Document:

Exhibit 10.1

Exhibit 10.1

EXECUTION VERSION

Asset Acquisition Agreement

Dated August 19, 2011

For the Acquisition of

Substantially all of the

Assets of

CORPORATE SECURITY SOLUTIONS, INC.

D/B/A NEXUS TECHNOLOGIES GROUP

by

HALIFAX SECURITY, INC.

D/B/A NORTH AMERICAN VIDEO

 

 

 

ASSET ACQUISITION AGREEMENT

	 	 	 
	Parties:

	 	Homeland Security Capital Corporation 

a Delaware corporation (“Homeland”)

4601 North Fairfax Road, Suite 1200

Arlington, VA 22203

	 
	 	 
	 

	 	Nexus Technologies Group, Inc.

a Delaware corporation (“Nexus”)

7 West Cross Street

Hawthorne, NY 10532
	 
	 	 
	 

	 	Corporate Security Solutions, Inc. 

d/b/a Nexus Technologies Group

a Pennsylvania corporation (“Seller”)

7 West Cross Street

Hawthorne, NY 10532
	 
	 	 
	 

	 	Halifax Security, Inc.

d/b/a North American Video 

a Delaware corporation (“Buyer”)

301 Drum Point

Brick, NJ 08723
	 
	 	 
	Date:

	 	August 19, 2011

Background: Seller is in the business of designing, developing and installing
integrated security solutions for the corporate and government security markets, including
providing related integration technology, engineering and CAD, project management, support and
related services (the “Seller Business”). Nexus owns 100% of the issued and outstanding
capital stock of Seller and Homeland owns 83% of the issued and outstanding capital stock of Nexus
on a fully-diluted basis. The parties desire that Seller sells and Buyer buys all of the Seller
Business and substantially all of the related assets, all on the terms and subject to the
conditions set forth in this Asset Acquisition Agreement (the “Agreement”).

Intending To Be Legally Bound, in consideration of the foregoing and the mutual
agreements contained herein and subject to the satisfaction of the terms and conditions set forth
herein, the parties hereto agree as follows:

 

 

 

SECTION 1. Defined Terms

Certain defined terms used in this Agreement and not specifically defined in context are
defined in this Section 1 as follows:

“Accounts Receivable” means (a) any right to payment for goods sold, leased or licensed or for
services rendered, whether or not it has been earned by performance, whether billed or unbilled,
and whether or not it is evidenced by any Contract; (b) any note receivable; or (c) any other
receivable or right to payment of any nature.

“Ancillary Agreements” means all agreements, instruments, exhibits, schedules, certificates or
other documents contemplated by this Agreement or by any of the foregoing.

“Asset” means any real, personal, mixed, tangible or intangible property of any nature.

“Business Day” shall mean any day other than a Saturday, a Sunday or other day on which banks
in the State of Delaware are permitted or required to be closed for regular banking business.

“Cash Asset” means any cash on hand, cash in bank or other accounts, readily marketable
securities, certificates of deposits and other cash equivalents.

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

“Consent” means any consent, approval, order or authorization of, or any declaration, filing
or registration with, or any application, notice or report to, or any waiver by, or any other
action (whether similar or dissimilar to any of the foregoing) of, by or with, any Person, which is
necessary in order to take a specified action or actions in a specified manner or to achieve a
specified result.

“Contract” means any written or oral contract, agreement, instrument, order, arrangement,
commitment or understanding of any nature.

“Contract Right” means any right, power or remedy of any nature under any Contract.

“Employee Benefit Plan” means any employee benefit plan as defined in Section 3(3) of ERISA,
any “voluntary employees’ beneficiary association” within the meaning of Section 501(c)(9) of the
Code, “welfare benefit fund” within the meaning of Section 419 of the Code, or “qualified asset
account” within the meaning of Section 419A of the Code, and any other plan, program, policy or
arrangement for or regarding bonuses, commissions, incentive compensation, severance, vacation,
deferred compensation, pensions, profit sharing, retirement, payroll savings, stock options, stock
purchases, stock awards, stock ownership, phantom stock, stock appreciation rights, equity
compensation, medical/dental expense payment or reimbursement, disability income or protection,
sick pay, group insurance, self insurance, death benefits, employee welfare or fringe benefits of
any nature, including those benefiting retirees or former employees.

 

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“Encumbrance” means any lien, superlien, security interest, pledge, right of first refusal,
preemptive right, mortgage, option, hypothecation, community property interest, infringement,
easement, covenant, encroachment, restriction, reservation, limitation, commitment, conditional
sale, prior assignment, understanding or arrangement imposing restrictions on title or use or other
restrictions or other encumbrance, claim, burden, security interest or charge of any kind or nature
(including any restriction on the voting of any security, any restriction on the transfer of any
security or other asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession, exercise or transfer of
any other attribute of ownership of any Asset).

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

“Environmental Laws” means all applicable Laws relating to the public health and safety and
protection of the environment including those governing the use, generation, handling, storage and
disposal or cleanup of Hazardous Substances, all as amended, and that are applicable to the Seller
or the Seller Business.

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

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

“GAAP” means generally accepted accounting principles under current United States accounting
rules and regulations, consistently applied.

“Governmental Body” means any: (a) nation, principality, republic, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental division, subdivision,
department, agency, bureau, branch, office, commission, council, board, instrumentality, officer,
official, representative, organization, unit, body or Entity and any court or other tribunal); (d)
multi-national organization or body; or (e) individual, Entity or body exercising, or entitled to
exercise, any executive, legislative, judicial, administrative, regulatory, police, military or
taxing authority or power of any nature.

“Greystone Project” means all transactions and Contracts (including without limitation all
amendments, modifications and supplements thereto) involving Seller that relate to the Greystone
Park Psychiatric Hospital, including without limitation any and all Contracts (including without
limitation all amendments, modifications and supplements thereto) between Seller and S.M. Electric
Company, Inc.

 

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“Hazardous Substances” means any (a) substance, waste, contaminant, pollutant or material
defined, designated or regulated as hazardous or toxic pursuant to any Environmental Law and (b)
asbestos, polychlorinated biphenyls, petroleum, petroleum products and urea formaldehyde, and mold.

“Indebtedness” means all Obligations of Seller, as obligor or otherwise, (i) for money
borrowed, whether or not evidenced by bonds, debentures, notes or other similar instruments
(including any letter of credit, banker’s acceptance or related reimbursement agreement issued for
such Person’s account and any notes issued in connection with any acquisition undertaken by
Seller); (ii) relating to any lease that is required to be classified as a capital lease in
accordance with GAAP consistently applied; (iii) in respect of any installment purchase of property
or services or deferred purchase price of property or services; (iv) to guarantee or be liable for
Obligations of the types described in clauses (i)-(iii), of any other Person; (v) for any accrued
interest, prepayment premiums or penalties or other direct costs, fees or expenses charged by the
lender that are related to the prepayment of such indebtedness or otherwise owed the lender, and
(vi) any other Obligation of Seller that, in accordance with GAAP, should be classified upon the
balance sheet of Seller as indebtedness.

“including” means including but not limited to.

“Insurance Policy” means any public liability, product liability, general liability,
comprehensive, property damage, vehicle, life, hospital, medical, dental, disability, worker’s
compensation, key man, fidelity bond, theft, forgery, errors and omissions, directors’ and
officers’ liability, or other insurance policy of any nature.

“Intangible” means any or all of the following and all rights in, arising out of, or
associated therewith: (a) all names, corporate names, domain names, fictitious names, trademarks,
trademark applications, service marks, service mark applications, trade names, brand names, product
names, and slogans throughout the world; (b) all inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary information, confidential information,
know-how, product rights, technology, technical data and all documentation relating to any of the
foregoing; (c) all United States, international and foreign patents, and patent applications and
all reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (d) all copyrights, copyright registrations and applications
therefore, and all other rights corresponding thereto throughout the world; (e) all websites, and
all designs related thereto; (f) all databases and data collections and all rights therein
throughout the world; (g) all moral and economic rights of authors and inventors, however
denominated throughout the world; and (h) any similar or equivalent rights to any of the foregoing
anywhere in the world, including any logo, formula, invention, product right, technology or other
intangible asset of any nature, whether in use, under development or design, or inactive.

“Judgment” means any order, writ, injunction, citation, award, decree, ruling, assessment or
other judgment of any nature of any Governmental Body or arbitrator.

 

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“Law” means any provision of any foreign, federal, state or local law, including common law,
statute, ordinance, charter, constitution, treaty, code, rule, directive, consent, decree,
administrative order, Judgment, regulation or guideline.

“Material Adverse Effect” means any fact, event, change, development or effect that,
individually or together with any one or more other facts, events, changes, developments or
effects, is or is reasonably likely to be materially adverse to (a) the properties, assets,
liabilities, business, results of operations, backlog (for the purpose of this definition, backlog
means any valid purchase order existing on the Closing Date), condition (financial or otherwise) of
the Seller, the Seller Business or its Specified Assets, or (b) the ability of the Seller to
perform or consummate the transactions contemplated by this Agreement or any Ancillary Agreement.

“Obligation” means any debt, liability, obligation, deficiency, Tax, penalty, claim, charge,
cause of action or other loss, cost or expense of any kind, nature or character, whether secured,
unsecured, recourse, nonrecourse, liquidated, unliquidated, accrued, absolute, fixed, contingent,
ascertained, unascertained, direct, indirect, known, unknown, joint or several, due or to become
due, vested or unvested, executory, determined, determinable or otherwise.

“Organizational Documents” means, with respect to any corporation, its certificate of
incorporation and bylaws, as amended, supplemented and restated, and, with respect to any other
Entity, its comparable constitutional instruments or documents, as amended, supplemented and
restated.

“Permit” means any license, permit, franchise, exemption, approval, waiver, order,
authorization, certificate, accreditation, security clearance, right or privilege of any nature,
granted, issued, given, approved, allowed or otherwise made available by any Governmental Body.

“Permitted Encumbrance” means (A) statutory Encumbrances for Taxes, assessments and other
governmental charges which are not yet due and payable or are due but not delinquent or are being
contested in good faith by appropriate Proceedings and for which appropriate reserves have been
recorded on the Financial Statements, (B) statutory or common law Encumbrances to secure sums not
yet due to landlords, sublandlords, licensors or sublicensors under leases or rental agreements
which are not in default, (C) deposits or pledges made in connection with, or to secure payment of,
workers’ compensation, unemployment insurance, old age pension or other social security programs
mandated under applicable Laws, and (D) statutory or common law Encumbrances in favor of carriers,
warehousemen, mechanics, workmen, repairmen and materialmen to secure claims for labor, materials
or supplies and incurred in the ordinary course of business for sums not yet due.

“Person” means any individual, Entity or Governmental Body.

“Proceeding” means any demand, claim, charge, complaint, audit, suit, action, litigation,
investigation, inquiry, notice of violation, arbitration, administrative hearing or other
proceeding of any legal, judicial, administrative, arbitral or other nature.

 

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“Real Property” means any real estate, land, building, condominium, town house, structure or
other real property of any nature, all shares of stock or other ownership interests in cooperative
or condominium associations or other forms of ownership interest through which interests in real
estate may be held, and all appurtenant and ancillary rights thereto, including easements,
covenants, water rights, sewer rights and utility rights.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing or otherwise releasing into the environment.

“Reportable Transaction” shall mean any transaction listed in Treasury Regulation Section
1.6011-4(b).

“Seller Intangible” means all Software and other Intangibles owned, marketed, licensed,
supported, maintained, used or under development by Seller.

“Software” means any computer program, operating system, application, system, firmware or
software of any nature, whether operational, active, under development or design, non-operational
or inactive, including all object code, source code, comment code, algorithms, processes, formulae,
interfaces, navigational devices, menu structures or arrangements, icons, operational instructions,
scripts, commands, syntax, screen designs, reports, designs, concepts, visual expressions,
technical manuals, test scripts, user manuals and other documentation therefore, whether in
machine-readable form, programming language or any other language or symbols, and whether stored,
encoded, recorded or written on disk, tape, film, memory device, paper or other media of any nature
and all data bases necessary or appropriate to operate any such computer program, operating system,
applications system, firmware or software.

“Specified Contracts” shall mean all Material Contracts and all other Contracts used by Seller
in connection with the Seller Business and set forth on Schedule 2.1.1(C), but excluding
Contracts relating to the Greystone Project and any other Contract that is an Excluded Asset.

“Tangible Property” means any furniture, fixtures, leasehold improvements, vehicles, office
equipment, computer equipment, other equipment, machinery, tools, forms, supplies or other tangible
personal property of any nature.

“Tax” means (a) any foreign, federal, state or local income, earnings, profits, gross
receipts, franchise, capital stock, net worth, sales, use, value added, occupancy, general
property, real property, personal property, intangible property, transfer, fuel, excise, payroll,
withholding, unemployment compensation, escheat, unclaimed property, social security, retirement or
other tax of any nature; (b) any foreign, federal, state or local organization fee, qualification
fee, annual report fee, filing fee, occupation fee, assessment, sewer rent or other fee or charges
of any nature; or (c) any deficiency, interest or penalty imposed with respect to any of the
foregoing.

“Tax Return” means any return (including any information return), report, statement, schedule,
notice, form, declaration, claim for refund or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement of or compliance with any law
relating to any Tax, including any amendment thereto.

 

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“to Seller’s knowledge” and similar phrases mean the actual knowledge of Robert Biscardi,
Peter Miller, Michael T. Brigante or Robert Alleva after making reasonable inquiry with respect to
the particular fact or matter in question.

“Virtual Data Room” means the virtual data room maintained by Seller at ftp://ftp.nexusna.com.

“Warn Act” means the Worker Adjustment and Retraining Notification Act, as amended.

SECTION 2. The Transaction

2.1 Sale and Purchase of Specified Assets. On the Closing Date (as defined in Section
6.1), effective to the fullest extent possible at 12:01 a.m. EST on the Closing Date (as defined
in Section 6.1) and subject to the other terms and conditions of this Agreement: (a) Seller
hereby sells, transfers, assigns and conveys to Buyer, and Buyer hereby purchases, all right, title
and interest in and to all of the Specified Assets (as defined in
Section 2.1.1), all free and
clear of any Encumbrances, except for any Permitted Encumbrances; and (b) Seller hereby assigns to
Buyer, and Buyer hereby assumes, only the Specified Liabilities of Seller (as defined in
Section 2.1.2).

2.1.1. Specified Assets. The “Specified Assets” means all Assets of Seller, other
than (a) Seller’s Cash Assets and (b) any intercompany and intracompany receivable cash balances
between Seller and any of its affiliates or between any of its affiliates, as of the Closing Date,
wherever located and whether or not reflected on Seller’s books and records, including the
following Assets:

(A) All of Seller’s Tangible Property.

(B) All of Seller’s Accounts Receivable and other current Assets but excluding all
prepaid premiums and other prepayments and deposits with respect to Seller’s Insurance Policies,
Seller’s Group Insurance Plans (as defined in Section 2.1.1(E)), Seller’s retirement plans
and any other Contracts not purchased by Buyer.

(C) All of Seller’s Contract Rights under the Specified Contracts, but excluding
Contract Rights under (1) this Agreement and any Ancillary Agreement; (2) Contracts that constitute
or evidence Employee Benefit Plans of Seller; (3) Contracts listed on Schedule 2.1.1(C)(3);
(4) any Contract relating to the Greystone Project; and (5) any Specified Contracts requiring a
material Consent that is not obtained on or before the Closing Date, as listed on Schedule
2.1.1(C)(5), which Specified Contracts shall be subject to the provision of Section
7.3; provided, that once such material Consent is obtained, the Contract Rights under
such Contract shall be deemed, automatically and without further action by the parties, to be
included in the Specified Assets as of the Closing Date.

 

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(D) All rights under all Insurance Policies owned, held or maintained by Seller, but
excluding (1) all rights under Insurance Policies that constitute group medical, dental,
hospitalization, health, disability and related Employee Benefit Plans of Seller (“Seller’s
Group Insurance Plans”); and (2) the rights of Seller under its Insurance Policies pertaining
exclusively to actual or potential claims or losses that remain Seller’s responsibility after the
Closing Date.

(E) All transferable rights under all Permits granted or issued to Seller or otherwise held by
Seller.

(F) All Seller Intangibles, including all Software that is licensed, owned or jointly owned by
Seller or under development by Seller or Seller and any joint development partner or customer.

(G) All of Seller’s rights with respect to telephone numbers, telephone directory listings and
advertisements, and all of Seller’s goodwill.

(H) All of Seller’s rights in, to and under the vehicle leases to which Seller is a party for
the vehicles leased thereby, which vehicle leases and the vehicles leased thereby (collectively,
the “Leased Vehicles”) are set forth on Schedule 2.1.1(H).

(I) All of Seller’s customer lists, prospect lists, supplier lists, data bases, computer
media, sales and marketing materials, invoices, correspondence, files, books and records, but
excluding (1) Seller’s corporate minute books, stock books and related Organizational
Documents and Tax Returns; and (2) Seller’s files, books and records relating exclusively to
Seller’s Assets not included in the Specified Assets or to Seller’s liabilities not included in the
Specified Liabilities.

(J) All of Seller’s claims, causes of action and other legal rights and remedies, whether or
not known as of the Closing Date, relating to Seller’s ownership of the Specified Assets or the
operation of the Seller Business, but excluding causes of action and other legal rights and
remedies of Seller (1) against Buyer with respect to the transactions contemplated by this
Agreement; or (2) relating exclusively to Seller’s Assets not included in the Specified Assets or
to Seller’s liabilities not included in the Specified Liabilities.

(K) All of Seller’s rights (but not any of Seller’s Obligations) under any and all
noncompetition, nondisclosure and other restrictive covenants made for the benefit of Seller
between Seller and any current or former employee and between Seller and any other Person.

(L) All Assets that have been excluded from the definition of Specified Assets in this
Section 2.1.1 shall be referred to herein as “Excluded Assets.”

 

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2.1.2. Specified Liabilities of Seller. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall assign, and Buyer shall assume, only the Specified
Liabilities. Thereafter, Buyer shall pay and discharge all such Specified
Liabilities as and when such Specified Liabilities become due and owing. The “Specified
Liabilities” of Seller means the following specifically described liabilities of Seller as of
the Closing Date:

(A) The obligations and liabilities which shall be reflected as current liabilities on the
Pre-Closing Balance Sheet (as defined in, and to be prepared in accordance with, Section
3.2.1) of Seller incurred in connection with the Seller Business, but only to the extent that the
incurrence or existence of any such obligation or liability does not constitute a breach or failure
of, or a default under, any representation, warranty, covenant or other provision of this Agreement
(including those of Section 4.9). Notwithstanding the foregoing, the Specified Liabilities
shall not include (1) any current, long-term or deferred Obligations for any Taxes, including,
subject to Section 7.5(a), any Tax resulting from the sale of the Specified Assets to Buyer
or otherwise resulting from the transactions contemplated by this Agreement and the Ancillary
Agreements; (2) any current or long-term Indebtedness of Seller and all accrued interest with
respect thereto; (3) any Obligations for overdrafts or any other liabilities with respect to bank
accounts; (4) any Obligations or Indebtedness to Nexus, Homeland or any affiliate thereof, or any
Obligations relating to any guarantees by Seller relating to any Obligations or Indebtedness of
Nexus, Homeland or any affiliate thereof; (5) any accrued expenses with respect to Seller’s
Insurance Policies; (6) Obligations relating to the Greystone Project; and (6) Obligations related
to the Excluded Assets.

(B) The obligations and liabilities of Seller under those Specified Contracts to which Seller
is a party, provided that the incurrence or existence of any such liability or Specified Contract
does not constitute a breach or failure of, or a default under, any representation, warranty,
covenant or other provision of this Agreement (including those of
Section 4.9), but only to
the extent that such liabilities arise in the ordinary course of performing such Specified
Contracts, in accordance with their respective terms, after the Closing Date and are not due to any
breach or failure of, or default under, any such Specified Contract by Seller. Notwithstanding the
foregoing, the Specified Liabilities of Seller shall not include any Obligations of Seller under
(1) this Agreement or any Ancillary Agreement; (2) any Contracts that constitute or evidence
Employee Benefit Plans of Seller; (3) any Contracts relating to the formation or acquisition of
Seller and (4) any Contract in which the Contract Rights thereunder are not included in the
Specified Assets.

2.2 No Other Liabilities. Notwithstanding any other provisions of this Agreement, Buyer shall
not in any manner assume or be liable or responsible for any Obligations of Seller other than the
Specified Liabilities. All Obligations of Seller other than the Specified Liabilities shall remain
the sole responsibility of Seller, and Seller shall pay and discharge such Obligations in full as
the same become due. Without limiting the generality of the foregoing, and in addition to the
liabilities excluded from the Specified Liabilities under
Section 2.1.2, Buyer shall not in any
manner assume or be liable or responsible for, or acquire any Assets of Seller subject to, any of
the following Obligations of Seller, whether or not reflected on the Pre-Closing Balance Sheet or
the Closing Balance Sheet:

2.2.1. Affiliates. Any Obligation to Nexus, Homeland or any current or former shareholder,
officer, director or controlling Person of Seller, or to any other Person
affiliated with Seller, Nexus or Homeland, their affiliates and predecessors, including
Obligations for dividends declared but not paid.

 

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2.2.2. Taxes. Any Obligation for any Tax, including (a) any Tax payable by Seller with
respect to the Seller Business or any other business operations incurred on or before the Closing
Date; (b) any Tax payable by Seller with respect to the ownership, possession, purchase, lease,
sale, disposition or use of any of Seller’s Assets at any time on or before the Closing Date; and
(c) any Tax resulting from the sale of the Specified Assets to Buyer or otherwise resulting from
the transactions contemplated by this Agreement and the Ancillary Agreements, subject to Section
7.5(a).

2.2.3. Post-Closing. Any Obligation of Seller, Nexus or Homeland that relates to any
Proceeding involving Seller, Nexus or Homeland with respect to any event that occurred at any time
on or before the Closing Date.

2.2.4. Transaction Related. Any Obligation that was or is incurred in connection with the
negotiation, execution or performance of this Agreement and any Ancillary Agreement.

2.2.5. Defaults. Any Obligation, the incurrence or existence of which constitutes or will
constitute a breach or failure of, or a default under, any representation, warranty, covenant or
other provision of this Agreement or any Ancillary Agreement.

2.2.6. Employees. Any Obligation to any or all employees of Seller, including Obligations
under Seller’s Employee Benefit Plans, Obligations under Seller’s Group Insurance Plans and
Obligations for severance pay and other termination benefits, Obligations for accrued but unpaid
regular compensation and any Obligations for vacation pay, sick days or paid time off.

2.2.7. Infringement. Any Obligation arising in connection with or related to Seller’s
infringement or alleged infringement of any Software or Intangible of any Person.

2.2.8. Encumbrances. Any Encumbrance, other than Permitted Encumbrances, on or affecting the
Specified Assets.

2.2.9. Indebtedness. Any Indebtedness not explicitly included as a Specified Liability.

2.2.10. Indemnification. Any Obligations to indemnify, reimburse or advance any amounts to
any officer, director, employee, or agent of Seller, Nexus, Homeland or any affiliate thereof.

2.2.11. Environmental. Any Obligation arising under or relating to Environmental Laws prior
to the Closing Date.

 

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2.2.12. Greystone Project. Any Obligation arising under or relating to the Greystone
Project.

2.3 Seller’s Employees. Subject to the condition that the Closing hereunder occurs, Buyer has
offered or shall offer to employ, as of the Closing Date, the full time employees of Seller
identified on Exhibit 2.3. Such employment will be on an “at will” basis for salaries, wages
and other benefits determined by Buyer, in its sole discretion. Buyer does not assume, and Seller
shall be fully responsible for the payment of, any severance or other benefits related to or
payable upon the termination of any of Seller’s employees including any employees offered
employment by Buyer who fail to become employees of Buyer. Seller shall cooperate with Buyer’s
efforts to employ and retain any such employees. Seller has provided to Buyer accurate and
complete copies of the personnel records of Seller’s employees at least 3 days before the Closing
Date. Seller shall be responsible for compliance in all material respects with all applicable Laws
and any termination or severance Obligations related to the termination by Seller of Seller’s
employees, including with respect to the continuation of health insurance benefits for terminated
employees (whether under COBRA or any other applicable Law) and their family members covered under
Seller’s health insurance plan.

SECTION 3. Purchase Price and Closing Balance Sheet

3.1 Purchase Price.

3.1.1. Purchase Price. The aggregate consideration to be paid by Buyer to Seller hereunder
(in addition to the assumption of the Specified Liabilities by Buyer in accordance with
Section 2.1) is $2,750,000, as may be adjusted pursuant to this Section 3 and
otherwise in this Agreement (the “Purchase Price”). At the Closing, Buyer shall pay to
Seller via wire transfer in immediately available funds to an account identified in writing by
Seller an amount equal to $2,750,000 minus: (a) $300,000 (the “Escrow Deposit”),
payable in accordance with Section 3.1.2; and plus (b) the Estimated Working
Capital Surplus (as defined below), if any; or minus (c) the Estimated Working Capital
Deficit (as defined below), if any (such adjusted amount to be paid by Buyer at Closing, the
“Closing Payment”).

3.1.2. Escrow Deposit. At the Closing, Buyer shall pay an amount equal to the Escrow Deposit
to CSC Trust Company of Delaware (the “Escrow Agent”) via wire transfer in immediately
available funds to be held in an escrow account established in accordance with, and subject to the
terms and conditions of, the Escrow Agreement to be executed by Buyer, Seller and Escrow Agent in
the form attached hereto as Exhibit 3.1.2 (the “Escrow Agreement”). The parties
acknowledge and agree that the Escrow Deposit shall be treated as installment obligations for
purposes of Section 453 of the Code, and Seller shall not be treated as having received any
portion of the Escrow Deposit until such amounts are actually released to Seller, and no party
shall take any action or filing position inconsistent with such characterization.

 

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3.2 Working Capital Adjustment.

3.2.1. Pre-Closing Adjustment. Seller has prepared and delivered to Buyer an unaudited
balance sheet of Seller as of a date no later than three Business Days prior to the Closing Date
(the “Pre-Closing Balance Sheet”), accompanied by a statement (the “Estimated Adjusted
Working Capital Statement”) setting forth the best estimate of Seller, based on the
Pre-Closing Balance Sheet and Seller’s good faith calculations, of Seller’s Adjusted Working
Capital (as defined below) as of 12:01 EST on the Closing Date, calculated in accordance with
Section 3.2.2 below (the “Estimated Adjusted Working Capital”), which Estimated
Adjusted Working Capital Statement shall include a detailed calculation of the Estimated Adjusted
Working Capital. The Pre-Closing Balance Sheet and the Estimated Adjusted Working Capital
Statement shall be prepared in the same manner as the preparation of the Closing Balance Sheet and
the Adjusted Working Capital Statement in accordance with Section 3.2.2(a). The approval
by Buyer of the Estimated Adjusted Working Capital shall not be deemed for any purposes as an
approval of the methodologies used to determine the Estimated Adjusted Working Capital. To the
extent that the Estimated Adjusted Working Capital is less than $700,000 (such difference referred
to as the “Estimated Working Capital Deficit”), the Purchase Price shall be decreased,
dollar for dollar, by the Estimated Working Capital Deficit, as reflected in Section 3.1.
To the extent that the Estimated Adjusted Working Capital is more than $700,000 (such difference
referred to as the “Estimated Working Capital Surplus”), the Purchase Price shall be
increased, dollar for dollar, by the Estimated Working Capital Surplus, as reflected in
Section 3.1.

3.2.2. Post-Closing Adjustment.

(a) Buyer shall prepare or cause to be prepared an unaudited balance sheet of Seller as of
12:01 a.m. EST on the Closing Date (the “Closing Balance Sheet”). Buyer shall deliver to
Seller, no later than 60 days after the Closing Date, the Closing Balance Sheet, accompanied by a
statement (“Adjusted Working Capital Statement”) setting forth Seller’s adjusted working
capital as of 12:01 EST on the Closing Date as calculated by Buyer from the Closing Balance Sheet
and in accordance with this Section 3.2.2 and Schedule 3.2.2(a) (“Seller’s
Adjusted Working Capital”), which Adjusted Working Capital Statement shall include a detailed
calculation of Seller’s Adjusted Working Capital. Except as set forth in this Section
3.2.2 or on Schedule 3.2.2(a), the Closing Balance Sheet and the Adjusted Working
Capital Statement shall be prepared in accordance with GAAP and in a manner consistent with the
preparation of the Financial Statements and without giving effect to the transactions contemplated
by this Agreement. No year-end adjustments shall be made to the Closing Date Balance Sheet.

(b) Seller shall provide written notice to Buyer of any objections to the Adjusted Working
Capital Statement (which may include objections to the Closing Balance Sheet) within 30 days after
Seller receives the Adjusted Working Capital Statement and the Closing Balance Sheet. If Seller
does not provide such written notification to Buyer of any such objections by the end of that 30
day period, then the Adjusted Working Capital Statement and the Closing Balance Sheet, as prepared
by Buyer, shall be considered final on the last day of that 30 day period. If Seller does provide
such written notification to Buyer of any such objections by the end of that 30 day period, and
Buyer and Seller are unable to resolve their differences within 30 days thereafter, then the
disputed items on

 

12

 

the
Adjusted Working Capital Statement shall be submitted to a nationally recognized independent accounting firm as mutually agreed
upon by Buyer and Seller for resolution, or if Buyer and Seller are unable to agree on such
independent accounting firm, to a certified public accountant selected in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (the accounting firm or
certified public accountant making such determination being herein after referred to as the
“Arbiter”). The Arbiter shall afford each of Buyer and its representatives and Seller and
its representatives up to 15 days in the aggregate to present their positions as to the disputed
items. If either party fails to make such a presentation on a timely basis, the Arbiter shall be
required to decide without further delay or extension on the basis of the submissions made to it
and the terms of this Agreement. The Arbiter shall resolve all disputed items in a written
determination to be delivered within 15 days following the end of the submission period, provided,
however, that any delay in delivering such determination shall not invalidate the award or
otherwise deprive the Arbiter of jurisdiction. Such resolution shall be final and binding upon the
parties and shall be reflected in any necessary revisions to the Closing Balance Sheet or the
Adjusted Working Capital Statement (as applicable). The fees, costs and expenses of the Arbiter
shall be paid by Buyer and Seller in inverse proportion as they may prevail on the disputed items
resolved by the Arbiter, utilizing the values of such items as initially submitted by the parties
to the Arbiter. Such proportional allocations shall be determined by the Arbiter at the time its
determination is rendered on the disputed items.

(c) To the extent that Seller’s Adjusted Working Capital as of the Closing Date, as finally
determined in accordance with Section 3.2.2 (“Final Adjusted Working Capital”), is
less than the Estimated Adjusted Working Capital (such difference referred to as the “Working
Capital Deficit”), the Purchase Price shall be decreased, dollar for dollar, by the Working
Capital Deficit. To the extent that the Final Adjusted Working Capital is more than the Estimated
Adjusted Working Capital (such difference referred to as the “Working Capital Surplus”),
the Purchase Price shall be increased, dollar for dollar, by the Working Capital Surplus. If
applicable, Buyer shall pay to Seller via wire transfer in immediately available funds to an
account identified in writing by Seller an amount equal to the Working Capital Surplus within 5
Business Days after the Final Adjusted Working Capital has been determined. If applicable, Seller
shall pay to Buyer via wire transfer in immediately available funds to an account identified in
writing by Buyer an amount equal to the Working Capital Deficit within 5 Business Days after the
Final Adjusted Working Capital has been determined. Seller, Nexus and Homeland shall be jointly
and severally liable for any adjustment amount owed by Seller pursuant to this Section
3.2.2(c) and Seller shall not rely on using any funds from the Escrow Deposit to satisfy such
obligation (it being clarified that the foregoing shall in no way limit any of Buyer’s rights in
the event of Seller’s breach or failure to comply with its obligations pursuant to this Section
3.2.2(c)). Buyer’s and Seller’s rights to indemnification pursuant to Section 9 (and
any limitations on such rights) shall not be deemed to limit, supersede or otherwise affect Buyer’s
or Seller’s rights pursuant to this Section 3.2.

(d) Each party shall make available to the other party its (and shall use its commercially
reasonable efforts to cause its accountants’) work papers, schedules and other supporting data as
may reasonably be requested by such party to enable such party to verify the
calculations of Adjusted Working Capital as set forth in the Closing Balance Sheet and
Adjusted Working Capital Statement.

 

13

 

3.3 Currency and Method of Payment. All dollar amounts stated in this Agreement are stated in
United States’ currency, and all payments required under this Agreement shall be paid in United
States’ currency. Unless otherwise specified, all payments required under this Agreement shall be
made by wire transfer of immediately available funds to an account designated in writing by the
recipient of such payment.

3.4 Allocation. The Purchase Price shall be allocated among the Specified Assets and the
Covenants set forth in Section 8. Buyer shall prepare an allocation (“Allocation
Statement”) of the Purchase Price among the Specified Assets in accordance with Section 1060 of
the Code and the applicable Treasury Regulations thereunder (and any similar provision of state,
local or foreign Law, as appropriate). Buyer shall deliver the Allocation Statement to Seller no
later than 90 days following the Closing Date. Seller shall notify Buyer of any objections to the
Allocation Statement within 15 days after Seller receives the Allocation Statement. If Seller does
not notify Buyer of any objections to the Allocation Statement, within that 15 day period, the
Allocation Statement shall be construed as final. If Seller notifies Buyer of an objection to the
Allocation Statement by the end of the 15 day period, and Buyer and Seller are unable to resolve
their differences within 15 days thereafter (“Dispute Resolution Period”), then the
disputed items on the Allocation Statement shall be submitted to the Arbiter within five days
after the end of the Dispute Resolution Period for resolution with the costs paid 50% by Seller and
50% by Buyer, and the Arbiter shall be instructed to deliver a finalized Allocation Statement as
soon as possible. Buyer and Seller and their respective affiliates shall report, act and file all
Tax Returns (including, but not limited to, Internal Revenue Service Form 8594) in all respects and
for all purposes consistent with the Allocation Statement as well as any amendments to such Tax
Returns required with respect to any adjustment to the Purchase Price. Neither Buyer, Seller or
any of their affiliates shall take any position (whether in audits, Tax Returns or otherwise) that
is inconsistent with the information set forth on the Allocation Statement, unless required to do
so by applicable Law; provided, however, that (i) Buyer’s cost for the Specified
Assets may differ from the total amount allocated hereunder to reflect the inclusion in the total
cost of items (for example capitalized acquisition costs) not included in the total amount so
allocated, and (ii) the amount realized by Seller may differ from the total amount allocated
hereunder to reflect transaction costs that reduce the amount realized for federal income Tax
purposes.

 

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SECTION 4. Representations Of Seller, Nexus and Homeland

Seller hereby represents and warrants, and Seller, Nexus and Homeland (all jointly and
severally) with respect to the Fundamental Matters (as defined in Section 9.4(e)) only,
hereby represent and warrant, to Buyer, in each case except as set forth in Seller’s disclosure
schedule delivered to Buyer prior to the execution of this Agreement (referenced as the “Seller
Disclosure Schedule”), as follows:

4.1 Organization.

(a) Seller is a corporation duly organized, validly existing and in good standing under the
Laws of the Commonwealth of Pennsylvania and each of Nexus and Homeland is a corporation duly
organized, validly existing and in good standing under the Laws of the State of Delaware. Seller
possesses the corporate power and authority to enter into and perform its obligations under this
Agreement and the Ancillary Agreements. Seller possesses the corporate power and authority: (i) to
own and use the Specified Assets in the manner in which such Specified Assets are currently owned
and used, and (ii) to conduct the Seller Business as such business is currently being conducted.
Seller is duly qualified or registered to do business in each jurisdiction where such qualification
or registration is required by applicable Law, except where the failure to be so qualified has not
had and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Seller is in good standing in the jurisdictions where it is required by applicable
Law to be qualified or registered to do business, except where the failure to be in good standing
has not had and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

(b) Seller does not have any subsidiaries and does not (and, to Seller’s knowledge, has not
previously) own or control, directly or indirectly, any securities of any Entity or any other
interest in any Person.

(c) Schedule 4.1(c) of the Seller Disclosure Schedule sets forth, for Seller: (i) all
foreign jurisdictions in which it is qualified or registered to do business, the date it so
qualified or registered, and its registered agent and office in each such jurisdiction (if
applicable); and (ii) all fictitious, assumed or other names of any type that are registered or
used by it or under which it has done business at any time since February 7, 2006.

(d) Accurate and complete copies of each of Seller’s, Nexus’ and Homeland’s Organizational
Documents, each as amended to date, and all Contracts relating to the acquisition or formation of
Seller, have been made available to Buyer in the Virtual Data Room.

(e) As of the date of this Agreement, Nexus owns 100% of the issued and outstanding capital
stock of Seller. The issued and outstanding capital stock of Nexus and the ownership thereof is
set forth on Schedule 4.1(e) of the Seller Disclosure Schedule.

 

15

 

(f) Except as set forth on Schedule 4.1(f) of the Seller Disclosure Schedule, (i)
there are no options, warrants, or other rights to acquire any equity interest or other securities
in Seller, (ii) all issued and outstanding shares of capital stock of Seller were duly authorized,
validly issued and are fully paid and nonassessable, and, to Seller’s knowledge, were not
issued in violation of any preemptive or other contractual rights and were issued in material
compliance with and under available exemptions from the registration requirements of the applicable
federal and state securities Laws; (iii) Seller has not granted or is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or Contracts of any character calling for the
transfer, purchase, registration, subscription or issuance of any equity interest or other
securities in Seller and there are no Contracts or understandings with respect to the voting of any
issued and outstanding shares of capital stock in Seller; (iv) all issued and outstanding shares of
capital stock in Seller are owned free and clear of all Encumbrances; and (v) there are no other
Contracts in place with respect to any of the issued and outstanding shares of capital stock or
other securities in Seller.

4.2 Authority; Non-Contravention.

(a) Each of Seller, Nexus and Homeland has the absolute and unrestricted right, power and
authority to enter into, execute, deliver and perform its obligations under this Agreement and the
Ancillary Agreements, as applicable, and the execution, delivery and performance of this Agreement
and the Ancillary Agreements and the consummation of the transactions contemplated hereby and
thereby by Seller, Nexus and Homeland have been duly authorized by all necessary corporate action.
This Agreement and the Ancillary Agreements have been duly and validly executed by each of Seller,
Nexus and Homeland, as applicable, and constitute the legal, valid and binding agreement thereof,
enforceable against each in accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable principles related to
or limiting creditors’ rights generally and by general principles of equity.

(b) Except
as set forth on Schedule 4.2(b) of the Seller Disclosure Schedule, neither
the execution, delivery and performance of this Agreement or any Ancillary Agreement nor the
consummation or performance of any of the transactions contemplated hereby or thereby by Seller,
Nexus or Homeland will directly or indirectly (with or without notice or lapse of time):

(i) contravene, conflict with or result in a violation of (a) any of the
Organizational Documents of Seller, Nexus or Homeland or (b) any resolution adopted
by the board of directors (or any committee thereof) or shareholders of Seller,
Nexus or Homeland;

(ii) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated by this Agreement or the Ancillary Agreements or to exercise any remedy
or obtain any relief under, any applicable Law or any Judgment to which Seller,
Nexus or Homeland, or any of the Specified Assets owned or used by Seller in
connection with the Seller Business, is subject, except to the extent that any of
the foregoing has not had and would not reasonably be expected to have a Material
Adverse Effect;

 

16

 

(iii) contravene, conflict with or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any Permit that is held by Seller that relates
to the Seller Business or to any of the Specified Assets owned or used by Seller in
connection with the Seller Business, except to the extent that any of the foregoing
has not had and would not reasonably be expected to have a Material Adverse Effect;

(iv) contravene, conflict with or result in a violation or breach of, or result
in a default under, any provision of, or give any Person the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Specified Contract or Contract
relating to the Seller Business to which Seller is a party or by which Seller, Nexus
or Homeland is bound or to which any of the Specified Assets are subject, except to
the extent that any of the foregoing has not had and would not reasonably be
expected to have a Material Adverse Effect;

(v) result in the imposition or creation of any Encumbrance upon or with
respect to any Specified Asset, other than Permitted Encumbrances; or

(vi) require a vote of the stockholders of Homeland, whether under applicable
Law or any Organizational Documents.

(c) Except
as set forth on Schedule 4.2(c) of the Seller Disclosure Schedule, none of
Seller, Nexus or Homeland was, is or will be required to make any filing with or give any notice
to, or to obtain any Consent from, any Person in connection with the execution and delivery of this
Agreement or the Ancillary Agreements or the consummation or performance of any of the transactions
contemplated hereby or thereby.

4.3
Financial and Corporate Records. Except as set forth on
Schedule 4.3 of the Seller
Disclosure Schedule, Seller’s books and records are and have been properly prepared and maintained
in form and substance adequate for preparing audited financial statements in accordance with GAAP,
and such books and records fairly and accurately reflect in all material respects (i) all of
Seller’s Assets and Obligations and (ii) all of the Contracts and other transactions to which
Seller is or was a party or by which the Seller Business or Assets of Seller is or was affected.
Accurate and complete copies of the contents of Seller’s minute books and stock books have been
made available to Buyer in the Virtual Data Room.

4.4 Compliance with Laws; Permits.

(a) Except
as set forth on Schedule 4.4(a) of the Seller Disclosure Schedule: (i) Seller
is, and, to Seller’s knowledge, at all times since February 7, 2006 has been, in compliance with
each Judgment and with each Law that is or, to Seller’s knowledge, was applicable to it or to the
conduct of any of the Seller Business or the ownership, lease or use of any of its Specified
Assets; (ii) no event has occurred since February 7, 2006, and, to Seller’s knowledge, no condition
or circumstance exists, that might (with or without notice or lapse of time) constitute or
result in a violation by Seller of, or a failure on the part of Seller to comply with, any
Judgment or Law that is or was applicable to it or to the conduct of any of the Seller Business or
the ownership, lease or use of any of its Specified Assets; or (iii) Seller has not received, at
any time since February 7, 2006, any written, or to Seller’ knowledge verbal, notice from any
Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential
violation of, or failure to comply with, any Judgment or applicable Law, or (B) any actual,
alleged, possible or potential Obligation on the part of Seller to undertake, or to bear all or any
portion of the cost of, any cleanup or any remedial, corrective or response action of any nature.

 

17

 

(b) Except
as set forth on Schedule 4.4(b) of the Seller Disclosure Schedule, Seller has
obtained and currently holds, and, to Seller’s knowledge, at all times since February 7, 2006 has
held, all Permits required for the operation of the Seller Business, except to the extent that any
of the foregoing has not had and could not reasonably be expected to have a Material Adverse
Effect. All Permits held by Seller are set forth on
Schedule 4.4(b) of the Seller Disclosure
Schedule, and accurate and complete copies of such Permits have been made available to Buyer in the
Virtual Data Room. Seller has paid when due any material fees or charges of any nature required to
be paid by it in connection with each such Permit.

(c) This Section 4.4 does not relate to matters with respect to Taxes, which are the
subject of Section 4.19; to environmental matters, which are the subject of Section
4.13; or to employment or labor matters, which are the subject of Section 4.16 and
Section 4.17, respectively.

4.5 Financial Statements.

(a) Seller’s fiscal year ends on June 30.

(b) Seller has made available to Buyer in the Virtual Data Room the following financial
statements and related notes (the “Financial Statements”): (i) the audited consolidated
balance sheets of Seller and Nexus as of June 30, 2008, 2009 and 2010, and the audited consolidated
statements of income of Seller and Nexus for the years ended June 30, 2008, 2009 and 2010; (ii) the
unaudited consolidated balance sheet of Seller and Nexus (the “Latest Balance Sheet”) as of
June 30, 2011 (the “Latest Balance Sheet Date”); and (iii) the unaudited consolidated
statement of income of Seller and Nexus for the period ending on the Latest Balance Sheet Date.

(c) The Financial Statements present fairly in all material respects the financial position of
Seller as of the respective dates thereof and the results of operations of Seller for the periods
covered thereby. Except as set forth on Schedule 4.5(c) of the Seller Disclosure Schedule,
the Financial Statements have been prepared based on the books and records of the Seller in
accordance with GAAP; provided, however, that the Latest Balance Sheet and the
unaudited consolidated statement of income for the period ending on the Latest Balance Sheet Date
are subject to year-end adjustments (the effect of which will not, individually or in the
aggregate, be material) and do not contain all of the notes required by GAAP (which if included
would not differ materially from those included in the Latest Balance Sheet). Seller has
made adequate provisions for losses on Contracts in accordance with past practice, and the
provisions in respect thereof have been determined in accordance with GAAP.

 

18

 

(d) Seller’s earnings before interest, taxes, depreciation and amortization, determined from
the Financial Statements, as adjusted to add back the payment of management fees to Homeland, for
the fiscal year ended on June 30, 2010, is equal to or exceeds $$2,067,317.

4.6 Reserved.

4.7 Assets.

(a) Seller owns and has good, valid and marketable title to, all of its Assets and has the
right to transfer all rights, title and interest in such Assets, free and clear of any Encumbrance,
other than Permitted Encumbrances. Set forth on Schedule 4.7(a) of the Seller Disclosure
Schedule is an accurate and complete list of all Assets that are being leased or licensed to
Seller. Seller (i) is the lessee of, and holds valid leasehold interests in, all Assets leased by
it and reflected as leased on the Latest Balance Sheet, (ii) enjoys undisturbed possession of such
leased Assets and (iii) has the right to transfer all rights, title and interest to such leased
Assets, free and clear of any Encumbrance, other than any Permitted Encumbrances and except as set
forth on Schedule 4.7(a)(iii).

(b) Except for the Specified Assets, no other Assets are necessary to operate, or have been
material to the operation of, the Seller Business and no affiliate owns or has any interest in,
directly or indirectly (including through family members or other Persons), any Assets which are
necessary to operate or are material to the operation of the Seller Business.

4.8 Obligations. Seller has no Obligations or Indebtedness other than (a) those set forth on
the Latest Balance Sheet, (b) Obligations set forth on
Schedule 4.8 of the Seller Disclosure
Schedule, (c) material Obligations under Contracts of the type
set forth on Schedule 4.15(a) of
the Seller Disclosure Schedule, provided that as of the Latest Balance Sheet Date, no such
Obligation consisted of or resulted from a material default under or material violation of any such
Contract, (d) material Obligations that were incurred since the Latest Balance Sheet Date and which
were incurred in the ordinary course of business consistent with past practice and which were not
incurred in breach of any of the representations and warranties made
in Section 4.9 and (e)
Obligations incurred in connection with the execution of this Agreement and any of the Ancillary
Agreements. Except as set forth on Schedule 4.8 of the Seller Disclosure Schedule, none of
Seller’s Obligations are guaranteed by any Person.

 

19

 

4.9
Absence of Certain Changes or Events. Except as set forth on
Schedule 4.9 of the
Seller Disclosure Schedule, since July 1, 2010:

(a) except in the ordinary course of its business consistent with its past practices, Seller
has not: (i) incurred any Obligation that exceeds $25,000; (ii) made any loan or advance to any
Person that exceeds $25,000; (iii) assumed, guaranteed or otherwise become liable for any
Obligation of any Person that exceeds $25,000; (iv) committed for any capital expenditure that
exceeds $25,000; (v) purchased, leased, licensed, sold, abandoned or otherwise
acquired or disposed of any business or Assets that exceeds $25,000; (vi) waived or released
any right or canceled or forgiven any debt or claim that exceeds $25,000; (vii) discharged any
Encumbrance or discharged or paid any Indebtedness or other Obligation that exceeds $25,000; (viii)
assumed or entered into any material Contract other than this Agreement; (ix) increased, or
authorized an increase in, the compensation or benefits paid or provided to any of its directors,
officers, employees, consultants, agents or representatives; (x) accrued any deferred bonuses or
compensation due to any officers, employees, consultants, agents or representatives of Seller,
except to the extent such deferred bonuses or compensation was accrued on the Latest Balance Sheet;
or (xi) made any Tax election.

(b) even in the ordinary course of its business consistent with its past practices, Seller has
not: (i) created an Encumbrance, except for Permitted Encumbrances, on any of the Specified Assets
or otherwise permitted or gained any knowledge that any of the Specified Assets became subject to
an Encumbrance, except for Permitted Encumbrances; (ii) terminated, or amended or modified in any
material respect, any Specified Contract; (iii) repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities; (iv) sold or otherwise issued any shares of capital
stock or any other securities; (v) amended its Organizational Documents; (vi) been a party to any
merger, consolidation, recapitalization, reclassification of shares, stock split, reverse stock
split or similar transaction; or (vii) changed any of its methods of accounting or accounting
practices in any respect; and

(c) To Seller’s knowledge, no event or circumstance has occurred, and no condition exists,
that has had or could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

4.10 Accounts Receivable. Schedule 4.10 of the Seller Disclosure Schedule sets forth
an accurate and complete list of all Accounts Receivable of Seller as of three (3) days prior to
the Closing Date showing customer names, individual invoice dates, individual invoice amounts and
allowances for doubtful accounts, or, in the case of earned but not billed receivables, customer
names and individual dates on which the receivables are billable. All Accounts Receivable of
Seller set forth on Schedule 4.10 of the Seller Disclosure Schedule, arose from bona fide
transactions in the ordinary course of business consistent with past practices, are proper and
valid Accounts Receivable and represent legally enforceable claims against Persons for goods sold,
leased or licensed or to be sold, leased or licensed or for services rendered or to be rendered and
may be collected by Seller, subject to trade discounts provided in the ordinary course of business
in accordance with past practice and any allowance for doubtful accounts contained in the Latest
Balance Sheet, which allowance has been established in accordance with GAAP. There are no refunds,
discounts, unissued credits, rights of setoff or assignments affecting any such Accounts
Receivable. With respect to unbilled Accounts Receivables, such unbilled Accounts Receivable are
reflected on the books and records of Seller (in accordance with GAAP) and, to Seller’s knowledge,
there are no facts that would prohibit or restrict the billing of any such unbilled Accounts
Receivable in the ordinary course of business consistent with past practice.

 

20

 

4.11 Tangible Property; Inventory.

(a) Except
as set forth on Schedule 4.11(a) of the Seller Disclosure Schedule, all of
Seller’s Tangible Property is located at Seller’s offices or facilities, and Seller has the full
and unqualified right to require the immediate return of any of its Tangible Property which is not
located at its offices or facilities. All Tangible Property of Seller, wherever located, (i) is in
good condition, ordinary wear and tear excepted, (ii) is free of defects and damages and (iii) is
sufficient for Seller’s operations and business as presently conducted. With respect to each
Leased Vehicle set forth on Schedule 4.7(a) of the Seller Disclosure Schedule and that is
included in the Specified Assets, except as set forth on Schedule 4.11(a) of the Seller
Disclosure Schedule, all such vehicles are in good operating condition, ordinary wear and tear
excepted, and, to Seller’s knowledge, have been maintained in accordance with the respective
manufacturers care and maintenance standards.

(b) All of the inventory of Seller consists of a quality and quantity usable and salable in
the ordinary course of business consistent with past practices. Except as set forth on
Schedule 4.11(b) of the Seller Disclosure Schedule, all items included in inventory of
Seller is the property of Seller, free and clear of any Encumbrance, except for any Permitted
Encumbrances, have not been pledged as collateral, and are not held by Seller on consignment from
others and conform in all material respects to all standards applicable to such inventory or its
use or sale imposed by any Laws. All of the inventory of Seller included in the Specified Assets
has a value of up to $100,000 as determined in accordance with GAAP.

4.12 Real Property. Seller does not own, and has not owned, any Real Property. Schedule
4.12 of the Seller Disclosure Schedule sets forth an accurate and complete list of all Real
Property leased by Seller. Seller has made available to Buyer in the Virtual Data Room an accurate
and complete copy of each lease set forth on Schedule 4.12 of the Seller Disclosure
Schedule. All such Real Property leases are valid and in full force and effect and are enforceable
by Seller in accordance with their terms and Seller has not received written, or to Seller’s
knowledge verbal, notice of default from the landlord under any such lease and there is no default
by Seller under any such lease that remains uncured. All Real Property under lease to or otherwise
used by Seller is in good condition, ordinary wear and tear excepted, and is sufficient for the
current operations of Seller. The demised premises under each lease are sufficient for the current
operations of Seller. Utility services are currently available to the demised premises under each
lease for Seller’s current use thereof.

4.13 Environmental Matters.

(a) Seller is in compliance with all applicable Environmental Laws, which compliance includes
the possession by such Seller of all Permits required under applicable Environmental Laws, and
Seller is in compliance with the terms and conditions thereof. To Seller’s knowledge, Seller has
not Released any Hazardous Substances in, on, under or from any of Seller’s Real Property. Seller
has not taken any actions or failed to take any actions that could reasonably be expected to
result, or have resulted, in a violation of Environmental Laws or that could reasonably be expected
to constitute, or have constituted, a violation of Environmental Law on any of Seller’s Real
Property.

 

21

 

(b) The representations and warranties made in this Section 4.13 are the exclusive
representations and warranties of Seller relating to Environmental Laws.

4.14 Intangibles.

(a) Schedule 4.14(a) of the Seller Disclosure Schedule sets forth an accurate and complete
list and description of all Seller Intangibles. Except as set forth on Schedule 4.14(a) of the
Seller Disclosure Schedule, to Seller’s knowledge, no other Seller Intangibles (other than trade
secrets and know-how) are necessary for or used in the operation of the Seller Business.

(b) Except
as set forth on Schedule 4.14(b) of the Seller Disclosure Schedule, Seller has
all right, title and interest in and to, including good and indefeasible title and the full right
to use, all Seller Intangibles, free and clear of any Encumbrance, except for any Permitted
Encumbrances. Schedule 4.14(b) of the Seller Disclosure Schedule sets forth all third party
Software and Intangibles used in connection with, or necessary to market, license, sell, or modify
Seller Intangibles. Except as set forth on Schedule 4.14(b) of the Seller Disclosure Schedule,
no rights of any other third party are necessary to market, license, sell, offer for sale, modify,
update, use or create derivative works of Seller Intangibles.

(c) To Seller’s knowledge, none of Seller Intangibles or their respective past or current uses
has violated or infringed upon, or is violating or infringing upon, or by conducting the Seller
Business as currently conducted by Seller, will violate or infringe upon any Intangible of any
Person. No Proceeding or Judgment is pending or, to Seller’s knowledge, is threatened, nor has any
claim or demand been made, which challenges or challenged the legality, validity, enforceability,
use or exclusive ownership by Seller of any of Seller Intangibles. Seller has adequately
maintained all trade secrets and copyrights with respect to Seller Intangibles. To Seller’s
knowledge, no Person is violating or infringing upon, or has violated or infringed upon at any
time, any of Seller Intangibles.

(d) Any license, sublicense or other Contract covering or relating to any Seller Intangible is
legal, valid, binding, enforceable and in full force and effect, and upon consummation of the
transactions contemplated hereby, will continue to be legal, valid, binding, enforceable and in
full force and effect on terms identical to those in effect immediately prior to the consummation
of the transactions contemplated hereby. Seller is not in breach of or default under any license,
sublicense or other Contract covering or relating to any Seller Intangible or has performed any act
or omitted to perform any act which, with notice or lapse of time or both, will become or result in
a material violation, breach or default thereunder. No Proceeding is pending or, to Seller’s
knowledge, is being or has been threatened nor has any claim or demand been made, which challenges
the legality, validity, enforceability or ownership of any license, sublicense or other Contract
covering or relating to any Seller Intangible.

(e) Except with respect to demonstration or trial copies, to Seller’s knowledge, no portion of
any Seller Intangibles contains any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead
device,” “virus” or other software routines or hardware components designed to permit unauthorized
access to damage, interfere with, intercept, disable or erase software, hardware, or data without
the consent of the user.

 

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(f) Set
forth on Schedule 4.14(f) of the Seller Disclosure Schedule are all Internet domain
names related to the Seller Business registered by Seller or any other Person or Entity
(“Domain Names”). Schedule 4.14(f) sets forth the identities of the registrants of all
Domain Names, and all registrations of Domain Names are in good standing until such dates as set
forth on Schedule 4.14(f) of the Seller Disclosure Schedule. To Seller’s knowledge, no action
has been taken or is pending to challenge rights to, suspend, cancel or disable any Domain Name,
registration therefore or the right of Seller to use a Domain Name. Seller has all right, title
and interest in and to, and rights to use on the Internet and otherwise as a trademark and trade
name, the Domain Names.

(g) Neither Seller nor any affiliate of Seller has not exported or re-exported, directly or
indirectly (including via remote access) any part of any Seller Intangible to any country to which
a license is required under the Laws relating to the control of imports and exports of commodities
and technical data, use and remote use of Software and related property, and registration of
customer Contracts, including the Export Administration Regulations of the U.S. Department of
Commerce, the International Traffic in Arms Regulations of the U.S. Department of State, and the
Enhanced Proliferation Control Initiative in the U.S. without first obtaining all applicable
licenses.

(h) No Software that is free software, open source, public source, shareware, freeware or
similar Software (“OSS”), or any enhancement, modification, improvement or derivative
thereof, including any Software licensed pursuant to any version of any general or other public
license, including the GNU general public licenses or the limited or lesser general public license,
or any other license for OSS (“Public License”), is used in, incorporated into, integrated
with, bundled with or used in conjunction with any Seller Intangible.

4.15 Contracts.

(a) Schedule 4.15(a) of the Seller Disclosure Schedule sets forth an accurate and complete
list of each of the following Contracts in effect (in whole or in part) as of the Closing Date to
which Seller is a party or by which Seller is bound (collectively, the “Material
Contracts”): (i) any Contract or series of related Contracts under which Seller provides any
service or distributes or sells any product to any Person providing for annual payments in excess
of $25,000, individually or in the aggregate, and longer than twelve (12) months in duration; (ii)
any Contract or series of related Contracts under which Seller is provided any service (including
subcontractor services) or purchases any product from another Person providing for annual payments
in excess of $25,000, individually or in the aggregate, and longer than twelve (12) months in
duration; (iii) any Contract or series of related Contracts with any Governmental Body, including
Contracts where Seller is a subcontractor, directly or indirectly, to another Person who provides
any service or distributes or sells any product to a Governmental Body, providing for annual
payments in excess of $25,000, individually or in the aggregate, and longer than twelve (12) months
in duration; (iv) Software license and Software maintenance

 

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 Contracts under which Seller is the
licensor or provider of services; (v) Contracts for the purchase
or lease  of Real Property or
otherwise concerning Real Property (including service Contracts) owned, leased or used by Seller;
(vi) loan Contracts, mortgages, notes, guarantees and other financing Contracts; (vii) Contracts
for the purchase, lease, support or maintenance of computer equipment
and other equipment, Contracts for the purchase, license, distribution, support lease or
maintenance of Software or Intangibles under which Seller is the purchaser, licensee, lessee or
user; (viii) employment (including offer letters), independent contractor, severance, consulting,
sales representative and collective bargaining Contracts (excluding Contracts which constitute
Employee Benefit Plans set forth on Schedule 4.17 of the Seller Disclosure Schedule, and
excluding oral Contracts with employees for “at will” employment terminable without penalty); (ix)
Contracts under which any rights in or ownership of any Seller Intangible, the Seller Business or
Assets of Seller, or any shares or other ownership interests in Seller was acquired; (x) Contracts
containing clauses that prohibit or restrict Seller from soliciting any employee or customer of any
other Person; (xi) Contracts containing clauses that prohibit or restrict Seller from engaging in
any business or disclosing any information; (xii) Contracts that contain “most favored nation” or
similar clauses; (xiii) any Contract (or series of related Contracts) that contemplates or involves
the payment or delivery of cash or other consideration in an amount or having a value in excess of
$25,000, including any Contract under which any Person may seek to enforce an indemnity or warranty
against Seller; (xiv) any Contract that could reasonably be expected to have a Material Adverse
Effect; (xv) any settlement Contract, waiver or other release of any Seller rights; (xvi) any
partnership, joint venture, strategic alliance and similar Contracts; (xvii) any performance bonds,
completion bonds, bid bonds, suretyship agreements, guarantees, bank guarantees and similar
instruments and Contracts and any letters of credit and the related reimbursement Contracts issued
with respect to any of the foregoing; and (xviii) any Contract, proposal, understanding or
commitment to enter into any of the foregoing. A description of each oral Material Contract is set
forth on Schedule 4.15(a) of the Seller Disclosure Schedule, and accurate and complete copies of
each written Material Contract have been made available to Buyer in the Virtual Data Room.

(b) Except
as set forth on Schedule 4.15(b) of the Seller Disclosure Schedule, each of the
customers of Seller has signed and is bound by a written Contract. Except as set forth on
Schedule 4.15(b) of the Seller Disclosure Schedule, all customers have accepted the products or
services described in their respective Material Contract. No Material Contract requires the Seller
to be a certified Small Business Enterprise or to hold any similar designation.

(c) Each Material Contract is valid and in full force and effect, and, to Seller’s knowledge,
is enforceable by Seller in accordance with its terms. Except as set
forth on Schedule 4.15(c)
of the Seller Disclosure Schedule: (i) Seller has not and, to Seller’s knowledge, no Person has,
violated, breached, or declared or committed any default under, any Specified Contract, except to
the extent any of the foregoing has not had and could not reasonably be expected to have Material
Adverse Effect; (ii) no event has occurred, and no circumstance or condition exists, that might
(with or without notice or lapse of time) (A) result in a violation or breach of any of the
provisions of any Specified Contract, (B) give any Person the right to declare a default or
exercise any remedy under any Specified Contract, (C) give any Person the right to accelerate the
maturity or performance of any Specified Contract, (D) give Seller or any other Person, the right
to cancel, terminate or modify any Specified Contract or (E) give any Person the right to be
indemnified, defended, released or held harmless under any Specified Contract; (iii) Seller has not
received any written, or to Seller’s knowledge verbal, notice regarding any actual, alleged,
possible or potential violation or breach of, or default under, any
Specified Contract; and (iv) Seller has not waived any of its material rights under any
Specified Contract.

 

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(d) Except as set forth on Schedule 4.15(d) of the Seller Disclosure Schedule, there
are no currently outstanding proposals or offers submitted by Seller to any customer, prospect,
supplier or other Person which if accepted, would result in a legally binding Contract of Seller
involving an amount or commitment exceeding $25,000 in any single case or an aggregate amount or
commitment exceeding $50,000 in the aggregate.

4.16 Employees and Independent Contractors.

(a) Schedule 4.16(a) of the Seller Disclosure Schedule sets forth an accurate and complete
list of all of the employees of Seller (including any employee of Seller who is on a leave of
absence or on layoff status and any temporary employee) and (i) their titles or responsibilities;
(ii) their dates of hire; (iii) their current salaries or wages, bonus, commission or incentive
plans and all bonuses, commissions and incentives paid at any time during the past 12 months; (iv)
their last compensation changes and the dates on which such changes were made; (v) any specific
bonus, commission or incentive plans or Contracts for or with them; (vi) each Employee Benefit Plan
in which they participate; (vii) any Permit that is held by them and that relates to or is useful
in connection with the Seller Business; (viii) any outstanding loans or advances made to them; and
(ix) whether they are classified as “exempt” or “non-exempt” from overtime pay.

(b) Schedule 4.16(a) of the Seller Disclosure Schedule also sets forth an accurate and
complete list of all sales representatives and independent contractors engaged by Seller and (i)
their payment arrangements (if not set forth in a Specified Contract listed or described on
Schedule 4.15(a) of the Seller Disclosure Schedule); and (ii) a brief description of their jobs
or projects currently in progress; and (iii) material Contract terms, including termination
provisions (if not set forth in a Specified Contract listed or
described on Schedule 4.15(a) of
the Seller Disclosure Schedule).

(c) Except as limited by the specific and express terms of any employment Contracts set forth
on Schedule 4.15(a) of the Seller Disclosure Schedule and except for any limitations of general
application which may be imposed under applicable employment Laws, Seller has the right to
terminate the employment of each of its employees at will and to terminate the engagement of any of
its sales representatives, consultants or independent contractors without payment to such employee
or independent contractor other than for services rendered through termination and without
incurring any penalty or liability other than liability for severance pay in accordance with such
company’s disclosed severance pay policy.

(d) Seller is in compliance with all Laws relating to labor, compensation, employee benefits,
leave of absence, non-discrimination, anti-harassment, anti-retaliation, whistle-blowing, health
and safety and employment practices. Seller has made available to Buyer in the Virtual Data Room
accurate and complete copies of all employee manuals and handbooks, disclosure materials, policy
statements and other materials relating to the employment of the current and former employees of
Seller.

 

25

 

(e) Seller has never been a party to or bound by any union or collective bargaining Contract,
nor is any such Contract currently in effect or being negotiated by or on behalf of Seller. No
employee of Seller is represented by a union or labor organization or subject to a collective
bargaining agreement. There is not presently pending or existing, and to Seller’s knowledge, there
is not threatened, any organizing effort, question concerning representation or application for
certification or decertification of a collective bargaining agent.

(f) Reserved.

(g) To Seller’s knowledge: (i) no employee of Seller has received an offer to join a business
that may be competitive with Seller or the Seller Business; and (ii) no employee of Seller is a
party to or is bound by any confidentiality, noncompetition or other Contract (with any Person)
that may have an adverse effect on (A) the performance by such employee of any of his or her duties
or responsibilities as an employee of Seller, or (B) the Seller Business.

(h) Except as set forth on Schedule 4.16(h) of the Seller Disclosure Schedule,
Seller’s current and past employees, consultants and contractors have signed Contracts with Seller
containing restrictions that adequately protect the proprietary and confidential information of
Seller and prohibit each employee, consultant and contractor from soliciting customers of Seller
and provisions that vest in Seller the full ownership of items developed by such Person.

(i) Except
as set forth on Schedule 4.16(i) of the Seller Disclosure Schedule, since July 1,
2010, no employee of Seller having an annual salary of $50,000 or more has indicated an intention
to terminate or has terminated his or her employment with Seller.

(j) Schedule 4.16(j) of the Seller Disclosure Schedule sets forth a list of the names,
locations, and termination dates of all employees separated from their employment with Seller
during the 90 day period prior to Closing Date and except as set
forth on Schedule 4.16(j) of the
Seller Disclosure Schedule, during such period, Seller has not had an “employment loss” triggering
event within the meaning of the WARN Act or any similar Law. All terminations of employees were
effected in compliance with the WARN Act and other applicable Laws. Seller has maintained
compliance with any applicable provisions of the WARN Act through the Closing Date.

 

26

 

4.17 Employee Benefit Plans.

(a) Schedule 4.17(a) of the Seller Disclosure Schedule sets forth an accurate and complete
list and description of all of the (i) Employee Benefit Plans which Seller, or any ERISA Affiliate,
sponsors, maintains or contributes to, is required to contribute to, or has or could reasonably be
expected to have any Obligation to present or former employees of Seller or its ERISA Affiliates
(referred to collectively as the “Seller’s Employee Benefit Plans” and individually as a
“Seller’s Employee Benefit Plan”), (ii) employees employed by Seller affected or covered by
an Employee Benefit Plan, (iii) Obligations thereunder as of the Closing Date, and (iv) ERISA
Affiliates. Accurate and complete copies of all of Seller’s Employee Benefit Plans have been
provided to Buyer as well as the most recent determination letter issued, if any, or if none,
Internal Revenue Service (“IRS”) opinion or advisory letter issued with respect to a
Seller’s Employee Benefit Plan that is intended to be a qualified plan within the meaning of
Section 401(a) of the Code, all pending applications for rulings, determination letters, opinions,
no action letters and similar documents filed with any Governmental Body, summary plan
descriptions, service Contracts, stop loss insurance policies, and all related Contracts and
documents (including, but not limited to, all compliance reports and testing results for the past
three years, employee summaries and material employee communications), all closing letters, audit
finding letters, revenue agent findings and similar documents. None of Seller’s Employee Benefit
Plans is subject to Title IV of ERISA or Code Section 412. None of Seller’s Employee Benefit Plans
is a Multiple Employer Plan or Multiemployer Plan under Code Section 413(c) or 414(f). No
employer, other than Seller or an ERISA Affiliate, is permitted to participate or participates in
Seller’s Employee Benefit Plans and no leased employees (as defined in Section 414(n) of the Code)
or independent contractors are eligible for, or participate in, Seller’s Employee Benefit Plans.
None of Seller’s Employee Benefit Plans promises or provides health, life or other welfare benefits
to retirees or former employees, or severance benefits, except as required by Code Section 4980B,
Sections 601 through 609 of ERISA, or comparable state statutes which provide for continuing health
care coverage.

(b) Except as set forth on Schedule 4.17(a) of the Seller Disclosure Schedule, neither
Seller nor any ERISA Affiliate has (i) established, sponsored, maintained or contributed to (or has
or had the Obligation to contribute to) any Employee Benefit Plan, (ii) proposed any Employee
Benefit Plan which it plans to establish, sponsor, maintain or to which it will be required to
contribute, or (iii) proposed any changes to any of Seller’s Employee Benefit Plans now in effect.
Except as set forth on Schedule 4.17(a) of the Seller Disclosure Schedule, each of Seller’s
Employee Benefit Plans that provides a self-insured health benefit is subject to a stop-loss
insurance policy in which Seller is an insured party and no facts exist which could form the basis
for any denial of coverage under such policy.

(c) With respect to Seller’s Employee Benefit Plans, Seller and each ERISA Affiliate will have
made, on or before the Closing Date, all payments required to be made by them on or before the
Closing Date and will have accrued (in accordance with GAAP) as of the Closing Date all payments
due but not yet payable as of the Closing Date. There has not been, nor will there be, any
Accumulated Funding Deficiencies (as defined in ERISA or the Code) or waivers of such deficiencies.

(d) Seller has made available to Buyer in the Virtual Data Room an accurate and complete copy
of the most current Form 5500 and any other form or filing required to be submitted to any
Governmental Body with regard to each of Seller’s Employee Benefit Plans and the most current
actuarial report, if any, with regard to each of Seller’s Employee Benefit Plans and such forms are
attached as Schedule 4.17(d) of the Seller Disclosure Schedule.

 

27

 

(e) All of Seller’s Employee Benefit Plans are, and have been, operated in compliance with
their provisions and with all applicable Laws including ERISA and the Code and the regulations and
rulings thereunder. With respect to each of Seller’s Employee Benefit Plans that is intended to be
qualified under Section 401(a), each such plan has been determined by the IRS to be so qualified as
to form, and each trust forming a part thereof has been determined by the IRS to be exempt from tax
pursuant to Section 501(a) of the Code, and with
respect to each of Seller’s Employee Benefit Plans that is intended to be a “voluntary
employees’ beneficiary association” within the meaning of Section 501(c)(9) of the Code, each such
association has been determined by the IRS to have such status. No reason exists that would cause
such qualified or Section 501(c)(9) status to be revoked for any period. Seller, its ERISA
Affiliates, and all fiduciaries of Seller’s Employee Benefit Plans have complied with the
provisions of Seller’s Employee Benefit Plans and with all applicable Laws including ERISA and the
Code and the regulations and rulings thereunder. There have been no Reportable Events (as defined
in ERISA), no events described in Sections 4062, 4063 or 4064 of ERISA, and no termination or
partial termination (including any termination or partial termination attributable to this
transaction) of any of Seller’s Employee Benefit Plans. There would be no Obligation of Seller or
any ERISA Affiliate under Title IV of ERISA if any of Seller’s Employee Benefit Plans were
terminated as of the Closing Date. Neither Seller nor any ERISA Affiliate has incurred, nor will
incur, any withdrawal liability, nor does Seller nor any ERISA Affiliate have any contingent
withdrawal liability, under ERISA, to any Multiemployer Plan (as defined in ERISA). Neither Seller
nor any ERISA Affiliate has incurred, or will incur, any Obligation to the Pension Benefit Guaranty
Corporation (or any successor thereto). None of Seller’s Employee Benefit Plans is a “MEWA” as
defined in Section 3(40)(A) of ERISA. No non-exempt prohibited transaction under Section 406 or
407 of ERISA or Section 4975 of the Code has occurred with respect to any of Seller’s Employee
Benefit Plans. Neither Seller nor any ERISA Affiliate has incurred, nor will incur, any tax
liability or civil penalty, damages, or other liabilities arising under Section 502 of ERISA,
resulting from any of Seller’s Employee Benefit Plans, with respect to any matter arising on or
before the Closing Date.

(f) Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including any severance,
unemployment compensation or golden parachute payment) becoming due from Seller or any ERISA
Affiliate under any of Seller’s Employee Benefit Plans, (ii) increase any benefits otherwise
payable under any of Seller’s Employee Benefit Plans, or (iii) result in the acceleration of the
time of payment or vesting of any such benefits to any extent.

(g) There are no pending Proceedings that have been asserted or instituted against any of
Seller’s Employee Benefit Plans, the assets of any of the trusts under such plans, the plan
sponsor, the plan administrator or any fiduciary of any such plan (other than routine benefit
claims), and, to Seller’s knowledge, there are no facts which could form the basis for any such
action, claim or lawsuit. There are no investigations or audits by any government agency of any of
Seller’s Employee Benefit Plans, any trusts under such plans, the plan sponsor, the plan
administrator or any fiduciary of any such plan that have been instituted or threatened and, to
Seller’s knowledge, there are no facts which could form the basis for any such investigation or
audit.

 

28

 

(h) Seller and its ERISA Affiliates can terminate each of Seller’s Employee Benefit Plans
without further liability to Seller or its ERISA Affiliates. No action or omission of Seller, or
any ERISA Affiliate, or any manager, officer, or agent thereof in any way restricts, impairs or
prohibits Seller or any ERISA Affiliate, or any successor, from amending, merging, or
terminating any of Seller’s Employee Benefit Plans in accordance with the express terms of any
such plan and applicable Law.

(i) Each of Seller’s Employee Benefit Plans that is a “nonqualified deferred compensation
plan” (as defined in Code Section 409A(d)(1)) has been operated in good faith compliance with Code
Section 409A and the rules and regulations issued thereunder. No stock option or equity unit
option granted under any of Seller’s Employee Benefit Plans has an exercise price that has been or
may be less than the fair market value of the underlying stock or equity units (as the case may be)
as of the date such option was granted or has any feature for the deferral of compensation that
could render the grant subject to Section 409A of the Code.

4.18 Customers, Prospects, Suppliers and Subcontractors.

(a) Schedule 4.18(a) of the Seller Disclosure Schedule sets forth an accurate and
complete list of the top ten, by revenue, of all current customers, suppliers and subcontractors of
Seller. Since July 1, 2008, there has been no termination, cancellation, material curtailment,
non-renewal or material renegotiation of the business relationship of Seller with any customer,
supplier or subcontractor or any group of affiliated customers, suppliers or subcontractors except
in the ordinary course of business consistent with past practices or when a Contract expired by its
terms and did not have a renewal provision. Except as set forth on
Schedule 4.18 of the
Seller Disclosure Schedule, none of the current customers, suppliers or subcontractors of Seller
has given written or, to Seller’s knowledge verbal, notice to Seller that (i) it will or intends to
terminate its Contract with Seller or not renew its Contract with Seller, to the extent same is
renewable, (ii) it will otherwise terminate its relationship with Seller, or (iii) it may otherwise
materially reduce the volume of business transacted with Seller below historical levels. The
relationship of Seller with its customers, suppliers and subcontractors is currently on a good and
normal basis, and Seller has not experienced any material problems with customers, suppliers or
subcontractors since July 1, 2008.

(b) Schedule 4.18(b) of the Seller Disclosure Schedule sets forth an accurate and
complete list of (i) each current subcontractor of Seller, (ii) each project for which each such
subcontractor has been engaged by Seller, and (iii) each Specified Contract in effect between
Seller and such subcontractor. To Seller’s knowledge, each such subcontractor has obtained and
holds all material Permits required to perform its obligations pursuant to each such Specified
Contract and, to Seller’s knowledge, is in material compliance with all such Permits.

4.19 Taxes.

(a) Schedule 4.19(a) of the Seller Disclosure Schedule sets forth a true and correct list of
all Tax Returns with respect to Seller’s last five fiscal years. True and correct copies of all
federal, state, local and foreign income, sales and use Tax Returns filed by Seller with respect to
its last five fiscal years are attached to Schedule 4.19(a) of the Seller Disclosure Schedule,
and true and correct copies of all other Tax Returns listed thereon have been made available to
Buyer in the Virtual Data Room.

 

29

 

(b) Except
as set forth on Schedule 4.19(b) of the Seller Disclosure Schedule: (i) Seller
has properly and timely filed all Tax Returns required to be filed by it, all of which were
accurately prepared and completed in compliance with all Laws; (ii) Seller has paid all Taxes
required to be paid by it (whether or not shown on a Tax Return); (iii) no audit of Seller by any
governmental taxing authority has ever been conducted, is currently pending; (iv) no written notice
of any proposed Tax audit, or of any Tax deficiency or adjustment, has been received by Seller; (v)
there are no Contracts or waivers currently in effect that provide for an extension of time for the
assessment of any Tax against Seller; (vi) the Financial Statements fully accrue all actual and
contingent liabilities for Taxes with respect to all periods through the dates thereof in
accordance with GAAP; (vii) since the Latest Balance Sheet Date, Seller has not incurred any
liabilities for Taxes except in the ordinary course of business consistent with past practices; and
(viii) no Proceeding is pending or has been threatened in writing, and no claim has been asserted
against or with respect to Seller in respect of any Tax.

(c) No written claim has ever been made to Seller by a Governmental Body in a jurisdiction
where Seller does not file Tax Returns that Seller is or may be subject to taxation by that
jurisdiction. There are no Encumbrances on any of the assets of Seller that arose in connection
with any failure (or alleged failure) to pay any Tax, except for any Permitted Encumbrances.

(d) There is no Contract covering any employee or former employee of Seller that could give
rise to the payment of any amount that would not be deductible pursuant to Sections 280G or 162 of
the Code.

(e) Seller (a) has not been a member of an affiliated group (as such term is defined in
Section 1504 of the Code) filing a consolidated federal income tax return (except for the
affiliated group that Seller is currently a member of) and (b) has no liability for the Taxes of
any Person under Reg. § 1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.

(f) Except
as set forth on Schedule 4.19(f) of the Seller Disclosure Schedule,
Seller has complied in all material respects with the provisions of the Code relating to the
withholding and payment of Taxes, including the withholding and reporting requirements under Code
sections 1441 through 1464, 3401 through 3406, and 6041 through 6049, as well as similar provisions
under any other Laws, and has, within the time and in the manner prescribed by Law, withheld from
employee wages and paid over to the proper Governmental Body all amounts required. Seller has
undertaken in good faith to appropriately classify all service providers as
either employees or independent contractors for all Tax purposes. Seller (A) has collected
and remitted all applicable sales or use Taxes to the appropriate Governmental Body, or (B) has
obtained, in good faith, any applicable sales or use Tax exemption certificates.

 

30

 

(g) Seller has disclosed to the Internal Revenue Service on the appropriate Tax Returns any
Reportable Transaction in which Seller has participated. Seller has retained all documents and
other records pertaining to any Reportable Transaction in which Seller has participated, including
documents and other records listed in Treasury Regulation Section 1.6011-4(g) and any other
documents or other records which are related to any Reportable Transaction in which Seller has
participated but not listed in Treasury Regulation Section 1.6011-4(g).

4.20
Proceedings and Judgments. Except as set forth on
Schedule 4.20 of the Seller
Disclosure Schedule: (i) no Proceeding is currently pending or, to Seller’s knowledge, threatened,
nor has any Proceeding occurred or, to Seller’s knowledge, been threatened, at any time since July
1, 2008, to which Seller is or was a party; (ii) no Judgment is currently outstanding, nor has any
Judgment been outstanding at any time since July 1, 2008, against Seller, or by which Seller or any
Specified Assets or the Seller Business is or was bound; and (iii) no breach of Specified Contract,
breach of warranty, tort, negligence, infringement, product liability, discrimination, wrongful
discharge, criminal, regulatory, administrative or other claim of any nature has been asserted or,
to Seller’s knowledge, threatened by or against Seller at any time since July 1, 2008. Except as
set forth on Schedule 4.20 of the Seller Disclosure Schedule, to Seller’s knowledge, no event
has occurred, and no claim, dispute or other condition or circumstance exists, that might directly
or indirectly give rise to or serve as a basis for the commencement of any Proceeding described in
this Section 4.20 of the Seller Disclosure Schedule. As to each matter set forth on
Schedule 4.20 of the Seller Disclosure Schedule, accurate and complete copies of all pertinent
pleadings, Judgments and correspondence have been made available to Buyer in the Virtual Data Room.

4.21
Insurance. Schedule 4.21 of the Seller Disclosure Schedule sets forth an accurate
and complete list and description of all Insurance Policies (excluding Insurance Policies that
constitute Seller Employee Benefit Plans set forth on
Schedule 4.16(a) of the Seller Disclosure
Schedule) currently owned or maintained by Seller and all liability and errors and omissions
Insurance Policies owned or maintained by Seller at any time since January 1, 2006 and attached
thereto is a accurate and complete copy of the loss runs for all such Insurance Policies dated as
of the Closing Date. Except as set forth on Schedule 4.21 of the Seller Disclosure Schedule,
all such Insurance Policies are or were on an “occurrence” rather than a “claims made” basis.
Seller has made available to Buyer in the Virtual Data Room accurate and complete copies of all
Insurance Policies described or required to be described on
Schedule 4.21 of the Seller
Disclosure Schedule. Each such Insurance Policy is in full force and effect; Seller has not
received notice of cancellation or non-renewal with respect to any such Insurance Policy; and there
is no basis for the insurer thereunder to terminate or not renew any such Insurance Policy. Except
as set forth on Schedule 4.21 of the Seller Disclosure Schedule, there are no claims that are
pending under any of the Insurance Policies set forth on
Schedule 4.21 of the Seller
Disclosure Schedule.

 

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4.22 Questionable Payments. None of Seller or any of the current or, to Seller’s knowledge
former, executives, directors, officers, representatives, agents or employees thereof (when acting
in such capacity or otherwise on behalf of Seller): (a) has used or is using any corporate funds
for any illegal contributions, gifts, entertainment or other unlawful or inappropriate
expenditures; (b) has used or is using any corporate funds for any direct or indirect unlawful
payments to any foreign or domestic government officials or employees; (c) has violated or is
violating any provision of the Foreign Corrupt Practices Act of 1977, as amended; (d) has
established or maintained, or is maintaining, any unlawful or unrecorded fund of corporate monies
or other properties; (e) has made at any time, any false or fictitious entries on the books and
records of Seller; (f) has made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment of any nature using corporate funds or otherwise on behalf of Seller; or (g) has
made any material favor or gift that is not deductible for federal income tax purposes using
corporate funds or otherwise on behalf of Seller.

4.23 Related Party Transactions; Shared Services. Except for Contracts set forth on
Schedule 4.16(a) of the Seller Disclosure Schedule, there are no Contracts, including real estate
leases, personal property leases, loans, guarantees, transactions, understandings or other
arrangements of any nature between or among Seller and Nexus and Homeland or any current or former
director, officer or controlling Person of Seller, or to Seller’s knowledge, Nexus and Homeland or
any other Person affiliated therewith. Set forth on Schedule 4.23 of the Seller Disclosure
Schedule is a summary of any and all services (e.g. administration, data processing, accounting,
tax, treasury, insurance, banking, personnel, payroll, legal and communications) (i) provided by
Nexus or Homeland or any other affiliate of Seller to Seller, or (ii) provided by Seller to Nexus
or Homeland or any other affiliate of Seller.

4.24 Brokerage Fees. Except for the arrangement with Curtis Securities, LLC, no Person acting
on behalf of Seller is or shall be entitled to any brokerage or finder’s fee in connection with the
transactions contemplated by this Agreement and any such fee payable to Curtis Securities, LLC
shall be paid by or on behalf of Seller.

4.25 Product Liability; Product Warranty.

(a) Except as set forth on Schedule 4.25(a) of the Seller Disclosure Schedule, there
has not been since July 1, 2008 and, to Seller’s knowledge, there are currently no existing
circumstances or conditions with respect to any products marketed or sold or services rendered by
the Seller that could reasonably be expected to result in Product Liability Claims against Seller.
As used herein, a “Product Liability Claim” means a claim for personal injury or property
damage alleged to have been caused by the defective or improper design, manufacture, repair,
materials or workmanship of any product sold, rented or repaired or other services rendered by or
on behalf of Seller.

(b) Each product sold, leased or delivered and each service rendered by Seller has been in
material conformity with all applicable contractual commitments and all express and implied
warranties, and, to Seller’s knowledge, Seller does not have any Obligation for replacement or
repair thereof in excess of any reserve therefor on the Latest Balance Sheet, which reserve has
been established in accordance with GAAP. No product sold, leased or
delivered and no service rendered by Seller is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale or lease set forth on
Schedule 4.25(b) of the Seller Disclosure Schedule.

 

32

 

4.26 Full Disclosure. No representation or warranty made by Seller, Nexus or Homeland in this
Agreement or any Ancillary Agreement (a) contains any untrue statement of any material fact; or (b)
omits to state a material fact that is necessary in order to make the statements made, in light of
the circumstances under which such statements are made, not misleading.

4.27 Exclusivity of Representations and Warranties. The representations and warranties by
Seller, Nexus and Homeland, as applicable, in this Agreement and in the Ancillary Agreements
constitute the sole and exclusive representations and warranties of Seller, Nexus and Homeland, as
applicable, to Buyer in connection with the transactions contemplated hereby and thereby, and Buyer
hereby acknowledges and agrees that Seller, Nexus and Homeland, as applicable, are not making any
representation or warranty whatsoever, express or implied, beyond those expressly given in this
Agreement and in the Ancillary Agreements.

SECTION 5. Representations Of Buyer

Buyer hereby represents and warrants to Seller as follows:

5.1 Organization. Buyer is a corporation that is duly organized, validly existing and in good
standing under the Law of its jurisdiction of incorporation. Buyer possesses the corporate power
and authority to own its Assets, conduct its business as and where such business is presently
conducted, and enter into and perform its obligations under this Agreement and the Ancillary
Agreements.

5.2 Authority; Non-Contravention. Buyer’s execution, delivery and performance of this
Agreement and the Ancillary Agreements and its consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate actions, do not and will not (with
or without notice or lapse of time) constitute a violation of, conflict with or breach of (a) any
provisions of Buyer’s Organizational Documents; (b) any applicable Law or Judgment; or (c) any
provision of a Contract to which Buyer is a party or by which Buyer is bound and do not require the
consent of any Person or Governmental Body. Each of the Agreement and the Ancillary Agreements
constitute, or upon execution and delivery, will constitute, the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable
principles related to or limiting creditors’ rights generally and by general principles of equity.

5.3 Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately
available funds to enable it to make payment of the Purchase Price and consummate the transactions
contemplated by this Agreement and the Ancillary Agreements.

5.4 Legal Proceedings. There are no Proceedings pending or, to Buyer’s knowledge, threatened
against or by Buyer or any of its affiliates that challenge or seek to prevent, enjoin or otherwise
delay the transactions contemplated by this Agreement and the Ancillary Agreements. To the Buyer’s
knowledge, no event has occurred or circumstances exist that may give rise or serve as a basis for
any such Proceedings.

 

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5.5 Brokerage Fees. No Person acting on behalf of Buyer is or shall be entitled to any
brokerage or finder’s fee in connection with the transactions contemplated by this Agreement.

5.6 Exclusivity of Representations and Warranties. The representations and warranties by
Buyer in this Agreement and in the Ancillary Agreements constitute the sole and exclusive
representations and warranties of Buyer to Seller in connection with the transactions contemplated
hereby and thereby, and Seller hereby acknowledges and agrees that Buyer is not making any
representation or warranty whatsoever, express or implied, beyond those expressly given in this
Agreement and in the Ancillary Agreements.

SECTION 6. Closing

6.1 Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) shall be held on the date of this Agreement (the “Closing Date”), at a
location that is mutually acceptable to the parties or via .pdf, facsimile or a combination of the
foregoing. The Closing shall be considered to have been effective on the Closing Date.

6.2 Seller’s, Nexus’ and Homeland’s Obligations at the Closing. At the Closing, Seller, Nexus
and Homeland (as applicable) shall deliver or cause to be delivered the following to Buyer:

6.2.1. Specified Assets. Possession and control of the Seller Business, all of the Specified
Assets, including all of Seller’s Real Property and Tangible Property including all applicable
keys, access cards and other entry devices.

6.2.2. Documents of Transfer. Such bills of sale, assignments, deeds, endorsements,
affidavits, and other instruments and documents of sale, transfer, assignment and conveyance as
Buyer may reasonably require, in order to lawfully and effectively sell, transfer, assign and
convey to Buyer all right, title and interest in and to all of the Specified Assets, in each case
in form reasonably acceptable to Buyer, dated as of the Closing Date, and duly executed and, if
necessary, acknowledged by Seller, including:

(a) General Assignment and Bill of Sale. A General Assignment and Bill of Sale covering all of
the applicable Specified Assets, substantially in the form attached hereto as Exhibit
6.2.2(a);

(b) Assignment and Assumption Agreement. An Assignment and Assumption Agreement, covering all
of the Specified Liabilities, substantially in the form attached hereto as Exhibit
6.2.2(b);

(c) Assignments of Leases. Assignments of all Real Property leases and Tangible Property
leases;

 

34

 

(d) Assignment of Intellectual Property Rights. Any executed intellectual property assignments
(including assignment of trademarks and trademark applications); and

(e) Leased Vehicles. Vehicle assignments sufficient to transfer the Leased Vehicles.

6.2.3. Name Change. Proper amendments to Seller’s and Nexus’ fictitious name registrations,
withdrawing Seller and Nexus and adding Buyer as the registrant and a proper amendment to Seller’s
Organizational Documents and Nexus’ Organizational Documents changing Seller’s and Nexus’
corporate name (as applicable) to a name that is not similar to Seller’s and Nexus’ current
corporate name or any product or other name used by Seller and included in the Specified Assets,
all dated as of the Closing Date and duly executed by the applicable officers of Seller and Nexus
(as applicable), in forms acceptable for immediate filing with the appropriate office.

6.2.4. Incumbency Certificates. Certificates of Secretary of Seller, Nexus and Homeland as
to the incumbency and signatures of the officers of Seller, Nexus and Homeland executing this
Agreement.

6.2.5. Resolutions. Copies of the corporate resolutions duly adopted by Seller, Nexus and
Homeland authorizing Seller, Nexus and Homeland to enter into and perform this Agreement and the
Ancillary Agreements, certified by proper officers as in full force and effect on and as of the
Closing Date.

6.2.6. Good Standing. Good standing certificates for Seller, Nexus and Homeland, dated no
earlier than 5 days before the Closing Date, from their respective jurisdiction of incorporation,
and from each other jurisdiction in which Seller, Nexus or Homeland is qualified or registered to
do business as a foreign company.

6.2.7. Consents. Copies of all executed or filed Consents (as applicable) listed on
Schedule 6.2.7.

6.2.8. Evidence of Debt Payoff and Release of Liens. Proper documentary evidence of the
termination and payoff of all Obligations for borrowed money and release of Encumbrances, in form
and substance acceptable to Buyer, along with written authorization to file the UCC’s termination
forms, with such forms prepared and ready and acceptable for immediate filing with the appropriate
state or local Governmental Body.

6.2.9. FIRPTA Certificate. A certificate from Seller certifying that Seller is not a
“foreign person” as such term is defined in Section 1445 of the Code.

6.2.10. Greystone Subcontract Agreement. The Greystone Subcontract Agreement, substantially
in the form attached hereto as Exhibit 6.2.10 (the “Greystone Subcontract
Agreement”).

 

35

 

6.2.11. Other Documents. All other agreements, certificates, instruments and documents
reasonably requested by Buyer in order to fully consummate the transactions contemplated by this
Agreement and the Ancillary Agreements and carry out the purposes and intent of this Agreement and
the Ancillary Agreements.

6.3 Obligations of Buyer at Closing. At the Closing, Buyer shall deliver the following to
Seller (except as otherwise indicated):

6.3.1. Closing Payment. A wire transfer to Seller in the amount of the Closing Payment, in
accordance with Seller’s written instructions as to payment.

6.3.2. Incumbency Certificate. A certificate of Secretary of Buyer as to the incumbency and
signatures of the officers of Buyer executing this Agreement.

6.3.3. Resolutions. Copies of the resolutions duly adopted by the board of directors of
Buyer, authorizing Buyer to enter into and perform this Agreement, certified by proper officers as
in full force and effect on and as of the Closing Date.

6.3.4. Good Standing. A good standing certificate for Buyer from its jurisdiction of
incorporation, dated no earlier than 5 days before the Closing Date.

6.3.5. Greystone Subcontract Agreement. The Greystone Subcontract Agreement, duly executed by
Buyer.

6.3.6. Other Documents. All other agreements, certificates, instruments and documents
reasonably requested by Seller in order to fully consummate the transactions contemplated by this
Agreement and carry out the purposes and intent of this Agreement.

SECTION 7. Certain Obligations After Closing

7.1 Transition and Cooperation. From and after the Closing Date, (a) Seller, Nexus and
Homeland shall reasonably cooperate with Buyer, at Buyer’s expense, to transfer to Buyer the
control and enjoyment of the Seller Business and the Specified Assets; (b) none of Seller, Nexus or
Homeland shall take any action, directly or indirectly, alone or together with others, which
obstructs or impairs Buyer’s ability to assume the Seller Business and the Specified Assets; (c)
Seller, Nexus and Homeland shall promptly deliver to Buyer all correspondence, papers, documents
and other items and materials received by any of them or found to be in their possession which
pertain to the Seller Business or the Specified Assets (other than Seller’s Organizational
Documents or anything related to the Excluded Assets); and (d) Buyer shall reasonably cooperate
with Seller in the provision of any information necessary in order for Seller to file all Tax
Returns and reports required to be filed with respect to the Assets, business and operations of
Seller and to wind down Seller’s operations.

 

36

 

7.2 Use of Names. Beginning immediately after the Closing Date, Seller, Nexus and Homeland
shall cease all use of all corporate names, fictitious names, product names and other names used by
Seller, Nexus and Homeland at any time on or before the Closing Date and included in the Specified
Assets or related to the Seller Business, except as may be necessary to perform their obligations
hereunder. Upon Buyer’s request, Seller, Nexus and Homeland shall promptly sign all Consents and
other documents that may be necessary to allow Buyer to use or appropriate the use of any such name
used by Seller, Nexus and Homeland at any time on or before the Closing Date.

7.3 Contract Matters. After the Closing, each Contract (“Transferred Contract”) as to
which (a) the Contract Rights of Seller are included in the Specified Assets, and (b) Consent to
the assignment thereof from Seller to Buyer may be required under such Transferred Contract or
applicable Law but was not obtained on or before the Closing Date, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would constitute a breach
thereof or be unlawful, and Seller, at its expense, shall use its reasonable best efforts to obtain
any such required Consent(s) as promptly as possible and shall fully cooperate with Buyer in
Buyer’s efforts to obtain Consent to the assignment of such Transferred Contract. Seller shall
make available to Buyer all Contract Rights and other benefits of such Transferred Contract, on a
subcontract or sublease basis or in some other appropriate manner to the fullest extent possible,
and Buyer shall be considered an independent subcontractor or sublessee of Seller, or an agent of
Seller, with respect to all matters concerning such Transferred Contract. Without Buyer’s prior
written consent, Seller shall not agree to any amendment, modification, extension, renewal,
termination or other change in the terms of such Transferred Contract, nor shall Seller exercise or
waive any Contract Right under such Transferred Contract. Buyer shall be entitled to receive and/or
retain all payments due from the other party or parties under the Transferred Contracts. If and
when Consent to assignment of such Transferred Contract is obtained, such Transferred Contract
shall no longer be subject to the provisions of this Section 7.3.

7.4 Retirement and Group Insurance Plans. As soon as is practical after the Closing Date,
Seller shall, and Nexus and Homeland shall cause Seller to, take all actions as are necessary or
appropriate to fully vest, as of the Closing Date, the interests under Seller’s
Employee Benefit Plans of all of Seller’s employees who are hired by Buyer. Seller shall be
solely responsible for all discontinuance, termination and similar charges that may be due to any
investment option or management providers or to any plan record keeping or other agents with
respect to Seller’s Employee Benefit Plans. For as long as is necessary after the Closing Date,
Seller shall maintain Seller’s Group Insurance Plans and its Employee Welfare Benefit Plans, as
defined in ERISA (collectively referred to as “Group Plans”) in effect, with proper
funding, for the purpose of covering all employee claims (“Continuing Claims”) (a) that
were incurred but not paid before the Closing Date; (b) for hospitalizations that began before the
Closing Date and continued after the Closing Date; and (c) by employees of Seller that were not
employed by Buyer. Seller shall be responsible for any Obligations under Section 4980(B) of the
Code and Sections 601-609 of ERISA with respect to Group Plans (collectively, “COBRA
Obligations”). Seller may terminate its health plans after expiration of all Continuing Claims
and COBRA Obligations. Buyer shall have no responsibility for the Continuing Claims or COBRA
Obligations.

 

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7.5 Taxes.

(a) All transfer, registration, stamp, value added, documentary, recordation, sales, use and
similar fees or Taxes (including all applicable real estate transfer taxes and transfer taxes),
including any penalties, interest and additions to such fees and taxes incurred in connection with
this Agreement shall be borne equally by Seller and Buyer. Seller and Buyer shall cooperate in the
timely making of all Tax Returns as may be required in connection therewith and shall share the
expenses of preparing and filing such returns equally.

(b) Seller shall be responsible for and will perform all Tax withholding, payment and
reporting duties with respect to any wages and other compensation paid by Seller to any employee
for services performed prior to the Closing Date. Buyer shall be responsible for and will perform
all Tax withholding, payment and reporting duties with respect to any wages and other compensation
paid to any employee who accepts a position with Buyer or any of its affiliates after the Closing
Date. Pursuant to Rev. Proc. 2004-53, 2004-34 I.R. B. 320, provided that Seller provides Buyer
with all necessary payroll records for the calendar year which includes the Closing Date, Buyer
shall have the right to elect to furnish a Form W-2 (the “Form W-2”) to each employee
employed by Buyer who had been employed by Seller, disclosing all wages and other compensation paid
for such calendar year, and taxes withheld therefrom, in which case Buyer and not Seller shall file
the Form W-2. Buyer shall notify Seller no later than January 31, 2012 as to whether Buyer has
elected to exercise its rights under this Section 7.5(b). If Buyer determines not to elect to
exercise such rights, Seller shall remain responsible for filing the Form W-2.

(c) In connection with the preparation of Tax Returns, audit examinations and any
administrative or judicial proceedings relating to Taxes, and as necessary or desirable in order to
minimize any withholding Taxes imposed on the transactions contemplated by this Agreement, Seller,
on the one hand, and Buyer, on the other hand, shall cooperate fully with each other, including the
furnishing or making available of records, personnel, powers of attorney or other materials
necessary or helpful for the preparation of such
Tax Returns, the conduct of audit examinations or the defense of claims by Governmental Bodies
as to the imposition of Taxes in accordance with the provisions of
Section 7.1.

(d) Seller shall retain all documents and other records for the appropriate period of time as
set forth in Treasury Regulation Section 1.6011-4(g) which relate to any Reportable Transaction in
which Seller has participated.

(e) It may not be practicable to comply or attempt to comply with the procedures of the “Bulk
Sales Law” or similar Law of any or all of the states in which the Specified Assets are situated or
of any other state which may be asserted to be applicable to the transactions contemplated hereby.
Accordingly, to induce Buyer to waive any requirements for compliance with any or all of such Laws,
Seller, Nexus and Homeland hereby agree that the indemnity provisions
of Section 9.1 hereof
shall apply to any Losses of Buyer and its affiliates arising out of or resulting from the failure
of Seller or Buyer to comply with any such Laws.

 

38

 

7.6 Retention of and Access to Books and Records. Seller, Nexus and Homeland (on the one
hand) and Buyer (on the other hand) shall each preserve and keep the records held by them relating
to the Seller Business or the Specified Assets as required by applicable Law and shall make such
records and personnel available to the other as may be reasonably requested by such party in
connection with any federal securities disclosure, Tax audits, the preparation of Tax Returns and
financial statements, any insurance claims by or Proceedings against or governmental investigations
of Seller, Nexus or Homeland or Buyer or any of their affiliates or in order to enable Seller,
Nexus or Homeland or Buyer to comply with their respective obligations under this Agreement and any
Ancillary Agreement. The requesting party or its representatives shall be permitted to make copies
of such records, in each case at no cost to the requesting party or its representatives (other than
for reasonable out-of-pocket expenses); provided, that nothing herein shall require either party to
make such records available to the other (or to require a party to make any employees or auditors
available to the other) to the extent that the resulting disclosure would (a) jeopardize any
attorney-client or other legal privilege, and (b) contravene any applicable Law or Judgment.

7.7 Further Assurances. At any time and from time to time after the Closing Date, at Buyer’s
request and expense, and without further consideration, each party shall promptly execute and
deliver all such further agreements, certificates, instruments and documents, and perform such
further actions, as such other party may reasonably request in order to fully consummate the
transactions contemplated hereby and carry out the purposes and intent of this Agreement. Without
limiting the generality of the foregoing, Seller shall timely file all Tax Returns and reports
required to be filed with respect to the Assets, business and operations of Seller for all periods
ending on or before the Closing Date and Buyer shall reasonably cooperate with providing any
information to Seller that Seller requires in order to file such Tax Returns.

7.8 Cash Assets. From and after the Closing, all new Cash Assets received by Seller, Nexus or
Homeland with respect to the Seller Business, including, deposits in transit, payments for Accounts
Receivable or under any Specified Contracts or Transferred Contracts, and all other Cash Assets
received by Seller, Nexus or Homeland which are allocable to the conduct of the
Seller Business and which are not an Excluded Asset or solely related to an Excluded Asset,
shall be held in trust for Buyer and shall be promptly paid to Buyer.

SECTION 8. Restrictive Covenants of Seller, Nexus and Homeland 

8.1 Certain Acknowledgements. Each of Seller, Nexus and Homeland expressly acknowledges that:

(a) “Restricted Business” means engaging in non-proprietary integrated security
solutions, including access control, alarm, video, CCTV, communication, perimeter protection and
bomb and metal detection security systems. For the avoidance of doubt, Restricted Business does not
include the development, commercialization, manufacturing, marketing or installation of biometric
products for the homeland security marketplace or identity management solutions.

 

39

 

(b) the Restricted Business is highly competitive, is marketed throughout the United States
and in many other locations worldwide;

(c) Buyer and its affiliates expend substantial time and money, on an ongoing basis, to train
its employees, maintain and expand its customer base, and improve and develop its products,
services and technology;

(d) the
covenants of this Section 8 (the “Covenants”) are a material part of the
agreement among the parties hereto and are an integral part of the obligations of each of Seller,
Nexus and Homeland; the Covenants are supported by good and adequate consideration; and the
Covenants are reasonable and necessary to protect the legitimate business interests of Buyer.

8.2 Nondisclosure Covenants. After the Closing Date, except with Buyer’s prior written
consent or as required by applicable Law, none of Seller, Nexus or Homeland shall, directly or
indirectly, in any capacity communicate, publish or otherwise disclose to any Person, or use for
the benefit of any Person, any confidential or proprietary property, knowledge or information of
Buyer (including the Specified Assets) or concerning the Seller Business acquired hereunder, Assets
or financial condition, no matter when or how such knowledge or information was acquired, including
(i) the identity of customers and prospects, their specific requirements, and the names, addresses
and telephone numbers of individual contacts at customers and prospects; (ii) prices, renewal dates
and other detailed terms of customer and supplier contracts and proposals; (iii) pricing policies,
marketing and sales strategies, methods of delivering products and services, and product and
service development projects and strategies; (iv) trade secrets, inventions, mask works, ideas,
processes, formulas, source and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques; (v) source code, object code,
formats, user manuals, technical manuals and other documentation for Software products; (vi) screen
designs, report designs and other designs, concepts and visual expressions for Software products;
(vii) designs, concepts, know-how, user manuals, technical manuals and other documentation for
affiliate networks, communications networks and related technologies; (viii) employment and payroll
records; (ix) forecasts, budgets, acquisition models and other nonpublic financial information; (x)
information
regarding the skills and compensation of other employees of Buyer or its affiliates; and (xi)
expansion plans, management policies, methods of operation, information about possible acquisitions
or divestitures and other business and acquisition strategies and policies (subject to Section
8.4, collectively, the “Confidential Information”).

8.3 Noncompetition Covenants. Except with Buyer’s prior written consent, none of Seller,
Nexus or Homeland shall, directly or indirectly, in any capacity, at any location worldwide:

(a) during the period beginning on the Closing Date and ending on the three year anniversary
of the Closing Date, communicate with or solicit any Person who is or during such period becomes a
customer, supplier, employee, salesman, agent or representative of, or a consultant, independent
contractor or subcontractor to, Buyer or its affiliates, in any manner that interferes with such
Person’s relationship with the Restricted Business;

 

40

 

(b) during the period beginning on the Closing Date and ending on the three year anniversary
of the Closing Date, market or sell any products, services, Software or technology that is similar
to (visually or functionally) or competitive with any proprietary products, services, Software or
technology of the Restricted Business;

(c) during the period beginning on the Closing Date and ending on the three year anniversary
of the Closing Date, establish, own, manage, operate, finance or control, or participate in the
establishment, ownership, management, operation, financing or control of, or be a director,
officer, manager, employee, salesman, agent or representative of, or be a consultant to, any Person
that conducts a business competitive with the Restricted Business; provided, that, notwithstanding
the foregoing, C. Thomas McMillen and Michael T. Brigante may serve as a director of any Person
that conducts a business competitive with the Restricted Business; or

(d) at any time after the Closing Date, disparage the Seller Business, Buyer or any of Buyer’s
affiliates, shareholders, directors, officers or employees.

8.4 Certain Exclusions. For purposes of this Section 8, confidential and proprietary
knowledge and information of Buyer shall not include any knowledge and information that is now
known by or readily available to the general public, or that becomes known by or readily available
to the general public other than as a result of any breach of this
Section 8. The ownership by
Seller, Nexus or Homeland of not more than 5% of the outstanding securities of any public company
shall not, by itself, constitute a breach of the Covenants contained
in Section 8.3 by
Seller, Nexus or Homeland.

8.5 Enforcement of Covenants. Each of Seller, Nexus and Homeland expressly acknowledge that
it may be difficult to measure the damages that might result from any breach of any of the
Covenants, and that any breach of any of the Covenants may result in irreparable injury to Buyer
and its affiliates for which money damages could not adequately compensate. If a breach of the
Covenants occurs, Buyer shall be entitled, in addition to all other rights and remedies that Buyer
may have at law or in equity, to seek an injunction to be issued by any competent court enjoining
and restraining Seller, Nexus and Homeland and all other Persons
involved therein from continuing such breach. The existence of any claim or cause of action
that Seller, Nexus and Homeland or any such other Person may have against Buyer shall not
constitute a defense or bar to the enforcement of any of the Covenants. If Buyer must resort to
litigation to enforce any of the Covenants that has a fixed term, then such term shall be extended
for a period of time equal to the period during which a breach of such Covenant was occurring,
beginning on the date of a final court order (without further right of appeal) holding that such a
breach occurred or, if later, the last day of the original fixed term of such Covenant.

8.6 Scope of Covenants. If any Covenant, or any part thereof, or the application thereof, is
construed to be invalid, illegal or unenforceable, then the other Covenants, or the other portions
of such Covenant, or the application thereof, shall not be affected thereby and shall be
enforceable without regard thereto. If any of the Covenants is determined to be unenforceable
because of its scope, duration, geographical area or other factor, then the court making such
determination shall have the power to reduce or limit such scope, duration, area or other factor,
and such Covenant shall then be enforceable in its reduced or limited form.

 

41

 

SECTION 9. Indemnification

9.1 Seller’s, Nexus’ and Homeland’s Indemnification. From and after the Closing Date, and
subject to the terms and limitations set forth in this Section 9, Seller shall, and Seller,
Nexus and Homeland (all jointly and severally) pursuant to Section 9.1(a) with respect to
Fundamental Matters (as defined in Section 9.4(e) and pursuant to Section 9.1(i)
only shall, indemnify and hold harmless Buyer, its affiliates, and their respective successors and
assigns, and their respective directors, officers, employees, agents and representatives (the
“Buyer Indemnitees”), from and against any and all Proceedings, debts, liabilities, losses,
diminution in value, damages, costs and expenses and other Obligations, including costs of defense
and investigation, reasonable attorney’s fees, consultants, accountants and expert witness fees and
court costs and related disbursements, including the cost of enforcing this indemnification
(collectively, “Claims”), arising out of, in connection with or caused by, directly or
indirectly, any of the following:

(a) Misrepresentation. Any breach of any warranty or representation made by Seller, Nexus or
Homeland in this Agreement or any Ancillary Agreement; provided, that Seller, Nexus and
Homeland shall, jointly and severally, indemnify the Buyer Indmenitees pursuant to this Section
9.1(a) for breaches of the Fundamental Matters only and Seller, solely and not jointly and
severally with Nexus or Homeland, shall indemnify the Buyer Indemnitees for breaches of any other
warranty or representation in accordance with this Section 9.1(a).

(b) Nonperformance. Any breach by Seller, Nexus or Homeland, as applicable, of any covenant
contained in this Agreement or any Ancillary Agreement. For the avoidance of doubt,
indemnification for any breach under this Section 9.1(b) is several and not joint and
several. 

(c) Due Diligence Matters. Any matters disclosed, described or relating to Seller not having
Permits for the installation of security systems that required any Permits, as disclosed in more
detail on Schedule 4.4(b) of the Seller Disclosure Schedule.

(d) Proceedings. Any Proceeding against Seller, Nexus or Homeland, as applicable, by any
Person arising out of or caused by, directly or indirectly, any act or omission of Seller, or any
of its members, stockholders, managers, officers, employees, agents or representatives, occurring
at any time on or before the Closing Date. For the avoidance of doubt, indemnification for any
breach under this Section 9.1(d) is several and not joint and several.

(e) Non-Assumed Obligations. Any Obligation of Seller other than those expressly included in
the Specified Liabilities including (i) any of the types of Obligations specifically excluded from
the Specified Liabilities under Section 2.2; (ii) any such Obligation that may be imposed
upon Buyer as a result of the failure by Seller to comply with any bulk sales, bulk transfer,
fraudulent conveyance or similar Law of any jurisdiction that may be applicable to some or all of
the transactions contemplated by this Agreement; and (iii) any such Obligation that may be imposed
upon Buyer or its affiliates as a result of any Law under which Buyer or its affiliates may have
successor liability for any Tax or other Obligations of Seller other than the Specified Liabilities
or Seller’s Employee Benefit Plans.

 

42

 

(f) Proceedings by Employees and Related Matters. Any Proceeding against Buyer by or on
behalf of any employee of Seller (i) who is not hired or employed by Buyer or (ii) with respect to
an employee who is hired or employed by Buyer, whose Claim in such Proceeding relates to a Claim
that arose prior to the Closing Date.

(g) Other Proceedings. Any Proceeding against Buyer by or on behalf of any Person who, after
the Closing hereunder, purchases or receives any equity interest of or other securities in Seller,
Nexus or Homeland, as applicable, which Proceeding relates to Seller, the Seller Business, or
Seller’s Assets. For the avoidance of doubt, indemnification for any breach under this Section
9.1(g) is several and not joint and several.

(h) Collection of Accounts Receivable. The failure of Buyer to collect within 180 days of
Closing the full amount of the Accounts Receivable, net of corresponding reserves, as reflected on
the Closing Balance Sheet; provided, that except with respect to any matter for which Buyer would
be entitled to be indemnified (without taking into account any limitations or thresholds), Buyer
shall not be entitled to indemnification pursuant to this Section 9.1(h) where such failure
of Buyer to collect a particular Accounts Receivable is a direct result of Buyer’s post-Closing
breach of its obligations under the Specified Contract to which such Accounts Receivable relates.

(i) Greystone Indemnity. Any services performed under, products sold under or any other
Claims relating, in whole or in part, to the Greystone Project, including without limitation the
legal action in the Superior Court of New Jersey, Union County, captioned S.M. Electric
Company, Inc. v. Torcon, Inc. et al., Docket No. UNN-L-0272-10 as referenced on Schedule
4.20 of the Seller Disclosure Schedule. For the avoidance of doubt, indemnification for any
breach under this Section 9.1(i) is joint and several.

(j) Alleva Indemnity. The complaint filed by the State of New York, Division of Licensing
Services, against Robert Alleva (File No. 2011-0514), with respect to
alleged violations of Article 6-D of the General Business Law and Regulations, as disclosed in
more detail on Schedule 4.4(a) of the Seller Disclosure Schedule.

9.2 Buyer’s Indemnification. From and after the Closing Date, Buyer shall indemnify and hold
harmless Seller and its successors and assigns, and their respective directors, officers,
employees, agents and representatives, from and against any and all Claims, arising out of, in
connection with or caused by, directly or indirectly, any of the following:

(a) Misrepresentation. Any breach of any warranty or representation made by Buyer in this
Agreement or any Ancillary Agreement.

(b) Nonperformance. Any breach by Buyer of any covenant contained in this Agreement or any
Ancillary Agreement.

(c) Specified Liabilities. Except with respect to any matter for which Buyer would be
entitled to be indemnified with respect to or arising out of any such Specified Liability (without
taking into account any limitations or thresholds), the Specified Liabilities.

 

43

 

9.3 Indemnification Procedures. With respect to each event, occurrence or matter (an
“Indemnification Matter”) as to which any party, as the case may be (the
“Indemnitee”), is seeking indemnification from Seller, Nexus or Homeland or from Buyer, as
the case may be (the “Indemnitor”), under this
Section 9:

(a) Within 10 days after the Indemnitee receives written documents underlying the
Indemnification Matter or, if the Indemnification Matter does not involve a third party Proceeding,
promptly after the Indemnitee first has actual knowledge of the Indemnification Matter, the
Indemnitee shall give a reasonably detailed written notice to the Indemnitor of the nature of the
Indemnification Matter and the amount demanded or claimed in connection therewith
(“Indemnification Notice”), together with copies of any such written documents; provided,
however, that no delay on the part of Indemnitee in providing the Indemnification Notice to
Indemnitor shall relieve Indemnitor from any obligation hereunder, except to the extent Indemnitor
is materially prejudiced thereby.

(b) If a third party Proceeding is involved, then, upon receipt of the Indemnification Notice,
the Indemnitor shall, at its expense and through counsel of its choice, promptly assume and have
sole control over the litigation, defense or settlement (the “Defense”) of the
Indemnification Matter, except that (i) the Indemnitee may, at its option and expense and through
counsel of its choice, participate in (but not control) the Defense; (ii) if the Indemnitor is
Seller, Nexus or Homeland and the Indemnitee reasonably believes that the handling of the Defense
by the Indemnitor may have a material adverse effect on the Indemnitee, its business or financial
condition, or its relationship with any customer, supplier, employee, salesman, consultant, agent
or representative, then the Indemnitee may, at its option and expense and through counsel of its
choice, assume control of the Defense, provided that the Indemnitor shall be entitled to
participate in the Defense at its expense and through counsel of its choice; (iii) the Indemnitor
shall not consent to any Judgment, or agree to any settlement, without the Indemnitee’s prior
written consent; and (iv) if the Indemnitor does not promptly assume control
over the Defense or, after doing so, does not continue to prosecute the Defense in good faith,
the Indemnitee may, at its option and through counsel of its choice, but at the Indemnitor’s
expense, assume control over the Defense. In any event, the Indemnitor and the Indemnitee shall
fully cooperate with each other in connection with the Defense including by furnishing all
available documentary or other evidence as is reasonably requested by the other.

(c) To the extent that any Claims that are subject to indemnification pursuant to Section
9.2 are covered by insurance policies with premiums paid by or on behalf of Seller prior to the
Closing Date, Buyer shall use commercially reasonable efforts to obtain the maximum recovery under
such insurance policies; provided that Buyer shall nevertheless be entitled to bring a
claim for indemnification under this Section 9 in respect of such Claims and the time
limitations set forth herein for bringing a claim for indemnification under this Agreement shall be
tolled during the pendency of such insurance claim. The existence of a claim by Buyer for monies
from an insurer or against a third party in respect of any Claims shall not, however, delay any
payment pursuant to the indemnification provisions contained herein and otherwise determined to be
due and owing by Seller, Nexus or Homeland. If Buyer has received the payment required by this
Agreement from Seller, Nexus or Homeland in respect of any Claims and later receives proceeds from
insurance or other amounts in respect of such Claim, then Buyer shall hold such proceeds or other
amounts in trust for the benefit of Seller, Nexus or Homeland, as applicable, and shall pay to
Seller, Nexus or Homeland, as applicable, as promptly as practicable after receipt, a sum equal to
the amount of such proceeds or other amount received, up to the aggregate amount of any payments
received from Seller, Nexus or Homeland pursuant to this Agreement in respect of such Claim.
Notwithstanding any other provisions of this Agreement, it is the intention of the Parties that no
insurer or any other third party shall be (i) entitled to a benefit it would not be entitled to
receive in the absence of the foregoing indemnification provisions, or (ii) relieved of the
responsibility to pay any Claims for which it is obligated.

 

44

 

9.4
Limits on Indemnification. The Indemnitor’s liability
pursuant to Section 9.1 (except for
Sections 9.1(i) and 9.1(j)) or Section 9.2 (as applicable) shall be limited as
follows (except in the case of fraud or willful misconduct or a criminal matter or as provided in
Section 9.6); it being clarified that the limitations set forth below shall not be
applicable to any Indemnification Matter (as defined below) pursuant to Sections 9.1(i) or
9.1(j).

(a) Threshold.
No amount shall be payable by the Indemnitor pursuant to
Section 9.1 or
Section 9.2 (as applicable) unless and until the aggregate amount otherwise payable by the
Indemnitor pursuant to Section 9.1 or Section 9.2 (as applicable) exceeds $27,500 (the
“Threshold”). At such time as the total amount payable by the Indemnitor pursuant to
Section 9.1 or Section 9.2 (as applicable) exceeds the Threshold in the aggregate, the
Indemnitees shall be entitled to be indemnified against all amounts above the Threshold that are
otherwise payable by the Indemnitor pursuant to Section 9.1 or Section 9.2 (as applicable).

(b) Ceiling.
The Indemnitor’s total liability pursuant to Section 9.1 or Section 9.2
(as applicable), except as set forth in Section 9.4(e), shall not exceed $300,000 in the
aggregate.

(c) Time
Periods. With respect to any Indemnification Matter pursuant to
Section 9.1 or
Section 9.2 (as applicable), and except as set forth in Section 9.4(e), the
Indemnitor shall have no liability unless the Indemnitee gives an Indemnification Notice with
respect thereto within 18 months after the Closing Date.

(d) Exclusive Remedies. The parties acknowledge and agree that, from and after the Closing
Date, their sole and exclusive remedy with respect to any and all claims (other than claims arising
from fraud, willful misconduct or criminal activity on the part of a party hereto in connection
with the transactions contemplated by this Agreement and any Ancillary Agreement and other than
with respect to Section 8) for any breach of any representation, warranty, covenant,
agreement or obligation set forth herein or otherwise relating to the subject matter of this
Agreement, shall be pursuant to the indemnification provisions set forth in this Section 9.
Nothing in this Section 9.4(d) shall limit any Person’s right to seek and obtain any
equitable relief to which any Person shall be entitled or to seek any remedy on account of any
Person’s fraudulent, criminal or willful misconduct.

 

45

 

(e) Exceptions to Limitations. With respect to any Indemnification Matter pursuant to:
Section 4.1 (Organization), Section 4.2(a) (Authority), Section 4.4(a)
(Compliance with Laws), Section 4.7(a) (Assets), Section 4.13 (Environmental
Matters) and Section 4.24 (Brokerage Fees) (collectively, the “Fundamental
Matters”), the Indemnitor’s total liability pursuant to Section 9.1(a) shall not exceed the
Purchase Price and, with respect to (i) Section 4.1
(Organization), Section 4.2(a)
(Authority), Section 4.7(a) (Assets), the Indemnitee shall not have any time limitation to
provide the Indemnitor with an Indemnification Notice, and (ii) Section 4.4(a) (Compliance
with Laws), Section 4.13 (Environmental Matters) and Section 4.24 (Brokerage Fees),
the Indemnitor shall have no liability unless the Indemnitee gives an Indemnification Notice with
respect thereto prior to the expiration of the statute of limitations applicable to the underlying
matters covered by such provisions.

9.5 Tax Treatment. Any indemnity payment under this Agreement will be treated as an
adjustment to the Purchase Price, unless a “Final Determination” with respect to the indemnified
party or any of its affiliates causes any such payment not to be treated as an adjustment to such
price for federal income Tax purposes. For purposes of this Agreement “Final
Determination” means (a) with respect to federal income Taxes, a “determination” as defined in
Section 1313(a) of the Code or execution of an Internal Revenue Service Form 870-AD and, (b) with
respect to Taxes other than federal income Taxes, any final determination of liability in respect
of a Tax that, under applicable Law, is not subject to further appeal, review or modification
through proceedings or otherwise (including the expiration of a statute of limitations or a period
for the filing of claims for refunds, amended returns or appeals from adverse determinations).

9.6 Special Rule for Fraud. Notwithstanding any provision of this Agreement to the contrary,
Nexus and Homeland shall indemnify the Buyer Indemnitees from and against any and all Claims
arising out of, in connection with or caused by, directly or indirectly, any fraud, willful
misconduct or criminal activity on the part of Nexus, Homeland or Seller in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements. The
indemnification obligations of Nexus and Homeland pursuant to this Section 9.6 shall
not be subject to any limitations set forth elsewhere in this Section 9.

 

46

 

SECTION 10. Other Provisions

10.1 Publicity. At all times after the Closing Date, neither party shall without the prior
written consent of the other parties (which consent shall not be unreasonably withheld, delayed or
conditioned), make any public announcement regarding the transactions contemplated by this
Agreement or the Ancillary Agreements, nor shall they in any manner disseminate any information
regarding the transactions contemplated by this Agreement or the Ancillary Agreements, unless
required under applicable Law and the Securities and Exchange Commission’s rules and regulations
applicable to Homeland; provided, however, that to the extent any such disclosure
is required by applicable Law or the Securities and Exchange Commission’s rules and regulations,
Homeland shall use its commercially reasonable efforts consistent with applicable Law to consult
with Buyer with respect to the content and timing of any such disclosure before such disclosure is
made.

10.2 Fees and Expenses. Buyer shall pay all of the fees and expenses incurred by it, and
Seller, Nexus and Homeland shall pay all of the fees and expenses they incur, in negotiating and
preparing this Agreement and the Ancillary Agreements and in consummating the transactions
contemplated hereby and thereby.

10.3 Notices. All notices, consents or other communications required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly given (a) when
delivered personally if delivered before 5:00 p.m. local time, and the next Business Day if
delivered after 5:00 p.m. local time, (b) one Business Day after being sent by a nationally
recognized overnight delivery service, postage or delivery charges prepaid, (c) five Business Days
after being sent by registered or certified mail, return receipt requested, postage charges
prepaid, (d) on the Business Day transmitted if transmitted by facsimile before 5:00 p.m. Eastern
Time, and the next Business Day if transmitted by facsimile after 5:00 p.m. Eastern Time, confirmed
in either case within 48 hours thereafter by a signed original sent in one of the manners provided
in the preceding clauses. Notices to Seller, Nexus or Homeland shall be sent to such parties’
respective addresses as set forth on page one of this Agreement to the attention of Michael T.
Brigante, Chief Financial Officer (facsimile number: 703-526-0649) with a copy sent simultaneously
to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC to the attention of: Kenneth R. Koch (facsimile
number: 212-983-3115). Notices to Buyer shall be sent to Buyer’s address stated on page one of
this Agreement to the attention of Jason Oakley, Chief Executive Officer (facsimile number:
732-477-1988), with a copy sent simultaneously to Blank Rome LLP, One Logan Square, Philadelphia,
Pennsylvania 19103, to the attention of Gary R. Goldenberg, (facsimile number (215) 832-5733). Any
party may change its address for notice and the address to which copies must be sent by giving
notice of the new addresses to the other parties in accordance with
this Section 10.3,
provided that any such change of address notice shall not be effective unless and until received.

10.4 Survival. All representations, warranties, covenants and indemnifications made in this
Agreement or pursuant hereto shall survive the date of this Agreement, the Closing Date
and the consummation of the transactions contemplated by this Agreement, subject to the
provisions of Section 9.4.

 

47

 

10.5 Interpretation of Representations. Each representation and warranty made in this
Agreement or pursuant hereto, including in any Schedule, is independent of all other
representations and warranties made by the same parties, whether or not covering related or similar
matters, and must be independently and separately satisfied. Exceptions or qualifications to any
such representation or warranty shall not be construed as exceptions or qualifications to any other
representation or warranty.

10.6 Entire Understanding. This Agreement together with the Ancillary Agreements, Exhibits
and Schedules hereto, state the entire understanding among the parties with respect to the subject
matter hereof and thereto, and supersede all prior oral and written communications and agreements,
and all contemporaneous oral communications and agreements, with respect to the subject matter
hereof including all confidentiality agreements and letters of intent previously entered into among
some or all of the parties hereto. No amendment or modification of this Agreement shall be
effective unless in writing and signed by the party against whom enforcement is sought. Nothing
contained in Section 9 or elsewhere in this Agreement shall be deemed to limit (or adversely
affect) in any manner any right or remedy of any party hereto under any of the agreements
contemplated by this Agreement.

10.7 Assignment. This Agreement shall bind, benefit, and be enforceable by and against Buyer,
Seller, Nexus, Homeland and their respective successors and consented-to assigns. No party shall
in any manner assign any of such party’s rights or obligations under this Agreement without the
express prior written consent of the other parties, provided, however, Buyer shall not be required
to obtain the express prior written consent of the other parties in connection with its assignment
of this Agreement or any of its rights or obligations hereunder to an affiliate thereof or in
connection with any merger, consolidation, reorganization, transfer or sale of all or substantially
all of the stock or assets of Buyer.

10.8 Waivers. Except as otherwise expressly provided herein, no waiver with respect to this
Agreement shall be enforceable unless in writing and signed by the party against whom enforcement
is sought. Except as otherwise expressly provided herein, no failure to exercise, delay in
exercising, or single or partial exercise of any right, power or remedy by any party, and no course
of dealing between or among any of the parties, shall constitute a waiver of, or shall preclude any
other or further exercise of, any right, power or remedy.

10.9 Severability. If any provision of this Agreement is construed to be invalid, illegal or
unenforceable, then the remaining provisions hereof shall not be affected thereby and shall be
enforceable without regard thereto.

10.10 Counterparts. This Agreement may be executed in any number of counterparts (including
by means of facsimile or .pdf), each of which shall be deemed an original but all of which together
will constitute one and the same instrument.

10.11 Section Headings. Section and subsection headings in this Agreement are for convenience
of reference only, do not constitute a part of this Agreement, and shall not affect its
interpretation.

 

48

 

10.12 References. All words used in this Agreement shall be construed to be of such number
and gender as the context requires or permits.

10.13 Controlling Law. THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

10.14 Jurisdiction and Process. In any action between or among any of the parties, whether
arising out of this Agreement or the Ancillary Agreements, (a) each of the parties irrevocably
consents to the exclusive jurisdiction and venue of the federal and state courts located in the
State of Delaware, (b) if any such action is commenced in a state court, then, subject to
applicable law, no party shall object to the removal of such action to any federal court located in
the State of Delaware, (c) each of the parties irrevocably waives the right to trial by jury, (d)
each of the parties irrevocably consents to service of process by first class certified mail,
return receipt requested, postage prepaid, to the address at which such party is to receive notice
in accordance with Section 10.3, and (e) the prevailing parties shall be entitled to recover
their reasonable attorneys’ fees, costs and disbursements from the other parties (in addition to
any other relief to which the prevailing parties may be entitled).

10.15 No Third-Party Beneficiaries. Except as otherwise provided in Section 9, no
provision of this Agreement is intended to or shall be construed to grant or confer any right to
enforce this Agreement, or any remedy for breach of this Agreement, to or upon any Person other
than the parties hereto including any customer, prospect, supplier, employee, contractor, salesman,
agent or representative of Seller, Nexus or Homeland.

10.16 Neutral Construction. In view of the fact that each of the parties hereto have been
represented by their own counsel and this Agreement has been fully negotiated by all parties, the
legal principle that ambiguities in a document are construed against the draftsperson of that
document shall not apply to this Agreement.

[SIGNATURE PAGES FOLLOW]

 

49

 

INTENDING TO BE LEGALLY BOUND, the parties hereto have executed this Agreement as of the date
first stated above.

	 	 	 	 	 	 	 
	HOMELAND SECURITY CAPITAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ C. Thomas McMillen	 	 
	 	 	 	 	 
	 

	 	Name:
	 	C. Thomas McMillen	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	NEXUS TECHNOLOGIES GROUP, INC.
	 
	 	 	 	 	 	 
	By:	 	/s/ Michael T. Brigante	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Michael T. Brigante	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	CORPORATE SECURITY SOLUTIONS, INC.

D/B/A NEXUS TECHNOLOGIES GROUP	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Michael T. Brigante	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Michael T. Brigante	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	HALIFAX SECURITY, INC.

D/B/A NORTH AMERICAN VIDEO	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Jason Oakley	 	 
	 	 	 	 	 
	 

	 	Name:
	 	/s/ Jason Oakley	 	 
	 

	 	Title:
	 	President & Chief Executive Officer	 	 

[Signature Page to Asset Acquisition Agreement]

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 1. Defined Terms
	 	 	2	 
	 
	 	 	 	 
	Section 2. The Transaction
	 	 	7	 
	 
	 	 	 	 
	2.1 Sale and Purchase of Specified Assets
	 	 	7	 
	2.2 No Other Liabilities
	 	 	9	 
	2.3 Seller’s Employees
	 	 	11	 
	 
	 	 	 	 
	Section 3. Purchase Price and Closing Balance Sheet
	 	 	11	 
	 
	 	 	 	 
	3.1 Purchase Price
	 	 	11	 
	3.2 Working Capital Adjustment
	 	 	12	 
	3.3 Currency and Method of Payment
	 	 	14	 
	3.4 Allocation
	 	 	14	 
	 
	 	 	 	 
	Section 4. Representations Of Seller, Nexus and Homeland
	 	 	15	 
	 
	 	 	 	 
	4.1 Organization
	 	 	15	 
	4.2 Authority; Non-Contravention
	 	 	16	 
	4.3 Financial and Corporate Records
	 	 	17	 
	4.4 Compliance with Laws; Permits
	 	 	17	 
	4.5 Financial Statements
	 	 	18	 
	4.6 Reserved
	 	 	19	 
	4.7 Assets
	 	 	19	 
	4.8 Obligations
	 	 	19	 
	4.9 Absence of Certain Changes or Events
	 	 	20	 
	4.10 Accounts Receivable
	 	 	20	 
	4.11 Tangible Property; Inventory
	 	 	21	 
	4.12 Real Property
	 	 	21	 
	4.13 Environmental Matters
	 	 	21	 
	4.14 Intangibles
	 	 	22	 
	4.15 Contracts
	 	 	23	 
	4.16 Employees and Independent Contractors
	 	 	25	 
	4.17 Employee Benefit Plans
	 	 	27	 
	4.18 Customers, Prospects, Suppliers and Subcontractors
	 	 	29	 
	4.19 Taxes
	 	 	29	 
	4.20 Proceedings and Judgments
	 	 	31	 
	4.21 Insurance
	 	 	31	 
	4.22 Questionable Payments
	 	 	32	 
	4.23 Related Party Transactions; Shared Services
	 	 	32	 
	4.24 Brokerage Fees
	 	 	32	 
	4.25 Product Liability; Product Warranty
	 	 	32	 
	4.26 Full Disclosure
	 	 	33	 
	4.27 Exclusivity of Representations and Warranties
	 	 	33	 
	 
	 	 	 	 
	Section 5. Representations Of Buyer
	 	 	33	 
	 
	 	 	 	 
	5.1 Organization
	 	 	33	 
	5.2 Authority; Non-Contravention
	 	 	33	 
	5.3 Sufficiency of Funds
	 	 	33	 
	5.4 Legal Proceedings
	 	 	33	 
	5.5 Brokerage Fees
	 	 	34	 
	5.6 Exclusivity of Representations and Warranties
	 	 	34	 

 

 

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 6. Closing
	 	 	34	 
	 
	 	 	 	 
	6.1 Closing
	 	 	34	 
	6.2 Seller’s, Nexus’ and Homeland’s Obligations at the Closing
	 	 	34	 
	6.3 Obligations of Buyer at Closing
	 	 	36	 
	 
	 	 	 	 
	Section 7. Certain Obligations After Closing
	 	 	36	 
	 
	 	 	 	 
	7.1 Transition and Cooperation
	 	 	36	 
	7.2 Use of Names
	 	 	37	 
	7.3 Contract Matters
	 	 	37	 
	7.4 Retirement and Group Insurance Plans
	 	 	37	 
	7.5 Taxes
	 	 	38	 
	7.6 Retention of and Access to Books and Records
	 	 	39	 
	7.7 Further Assurances
	 	 	39	 
	7.8 Cash Assets
	 	 	39	 
	 
	 	 	 	 
	Section 8. Restrictive Covenants of Seller, Nexus and Homeland
	 	 	39	 
	 
	 	 	 	 
	8.1 Certain Acknowledgements
	 	 	39	 
	8.2 Nondisclosure Covenants
	 	 	40	 
	8.3 Noncompetition Covenants
	 	 	40	 
	8.4 Certain Exclusions
	 	 	41	 
	8.5 Enforcement of Covenants
	 	 	41	 
	8.6 Scope of Covenants
	 	 	41	 
	 
	 	 	 	 
	Section 9. Indemnification
	 	 	42	 
	 
	 	 	 	 
	9.1 Seller’s, Nexus’ and Homeland’s Indemnification
	 	 	42	 
	9.2 Buyer’s Indemnification
	 	 	43	 
	9.3 Indemnification Procedures
	 	 	44	 
	9.4 Limits on Indemnification
	 	 	45	 
	9.5 Tax Treatment
	 	 	46	 
	9.6 Special Rule for Fraud
	 	 	46	 
	 
	 	 	 	 
	Section 10. Other Provisions
	 	 	47	 
	 
	 	 	 	 
	10.1 Publicity
	 	 	47	 
	10.2 Fees and Expenses
	 	 	47	 
	10.3 Notices
	 	 	47	 
	10.4 Survival
	 	 	47	 
	10.5 Interpretation of Representations
	 	 	48	 
	10.6 Entire Understanding
	 	 	48	 
	10.7 Assignment
	 	 	48	 
	10.8 Waivers
	 	 	48	 
	10.9 Severability
	 	 	48	 
	10.10 Counterparts
	 	 	48	 
	10.11 Section Headings
	 	 	48	 
	10.12 References
	 	 	49	 
	10.13 Controlling Law
	 	 	49	 
	10.14 Jurisdiction and Process
	 	 	49	 
	10.15 No Third-Party Beneficiaries
	 	 	49	 
	10.16 Neutral Construction
	 	 	49Exhibit 10.1

Exhibit 10.1

OPNEXT, INC.

46429 Landing Parkway

Fremont, California 94538

This Second Amended and Restated Employment Agreement (this “Agreement”) is entered
into as of August 23, 2011 (the “Effective Date”), by and between Opnext, Inc., a Delaware
corporation (“Opnext” or the “Company”), and Michael Chan (“Executive”).
This Agreement amends and restates in its entirety the Prior Agreement (as defined below).

WHEREAS, Executive and Opnext are currently parties to that certain Amended and Restated
Employment Agreement entered into by and between Opnext and Executive, dated as of July 29, 2008,
as amended on May 15, 2009 (the “Prior Agreement”); and

WHEREAS, Executive and Opnext wish to amend and restate the Prior Agreement on the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

	 	 	 
	1. Employer:

	 	Opnext, Inc.
	 
	 	 
	2. Employee:

	 	Michael Chan
	 
	 	 
	3. Position and
Duties:

	 	Executive shall be the President, Opnext
Subsystems, Inc. and Executive Vice President,
Business Development and Marketing, and shall have
the normal duties, responsibilities, functions and
authority of an executive holding such divisional
president position and executive vice president
position with a company the size and structure of
Opnext. Executive shall report directly to the
Chief Executive Officer (“CEO”). Executive has
primary responsibility for identifying and pursuing
strategic business opportunities, including
mergers, acquisitions, partnerships, alliances
and/or joint ventures. Executive shall work with
the CEO in developing long-range strategic plans
for Opnext. Executive shall exercise such further
responsibilities and perform such further duties as
directed from time to time by the CEO and the Board
of Directors of Opnext (the “Board”).
	 
	 	 
	4. Base Salary:

	 	$367,200 per annum, subject to increase from time
to time as determined by the Board or the
Compensation Committee of the Board in its sole
discretion.

 

 

	 	 	 
	5. Annual Bonus:

	 	Executive will be eligible to participate in the
Company’s annual incentive bonus plan applicable to
similarly situated executives of the Company. The
amount of Executive’s annual bonus will be based on
the attainment of individual and/or Company
performance criteria established and
evaluated by the Company in accordance with the terms of such bonus plan as
in effect from time to time, provided that, subject to the terms of such
bonus plan, Executive’s target annual bonus will be 70% of his Base Salary.
Each annual bonus shall be awarded under, and subject to the terms and
conditions of, Opnext’s Second Amended and Restated 2001 Long Term Stock
Incentive Plan, as amended from time to time (the “Stock Incentive
Plan”), and, if payable, shall be paid not later than the last day of
the applicable two and one-half (2 1/2) month short-term deferral period with
respect to such annual bonus payment, within the meaning of Treasury
Regulation Section 1.409A-1(b)(4).
	 
	 	 
	6. At-Will
Employment:

	 	Executive’s employment with the Company is “at-will” and is not for a specified period of time. Subject
to the Company’s obligations under Sections 10 and 11 hereof, either Executive or the Company may
terminate Executive’s employment at any time and for any reason whatsoever (or for no reason). This
at-will employment relationship cannot be changed except in a writing signed by Executive and an
authorized representative of the Company.
	 
	 	 
	7. Benefits:

	 	Executive will be eligible to receive group welfare and retirement benefits in accordance with Opnext
company plans or policies as in effect from time to time.
	 
	 	 
	8. Vacation:

	 	Executive will receive four (4) weeks paid vacation time per annum.
	 
	 	 
	9. Annual
Performance
Reviews:

	 	Executive’s job performance shall be reviewed annually by the Board. In conjunction with such annual
performance review process, Executive will be eligible for salary increases, annual bonus awards (the
bonus target is set forth under Section 5 above) and stock options or other equity-based awards, which
will be subject to Company policy and vesting terms. Salary increases, annual bonuses and stock options
or other equity-based awards will be determined by the Board or the Compensation Committee of the Board
in its sole discretion based on the overall performance of Opnext as well as Executive’s individual
performance. Salary increases, annual bonuses and stock options or other equity-based awards are
awarded at the discretion of the Board or the Compensation Committee of the Board.

 

2

 

	 	 	 
	10. Termination
Without Cause
or With Good
Reason:

	 	

In the event that Executive incurs a “separation from service” (within the meaning of Section
409A(a)(2)(A)(i) of the Internal Revenue Code of
1986, as amended (the “Code”), and Treasury Regulation Section
1.409A-1(h)) (“Separation from Service”) by reason of (a) a
termination of Executive’s employment by the Company without Cause (as
defined below) or (b) Executive’s resignation for Good Reason (as defined
below), the Company shall pay Executive as severance a lump-sum cash payment
equal to one (1.0) times (the “Severance Multiple”) his then current
annual Base Salary (the “Severance Payment”). Subject to the
Payment Delay (as defined below), the Severance Payment shall be paid to
Executive on the sixtieth (60th) day after the date of such
Separation from Service. Executive’s right to receive the Severance Payment
is conditioned on and subject to Executive’s execution and non-revocation of
a general release of claims substantially in the form attached hereto as
Exhibit A. For purposes of clarification, a termination of
Executive’s employment by reason of Executive’s death or Disability (as
defined below) shall not be deemed to be a termination by the Company
“without Cause” for purposes of this Agreement.
	 
	 	 
	 

	 	The Severance Payment is intended to satisfy the short-deferral exemption
under Treasury Regulation Section 1.409A-1(b)(4) and shall be made not later
than the last day of the applicable two and one-half (2 1/2) month short-term
deferral period with respect to the Severance Payment, within the meaning of
Treasury Regulation Section 1.409A-1(b)(4).
	 
	 	 
	 

	 	“Good Reason” as used herein shall mean the occurrence of any of the
following without the consent of Executive:
	 
	 	 
	 

	 	(i)   a material and substantial diminution of Executive’s duties or
responsibilities; or

	 
	 	 
	 

	 	(ii)  a material reduction by Opnext of Executive’s
Base Salary or target bonus as set forth in Section 5 above.

	 
	 	 
	 

	 	provided, however, that Executive’s resignation shall only constitute a
resignation for Good Reason hereunder if (x) Executive provides the Company
with written notice setting forth the specific facts or circumstances
constituting Good Reason within 20 days after the initial existence of such
facts or circumstances, (y) the Company has failed to cure such facts or
circumstances within 30 days after receipt of such written notice, and (z)
the date of Executive’s Separation from Service occurs no later than 60 days
after the initial occurrence of the facts or circumstances constituting Good
Reason. Notwithstanding anything contained herein, in no event will any
change in Executive’s position, title, duties or responsibilities to reflect
a reduced business development or marketing role constitute “Good Reason”
for purposes of this Agreement or any other agreement.

 

3

 

	 	 	 
	 

	 	Except as set forth above, upon termination by Opnext without Cause or
resignation by Executive for Good Reason, Executive shall not be entitled to
receive any further compensation or payments hereunder (except for
Executive’s unpaid Base Salary, accrued vacation and expense reimbursements
relating to the period prior to the date of termination of employment). In
the event of such a termination, any stock options or other equity-based
awards held by Executive shall be subject to the provisions of the incentive
award plan and applicable award agreement pursuant to which such awards were
granted.
	 
	 	 
	 

	 	Notwithstanding anything to the contrary in this Agreement, no compensation
or benefits, including, without limitation, the Severance Payment, shall be
paid to Executive during the six-month period following Executive’s
Separation from Service if Executive is a “specified employee” at the time
of such Separation from Service (as determined by the Company in accordance
with Section 409A of the Code) and the Company determines that paying such
amounts at the time or times indicated in this Agreement would be a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the
payment of any such amounts is delayed as a result of the previous sentence
(the “Payment Delay”), then on the first day following the end of
such six-month period, the Company shall pay Executive a lump-sum amount
equal to the cumulative amount that would have otherwise been payable to
Executive during such six-month period.
	 
	 	 
	11. Change in
Control
Termination:

	 	Subject to the Payment Delay, if a Change in Control occurs and Executive incurs a
Separation from Service by reason of (a) a termination of Executive’s employment by the
Company without Cause or (b) Executive’s resignation for Good Reason, in each case
immediately prior to or upon the Change in Control, or within the one (1) year period
following the Change in Control, then Executive shall be entitled to the Severance
Payment, subject to and in accordance with the terms and conditions set forth in Section
10 (including, without limitation, the requirement that Executive execute and not revoke
the Release), except that for purposes of this Section 11, the Severance Multiple for the
Severance Payment shall be two (2.0) instead of one (1.0).
	 
	 	 
	 

	 	For purposes of this Agreement, “Change in Control” shall have the meaning set forth in
the Stock Incentive Plan.

 

4

 

	 	 	 
	12. Termination
For Cause:

	 	“Cause” as utilized herein shall mean:
	 
	 	 
	 

	 	(i)   the commission of a felony or the commission of any other act or
omission involving dishonesty or fraud with respect to Opnext or any of its
subsidiaries or affiliates or any of their customers or suppliers;

	 
	 	 
	 

	 	(ii)  conduct that brings Opnext or any of its subsidiaries or affiliates
into substantial public disgrace or disrepute;

	 
	 	 
	 

	 	(iii)  any material breach of the Non-Competition Agreement referred to
below;

	 
	 	 
	 

	 	(iv)  fraud or embezzlement with respect to Opnext or any of its subsidiaries
or affiliates;

	 
	 	 
	 

	 	(v)  gross negligence or willful misconduct with respect to Opnext or any of
its subsidiaries or affiliates; or

	 
	 	 
	 

	 	(vi) repeated failure to perform in any material respect Executive’s duties
as directed by the Board.

	 
	 	 
	 

	 	Upon notice by Opnext to Executive of a termination for Cause, the
“Termination Date” shall be the date on which such notice is mailed
or hand-delivered, or as otherwise specified in the notice of termination,
to Executive. Upon termination for Cause or resignation by Executive
without Good Reason, Executive shall not be entitled to receive any further
compensation or payments hereunder (except for Executive’s unpaid Base
Salary, accrued vacation and expense reimbursements relating to the period
prior to the Termination Date). In the event of a termination for Cause,
any unvested stock options or other equity-based awards held by Executive
shall immediately be cancelled and terminate as of the Termination Date.
Vested stock options and other equity-based awards shall be subject to the
provisions of the Stock Incentive Plan and applicable award agreement
pursuant to which such awards were granted.
	 
	 	 
	13. Disability:

	 	If, by reason of any physical or mental injury,
illness or incapacity, Executive is unable to
effectively perform his duties and
responsibilities as determined by the Board
(“Disability”) for more than 180 days during any
12-month period, Executive’s employment with
Opnext will be terminated. In addition, in the
event of Executive’s Disability for more than 30
consecutive days, Executive shall only be entitled
to receive such compensation as is provided under
Opnext’s disability benefit plans. If Executive’s
employment is terminated by reason of a Disability
as set forth herein, any stock options or other
equity-based awards held by Executive shall be
subject to the provisions of the incentive award
plan and applicable award agreement pursuant to
which such awards were granted.

 

5

 

	 	 	 
	14. Non-Competition
Agreement:

	 	Executive hereby acknowledges and agrees that he
has previously entered into a Non-Competition
Agreement with Opnext (the “Non-Competition Agreement”), and that such agreement remains in
full force and effect.
	 
	 	 
	15. Restrictions:

	 	Executive represents and warrants to Opnext that
there are no restrictions or agreements or
limitations on Executive’s right or ability to
enter into this Agreement or perform the terms set
forth herein.
	 
	 	 
	16. Confidential
Information:

	 	Executive hereby acknowledges and agrees that he
has previously entered into a Confidentiality
Agreement with Opnext (the “Confidentiality Agreement”) in part to restrict the disclosure by
Executive of such trade secrets and other
confidential information and that such agreement
remains in full force and effect.
	 
	 	 
	17. Withholdings:

	 	All payments set forth herein which are subject to
withholding shall be made less any required
withholdings.
	 
	 	 
	18. Binding
Arbitration:

	 	Any controversy arising out of or relating to this
Agreement, the Non-Competition Agreement or the
Confidentiality Agreement shall be settled by
binding arbitration in New York City, New York in
accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The
award rendered in any such proceeding shall be
final and binding, and judgment upon the award may
be entered in any court having jurisdiction
thereof. The costs of any such arbitration
proceedings shall be borne equally by Opnext and
Executive. Neither party shall be entitled to
recover attorneys’ fee or costs expended in the
course of such arbitration or enforcement of the
award rendered thereunder.
	 
	 	 
	19. Governing Law:

	 	All issues and questions concerning the
construction, validity, enforcement and
interpretation of this Agreement shall be governed
by, and construed in accordance with, the internal
laws of the State of Delaware, without giving
effect to any choice of law or conflict of law
provision or rule (whether of the State of
Delaware or any other jurisdiction) that would
cause the application of the laws of any
jurisdiction other than the State of Delaware.
	 
	 	 
	20. Notices:

	 	All notices in connection herewith or provided for
hereunder shall be validly given or made only if
made in writing and delivered personally or mailed
by registered or certified mail, return receipt
requested, postage prepaid, to the party entitled
or required to receive the same, as follows:
	 
	 	 
	 

	 	If to Executive, addressed to him at his most recent address
on the records of the Company.

 

6

 

	 	 	 
	 

	 	If to the Company, addressed to:

	 
	 	 
	 

	 	Opnext, Inc.

46429 Landing Parkway

Fremont, CA 94538

Attention: General Counsel

	 
	 	 
	21. Section 409A:

	 	To the extent applicable, this Agreement shall be
interpreted and applied consistent and in
accordance with Section 409A of the Code and
Department of Treasury regulations and other
interpretive guidance issued thereunder.
Notwithstanding any provision of this Agreement to
the contrary, if the Company determines that any
compensation or benefits payable under this
Agreement may not be either exempt from or
compliant with Section 409A of the Code and related
Department of Treasury guidance, the Company may in
its sole discretion adopt such amendments to this
Agreement or adopt other policies and procedures
(including amendments, policies and procedures with
retroactive effect), or take any other actions,
that the Company determines are necessary or
appropriate to (i) exempt the compensation and
benefits payable under this Agreement from Section
409A of the Code and/or preserve the intended tax
treatment of such compensation and benefits, or
(ii) comply with the requirements of Section 409A
of the Code and related Department of Treasury
guidance; provided, however, that this Section 21
shall not create any obligation on the part of the
Company to adopt any such amendment, policy or
procedure or take any such other action.

[Signature Page Follows]

 

7

 

SIGNATURE PAGE TO AGREEMENT

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

	 	 	 	 	 
	 	OPNEXT, INC.

 	 
	 	By:  	/s/ Harry L. Bosco
 	 
	 	 	Harry L. Bosco 	 
	 	 	CEO and President 	 
	 
	 	AGREED TO AND ACCEPTED:

 	 
	 	/s/ Michael Chan
 	 
	 	Name:  Michael Chan 	 

 

8

 

EXHIBIT A

GENERAL RELEASE OF CLAIMS

For valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of
Opnext, Inc. and each of its partners, associates, affiliates, subsidiaries, successors, heirs,
assigns, agents, directors, officers, employees, shareholders, representatives, lawyers,
accountants, insurers, and all persons acting by, through, under or in concert with them, or any of
them, of and from any and all manner of action or actions, cause or causes of action, in law or in
equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages,
losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or
contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have
against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the
beginning of time to the date hereof. The Claims released herein include, without limiting the
generality of the foregoing, any Claims in any way arising out of, based upon, or related to the
employment or termination from employment of the undersigned by the Releasees, or any of them; any
Claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or
any related agreement to which any Releasee is a party); any alleged breach of any express or
implied contract of employment; any alleged torts or other alleged legal restrictions on the
Releasees’ right to terminate the employment of the undersigned; and any alleged violation of any
federal, state or local statute or ordinance including, without limitation, Title VII of the Civil
Rights Act of 1964, the Age Discrimination In Employment Act, the Americans With Disabilities Act,
and the California Fair Employment and Housing Act. Notwithstanding the foregoing, this Release
shall not operate to release any Claims which the undersigned may have to payments or benefits
under Section 10 or Section 11 of that certain Second Amended and Restated Employment Agreement,
dated as of August 18, 2011, by and between Opnext, Inc. and the undersigned.

THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY
HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

 

1

 

IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY
ADVISED AS FOLLOWS:

(1) HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;

(2) HE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND

(3) HE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE WILL
BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.

The undersigned represents and warrants that there has been no assignment or other transfer of
any interest in any Claim which he may have against the Releasees, or any of them, and the
undersigned agrees to indemnify and hold the Releasees, and each of them, harmless from any
liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by the Releasees,
or any of them, as the result of any such assignment or transfer or any rights or Claims under any
such assignment or transfer. It is the intention of the parties that this indemnity does not
require payment as a condition precedent to recovery by the Releasees against the undersigned under
this indemnity.

The undersigned agrees that if he hereafter commences any suit arising out of, based upon, or
relating to any of the Claims released hereunder or in any manner asserts against the Releasees, or
any of them, any of the Claims released hereunder, then the undersigned agrees to pay to the
Releasees, and each of them, in addition to any other damages caused to the Releasees thereby, all
attorneys’ fees incurred by the Releasees in defending or otherwise responding to said suit or
Claim.

The undersigned further understands and agrees that neither the payment of any sum of money
nor the execution of this Release shall constitute or be construed as an admission of any liability
whatsoever by the Releasees, or any of them, who have consistently taken the position that they
have no liability whatsoever to the undersigned.

IN WITNESS WHEREOF, the undersigned has executed this Release this
 _____ 

day of
 _____ 

20____.

	 	 	 
	 

Michael Chan

	 	 

 

2

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