its successor in interest in the event that there is a sale of
substantially all of the assets of AMT or a change in control of the stock of
AMT, unless Licensor reasonably objects to such assignment (e.g., assignee is a
competitor of Licensor).  Except as
provided in this Section 9.1, any attempt to assign or transfer this Agreement,
without such consent, will be null, void, and of no effect.  Subject to the foregoing, this Agreement will
bind and inure to the benefit of each party’s permitted successors and assigns.

9.2           Governing
Law and Jurisdiction.  This Agreement will be governed by and
construed in accordance with the laws of the State of Oregon, excluding its
conflict of laws principles.  The parties
disclaim application of the United Nations Convention on Contracts for the
International Sale of Goods.

9.3           Compliance
with Law.  AMT will have and maintain all permits and
licenses required by any governmental unit or agency and will comply with all
applicable laws and regulations, including United States export laws, in
performing its this Agreement and with respect to the Products.

9.4           Attorneys’
Fees.  Should either party employ an attorney to
institute suit or action or demand arbitration to enforce any of the provisions
of this Agreement, to protect its interest in any matter arising under this
Agreement, or to collect damages for the breach of this Agreement, the
prevailing party shall be entitled to recover from the other party reasonable
attorney fees, costs, charges, and expenses (including the cost of experts)
expended or incurred therein at hearing, trial, on appeal, or otherwise in an
amount to be fixed by the court or arbitrator(s).  Unless judgment goes by default, the attorney
fee award shall not be computed in accordance with any court schedule, but
shall be such as to fully reimburse all attorneys fees actually incurred in
good faith, regardless of the size of a judgment, it being the intention of the
parties to fully compensate for all attorney fees and experts fees and experts
fees paid or incurred in good faith.  The
arbitrator(s) in any arbitration proceeding shall have the right to allocate
his or their fees between the parties or to charge all of such fees to one
party, as the arbitrator(s) shall deem to be just.  This clause applies, but is not limited to,
proceedings in bankruptcy or otherwise.

9.5           Nonexclusive
Remedy.  Except as expressly set forth in this
Agreement, the exercise by either party of any of its remedies under this
Agreement will be without prejudice to its other remedies under this Agreement
or otherwise.

9.6           Notices.  All
notices, approvals, consents and other communications required or permitted
under this Agreement will be in writing and delivered by confirmed facsimile
transmission, by courier or overnight delivery service with written
verification of receipt, or by registered or certified mail, return receipt
requested, postage prepaid, and, in each instance, will be deemed given upon
receipt.  All such notices, approvals,
consents and other communications will be sent to the addresses set forth above
or to such other address as may be specified by either party to the other party
in accordance with this Section.

For
Licensor:

Charles R. Schrader

Jordan Schrader PC

P.O. Box 230669

Portland,
Oregon 97281

Two Centerpointe Drive, 6th Floor

Portland, Oregon 96035

Fax:
(508) 598-7373

For AMT:

Reish
Luftman Reicher & Cohen

11755
Wilshire Boulevard,

Tenth
Floor

Los
Angeles, California 90025

Attention:  Mark Terman

Fax:  310-478-5891

9.7           Force
Majeure.  Neither
party will be responsible for any failure or delay in its performance under this
Agreement (except for any payment obligations) due to causes beyond

 8
 

its
reasonable control, including, but not limited to, labor disputes, strikes,
lockouts, shortages of or inability to obtain energy, raw materials or
supplies, war, terrorism, riot, or acts of God.

9.8           Relationship
of the Parties.  The parties are independent contractors and
this Agreement will not establish any relationship of partnership, joint
venture, employment, franchise or agency between the parties.  Neither party will have the power to bind the
other party or to incur any obligations on its behalf, without the other party’s
prior consent.

9.9           Waiver.  The
failure by either party to enforce any provision of this Agreement will not
constitute a waiver of future enforcement of that or any other provision.

9.10         Severability.  If for any reason a court of
competent jurisdiction finds any provision of this Agreement invalid or
unenforceable, that provision of the Agreement will be enforced to the maximum
extent permissible and the other provisions of this Agreement will remain in
full force and effect.

9.11         Exhibits.  Any
exhibits referred to in this Agreement are by this reference incorporated into
this Agreement as if they were fully set forth herein.

9.12         Mediation. 
Except for claims for indemnity arising out of or relating to a lawsuit
claiming damages for personal injury or property damage filed by or against any
party to this Agreement, the parties mutually agree that any dispute that may
arise under this Agreement will be submitted to a mediator agreed to by both
parties as soon as reasonable after such dispute arises, but in any event prior
to the commencement of arbitration or litigation.  Such mediation shall occur in the Portland,
Oregon metropolitan area and the mediation fees and mediator’s expenses shall
be shared equally by the parties.   The
parties agree to exercise their best efforts in good faith to resolve all
disputes in mediation.  Either party may
terminate the mediation at any time after the first session, but the decision
to terminate must be delivered in person by the party’s representative to the
other party’s representative and the mediator.

9.13         Entire
Agreement.  This Agreement, including all exhibits
hereto, constitutes the complete and exclusive understanding and agreement
between the parties regarding its subject matter and supersedes all prior or
contemporaneous agreements or understandings, whether written or oral, relating
to its subject matter.  Any waiver, modification
or amendment of any provision of this Agreement will be effective only if in
writing and signed by duly authorized representatives of each party.

9.14         Counterparts.  This Agreement may be executed in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.

 9
 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

	
  AMERICAN MEDICAL TECHNOLOGIES:

  	
   

  	
  CROWNBEAV, LLC

  
	
   

  	
   

  	
   

  
	
  By:

  	
     /s/
  Judd D. Hoffman  

  	
   

  	
  By:

  	
     /s/ Peter E. Pifer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    Judd
  D. Hoffman  

  	
   

  	
  Name:

  	
    Peter E. Pifer  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    CEO/President  

  	
   

  	
  Title:

  	
    CEO/Manager  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
    05/12/07

  	
   

  	
  Date:

  	
    05/08/07

  
	
   

  	
   

  	
   

  	
   

  	
   

  
												

 

 10

Exhibit A

Products and Marks

Products

SHELLS ONLY KITS:

AKSO    112 Adult Posterior
Crowns (Opaque)

AKTSO  112 Adult Posterior Crowns
(Translucent)

ATSO    56 Adult Anterior Crowns

PKSO    112 Pediatric Crowns

APSO    56 Pediatric Anterior
Crowns

PBSO    16 Bridge Shells (Opaque)

PBTSO   16 Bridge Shells (Translucent)

CROWN REFILL PACKAGES:

Adult Posterior   (ACT = Translucent)

AC1 or ACT1    Small Upper Right
Molar

AC2 or ACT2    Medium Upper Right
Molar

AC3 or ACT3    Large Upper Right
Molar

AC4 or ACT4    X-Large Upper Right Molar

AC5 or ACT5    Small Upper Left
Molar

AC6 or ACT6    Medium Upper Left
Molar

AC7 or ACT7    Large Upper Left
Molar

AC8 or ACT8    X-Large Upper
Right Molar

AC9 or ACT9    Small Lower
Bicuspid

AC10 or ACT10  Large Lower
Bicuspid

AC11 or ACT11  Small Lower Molar

AC12 or ACT12  Medium Lower Molar

AC13 or ACT13  Large Lower Molar

AC14 or ACT14  X-Large Lower
Molar

AC15 or ACT15  Small Upper
Bicuspid

AC16 or ACT16  Large Upper Bicuspid

Pediatric Posterior

PC1    Upper Small Right Primary
Molar

PC2    Upper Large Right Primary
Molar

PC3    Lower Small Right Primary
Molar

PC4    Lower Large Right Primary
Molar

PC5    Lower Small Left Primary
Molar

PC6    Lower Large Left Primary
Molar

PC7    Upper Small Left Primary
Molar

PC8    Upper Large Left Primary Molar

Adult Anterior

AA1   Small Cuspid

AA2   Medium Cuspid

AA3   Large Cuspid

AA4   X-Small Incisor

AA5   Small Incisor

AA6   Medium Incisor

AA7   Large Incisor

AA8   X-Large Incisor

Pediatric Anterior

PA1   Small Cuspid

 1
 

PA2    Medium Cuspid

PA3    Large Cuspid

PA4    X-Large Cuspid

PA5    Small Incisor

PA6    Medium Incisor

PA7    Large Incisor

PA8    X-Large Incisor

BRIDGE REFILL PACKAGES:

Posterior Bridge  (PBT = Translucent)

PB1 or PBT1    Small Upper Right
Bridge

PB2 or PBT2    Large Upper Right
Bridge

PB3 or PBT3    Small Upper Left
Bridge

PB4 or PBT4    Large Upper Left
Bridge

PB5 or PBT5    Small Lower Right
Bridge

PB6 or PBT6    Large Lower Right
Bridge

PB7 or PBT7    Small Lower Left
Bridge

PB8 or PBT8    Large Lower Left Bridge

Marks

Patented
Products:

U.S. Pat. Nos. 6,068,481; 6,257,892; 6,447,296

U.S. and foreign patents
issued and pending

Trademark:

DIRECTCROWN®
is a registered trademark of CrownBeav, LLC

Copyright
Notice:

©CrownBeav 2007

All Rights Reserved

ISO
Certification:

No. FM502327

 2

EXHIBIT B

Minimum Commitment and Royalty Schedule

Commencing with the second calendar quarter of 2007 and continuing on a
trailing twelve month basis through the remainder of the term of the Agreement,
AMT shall order at least 200,000 units annually in the Exclusive Territory for
the licenses granted by this Agreement to continue.

In executing this Agreement, AMT agrees to a two tier Product cost
schedule, one for the international market (the Exclusive Territory) and a
separate one for the U.S/Canadian market (the Nonexclusive Territory).

Markets in the Exclusive Territory shall have initial pricing (“Royalty”)
of $  per shell until unit orders exceed
200,000 units.  Initial shell Royalty on
units above 200,000 shells shall be $  per shell. 
Initial Royalty for bridge shell units shall be $  per unit, which shall initially reduce to $  per shell unit when the total shell units of
crown and bridge units exceed 200,000 on a trailing 12 month basis.  The minimum number of shell units ordered in
the Exclusive Territory may not be less than 200,000 units annually for the
licenses granted by this Agreement to continue and not be subject to
termination by Licensor for cause. 
Licensor may agree to take into consideration any unforeseen or
prevailing market conditions prior to terminating this Agreement for failure to
meet 200,000 units annually.

Markets in the Nonexclusive Territory shall have initial pricing (“Royalty”)
of $  per shell unit until unit orders by
AMT exceed 250,000 units.  For shell unit
orders above 250,000, the initial Royalty on such shells be at $  per shell. 
Bridge shell units shall have an initial Royalty of $  per unit until 250,000 such units are ordered
by AMT.  Bridge shell units shall have an
initial Royalty of $  per shell when
total crown and bridge units ordered exceed 250,000 on a trailing 12 month
basis.  The minimum number of shell units
ordered in the Nonexclusive Territory by AMT and Licensor together shall not be
less than 250,000 shell units during the trailing 12 months for this Agreement
to not be subject to termination by Licensor for cause.  Licensor may agree to take into consideration
any unforeseen or prevailing market conditions prior to terminating this
Agreement for failure to meet 250,000 units annually.

On or before April 1, 2008, and on or before each succeeding April 1,
AMT and Licensor shall agree upon price adjustments (“Price Adjustments”), if
any, to be applied to the Royalties and other pricing that may arise under this
Agreement for the next succeeding twelve month period beginning April 1st (“Agreement Year”).  Such Price Adjustment will take into account
the following factors (collectively, “Pricing Factors”) as they relate to
changes from the then pricing and Royalties: 
(i) changes in the cost of labor, materials, manufacturers and service
providers used by Licensor in its operations, (ii) changes in regulatory
requirements which may give rise to changed costs for Licensor, and (iii)
changes in Licensor’s overhead costs. 
Such Price Adjustments will take effect April 1 and apply to the balance
of the Agreement Year.

If AMT and Licensor can not agree on Price Adjustments then AMT and
Licensor shall mediate the Price Adjustments in accordance with Section 9.12 of
this Agreement.

If no agreement is reached by May 15 of the Agreement Year, through
mediation or otherwise, then the Price Adjustments shall be submitted to
binding arbitration.  The arbitration
shall be held in Portland, Oregon, in accordance with the rules of the Arbitration
Service of Portland then in effect. 
Price Adjustment disputes shall be heard and decided by one arbitrator
jointly selected by the parties on or before June 30, but if they are unable to
agree on the choice of an arbitrator the Presiding Judge of the

 1
 

Court of Jurisdiction shall appoint the arbitrator.  The arbitrator shall be a person
knowledgeable of the polycarbonate manufacturing and dental products
industries.  AMT and Licensor shall share
compensation of the arbitrator equally. 
The determination of Price Adjustments, if any, by the arbitrator shall
take into account the Pricing Factors, and shall be final and binding on AMT
and Licensor.  The arbitrator shall make
his or her decision no later than July 15 of the Agreement Year in which the Price
Adjustments are to take effect.

All Royalty
payments shall be due at the time provided in Section 4.1.  AMT shall pay all Royalties and other costs
due hereunder in United States dollars.

 2

EXHIBIT
C

OPTION AGREEMENT

AMT
and Licensor have entered into the Agreement, of which this exhibit is a part,
under which Licensor grants to AMT the exclusive distribution rights to the
products listed in Exhibit A in international markets and nonexclusive rights
to the products listed in Exhibit A in the US and Canadian markets.

In
addition to agreeing to pay for the Products, as provided elsewhere in the
Agreement, AMT grants to Licensor the option to purchase 1,000,000 shares of
AMT common stock at $.20 per share.  This
option will vest two years from the Effective Date of the Agreement.  The option shall terminate and expire on the
earlier to occur of the termination (other than termination for cause by
Licensor, or termination without cause by AMT), or five (5) years from the
Effective Date of the Agreement – whichever shall first occur.

If
the share value of the AMT stock at the end of the second year from the
Effective Date of the Agreement does not have a trading price of $.40 per share
during the preceding 30-day period, AMT will grant to Licensor an option to
purchase additional AMT shares so that the value of the AMT shares subject to
the new option, when added to the value of the AMT shares that Licensor already
has an option to purchase is equal to 
$400,000.

For
example if at the end of the second anniversary of the Effective Date of the
Agreement, the trading price of the AMT stock is $.30 per share, AMT will grant
to Licensor an option to acquire an additional 333,333 shares of AMT stock.  $400,000 – Value of AMT stock under the
outstanding option of $300,000 (1,000,000 x $.30.) + Value of an additional
333,333 shares of AMT stock a $.30 a share $1,000,0000 (333,333 x .$.30).

Upon the exercise of this option by Licensor,
the initial term of this Agreement, as set forth in Section 5.1, shall be
extended for ten (10) years from the date of exercise, unless the Agreement is
terminated earlier in accordance with the terms of the Agreement.  At the end of such ten (10) year term, this
Agreement will renew for an additional ten (10) year term if the terms and
conditions of such renewal are agreed upon by the parties prior to the
expiration of the extended initial term of this Agreement.  In addition, AMT will be granted a first
right of refusal to license products developed and marketed by Licensor and/or
any affiliated company or subsidiary on a nonexclusive basis as a private
label, or under negotiated terms as branded products.

 1

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