Document:

exhibit10-55.htm

    
       

      
        
          EXHIBIT
10.55

        

      

    

    EMPLOYMENT
CONTRACT

    

    This
Employment Contract (“Contract”) is entered into by and between Amarillo
Biosciences, Inc., a Texas corporation (“Employer”) and Peter Mueller
(“Employee”). Employer hereby employs Employee, and Employee accepts employment,
on the following terms and conditions.

    

    ARTICLE
I

    TERM
OF EMPLOYMENT

    

    1.0. By this Contract,
Employer employs Employee, and Employee accepts employment with Employer
starting April 15, 2008 to continue until this Contract shall have been
terminated by either party by the serving of three months’ advance, written
notice of such termination upon the other party.

    

    ARTICLE
II

    COMPENSATION

    

    2.0. As compensation for all
services rendered under this Contract, Employee shall be paid by Employer a
salary of TWO HUNDRED TEN THOUSAND DOLLARS ($210,000.00) per YEAR, payable at
least monthly during the term of this Contract. The amount paid is to be
prorated for any partial employment period.  Furthermore, Employee
recognizes that Employer has a cash shortage, and Employee will accept payment
in Employer’s voting common stock, which stock shall not be registered, until
such time that funds have been raised to pay Employee in
cash.  Employee recognizes that Employer may experience periodic cash
shortages and agrees that he will take stock in lieu of cash in the future, if
the payment of Employee by Employer in cash would cause Employer to default, or
to be likely to default, on other obligations.

    

    ARTICLE
III

    DUTIES
OF EMPLOYEE AND JOB DESCRIPTION

    

    3.0. Employee is employed as
Chief Operating Officer of Employer, and shall work at the corporate offices in
Amarillo, Texas or from his home.  Employee shall perform the duties
(below) of Chief Operating Officer; reporting to the President &
CEO.

    

    3.1. Summary of Duties and
Responsibilities:  The Chief Operating Officer and Director of
Research and Development will focus on fund raising and develop, maintain and
promote the vision of the company. The COO will direct the functions of research
and development (R&D), sales and marketing, business development /
licensing, global commercial development, production and administration. The COO
will seek strategic alliances and business opportunities with other companies
and organizations. The COO will lead the development of the strategic plan and
establish objectives for all functions. The COO will interact with regulatory
affairs to ensure processes remain in control and product quality is maintained.
The COO will evaluate all operations for opportunities to improve quality and
productivity, resulting in efficiencies and cost savings.

    
      
        
           

        

         

      

      
        1

        
          

        

      

      
         

      

    

    

    Duties
may be further set fourth in the Bylaws of Employer, or by resolution of the
Board of Directors of Employer. Employee shall devote his entire productive
time, ability, attention and energies to the business of Employer during the
term of this Contract, and during such time, Employee shall not directly or
indirectly render any services of a business, commercial or professional nature
to any other person or organization, whether or not for compensation, without
the prior consent of the Board of Directors of Employer.

    

    ARTICLE
IV

    EMPLOYEE
BENEFITS

    

    4.0. If Employer provides
hospital, surgical, medical, dental, group life insurance, or other fringe
benefits to its employees, or any of them, at any time during the term of this
Contract, Employee shall be entitled to participate in such benefits, on terms
and conditions at least as favorable as those accorded to other employees of
Employer, subject to insurability.  Employee shall be entitled an
amount of cash equal to what might otherwise be applied to the Company’s group
health plan to allow Employee to keep his current health plan.

    

    

    ARTICLE
V

    REIMBURSEMENT
OF EXPENSES INCURRED BY EMPLOYEE

    

    5.0. Employee is authorized to
incur reasonable business expenses for promoting the business of Employer,
including expenditures for entertainment and travel. Employer will reimburse
Employee for all such expenses upon Employee’s presentation of written expense
vouchers, itemizing such expenditures.

    

    ARTICLE
VI

    PROPERTY
RIGHTS OF PARTIES

    

    6.0. Employee has had access
to and become familiar with, and during the term of continued employment, will
continue to have access to and become familiar with, various trade secrets,
consisting of formulas, devices, secret inventions, processes, compilations of
information, records, and specifications owned by Employer and regularly used in
the operation of Employer. Employee shall not disclose any such trade secrets
directly or indirectly nor use them in any way either during the term of this
Contract or at any time thereafter except as required in the course of his
employment. All files, records, documents, drawings, specifications, equipment
and similar items relating to the business of Employer, whether or not prepared
by Employee, shall remain the exclusive property of Employer and shall not be
removed from the premises of Employer under any circumstances, except in pursuit
of the trade and business of Employer

    
      
        
           

        

         

      

      
        2

        
          

        

      

      
         

      

    

    

    6.1. On the termination of
employment or whenever requested by Employer, Employee shall immediately deliver
to Employer all property in Employee’s possession or under Employee’s control
belonging to Employer, including but not limited to all accounting records,
computer terminals and drives, tapes, disks, or other data storage mechanisms,
accounting machines, and all office furniture and fixtures, supplies and other
personal property in the possession or under the control of Employee, in good
condition, ordinary wear and tear excepted, and including without limitation all
correspondence files, research date, and patent information or data, of every
sort.

    

    6.2.  Employee
hereby promises and agrees to convey and assign to Employer any and all other
rights or interests he may now have in and to trade secrets, formulas, devices,
inventions, processes, patents, applica­tions, continuations, copyrights,
trademarks, compilations of information, records, specifications, rights,
interests and data of every other sort, affecting or pertaining directly or
indirectly to the business of Employer as now conducted, or to the patents,
trade secrets, and other rights not owned by Employer. In further clarification
of the preceding sentence, it is not Employee's intention to retain
individual­ly any such rights or interests, other than those heretofore
specifically excepted. Except for the rights heretofore excepted, Employee does
not claim any rights or interests in and to trade secrets, formulas, devices,
inventions, processes, patents, applications, continuations, copyrights,
trade-marks, compilations of information, records, specifications, rights,
interests and data of any other sort, affecting or pertaining directly or
indirectly to the business of Employer as now conducted, or to the patents,
trade secrets, and other rights now owned by Employer.

    

    6.3.           Employee
agrees that he will promptly and fully inform and disclose to Employer all
inventions, designs, improvements and discoveries that Employee may have during
the term of this Contract that pertain or relate to the business of Employer or
to any experimental work carried on by Employer, whether conceived by Employee
alone or with others and whether or not conceived during regular working hours.
All such inventions, designs, improvements and discoveries shall be the
exclusive property of Employer. Employee shall assist Employer in obtaining
patents on all such inven­tions, designs, improvements and discoveries
deemed patentable by Employer, and shall execute all documents and do all things
necessary to obtain such patents for Employer or Employer.

    

    6.4. It is contemplated that
Employee in the course of his employment will be engaged in work involving
various patents and secret processed owned by Employer. All experiments,
developments, formulas, patterns, devices, secret inventions and compilations of
information, records and specifications regarding such matter are trade secrets,
which Employee shall not disclose directly or indirectly to anyone other than
Employer or their agents, or use in any way either during the term of this
Contract or at any time after the termination of this Contract, except as
required in the course and scope of his employment.

    
      
        
           

        

         

      

      
        3

        
          

        

      

      
         

      

    

    

    6.5. During the term of this
Contract, Employee shall not directly or indirectly either as an owner employee,
employer, consultant, agent, principal, partner, stock holder, corporate office,
director, or in any other individual or representative capacity engage or
participate in any business that is in competition in any manner whatsoever with
the business of Employer, provided, however, that Employee may without
restriction invest in professionally managed mutual funds and Employee may
purchase, own and sell stock or other securities, as long as Employee is not
directly or indirectly through one or more intermediaries in control of or
controlled by or under common control with any such company. Furthermore, upon
the termination of this Contract, Employee expressly agrees not to engage or
participate directly or indirectly in any business that is in competition with
the business of Employer, for a period of three (3) years; and further provided,
that no business will be considered to be in competition with Employer unless
its business relates to the manufacture, sale, testing or development of
products containing oral
interferon alpha. Employer and Employee
recognize and agree that Employer may obtain or develop additional technologies
from time to time, and if that is the case, Employer may expand the terms of
this non-competition provision by giving written notice to Employee of the
additional technologies that are to be protected.

    

    6.6. In the event of a breach
of Employee of any provisions of this Article VI, the parties hereto agree that
Employer, in addition to any other remedies to which Employer may be entitled at
law, shall be entitled to the remedy of specific performance, it being
understood and agreed by the parties hereto that damages may be difficult to
ascertain, and that an award of damages would in all probability not
sufficiently compensate Employer for any breach by Employee of such
provisions.

    

    ARTICLE
VII

    STOCK
OPTION

    

    7.0. Employer hereby grants to
Employee non-transferable stock options to purchase 700,000 shares of Employer’s
voting common stock, subject to the terms and conditions hereinafter set forth
in this Article VII. Where required by applicable laws or regulation, or by
administrative necessity, the Board of Directors of Employer may prescribe
additional terms and conditions regarding the issuance and administration of the
stock options, as long as such additional terms and conditions do not conflict
with the terms and conditions hereinafter set forth.

    

    7.1. The options granted
pursuant to Section 8.0 above, shall be exercisable as
follows:

    a.            
as to 100,000 shares, between April 15, 2008 and April 14, 2013;

    

    
      	
               
      

            	
              b.

            	
              as
      to 200,000 shares, between April 15, 2009 and April 14, 2014,
      inclusive;

            

    

    
      
        
           

        

         

      

      
        4

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              c.

            	
              as
      to 200,000 shares, between April 15, 2010 and April 14, 2015, inclusive;
      and

            

    

    

    
      	
               
      

            	
              d.

            	
              as
      to 200,000 shares, between April 15, 2011 and April 14, 2016
      inclusive

            

    

    

    

    The
exercise price for all options shall be the closing price of ABI stock on April
15, 2008 or $0.30, whichever is greater.

    

    The foregoing notwithstanding, no
options which are not already theretofore exercisable shall become exercisable
at any time after the termination of Employee’s full time active employment with
Employer.

    

    7.2.  In the event
of death or complete disability of Employee, or a voluntary termination of
employment (which shall include the resignation of Employee, or the giving of a
notice of termination of this Contract, or a successor or amended employment
contract, by Employee pursuant to Section 1.0, above), Employee (or if
applicable, Employee’s estate or personal representative) shall have a period of
sixty (60) days within which to exercise any matured (exercisable) options which
have not theretofore been exercised; and after the expiration of said sixty (60)
day period, such options shall expire and be of no further force or effect. In
the event of notice of a pending or completed Change in Control, as hereinafter
defined, all options held by Employee under this Employment Contract shall be
immediately exercisable, and Employee shall thereupon have a period of sixty
(60) days within which to exercise any or all of such options; and after the
expiration of said sixty (60) day period, such options shall expire and be of no
further force or effect.

    

    For
purposes of this Agreement, “Change in Control” shall mean when any entity,
person or group other than Employer or a Subsidiary of Employer or Hayashibara
Biochemical Laboratories, Inc. or an affiliate thereof acquires shares of
Employer in a transaction or series of transactions that result in such entity,
person or group directly or indirectly owning beneficially fifty-one percent
(51%) or more of Employer’s outstanding shares of voting common
stock.

    

    7.3. The stock options herein
granted are not qualified or incentive stock options within the meaning of the
Internal Revenue Code of 1986, or successor provisions.  Employer has
provided no tax advice to Employee with respect to the taxation of the grant
and/or exercise of such options, and/or the disposition of the underlying
shares, and Employee has been advised to consult with his own tax advisor
regarding such matters.  Furthermore, the underlying shares will not
be registered with the SEC, and will therefore be “Restricted Securities” within
the meaning of Rule 144, promulgated under the Securities Act of
1933.  Employer cannot insure that its securities will continue to
qualify for sale or resale under Rule 144, and in the event Rule 144 should at
some time be no longer available with regard to such sales, Employee might find
it difficult or impossible to sell the option shares.

    
      
        
           

        

         

      

      
        5

        
          

        

      

      
         

      

    

     

    ARTICLE
VIII

    ENTIRETY
OF AGREEMENT; AMENDMENTS; SURVIVAL

    

    8.0. This Contract supersedes
all other agreements, either oral or in writing, between the parties to this
Contract with respect to the employment of Employee by Employer. This Contract
contains the entire understanding of the parties and all of the covenants and
agreements between the parties with respect to such employment.

    

    8.1. This Contract may be
amended only by an instrument signed in writing by both parties; and provided
further, that no amendment may be executed on behalf of Employer, except
pursuant to a resolution of the Board of Director of Employer.

    

    8.2. The following provisions
shall survive the expiration of this Agreement: ARTICLES VI, VII, and
VIII.

    

    

    IN
WITNESS WHEREOF, this Contract is executed by the undersigned as of this 10 day
of April, 2008.

    

    

    EMPLOYEE:                                EMPLOYER:

    AMARILLO BIOSCIENCES,
INC.

    

    

    

    

        /s/
Peter
Mueller                                                                 By:
      /s/
Joseph M. Cummins

        Peter
Mueller                                                                                 Joseph
M. Cummins, President, CEO

    
      
        
           

        

         

      

      
        6deepdown_8k-ex1001.htm

     

    EXHIBIT
10.1

     

    
      

      

    

     

     

    STOCK
PURCHASE AGREEMENT

     

    by and
among

     

    DEEP
DOWN, INC.,

     

    FLOTATION
TECHNOLOGIES, INC.

     

    and

     

    THE
SELLING STOCKHOLDERS

     

    _______________

     

    Dated as
of April 17, 2008

     

     

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
OF CONTENTS

     

    
      
        	 	 	
                Page

              
	 	 	 
	ARTICLE I 	DEFINITIONS	
                
                  1

                

              
	 	 	 	 
	 	
                1.1

              	
                Certain
      Definitions

              	
                1

              
	 	
                1.2

              	
                Terms Defined Elsewhere in
      this Agreement

              	
                8

              
	 	
                1.3

              	
                Other Definitional and
      Interpretive Matters

              	
                10

              
	 	 	 	 
	ARTICLE II	
                SALE AND
      PURCHASE OF SHARES, PURCHASE PRICE; CLOSING

              	
                11

              
	 	 	 	
                 

              
	 	
                2.1

              	
                Sale and Purchase of
      Shares

              	
                11

              
	 	
                2.2

              	
                Cash Price

              	
                11

              
	 	
                2.3

              	
                Payment of Purchase
      Price

              	
                12

              
	 	
                2.4

              	
                Cash Price Adjustment

              	
                12

              
	 	
                2.5

              	
                Closing
      Date

              	
                14

              
	 	
                2.6

              	
                Deliveries Prior to the
      Closing Date

              	
                14

              
	 	
                2.7

              	
                
                  Deliveries on the Closing
      Date

                

              	
                15

              
	 	
                2.8

              	
                Net Cash Payment to Selling
      Stockholders

              	
                16

              
	 	 	 	 
	ARTICLE III	
                REPRESENTATIONS
      AND WARRANTIES RELATING TO THE SELLING STOCKHOLDERS

              	
                16

              
	 	 	 	 
	 	
                3.1

              	
                Organization and Good
      Standing

              	
                16

              
	 	
                3.2

              	
                Authorization of
      Agreement

              	
                16

              
	 	
                3.3

              	
                Conflicts; Consents of
      Third Parties

              	
                16

              
	 	
                3.4

              	
                
                  Ownership and Transfer of
      Shares

                

              	
                17

              
	 	
                3.5

              	
                Litigation

              	
                17

              
	 	
                3.6

              	
                Financial
      Advisors

              	
                17

              
	 	
                3.7

              	
                No Affiliation with
      Independent Valuation Firm

              	
                17

              
	 	 	 	 
	ARTICLE IV	
                REPRESENTATIONS
      AND WARRANTIES RELATING TO THE COMPANY

              	
                17

              
	 	 	 	 
	 	
                4.1

              	
                
                  Organization and Good
      Standing

                

              	
                18

              
	 	
                4.2

              	
                Authorization of
      Agreement

              	
                18

              
	 	
                4.3

              	
                Conflicts; Consents of
      Third Parties

              	
                18

              
	 	
                4.4

              	
                Capitalization

              	
                19

              
	 	
                4.5

              	
                Subsidiaries

              	
                
                  19

                

              
	 	
                4.6

              	
                Corporate
      Records

              	
                19

              
	 	
                4.7

              	
                Financial
      Statements

              	
                20

              
	 	
                4.8

              	
                No Undisclosed
      Liabilities

              	
                21

              
	 	
                4.9

              	
                Absence of Certain
      Developments

              	
                21

              
	 	
                4.10

              	
                Taxes

              	
                23

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	
                4.11

              	
                Real
      Property

              	
                26

              
	 	
                4.12

              	
                Tangible Personal
      Property

              	
                28

              
	 	
                4.13

              	
                Technology and Intellectual
      Property

              	
                28

              
	 	
                4.14

              	
                Material
      Contracts

              	
                32

              
	 	
                4.15

              	
                Employee Benefits
      Plans

              	
                34

              
	 	
                4.16

              	
                Labor

              	
                37

              
	 	
                4.17

              	
                Litigation

              	
                38

              
	 	
                4.18

              	
                Compliance with Laws;
      Permits

              	
                38

              
	 	
                4.19

              	
                Environmental
      Matters

              	
                38

              
	 	
                4.20

              	
                Insurance

              	
                39

              
	 	
                4.21

              	
                Inventories

              	
                40

              
	 	
                4.22

              	
                Accounts and Notes
      Receivable and Payable

              	
                40

              
	 	
                4.23

              	
                Related Party
      Transactions

              	
                41

              
	 	
                4.24

              	
                Customers and
      Suppliers

              	
                41

              
	 	
                4.25

              	
                Product Warranty; Product
      Liability

              	
                41

              
	 	
                4.26

              	
                
                  Banks; Power of
      Attorney

                

              	
                42

              
	 	
                4.27

              	
                Certain
      Payments

              	
                42

              
	 	
                4.28

              	
                Certain Governmental
      Matters

              	
                
                  42

                

              
	 	
                4.29

              	
                Financial
      Advisors

              	
                43

              
	 	
                4.30

              	
                Full
      Disclosure

              	
                43

              
	 	
                4.31

              	
                Disclaimer of Other
      Representations and Warranties

              	
                43

              
	 	 	 	 
	ARTICLE V	
                REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

              	
                43

              
	 	 	 	 
	 	
                5.1

              	
                
                  Organization and Good
      Standing

                

              	
                43

              
	 	
                5.2

              	
                Authorization of
      Agreement

              	
                44

              
	 	
                5.3

              	
                Conflicts; Consents of
      Third Parties

              	
                44

              
	 	
                5.4

              	
                Litigation

              	
                44

              
	 	
                5.5

              	
                Financial
      Advisors

              	
                44

              
	 	
                5.6

              	
                Investment
      Intent

              	
                44

              
	 	
                5.7

              	
                No Affiliation with
      Independent Valuation Firm

              	
                44

              
	 	 	 	 
	ARTICLE VI	
                COVENANTS

              	
                45

              
	 	 	 	 
	 	
                6.1

              	
                
                  Access to Information;
      Confidentiality

                

              	
                45

              
	 	
                6.2

              	
                Conduct of the Business
      Pending the Closing

              	
                45

              
	 	
                6.3

              	
                
                  Third Party
      Consents

                

              	
                49

              
	 	
                6.4

              	
                
                  Governmental Consents and
      Approvals

                

              	
                49

              
	 	
                6.5

              	
                Further
      Assurances

              	
                49

              
	 	
                6.6

              	
                No
    Shop

              	
                49

              
	 	
                6.7

              	
                Non-Competition;
      Non-Solicitation; Confidentiality

              	
                50

              
	 	
                6.8

              	
                Preservation of
      Records

              	
                51

              
	 	
                6.9

              	
                Publicity

              	
                52

              
	 	
                6.10

              	
                Cooperation with
      Financing

              	
                52

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	 	
                6.11

              	
                
                  Related-Party Transactions
      with Non-Management Affiliates

                

              	
                52

              
	 	
                6.12

              	
                Monthly Financial
      Statements

              	
                52

              
	 	
                6.13

              	
                Fees and
      Expenses

              	
                53

              
	 	
                6.14

              	
                
                  Notification of Certain
      Matters

                

              	
                53

              
	 	
                6.15

              	
                Debt

              	
                54

              
	 	
                6.16

              	
                Resignation of
      Directors

              	
                54

              
	 	
                6.17

              	
                Use of
      Name

              	
                54

              
	 	
                6.18

              	
                Section 338(h)(10)
      Election

              	
                54

              
	 	 	 	 
	ARTICLE VII	
                CONDITIONS
      TO CLOSING

              	
                55

              
	 	 	 	 
	 	
                7.1

              	
                
                  Conditions Precedent to
      Obligations of Purchaser

                

              	
                55

              
	 	
                7.2

              	
                Conditions Precedent to Obligations of the Selling
      Stockholders

              	
                57

              
	 	 	 	 
	ARTICLE VIII	
                INDEMNIFICATION

              	
                58

              
	 	 	 	 
	 	
                8.1

              	
                
                  Survival of Representations
      and Warranties

                

              	
                58

              
	 	
                8.2

              	
                Indemnification

              	
                59

              
	 	
                8.3

              	
                Indemnification
      Procedures

              	
                60

              
	 	
                8.4

              	
                Limitations on
      Indemnification for Breaches of Representations and
      Warranties

              	
                61

              
	 	
                8.5

              	
                Tax
      Matters

              	
                62

              
	 	
                8.6

              	
                Indemnity
      Escrow

              	
                65

              
	 	
                8.7

              	
                
                  Tax Treatment of Indemnity
      Payments

                

              	
                65

              
	 	
                8.8

              	
                Exclusive
      Remedy

              	
                65

              
	 	
                8.9

              	
                Selling
      Stockholder Indemnification Limit

              	
                66

              
	 	 	 	 
	ARTICLE IX	
                TERMINATION

              	
                66

              
	 	 	 	 
	 	
                9.1

              	
                Termination of
      Agreement

              	
                66

              
	 	
                9.2

              	
                Procedure Upon Termination

              	
                67

              
	 	
                9.3

              	
                Effect of
      Termination

              	
                67

              
	 	 	 	 
	ARTICLE IX	
                MISCELLANEOUS

              	
                67

              
	 	 	 	
                 

              
	 	
                10.1

              	
                Expenses

              	
                67

              
	 	
                10.2

              	
                Stockholder
      Representative

              	
                67

              
	 	
                10.3

              	
                Specific
      Performance

              	
                69

              
	 	
                10.4

              	
                Submission to Jurisdiction;
      Consent to Service of Process; Waiver of Jury Trial

              	
                69

              
	 	
                10.5

              	
                Entire Agreement; Amendments and
      Waivers

              	
                69

              
	 	
                10.6

              	
                Governing
      Law

              	
                70

              
	 	
                10.7

              	
                Notices

              	
                70

              
	 	
                10.8

              	
                Severability

              	
                71

              
	 	
                10.9

              	
                Binding Effect; Assignment

              	
                71

              
	 	
                10.10

              	
                Non-Recourse

              	
                71

              
	 	
                10.11

              	
                Counterparts

              	
                72

              

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

    

    
    

    Exhibits

    

    Exhibit A
– Selling Stockholders Information

    

    Exhibit B
– Agreed Principles

    

    Exhibit C
– Escrow Agreement

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    
      
        STOCK
PURCHASE AGREEMENT

        

        This
STOCK PURCHASE
AGREEMENT, dated April 17, 2008 (the “Agreement”),
by and among Deep Down, Inc., a corporation existing under the laws of Nevada
(“Purchaser”),
Flotation Technologies, Inc., a corporation existing under the laws of Maine
(the “Company”),
and the stockholders of the Company listed on the signature pages hereof under
the heading “Selling Stockholders” (collectively, the “Selling
Stockholders”).

         

        W I T N E
S S E T H:

         

        WHEREAS, the Selling
Stockholders own an aggregate of 1,000 shares of the common stock, no par value
per share (the “Shares”),
of the Company, which constitute all of the issued and outstanding shares of
capital stock of the Company;

         

        WHEREAS, the Selling
Stockholders desire to sell to Purchaser, and Purchaser desires to purchase from
the Selling Stockholders, the Shares for the purchase price and upon the terms
and conditions hereinafter set forth; and

         

        WHEREAS, certain terms used in
this Agreement are defined in Section
1.1;

         

        NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:

         

         

        ARTICLE
I

         

        DEFINITIONS

         

        1.1    Certain
Definitions.  For purposes of this Agreement, the following
terms shall have the meanings specified in this Section
1.1:

         

        “Adjustment
Escrow Account” means a separate account, set up pursuant to the Escrow
Agreement, where the Adjustment Escrow Amount is held for disbursement by the
Escrow Agent.

         

        “Adjustment
Escrow Amount” means $250,000.

         

        “Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person, and the term “control”
(including the terms “controlled
by” and “under
common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities, by contract or
otherwise.

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

           

        

        “Affiliated
Group” means any affiliated group within the meaning of Section 1504 of
the Code or any comparable or analogous group under applicable Law.

         

        “Agreed
Principles” means the accounting principles used in determining Closing
Working Capital as set forth on Exhibit B
hereto.

         

        “Business
Day” means any day of the year on which national banking institutions in
Texas are open to the public for conducting business and are not required or
authorized to close.

         

        “Cash”
means the amount of cash and bank deposits as reflected in bank statements, and
certificates of deposit less escrowed amounts or other restricted cash balances
and less the amounts of any unpaid checks, drafts and wire transfers issued on
or prior to the date of determination, calculated in accordance with GAAP
applied on a basis consistent with the preparation of the Financial
Statements.

         

        “Closing
Working Capital” means (A) the Included Current Assets of the Company,
less (B) the Included Current Liabilities of the Company, determined as of the
open of business on the Closing Date (but also giving effect to the distribution
made by the Company under Section 2.8 hereof)
and in accordance with the Agreed Principles.

         

        “Code”
means the Internal Revenue Code of 1986, as amended, and regulations promulgated
thereunder.

         

        “Company
Transaction Expenses” means, except as otherwise expressly set forth in
this Agreement, the aggregate amount of all unpaid out-of-pocket fees and
expenses, incurred by or on behalf of, or to be paid by, the Company in
connection with the process of selling the Company or otherwise relating to the
negotiation, preparation or execution of this Agreement or any documents or
agreements contemplated hereby or the performance or consummation of the
transactions contemplated hereby, including (A) any fees and expenses associated
with obtaining necessary or appropriate waivers, consents or approvals of any
Governmental Body or third parties on behalf of the Company, (B) any fees or
expenses associated with obtaining the release and termination of any Liens; (C)
all brokers’ or finders’ fees; (D) fees and expenses of counsel, advisors,
consultants, investment bankers, accountants, and auditors and experts, and (F)
all sale, “stay-around,” retention, or similar bonuses or payments to current or
former directors, officers, employees and consultants paid as a result of or in
connection with the transactions contemplated hereby; provided, however, that the
fees and expenses of Malone & Bailey, PC  incurred in respect of
performing an audit of the consolidated financial statements of the Company for
the fiscal years ended December 31, 2007 and 2006 shall not be “Company
Transaction Expenses” and payment therefor shall be the obligation of
Purchaser.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

           

        

        “Contract”
means any contract, agreement, indenture, note, bond, mortgage, loan,
instrument, lease, license, commitment or other arrangement, understanding,
undertaking, commitment or obligation, whether written or oral.

         

        “Environmental
Costs and Liabilities” means, with respect to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages
(including punitive damages and consequential damages) costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person or in response to any violation of Environmental Law, whether
known or unknown, accrued or contingent, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute or
otherwise, to the extent based upon, related to, or arising under or pursuant to
any Environmental Law, Environmental Permit, Order or agreement with any
Governmental Body or other Person, which relates to any environmental, health or
safety condition, violation of Environmental Law or a Release or threatened
Release of Hazardous Materials.

         

        “Environmental
Law” means any Law in any way relating to the protection of human health
and safety, the environment or natural resources including the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601
et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air
Act (42 U.S.C. § 7401 et seq.) the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.) and the Maine
Protection and Improvement of Waters Act, 38 M.R.S.A. § 361-A, the Maine
Uncontrolled Hazardous Substances Sites Law, 38 M.R.S.A. § 1362.1), Maine
Hazardous Waste, Septage and Solid Waste Management Act, 38 M.R.S.A. §§ 1301 et
seq. and Maine Site Location of Development Law 38 M.R.S.A. §§ 481 -490 , as
each has been or may be amended and the regulations promulgated pursuant
thereto.

         

        “Environmental
Permit” means any Permit required by Environmental Laws for the operation
of the Company.

         

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

         

        “GAAP”
means generally accepted accounting principles in the United States as of the
date hereof.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

           

        

        “Governmental
Body” means any government or governmental or regulatory body thereof, or
political subdivision thereof, whether federal, state, local or foreign, or any
agency, instrumentality or authority thereof, or any court or arbitrator (public
or private).

         

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

         

        “Included
Current Assets” means Cash, accounts
receivable, inventory, prepaid expenses, and other prepaid amounts, but
excluding deferred tax assets and receivables from any of the Company’s
Affiliates, directors, employees, officers or stockholders and any of their
Affiliates, determined in accordance with GAAP applied using the same accounting
methods, practices, principles, policies and procedures, with consistent
classifications, judgments and valuation and estimation methodologies that were
used in the preparation of the Company’s audited Financial Statements for the
most recent fiscal year end as if such accounts were being prepared and audited
as of a fiscal year end, subject only to the Agreed Principles.

         

         “Included
Current Liabilities” means accounts payable,
accrued Taxes of the Company, the Customer Deposit Liability (as defined in
Exhibit B), and
accrued expenses, but excluding Company Transaction Expenses, payables to any of
the Company’s Affiliates, directors, employees, officers or stockholders and any
of their Affiliates and Indebtedness, determined in accordance with GAAP applied
using the same accounting methods, practices, principles, policies and
procedures, with consistent classifications, judgments and valuation and
estimation methodologies that were used in the preparation of the Company’s
audited Financial Statements for the most recent fiscal year end as if such
accounts were being prepared and audited as of a fiscal year end, subject only
to the Agreed Principles.

         

        “Indebtedness”
of any Person means, without duplication, (i) the principal, accreted
value, accrued and unpaid interest, prepayment and redemption premiums or
penalties (if any), unpaid fees or expenses and other monetary obligations in
respect of (A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable;
(ii) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person and
all obligations of such Person under any title retention agreement (but
excluding trade accounts payable and other accrued current liabilities arising
in the Ordinary Course of Business (other than the current liability portion of
any indebtedness for borrowed money)); (iii) all obligations of such Person
under leases required to be capitalized in accordance with GAAP; (iv) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker’s acceptance or similar credit transaction; (v) all obligations
of such Person under interest rate or currency swap transactions (valued at the
termination value thereof); (vi) the liquidation value, accrued and unpaid
dividends, prepayment or redemption premiums and penalties (if any), unpaid fees
or expenses and other monetary obligations in respect of any redeemable
preferred stock of such Person; (vii) all obligations of the type referred
to in clauses (i) through (vi) of any Persons for the payment of which such
Person is responsible or liable, directly or indirectly, as obligor, guarantor,
surety or otherwise, including guarantees of such obligations; and
(viii) all obligations of the type referred to in clauses (i) through (vii)
of other Persons secured by (or for which the holder of such obligations has an
existing right, contingent or otherwise, to be secured by) any Lien on any
property or asset of such Person (whether or not such obligation is assumed by
such Person).

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

           

        

        “Indemnity
Escrow Account” means an account, set up pursuant to the Escrow
Agreement, where the Indemnity Escrow Amount is held for disbursement by the
Escrow Agent.

         

        “Independent
Valuation Firm” means Baker Newman Noyes, LLC, and if it refuses or is
unable to perform the requested services, Purchaser and the Stockholder
Representative shall negotiate in good faith to agree upon a different valuation
firm.

         

        “Intellectual
Property” means any rights available (including with respect to
Technology) under patent, copyright, trade secret or trademark law or any other
similar statutory provision or common law doctrine in the United States or
anywhere else in the Territory, and also domain names.

         

        “IRS”
means the Internal Revenue Service.

         

         “Knowledge”
(other than “Knowledge of the Company” or “Knowledge of the Selling
Stockholders,” which are defined below) means, with respect to any Person that
is not an individual, the knowledge after due inquiry of such Person’s directors
and executive officers and all other officers and managers having responsibility
relating to the applicable matter or, in the case of an individual, knowledge
after due inquiry (and, in each case, shall include the knowledge that each such
Person would have acquired upon such inquiry or that otherwise would be imputed
to such Person by operation of Law).

         

        “Knowledge
of the Company”
means the knowledge after due inquiry of any of Timothy H. Cook, Peter Russell,
Peter Perro, and David Capotosto (and, in each case, shall include the knowledge
that each such Person would have acquired upon such inquiry or that otherwise
would be imputed to such Person by operation of Law).

         

        Knowledge
of the Selling Stockholders” means the actual knowledge
without investigation of any of Timothy H. Cook, Sidney D. Cook and Catherine B.
Cook.

         

        “Law”
means any foreign, federal, state or local law (including common law), statute,
code, ordinance, rule, regulation, Order or other requirement.

         

        “Legal
Proceeding” means any judicial, administrative or arbitral actions,
suits, mediation, investigation, inquiry, proceedings or claims (including
counterclaims) by or before a Governmental Body.

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

           

        

        “Liability”
means any debt, loss, damage, adverse claim, fines, penalties, liability or
obligation (whether direct or indirect, known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, matured or unmatured,
determined or determinable, liquidated or unliquidated, or due or to become due,
and whether in contract, tort, strict liability or otherwise), and including all
costs and expenses relating thereto including all fees, disbursements and
expenses of legal counsel, experts, engineers and consultants and costs of
investigation.

         

        “Lien”
means any lien, pledge, mortgage, deed of trust, security interest, claim,
lease, charge, option, right of first refusal, easement, servitude, proxy,
voting trust or agreement, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation
whatsoever.

         

        “Material
Adverse Effect” means a material adverse effect on (i) the business,
assets, properties, results of operations, condition (financial or otherwise) or
prospects of the Company, (ii) the value of the Company, (iii) regulatory or
political conditions, or securities markets in the United States or worldwide or
any outbreak of hostilities, terrorist activities or war, or any material
worsening of any such hostilities, activities or war underway as of the date
hereof or (iv) the ability of the Selling Stockholders to consummate the
transactions contemplated by this Agreement or perform their obligations under
this Agreement or the Selling Stockholder Documents.

         

        “Order”
means any order, injunction, judgment, doctrine, decree, ruling, writ,
assessment or arbitration award of a Governmental Body.

         

        “Ordinary
Course of Business” means the ordinary and usual course of day-to-day
operations of the business of the Company through the date hereof consistent
with past practice.

         

        “Permits”
means any approvals, authorizations, consents, licenses, permits or certificates
of a Governmental Body.

         

        “Permitted
Exceptions” means (i) all defects, exceptions, restrictions, easements,
rights of way and encumbrances disclosed in policies of title insurance which
have been delivered to Purchaser; (ii) statutory liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings,
provided an appropriate reserve has been established herefore in the Financial
Statements in accordance with GAAP; (iii) mechanics’, carriers’, workers’, and
repairers’ Liens arising or incurred in the Ordinary Course of Business that are
not material to the business, operations and financial condition of the Company
Property so encumbered and that are not resulting from a breach, default or
violation by the Company of any Contract or Law; (iv) zoning, entitlement
and other land use and environmental regulations by any Governmental Body, provided that such
regulations have not been violated; and (v) Liens listed in Section 1.1(p) of the
Disclosure Schedule.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

           

        

        “Person”
means any individual, corporation, limited liability company, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.

         

        “Purchase
Price” means an
aggregate price of $23,300,000.00, subject to adjustment as provided in Section
2.4 and Article VIII.

         

        “Release”
means any release, spill, emission, leaking, pumping, poring, injection,
deposit, dumping, emptying, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, or into or out of any
property.

         

        “Remedial
Action” means all actions including any capital expenditures undertaken
to (i) clean up, remove, treat or in any other way address any Hazardous
Material; (ii) prevent the Release or threat of Release, or minimize the further
Release of any Hazardous Material so it does not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and
care; or (iv) to correct a condition of noncompliance with Environmental
Laws.

         

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

         

        “Software”
means any and all computer programs, whether in source code or object code;
databases and compilations, whether machine readable or otherwise; descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing; and all documentation including user manuals and other
training documentation related to any of the foregoing.

         

        “Subsidiary”
means any Person of which (i) a majority of the outstanding share capital,
voting securities or other equity interests are owned, directly or indirectly,
by the Company or (ii) the Company is entitled, directly or indirectly, to
appoint a majority of the board of directors, board of managers or comparable
body of such Person.

         

        “Target
Working Capital” means an amount equal to $1,800,000.00.

         

        “Taxes”
means (i) all federal, state, local or foreign taxes, charges, fees, imposts,
levies or other assessments, including all income, gross receipts, capital,
sales, use, ad valorem, value added, transfer, franchise, profits, inventory,
capital stock, license, withholding, payroll, employment, social security,
unemployment, excise, severance, stamp, occupation, property and estimated
taxes, customs duties, fees, assessments and charges of any kind whatsoever,
(ii) all interest, penalties, fines, additions to tax or additional amounts
imposed by any Taxing Authority in connection with any item described in clause
(i) and (iii) any transferee liability in respect of any items described in
clauses (i) or (ii) payable by reason of Contract, assumption, transferee
liability, operation of Law, Treasury Regulation Section 1.1502-6(a) (or any
predecessor or successor thereof of any analogous or similar provision under
Law) or otherwise.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

           

        

        “Taxing
Authority” means the IRS and any other Governmental Body responsible for
the administration of any Tax.

         

        “Tax
Return” means any return, report or statement required to be filed with
respect to any Tax (including any elections, declarations, schedules or
attachments thereto, and any amendment thereof) including any information
return, claim for refund, amended return or declaration of estimated Tax, and
including, where permitted or required, combined, consolidated or unitary
returns for any group of entities that includes the Company  or any of
its Affiliates.

         

        “Technology”
means, collectively, designs, formulae, algorithms, procedures, methods,
techniques, ideas, know-how, results of research and development, Software,
tools, data, inventions, apparatus, creations, improvements, works of authorship
and other similar materials, and all recordings, graphs, drawings, reports,
analyses, and other writings, and any other embodiments of the above, in any
form whether or not specifically listed herein, and all related technology, that
are used, incorporated, or embodied in or displayed by any of the foregoing or
used in the design, development, reproduction, sale, marketing, maintenance or
modification of any of the foregoing.

         

        “WARN”
means the Worker Adjustment and Retraining Notification Act of 1988, as
amended.

         

        1.2    Terms Defined Elsewhere in
this Agreement.  For purposes of this Agreement, the following
terms have meanings set forth in the sections indicated:

         

        
          	
                  Term

                	
                  Section

                
	
                  Acquisition
      Transaction

                	
                  6.6(a)

                
	
                  Agreement

                	
                  Recitals

                
	
                  Asset
      Allocation Statement

                	
                  6.18(d)

                
	
                  Balance
      Sheet

                	
                  4.7(a)

                
	
                  Balance
      Sheet Date

                	
                  4.7(a)

                
	
                  Basket

                	
                  8.4(a)

                
	
                  Cap

                	
                  8.4(b)

                
	
                  Cash
      Price

                	
                  2.2

                
	
                  Closing

                	
                  2.5

                
	
                  Closing
      Balance Sheet

                	
                  2.4(b)

                
	
                  Closing
      Date

                	
                  2.5

                

        

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

        
          	
                  Term 

                	
                  Section 

                
	
                  Closing
      Working Capital Statement

                	
                  2.4(b)

                
	
                  COBRA

                	
                  4.15(p)

                
	
                  Common
      Stock

                	
                  4.4(a)

                
	
                  Company

                	
                  Recitals

                
	
                  Company
      Documents

                	
                  4.2

                
	
                  Company
      Marks

                	
                  6.17

                
	
                  Company
      Permits

                	
                  4.18(b)

                
	
                  Company
      Plans

                	
                  4.15(a)

                
	
                  Company
      Property

                	
                  4.11(a)

                
	
                  Company
      Properties

                	
                  4.11(a)

                
	
                  Confidential
      Information

                	
                  6.7(c)

                
	
                  Confidentiality
      Agreement

                	
                  6.1

                
	
                  Customer
      Deposit Liability

                	
                  Exhibit
      B

                
	
                              Disclosure
      Schedule Update

                	
                  6.14(b)

                
	
                  Employees

                	
                  4.15(a)

                
	
                  ERISA
      Affiliate

                	
                  4.15(a)

                
	
                  Escrow
      Agent

                	
                  8.6

                
	
                  Escrow
      Agreement

                	
                  8.6

                
	
                  Expenses

                	
                  9.3

                
	
                  Final
      Closing Working Capital

                	
                  2.4(d)

                
	
                  Financial
      Statements

                	
                  4.7(a)

                
	
                  FIRPTA
      Affidavit

                	
                  2.7(h)

                
	
                  Government
      Contract

                	
                  4.28

                
	
                  Indemnity
      Escrow Amount

                	
                  8.6

                
	
                  Loss

                	
                  8.2(a)

                
	
                  Losses

                	
                  8.2(a)

                
	
                  Material
      Contracts

                	
                  4.14(a)

                
	
                  Multiemployer
      Plan

                	
                  4.15(a)

                
	
                  Owned
      Property

                	
                  4.11(a)

                
	
                  Owned
      Properties

                	
                  4.11(a)

                
	
                  PBGC

                	
                  4.15(i)

                
	
                  Personal
      Property Leases

                	
                  4.12(b)

                

        

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        
          	
                  Term 

                	
                  Section 

                
	
                  Purchase
      Price

                	
                  2.2

                
	
                  Purchaser

                	
                  Recitals

                
	
                  Purchaser
      Documents

                	
                  5.2

                
	
                  Purchaser
      Indemnified Parties

                	
                  8.2(a)

                
	
                  Real
      Property Lease

                	
                  4.11(a)

                
	
                  Real
      Property Leases

                	
                  4.11(a)

                
	
                  Related
      Persons

                	
                  4.23

                
	
                  Representatives

                	
                  6.6(a)

                
	
                  Restricted
      Business

                	
                  6.7(a)

                
	
                  Revised
      Statements

                	
                  6.18(d)

                
	
                  Section
      338(h)(10) Election

                	
                  6.18(a)

                
	
                  Selling
      Stockholders

                	
                  Recitals

                
	
                  Selling
      Stockholder Documents

                	
                  3.2

                
	
                  Selling
      Stockholder Indemnified Parties

                	
                  8.2(b)

                
	
                  Short
      Year Returns

                	
                  8.5(b)(iv)

                
	
                  Stockholder
      Representative

                	
                  10.2(a)

                
	
                  Straddle
      Period

                	
                  8.5(c)

                
	
                  Shares

                	
                  Recitals

                
	
                  Survival
      Period

                	
                  8.1

                
	
                  Tax
      Claim

                	
                  8.5(d)(i)

                
	
                  Termination
      Date

                	
                  9.1(a)

                
	
                  Third
      Party Claim

                	
                  8.3(b)

                
	
                  Title
      IV Plans

                	
                  4.15(a)

                

        

         

        1.3    Other Definitional and
Interpretive Matters.  

         

        (a)    Unless
otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply:

         

        Calculation of Time
Period.  When calculating the period of time before which,
within which or following which any act is to be done or step taken pursuant to
this Agreement, the date that is the reference date in calculating such period
shall be excluded.  If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business
Day.

         

        Dollars.  Any
reference in this Agreement to $ shall mean U.S. dollars.

         

        Exhibits/Schedules.  The
Exhibits and Schedules to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.  All Exhibits and
Schedules annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein.  Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined
therein shall be defined as set forth in this Agreement.

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

           

        

        Gender and
Number.  Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.

         

        Headings.  The
provision of a Table of Contents, the division of this Agreement into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement.  All references in this Agreement to
any “Section” are to the corresponding Section of this Agreement unless
otherwise specified.

         

        Herein.  The
words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to
this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires.

         

        Including.  The
word “including” or any
variation thereof means “including, without
limitation” and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately
following it.

         

        Laws.  Any
reference to a particular law (whether of a specific act, statute or section
thereof) shall be deemed also to refer to such law as it may be amended from
time to time and to any successor law or provision thereto.

         

        (b)    The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as jointly drafted by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provision of this
Agreement.

         

        ARTICLE
II               

         

        SALE
AND PURCHASE OF SHARES, PURCHASE PRICE; CLOSING

         

        2.1    Sale and Purchase of
Shares.  Upon the terms and subject to the conditions contained
herein, on the Closing Date, each Selling Stockholder agrees to sell to
Purchaser, free and clear of any and all Liens, and Purchaser agrees to purchase
from each Selling Stockholder, the Shares owned by such Selling Stockholder set
forth opposite such Selling Stockholder’s name on Exhibit A
hereto.

         

        2.2    Cash
Price.  Purchaser shall pay for the Shares by delivery of an
amount in cash equal to the Purchase Price, less (a) Indebtedness of the Company
as of the close of business on the day immediately preceding the Closing Date
(as set forth in the certificate to be delivered to Purchaser on the Closing
Date as provided under Section 6.15 hereof)
and (b) any Company Transaction Expenses (as set forth in the certificate to be
delivered to Purchaser on the Closing Date as provided under Section 6.13 hereof)
(the Purchase Price less such amounts described in (a) and (b), the “Cash
Price”).

         

        
          
            
            

          

          
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        2.3    Payment of Purchase
Price.

         

        (a)    On the
Closing Date, Purchaser shall pay the Cash Price less the Adjustment Escrow
Amount and the Indemnity Escrow Amount to the Selling Stockholders by wire
transfer of immediately available funds into accounts designated in writing by
the Selling Stockholders not less than three Business Days prior to the Closing
Date and allocated among the Selling Stockholders in accordance with their
respective aggregate percentage ownership of the Shares as set forth on Exhibit
A.

         

        b)    On the
Closing Date, Purchaser shall pay the Adjustment Escrow Amount and the Indemnity
Escrow Amount to the Escrow Agent in cash payable by wire transfer of
immediately available funds for deposit into the Adjustment Escrow Account and
the Indemnity Escrow Account, respectively.

         

        (c)    On the
Closing Date, Purchaser shall pay from the Purchase Price, on behalf of the
Company, the outstanding Company Transaction Expenses (as shown in the
certificate delivered to Purchaser on the Closing Date pursuant to Section 6.13) and
Indebtedness (as shown in the certificate delivered to Purchaser on the Closing
Date pursuant to Section 6.15 hereof)
of the Company per direction of the Company for the payment
thereof.

         

        (d)    Any
payments of Cash Price that constitute compensation to Selling Stockholders, who
are (or were) employees of the Company shall be subject to reduction for
employment-related Taxes as required by applicable federal and state withholding
Laws and all such withheld amounts shall be remitted to the applicable Taxing
Authorities promptly following the date of payment.  Despite having
amounts so withheld, the applicable Selling Stockholders shall be treated as
though they had received and shall be deemed to have received the full amounts
of the Purchase Price to which they are otherwise entitled.

         

        2.4    Cash Price
Adjustment.

         

        (a)    Following
the Closing, the Cash Price shall be adjusted as provided herein to reflect the
difference between Closing Working Capital and Target Working
Capital.

         

        (b)    Within 45
days following the Closing Date, Purchaser shall deliver to the Stockholder
Representative a balance sheet of the Company as of the open of business on the
Closing Date (the “Closing
Balance Sheet”) audited by Purchaser’s accountants and a statement of
Closing Working Capital derived from the Closing Balance Sheet (the “Closing
Working Capital Statement”).  The Closing Balance Sheet and the
Closing Working Capital Statement shall be prepared in accordance with GAAP
applied using the same accounting methods, practices, principles, policies and
procedures, with consistent classifications, judgments and valuation and
estimation methodologies that were used in the preparation of the Company’s
audited Financial Statements for the most recent fiscal year end as if such
Closing Balance Sheet was as of a fiscal year end, subject only to the Agreed
Principles.  Exhibit B sets forth
the Agreed Principles and contains illustrative examples of (i) the calculation
of Customer Deposit Liability, (ii) the Closing Working Capital Statement and
(iii) the calculation of Closing Working Capital.

         

        
          
            
            

          

          
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        (c)    The
Closing Balance Sheet and the Closing Working Capital Statement (and the
computation of Closing Working Capital indicated thereon) delivered by Purchaser
to the Stockholder Representative shall be conclusive and binding upon the
parties unless the Stockholder Representative, within 20 days after delivery to
the Stockholder Representative of the Closing Balance Sheet and the Closing
Working Capital Statement, notifies Purchaser in writing that the Stockholder
Representative disputes any of the amounts set forth therein, specifying the
nature of the dispute and the basis therefor.   Purchaser
and the Stockholder Representative shall in good faith attempt to resolve any
dispute and, if the parties so resolve all disputes, the Closing Balance Sheet
and the Closing Working Capital Statement (and the computation of Closing
Working Capital indicated thereon), as amended to the extent necessary to
reflect the resolution of the dispute, shall be conclusive and binding on the
parties.  If Purchaser and the Stockholder Representative do not reach
agreement in resolving the dispute within 20 days after notice is given by the
Stockholder Representative to Purchaser pursuant to the second preceding
sentence, the parties shall submit the dispute to the Independent Valuation Firm
for resolution.  Each of Purchaser and the Stockholder Representative
agrees to execute, if requested by the Independent Valuation Firm, a reasonable
engagement letter.  Purchaser and the Stockholder Representative shall
cooperate with the Independent Valuation Firm and promptly provide all documents
and information requested by the Independent Valuation
Firm.  Promptly, but no later than thirty (30) days after acceptance
of appointment as the Independent Valuation Firm, the Independent Valuation Firm
shall determine (it being understood that in making such determination, the
Independent Valuation Firm shall be functioning as an expert and not as an
arbitrator), based solely on written submissions by Purchaser and the
Stockholder Representative, and not by independent review, only those issues in
dispute and shall render a written report as to the resolution of the dispute
and the resulting computation of the Closing Working Capital which shall be
conclusive and binding on the parties hereto.  In resolving any
disputed item, the Independent Valuation Firm (i) shall be bound by the
provisions of this Section 2.4 and
(ii) may not assign a value to any item greater than the greatest value for
such items claimed by either Purchaser or Stockholder Representative or less
than the smallest value for such items claimed by either
thereof.  Subject to the provisions of Section 10.4,
judgment may be entered to enforce such report in any court of competent
jurisdiction.  The fees, costs and expenses of the Independent
Valuation Firm shall be allocated to and borne by Purchaser and the Selling
Stockholders based on the inverse of the percentage that the Independent
Valuation Firm’s determination (before such allocation) bears to the total
amount of the total items in dispute as originally submitted to the Independent
Valuation Firm.  For example, should the items in dispute total in
amount to $1,000 and the Independent Valuation Firm awards $600 in favor of the
Selling Stockholders’ position, 60% of the costs of its review would be borne by
Purchaser and 40% of the costs would be borne by the Selling
Stockholders.

         

        (d)    The
Closing Working Capital derived from the items and amounts deemed agreed
pursuant to Section
2.4(c) above, collectively with those items and amounts as resolved by
the Independent Valuation Firm pursuant to Section 2.4(c) above,
shall constitute the “Final
Closing Working Capital”.

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

           

        

        (e)    Upon
final determination of the Final Closing Working Capital as provided above,
(A) if Final Closing Working Capital is greater than the Target Working
Capital, the Cash Price shall be increased by the amount of such excess and
Purchaser shall promptly, but no later than 10 business days after such final
determination of Final Closing Working Capital, pay the amount of such increase,
together with interest thereon from the Closing Date to the date of payment
thereof, to the Stockholder Representative for distribution to the Selling
Stockholders in accordance with their respective aggregate percentage ownership
of the Shares as set forth on Exhibit A, and
(B) if Final Closing Working Capital is less than the Target Working
Capital, the Cash Price shall be decreased by the amount of such deficiency and,
subject to the terms of Section 2.4(g) below,
the Selling Stockholders, jointly and severally, shall promptly, but no later
than 10 business days after such final determination of Final Working Capital,
pay to Purchaser an amount equal to such deficiency, together with interest
thereon from the Closing Date to the date of payment thereof.

         

        (f)    For the
purposes of this Section 2.4(b),
interest will be payable at the “prime” rate, as announced by The Wall Street
Journal, Eastern Edition, from time to time to be in effect, calculated based on
a 365 day year and the actual number of days elapsed.

         

        (g)    Any
payment to be made by the Selling Stockholders to Purchaser pursuant to Section 2.4(e) above
will first be made as a payment from the Adjustment Escrow Account in accordance
with the terms of the Escrow Agreement.  Other than any such payment
from the Adjustment Escrow Account, any payment to be made under this Section 2.4 shall be
made by wire transfer of immediately available funds.  The entire
balance in the Adjustment Escrow Account, less any amount paid or payable to the
Purchaser under Section 2.4(e)(B) or
in payment of the fees of the Independent Valuation Firm, will be paid by the
Escrow Agent to the Stockholder Representative, for further distribution to the
Selling Stockholders, no later 10 business days after the final determination of
Final Working Capital.

         

        2.5    Closing
Date.  The consummation of the sale and purchase of the Shares
provided for in Section 2.1 hereof
(the “Closing”)
shall take place at the offices of Looper Reed & McGraw, P.C. located at
1300 Post Oak Boulevard, Suite 2000, Houston, Texas 77056 (or at such other
place as the parties may otherwise designate) at 10:00 a.m. (Houston time) on a
date to be specified by the parties (the “Closing
Date”), which date shall be no later than the third Business Day after
the satisfaction or waiver of the conditions set forth in Article VII (other
than conditions that by their nature are to be satisfied at Closing, but subject
to the satisfaction or waiver of those conditions at such time), unless another
time, date or place is agreed to in writing by the parties hereto.

         

        2.6    Deliveries Prior to the
Closing Date.  No later than three Business Days prior to the
Closing Date, the Company shall deliver to Purchaser:

         

        (a)    the
pay-off letters or final invoices in respect of Company Transaction Expenses and
the certificate setting forth an estimate of Company Transaction Expenses,
pursuant to Section
6.13.

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

           

        

        (b)    the
pay-off letters in respect of Indebtedness to be repaid as of the Closing and
the certificate setting forth an estimate of Indebtedness, pursuant to Section
6.15.

         

        2.7    Deliveries on the Closing
Date.  At the Closing, the Selling Stockholders shall deliver
or cause the Company to deliver, as applicable, to Purchaser:

         

        (a)    copies of
resolutions, certified by the Secretary of the Company and an authorized person
of each Selling Stockholder, respectively, as to the authorization of this
Agreement and all of the transactions contemplated hereby;

         

        (b)    copies of
the releases from Affiliates of the Company, pursuant to Section
6.11;

         

        (c)    stock
certificates from each of the Selling Stockholders representing the Shares, duly
endorsed in blank or accompanied by stock transfer powers and with all requisite
stock transfer tax stamps attached and otherwise sufficient to transfer the
Shares to Purchaser free and clean of all Liens;

         

        (d)    certificates
of good standing dated not more than 5 Business Days prior to the Closing Date
(i) with respect to the Company issued by the Secretary of State of the State of
Maine and (ii) for each state in which the Company is qualified to do business
as a foreign corporation;

         

        (e)    all
instruments and documents necessary to release any and all Liens other than
Permitted Exceptions, including appropriate UCC financing statement amendments
(termination statements);

         

        (f)    the
certificate indicating the Company Transaction Expenses as of the close of
business on the day immediately preceding the Closing Date, pursuant to Section
6.13;

         

        (g)    the
certificate indicating the amount of Indebtedness to be repaid as of the
Closing, pursuant to Section
6.15;

         

        (h)    affidavits
of non-foreign status from each of the Selling Stockholders that complies with
Section 1445 of the Code (a “FIRPTA
Affidavit”);

         

        (i)    an IRS
Form 8023, duly executed by each Selling Stockholder; and

         

        (j)    such
other documents (e.g.,
estoppel certificates, lien searches and title commitments to real property) as
Purchaser shall reasonably request.

         

        
          
            
            

          

          
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        2.8    Net Cash Payment to Selling
Stockholders.  Immediately prior to the Closing, the Company
shall pay to the Selling Stockholders, in accordance with their respective
aggregate percentage ownership of the Shares as set forth on Exhibit A, an
aggregate amount (as mutually agreed by Purchaser and the Company) equal to the
excess (if any) of (i) the Cash of the Company as of the Closing Date over (ii)
the Customer Deposit Liability (reduced by Company receivables as of the Closing
Date that are related to customer deposits) of the Company as of the Closing
Date.

         

        ARTICLE
III

         

        REPRESENTATIONS
AND WARRANTIES RELATING TO THE SELLING STOCKHOLDERS

         

        Each
Selling Stockholder, severally and not jointly, hereby represents and warrants
to Purchaser that:

         

        3.1    Organization and Good
Standing  Such Selling Stockholder (if other than an
individual) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now conducted.

         

        3.2    Authorization of
Agreement.  Such Selling Stockholder has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each
other agreement, document, or instrument or certificate contemplated by this
Agreement or to be executed by such Selling Stockholder in connection with
the consummation of the transactions contemplated by this Agreement (the
“Selling
Stockholder Documents”), and to consummate the transactions contemplated
hereby and thereby.  The execution, delivery and performance of this
Agreement and each of the Selling Stockholder Documents, and the consummation of
the transactions contemplated hereby and thereby, has been duly authorized and
approved by all required action on the part of such Selling
Stockholder.  This Agreement has been, and each of the Selling
Stockholder Documents will be at or prior to the Closing, duly and validly
executed and delivered by such Selling Stockholder and (assuming due
authorization, execution and delivery by Purchaser) this Agreement constitutes,
and each of the Selling Stockholder Documents when so executed and delivered
will constitute, legal, valid and binding obligations of such Selling
Stockholder, enforceable against such Selling Stockholder in accordance with its
terms except to the extent that enforceability is limited by equitable
principles..

         

        3.3    Conflicts; Consents of Third
Parties.

         

        (a)    Except as
set forth in Section
3.3(a) of the Disclosure Schedule, none of the execution and delivery by
such Selling Stockholder of this Agreement or the Selling Stockholder Documents,
the consummation of the transactions contemplated hereby or thereby, or
compliance by such Selling Stockholder with any of the provisions hereof or
thereof will conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination or cancellation under any provision of (i) if such Selling
Stockholder is other than an individual, the organizational documents of such
Selling Stockholder; (ii) any Contract or Permit to which any Selling
Stockholder is a party or by which any of the properties or assets of such
Selling Stockholder are bound; (iii) any Order of any Governmental Body
applicable to such Selling Stockholder or by which any of the properties or
assets of such Selling Stockholder are bound; or (iv) any applicable
Law.

         

        
          
            
            

          

          
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        (b)    No
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is
required on the part of such Selling Stockholder in connection with the
execution and delivery of this Agreement, the Selling Stockholder Documents, the
compliance by such Selling Stockholder with any of the provisions hereof, or the
consummation of the transactions contemplated hereby, except for those set forth
on Section
3.3(b) of the Disclosure Schedule.

         

        3.4    Ownership and Transfer of
Shares.  Such Selling Stockholder is the record and beneficial
owner of the Shares indicated as being owned by such Selling Stockholder on
Exhibit A, free
and clear of any and all Liens.  Such Selling Stockholder has the
power and authority to sell, transfer, assign and deliver such Shares as
provided in this Agreement, and such delivery will convey to Purchaser good and
marketable title to such Shares, free and clear of any and all
Liens.  No payments made to such Selling Stockholder who is (or was)
an employee of the Company are subject to reduction for employment-related Taxes
as required by applicable federal and state withholding Laws.

         

        3.5    Litigation.  There
is no Legal Proceeding pending or, to the Knowledge of such Selling Stockholder,
threatened against such Selling Stockholder or to which such Selling Stockholder
is otherwise a party relating to this Agreement, the Selling Stockholder
Documents or the transactions contemplated hereby or thereby.

         

        3.6    Financial
Advisors.  Except as set forth in Section 3.6 of the
Disclosure Schedule, no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for such Selling Stockholder in connection with the
transactions contemplated by this Agreement and no Person is or will be entitled
to any fee or commission or like payment in respect thereof

         

        3.7    No Affiliation with
Independent Valuation Firm.  The Independent Valuation Firm (i)
is not an Affiliate of such Selling Stockholder, and (ii) is not (and has not
ever been) a party to any Contract with such Selling Stockholder or any of such
Selling Stockholder’s Affiliates (other than any Contract contemplated to be
entered into pursuant to this Agreement).

         

        ARTICLE
IV

         

        REPRESENTATIONS
AND WARRANTIES RELATING TO THE COMPANY

         

        The
Selling Stockholders, jointly and severally, hereby represent and warrant to
Purchaser that the statements contained in this Article IV are correct and
complete as of the date of this Agreement and as of the Closing Date as
qualified in the Disclosure Schedule (as such Disclosure Schedule may be
supplemented by Disclosure Schedule Updates in accordance with Section
6.14):

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

           

        

        4.1    Organization and Good
Standing.  The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maine and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now conducted and as currently proposed to be
conducted.  The Company is duly qualified or authorized to do business
as a foreign corporation and is in good standing under the laws of each
jurisdiction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified, authorized or in good standing could not reasonably
be expected to be material.

         

        4.2    Authorization of
Agreement.  The Company has all requisite power, authority and
legal capacity to execute and deliver this Agreement and each other agreement,
document, or instrument or certificate to be executed by the Company in
connection with the transactions contemplated by this Agreement (the “Company
Documents”), to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.  The
execution, delivery and performance of this Agreement and each of the Company
Documents, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized and approved by all required action on the
part of the Company.  This Agreement has been, and each of the Company
Documents will be at or prior to the Closing, duly and validly executed and
delivered by the Company and (assuming due authorization, execution and delivery
by Purchaser) this Agreement constitutes, and each of the Company Documents when
so executed and delivered will constitute, legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms.

         

        4.3    Conflicts; Consents of Third
Parties.

         

        (a)    Except as
set forth in Section
4.3(a) of the Disclosure Schedule, none of the execution and delivery by
the Company of this Agreement or the Company Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Company with
any of the provisions hereof or thereof will conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or give rise
to any obligation of the Company to make any payment under, or give rise to any
increased, additional, accelerated or guaranteed rights or entitlements of any
Person under, or result in the creation of any Liens upon any of the properties
or assets of Company under, any provision of (i) the certificate of
incorporation and by-laws or comparable organizational documents of the Company;
(ii) any Contract or Permit; (iii) any Order applicable to the Company or
any of the properties or assets of the Company; or (iv) any applicable
Law.

         

        (b)    No
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is
required on the part of the Company in connection with (i) the execution and
delivery of this Agreement, the Company Documents, respectively, the compliance
by the Company with any of the provisions hereof and thereof, or the
consummation of the transactions contemplated hereby or thereby, or
(ii) the continuing validity and effectiveness immediately following the
Closing of any Permit or Contract of the Company, except for those set forth on
Section 4.3(b)
of the Disclosure Schedule.

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

           

        

        4.4    Capitalization.

         

        (a)    The
authorized capital stock of the Company consists of 1,000 shares (the “Common
Stock”), no par value per share.  The Shares are the only
issued and outstanding shares of Common Stock and the Company holds no shares as
treasury stock.  All of the issued and outstanding shares of Common
Stock were duly authorized for issuance and are validly issued, fully paid and
non-assessable and were not issued in violation of any purchase or call option,
right of first refusal, subscription right, preemptive right or any similar
rights.  All of the outstanding shares of Common Stock are owned of
record by the holders and in the respective amounts as are set forth on Exhibit
A.

         

        (b)    There is
no existing option, warrant, call, right or Contract to which any Selling
Stockholder or the Company is a party requiring, and there are no securities of
the Company outstanding which upon conversion or exchange would require, the
issuance, sale or transfer of any additional shares of capital stock or other
equity securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of the Company.  There are no
obligations, contingent or otherwise, of the Company to (i) repurchase, redeem
or otherwise acquire any shares of Common Stock or the capital stock or other
equity interests, or (ii) provide material funds to, or make any material
investment in (in the form of a loan, capital contribution or otherwise), or
provide any guarantee with respect to the obligations of, any
Person.  There are no outstanding options, stock appreciation, phantom
stock, profit participation or similar rights with respect to the
Company.  There are no bonds, debentures, notes or other indebtedness
of the Company having the right to vote or consent (or, convertible into, or
exchangeable for, securities having the right to vote or consent) on any matters
on which stockholders (or other equityholders) of the Company may
vote.  Except as set forth in Section 4.4(b) to the
Disclosure Schedule, there are no voting trusts, irrevocable proxies or other
Contracts or understandings to which the Company or any Selling Stockholder is a
party or is bound with respect to the voting or consent of any shares of Common
Stock.

         

        4.5    Subsidiaries.  The
Company has no Subsidiaries and, except as set forth in Section 4.5 of the
Disclosure Schedule, does not own any shares of capital stock or other
securities of or investments in any other Person.

         

        4.6    Corporate
Records.

         

        (a)    The
Company has delivered to Purchaser true, correct and complete copies of the
certificate of incorporation (certified by the Secretary of State or other
appropriate official of the applicable jurisdiction of organization) and by-laws
(certified by the secretary, assistant secretary or other appropriate officer)
or comparable organizational documents of the Company, in each case as amended
and in effect on the due date hereof, including all amendments
thereto.

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

           

        

        (b)    Except as
set forth in Section
4.6(b) of the Disclosure Schedule, the minute books of the Company
previously provided to Purchaser contain true, correct and complete records of
all meetings and accurately reflect all other corporate action of the
stockholders and board of directors (including committees thereof) of the
Company.  The stock certificate books and stock transfer ledgers of
the Company previously provided to Purchaser are true, correct and
complete.  All stock transfer taxes levied, if any, or payable with
respect to all transfers of shares of the Company prior to the date hereof have
been paid and appropriate transfer tax stamps affixed.

         

        4.7    Financial
Statements.  

         

        (a)    The
Company has delivered to Purchaser copies of (i) the reviewed balance sheet of
the Company as at December 31, 2006 and the related reviewed statements of
income, stockholders’ equity and cash flows of the Company for the year then
ended, (ii) the audited balance sheet of the Company as at December 31, 2007 and
the related audited statements of income, stockholders’ equity and of cash flows
of the Company for the year then ended, and (iii) the unaudited balance
sheet of the Company as at February 29, 2008 and the related statement of income
of the Company for the two month period then ended (such audited and unaudited
statements, including the related notes and schedules thereto, are referred to
herein as the “Financial
Statements”).  Each of the audited Financial Statements is
complete and correct and has been prepared in accordance with GAAP consistently
applied by the Company without modification of the accounting principles used in
the preparation thereof throughout the periods presented and presents fairly in
all material respects the financial position, results of operations and cash
flows of the Company as at the dates and for the periods indicated
therein  The unaudited Financial Statements have been prepared by the
management of the Company (and, in the case of the Financial Statements as at
December 31, 2006 and the year then ended, were reviewed by the Company’s
independent auditors) and are consistent with the Company’s books and
records

         

        The
balance sheet of the Company as at December 31, 2007 is referred to herein as
the “Balance
Sheet” and such date is referred to herein as the “Balance
Sheet Date.”

         

        (b)    Except as
set forth in Section
4.7(b) of the Disclosure Schedule, all books, records and accounts of the
Company are accurate and complete and are maintained in all material respects in
accordance with good business practice and all applicable Laws.

         

        (c)    The
Company has provided to Purchaser copies of all issued auditors’ reports,
letters to management regarding accounting practices and controls and all
responses to such letters from management, in each case to the extent relating
to the business and the operation thereof, whether the same are issued to the
Company.

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

           

        

        4.8    No Undisclosed
Liabilities.  Except as set forth in Section 4.8 of the
Disclosure Schedule, the Company has no Indebtedness or Liabilities (whether or
not required under GAAP to be reflected on a balance sheet or the notes thereto)
other than those (i) specifically reflected on and fully reserved against in the
Financial Statements, (ii) incurred in the Ordinary Course of Business since the
Balance Sheet Date, (iii) Liabilities arising under Contracts not yet due (and
not arising from the failure to perform or any breach or default thereunder) or
(iv) that are immaterial to the Company.

         

        4.9    Absence of Certain
Developments.  Except as expressly contemplated by this
Agreement or as set forth on Section 4.9 to the
Disclosure Schedule, since the Balance Sheet Date (i) the Company has conducted
its business in the Ordinary Course of Business and (ii) there has not been any
event, change, occurrence or circumstance that, individually or in the aggregate
with any such events, changes, occurrences or circumstances, has had or could
reasonably be expected to have a Material Adverse Effect.  Without
limiting the generality of the foregoing, except as set forth on Section 4.9 to the
Disclosure Schedule, since the Balance Sheet Date::

         

        (a)    there has
not been any damage, destruction or loss, whether or not covered by insurance,
with respect to the property and assets of the Company having a replacement cost
of more than $100,000 for any single loss or $250,000 for all such
losses;

         

        (b)    there has
not been any declaration, setting aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Company or any
repurchase, redemption or other acquisition by the Company of any outstanding
shares of capital stock or other securities of, or other ownership interest in,
the Company;

         

        (c)    the
Company has not awarded or paid any bonuses to employees of the Company except
to the extent accrued on the Balance Sheet, or entered into any employment,
deferred compensation, severance or similar agreement (nor amended any such
agreement) or agreed to increase the compensation payable or to become payable
by it to any of the Company’s directors, officers, employees, agents or
representatives or agreed to increase the coverage or benefits available under
any severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or other
incentive compensation, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with such directors, officers, employees,
agents or representatives;

         

        (d)    there has
not been any change by the Company in accounting or Tax reporting principles,
methods or policies;

         

        
          
            
            

          

          
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        (e)    the
Company has not made or rescinded any election relating to Taxes or settled or
compromised any claim relating to Taxes;

         

        (f)    the
Company has not entered into any transaction or Contract other than in the
Ordinary Course of Business;

         

        (g)    the
Company has not failed to promptly pay and discharge current liabilities except
where disputed in good faith by appropriate proceedings;

         

        (h)    the
Company has not made any loans, advances or capital contributions to, or
investments in, any Person or paid any fees or expenses to any Selling
Stockholder or any director, officer, partner, stockholder or Affiliate of any
Selling Stockholder (other than reimbursements of business expenses incurred and
reimbursed in the Ordinary Course of Business);

         

        (i)    the
Company has not (A) mortgaged, pledged or subjected to any Lien any of its
assets, or (B) acquired any assets or sold, assigned, transferred, conveyed,
leased or otherwise disposed of any assets of the Company, except, in the case
of clause (B), for assets acquired, sold, assigned, transferred, conveyed,
leased or otherwise disposed of in the Ordinary Course of Business;

         

        (j)    the
Company has not discharged or satisfied any Lien, or paid any Liability, except
in the Ordinary Course of Business;

         

        (k)    the
Company has not canceled or compromised any debt or claim or amended, canceled,
terminated, relinquished, waived or released any Contract or right except in the
Ordinary Course of Business and which, in the aggregate, would not be material
to the Company;

         

        (l)    the
Company has not made or committed to make any capital expenditures or capital
additions or betterments in excess of $50,000 individually or $100,000 in the
aggregate;

         

        (m)   the
Company has not issued, created, incurred, assumed, guaranteed, endorsed or
otherwise become liable or responsible with respect to (whether directly,
contingently, or otherwise) any Indebtedness;

         

        (n)   the
Company has not granted any license or sublicense of any rights under or with
respect to any Intellectual Property owned by the Company except in the Ordinary
Course of Business;

         

        
          
            
            

          

          
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        (o)    the
Company has not instituted or settled any Legal Proceeding; and

         

        (p)    none of
the Selling Stockholders or the Company has agreed, committed, arranged or
entered into any understanding to do anything set forth in this Section
4.9.

         

        4.10        
Taxes.

         

        (a)    (i)
Except as set forth in Section 4.10(a) of
the Disclosure Schedule, all Tax Returns required to be filed by or on behalf of
the Company and any Affiliated Group of which the Company is or was a member
have been duly and timely filed with the appropriate Taxing Authority in all
jurisdictions in which such Tax Returns are required to be filed (after giving
effect to any valid extensions of time in which to make such filings), and all
such Tax Returns are true, complete and correct in all respects; and (ii) all
Taxes required to be paid by or on behalf of the Company and any Affiliated
Group of which the Company is or was a member have been fully and timely
paid.  With respect to any period for which Tax Returns have not yet
been filed or for which Taxes are not yet due or owing, the Company has made due
and sufficient accruals for such Taxes in the Financial Statements and its books
and records.  All required estimated Tax payments sufficient to avoid
any underpayment penalties or interest have been made by or on behalf of the
Company.

         

        (b)    Except as
set forth in Section
4.10(b) of the Disclosure Schedule, the Company has complied in all
material respects with all applicable Laws relating to the payment and
withholding of Taxes and has duly and timely withheld and paid over to the
appropriate Taxing Authority all amounts required to be so withheld and paid
under all applicable Laws.

         

        (c)    Purchaser
has received complete copies of (i) all federal, state, local and foreign income
or franchise Tax Returns of the Company relating to the taxable periods since
January 1, 2002 and (ii) any audit report issued within the last three years
relating to any Taxes due from or with respect to the Company.  All
income and franchise Tax Returns filed by or on behalf of the Company have been
examined by the relevant Taxing Authority or the statute of limitations with
respect to such Tax Returns has expired.

         

        (d)    Section 4.10(d) of
the Disclosure Schedule lists (i) all types of Taxes paid, and all types of Tax
Returns filed by or on behalf of Company, and (ii) all of the jurisdictions that
impose such Taxes or with respect to which the Company has a duty to file such
Tax Returns.  No claim has been made by a Taxing Authority in a
jurisdiction where the Company does not file Tax Returns such that it is or may
be subject to taxation by that jurisdiction.

         

        
          
            
            

          

          
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        (e)    All
deficiencies asserted or assessments made as a result of any examinations by any
Taxing Authority of the Tax Returns of, or including, the Company have been
fully paid, and there are no other audits or investigations by any Taxing
Authority in progress, nor have the Selling Stockholders or the Company received
any notice from any Taxing Authority that it intends to conduct such an audit or
investigation.  No issue has been raised by a Taxing Authority in any
prior examination of the Company which, by application of the same or similar
principles, could reasonably be expected to result in a proposed deficiency for
any subsequent taxable period.

         

        (f)    Neither
the Company nor any other Person on their behalf has (i) filed a consent
pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by the Company, (ii) agreed to
or is required to make any adjustments pursuant to Section 481(a) of the Code or
any similar provision of Law or has any knowledge that any Taxing Authority has
proposed any such adjustment, or has any application pending with any Taxing
Authority requesting permission for any changes in accounting methods that
relate to the Company, (iii) executed or entered into a closing agreement
pursuant to Section 7121 of the Code or any similar provision of Law with
respect to the Company, (iv) requested any extension of time within which to
file any Tax Return, which Tax Return has since not been filed, (v) granted any
extension for the assessment or collection of Taxes, which Taxes have not since
been paid, or (vi) granted to any Person any power of attorney that is currently
in force with respect to any Tax matter.

         

        (g)    No
property owned by the Company is (i) property required to be treated as being
owned by another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) “tax-exempt use property” within
the meaning of Section 168(h)(1) of the Code or (iii) “tax-exempt bond financed
property” within the meaning of Section 168(g) of the Code, (iv) “limited use
property” within the meaning of Rev. Proc. 76-30, (v) subject to Section
168(g)(1)(A) of the Code, or (vi) subject to any provision of state, local or
foreign Law comparable to any of the provisions listed above.

         

        (h)    No
Selling Stockholder is a foreign person within the meaning of Section 1445
of the Code.

         

        (i)    The
Company is not a party to any tax sharing, allocation, indemnity or similar
agreement or arrangement (whether or not written) pursuant to which it will have
any obligation to make any payments after the Closing.

         

        
          
            
            

          

          
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        (j)    There is
no contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible by Purchaser, the Company or any of their respective
Affiliates by reason of Section 280G of the Code.

         

        (k)   The
Company is not subject to any private letter ruling of the IRS or comparable
rulings of any Taxing Authority.

         

        (l)    There are
no Liens as a result of any unpaid Taxes upon any of the assets of the
Company.

         

        (m)   The
Company has never been a member of any consolidated, combined, affiliated or
unitary group of corporations for any Tax purposes other than a group in which
the Company is the common parent.

         

        (n)    The
Company has not constituted either a “distributing corporation” or a “controlled
corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code (A) in the two years prior to the date of this Agreement or (B) in a
distribution which could otherwise constitute part of a “plan” or “series of
related transactions” (within the meaning of Section 355(e) of the Code) in
conjunction with the transactions contemplated by this Agreement.

         

        (o)    Except as
set forth in Section
4.10(n) to the Disclosure Schedule, there is no taxable income of the
Company that will be required under applicable Tax Law to be reported by the
Purchaser or any of its Affiliates, including the Company, for a taxable period
beginning after the Closing Date which taxable income was realized (and reflects
economic income) arising prior to the Closing Date.

         

        (p)    The
Company has not engaged in any “intercompany transactions” in respect of which
gain was and continues to be deferred pursuant to Treasury Regulations Section
1.1502-13 or any analogous or similar provision of Law.

         

        (q)    The
Selling Stockholders and the Company are members of a “selling consolidated
group” within the meaning of Treasury Regulation Section
1.338(h)(10)-1(b)(2).

         

        (r)    The
Company has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to substantial understatement of federal income tax
within the meaning of Section 6662 of the Code.

         

        
          
            
            

          

          
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        (s)    The
Company does not have, and has never had, a permanent establishment in any
country other than the United States, or has engaged in a trade or business in
any country other than the United States that subjected it to tax in such
country.

         

        (t)    The
Company has been a validly electing “S” corporation within the meaning of
Sections 1361 and 1362 of the Code at all times since its inception and the
Company will be an “S” corporation up to and including the day before the
Closing Date.

         

        (u)    The
Company has been a validly electing “S” corporation under each provision of
state or local law analogous to Sections 1361 and 1362 of the Code in each
jurisdiction where Company is required to file a Tax Return at all times since
its inception and Company will be an “S” corporation up to and including the day
before the Closing Date.

         

        (v)    Except as
set forth on Section
4.10(v) of the Disclosure Schedule, the Company has no potential
liability for any Tax under Section 1374 of the Code.  The Company has
not, in the past ten years, (i) acquired assets from another corporation in a
transaction in which such entity’s tax basis for the acquired asset was
determined, in whole, or in part, by reference to the Tax basis of the acquired
assets (or any other property) in the hands of the transferor or (ii) acquired
the stock of any corporation which is a Qualified Subchapter S Subsidiary,
within the meaning of Section 1361(b)(3) of the Code.

         

        4.11        
Real
Property.

         

        (a)    Section 4.11(a) of
the Disclosure Schedule sets forth a complete list of (i) all real property and
interests in real property, including improvements thereon and easements
appurtenant thereto owned in fee by the Company (individually, an “Owned
Property” and collectively, the “Owned
Properties”), (ii) all real property and interests in real property
leased by the Company (individually, a “Real
Property Lease” and collectively, the “Real
Property Leases” and, together with the Owned Properties, being referred
to herein individually as a “Company
Property” and collectively as the “Company
Properties”) as lessee or lessor, including a description of each such
Real Property Lease (including the name of the third party lessor or lessee and
the date of the lease or sublease and all amendments thereto).  The
Company has good and marketable fee title to all Owned Property, free and clear
of all Liens of any nature whatsoever, except Permitted
Exceptions.  Except as set forth in Section 4.11(a) of
the Disclosure Schedule, the Company Properties constitute all interests in real
property currently used, occupied or currently held for use in connection with
the business of the 

         

        
          
            
            

          

          
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        Company
and which are necessary for the continued operation of the business of the
Company as the business is currently conducted.  All of the Company
Properties and buildings, fixtures and improvements thereon (i) are in good
operating condition (ordinary wear and tear excepted) without structural
defects, and all mechanical and other systems located thereon are in good
operating condition, and no condition exists requiring material repairs,
alterations or corrections and (ii) are suitable, sufficient and appropriate in
all respects for their current and contemplated uses.  Except as set
forth on Section
4.11(a) to the Disclosure Schedule, none of the improvements located on
the Company Properties constitute a legal non-conforming use or otherwise
require any special dispensation, variance or special permit under any
Laws.  The Company has delivered to Purchaser true, correct and
complete copies of (i) all deeds, title reports and surveys for the Owned
Properties and (ii) the Real Property Leases, together with all amendments,
modifications or supplements, if any, thereto.  The Company Properties
are not subject to any leases, rights of first refusal, options to purchase or
rights of occupancy, except the Real Property Leases set forth on Section 4.11(a) of
the Disclosure Schedule.

         

        (b)    The
Company has a valid, binding and enforceable leasehold interest under each of
the Real Property Leases under which it is a lessee, free and clear of all Liens
other than Permitted Exceptions.  Each of the Real Property Leases is
in full force and effect.  The Company is not in default under any
Real Property Lease, and to the Knowledge of the Company and the Selling
Stockholders, no event has occurred and no circumstance exists which, if not
remedied, and whether with or without notice or the passage of time or both,
would result in such a default.  The Company has not received or given
any notice of any default or event that with notice or lapse of time, or both,
would constitute a default by the Company under any of the Real Property Leases
and, to the Knowledge of the Company and the Selling Stockholders, no other
party is in default thereof, and no party to any Real Property Lease has
exercised any termination rights with respect thereto.

         

        (c)    The
Company has all certificates of occupancy and Permits of any Governmental Body
necessary or useful for the current use and operation of each Company Property,
and the Company has fully complied with all material conditions of the Permits
applicable to them.  No default or violation or, to the Knowledge of
Company and the Selling Stockholders, event that with the lapse of time or
giving of notice or both would become a default or violation, has occurred in
the due observance of any Permit.

         

        (d)    There
does not exist any actual or, to the Knowledge of the Company and the Selling
Stockholders, threatened or contemplated condemnation or eminent domain
proceedings that affect any Company Property or any part thereof, and none of
the Company or any Selling Stockholder has received any notice, oral or written,
of the intention of any Governmental Body or other Person to take or use all or
any part thereof.

         

        (e)    None of
the Selling Stockholders or the Company has received any notice from any
insurance company that has issued a policy with respect to any Company Property
requiring performance of any structural or other repairs or alterations to such
Company Property.

         

        
          
            
            

          

          
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        (f)    The
Company does not own, hold, is obligated under or is a party to, any option,
right of first refusal or other contractual right to purchase, acquire, sell,
assign or dispose of any real estate or any portion thereof or interest
therein.

         

        4.12    Tangible Personal
Property.

         

        (a)    The
Company has good and marketable title to all of the items of tangible personal
property used in the business of the Company (except as sold or disposed of
subsequent to the date thereof in the Ordinary Course of Business and not in
violation of this Agreement), free and clear of any and all Liens, other than
the Permitted Exceptions.  Except as set forth in Section 4.12(a) of
the Disclosure Schedule, all such items of tangible personal property which,
individually or in the aggregate, are material to the operation of the business
of the Company are in good condition and in a state of good maintenance and
repair (ordinary wear and tear excepted) and are suitable for the purposes
used.

         

        (b)    Section 4.12(b) of
the Disclosure Schedule sets forth all leases of personal property (“Personal
Property Leases”) involving annual payments in excess of $20,000 relating
to personal property used in the business of the Company or to which the Company
is a party or by which the properties or assets of the Company are
bound.  Except as set forth in Section 4.12(b) of
the Disclosure Schedule, all of the items of personal property under the
Personal Property Leases are in good condition and repair (ordinary wear and
tear excepted) and are suitable for the purposes used, and such property is in
all material respects in the condition required of such property by the terms of
the lease applicable thereto during the term of the lease.  The
Company has delivered to Purchaser true, correct and complete copies of the
Personal Property Leases, together with all amendments, modifications or
supplements thereto.

         

        (c)    The
Company has a valid and enforceable leasehold interest under each of the
Personal Property Leases under which it is a lessee.  Each of the
Personal Property Leases is in full force and effect and the Company has not
received or given any notice of any default or event that with notice or lapse
of time, or both, would constitute a default by the Company under any of the
Personal Property Leases and, to the Knowledge of the Company and the Selling
Stockholders, no other party is in default thereof, and no party to the Personal
Property Leases has exercised any termination rights with respect
thereto.

         

        4.13    Technology and Intellectual
Property.

         

        (a)    Section 4.13(a) of
the Disclosure Schedule sets forth a complete and accurate list, as of the date
of this Agreement, of (i) each issued patent owned by the Company, (ii) each
pending patent application filed by or on behalf of the Company, (iii) each
trademark registration, service mark registration, and copyright registration
owned by the Company, (iv) each application for trademark registration, service
mark registration, and copyright registration made by or on behalf of the
Company, 

         

        
          
            
            

          

          
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        (v) each
domain name registered by or on behalf of the Company and (vi) each material
trade name, d/b/a, unregistered trademark, and unregistered service mark used by
the Company in connection with its business.  Section 4.13(a) of
the Disclosure Schedule lists, for each such item of Intellectual Property owned
by the Company, the item, the jurisdiction, the filing and, if issued, issuance
dates and any serial or registration numbers.

         

        (b)    Except as
disclosed in Section
4.13(b) of the Disclosure Schedule, the Company owns all right, title and
interest in and to all Intellectual Property required to be set forth on Section 4.13(a) of
the Disclosure Schedule.  Except as set forth on Section 4.13(b) of
the Disclosure Schedule all such Intellectual Property is subsisting, and all
necessary registration, maintenance, renewal, and other relevant filing fees due
through the date hereof in connection therewith have been timely paid and all
necessary documents and certificates in connection therewith have been timely
filed with the relevant patent, copyright, trademark, or other authorities in
the United States or foreign jurisdictions, as the case may be, for the purposes
of maintaining such registered Intellectual Property in full force and
effect. Except as set
forth on Section
4.13(a) of the Disclosure Schedule, there are, as of the date of this
Agreement, no filings, payments or similar actions that must be taken by the
Company within 90 days following the Closing Date for the purposes of obtaining,
maintaining, perfecting or renewing any such registrations and
applications.

         

        (c)    Except as
set forth on Section
4.13(c) of the Disclosure Schedule, the Company owns all right, title and
interest in and to, or has valid and continuing rights to use, sell and license,
all Intellectual Property, Software and other Technology used in the conduct of
the business and operations of the Company as presently conducted and as
currently proposed to be conducted, free and clear of all Liens or obligations
to others other than Permitted Exceptions. The business and operations of the
Company, its Technology, products and services and the designing, development,
manufacturing, reproduction, use, marketing, sale, distribution, maintenance and
modification of any of the foregoing as presently performed and as currently
contemplated to be performed does not infringe upon, misappropriate or otherwise
violate any Intellectual Property of any third party.

         

        (d)    Except
with respect to licenses of Software (i) generally available for an annual or
one-time license fee of no more than $10,000 in the aggregate, (ii) distributed
as “freeware” or (iii) distributed via Internet access without charge and for
use without charge, Section 4.13(d) of
the Disclosure Schedule sets forth a list, complete and accurate as of the date
of this Agreement, of all agreements pursuant to which the Company licenses in
or otherwise is authorized to use all Intellectual Property, Software and other
Technology used in the conduct of the business and operations of the Company as
presently conducted and as currently contemplated to be
conducted.  The Company has delivered to Purchaser correct, complete
and current copies of all such agreements.  Except pursuant to the
agreements described in clause (i) above or identified on Section  4.13(d)
of the Disclosure Schedule, the Company is not required, obligated, or under any
liability whatsoever to make any payments in excess of $10,000 per year by way of
royalties, fees or other payments described in the applicable agreements, to any
third party with respect to any Intellectual Property, Software and other
Technology used in the conduct the business and operations of the Company as
presently conducted.

         

        
          
            
            

          

          
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        (e)    Except as
set forth on Section
4.13(e) of the Disclosure Schedule, neither the execution of this
Agreement, the consummation of the transactions contemplated by this Agreement,
nor the conduct of the business and operations of the Company as presently
conducted and as currently proposed to be conducted will result in: (i) the
Company granting to any third party any right to any Technology or Intellectual
Property owned by, or licensed to, the Company, or (ii) the Company being bound
by, or subject to, any non-compete or other restriction on the operation or
scope of its business.  Except as set forth in Section 4.13(e) of
the Disclosure Schedule, following the Closing, the Company will have the right
to exercise all of its current rights under agreements granting rights to the
Company with respect to Intellectual Property, Software and other Technology of
a third party to the same extent and in the same manner it would have been able
to had the transaction contemplated by this Agreement not occurred, and without
the payment of any additional consideration as a result of such transaction and
without the necessity of any third party consent as a result of such
transaction.

         

        (f)    Section 4.13(f) of
the Disclosure Schedule sets forth a complete and accurate list of all
agreements pursuant to which the Company has licensed to a third party for any
purpose any Intellectual Property, Software or other Technology owned by or
exclusively licensed to the Company.  Section 4.13(f) of
the Disclosure Schedule further sets forth a complete and accurate list of all
agreements to which the Company is a party (i) containing a covenant not to
compete or otherwise limiting its ability to use or exploit fully any
Intellectual Property owned by the Company or (ii) containing an agreement to
indemnify any other Person against any claim of infringement, violation,
misappropriation or unauthorized use of any Intellectual Property of a third
party.  The Company has delivered to Purchaser true, correct and
complete copies of each agreement set forth on Section 4.13(f) of the
Disclosure Schedule, together with all amendments, modifications or supplements
thereto.

         

        (g)    Except as
set forth in Section
4.13(g) of the Disclosure Schedule, The Company has not in the last ten
years (i) transferred ownership of, (ii) granted any exclusive license of or
right to use, (iii) authorized the retention of any exclusive rights to use, or
(iv) authorized joint ownership of, any Intellectual Property, Software or other
Technology owned by the Company.

         

        (h)    Section 4.13(h) of
the Disclosure Schedule sets forth a complete and accurate list of (i) all
Software that is owned exclusively by the Company that is material to the
operation of the business of the Company and (ii) all Software that is used
by the Company in the business of the Company that is not exclusively owned by
the Company, excluding Software available on reasonable terms through commercial
distributors or in consumer retail stores for a license fee of no more than
$10,000.

         

        (i)    Except as
set forth in Section
4.13(i) of the Disclosure Schedule, since January 1, 2005 the Company has
not brought any action, suit or proceeding or asserted any claim (other than
claims that have been resolved to the Company’s satisfaction) against any Person
for infringing or misappropriating any Technology or, to the Knowledge of the
Company, Intellectual Property owned by the Company, nor, to the Knowledge of
the Company, is there any basis for any such action, suit or
proceeding.

         

        
          
            
            

          

          
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        (j)    Except as
set forth in Section
4.13(j) of the Disclosure Schedule, there is no action, suit, proceeding,
hearing, investigation, notice or complaint pending or, to the Knowledge of the
Company, threatened, by any third party before any court or tribunal (including,
without limitation, the United States Patent and Trademark Office or equivalent
authority anywhere in the world) relating to any of Company’s Intellectual
Property or Technology, nor has any claim or demand been made by any third party
that (i) challenges the validity, enforceability, use or exclusive ownership of
any Intellectual Property or Technology owned by the Company or (ii) alleges any
infringement, misappropriation, violation, or unfair competition or trade
practices by the Company of any Intellectual Property or Technology of any third
party, nor to the Knowledge of the Company, is there any basis for any such
claim or demand.

         

        (k)    None of
the Company’s Technology or Intellectual Property is subject to any outstanding
injunction, decree, order, judgment, agreement or stipulation that restricts in
any manner the use, transfer or licensing thereof by the Company or affects the
validity, use or enforceability of any such Technology or Intellectual
Property.

         

        (l)    The
Company has taken adequate measures to protect the confidentiality of all trade
secrets owned by the Company that are material to the Company’s business as
currently conducted and as proposed to be conducted.  Except as set
forth in Section
4.13(l) of the Disclosure Schedule, the Company has executed valid
written agreements with all of its past and present employees who have
contributed to the development of Technology and Intellectual Property pursuant
to which such employees have assigned to the Company all their rights in and to
all Technology and Intellectual Property they may develop in the course of their
employment and agreed to hold all trade secrets and confidential information of
the Company in confidence both during and after their
employment.  Except as set forth in Section 4.13(l) of
the Disclosure Schedule, the Company has executed valid written agreements with
all its past and present consultants and independent contractors who have been
retained in connection with the development of Technology and Intellectual
Property by which the consultants and independent contractors have assigned to
the Company all their rights in and to such Technology and Intellectual Property
and agreed to hold all trade secrets and confidential information of the Company
in confidence both during and after the term of their engagements.  No
trade secrets or other confidential information owned by the Company that is
material to its business as currently conducted and as proposed to be conducted
have been disclosed or authorized to be disclosed by the Company to any of its
employees or any third party other than pursuant to a written non-disclosure or
confidentiality agreement.  Except as set forth in Section 4.13(l) of
the Disclosure Schedule, no employee, consultant or independent contractor of
the Company is, as a result of or in the course of such employee’s, consultant’s
or independent contractor’s engagement by the Company, in default or breach of
any material term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement.

         

        (m)    To the
Knowledge of the Company, none of the Software owned by the Company contains any
program routine, device, or other undisclosed feature, including, without
limitation, a time bomb, virus, drop-dead device, malicious logic, worm, trojan
horse, bug, error, defect or trap door, that is designed to delete, disable,
deactivate, interfere with, or otherwise harm the Software or the hardware,
data, or computer programs or codes of a user of such Software, or that is
designed to provide access or produce modifications not authorized by such
user.

         

        
          
            
            

          

          
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        (n)    The
information technology systems of the Company, including the relevant Software
and hardware, are adequate for the business as presently conducted and as
currently proposed to be conducted, including with respect to expected increases
in business volume.  Except as set forth in Section 4.13(n) of
the Disclosure Schedule, the information technology systems of the Company have
not suffered any material failure within the past two years.

         

        (o)    The
Company is in compliance with any posted privacy policies and any laws or
regulations relating to personally identifiable information.

         

        4.14    Material
Contracts.

         

        (a)    Section  4.14(a)
of the Disclosure Schedule sets forth, by reference to the applicable
subsection of this Section 4.14(a), all
of the following Contracts to which the Company is a party or by which it or any
of its assets or properties are bound (collectively, the “Material
Contracts”):

         

        (i)    Contracts
with any Selling Stockholder or Affiliate thereof or any current or former
officer, director, stockholder or Affiliate of the Company;

         

        (ii)   Contracts
with any labor union or association representing any employee of the
Company;

         

        (iii)   Contracts
for the sale of any of the assets of the Company other than in the Ordinary
Course of Business or for the grant to any Person of any preferential rights to
purchase any of its assets;

         

        (iv)   Contracts
for joint ventures, strategic alliances, partnerships, licensing arrangements,
or sharing of profits or proprietary information;

         

        (v)    Contracts
containing covenants of the Company not to compete in any line of business or
with any Person in any geographical area or not to solicit or hire any person
with respect to employment or covenants of any other Person not to compete with
the Company in any line of business or in any geographical area or not to
solicit or hire any person with respect to employment;

         

        (vi)   Contracts
for the acquisition (by merger, purchase of stock or assets or otherwise) by the
Company of any operating business or material assets or the capital stock of any
other Person;

         

        (vii)   Contracts
relating to the incurrence, assumption or guarantee of any Indebtedness or
imposing a Lien on any of the assets of the Company, including indentures,
guarantees, loan or credit agreements, sale and leaseback agreements, purchase
money obligations incurred in connection with the acquisition of property,
mortgages, pledge agreements, security agreements, or conditional sale or title
retention agreements;

         

        (viii)   purchase
Contracts giving rise to Liabilities of the Company in excess of
$50,000;

         

        
          
            
            

          

          
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        (ix)    all
Contracts providing for payments by or to the Company in excess of $100,000 in any fiscal year or
$100,000 in the aggregate during the term thereof;

         

        (x)    all
Contracts obligating the Company to provide or obtain products of services for a
period of one year or more or requiring the Company to purchase or sell a stated
portion of its requirements or outputs;

         

        (xi)   Contracts
under which the Company has made advances or loans to any other Person (other
than accounts payable arising in the Ordinary Course of Business);

         

        (xii)   Contracts
providing for severance, retention, change in control or other similar
payments;

         

        (xiii)         
Contracts
involving expected payment of $50,000 or more in any annual period for the
employment of any individual on a full-time, part-time or consulting
basis;

         

        (xiv)         
material
management Contracts and Contracts with independent contractors or consultants
(or similar arrangements) that are not cancelable without penalty or further
payment and without more than 30 days’ notice; and

         

        (xv)    outstanding
Contracts of guaranty, surety or indemnification, direct or indirect, by the
Company.

         

        (b)    Except as
set forth in Section
4.14(b) of the Disclosure Schedule, each of the Material Contracts is in
full force and effect and is the legal, valid and binding obligation of the
Company and of the other parties thereto enforceable against each of them in
accordance with its terms and, upon consummation of the transactions
contemplated by this Agreement, shall continue in full force and effect without
penalty or other adverse consequence.  Except as set forth in Section 4.14(b) of
the Disclosure Schedule, the Company is not in default under any Material
Contract, nor, to the Knowledge of the Company or the Selling Stockholders, is
any other party to any Material Contract in breach of or default thereunder, and
no event has occurred that with the lapse of time or the giving of notice or
both would constitute a breach or default on the Company or any other party
thereunder.  Except as set forth in Section 4.14(b) of
the Disclosure Schedule, no party to any of the Material Contracts has exercised
any termination rights with respect thereto, and no party has given written or,
to the Knowledge of the Company or the Selling Stockholders, other notice of any
significant dispute with respect to any Material Contract.  The
Company has delivered to Purchaser true, correct and complete copies of all of
the Material Contracts, together with all amendments, modifications or
supplements thereto.

         

        
          
            
            

          

          
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        4.15    Employee Benefits
Plans.

         

        (a)    Section 4.15(a) of
the Disclosure Schedule sets forth a correct and complete list
of:  (i) all “employee benefit plans” (as defined in Section 3(3) of
ERISA), and all other employee benefit plans, programs, agreements, policies,
arrangements or payroll practices, including bonus plans, employment, consulting
or other compensation agreements, collective bargaining agreements, incentive,
equity or equity-based compensation, or deferred compensation arrangements,
change in control, termination or severance plans or arrangements, stock
purchase, severance pay, sick leave, vacation pay, salary continuation for
disability, hospitalization, medical insurance, life insurance and scholarship
plans and programs maintained by the Company or to which the Company contributed
or is obligated to contribute thereunder for current or former employees of the
Company or any of the (the “Employees”)
(collectively, the “Company
Plans”), and (ii) all “employee pension plans” (as defined in
Section 3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code),
maintained by the Company or any of its Affiliates and any trade or business
(whether or not incorporated) that is or has ever been under common control, or
that is or has ever been treated as a single employer, with any of them under
Section 414(b), (c), (m) or (o) of the Code (each, an “ERISA
Affiliate”) or to which the Company or any ERISA Affiliate contributed or
has ever been obligated to contribute thereunder (the “Title IV
Plans”).  Section 4.15(a) of
the Disclosure Schedule sets forth each Company Plan and Title IV Plan that is a
“multiemployer plan” (as defined in Section 3(37) of ERISA (a “Multiemployer
Plan”)), or is or has been subject to Sections 4063 or 4064 of
ERISA.

         

        (b)    Correct
and complete copies of the following documents, with respect to each of the
Company Plans (other than a Multiemployer Plan), have been made available or
delivered to Purchaser by the Company, to the extent applicable:  (i)
any plans, all amendments thereto and related trust documents, insurance
contracts or other funding arrangements, and amendments thereto; (ii) the most
recent Forms 5500 and all schedules thereto and the most recent actuarial
report, if any; (iii) the most recent IRS determination letter; (iv) summary
plan descriptions; (v) written communications to employees relating to the
Company Plans; and (vi) written descriptions of all non-written agreements
relating to the Company Plans.

         

        (c)    The
Company Plans have been maintained in all material respects in accordance with
their terms and with all provisions of ERISA, the Code (including rules and
regulations thereunder) and other applicable Federal and state Laws and
regulations, and neither the Company nor any “party in interest” or
“disqualified person” with respect to the Company Plans has engaged in a
non-exempt “prohibited transaction” within the meaning of Section 4975 of the
Code or Section 406 of ERISA.  To the Knowledge of the Company or the
Selling Stockholders, no fiduciary has any liability for breach of fiduciary
duty or any other failure to act or comply in connection with the administration
or investment of the assets of any Company Plan.

         

        (d)    The
Company Plans intended to qualify under Section 401 of the Code are so qualified
and any trusts intended to be exempt from Federal income taxation under Section
501 of the Code are so exempt, and nothing has occurred with respect to the
operation of the Company Plans that could cause the loss of such qualification
or exemption or the imposition of any liability, penalty or tax under ERISA or
the Code.

         

        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

           

        

        (e)    Each
Company Plan that is intended to meet the requirements for tax-favored treatment
under Subchapter B of Chapter 1 of Subtitle A of the Code meets such
requirements.

         

        (f)    Neither
the Company nor any ERISA Affiliate has withdrawn in a complete or partial
withdrawal from any Multiemployer Plan prior to the Closing Date, nor have any
of them incurred any liability due to the termination or reorganization of a
Multiemployer Plan.  Purchaser will not have (i) any obligation
to make any contribution to any Multiemployer Plan or (ii) any withdrawal
liability from any Multiemployer Plan under Section 4201 of ERISA, which it
would not have had but for the consummation of the transactions contemplated by
this Agreement.

         

        (g)    Section 4.15(g) of
the Disclosure Schedule sets forth on a plan by plan basis, the present value of
benefits payable presently or in the future to Employees under each unfunded
Company Plan.

         

        (h)    All
contributions (including all employer contributions and employee salary
reduction contributions) required to have been made under any of the Company
Plans (including workers compensation) or Title IV Plans or by Law (without
regard to any waivers granted under Section 412 of the Code), to any funds or
trusts established thereunder or in connection therewith have been made by the
due date thereof (including any valid extension), and all contributions for any
period ending on or before the Closing Date that are not yet due will have been
paid or sufficient accruals for such contributions and other payments in
accordance with GAAP are duly and fully provided for on the Balance
Sheet.  No accumulated funding deficiencies exist in any of the
Company Plans or Title IV Plans subject to Section 412 of the Code.

         

        (i)    There is
no “amount of unfunded benefit liabilities” (as defined in Section 4001(a)(18)
of ERISA) in any of the Title IV Plans.  Each of the Title IV Plans
are fully funded in accordance with the actuarial assumptions used by the
Pension Benefit Guaranty Corporation (“PBGC”)
to determine the level of funding required in the event of the termination of a
Title IV Plan and the “benefit liabilities” (as defined in Section 4001(a)(16)
of ERISA) of such Title IV Plan using such PBGC assumptions do not exceed the
assets of such Title IV Plan.

         

        (j)    There has
been no “reportable event” (as defined in Section 4043 of ERISA) with respect to
the Title IV Plans that would require the giving of notice or any event
requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of
ERISA.

         

        (k)    Neither
the Company nor any ERISA Affiliate has terminated any Title IV Plan, or
incurred any outstanding liability under Section 4062 of ERISA to the PBGC or to
a trustee appointed under Section 4042 of ERISA.  All premiums due the
PBGC with respect to the Title IV Plans have been paid.

         

        
          
            
            

          

          
            35

            
              

            

          

          
            
            

          

           

        

        (l)    No
liability under any Company Plan or Title IV Plan has been funded nor has any
such obligation been satisfied with the purchase of a contract from an insurance
company that is not rated AA by Standard & Poor’s Corporation or the
equivalent by any other nationally recognized rating agency.

         

        (m)   None of
the Company, any ERISA Affiliate nor any organization to which the Company or
any ERISA Affiliate is a successor or parent corporation within the meaning of
Section 4069(b) of ERISA has engaged in any transaction within the meaning of
Section 4069 or 4212(c) of ERISA.

         

        (n)    There are
no pending actions, claims or lawsuits that have been asserted or instituted
against the Company Plans, the assets of any of the trusts under the Company
Plans or the sponsor or administrator of any of the Company Plans, or against
any fiduciary of the Company Plans with respect to the operation of any of the
Company Plans (other than routine benefit claims), nor to the Knowledge of the
Company or the Selling Stockholders, are there facts that could form the basis
for any such claim or lawsuit.

         

        (o)    There is
no material violation of ERISA or the Code with respect to the filing of
applicable reports, documents and notices regarding the Company Plans with the
Secretary of Labor or the Secretary of the Treasury or the furnishing of such
documents to the participants in or beneficiaries of the Company
Plans.  All amendments and actions required to bring the Company Plans
into conformity in all material respects with all of the applicable provisions
of the Code, ERISA and other applicable Laws have been made or
taken.  Any bonding required with respect to the Company Plans in
accordance with applicable provisions of ERISA has been obtained and is in full
force and effect.

         

        (p)    None of
the Company Plans provides for post-employment life or health insurance,
benefits or coverage for any participant or any beneficiary of a participant,
except as may be required under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”),
and at the expense of the participant or the participant’s
beneficiary.  Each of the Company and any ERISA Affiliate which
maintains a “group health plan” within the meaning Section 5000(b)(1) of the
Code has complied with the notice and continuation requirements of Section 4980B
of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA and the regulations
thereunder.

         

        (q)    Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any Employee from the Company, (ii) increase any benefits otherwise payable
under any Company Plan or Title IV Plan or (iii) result in the acceleration of
the time of payment or vesting of any such benefits under any Company Plan or
Title IV Plan.

         

        
          
            
            

          

          
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        (r)    The
Company does not have a contract, plan or commitment, whether legally binding or
not, to create any additional Company Plan or to modify any existing Company
Plan.

         

        (s)    No stock
or other security issued by the Company forms or has formed a material part of
the assets of any Company Plan.

         

        (t)    Except as
set forth in Section
4.15(t) of the Disclosure Schedule, any individual who performs services
for the Company (other than through a contract with an organization other than
such individual) and who is not treated as an employee of the Company for
Federal income tax purposes by the Company is not an employee for such
purposes.

         

        4.16    Labor.

         

        (a)    The
Company is not a party to any labor or collective bargaining agreement and there
are no labor or collective bargaining agreements which pertain to employees of
the Company.

         

        (b)    No
Employees are represented by any labor organization.  No labor
organization or group of Employees has made a pending demand for recognition,
and there are no representation proceedings or petitions seeking a
representation proceeding presently pending or, to the Knowledge of the Company
or the Selling Stockholders, threatened to be brought or filed, with the
National Labor Relations Board or other labor relations
tribunal.  There is no organizing activity involving the Company
pending or, to the Knowledge of the Company or the Selling Stockholders,
threatened by any labor organization or group of Employees.

         

        (c)    There are
no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or
(ii) material grievances or other labor disputes pending or, to the
Knowledge of the Company or the Selling Stockholders, threatened against or
involving the Company.  There are no unfair labor practice charges,
grievances or complaints pending or, to the Knowledge of the Company or the
Selling Stockholders, threatened by or on behalf of any Employee or group of
Employees.

         

        (d)    There are
no complaints, charges or claims against the Company pending or, to Knowledge of
the Company or the Selling Stockholders, threatened that could be brought or
filed, with any Governmental Body based on, arising out of, in connection with
or otherwise relating to the employment or termination of employment of or
failure to employ, any individual.  Except as set forth in Section 4.16(d) of
the Disclosure Schedule, the Company is in compliance with all Laws relating to
the employment of labor, including all such Laws relating to wages, hours, WARN
and any similar state or local “mass layoff” or “plant closing” Law, collective
bargaining, discrimination, civil rights, safety and health, workers’
compensation and the collection and payment of withholding and/or social
security taxes and any similar tax except for immaterial
non-compliance.  There has been no “mass layoff” or “plant closing”
(as defined by WARN) with respect to the Company within the six (6) months prior
to Closing.

         

        
          
            
            

          

          
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        4.17    Litigation.  There
is no Legal Proceeding pending or, to the Knowledge of the Company or the
Selling Stockholders, threatened against the Company (or to the Knowledge of the
Company or the Selling Stockholders, pending or threatened, against any of the
officers, directors or employees of the Company with respect to their business
activities on behalf of the Company), or to which the Company is otherwise a
party before any Governmental Body, nor to the Knowledge of the Company or the
Selling Stockholders is there any reasonable basis for any such Legal
Proceeding.  The Company is not subject to any Order, and is not in
breach or violation of any Order.  The Company is not engaged in any
legal action to recover monies due it or for damages sustained by
it.  There are no Legal Proceedings pending or, to the Knowledge of
the Company or the Selling Stockholders, threatened against the Company or to
which the Company is otherwise a party relating to this Agreement or, any
Company Document or the transactions contemplated hereby or
thereby.

         

        4.18    Compliance with Laws;
Permits.

         

        (a)    The
Company is in compliance in all material respects with all Laws applicable to
its business, operations or assets.  The Company has not received any
written, or to the Knowledge of the Company or the Selling Stockholders, other
notice of or been charged with the violation of any Laws.  To the
Knowledge of the Company or the Selling Stockholders, the Company is not under
investigation with respect to the violation of any Laws and there are no facts
or circumstances which could form the basis for any such violation.

         

        (b)    Section 4.18 of the
Disclosure Schedule contains a list of all Permits which are required for the
operation of the business of the Company as presently conducted and as presently
intended to be conducted (“Company
Permits”), other than those the failure of which to possess is
immaterial.  The Company currently has all Permits which are required
for the operation of its business as presently conducted and as presently
intended to be conducted, other than those the failure of which to possess is
immaterial.  The Company is not in default or violation, and to the
Knowledge of the Company or the Selling Stockholders, no event has occurred
which, with notice or the lapse of time or both, would constitute a default or
violation, in any material respect of any term, condition or provision of any
Company Permit, and to the Knowledge of the Company or the Selling Stockholders,
there are no facts or circumstances which could form the basis for any such
default or violation.  There are no Legal Proceedings pending or, to
the Knowledge of the Company or the Selling Stockholders, threatened, relating
to the suspension, revocation or modification of any Company
Permit.  Assuming that the consents or waivers (as applicable) set
forth on Section
4.3(b) of the Disclosure Schedule are obtained, none of the Company
Permits will be impaired or in any way affected by the consummation of the
transactions contemplated by this Agreement.

         

        4.19    Environmental
Matters.  Except as set forth on Section 4.19 of the
Disclosure Schedule:

         

        (a)    the
operations of the Company are and have been in material compliance with all
applicable Environmental Laws, which compliance includes obtaining, maintaining
in good standing and complying with all Environmental Permits and no action or
proceeding is pending or, to the Knowledge of the Company or the Selling
Stockholders, threatened to revoke, modify or terminate any such Environmental
Permit, and, to the Knowledge of the Company or the Selling Stockholders, no
facts, circumstances or conditions currently exist that could adversely affect
such continued compliance with Environmental Laws and Environmental Permits or
require currently unbudgeted capital expenditures to achieve or maintain such
continued compliance with Environmental Laws and Environmental
Permits;

         

        
          
            
            

          

          
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        (b)    The
Company is not the subject of any outstanding written Order or Contract with any
Governmental Body or Person with respect to (i) Environmental Laws, (ii)
Remedial Action or (iii) any Release or threatened Release of a Hazardous
Material;

         

        (c)    no claim
has been made or is pending, or to the Knowledge of the Company or the Selling
Stockholders, threatened against the Company alleging either or both that the
Company may be in violation of any Environmental Law or Environmental Permit, or
may have any material liability under any Environmental Law;

         

        (d)    to the
Knowledge of the Company or the Selling Stockholders, no facts, circumstances or
conditions exist with respect to the Company or any property currently or
formerly owned, operated or leased by the Company or any property to which the
Company arranged for the disposal or treatment of Hazardous Materials that could
reasonably be expected to result in the Company incurring material unbudgeted
Environmental Costs and Liabilities;

         

        (e)    there are
no investigations of the business, operations, or currently or, to the Knowledge
of the Company or the Selling Stockholders, previously owned, operated or leased
property of the Company pending or, to the Knowledge of the Company or the
Selling Stockholders, threatened which could lead to the imposition of any
Environmental Costs and Liabilities or Liens under Environmental
Law;

         

        (f)    the
transactions contemplated hereunder do not require the consent of or filings
with any Governmental Body with jurisdiction over the Company with respect to
environmental matters, and none of the Owned Property or Real Property Leases is
located in New Jersey, Indiana or Connecticut;

         

        (g)    there is
not located at any of the properties currently or (while owned, operated or
leased by the Company) previously owned, operated or leased by the Company any
(i) underground storage tanks, (ii) landfill, (iii) surface impoundment, (iii)
asbestos-containing material or (iv) equipment containing polychlorinated
biphenyls; and

         

        (h)    the
Company has provided to Purchaser all environmentally related audits, studies,
reports, analyses, and results of investigations that have been performed with
respect to the currently or previously owned, leased or operated properties of
the Company.

         

        4.20    Insurance.  The
Company has insurance policies in full force and effect (a) for such amounts as
are sufficient for all requirements of Law and all agreements to which the
Company is a party or by which it is bound, and (b) which are in such amounts,
with such deductibles and against such risks and losses, as are reasonable for
the business, assets and properties of the Company.  Set forth in
Section 4.20 of
the Disclosure Schedule is a list of all insurance policies and all fidelity
bonds held by or applicable to the Company setting forth, in respect of each
such policy, the policy name, policy number, carrier, term, type and amount of
coverage and annual premium, whether the policies may be terminated upon
consummation of the transactions contemplated hereby and if and to what extent
events being notified to the insurer after the Closing Date are generally
excluded from the scope of the respective policy.  Except as set forth
on Section 4.20
of the Disclosure Schedule, no event relating to the Company has occurred which
could reasonably be expected

         

        
          
            
            

          

          
            39

            
              

            

          

          
            
            

          

           

        

         to
result in a retroactive upward adjustment in premiums under any such insurance
policies or which could reasonably be expected to result in a prospective upward
adjustment in such premiums.  Excluding insurance policies that have
expired and been replaced in the Ordinary Course of Business, no insurance
policy has been cancelled within the last two years and, to the Knowledge of the
Company or the Selling Stockholders, no threat has been made to cancel any
insurance policy of the Company during such period.  Except as noted
on Section 4.20
of the Disclosure Schedule, all such insurance will remain in full force and
effect immediately following the consummation of the transactions contemplated
hereby.  No event has occurred, including the failure by the Company
to give any notice or information or the Company giving any inaccurate or
erroneous notice or information, which limits or impairs the rights of the
Company under any such insurance policies.

         

        4.21    Inventories.  The
inventories of the Company are in good and marketable condition, and are usable
and of a quantity and quality saleable in the Ordinary Course of
Business.  The inventories of the Company set forth in the Balance
Sheet were valued at the lower of cost (on a FIFO/LIFO basis) or market and were
properly stated therein in accordance with GAAP consistently
applied.  Adequate reserves have been reflected in the Balance Sheet
for obsolete, excess, damaged, slow-moving, or otherwise unusable inventory,
which reserves were calculated in a manner consistent with past practice and in
accordance with GAAP consistently applied.  The inventories of the
Company constitute sufficient quantities for the normal operation of business in
accordance with past practice.

         

        4.22    Accounts and Notes
Receivable and Payable  

         

        (a)    All
accounts and notes receivable of the Company have arisen from bona fide
transactions in the Ordinary Course of Business consistent with past practice
and are payable on ordinary trade terms.  All accounts and notes
receivable of the Company reflected on the Balance Sheet are good and
collectible at the aggregate recorded amounts thereof, net of any applicable
reserve for returns or doubtful accounts reflected thereon, which reserves are
adequate and were calculated in a manner consistent with past practice and in
accordance with GAAP consistently applied.  All accounts and notes
receivable arising after the Balance Sheet Date are good and collectible at the
aggregate recorded amounts thereof, net of any applicable reserve for returns or
doubtful accounts.  Except for arrangements in the Ordinary Course of
Business (as described in Section 4.22(a) of
the Disclosure Schedule), none of the accounts or the notes receivable of the
Company (i) are subject to any setoffs or counterclaims or (ii) represent
obligations for goods sold subject to any repurchase or return
arrangement.

         

        (b)    All
accounts payable of the Company reflected in the Balance Sheet or arising after
the date thereof are the result of bona fide transactions in the Ordinary Course
of Business and have been paid or are not yet due and payable.

         

        
          
            
            

          

          
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        4.23    Related Party
Transactions.  Except as set forth on Section 4.23 of the
Disclosure Schedule, no employee, officer, director, stockholder, partner or
member of the Company, any member of his or her immediate family or any of their
respective Affiliates (“Related
Persons”) (i) owes any amount to the Company, nor does the Company owe
any amount to, or has the Company committed to make any loan or extend or
guarantee credit to or for the benefit of, any Related Person, (ii) is involved
in any business arrangement or other relationship with the Company (whether
written or oral), (iii) owns any property or right, tangible or intangible, that
is used by the Company, (iv) has any claim or cause of action against the
Company or (v) owns any direct or indirect interest of any kind in, or controls
or is a director, officer, employee or partner of, or consultant to, or lender
to or borrower from or has the right to participate in the profits of, any
Person which is a competitor, supplier, customer, landlord, tenant, creditor or
debtor of the Company.

         

        4.24    Customers and
Suppliers.  

         

        (a)    Section 4.24 of the
Disclosure Schedule sets forth a list of the ten (10) largest customers and the
ten (10) largest suppliers of the Company, as measured by the dollar amount of
purchases therefrom or thereby, during the fiscal year ended December 31, 2007,
showing the approximate total sales by the Company to each such customer and the
approximate total purchases by the Company from each such supplier, during such
period.

         

        (b)    Since the
Balance Sheet Date, no customer or supplier listed on Section 4.24 of the
Disclosure Schedule has terminated its relationship with the Company or
materially reduced or changed the pricing or other terms of its business with
the Company and, to the Knowledge of the Company or the Selling Stockholders, no
customer or supplier listed on Section 4.24 of the
Disclosure Schedule has notified the Company that it intends to terminate or
materially reduce or change the pricing or other terms of its business with the
Company.

         

        4.25    Product Warranty; Product
Liability.  

         

        (a)    Except as
set forth on Section
4.25 of the Disclosure Schedule, each product manufactured, sold or
delivered by the Company in conducting its business has been in material
conformity with all product specifications, all express and implied warranties
and all applicable Laws.  Except as set forth in Section 4.25 of the
Disclosure Schedule, the Company has no material liability for replacement or
repair of any such products or other damages in connection therewith or any
other customer or product obligations not reserved against on the Balance
Sheet.  Except as set forth in Section 4.25 of the
Disclosure Schedule, the Company has not sold any products or delivered any
services that included a warranty for a period of longer than one
year.

         

        
          
            
            

          

          
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        (b)    The
Company has no material liability arising out of any injury to individuals or
property as a result of the ownership, possession, or use of any product
designed, manufactured, assembled, repaired, maintained, delivered, sold or
installed, or services rendered, by or on behalf of the Company.  The
Company has not committed any act or failed to commit any act, which would
result in, and to the Knowledge of the Company or the Selling Stockholders,
there has been no occurrence which would give rise to or form the basis of, any
material product liability or liability for breach of warranty (whether covered
by insurance or not) on the part of the Company with respect to products
designed, manufactured, assembled, repaired, maintained, delivered, sold or
installed or services rendered by or an behalf of the Company.

         

        4.26    Banks; Power of
Attorney.  Section 4.26 of the
Disclosure Schedule contains a complete and correct list of the names and
locations of all banks in which Company has accounts or safe deposit boxes and
the names of all persons authorized to draw thereon or to have access
thereto.  Except as set forth on Section 4.26 of the
Disclosure Schedule, no person holds a power of attorney to act on behalf of the
Company.

         

        4.27    Certain
Payments.  None of the Company or any Selling Stockholder nor,
to the Knowledge of the Company or the Selling Stockholders, any director,
officer, employee, or other Person associated with or acting on behalf of any of
them, has directly or indirectly (a) made any contribution, gift, bribe, rebate,
payoff, influence payment, kickback, or other payment to any Person, private or
public, regardless of form, whether in money, property, or services (i) to
obtain favorable treatment in securing business for the Company, (ii) to pay for
favorable treatment for business secured by the Company, (iii) to obtain special
concessions or for special concessions already obtained, for or in respect of
the Company, or (iv) in violation of any Law, or (b) established or maintained
any fund or asset with respect to the Company that has not been recorded in the
books and records of the Company.

         

        4.28    Certain Governmental
Matters.  The Company has not received from any U.S.
Governmental Body or any prime contractor or subcontractor from a U.S.
Governmental Body any special, preferential or advantageous treatment in the
award of a Government Contract, or in any other manner, including as a “small
business concern,” “small disadvantaged business” (or “minority-owned
business”), “women-owned” concern, or any other socially and economically
disadvantaged classification, as defined in the Small Business Act (15 U.S.C.
Sec. 631, et. seq.), the Federal Property and Administrative Services Act (41
U.S.C. Sec. 252), section 7102 of the Federal Acquisition Streamlining Act of
1994 (Public Law 103-355), 10 U.S.C. Sec 2323, Executive Order 12138, May 18,
1979, or regulations implementing these requirements, including the Federal
Acquisition Regulations.  “Government
Contract” means any prime contract with a U.S. Governmental Body and
any subcontract with a prime contractor or higher tier subcontractor under a
prime contract with a U.S. Governmental Body.

         

        
          
            
            

          

          
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        4.29      
Financial
Advisors.  Except as set forth on Section 4.29 of the
Disclosure Schedule, no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for the Selling Stockholders or the Company in
connection with the transactions contemplated by this Agreement and no Person is
or will be entitled to any fee or commission or like payment in respect
thereof.

         

        4.30      
Full
Disclosure.  No representation or warranty of the Company or
Selling Stockholders contained in this Agreement or in any of the Selling
Stockholder Documents and no written certifications made by or on behalf of the
Company or a Selling Stockholder to Purchaser pursuant to this Agreement or any
of the Company Documents or Selling Stockholder Documents contains an untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not
misleading.  

         

        4.31       
Disclaimer of Other
Representation and Warranties.  Except as expressly set forth
in Article III and Article IV, and in any written certifications made by or on
behalf of the Company or a Selling Stockholder to Purchaser pursuant to this
Agreement or any of the Company Documents or Selling Stockholder Documents, the
Selling Stockholders make no representation or warranty, express or implied, at
law or in equity, in respect of the Company or any of its assets Liabilities or
operations, including with respect to merchantability or fitness for any
particular purpose, and any such other representations or warranties are hereby
expressly disclaimed.

         

        ARTICLE
V

         

        REPRESENTATIONS
AND WARRANTIES OF PURCHASER

         

        Purchaser
hereby represents and warrants to the Selling Stockholders that:

         

        5.1    Organization and Good
Standing.  Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has all
requisite corporate power and authority to own, lease and operate properties and
carry on its business.

         

        5.2    Authorization of
Agreement.  Purchaser has all corporate power and authority to
execute and deliver this Agreement and each other agreement, document,
instrument or certificate to be executed by Purchaser in connection with the
consummation of the transactions contemplated hereby and thereby (the “Purchaser
Documents”), and to consummate the transactions contemplated hereby and
thereby.  The execution, delivery and performance by Purchaser of this
Agreement and each Purchaser Document have been duly authorized by all necessary
corporate action on behalf of Purchaser.  This Agreement has been, and
each Purchaser Document will be at or prior to the Closing, duly executed
and delivered by Purchaser and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and each Purchaser Document when so executed and delivered will constitute, the
legal, valid and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its respective terms.

         

        
          
            
            

          

          
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        5.3    Conflicts; Consents of Third
Parties.

         

        (a)    Except as
set forth in Section 5.3(b) of the Disclosure Schedule, none of the execution
and delivery by Purchaser of this Agreement or the Purchaser Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by Purchaser with any of the provisions hereof or thereof will conflict with, or
result in violation of or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation  or
acceleration of any obligation under any provision of (i) the certificate
of incorporation and by-laws or comparable organizational documents of
Purchaser; (ii) any Contract or Permit to which Purchaser is a party or by
which any of the properties or assets of Purchaser are bound; (iii) any Order of
any Governmental Body applicable to Purchaser or by which any of the properties
or assets of Purchaser are bound; or (iv) any applicable Law.

         

        (b)    No
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of Purchaser in connection with the execution and delivery of this
Agreement or the Purchaser Documents or the compliance by Purchaser with any of
the provisions hereof or thereof, except for those set forth on Section 5.3(b) of the
Disclosure Schedule.

         

        5.4    Litigation.  There
are no Legal Proceedings pending or, to the Knowledge of Purchaser, threatened
against Purchaser or to which Purchaser is otherwise a party relating to this
Agreement, the Purchaser Documents or the transactions contemplated hereby and
thereby.

         

        5.5    Financial
Advisors.  No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for Purchaser in connection with the
transactions contemplated by this Agreement and no Person is entitled to any fee
or commission or like payment in respect thereof.

         

        5.6    Investment
Intent.  Purchaser is acquiring the Shares for its own account,
for investment purposes only and not with a view to the distribution (as such
term is used in Section 2(11) of the Securities Act)
thereof.  Purchaser understands that the Shares have not been
registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.

         

        5.7    No Affiliation with
Independent Valuation Firm.  The Independent Valuation Firm (i)
is not an Affiliate of Purchaser, and (ii) is not (and has not ever been) a
party to any Contract with Purchaser or any of the Purchaser’s Affiliates (other
than any Contract contemplated to be entered into pursuant to this
Agreement).

         

        
          
            
            

          

          
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        ARTICLE
VI

         

        COVENANTS

         

        6.1    Access to Information;
Confidentiality.  The Company shall afford to Purchaser and its
accountants, counsel, financial advisors and other representatives, and to
prospective lenders and other financing sources and each of their respective
representatives, access, during normal business hours upon reasonable notice
throughout the period prior to the Closing, to the Company’s properties and
facilities, books, financial information, Contracts and records of the Company
and, during such period, shall furnish promptly such information concerning the
businesses, properties and personnel of the Company as Purchaser shall
reasonably request; provided, however, such
investigation shall not unreasonably disrupt the Company’s
operations.  Prior to the Closing, the Company shall generally keep
Purchaser informed as to all material matters involving the operations and
businesses of the Company.  The Company shall authorize and direct its
appropriate directors, managers and employees to discuss matters involving the
operations and business of the Company with representatives of Purchaser and its
prospective lenders or placement agents and other financial
sources.  All nonpublic information provided to, or obtained by,
Purchaser in connection with the transactions contemplated hereby shall be
“Confidential Information” for purposes of the Confidentiality and
Non-Disclosure Agreement, dated as of February 11, 2008, between Purchaser and
the Company (the “Confidentiality
Agreement”), the terms of which shall continue in force until the
Closing; provided that
Purchaser and the Company may disclose such information as may be necessary in
connection with (i) seeking necessary consents and approvals as contemplated
hereby and (ii) obtaining financing for the Purchase
Price.  Notwithstanding the foregoing, the Company shall not be
required to disclose any information if such disclosure would contravene any
applicable Law.  No information provided to or obtained by Purchaser
pursuant to this Section 6.1 shall
limit or otherwise affect the remedies available hereunder to Purchaser or the
representations or warranties of, or the conditions to the obligations of, the
parties hereto.

         

        6.2    Conduct of the Business
Pending the Closing.

         

        (a)    Except as
otherwise expressly provided in this Agreement or with the prior written consent
of Purchaser, between the date hereof and the Closing, the Selling Stockholders
and the Company shall:

                        

        (i)    conduct
the respective businesses of the Company only in the Ordinary Course of
Business;

         

        (ii)    use their
commercially reasonable efforts to (A) preserve the present business operations,
organization (including officers and employees) and goodwill of the Company and
(B) preserve the present relationships with Persons having business dealings
with the Company (including customers and suppliers);

         

        (iii)   maintain
(A) all of the assets and properties of, or used by, the Company in their
current condition, ordinary wear and tear excepted, and (B) insurance upon all
of the properties and assets of the Company in such amounts and of such kinds
comparable to that in effect on the date of this Agreement;

         

        
          
            
            

          

          
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        (iv)   (A)
maintain the books, accounts and records of the Company in the Ordinary Course
of Business, (B) continue to collect accounts receivable and pay accounts
payable utilizing normal procedures and without discounting or accelerating
payment of such accounts, and (C) comply in all material respects with all
contractual and other obligations of the Company; and

         

        (v)    comply in
all material respects with all applicable Laws.

         

        (b)    Without
limiting the generality of the foregoing, except as otherwise expressly provided
in this Agreement or with the prior written consent of Purchaser, the Selling
Stockholders and the Company shall not:

         

        (i)    declare,
set aside, make or pay any dividend or other distribution in respect of the
capital stock of the Company or repurchase, redeem or otherwise acquire any
outstanding shares of the capital stock or other securities of, or other
ownership interests in, the Company;

         

        (ii)    transfer,
issue, sell, pledge, encumber or dispose of any shares of capital stock or other
securities of, or other ownership interests in, the Company or grant options,
warrants, calls or other rights to purchase or otherwise acquire shares of the
capital stock or other securities of, or other ownership interests
in,  the Company;

         

        (iii)    effect
any recapitalization, reclassification, stock split, combination or like change
in the capitalization of the Company, or amend the terms of any outstanding
securities of the Company;

         

        (iv)    amend the
certificate of incorporation or by-laws or equivalent organizational or
governing documents of the Company;

         

        (v)    (A)
increase the salary or other compensation of any director, officer or, except in
the Ordinary Course of Business, any other employee of the Company, (B) grant
any unusual or extraordinary bonus, benefit or other direct or indirect
compensation to any director, officer, employee or consultant, (C) increase the
coverage or benefits available under any (or create any new) severance pay,
termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan or arrangement
made to, for, or with any of the directors, officers, employees, agents or
representatives of the Company or otherwise modify or amend or terminate any
such plan or arrangement or (D) enter into any employment, deferred
compensation, severance, special pay, consulting, non-competition or similar
agreement or arrangement with any directors or officers of the Company (or amend
any such agreement to which the Company is a party);

         

        
          
            
            

          

          
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        (vi)    except in
the Ordinary Course of Business, (A) issue, create, incur, assume, guarantee,
endorse or otherwise become liable or responsible with respect to (whether
directly, contingently or otherwise) any Indebtedness; (B) pay, repay,
discharge, purchase, repurchase or satisfy any Indebtedness of the Company; or
(C) modify the terms of any Indebtedness or other Liability;

         

        (vii)    subject
to any Lien or otherwise encumber or, except for Permitted Exceptions, permit,
allow or suffer to be encumbered, any of the properties or assets (whether
tangible or intangible) of, or used by, the Company;

         

        (viii)   acquire
any material properties or assets or sell, assign, license, transfer, convey,
lease or otherwise dispose of any of the material properties or assets of, or
used by, the Company, other than in the Ordinary Course of
Business;

         

        (ix)    (A) enter
into or agree to enter into any merger or consolidation with any corporation or
other entity; or (B) engage in any new business or invest in, make a loan,
advance or capital contribution to, or otherwise acquire the securities, of any
other Person;

         

        (x)    cancel or
compromise any debt or claim or waive or release any material right of the
Company except in the Ordinary Course of Business;

         

        (xi)    enter
into any commitment for capital expenditures of the Company in excess of $50,000
for any individual commitment and $100,000 for all commitments in the
aggregate;

         

        (xii)    enter
into, modify or terminate any labor or collective bargaining agreement of the
Company or, through negotiation or otherwise, make any commitment or incur any
liability to any labor organization with respect to the Company;

         

        (xiii)    (A)
introduce any material change with respect to the operation of the Company,
including any material change in the types, nature, composition or quality of
its products or services, or, (B) other than in the Ordinary Course of Business,
make any change in product specifications or prices or terms of distributions of
such products, or (C) change its pricing, discount, allowance or return policies
or grant any pricing, discount, allowance or return terms for any customer or
supplier not in accordance with such policies;

         

        (xiv)    except
for transfers of Cash pursuant to normal cash management practices in the
Ordinary Course of Business, make any investments in or loans to, or pay any
fees or expenses to, or enter into or modify any Contract with any Related
Persons;

         

        
          
            
            

          

          
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        (xv)    make a
change in its accounting or Tax reporting principles, methods or
policies;

         

        (xvi)         
make,
change or revoke any Tax election, settle or compromise any Tax claim or
liability or enter into a settlement or compromise, or change (or make a request
to any taxing authority to change) any material aspect of its method of
accounting for Tax purposes;

         

        (xvii)         
enter
into any Contract, understanding or commitment that restrains, restricts, limits
or impedes the ability of the Company to compete with or conduct any business or
line of business in any geographic area or solicit the employment of any
persons;

         

        (xviii)        
terminate,
amend, restate, supplement or waive any rights under any (A) Material Contract,
Real Property Lease, Personal Property Lease or Intellectual Property license,
other than in the Ordinary Course of Business or (B) Permit;

         

        (xix)    settle or
compromise any pending or threatened Legal Proceeding or any claim or claims
for, or that would result in a loss of revenue of, an amount that could,
individually or in the aggregate, reasonably be expected to be greater than
$50,000;

         

        (xx)    change or
modify its credit, collection or payment policies, procedures or practices,
including acceleration of collections or receivables (whether or not past due)
or fail to pay or delay payment of payables or other liabilities;

         

        (xxi)    take any
action which would adversely affect the ability of the parties to consummate the
transactions contemplated by this Agreement;

         

        (xxii)    agree to
do anything (A) prohibited by this Section 6.2, (B)
which would make any of the representations and warranties of the Selling
Stockholders in this Agreement or any of the Selling Stockholder Documents or
Company Documents untrue or incorrect in any material respect or could result in
any of the conditions to the Closing not being satisfied or (C) that would be
reasonably expected to have a Material Adverse Effect; and

         

        (xxiii)    fail to
pay any required maintenance or other similar fees or otherwise fail to make
required filings or payments required to maintain and further prosecute any
applications for registration of Intellectual Property.

         

        
          
            
            

          

          
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        6.3    Third Party
Consents.  The Selling Stockholders and the Company shall use
their commercially reasonable efforts to obtain at the earliest practicable date
all consents, waivers and approvals from, and provide all notices to, all
Persons that are not a Governmental Body, which consents, waivers, approvals and
notices are required to consummate, or in connection with, the transactions
contemplated by this Agreement, including the consents, waivers, approvals and
notices referred to in Sections 3.3(b) and
4.3(b)
hereof.  All such consents, waivers, approvals and notices shall be in
writing and in form and substance satisfactory to Purchaser, and executed
counterparts of such consents, waivers and approvals shall be delivered to
Purchaser promptly after receipt thereof, and copies of such notices shall be
delivered to Purchaser promptly after the making
thereof.  Notwithstanding anything to the contrary in this Agreement,
neither Purchaser nor any of its Affiliates (which for purposes of this sentence
shall include the Company) shall be required to pay any amounts in connection
with obtaining any consent, waiver or approval.

         

        6.4    Governmental Consents and
Approvals.  Each of Purchaser, the Selling Stockholders and the
Company shall use its commercially reasonable efforts to obtain at the earliest
practical date all consents, waivers, approvals, Orders, Permits, authorizations
and declarations  from, make all filings with, and provide all notices
to, all Governmental Bodies which are required to consummate, or in connection
with, the transactions contemplated by this Agreement, including the consents,
waivers, approvals, Orders, Permits, authorizations, declarations, filings and
notices referred to in Sections 3.3(b) and
4.3(b).  

         

        6.5    Further
Assurances.  Subject to, and not in limitation of, Sections 6.3 and
6.4, each of
the Selling Stockholders, the Company and Purchaser shall use its commercially
reasonable efforts to (a) take, or cause to be taken, all actions necessary or
appropriate to consummate the transactions contemplated by this Agreement and
(b) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement.

         

        6.6    No Shop.

         

        (a)    The
Selling Stockholders and the Company shall not, and shall not permit any of the
Affiliates, directors, officers, employees, representatives or agents of the
Selling Stockholders or the Company (collectively, the “Representatives”)
to, directly or indirectly, (i) discuss, encourage, negotiate, undertake,
initiate, authorize, recommend, propose or enter into, whether as the proposed
surviving, merged, acquiring or acquired corporation or otherwise, any
transaction involving a merger, consolidation, business combination, purchase or
disposition of any material amount of the assets of the Company or any capital
stock or other ownership interests of the Company other than the transactions
contemplated by this Agreement (an “Acquisition
Transaction”), (ii) facilitate, encourage, solicit or initiate
discussions, negotiations or submissions of proposals or offers in respect of an
Acquisition Transaction, (iii) furnish or cause to be furnished, to any
Person, any information concerning the business, operations, properties or
assets of the Company in connection with an Acquisition Transaction, or
(iv) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to do or seek
any of the foregoing.

         

        
          
            
            

          

          
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        (b)    The
Selling Stockholders and the Company shall notify Purchaser orally and in
writing promptly (but in no event later than 24 hours) after receipt by any of
the Selling Stockholders, the Company, or any of the Representatives thereof of
any proposal or offer from any Person other than Purchaser to effect an
Acquisition Transaction or, other than in the Ordinary Course of Business, any
request for non-public information relating to the Company or for access to the
properties, books or records of the Company by any Person other than
Purchaser.  Such notice shall indicate the identity of the Person
making the proposal or offer, or intending to make a proposal or offer or
requesting non-public information or access to the books and records of the
Company, the material terms of any such proposal or offer, or modification or
amendment to such proposal or offer and copies of any written proposals or
offers or amendments or supplements thereto.  The Selling Stockholders
and the Company shall keep Purchaser informed, on a current basis, of any
material changes in the status and any material changes or modifications in the
material terms of any such proposal, offer, indication or request.

         

        (c)    The
Selling Stockholders and the Company shall (and the Selling Stockholders and the
Company shall cause their Representatives to) immediately cease and cause to be
terminated any existing discussions or negotiations with any Persons (other than
Purchaser) conducted heretofore with respect to any Acquisition
Transaction.  The Selling Stockholders and the Company agree not to
release any third party from the confidentiality and standstill provisions of
any agreement to which the Company is a party.

         

        6.7    Non-Competition;
Non-Solicitation; Confidentiality.

         

        (a)    For a
period of three (3) years from and after the Closing Date, the Selling
Stockholders shall not, and shall cause their Affiliates not to, directly or
indirectly, own, manage, engage in, operate, control, work for, consult with,
render services for, do business with, maintain any interest in (proprietary,
financial or otherwise) or participate in the ownership, management, operation
or control of, any business, whether in corporate, proprietorship or partnership
form or otherwise, engaging in a business the same or similar to that, or that
otherwise competes with, the Company (a “Restricted
Business”); provided, however, that the
restrictions contained in this Section 6.7(a)
shall not restrict the acquisition by any Selling Stockholders, directly or
indirectly, of (i) any number of shares of capital stock and other securities of
Purchaser, or (ii) less than two percent (2%) of the outstanding capital stock
of any publicly traded company engaged in a Restricted Business.

         

        (b)    For a
period of three (3) years from and after the Closing Date, the Selling
Stockholders shall not, and shall cause their employees and Affiliates not to,
directly or indirectly:  (i) cause, solicit, induce or encourage
any employees of the Company to leave such employment or hire, employ or
otherwise engage any such individual, (ii) cause, induce or encourage any
material actual or prospective client, customer, supplier, or licensor of the
Company (including any existing or former customer of the Company and any Person
that becomes a client or customer of the Company after the Closing) or any other
Person who has a material business relationship with the Company, to terminate
or modify any such actual or prospective relationship.

         

        
          
            
            

          

          
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        (c)    From and
after the Closing Date, except for disclosures and uses of Confidential
Information (as defined below) in connection with the performance of a Contract
between a Selling Stockholder and the Company or the Purchaser, the Selling
Stockholders shall not and shall cause their Affiliates not to (in either case,
directly or indirectly) disclose, reveal, divulge or communicate to any Person
other than authorized officers, directors and employees of Purchaser or use or
otherwise exploit for its own benefit or for the benefit of anyone other than
Purchaser, any Confidential Information (as defined below).  A Selling
Stockholder shall not have any obligation to keep confidential (or cause its
officers, directors or Affiliates to keep confidential) any Confidential
Information if and to the extent disclosure thereof is specifically required by
applicable Law; provided, however, that in the
event disclosure is required by applicable Law, the Selling Stockholders shall,
to the extent reasonably possible, provide Purchaser with prompt notice of such
requirement prior to making any disclosure so that Purchaser may seek an
appropriate protective order.  For purposes of this Section 6.7(c),
“Confidential
Information” means any information with respect to the Company, including
methods of operation, customer lists, products, prices, fees, costs, Technology,
inventions, trade secrets, know-how, Software, marketing methods, plans,
personnel, suppliers, competitors, markets or other specialized information or
proprietary matters.  “Confidential
Information” does not include, and there shall be no obligation hereunder
with respect to, information that (i) is generally available to the public on
the date of this Agreement or (ii) becomes generally available to the public
other than as a result of a disclosure not otherwise permissible
hereunder.

         

        (d)    The
covenants and undertakings contained in this Section 6.7
relate to matters which are of a special, unique and extraordinary character and
a violation of any of the terms of this Section 6.7 will
cause irreparable injury to Purchaser, the amount of which will be impossible to
estimate or determine and which cannot be adequately
compensated.  Accordingly, the remedy at law for any breach of this
Section 6.7
will be inadequate.  Therefore, Purchaser will be entitled to a
temporary and permanent injunction, restraining order or other equitable relief
from any court of competent jurisdiction in the event of any breach of this
Section 6.7
without the necessity of proving actual damage or posting any bond
whatsoever.  The rights and remedies provided by this Section 6.7 are
cumulative and in addition to any other rights and remedies which Purchaser may
have hereunder or at law or in equity.  In the event that Purchaser
were to seek damages for any breach of this Section 6.7, the
portion of the consideration delivered to the Selling Stockholders hereunder
which is allocated by the parties to the foregoing covenant shall not be
considered a measure of or limit on such damages.

         

        (e)    The
parties hereto agree that, if any court of competent jurisdiction determines
that a specified time period, a specified geographical area, a specified
business limitation or any other relevant feature of this Section 6.7 is
unreasonable, arbitrary or against public policy, then a lesser period of time,
geographical area, business limitation or other relevant feature which is
determined by such court to be reasonable, not arbitrary and not against public
policy may be enforced against the applicable party.

         

        6.8    Preservation of
Records.  Subject to any retention requirements relating to the
preservation of Tax records, the Selling Stockholders and Purchaser agree that
each of them shall (and prior to the Closing shall cause the Company to)
preserve and keep the records held by them relating to the respective businesses
of the Company for a period of seven years from the Closing Date and shall make
such records and personnel available to the other as may be reasonably required
by such party in connection with, among other 

         

        
          
            
            

          

          
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        things,
any insurance claims by, legal proceedings against or governmental
investigations of the Selling Stockholders, the Company or Purchaser or any of
their Affiliates or in order to enable the Selling Stockholders or Purchaser to
comply with their respective obligations under this Agreement and each other
agreement, document or instrument contemplated hereby or thereby.  In
the event the Selling Stockholders or Purchaser wishes to destroy (or permit to
be destroyed) such records after that time, such party shall first give 90 days
prior written notice to the other and such other party shall have the right at
its option and expense, upon prior written notice given to such party within
that 90 day period, to take possession of the records within 180 days after the
date of such notice.

         

        6.9    Publicity.  None
of the Purchaser, Selling Stockholders or the Company shall issue any press
release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
party hereto, which approval will not be unreasonably withheld or delayed,
unless, in the sole judgment of Purchaser, disclosure is otherwise required by
applicable Law or by the applicable rules of any stock exchange (or similar
self-regulatory organization) with which Purchaser or its Affiliates lists
securities, provided that, to the
extent required by applicable Law, the party intending to make such release
shall use its commercially reasonable efforts consistent with such applicable
Law to consult with the other party with respect to the text
thereof.

         

        6.10   Cooperation with
Financing.  In order to assist Purchaser with obtaining
financing, the Selling Stockholders and the Company shall provide such
assistance and cooperation as Purchaser and its Affiliates may reasonably
request, including (i) cooperating with prospective lenders, underwriters,
placement agents or initial purchasers and their respective advisors (including
for purposes of performing their due diligence) and (ii) helping procure other
definitive financing or offering documents or other reasonably requested
certificates or documents, customary certificates (including a certificate of
the chief financial officer of the Company with respect to solvency matters),
legal opinions and real estate title documentation.  All documented
fees, costs and expenses incurred by the Selling Stockholders and the Company in
providing such assistance and cooperation shall be paid by Purchaser.

         

        6.11   Related-Party Transactions
with Non-Management Affiliates.  On or prior to the Closing
Date, the Company shall (a) terminate all Contracts with any of the Selling
Stockholders or their respective Affiliates (other than those Contracts set
forth on Schedule
6.11) and (b) deliver releases executed by such Selling Stockholders and
Affiliates with whom the Company has terminated such Contracts pursuant to this
Section 6.11
providing that no further payments are due, or may become due, under or in
respect of any such terminated Contacts; provided that in no
event shall the Company pay any fee or otherwise incur any expense or financial
exposure with respect to any such termination or release.

         

        6.12   Monthly Financial
Statements.  As soon as reasonably practicable, but in no event
later than 20 days after the end of each calendar month during the period from
the date hereof to the Closing, the Company shall provide Purchaser with (a)
unaudited monthly financial statements of the Company and (b) operating or
management reports (such reports to be in the form prepared by the Company in
the Ordinary Course of Business) of the Company for such preceding
month.

         

        
          
            
            

          

          
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        6.13   Fees and
Expenses.  No later than three Business Days prior to the
Closing Date, the Company shall deliver to Purchaser (i) pay-off letters or
final invoices (in a form reasonably acceptable to Purchaser) in respect of the
Company Transaction Expenses from third-party service providers to whom payments
are required to be made by the Company, and (ii) a certificate of the Company
(in a form reasonably acceptable to Purchaser) setting forth an estimate of the
unpaid balance of all Company Transaction Expenses as of the close of business
on the day immediately preceding the Closing.  On the Closing Date
prior to the Closing, the Company shall deliver to Purchaser a certificate of
the Company (in a form reasonably acceptable to Purchaser) setting forth the
unpaid balance of all Company Transaction Expenses as of the close of business
on the day immediately preceding the Closing.  Such Company
Transaction Expenses shall be paid out of the Purchase Price at Closing in
accordance with Section 2.3
hereof.

         

        6.14    Notification of Certain
Matters.

         

        (a)    The
Selling Stockholders shall give notice to Purchaser and Purchaser shall give
notice to the Selling Stockholders, as promptly as reasonably practicable upon
becoming aware of (i) any fact, change, condition, circumstance, event,
occurrence or non-occurrence that has caused or is reasonably likely to cause
any representation or warranty in this Agreement (as modified by the Disclosure
Schedule and all Disclosure Schedule Updates) to be untrue or inaccurate in any
respect at any time after the date hereof and prior to the Closing, (ii) any
material failure on its part to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder or (iii) the
institution of or the threat of institution of any Legal Proceeding against any
of the Selling Stockholders, the Company related to this Agreement or the
transactions contemplated hereby; provided that the
delivery of any notice pursuant to this Section 6.14 shall
not limit or otherwise affect the remedies available hereunder to the party
receiving such notice, or the representations or warranties of, or the
conditions to the obligations of, the parties hereto;

         

        (b)    Notwithstanding
any other provision of this Agreement, between the date of this Agreement and
fifteen (15) days following such date, the Selling Stockholders shall be
permitted to update the Disclosure Schedule (each such update is referred to as
a “Disclosure
Schedule Update”).  A Disclosure Schedule Update may include
one or more sections that were not contained in the Disclosure Schedule
delivered on the date of this Agreement or any previous Disclosure Schedule
Update, in which event the Purchaser hereby agrees that the related Section of
Article IV
shall be amended, without further action by any party hereto, to include the
phrase “Except as set forth in Section [   ] of the Disclosure
Schedule” in the appropriate portion of that Article IV
Section.  Any determination regarding the truth, accuracy,
completeness or correctness of a representation or warranty of the Selling
Stockholders as of the date of this Agreement or as of the Closing Date shall be
made with reference to the disclosures contained in the Disclosure Schedule as
amended by all Disclosure Schedule Updates.  If any Disclosure
Schedule Update includes Sections 3.3(a),
3.3(b), 4.3(a) or 4.3(b) of the
Disclosure Schedule, Purchaser shall be permitted to update Section 7.1(g) of the
Disclosure Schedule.

         

        
          
            
            

          

          
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        6.15    Debt.  No
later than the third Business Day prior to the Closing Date, the Company shall
provide Purchaser with (i) a certificate of the Company (in a form reasonably
acceptable to Purchaser) setting forth an estimate of the balance of all
Indebtedness of the Company as of the close of business on the day immediately
preceding the Closing Date and (ii) customary pay-off letters (in a form
reasonably acceptable to Purchaser) from all holders of Indebtedness to be
repaid as of or prior to the Closing.  The Company shall also make
arrangements reasonably satisfactory to Purchaser for such holders to provide to
Purchaser recordable form mortgage and lien releases, canceled notes and other
documents reasonably requested by Purchaser prior to the Closing such that all
Liens on the assets or properties of the Company that are not Permitted
Exceptions shall be satisfied, terminated and discharged on or prior to the
Closing Date.  On the Closing Date prior to the Closing, the Company
shall deliver to Purchaser a certificate of the Company (in a form reasonably
acceptable to Purchaser) setting forth all Indebtedness of the Company as of the
close of business on the day immediately preceding the Closing
Date.

         

        6.16    Resignation of
Directors.  The Selling Stockholders shall cause each of the
directors of the Company to submit a letter of resignation effective as of the
Closing.

         

        6.17    Use of
Name.  The Selling Stockholders hereby agree that upon the
Closing, Purchaser and the Company shall have the sole right to the use of the
name “Flotation Technologies” or similar names and any service marks,
trademarks, trade names, d/b/a names, fictitious names, identifying symbols,
logos, emblems, signs or insignia related thereto or containing or comprising
the foregoing, or otherwise used in the business of the Company, including any
name or mark confusingly similar thereto and the trademarks and service marks
listed on Schedule
4.13(a) (collectively, the “Company
Marks”).  The Selling Stockholders shall not, and shall not
permit their respective Affiliates to, use such name or any variation or
simulation thereof or any of the Company Marks.  Each of the Selling
Stockholders shall, and shall cause each its Affiliates to, immediately after
the Closing, cease to hold itself out as having any affiliation with the Company
or any of its Affiliates.

         

        6.18    Section 338(h)(10)
Election.

         

        (a)    The
Selling Stockholders shall join with Purchaser in making an election under
Section 338(h)(10) of the Code and the Treasury Regulations and any
corresponding or similar elections under state, local or foreign tax law
(collectively, the “Section
338(h)(10) Election”) with respect to the Company.  For the
purpose of making the Section 338(h)(10) Election for federal income tax
purposes, on or prior to the Closing Date, the Selling Stockholders shall
deliver to Purchaser an executed original IRS Form 8023 (or successor form).
Purchaser will file the Form 8023 with the IRS at least 30 days prior to the due
date of such form, and Purchaser will provide the Selling Stockholders a copy of
such filing.

         

        (b)    Purchaser
shall be responsible for the preparation and filing of all forms and documents
required to effectuate the Section 338(h)(10) Election. In addition to the Form
8023, the Selling Stockholders shall execute (or cause to be executed) and
deliver to Purchaser such additional documents or forms as are reasonably
requested to complete properly the Section 338(h)(10) Election at least 30 days
prior to the date such Section 338(h)(10) Election is required to be
filed.

         

        
          
            
            

          

          
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        (c)    Purchaser
and the Selling Stockholders shall file, and shall cause their Affiliates to
file, all Tax Returns and statements, forms and schedules in connection
therewith in a manner consistent with the Section 338(h)(10) Election and shall
take no position contrary thereto unless required to do so by applicable Tax
Laws.

         

        (d)    Within
sixty (60) days after the Closing Date, Purchaser shall provide to the Selling
Stockholders a proposed IRS Form 8883 (the “Asset
Allocation Statement”),
which shall include a proposed allocation of the “Aggregate Deemed Sale Price”
(as defined in the Regulation 1.338-4 of the Code) among the assets of the
Company (in accordance with the provisions of Regulation 1.338-6 of the
Code).  Thereafter, Purchaser shall provide to the Selling Stockholder
from time to time revised copies of the Asset Allocation Statement (the “Revised
Statements”) so as to report any matters on the Asset Allocation
Statement that needs updating (including Purchase Price adjustments, if any).
Purchaser and the Selling Stockholders shall allocate the Purchase Price in
accordance with the Asset Allocation Statement or, if applicable, the last
Revised Statements provided by Purchaser to the Selling Stockholders, and all
Tax Returns and reports filed by Purchaser, the Selling Stockholders and their
respective Affiliates shall be prepared consistently with such
allocation.

         

        ARTICLE
VII

         

        CONDITIONS
TO CLOSING

         

        7.1    Conditions Precedent to
Obligations of Purchaser.  The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the
fulfillment, on or prior to the Closing Date, of each of the following
conditions precedent (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable Law):

         

        (a)    the
representations and warranties of the Selling Stockholders qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects (other than the representations and
warranties contained in Section 3.2
(Authorization of Agreement), 3.4 (Ownership and
Transfer of Shares), 3.6 (Financial
Advisors), 3.7
(Investment), the first sentence of 4.1 (Organization and
Good Standing), 4.2 (Authorization of
Agreement), 4.4
(Capitalization), 4.5 (Subsidiaries),
and 4.29
(Financial Advisors), which representations and warranties shall be true and
correct), in each case, as of the date of this Agreement and as of the Closing
as though made at and as of the Closing, except to the extent such
representations and warranties expressly speak as of an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date);

         

        
          
            
            

          

          
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        (b)    the
Selling Stockholders and the Company shall have performed and complied in all
material respects with all obligations and agreements required in this Agreement
to be performed or complied with by them on or prior to the Closing
Date;

         

        (c)    there
shall not have been or occurred any event, change, occurrence or circumstance
that, individually or in the aggregate with any such events, changes,
occurrences or circumstances, has had or could reasonably be expected to have a
Material Adverse Effect since the Balance Sheet Date;

         

        (d)    no Legal
Proceedings shall have been instituted or threatened or claim or demand made
against the Selling Stockholders, the Company or Purchaser, seeking to restrain
or prohibit, or to obtain substantial damages with respect to, the consummation
of the transactions contemplated hereby, and there shall not be in effect any
Order by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby;

         

        (e)    Purchaser
shall have received a certificate signed by each Selling Stockholder and by each
of the Chief Executive Officer of the Company, each in form and substance
reasonably satisfactory to Purchaser, dated the Closing Date, to the effect that
each of the conditions specified above in Sections 7.1(a)-(d)
have been satisfied in all respects; provided that with
respect to Section
7.1(a), the Chief Executive Officer of the Company shall only be required
to certify as to the representations and warranties contained in Article
IV;

         

        (f)    the
Selling Stockholders or the Company shall have obtained (or, as applicable made)
any consent, approval, order or authorization of, or registration, declaration
or filing with, any Governmental Body required to be obtained or made by it in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby;

         

        (g)    the
Selling Stockholders and the Company shall have obtained those consents, waivers
and approvals listed on Section 7.1(g) of the
Disclosure Schedule in a form satisfactory to Purchaser and copies thereof shall
have been delivered to Purchaser;

         

        (h)    Purchaser
shall have received the written resignations and release of claims to fees or
expenses of each of the directors and officers of the Company identified by
Purchaser prior to Closing, each in form and substance reasonably satisfactory
to Purchaser;

         

        
          
            
            

          

          
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        (i)    an
employment/consulting agreement on terms satisfactory to Purchaser (including,
without limitation, provisions relating to confidentiality, proprietary rights,
non-competition and non-solicitation) shall have been entered into with key
employees of the Company, and such agreements shall be in full force and effect
and all of such persons subject to such agreements shall be willing and able to
perform in accordance therewith;

         

        (j)    Purchaser
shall have obtained financing sufficient for it to consummate the transactions
contemplated by this Agreement on terms and conditions satisfactory to Purchaser
(in its sole and absolute discretion) and Purchaser shall have been satisfied
with its examination and diligence investigation of the Company, and its
business, assets, financial condition and results of operations;

         

        (k)    the
Company shall have obtained the issuance, reissuance or transfer of all Permits
required under Law for Purchaser to conduct the operations of the Company’s
business as of the Closing Date, and the Company shall have satisfied all
property transfer requirements and permitting reliance thereon by Purchaser’s
lenders or other financing sources arising under Law;

         

        (l)    Purchaser
shall have received the items noted in Sections 2.6 and
2.7;

         

        (m)   each of
the Stockholder Representative and the Escrow Agent shall have entered into and
executed the Escrow Agreement, substantially in the form of Exhibit C hereto;
and

         

        (n)    Purchaser
shall have received written evidence, satisfactory to Purchaser in its sole
discretion, that the Selling Stockholders and their Affiliates have irrevocably
and unconditionally released the Company from any and all Liabilities to the
Selling Stockholders and their Affiliates.

         

        7.2    Conditions Precedent to
Obligations of the Selling Stockholders.  The obligations of
the Selling Stockholders to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions precedent (any or all of which may be waived by
the Selling Stockholders in whole or in part to the extent permitted by
applicable Law):

         

        (a)    the
representations and warranties of Purchaser qualified as to materially shall be
true and correct, and those not so qualified shall be true and correct in all
material respects (other than the representations and warranties contained in
Sections 5.1
(Organization and Good Standing), 5.2 (Authorization of
Agreement), 5.5
(Investment Intention) and 5.6 (Financial
Advisors), which representations and warranties shall be true and correct), in
each case, as of the date of this Agreement and as of the Closing as though made
at and as of the Closing, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties qualified as to materially shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, on and as of such earlier date);

         

        
          
            
            

          

          
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        (b)    Purchaser
shall have performed and complied in all material respects with all obligations
and agreements required by this Agreement to be performed or complied with by
Purchaser on or prior to the Closing Date;

         

        (c)    no Legal
Proceedings shall have been instituted or threatened or claim or demand made
against the Selling Stockholders, the Company or Purchaser seeking to restrain
or prohibit, or to obtain substantial damages with respect to, the consummation
of the transactions contemplated hereby, and there shall not be in effect any
Order by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby;

         

        (d)    the
Stockholder Representative shall have received a certificate signed the Chief
Executive Officer of Purchaser, in form and substance reasonably satisfactory to
the Stockholder Representative, dated the Closing Date, to the effect that each
of the conditions specified above in Sections 7.2(a)-(c)
have been satisfied in all respects;

         

        (e)    Purchaser
and the Escrow Agent shall have entered into and executed the Escrow Agreement,
substantially in the form of Exhibit C
hereto;

         

        (f)    Purchaser
shall have obtained (or, as applicable made) any consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Body required to be obtained or made by it in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby; and

         

        (g)    Purchaser
shall have delivered the Purchase Price in accordance with Section 2.3
hereof.

         

        ARTICLE
VIII

         

        INDEMNIFICATION

         

        8.1    Survival of Representations
and Warranties.  The representations and warranties of the
parties contained in this Agreement, any certificate delivered pursuant hereto
or any Selling Stockholder Document, Company Document or Purchaser Document
shall survive the Closing through and including the second (2nd) anniversary of
the Closing Date; provided, however, that the
representations and warranties (a) of the Selling Stockholders set forth in
Sections 3.2
(Authorization of Agreement), 3.4 (Ownership and
Transfer of Shares), 3.6 (Financial
Advisors), 3.7
(Investment), 4.1 (Organization and
Good Standing), 4.2 (Authorization of
Agreement), 4.4
(Capitalization), 4.5 (Subsidiaries),
and 4.29
(Financial Advisors) shall survive the Closing indefinitely, (b) of the Selling
Stockholders set forth in Sections 4.10
(Taxes), 4.15
(Employee Benefit Plans) and 4.19 (Environmental)
shall survive the Closing until 30 days following the expiration of the
applicable statute of limitations with respect to the particular matter that is
the subject matter thereof, and (c) of Purchaser set forth in Sections 5.1
(Organization and Good Standing), 5.2 (Authorization of
Agreement), 5.5
(Investment Intention) and 5.6 (Financial
Advisors) shall survive the Closing indefinitely (in each case, the “Survival
Period”); provided, further, however, that any
obligations hereunder shall not terminate with respect to any Losses as to which
the Person to be indemnified shall have given notice (stating in reasonable
detail the basis of the claim for indemnification) to the indemnifying party in
accordance with Section 8.3(a)
before the termination of the applicable Survival Period.

         

        
          
            
            

          

          
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        8.2    Indemnification.

         

        (a)    Subject
to Sections 8.1
and 8.4 hereof,
the Selling Stockholders hereby agree, jointly and severally (except with
respect to Section
8.2(a)(ii), in which case it shall be severally, but not jointly), to
indemnify and hold Purchaser, the Company, and their respective directors,
officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and assigns (collectively, the “Purchaser
Indemnified Parties”) harmless from and against, and pay to the
applicable Purchaser Indemnified Parties the amount of, any and all losses,
liabilities, claims, obligations, deficiencies, demands, judgments, damages
(including incidental and consequential damages), interest, fines, penalties,
claims, suits, actions, causes of action, assessments, awards, costs and
expenses (including costs of investigation and defense and attorneys’ and other
professionals’ fees), or any diminution in value, whether or not involving a
third party claim (individually, a “Loss”
and, collectively, “Losses”):

                      

        (i)    based
upon, attributable to or resulting from the failure of any of the
representations or warranties made by the Selling Stockholders in this Agreement
(other than such representations and warranties made under Article III) or in
any Selling Stockholder Document or Company Document to be true and correct in
all respects at and as of the date hereof and at and as of the Closing
Date;

         

        (ii)    based
upon, attributable to or resulting from the failure of any of the
representations and warranties made by each Selling Stockholder in Article III to be
true and correct in all respects as of the date hereof and at and as of the
Closing Date;

         

        (iii)   based
upon, attributable to or resulting from the breach of any covenant or other
agreement on the part of the Selling Stockholders or (prior to the Closing) the
Company under this Agreement or any Selling Stockholder Document or Company
Document; and

         

        (iv)    arising
from or related to any Company Transaction Expenses, Indebtedness (to the extent
not deducted from the Purchase Price at Closing) or other fees, commissions, or
like payments, including, without limitation those of any Person having acted or
claiming to have acted, directly or indirectly, as a broker, finder or financial
advisor for the Selling Stockholders or the Company in connection with the
transactions contemplated by this Agreement.

         

        (b)    Subject
to Sections 8.1
and 8.4,
Purchaser hereby agrees to indemnify and hold the Selling Stockholders and their
respective Affiliates, agents, attorneys, representatives, successors and
permitted assigns (collectively, the “Selling
Stockholder Indemnified Parties”) harmless from and against, and pay to
the applicable Selling Stockholder Indemnified Parties the amount of any and all
Losses:

         

        (i)    based
upon, attributable to or resulting from the failure of any of the
representations or warranties made by Purchaser in this Agreement or in any
Purchaser Document to be true and correct in all respects at the date hereof and
as of the Closing Date; and

         

        
          
            
            

          

          
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        (ii)    based
upon, attributable to or resulting from the breach of any covenant or other
agreement on the part of Purchaser under this Agreement or any Purchaser
Document.

         

        8.3    Indemnification
Procedures.

         

        (a)    A claim
for indemnification for any matter not involving a Third Party Claim may be
asserted by notice to the party from whom indemnification is sought and in
accordance with the provisions of Section 8.6 hereof
and the Escrow Agreement; provided, however, that failure
to so notify the indemnifying party shall not preclude the indemnified party
from any indemnification which it may claim in accordance with this Article VIII and the
Escrow Agreement.

         

        (b)    In the
event that any Legal Proceedings shall be instituted or that any claim or demand
shall be asserted by any third party in respect of which indemnification may be
sought under Section
8.2 hereof (a “Third
Party Claim”), the indemnified party shall promptly cause written notice
of the assertion of any Third Party Claim of which it has knowledge which is
covered by this indemnity to be forwarded to the indemnifying
party.  The failure of the indemnified party to give reasonably prompt
notice of any Third Party Claim shall not release, waive or otherwise affect the
indemnifying party’s obligations with respect thereto except to the extent that
the indemnifying party can demonstrate actual loss and prejudice as a result of
such failure.  Subject to the provisions of this Section 8.3, the
indemnifying party shall have the right, at its sole expense, to be represented
by counsel of its choice, which must be reasonably satisfactory to the
indemnified party, and to defend against, negotiate, settle or otherwise deal
with any Third Party Claim which relates to any Losses indemnified against
hereunder; provided that the
indemnifying party shall have acknowledged in writing to the indemnified party
its unqualified obligation to indemnify the indemnified party as provided
hereunder.  If the indemnifying party elects to defend against,
negotiate, settle or otherwise deal with any Third Party Claim which relates to
any Losses indemnified by it hereunder, it shall within five days of the
indemnified party’s written notice of the assertion of such Third Party Claim
(or sooner, if the nature of the Third Party Claim so requires) notify the
indemnified party of its intent to do so; provided, that the
indemnifying party must conduct the defense of the Third Party Claim actively
and diligently thereafter in order to preserve its rights in this
regard.  If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Third Party Claim which relates to
any Losses indemnified against hereunder, fails to notify the indemnified party
of its election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such Third Party
Claim.  If the indemnified party defends any Third Party Claim, then
the indemnifying party shall

         

        
          
            
            

          

          
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         reimburse
the indemnified party for the expenses of defending such Third Party Claim upon
submission of periodic bills.  If the indemnifying party shall assume
the defense of any Third Party Claim, the indemnified party may participate, at
his or its own expense, in the defense of such Third Party Claim; provided, however, that such
indemnified party shall be entitled to participate in any such defense with
separate counsel at the expense of the indemnifying party if (i) so requested by
the indemnifying party to participate or (ii) in the reasonable opinion of
counsel to the indemnified party, a conflict or potential conflict exists
between the indemnified party and the indemnifying party that would make such
separate representation advisable; and provided, further, that the
indemnifying party shall not be required to pay for more than one such counsel
for all indemnified parties in connection with any Third Party
Claim.  The parties hereto agree to provide reasonable access to the
other to such documents and information as may be reasonably requested in
connection with the defense, negotiation or settlement of any such Third Party
Claim.  Notwithstanding anything in this Section 8.3 to the
contrary, neither the indemnifying party nor the indemnified party shall,
without the written consent of the other party, settle or compromise any Third
Party Claim or permit a default or consent to entry of any judgment unless the
claimant or claimants and such party provide to such other party an unqualified
release from all liability in respect of the Third Party Claim.  If
the indemnifying party makes any payment on any Third Party Claim, the
indemnifying party shall be subrogated, to the extent of such payment, to all
rights and remedies of the indemnified party to any insurance benefits or other
claims of the indemnified party with respect to such Third Party
Claim.

         

        (c)    After any
final decision, judgment or award shall have been rendered by a Governmental
Body of competent jurisdiction and the expiration of the time in which to appeal
therefrom, or a settlement shall have been consummated, or the indemnified party
and the indemnifying party shall have arrived at a mutually binding agreement,
in each case with respect to a Third Party Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such matter
and the indemnifying party shall pay all of such remaining sums so due and owing
to the indemnified party by wire transfer of immediately available funds within
five Business Days after the date of such notice (or, as applicable, as provided
in accordance with the Escrow Agreement and Section 8.6
hereof).

         

        8.4    Limitations on
Indemnification for Breaches of Representations and
Warranties.  

         

        (a)    An
indemnifying party shall not have any liability under Section 8.2(a)(i) or
Section
8.2(b)(i) hereof unless the aggregate amount of Losses incurred by the
indemnified parties and indemnifiable thereunder based upon, attributable to or
resulting from the failure of any of the representations or warranties to be
true and correct exceeds $150,000 (the “Basket”)
and then only for the amount by which such Losses exceed the Basket amount;
provided that
the Basket limitation shall not apply to Losses related to the failure to be
true and correct of any of the representations and warranties set forth in Sections 3.2
(Authorization of Agreement), 3.4 (Ownership and
Transfer of Shares), 3.6 (Financial
Advisors), 3.7
(Investment), 4.1 (Organization and
Good Standing), 4.2 (Authorization of
Agreement), 4.4
(Capitalization), 4.5 (Subsidiaries),
4.10 (Taxes),
4.19
(Environmental Matters), 4.29 (Financial
Advisors), 5.1
(Organization and Good Standing), 5.2 (Authorization of
Agreement), 5.5
(Financial Advisors) and 5.6 (Investment
Intent) hereto.

         

        
          
            
            

          

          
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        (b)    Neither
the Selling Stockholders nor Purchaser shall be required to indemnify any Person
under Section
8.2(a)(i) or 8.2(b)(i) for an
aggregate amount of Losses exceeding an amount equal to $2,200,000 (the “Cap”)
in connection with Losses related to the failure to be true and correct of any
of the representations or warranties of the Selling Stockholders or Purchaser in
Articles III,
IV and V, respectively;
provided that,
subject to Section
8.9, there shall be no Cap with respect to Losses related to the failure
to be true and correct of any of the representations or warranties contained in
Sections 3.2
(Authorization of Agreement), 3.4 (Ownership and
Transfer of Shares), 3.6 (Financial
Advisors), 3.7
(Investment), 4.1 (Organization and
Good Standing), 4.2 (Authorization of
Agreement), 4.4
(Capitalization), 4.5 (Subsidiaries),
4.10 (Taxes),
4.19
(Environmental Matters), 4.29 (Financial
Advisors), 5.1
(Organization and Good Standing), 5.2 (Authorization of
Agreement), 5.5
(Financial Advisors) and 5.6 (Investment
Intent) of this Agreement.

         

        (c)    For
purposes of calculating Losses hereunder, any materiality or Material Adverse
Effect qualifications in the representations, warranties, covenants and
agreements shall be disregarded.

         

        (d)    The
Selling Stockholders shall have no right of contribution or other recourse
against the Company or its directors, officers, employees, Affiliates, agents,
attorneys, representatives, assigns or successors for any Third Party Claims
asserted by Purchaser Indemnified Parties, it being acknowledged and agreed that
the covenants and agreements of the Company are solely for the benefit of the
Purchaser Indemnified Parties.  Nothing in this Section 8.4(d) shall
prevent a Selling Stockholder from seeking contribution from another Selling
Stockholder.

         

        8.5    Tax
Matters.

         

        (a)    Tax
Indemnification.  The Selling Stockholders hereby agree to be
liable for and to indemnify and hold the Purchaser Indemnified Parties harmless
from and against, and pay to the Purchaser Indemnified Parties the amount of,
any and all Losses respect of (i) all Taxes of the Company (or any predecessor
thereof) (A) for any taxable period ending on or before the Closing Date, and
(B) for the portion of any Straddle Period ending at the close of business on
the Closing Date (determined as provided in Section 8.5(d)); (ii)
any and all Taxes imposed on any member of a consolidated, combined or unitary
group of which the Company (or any predecessor thereof) is or was a member on or
prior to the Closing Date, by reason of the liability of the Company (or any
predecessor thereof), pursuant to Treasury Regulation Section 1.1502-6(a) (or
any predecessor or successor thereof or any analogous or similar provision under
state, local or foreign Law); (iii) the failure of any of the representations
and warranties contained in Section 4.10 to be
true and correct in all respects or the failure to perform any covenant
contained in this Agreement with respect to Taxes; (iv) any failure by the
Selling Stockholders to timely pay any and all Taxes required to be borne by the
Selling Stockholders pursuant to Section 8.5(f); and
(v) any Taxes imposed or assessed against the Company resulting from, arising
out of or based on the Section 338(h)(10) Election (other than income Taxes for
which the Selling Stockholders are liable as a result of the deemed sale of
Company assets under Code Section 338(a)).

         

        
          
            
            

          

          
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        (b)    Filing of Tax Returns;
Payment of Taxes.

         

        (i)    The
Company shall prepare and timely file all Tax Returns required to be filed by it
on or prior to the Closing Date and shall pay or cause to be paid all Taxes
shown due thereon for which the Company is or may be liable.  All such
Tax Returns shall be prepared in a manner consistent with prior
practice.  The Company shall provide Purchaser with copies of such
completed Tax Returns at least twenty (20) days prior to the due date for filing
thereof, along with supporting workpapers, for Purchaser’s review and approval
(which shall not be unreasonably withheld).  The Selling Stockholders
and Purchaser shall attempt in good faith to resolve any disagreements regarding
such Tax Returns prior to the due date for filing.  In the event that
the Selling Stockholders and the Purchaser are unable to resolve any dispute
with respect to such Tax Return at least ten days prior to the due date for
filing, such dispute shall be resolved pursuant to Section 8.5(g), which
resolution shall be binding on the parties.

         

        (ii)    Subject
to Section
8.5(c)(iv), following the Closing, Purchaser shall cause to be timely
filed all Tax Returns required to be filed by the Company after the Closing Date
and, subject to the rights to payment from the Selling Stockholders under Section 8.5(c)(iii),
pay or cause to be paid all Taxes shown due thereon

         

        (iii)    Not later
than ten (10) days prior to the due date for the payment of Taxes on any Tax
Returns which Purchaser has the responsibility to cause to be filed pursuant to
Section
8.5(c)(ii), the Selling Stockholders shall pay to Purchaser or the
applicable Governmental Body the amount of Taxes, as reasonably determined by
Purchaser, owed by the Selling Stockholders pursuant to the provisions of Section
8.5(a).  No payment pursuant to this Section 8.5(c)(iii)
shall excuse the Selling Stockholders from its indemnification obligations
pursuant to Section
8.5(a) if the amount of Taxes as ultimately determined (on audit or
otherwise) for the periods covered by such Tax Returns exceeds the amount of the
Selling Stockholders’ payment under this Section
8.5(c)(iii).

         

        (iv)    Notwithstanding
any other provision of this Section 8.5, the Selling Stockholders shall be
responsible for the preparation and filing of the Company’s Form 1120S and
related state returns for the tax period ending on the Closing Date (the “Short Year Returns”). Not
later than thirty (30) days prior to the due date for filing of the Short Year
Returns, the Stockholder Representative shall provide Purchaser with a copy of
each Short Year Return. The Selling Stockholders shall cause such changes to be
made in each of the Short Year Returns as Purchaser may reasonably request, and
shall not file such Short Year Returns without Purchaser’s approval (which shall
not be unreasonably withheld, conditioned, or delayed).

         

        
          
            
            

          

          
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        (c)    Straddle Period Tax
Allocation.  The Company will, unless prohibited by applicable
Law, close the taxable period of the Company as of the close of business on the
Closing Date.  If applicable Law does not permit the Company to close
its taxable year on the Closing Date or in any case in which a Tax is assessed
with respect to a taxable period which includes the Closing Date (but does not
begin or end on that day) (a “Straddle
Period”), the Taxes, if any, attributable to a Straddle Period shall be
allocated (i) to the Selling Stockholders for the period up to and including the
close of business on the Closing Date and (ii) to Purchaser for the period
subsequent to the Closing Date..  Any allocation of income or
deductions required to determine any Taxes attributable to a Straddle Period
shall be made by means of a closing of the books and records of the Company as
of the close of the Closing Date, provided that
exemptions, allowances or deductions that are calculated on an annual basis
(including, but not limited to, depreciation and amortization deductions) shall
be allocated between the period ending on the Closing Date and the period after
the Closing Date in proportion to the number of days in each such
period.

         

        (d)    Tax
Audits.

         

        (i)    If notice
of any Legal Proceeding with respect to Taxes of the Company (a “Tax
Claim”) shall be received by either party for which the other party may
reasonably be expected to be liable pursuant to Section 8.5(a), the
notified party shall notify such other party in writing of such Tax Claim; provided, however, that the
failure of the notified party to give the other party notice as provided herein
shall not relieve such failing party of its obligations under this Section 8.5 except to
the extent that the other party is actually and materially prejudiced
thereby.

         

        (ii)    Purchaser
shall have the right to represent the interests of the Company in any Tax Claim,
provided that
with respect to a Tax Claim relating exclusively to taxable periods ending on or
before the Closing Date, Purchaser shall not settle such claim without the
consent of the Stockholder Representative, which consent shall not be
unreasonably withheld, conditioned or delayed.

         

        (e)    Transfer
Taxes.  The Selling Stockholders shall be liable for and shall
pay (and shall indemnify and hold harmless the Purchaser Indemnified Parties
against) all sales, use, stamp, documentary, filing, recording, transfer or
similar fees or taxes or governmental charges as levied by any Governmental Body
including any interest and penalties) in connection with the transactions
contemplated by this Agreement.

         

        (f)    Disputes.  Any
dispute as to any matter covered by this Section 8.5 hereby
shall be resolved by an independent accounting firm mutually acceptable to the
Stockholder Representative and the Purchaser.  The fees and expenses
of such accounting firm shall be borne equally by the Selling Stockholders, on
the one hand, and the Purchaser on the other.  If any dispute with
respect to a Tax Return is not resolved prior to the due date of such Tax
Return, such Tax Return shall be filed in the manner which the party responsible
for preparing such Tax Return deems correct.

         

        
          
            
            

          

          
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        (g)    Time
Limits.  Any claim for indemnity under this Section 8.5 may be
made at any time prior to thirty (30) days after the expiration of the
applicable Tax statute of limitations with respect to the relevant taxable
period (including all periods of extension, whether automatic or
permissive).

         

        (h)    Exclusivity.  The
indemnification provided for in this Section 8.5 shall be
the sole remedy for any claim in respect of Taxes, including any claim arising
out of or relating to a breach of Section
4.10.  In the event of a conflict between the provisions of
this Section
8.5, on the one hand, and the provisions of Sections 8.1 through
8.4, on the
other, the provisions of this Section 8.5 shall
control.

         

        8.6    Indemnity
Escrow.  On the Closing Date, Purchaser shall, on behalf of the
Selling Stockholders, pay to Mellon Trust of New England, N.A., as agent to
Purchaser and the Selling Stockholders (the “Escrow
Agent”), in immediately available funds, to the Indemnity Escrow Account
an amount of the Cash Price equal to $2,200,000 (the “Indemnity
Escrow Amount”), in accordance with the terms of this Agreement and the
Escrow Agreement, which will be executed at the Closing, by and among Purchaser,
the Stockholder Representative (on behalf of the Selling Stockholders) and the
Escrow Agent (the “Escrow
Agreement”).  The funds in the Indemnity Escrow Account shall
be treated as being owned by the Selling Stockholders for Tax purposes and all
parties hereto will file all Tax Returns consistent with such
treatment.  Any payment the Selling Stockholders are obligated to make
to any Purchaser Indemnified Parties pursuant to this Article VIII shall be
paid first, to the extent there are sufficient funds in the Indemnity Escrow
Account, by release of funds to the Purchaser Indemnified Parties from the
Indemnity Escrow Account by the Escrow Agent in accordance with the provisions
of the Escrow Agreement and shall accordingly reduce the Indemnity Escrow Amount
and, second, to the extent the Indemnity Escrow Amount is insufficient to pay
any remaining sums due, then the Selling Stockholders shall be required to pay
all of such additional sums due and owing to the applicable Purchaser
Indemnified Party by wire transfer of immediately available funds on the date
that such funds would have been released from the Indemnity Escrow Account if
sufficient funds were in such account.  On the Business Day
immediately following the first (1st)
anniversary of the Closing Date, the Escrow Agent shall release a portion of the
funds held in the Indemnity Escrow Account to the Stockholder Representative
(for distribution to the Selling Stockholders in accordance with their
respective aggregate percentage ownership of the Shares as set forth on Exhibit A) in
accordance with the provisions of the Escrow Agreement.  The remaining
balance of funds held in the Indemnity Escrow Account shall thereafter be
distributed and released in accordance with the provisions of the Escrow
Agreement. 

         

        8.7    Tax Treatment of Indemnity
Payments.  The Selling Stockholders and the Purchaser agree to
treat any indemnity payment made pursuant to this Article VIII as an
adjustment to the Purchase Price for all income tax purposes.

         

        8.8    Exclusive
Remedy.  Except for claims for intentional acts of fraud, from
and after the Closing, the sole and exclusive remedy available to the parties
hereto for claims arising out of the subject matter of this Agreement shall be
indemnification in accordance with this Article
VIII.  Notwithstanding the foregoing, this Section 8.8 shall not
(i) operate to interfere with or impede the operation under Section 2.4 or this
Article VIII
for the resolution of certain disputes and payment of funds in respect thereof
or (ii) limit the rights of the parties to seek non-monetary equitable remedies
(including specific performance or injunctive relief).

         

        
          
            
            

          

          
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        8.9    Selling Stockholder
Indemnification Limit. Notwithstanding any other provision of this
Agreement, in no event shall any Selling Stockholder have any obligation to
indemnify the Purchaser Indemnified Parties (or any of them) for an aggregate
amount that exceeds such Selling Stockholder’s proportionate share (as set forth
on Exhibit A)
of the Cash Price.

         

        ARTICLE
IX

         

        TERMINATION

         

        9.1    Termination of
Agreement.  This Agreement may be terminated prior to the
Closing as follows:

         

        (a)    At the
election of the Stockholder Representative or Purchaser on or after May 30, 2008
(such date, as it may be extended under this Section 9.1(a), the
“Termination
Date”), if the Closing shall not have occurred by the close of business
on such date, provided that the
terminating party is not in material default of any of its obligations
hereunder;

         

        (b)    by mutual
written consent of the Stockholder Representative and Purchaser;

         

        (c)    by
written notice from the Stockholder Representative or Purchaser to the other if
there shall be in effect a final nonappealable Order of a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; it being agreed that the
parties hereto shall promptly appeal any adverse determination which is not
nonappealable (and pursue such appeal with reasonable diligence); provided, however, that the
right to terminate this Agreement under this Section 9.1(d) shall
not be available to a party if such Order was primarily due to the failure of
such party to perform any of its obligations under this Agreement;

         

        (d)    by
written notice from Purchaser to the Stockholder Representative (i) if any
Selling Stockholder or the Company shall have breached or failed to perform any
of its representations, warranties, covenants or agreements set forth in this
Agreement, or if any representation or warranty of any Selling Stockholder or
the Company shall have become untrue, in either case such that the conditions
set forth in Sections 7.1(a)
or 7.1(b) would
not be satisfied and such breach is incapable of being cured or, if capable of
being cured, shall not have been cured within ten (10) days following receipt by
the Stockholder Representative of notice of such breach from the Purchaser or
(ii) if any Disclosure Schedule Update shall disclose any fact, change,
condition, circumstance, event, occurrence or non-occurrence (or shall amend,
supplement or otherwise modify any prior disclosure provided in the Disclosure
Schedule or any Disclosure Schedule Updates) that the Purchaser believes could
have a materially adverse effect on the Company or Purchaser; or

         

        
          
            
            

          

          
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        (e)    by
written notice from the Stockholder Representative to Purchaser if Purchaser
shall have breached or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement, or if any representation or
warranty of Purchaser shall have become untrue, in either case such that the
conditions set forth in Sections 7.2(a) or
7.2(b) would
not be satisfied and such breach is incapable of being cured or, if capable of
being cured, shall not have been cured within ten (10) days following receipt by
Purchaser of notice of such breach from the Stockholder
Representative.

         

        9.2    Procedure Upon
Termination.  In the event of termination and abandonment by
Purchaser or the Stockholder Representative, or both, pursuant to Section 9.1, written
notice thereof shall forthwith be given to the other party or parties, and this
Agreement shall terminate, and the purchase of the Shares hereunder shall be
abandoned, without further action by Purchaser, the Company or the Selling
Stockholders; provided, however, that the
obligations of the parties under Section 6.9, Section 9.3 and Article X shall
remain in full force and effect.

         

        9.3    Effect of
Termination.  In the event that this Agreement is validly
terminated as provided herein, then each of the parties shall be relieved of
their duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without liability to Purchaser, any
Selling Stockholder or the Company; provided, however, that (a) in
the event that this Agreement is terminated by Purchaser pursuant to Section
9.1(d),  then the Company and the Selling Stockholders agree,
jointly and severally, to pay to Purchaser an amount equal to all out-of-pocket
fees and expenses (including all fees and expenses of counsel, accountants and
financial advisors and filing and other fees (collectively, “Expenses”)
of Purchaser and its Affiliates) and (b) in the event this Agreement is
terminated by the Stockholder Representative pursuant to Section 9.1(e), then
Purchaser agrees to pay to the Company an amount equal to all Expenses of the
Company and its Affiliates, and, in each case of clauses (a) and (b) such
payment to be made within 5 Business Days after such applicable termination in
respect of such termination; provided, further that the
obligations of the parties set forth in this Section 9.3, Section 6.9 and Article X hereof
shall survive any such termination and shall be enforceable
hereunder.

         

        ARTICLE
X

         

        MISCELLANEOUS

         

        10.1   Expenses.  Except
as otherwise provided in this Agreement, the Selling Stockholders and Purchaser
shall each bear their own expenses incurred in connection with the negotiation
and execution of this Agreement and each other agreement, document and
instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.

         

        10.2    Stockholder
Representative.  

         

        
          
            
            

          

          
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        (a)    Each
Selling Stockholder hereby irrevocably appoints Timothy H. Cook (the “Stockholder
Representative”) as such Selling Stockholder’s representative,
attorney-in-fact and agent, with full power of substitution to act in the name,
place and stead of such Selling Stockholder with respect to the transfer of such
Selling Stockholder’s Shares to Purchaser in accordance with the terms and
provisions of this Agreement and to act on behalf of such Selling Stockholder in
any amendment of or litigation or arbitration involving this Agreement and to do
or refrain from doing all such further acts and things, and to execute all such
documents, as such Stockholder Representative shall deem necessary or
appropriate in conjunction with any of the transactions contemplated by this
Agreement, including the power:

         

        (i)    to take
all action necessary or desirable in connection with the waiver of any condition
to the obligations of the Selling Stockholders to consummate the transactions
contemplated by this Agreement;

         

        (ii)    to
negotiate, execute and deliver all ancillary agreements, statements,
certificates, statements, notices, approvals, extensions, waivers, undertakings,
amendments and other documents required or permitted to be given in connection
with the consummation of the transactions contemplated by this Agreement (it
being understood that such Selling Stockholder shall execute and deliver any
such documents which the Stockholder Representative agrees to
execute);

         

        (iii)    to
terminate this Agreement if the Selling Stockholders are entitled to do
so;

         

        (iv)    to give
and receive all notices and communications to be given or received under this
Agreement and to receive service of process in connection with the any claims
under this Agreement, including service of process in connection with
arbitration; and

         

        (v)    to take
all actions which under this Agreement may be taken by the Selling Stockholders
and to do or refrain from doing any further act or deed on behalf of the Selling
Stockholder which the Stockholder Representative deems necessary or appropriate
in his sole discretion relating to the subject matter of this Agreement as fully
and completely as such Selling Stockholder could do if personally
present.

         

        (b)    If
Timothy H. Cook becomes unable to serve as Stockholder Representative, such
other Person or Persons as may be designated by a majority of the Selling
Stockholders, shall succeed as the Stockholder Representative.

         

        
          
            
            

          

          
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        10.3    Specific
Performance.  The Selling Stockholders acknowledge and agree
that a breach of this Agreement would cause irreparable damage to Purchaser and
that Purchaser will not have an adequate remedy at law.  Therefore,
the obligations of the Selling Stockholders under this Agreement, including the
Selling Stockholders’ obligation to sell the Shares to Purchaser, shall be
enforceable by a decree of specific performance issued by any court of competent
jurisdiction, and appropriate injunctive relief may be applied for and granted
in connection therewith.  Such remedies shall, however, be cumulative
and not exclusive and shall be in addition to any other remedies which any party
may have under this Agreement or otherwise.

         

        10.4    Submission to Jurisdiction;
Consent to Service of Process; Waiver of Jury Trial.

         

        (a)    Except as
otherwise specifically provided under Sections 2.4 and
8.5, the
parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of
any federal or state court located in the State of Maine over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto may be
heard and determined in such courts.  The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute.  Each of the parties hereto agrees that a judgment in
any such dispute may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

         

        (b)    Each of
the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by delivery of a copy thereof in
accordance with the provisions of Section
10.7.

         

        (c)    THE
PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
ARISING UNDER THIS AGREEMENT. THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

         

        10.5    Entire Agreement; Amendments
and Waivers.  This Agreement (including the schedules and
exhibits hereto), the Selling Stockholder Documents and the Purchaser Documents
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is
sought.  No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to

         

        
          
            
            

          

          
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        constitute
a waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein.  The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a further or continuing waiver of such breach or as a waiver of
any other or subsequent breach.  No failure on the part of any party
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.  All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.

         

        10.6    Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to contracts made and
performed in such state.

         

        10.7    Notices.  All
notices and other communications under this Agreement shall be in writing and
shall be deemed given (i) when delivered personally by hand (with written
confirmation of receipt), (ii) when sent by facsimile (with written confirmation
of transmission) or (iii) one Business Day following the day sent by overnight
courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number as
a party may have specified by notice given to the other party pursuant to this
provision):

         

        If to any
Selling Stockholder, to:

         

        c/o
Flotation Technologies, Inc.

        20 Morin
Street

        Biddeford,
ME 04005

        Facsimile:  (207)  284-
8098

        Attention:
Timothy H. Cook, President

         

        With a
copy to:

         

        Ruberto,
Israel & Weiner, P.C.

        100 North
Washington Street

        Boston,
MA 02114

        Facsimile:  (617)
742-2355

        Attention:  Gary C.
Bubb

         

        
          
            
            

          

          
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        If to
Purchaser, to:

         

        Deep
Down, Inc.

        15473
East Freeway (I-10 East)

        Channelview,
TX 77530

        Facsimile:  281-862-2522

        Attention:  Robert
E. Chamberlain, Jr., Chairman of the Board & CAO

         

        With a
copy to:

         

        Looper
Reed & McGraw, P.C.

        1300 Post Oak Blvd., Suite
2000

        Houston,
Texas 77056

        Facsimile:  (713)
986-7100

        Attention:  Jeffrey D.
Hopkins

         

        10.8    Severability.  If
any term or other provision of this Agreement is invalid, illegal, or incapable
of being enforced by any law or public policy, all other terms or provisions of
this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal, or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

         

        10.9    Binding Effect;
Assignment.  This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns.  Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any person or entity not a party to
this Agreement except as provided below.  No assignment of this
Agreement or of any rights or obligations hereunder may be made by either the
Selling Stockholders or Purchaser (by operation of law or otherwise) without the
prior written consent of the other parties hereto and any attempted assignment
without the required consents shall be void; provided, however, that
Purchaser may assign this Agreement and any or all rights or obligations
hereunder (including Purchaser’s rights to purchase the Shares and Purchaser’s
rights to seek indemnification hereunder) to any Affiliate of Purchaser, any
Person from which it has borrowed money or any Person to which Purchaser or any
of its Affiliates proposes to sell all or substantially all of the assets
relating to the business, provided Purchaser
shall remain primarily liable under this Agreement.  Upon any such
permitted assignment, the references in this Agreement to Purchaser shall also
apply to any such assignee unless the context otherwise requires. 

         

        10.10   Non-Recourse.  No
past, present or future director, officer, employee, incorporator, member,
partner, stockholder, Affiliate, agent, attorney or representative of Purchaser
shall have any liability for any obligations or liabilities of Purchaser under
this Agreement or for any claim based on, in respect of, or by reason of, the
transactions contemplated hereby.

         

        
          
            
            

          

          
            71

            
              

            

          

          
            
            

          

           

        

        10.11   Counterparts.  This
Agreement may be executed in one or more counterparts (including by facsimile),
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.

         

         

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

         

      

      
        
          	 	
                  DEEP
      DOWN, INC.

                   

                  By:
        /s/
      Robert E. Chamberlain,
      Jr.                       
                                                           

                  Robert
      E. Chamberlain, Jr., Chairman of the Board & CAO

                  

                   

                  FLOTATION
      TECHNOLOGIES, INC.

                   

                  By:
        /s/
      Timothy H.
      Cook                                    
                                

                  Timothy
      H. Cook, President

                  

                   

                  SELLING
      STOCKHOLDERS:

                   

                       
        /s/ Timothy H.
      Cook                                      
      

                  Timothy
      H. Cook

                  

                  

                        
      /s/ Sidney D.
      Cook                                         
      

                  Sidney
      D. Cook

                   

                       
      /s/ Catherine B.
      Cook                                      
      

                  Catherine
      B. Cook 

                

        

         

        
          
            
            

          

          
            73

            
              

            

          

          
            
            

          

        

        
EXHIBIT
A

        

        Selling Stockholder
Information

        

        
          	
                  Selling Stockholder
      Name and Address

                	
                  Number of Shares
      Owned

                	
                  Percentage of Purchase
      Price

                
	
                  Timothy
      H. Cook

                  33
      Hunters Run

                  Rye,
      NH 03870

                	
                  500
      Shares of Common

                  Stock

                	
                  50%

                
	
                  Sidney
      D. Cook

                  291
      Pool Street

                  Biddeford,
      ME 04005

                	
                  300
      Shares of Common

                  Stock

                	
                  30%

                
	
                  Catherine
      B. Cook

                  #20
      Fourth Street

                  Biddeford
      Pool, ME 04006

                	
                  200
      Shares of Common

                  Stock

                	
                  20%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]