Document:

Purchase Agreement

     

     

    

    

     

    

    Exhibit
      10.1

    

     

    

     

    

     

    STOCK
      PURCHASE AGREEMENT

     

    dated
      as
      of October 18, 2006

     

    among

     

    COTTAGE
      BAKERY, INC.,

     

    RIVERGATE
      PARTNERS, L.P.,

     

    JAMISON
      PARTNERS, L.P.,

     

    TERRY
      R.
      KNUTSON AND ROSE KNUTSON, AS CO-TRUSTEES OF THE TERRY AND ROSE KNUTSON 2000
      FAMILY TRUST UTA 6/21/00,

     

    CHURCH
      RESOURCE MINISTRIES,

     

    BETHEL
      TABERNACLE (A/K/A BETHEL OPEN BIBLE CHURCH),

     

    TERRY
      R.
      KNUTSON AND ROSE KNUTSON, AS SELLERS’ GUARANTOR,

     

    RH
      FINANCIAL CORPORATION

     

    and

     

    RALCORP
      HOLDINGS, INC., AS BUYER’S GUARANTOR

     

    

     

    

     

    

    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

     

     

     

    

 

    TABLE
      OF CONTENTS

     

                                                                                                                                                                                                                      
      Page

    ARTICLE
      I
      DEFINITIONS.......................................................................................................................................1

    1.1 Definitions...................................................................................................................................................1

    1.2 Other
      Defined
      Terms..................................................................................................................................8

    1.3 Construction...............................................................................................................................................9

    ARTICLE
      II PURCHASE AND
      SALE..................................................................................................................10

    2.1 Purchase
      and Sale of the Purchased
      Securities...................................................................................10

    2.2 Closing
      Date..............................................................................................................................................10

    2.3 Transactions
      to be Effected at the
      Closing..........................................................................................10

    2.4 Calculation
      and Payment of the Net Asset Value
      Adjustment.........................................................11

    2.5 Sellers’
      Representative............................................................................................................................13

    2.6 Escrow
      Account.......................................................................................................................................14

    ARTICLE
      III REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED
      COMPANY..................14

    3.1 Organization,
      Good Standing, Authority and
      Enforceability............................................................14

    3.2 Capitalization.............................................................................................................................................15

    3.3 No
      Conflicts;
      Consents...........................................................................................................................16

    3.4 Financial
      Statements; Acquired Company
      Debt.................................................................................16

    3.5 Taxes..........................................................................................................................................................17

    3.6 Compliance
      with Law;
      Authorizations..................................................................................................17

    3.7 Title
      to
      Personal
      Property.......................................................................................................................18

    3.8 Real
      Property............................................................................................................................................18

    3.9 Intellectual
      Property................................................................................................................................19

    3.10 Absence
      of Certain Changes or
      Events.............................................................................................20

    3.11 Inventory
      and Accounts
      Receivable..................................................................................................20

    3.12 No
      Undisclosed
      Liabilities....................................................................................................................21

    3.13 Contracts.................................................................................................................................................21

    3.14 Litigation.................................................................................................................................................23

    3.15 Employee
      Benefits.................................................................................................................................23

    3.16 Labor
      and
      Employment
      Matters..........................................................................................................25

    3.17 Environmental........................................................................................................................................25

     

     

     

    
      
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    3.18 Insurance................................................................................................................................................26

    3.19 Affiliated
      Transactions.........................................................................................................................27

    3.20 Brokers....................................................................................................................................................28

    3.21 Books
      and
      Records...............................................................................................................................28

    3.22 Customers...............................................................................................................................................28

    3.23 FDA
      Compliance...................................................................................................................................28

    3.24 Disclosure..............................................................................................................................................29

    ARTICLE
      IV REPRESENTATIONS AND WARRANTIES RELATING TO
      SELLERS...............................29

    4.1 Organization
      and Good
      Standing.........................................................................................................29

    4.2 Capitalization...........................................................................................................................................29

    4.3 Authority
      and
      Enforceability................................................................................................................30

    4.4 No
      Conflicts;
      Consents.........................................................................................................................30

    4.5 Capacity...................................................................................................................................................30

    4.6 No
      Orders
      or
      Actions............................................................................................................................30

    4.7 Absence
      of Certain Changes or
      Events..............................................................................................31

    4.8 Additional
      Representations by
      Rivergate..........................................................................................31

    ARTICLE
      V
      REPRESENTATIONS AND WARRANTIES OF THE
      BUYER................................................31

    5.1 Organization
      and Good
      Standing.........................................................................................................32

    5.2 Authority
      and
      Enforceability................................................................................................................32

    5.3 No
      Conflicts;
      Consents.........................................................................................................................32

    5.4 No
      Orders
      or
      Actions.............................................................................................................................33

    5.5 Purchase
      for
      Investment........................................................................................................................33

    5.6 Availability
      of
      Funds..............................................................................................................................33

    5.7 Brokers......................................................................................................................................................33

    5.8 No
      Other
      Representations.....................................................................................................................33

    ARTICLE
      VI COVENANTS OF THE ACQUIRED COMPANY AND
      SELLERS..........................................33

    6.1 Conduct
      of
      Business..............................................................................................................................33

    6.2 Negative
      Covenants...............................................................................................................................34

    6.3 Access
      to
      Information............................................................................................................................35

    6.4 Resignations............................................................................................................................................35

    6.5 Distribution
      of Cash and Cash
      Equivalents........................................................................................35

    6.6 Notification...............................................................................................................................................35

    6.7 Competing
      Offers; Merger or
      Liquidation...........................................................................................36

     

     

     

    
      
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    ARTICLE
      VII COVENANTS OF THE
      BUYER..................................................................................................36

    7.1 Confidentiality.........................................................................................................................................36

    7.2 Employee
      Matters...................................................................................................................................37

    ARTICLE
      VIII COVENANTS OF THE BUYER, THE SELLERS AND THE ACQUIRED
      COMPANY......38

    8.1 Regulatory
      and Other
      Approvals.........................................................................................................38

    8.2 Public
      Announcements..........................................................................................................................39

    8.3 Further
      Assurances................................................................................................................................39

    8.4 Real
      Property
      Covenants.......................................................................................................................39

    ARTICLE
      IX CONDITIONS TO
      CLOSING.......................................................................................................40

    9.1 Conditions
      to Obligations of the Buyer and the
      Sellers...................................................................40

    9.2 Conditions
      to Obligation of the
      Buyer................................................................................................41

    9.3 Conditions
      to Obligations of the
      Sellers.............................................................................................42

    ARTICLE
      X
      TERMINATION..............................................................................................................................43

    10.1 Termination............................................................................................................................................43

    10.2 Effect
      of
      Termination............................................................................................................................44

    ARTICLE
      XI
      INDEMNIFICATION....................................................................................................................44

    11.1 Survival..................................................................................................................................................44

    11.2 Indemnification
      by the
      Seller...............................................................................................................45

    11.3 Indemnification
      by
      Buyer....................................................................................................................46

    11.4 Indemnification
      Procedure for Third Party
      Claims...........................................................................47

    11.5 Indemnification
      Procedures for Non-Third Party
      Claims................................................................48

    11.6 Calculation
      of Indemnity
      Payments...................................................................................................48

    11.7 Characterization
      of Indemnification
      Payments................................................................................49

    ARTICLE
      XII TAX
      MATTERS..........................................................................................................................49

    12.1 Tax
      Indemnification.............................................................................................................................49

    12.2 Straddle
      Period.....................................................................................................................................49

    12.3 Tax
      Returns Filed after the Closing
      Date.........................................................................................50

    12.4 Cooperation
      on Tax
      Matters..............................................................................................................50

    12.5 Certain
      Taxes........................................................................................................................................51

    12.6 Tax
      Refunds..........................................................................................................................................51

    12.7 Tax
      Proceedings...................................................................................................................................51

    12.8 Disputes................................................................................................................................................52

     

     

     

    
      
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    12.9 Payment
      of Management Incentive Plan Tax Benefit
      Amount.....................................................52

    ARTICLE
      XIII POST CLOSING COVENANTS OF THE
      SELLER.................................................................52

    13.1 Covenant
      Not to Compete and
      Confidentiality...............................................................................52

    13.2 Non-Solicitation/Non-Hire..................................................................................................................53

    13.3 Confidentiality......................................................................................................................................54

    13.4 Remedy
      for
      Breach..............................................................................................................................54

    ARTICLE
      XIV
      MISCELLANEOUS....................................................................................................................54

    14.1 Notices...................................................................................................................................................54

    14.2 Sellers’
      Guaranty...................................................................................................................................56

    14.3 Buyer
      Guaranty.....................................................................................................................................57

    14.4 Amendments
      and
      Waivers..................................................................................................................57

    14.5 Expenses................................................................................................................................................58

    14.6 Successors
      and
      Assigns.....................................................................................................................58

    14.7 Governing
      Law......................................................................................................................................58

    14.8 Consent
      to
      Jurisdiction.......................................................................................................................58

    14.9 Counterparts.........................................................................................................................................58

    14.10 No
      Third
      Party
      Beneficiaries............................................................................................................59

    14.11 Entire
      Agreement...............................................................................................................................59

    14.12 Captions.............................................................................................................................................59

    14.13 Severability........................................................................................................................................59

    14.14 Interpretation.....................................................................................................................................59

     

    

     

    

     

    

     

    

    
      
        
          
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    STOCK
      PURCHASE AGREEMENT

     

    This
      STOCK PURCHASE AGREEMENT is made and entered into as of October 18, 2006 (the
      “Agreement”),
      by
      and among Cottage Bakery, Inc., a California corporation (the “Acquired
      Company”),
      Rivergate Partners, L.P. (“Rivergate”),
      Jamison Partners, L.P., Terry R. Knutson and Rose Knutson, as Co-Trustees of
      the
      Terry and Rose Knutson 2000 Family Trust UTA 6/21/00, Church Resource Ministries
      and Bethel Tabernacle (a/k/a Bethel Open Bible Church) (each of the foregoing
      (other than the Acquired Company) is referred to herein as a “Seller”
and
      collectively, the “Sellers”),
      Terry
      R. Knutson and Rose Knutson, each an individual of Lodi, California
      (collectively referred to as “Sellers’
      Guarantor”),
      RH
      Financial Corporation, a Nevada corporation (the “Buyer”)
      and
      Ralcorp Holdings, Inc., a Missouri corporation (“Buyer’s
      Guarantor”).

     

    WHEREAS,
      the Sellers collectively own 4,000 shares of common stock, par value $10.00
      per
      share, of the Acquired Company (the “Common
      Stock”),
      which
      shares of Common Stock constitute all of the issued and outstanding Equity
      Securities (as hereinafter defined) of the Acquired Company; and

     

    WHEREAS,
      the Sellers desire to sell such shares of Common Stock (the “Purchased
      Securities”)
      to the
      Buyer, and the Buyer desires to purchase the Purchased Securities from the
      Sellers, upon the terms and subject to the conditions of this
      Agreement.

     

    NOW,
      THEREFORE, in consideration of the foregoing premises and the respective
      representations, warranties, covenants and agreements contained herein, and
      for
      other good and valuable consideration, the sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1  Definitions. 
      When used in this Agreement, the following terms shall have the meanings
      assigned to them in this Section 1.1.

     

    “Acquired
      Company Material Adverse Effect”
means
      any change or effect that has had or is reasonably expected to have a materially
      adverse effect on the ability of the Sellers or the Acquired Company to
      consummate the Contemplated Transactions contemplated by this Agreement, or
      a
      materially adverse effect on the business, financial condition, properties,
      profitability or operations of the Acquired Company, taken as a whole, other
      than any such effect or change, caused by (a) general political, economic,
      financial, capital market or industry wide conditions, (b) a prospective
      change arising out of any adopted legislation, or other enactment by any
      Governmental Entity (in the case of (a) and (b) not having a unique or
      disproportionate effect on the Acquired Company), (c) the public
      announcement of this Agreement or the consummation of the Contemplated
      Transactions contemplated by this Agreement, or (d) the Buyer or any of its
      Affiliates.

     

     

    
      
        
        

      

      
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    “Affiliate”
means,
      with respect to any specified Person, any other Person directly or indirectly
      controlling, controlled by or under common control with such specified Person;
      provided, that for purposes of this definition, “control” (including, with
      correlative meanings, the terms “controlled by” and “under common control
      with”), as used with respect to any Person, shall mean the possession, directly
      or indirectly, of the power to direct or cause the direction of the management
      and policies of such Person, whether through the ownership of voting securities,
      by contract or otherwise.

     

    “Agreement
      of Purchase and Sale and Joint Escrow Instructions” means
      that certain Agreement of Purchase and Sale of Real Property and Joint Escrow
      Instructions between Rivergate, as Seller, and Buyer (or its Subsidiary), as
      purchaser, in the form attached as Exhibit A
      hereto.

     

    “Ancillary
      Agreements”
means,
      collectively, the Escrow Agreement, the Lease Amendment, the Employment
      Agreements, the Agreement of Purchase and Sale and Joint Escrow Instructions
      and
      any other agreements, instruments and documents delivered at the Closing in
      connection with the transactions contemplated by this Agreement.

     

    “Authorization”
means
      any authorization, approval, consent, certificate, license, permit or franchise
      of or from any Governmental Entity or pursuant to any Law.

     

    “Balance
      Sheet Date”
means
      June 30, 2006.

     

    “Base
      Net Asset Value”
means
      $18,000,000.

     

    “Benefit
      Plan”
means
      any employee related plan, program, policy, practice, contract, agreement or
      other arrangement providing for compensation, profit sharing, thrift, savings,
      bonus, loans, change in control, severance, retention, termination or pension
      benefits, retirement or superannuation benefits, deferred compensation,
      performance awards, stock or stock related awards, fringe benefits, health,
      dental, vision, life, hospitalization, insurance, employment, disability,
      vacation, sabbatical, accidental death and dismemberment, workers’ compensation
      or supplemental unemployment benefits, or other employee benefits or
      remuneration of any kind, whether written or unwritten or otherwise, funded
      or
      unfunded, including, without limitation, any “employee benefit plan” within the
      meaning of Section 3(3) of ERISA.

     

    “Books
      and Records”
means
      books of account, general, financial, warranty and shipping records, invoices,
      customer lists, correspondence, engineering, maintenance, operating and
      production records, advertising and promotional materials, credit records of
      customers and other documents, records and files, in each case of the Acquired
      Company.

     

    “Business
      Day”
means
      a
      day other than a Saturday, Sunday or other day on which banks located in Los
      Angeles, California are authorized or required by Law to close.

     

    “Buyer
      Material Adverse Effect”
means
      any material adverse effect on the ability of the Buyer to perform its
      obligations under this Agreement and the Ancillary Agreements, as
      applicable.

     

     

     

    
      
        
        

      

      
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    “Closing
      Amount”
means
      the Fixed Purchase Price (i) minus
      the
      Estimated Negative Net Asset Adjustment (if any) and (ii) minus
      any
      Indebtedness existing on the Closing Date and (iii) minus
      the
      Escrow Amount.

     

    “Closing
      Date Net Asset Value”
means
      total assets, excluding book cash (including investments, marketable securities
      and other cash type assets), minus total liabilities, excluding Indebtedness
      used to determine the Closing Amount as of the Closing Date, as such amounts
      are
      set forth on the Closing Date Balance Sheet (as prepared and determined in
      accordance with Section
      2.4).

     

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

     

    “Confidentiality
      Agreement”
means
      that certain Confidentiality Agreement dated as of April 18, 2003, between
      RSM EquiCo Capital Markets LLC and Buyer, as extended by that certain letter
      agreement dated July 5, 2006.

     

    “Contemplated
      Transactions” means
      the
      transactions contemplated by this Agreement and the Ancillary
      Agreements.

     

    “Contract”
means
      any agreement, contract, commitment, obligation, undertaking or arrangement,
      whether written or oral.

     

    “Employee
      Supplemental Retention Plan”
means
      that certain Employee Supplemental Retention Plan to be adopted by the Acquired
      Company in the form attached as Exhibit
      B
      hereto.

     

    “Employee
      Supplemental Plan Tax Benefit Amount”
means
      the net present value of the anticipated tax benefit to the Buyer in connection
      with its payment of the Employment Supplemental Retention Amount calculated
      in
      accordance with the methodology set forth in Schedule
      7.2(b).

     

    “Employment
      Agreements”
means
      those certain Employment Agreements between Ralcorp Holdings, Inc. and each
      of
      the Key Employees, in the forms attached to Exhibit
      C
      hereto.

     

    “Environmental
      Law” means
      any
      Law that relates to public health and safety and pollution or protection of
      the
      environment, including without limitation all those relating to the presence,
      use, production, reduction, generation, handling, transportation, treatment,
      storage, disposal, distribution, labeling, testing, processing, discharge,
      release, threatened release, control or cleanup of any Hazardous Materials,
      hazardous substances, hazardous wastes or pollutants, as such Laws are enacted
      and in effect on or prior to the Closing Date.

     

     “Equity
      Securities”
means
      (a) shares of capital stock and (b) options, warrants or other rights
      convertible into, or exercisable or exchangeable for, directly or indirectly,
      or
      otherwise entitling any Person to acquire, directly or indirectly, shares of
      capital stock.

     

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

     

     

     

    
      
        
        

      

      
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    “ERISA
      Affiliate”
means
      any Subsidiary of the Acquired Company or any other trade or business (whether
      or not incorporated) which would be treated as a single employer with the
      Acquired Company or any of its Subsidiaries under Section 414 of the
      Code.

     

    “Escrow
      Agent”
means
      J.P. Morgan Trust Company, National Association, a national banking
      association.

     

    “Escrow
      Agreement”
means
      that certain Escrow Agreement, dated as of the Closing Date, among Sellers,
      Buyer and the Escrow Agent, substantially in the form attached hereto as
Exhibit
      D.

     

    “Estimated
      Negative Net Asset Value Adjustment”
means
      the amount, if any, by which the Base Net Asset Value exceeds the Estimated
      Closing Date Net Asset Value.

     

    “Fixed
      Purchase Price”
means
      $170,840,000 (a) less
      the
      Employee Supplemental Retention Amount, (b) less
      the
      Management Supplemental Retention Amount and (c) plus
      the
      Employee Supplemental Plan Tax Benefit Amount.

     

    “Governmental
      Entity”
means
      any entity or body exercising executive, legislative, judicial, regulatory
      or
      administrative functions of or pertaining to United States federal, state or
      local government, including any department, commission, board, agency, bureau,
      official or other regulatory, administrative or judicial authority
      thereof.

     

    “Hazardous
      Materials”
means
      any flammable, ignitable, corrosive, reactive, radioactive or explosive
      substance or material, hazardous waste, toxic substance or related material
      and
      any other substance
      or
      material defined or designated as a hazardous or toxic substance, hazardous
      material or hazardous waste by any Law in effect on or prior to the Closing
      Date, including but not limited to petroleum and petroleum by-products, PCBs,
      and asbestos or asbestos containing materials.

     

    “HSR
      Act”
means
      the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
      amended.

     

    “Indebtedness”
of
      the
      Acquired Company means: (a) debt of the Acquired Company, including
      interest and any prepayment penalties thereon, created, issued or incurred
      by
      the Acquired Company for borrowed money (whether by loan or the issuance and
      sale of debt securities or the sale of property to another person subject to
      an
      understanding or agreement, contingent or otherwise, to repurchase such property
      from such person); (b) obligations of the Acquired Company to pay the
      deferred purchase or acquisition price of property or services, other than
      trade
      accounts payable arising, and accrued expenses incurred, in the ordinary course
      of business and consistent with the Acquired Company’s trade practices;
      (c) payment obligations in respect of letters of credit, bankers’
acceptances or similar instruments issued or accepted by banks and other
      financial institutions; (d) capital lease obligations; (e) unfunded
      deferred compensation obligations; (f) indebtedness of others guaranteed by
      the Acquired Company; and (g) undisputed payables more than thirty (30)
      days past due.

     

    “Indemnitee”
means
      any Person that is seeking indemnification from an Indemnitor pursuant to the
      provisions of this Agreement.

     

     

     

    
      
        
        

      

      
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    “Indemnitor”
means
      any party to this Agreement from which any Indemnitee is seeking indemnification
      pursuant to the provisions of this Agreement.

     

    “Key
      Employee”
means
      Terry Knutson, Jeff Ahlers, Jeff Babikian, Kevin Knutson, Lance Knutson, Kevin
      Haslebacher or Kevin O’Connell.

     

    “Knowledge
      of the Acquired Company”
or
      any
      similar phrase means all matters that are known to Terry Knutson, Jeff Ahlers,
      Adrienne Wang, Jeff Babikian, Lance Knutson, Kevin Knutson or Kevin Haslebacher,
      or with respect to those matters which such individual has functional
      responsibility, that would reasonably be expected to be known by such individual
      as of the date of this Agreement, after a reasonable investigation sufficient
      to
      express an informed view.

     

    “Knowledge
      of the Buyer”
or
      any
      similar phrase means all matters that are known to, or that would reasonably
      be
      expected to be known as of the date of this Agreement, after a reasonable
      investigation sufficient to express an informed view, by Kevin Hunt, Richard
      Scalise, Scott Monette or Matt Pudlowski.

     

    “Knowledge
      of Rivergate”
or
      any
      similar phrase means all matters that are known to, or that would reasonably
      be
      expected to be known as of the date of this Agreement, after a reasonable
      investigation sufficient to express an informed view, by Terry Knutson or Rose
      Knutson.

     

    “Law”
means
      any
      statute, principle of common law, ordinance, rule or regulation of any
      Governmental Entity.

     

    “Lease
      Amendment”
means
      that certain Lease Amendment, in the form attached as Exhibit
      E
      hereto.

     

    “Liabilities”
means
      liabilities, obligations or commitments of any nature whatsoever whether
      asserted or unasserted, known or unknown, absolute or contingent, direct or
      indirect, conditional, implied, derivative, joint, several, secondary, accrued
      or unaccrued, matured or unmatured or otherwise due or to become due, regardless
      of whether such obligation, duty or liability would be required to be disclosed
      on a balance sheet prepared in accordance with GAAP and regardless of whether
      such liability, obligation or commitment is immediately due and
      payable.

     

    “Lien”
means,
      with respect to any property or asset, any mortgage, lien, pledge, charge,
      claim, option, right of first refusal, restriction on use, voting, transfer
      or
      receipt of income or other similar restriction, security interest, hypothecation
      or any other encumbrance in respect of such property or asset.

     

    “Management
      Supplemental Retention Plan”
means
      that certain Management Supplemental Retention Plan to be adopted by the
      Acquired Company in the form attached as Exhibit
      F
      hereto.

     

     

     

    
      
        
        

      

      
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    “Order”
means
      any award, injunction, judgment, decree, order, ruling, subpoena or verdict
      or
      other decision issued, promulgated or entered by or with any Governmental Entity
      of competent jurisdiction or by any arbitrator.

     

    “Organizational
      Documents”
means,
      with respect to any entity, the certificate of incorporation, the articles
      of
      incorporation, by-laws, articles of organization, partnership agreement, limited
      liability company agreement, formation agreement, joint venture agreement or
      other similar organizational documents of such entity (in each case, as amended
      through the date of this Agreement).

     

    “Permitted
      Liens”
means
      (a) Liens for Taxes that are not yet delinquent or that may hereafter be
      paid without material penalty or that are being contested in good faith,
      (b) statutory Liens of landlords and workers’, carriers’, materialmen’s,
      suppliers’, warehousemen’s and mechanics’ or other like Liens incurred in the
      ordinary course of business, (c) Liens and encroachments, in the case of
      real property, which do not materially interfere with the present use of the
      properties they affect, (d) Liens that will be released prior to or as of
      the Closing, (e) Liens arising under this Agreement or any Ancillary
      Agreement and (f) Liens set forth on Schedule 1.1.

     

    “Person”
means
      an individual, a corporation (including any non-profit corporation), a
      partnership, a limited liability company, a trust, an unincorporated
      association, a Governmental Entity or any agency, instrumentality or political
      subdivision of a Governmental Entity, or any other entity or body.

     

    “Post-Closing
      Tax Period”
means
      any taxable period beginning after the Closing Date and, the portion of any
      Straddle Period beginning after the Closing Date.

     

    “Pre-Closing
      Tax Period”
means
      any taxable period ending on or before the Closing Date and the portion of
      any
      Straddle Period up through and including the Closing Date.

     

    “Pro-Rata
      Portion”
of
      each
      Seller is the percentage of shares of Purchased Securities held by each Seller
      as set forth in Section 3.2(a)
      of the
      Acquired Company Disclosure Schedule.

     

    “Purchase
      Price”
means
      the Fixed Purchase Price (a) plus
      the
      Management Incentive Plan Tax Benefit Amount, (b) plus
      the
      Ending Escrow Amount and (c) less
      the
      Negative Net Asset Adjustment (if any).

     

    “Restricted
      Territory”
means
      anywhere in the United States or Canada in which the Acquired Company conducts
      business as of the Closing Date.

     

    “Seller
      Material Adverse Effect”
means,
      with respect to a Seller, any material adverse effect on the ability of such
      Seller to perform its obligations under this Agreement and the Ancillary
      Agreements, as applicable.

     

    “Sellers’
      Representative” means
      Terry Knutson, an individual, who shall serve as the representative of each
      of
      the Sellers in accordance with Section 2.5
      of this
      Agreement.

     

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    “Straddle
      Period”
means
      any taxable period beginning on or before the Closing Date which includes (but
      does not end on) the Closing Date.

     

    “Subsidiary”
or
      “Subsidiaries”
means,
      with respect to any Person, any corporation, partnership, limited liability
      company, joint venture or other legal entity of any kind of which such Person
      (either alone or through or together with one or more of its other
      Subsidiaries), owns, directly or indirectly, more than fifty percent (50%)
      of
      the capital stock or other equity interests the holders of which are
      (a) generally entitled to vote for the election of the board of directors
      or other governing body of such legal entity or (b) generally entitled to
      share in the profits or capital of such legal entity.

     

    “Tax”
or
      “Taxes”
means
      all federal, state, local and foreign income, profits, franchise, capital gains,
      gross receipts, environmental, customs duty, capital stock, severance, stamp,
      payroll, sales, gift, employment, unemployment, disability, use, personal and
      real property, withholding, excise, production, transfer, alternative minimum,
      value added, occupancy, levy, assessment, tariff, duty and other taxes and
      any
      deficiency, fee and related charge or amount (including any fine, penalty,
      interest or other charge related thereto) imposed, assessed or collected by
      or
      under the authority of any Governmental Entity or payable pursuant to a tax
      sharing arrangement or any other Contract relating to the sharing of payment
      of
      any such tax, levy, assessment, tariff, duty, deficiency or fee.

     

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

     

    “Transfer
      Taxes”
means
      sales, use, transfer, real property transfer, recording, documentary, stamp,
      registration and stock transfer Taxes and any similar Taxes.

     

    “Treasury
      Regulations”
means
      the federal income Tax regulations promulgated under the Code.

     

    “Trust”
means
      an irrevocable trust established by the Buyer or Buyer’s Guarantor pursuant to a
      standard form of “rabbi trust” agreement with Trustee which is intended to be a
      grantor trust for federal tax purposes, and the principal and earnings of which
      (a) shall be used for the exclusive purpose of providing the benefits under
      the
      Management Supplemental Retention Plan and the Employee Supplemental Retention
      Plan or (b) in the event of an insolvency of Buyer or Buyer’s Guarantor or their
      Affiliates or other event that would cause the assets of the trust to be made
      available to the general creditors of Buyer or Buyer’s Guarantor or their
      Affiliates, shall be repaid to the Sellers and shall not be made available
      to
      any other creditors of Buyer or Buyer’s Guarantor or their
      Affiliates.

     

    “Trustee”
means
      Vanguard Fiduciary Trust Company or other bank or trust company serving as
      trustee of the Trust.

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

     

    1.2  Other
      Defined Terms.
      The
      following terms have the meanings assigned to such terms in the Sections of
      the
      Agreement set forth below:

     

    
      
        	
                Action

              	
                3.14

              
	
                Acquired
                  Company

              	
                Preamble

              
	
                Acquired
                  Company Benefit Plan

              	
                3.15

              
	
                Acquired
                  Company Disclosure Schedule

              	
                Preamble
                  to Article III

              
	
                Acquired
                  Company Disclosure Schedule Supplement

              	
                6.6(a)

              
	
                Acquired
                  Company Intellectual Property

              	
                3.9(d)

              
	
                Acquired
                  Company Licenses

              	
                3.9(d)

              
	
                Acquired
                  Company Owned Intellectual Property

              	
                3.9(b)

              
	
                Acquisition

              	
                2.1

              
	
                Affected
                  Employee

              	
                7.2(a)

              
	
                Agreement

              	
                Preamble

              
	
                Applicable
                  Survival Period

              	
                11.1(b)

              
	
                Balance
                  Sheet

              	
                3.4(a)

              
	
                Buyer

              	
                Preamble

              
	
                Buyer
                  Disclosure Schedule

              	
                Preamble
                  to Article V

              
	
                Buyer
                  Guaranty

              	
                14.3(a)

              
	
                Buyer’s
                  Guarantor

              	
                Preamble

              
	
                Buyer
                  Indemnitees

              	
                11.2(a)

              
	
                Closing

              	
                2.2

              
	
                Closing
                  Date 

              	
                2.2

              
	
                Closing
                  Date Balance Sheet

              	
                2.4(b)(i)

              
	
                Common
                  Stock

              	
                Recitals

              
	
                Confidential
                  Information

              	
                13.3

              
	
                Deductible

              	
                11.2(d)

              
	
                Dispute
                  Notice

              	
                2.4(c)

              
	
                Dispute
                  Period

              	
                2.4(c)

              
	
                Employee
                  Supplemental Retention Amount

              	
                7.2(b)

              
	
                Ending
                  Escrow Amount

              	
                2.6(a)

              
	
                Escrow
                  Account

              	
                2.3(a)(ii)

              
	
                Estimated
                  Closing Date Net Asset Value

              	
                2.4(a)

              
	
                Financial
                  Statements

              	
                3.4(a)

              
	
                GAAP

              	
                3.4(a)

              
	
                Improvements

              	
                3.25

              
	
                Indemnifiable
                  Tax

              	
                12.7(a)

              
	
                Indemnity
                  Cap

              	
                11.2(d)

              
	
                Independent
                  Accountants

              	
                2.4(f)

              
	
                Intellectual
                  Property

              	
                3.9(a)

              
	
                Interim
                  Financial Statements

              	
                3.4(a)

              
	
                Leases

              	
                3.8(b)

              
	
                Losses

              	
                11.2(a)

              
	
                Management
                  Incentive Plan Tax Benefit Amount

              	
                12.9

              
	
                Management
                  Supplemental Retention Amount

              	
                7.2(c)

              
	
                Material
                  Contracts

              	
                3.13(c)

              
	
                Material
                  Customers

              	
                3.22

              

      

    

    
      
        	
                Negative
                  Net Asset Adjustment

              	
                2.4(g)

              
	
                Non-Compete
                  Period

              	
                13.1

              

      

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    

      
        	
                Non-Compete
                  Sellers

              	
                13.1

              
	
                Notice
                  of Claim

              	
                11.4(a)

              
	
                Policies

              	
                3.18

              
	
                Position
                  Statement

              	
                2.4(f)

              
	
                Post-Closing
                  Delivery

              	
                2.4(b)

              
	
                Preliminary
                  Title Report

              	
                8.4(b)

              
	
                Purchased
                  Securities

              	
                Recitals

              
	
                Real
                  Property

              	
                4.8

              
	
                Resolution
                  Period

              	
                2.4(e)

              
	
                Rivergate

              	
                Preamble

              
	
                Seller

              	
                Preamble

              
	
                Seller
                  Disclosure Schedule

              	
                Preamble
                  to Article IV

              
	
                Seller
                  Disclosure Schedule Supplement

              	
                6.6(b)

              
	
                Seller
                  Indemnitees

              	
                11.3

              
	
                Sellers’
                  Guarantor

              	
                Preamble

              
	
                Sellers’
                  Guaranty

              	
                14.2(a)

              
	
                Short
                  Year Returns

              	
                12.3

              
	
                Survey

              	
                8.4(c)

              
	
                Tax
                  Proceeding

              	
                12.7(a)

              
	
                Third
                  Party Claim

              	
                11.4(a)

              
	
                Third
                  Party Defense

              	
                11.4(b)

              
	
                Third
                  Party Licenses

              	
                3.9(d)

              
	
                Transactional
                  Reps

              	
                11.1(a)

              

      

    

     

    1.3  Construction.
      For the
      purposes of this Agreement, except as otherwise expressly provided herein or
      unless the context otherwise requires: (a) the meaning assigned to each
      term defined herein shall be equally applicable to both the singular and the
      plural forms of such term and vice versa, and words denoting either gender
      shall
      include both genders as the context requires; (b) where a word or phrase is
      defined herein, each of its other grammatical forms shall have a corresponding
      meaning; (c) the terms “hereof,” “herein,” “hereunder,” “hereby” and
“herewith” and words of similar import shall, unless otherwise stated, be
      construed to refer to this Agreement as a whole and not to any particular
      provision of this Agreement; (d) when a reference is made in this Agreement
      to an Article, Section, paragraph, Exhibit or Schedule, such reference is to
      an
      Article, Section, paragraph, Exhibit or Schedule to this Agreement unless
      otherwise specified; (e) the word “include,” “includes,” and “including”
when used in this Agreement shall be deemed to be followed by the words “without
      limitation,” unless otherwise specified; and (f) a reference to any party
      to this Agreement or any other agreement or document shall include such party’s
      predecessors, successors and permitted assigns.

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    ARTICLE
      II

      

    PURCHASE
      AND SALE

     

    2.1  Purchase
      and Sale of the Purchased Securities.
      Upon
      the terms and subject to the conditions of this Agreement, at the Closing,
      the
      Sellers shall sell and transfer to the Buyer, and the Buyer shall purchase
      from
      the Sellers, all right, title and interest of the Sellers in all of the Equity
      Securities of the Acquired Company. The aggregate purchase price for all of
      the
      Purchased Securities is the Purchase Price, subject to adjustment as provided
      in
Section 2.4
      of this
      Agreement. The Purchase Price shall be paid as provided in Section 2.3.
      The
      purchase and sale of the Purchased Securities is referred to in this Agreement
      as the “Acquisition.”

     

    2.2  Closing
      Date.
      The
      closing of the Acquisition (the “Closing”)
      shall
      take place at the offices of Pillsbury Winthrop Shaw Pittman LLP, 725 South
      Figueroa Street, 28th Floor, Los Angeles, California 90017 at 10:00 a.m. Los
      Angeles time on the later of (i) October 31, 2006 or (ii) the
      date that is two business days following the termination of the applicable
      waiting period under the HSR Act, or (iii) at such other time and place as
      the parties may agree. The date on which the Closing occurs is referred to
      in
      this Agreement as the “Closing
      Date.”
Subject
      to the provisions of Article
      X,
      failure
      to consummate the purchase and sale provided for in this Agreement on the date
      and time and at the place determined pursuant to this Section 2.2
      will not
      result in the termination of this Agreement and will not relieve any party
      of
      any obligation under this Agreement. The Closing shall be effective as of 11:59
      p.m. on the Closing Date.

     

    2.3  Transactions
      to be Effected at the Closing.

     

    (a)  At
      the
      Closing, the Buyer shall:

     

    (i)  pay
      to
      each of the Sellers its Pro-Rata Portion of the Closing Amount by wire transfer
      of immediately available funds to the account or accounts designated in writing
      to the Buyer by Sellers’ Representative no later than three (3) Business Days
      prior to the Closing Date;

     

    (ii)  deposit
      $17,500,000 (the “Escrow
      Amount”)
      with
      the Escrow Agent by wire transfer of immediately available funds to the account
      designated by the Escrow Agent in the Escrow Agreement (the “Escrow
      Account”);
      and

     

    (iii)  deliver
      to the Sellers all other documents, instruments or certificates required to
      be
      delivered by the Buyer at or prior to the Closing pursuant to this
      Agreement.

     

    (b)  At
      the
      Closing, each of the Sellers shall:

     

    (i)  deliver
      to the Buyer a certificate or certificates representing the Purchased Securities
      being sold by them hereunder duly endorsed or accompanied by stock powers duly
      endorsed in blank, and

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    (ii)  deliver,
      or cause to be delivered, all other documents, instruments or certificates
      required to be delivered by the Sellers at or prior to the Closing pursuant
      to
      this Agreement.

     

     

    2.4  Calculation
      and Payment of the Net Asset Value Adjustment.

     

    (a)  The
      parties agree that in lieu of the Sellers’ Representative delivering to the
      Buyer a statement setting forth the Sellers’ good faith estimate and calculation
      of the Closing Date Net Asset Value (the “Estimated
      Closing Date Net Asset Value”),
      the
      parties agree that the Estimated Closing Date Net Asset Value shall equal the
      Base Net Asset Value.

     

    (b)  As
      promptly as reasonably practicable after the Closing Date, and in any event
      not
      later than sixty (60) days after the Closing Date, the Buyer shall prepare
      and
      deliver to the Sellers’ Representative (such delivery, the “Post-Closing
      Delivery”):

     

    (i)  a
      balance
      sheet (the “Closing
      Date Balance Sheet”)
      of the
      Acquired Company (without giving effect to the consummation of the Acquisition)
      prepared as of the close of business on the Closing Date in accordance with
      Schedule 2.4
      and with
      GAAP and consistently with the preparation of the Balance Sheet; provided,
      however,
      that if
      GAAP permits different treatments of any item, the historical treatment used
      by
      the Acquired Company (provided it is one of the GAAP treatments) shall be
      utilized but in all cases the accounting procedures in Schedule 2.4
      shall
      govern; and

     

    (ii)  a
      calculation of the Acquired Company’s Closing Date Net Asset Value.

     

    (c)  The
      Sellers’ Representative shall have thirty (30) days from the date the Buyer
      makes the Post-Closing Delivery (such period, the “Dispute
      Period”)
      to
      notify the Buyer, in writing (such notice, the “Dispute
      Notice”),
      as to
      whether the Sellers’ Representative agrees or disagrees with the Buyer’s
      preparation of the Closing Date Balance Sheet and its calculation of the
      Acquired Company’s Closing Date Net Asset Value. The Dispute Notice shall set
      forth in reasonable detail the reasons why the Sellers’ Representative believes
      the Buyer’s preparation of the Closing Date Balance Sheet or calculation of
      Closing Date Net Asset Value is incorrect. During the Dispute Period, the
      Sellers’ Representative and its representatives shall be permitted to review
      (during regular business hours and upon reasonable prior notice) the working
      papers of the Buyer and (where applicable) the Buyer’s accountants relating to
      the matters set forth in the Post-Closing Delivery.

     

    (d)  If
      the
      Sellers’ Representative fails to deliver a Dispute Notice to the Buyer during
      the Dispute Period, the Closing Date Balance Sheet and the Buyer’s calculation
      of Closing Date Net Asset Value shall be deemed to be correct and complete
      and
      final and shall be binding upon the Buyer and the Sellers.

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    (e)  If
      the
      Sellers’ Representative delivers a Dispute Notice to the Buyer during the
      Dispute Period, the Buyer and the Sellers’ Representative shall, for a period of
      thirty (30) days from the date the Dispute Notice is delivered to the Buyer
      (such period, the “Resolution
      Period”),
      use
      their respective good faith efforts to amicably resolve the items in dispute.
      Any items so resolved by the parties shall be deemed to be final and correct
      as
      so resolved and shall be binding upon each of the Buyer and the
      Sellers.

     

    (f)  If
      the
      Buyer and the Sellers’ Representative are unable to resolve all of the items in
      dispute during the Resolution Period, then either the Buyer, on the one hand,
      or
      the Sellers’ Representative, on the other hand, may refer the items remaining in
      dispute to the Los Angeles office of Deloitte & Touche LLP (the
“Independent
      Accountants”).
      Such
      referral shall be made in writing to the Independent Accountants, a copy of
      which shall concurrently be delivered to the non-referring party. The referring
      party shall furnish the Independent Accountants, at the time of such referral,
      with the Closing Date Balance Sheet, the Buyer’s calculation of Closing Date Net
      Asset Value and the Dispute Notice. The parties shall also furnish the
      Independent Accountants with such other information and documents as the
      Independent Accountants may reasonably request in order for them to resolve
      the
      items in dispute. The Buyer and the Sellers’ Representative shall each also,
      within ten (10) days of the date the items in dispute are referred to the
      Independent Accountants, provide the Independent Accountants with a written
      notice (a “Position
      Statement”)
      describing in reasonable detail their respective positions on the items in
      dispute (a copy of which will concurrently be delivered to the other party).
      If
      any party fails to timely deliver its Position Statement to the Independent
      Accountants, the Independent Accountants shall resolve the items in dispute
      solely upon the basis of the information otherwise provided to them. The
      Independent Accountants shall resolve all disputed items in a written
      determination to be delivered to the Buyer and the Sellers’ Representative
      within thirty (30) days after such matter is referred to them; provided,
      however,
      that
      any delay in delivering such determination shall not invalidate such
      determination or deprive the Independent Accountants of jurisdiction to resolve
      the items in dispute. The decision of the Independent Accountants as to the
      items in dispute shall be final and binding upon the Buyer and the Sellers
      and
      shall not be subject to judicial review. The fees and expenses of the
      Independent Accountants shall be borne by the Sellers’ Representative and Buyer
      in inverse proportion as they may prevail on matters resolved by the Independent
      Accountants, which proportionate allocations shall also be determined by the
      Independent Accountants.

     

    (g)  Within
      ten (10) days after the final determination of Closing Date Net Asset Value
      (whether through failure of the Sellers’ Representative to timely deliver a
      Dispute Notice, agreement of the parties, or determination of the Independent
      Accountants), if the Closing Date Net Asset Value (as so finally determined)
      is
      less than the Estimated Closing Date Net Asset Value (the amount of such
      difference, the “Negative
      Net Asset Adjustment”)
      and if
      the Negative Net Asset Adjustment is at least $100,000, the Sellers’
Representative (for and on behalf of each Seller, but without any personal
      liability whatsoever) shall pay the Buyer an amount equal to the combined
      Pro-Rata Portion of the Negative Net Asset Adjustment plus
      interest
      thereon accruing at a rate of 5.25% per annum,
      calculated on the basis of a 365-day year for the actual number of days that
      such amount or any part thereof remains unpaid from the Closing Date,
      and
      each Seller shall reimburse the Sellers’ Representative for his, her or its
      Pro-Rata Portion of the Negative Net Asset Adjustment or the Sellers’
Representative may pay such amount out of the account he establishes pursuant
      to
Section 2.5(a).

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    2.5  Sellers’
      Representative.

     

    (a)  Each
      Seller hereby irrevocably constitutes and appoints the Sellers’ Representative
      to act as its exclusive agent and attorney-in-fact to give and receive notices
      on behalf of the Sellers (including, without limitation, Dispute Notices) and
      in
      general to do all things and to perform all acts on each Seller’s behalf as may
      be contemplated by this Agreement and the Escrow Agreement (including, without
      limitation, the resolution of net asset value adjustment and indemnity claim
      disputes). The Sellers shall be bound by all acts of the Sellers’ Representative
      taken in connection and conformity with this Agreement and the Escrow Agreement.
      The Sellers’ Representative also shall be entitled to establish one or more cash
      reserve trust accounts (to be held for the benefit of the Sellers) to reserve
      for potential indemnity claims, any potential Negative Asset Value Adjustment,
      or any expenses, costs or other amounts (including, without limitation,
      attorneys’, accountants’ and other professional fees and costs) as the Sellers’
Representative deems reasonably appropriate or necessary.

     

    (b)  This
      power of attorney, and all authority hereby conferred, is irrevocable and will
      not be terminated by any act of any Seller or by operation of Law, whether
      by
      the death or incapacity of any Seller or by the occurrence of any other event.
      The Sellers’ Representative is acting solely in an agency capacity and will have
      no personal liability of any type for any action taken in the capacity of the
      Sellers’ Representative in accordance with the terms of this Agreement,
      including, without limitation, the compromise, settlement, payment or defense
      of
      any claim (including, without limitation, expenses and costs associated
      therewith) under this Agreement regardless of whether any Seller is the claimant
      or the party against whom a claim is being made, other than relating to the
      gross negligence or willful misconduct of the Sellers’
Representative.

     

    (c)  In
      connection with the exercise of his duties, the Sellers’ Representative will be
      entitled to consult with and rely upon legal counsel and other professional
      advisors, with the costs thereof (and all other out-of-pocket costs reasonably
      incurred by the Sellers’ Representative incident to discharging his duties under
      this Agreement and the Escrow Agreement) to be allocated among the Sellers
      in
      accordance with their Pro-Rata Portion (the amount of which may be withheld
      from
      any payment due to any Seller hereunder) and will have no personal liability
      of
      any type hereunder for any actions of any type taken in good faith reliance
      upon
      the advice of such advisors.

     

    (d)  Any
      payment received by the Sellers’ Representative on behalf of a Seller in respect
      of his, her or its Purchased Securities, as the case may be, pursuant to this
      Agreement and the Escrow Agreement shall be distributed to such Seller, as
      the
      case may be, within ten (10) Business Days after receipt thereof by the Sellers’
Representative, but in all cases subject to any reasonable reserves as
      contemplated in Section 2.5(a).

     

    (e)  Each
      Seller agrees jointly and severally, to indemnify, defend and hold the Sellers’
Representative harmless from and against any and all claims, losses,
      liabilities, damages and expenses (including, without limitation, reasonable
      attorneys’ fees and costs) which he may suffer or sustain as a result of any
      action taken in good faith hereunder or under the Escrow Agreement.

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    2.6  Escrow
      Account.
      Subject
      to the terms and conditions of the Escrow Agreement,
      on the
      date fifteen (15) months after the Closing Date, the Escrow Agent shall pay
      90% of the remaining Escrow Amount net of any Losses set forth in any unresolved
      Notice of Claim(s) held in the Escrow Account on such date to the Sellers’
Representative (for and on behalf of each of the Sellers), in immediately
      available funds. Subject to the terms and conditions of the Escrow Agreement,
      on
      the date eighteen (18) months after the Closing Date, the Escrow Agent
      shall pay the remaining Escrow Amount net of any Losses set forth in any
      unresolved Notice of Claim(s) held in the Escrow Account on such date, to the
      Sellers’ Representative (for and on behalf of each of the Sellers), in
      immediately available funds. Thereafter, amounts subject to any unresolved
      Notice of Claim(s) shall be distributed to the party entitled thereto promptly
      upon the final resolution of such Notice of Claim in accordance with the Escrow
      Agreement. The aggregate amount of funds released to the Sellers’ Representative
      out of the Escrow Account are referred to herein as the “Ending
      Escrow Amount,”
and
      the
      Sellers’ Representative shall distribute all such funds to the Sellers in
      accordance with Section
      2.5.

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES OF THE ACQUIRED COMPANY

     

    The
      Acquired Company represents and warrants to the Buyer that each statement
      contained in this Article III
      is true
      and correct as of the date hereof and the same shall be true on the Closing
      Date
      (subject to any Acquired Company Disclosure Schedule Supplement or other notice
      provided in accordance with Section
      6.6),
      except
      as set forth in the disclosure schedule accompanying this Agreement, which
      is
      attached to this Agreement and is designated therein as being the “Acquired
      Company Disclosure Schedule” (the “Acquired
      Company Disclosure Schedule”).
      The
      Acquired Company Disclosure Schedule has been arranged in sections corresponding
      to the Sections of this Article
      III.
      Each
      section of the Acquired Company Disclosure Schedule shall be deemed to
      incorporate by reference all information disclosed in any other section of
      the
      Acquired Company Disclosure Schedule to the extent that the information
      disclosed is in sufficient detail so that it is reasonably apparent from a
      reading of the disclosure that such disclosure is applicable to such other
      section.

     

    3.1  Organization,
      Good Standing, Authority and Enforceability.

     

    (a)  The
      Acquired Company is a corporation duly organized, validly existing and in good
      standing under the Laws of the State of California, has all requisite power
      to
      own, lease and operate its properties and to carry on its business as now being
      conducted, and is duly qualified to do business and is in good standing as
      a
      foreign corporation in each jurisdiction in which it owns or leases property
      or
      conducts any business so as to require such qualification, except where the
      failure to be so qualified would not reasonably be expected to have an Acquired
      Company Material Adverse Effect or would not result in the imposition of a
      material fine, penalty or expense.

     

    (b)  Sellers
      have delivered to Buyer’s Guarantor complete and correct Organizational
      Documents of the Acquired Company, as currently in effect and complete and
      correct copies of the Acquired Company’s minutes of its meetings of its board of
      directors and shareholders since its inception. The Acquired Company is not
      in
      default of or in violation of any provisions of its Organizational
      Documents.

     

     

     

    
      
        
        

      

      
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    (c)  Section 3.1(c)
      of the
      Acquired Company Disclosure Schedule sets forth a complete and accurate
      list of the Acquired Company’s directors and officers.

     

    (d)  Except
      as
      set forth on Section 3.1(d)
      of the
      Acquired Company Disclosure Schedules, the Acquired Company has not conducted
      business under any other name other than Cottage Bakery, Inc.

     

    3.2  Capitalization. 

     

    (a)  The
      authorized capital stock of the Acquired Company consists of 5,000 shares of
      Common Stock par value $10.00 per share, of which 4,000 shares of Common Stock
      are issued and outstanding and held of record by the Sellers as set forth in
      Section 3.2(a)
      of the
      Acquired Company Disclosure Schedule. All of the outstanding shares of Common
      Stock have been duly authorized, validly issued and fully paid, and are
      nonassessable.

     

    (b)  Other
      than the Purchased Securities, the Acquired Company does not have, and on the
      Closing Date will not have, outstanding any shares of Common Stock or any other
      Equity Securities.

     

    (c)  (i) There
      are no existing rights, calls, or commitments of any character relating to
      the
      Purchased Securities or other Equity Securities of the Acquired Company, and
      (ii) except as set forth in the Organizational Documents of the Acquired
      Company, no Person has any right of first refusal, pre-emptive right,
      subscription right or similar right with respect to any shares of Common Stock
      or other Equity Securities of the Acquired Company.

     

    (d)  Other
      than Cottage Bakery Retail, Inc., a California corporation, and The Elizabeth,
      Inc., a California corporation, the Acquired Company has never had any
      Subsidiaries. Cottage Bakery Retail, Inc. ceased business operations in July
      2004. The Elizabeth, Inc. was spun-off by the Acquired Company on November
      30,
      2001. Other than the Sellers, the Sellers’ Guarantors or the aforementioned
      Subsidiaries, the Acquired Company has never had any Affiliates.

     

    (e)  Sellers
      are, and on the Closing Date will be, the record owners and holders of the
      Equity Securities, free and clear of all Liens.

     

    (f)  The
      Acquired Company does not own or have any Contract to acquire, any Equity
      Securities or other securities of any Person or any direct or indirect equity
      ownership in any trust in any other business, other than ownership of less
      than
      one percent (1%) of the outstanding stock of any publicly-traded
      corporation.

     

     

     

    
      
        
        

      

      
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    3.3  No
      Conflicts; Consents.

     

    (a)  Except
      as
      set forth on Section 3.3(a)
      of the
      Acquired Company Disclosure Schedule, the execution and delivery of this
      Agreement and the Ancillary Agreements by the Sellers do not, and the
      consummation of the transactions contemplated hereby (in each case, with or
      without the giving of notice or lapse of time, or both) will not,
      (i) violate the provisions of any of the Organizational Documents or any
      resolution adopted by the board of directors or the shareholders of the Acquired
      Company, (ii) assuming compliance by the Acquired Company with the matters
      referred to in Section 3.3(b),
      violate
      or conflict with or result in a material violation of any Law, Authorization
      or
      Order applicable to the Acquired Company on the date hereof, (iii) give any
      Governmental Entity or give any other Person the right to terminate the
      Contemplated Transactions or to exercise any remedy or relief under any Law,
      Authorization or Order to which the Acquired Company or any of the assets are
      subject, (iv) result in the creation of any Liens (other than any Permitted
      Lien) upon any of the assets owned or used by the Acquired Company,
      (v) contravene or conflict with in any material respect, or would not
      result in a material violation or breach of any provision of or give any Person
      the right to accelerate the maturity or performance of, or to cancel, terminate
      or modify any Material Contract, or (vi) give any Governmental Entity the
      right to revoke, withdraw, suspend, cancel, terminate or modify, any
      Authorizations that are held by the Acquired Company and that are related to
      the
      business of or any assets owned or used by the Acquired Company or necessary
      to
      conduct the Acquired Company’s business in substantially the same manner as
      previously conducted, except where such action by a Governmental Entity would
      not result in the imposition of a material fine, penalty or
      expense.

     

    (b)  Except
      as
      set forth in Section 3.3(b)
      of the
      Acquired Company Disclosure Schedule, no Authorization or Order of,
      registration, declaration or filing with, or notice to any Governmental Entity
      is required by the Acquired Company in connection with the execution and
      delivery of this Agreement and the Ancillary Agreements and the consummation
      of
      the transactions contemplated hereby and thereby, except for such
      Authorizations, Orders, declarations, filings and notices the failure to obtain
      which would not reasonably be expected to have an Acquired Company Material
      Adverse Effect or would not result in the imposition of a material fine, penalty
      or expense.

     

    3.4  Financial
      Statements; Acquired
      Company Debt.

     

    (a)  True
      and
      complete copies of (i) the audited balance sheet of the Acquired Company as
      of June 30, 2003, 2004 and 2005, together with statements of income,
      changes in shareholder equity and cash flows for the fiscal year then ended
      and
      (ii) the audited balance sheet of the Acquired Company as of June 30,
      2006 (the “Balance
      Sheet”),
      together with statements of income, changes in shareholder equity and cash
      flows
      for the fiscal year ended June 30, 2006, are included in Section 3.4(a)
      of the
      Acquired Company Disclosure Schedule (the “Financial
      Statements”).
      Together the Financial Statements have been prepared in accordance with United
      States generally accepted accounting principles (“GAAP”)
      applied on a consistent basis throughout the periods involved (except as may
      be
      indicated in the notes thereto) and on such basis fairly present in all material
      respects the financial condition, cash flows, changes in Equity Securities
      and
      results of operations of the Acquired Company as of the respective dates thereof
      and for the respective periods indicated. True and complete copies of unaudited
      balance sheets of the Acquired Company as of August 31, 2006, together with
      statements of income for the fiscal period then ended are included in
Section
      3.4(a)
      of the
      Acquired Company Disclosure Schedule (the “Interim
      Financial Statements”).
      The
      Interim Financial Statements have been prepared in accordance with the Acquired
      Company’s accounting principles applied on a consistent basis through the period
      involved and present in all material respects the financial condition and
      results of operations of the Acquired Company as of the respective date for
      the
      period involved.

     

     

     

    
      
        
        

      

      
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    (b)  Except
      as
      set forth on Section 3.4(b)
      of the
      Acquired Company Disclosure Schedule, the Acquired Company does not have any
      Indebtedness as of the date hereof. At the Closing Date, the Acquired Company
      will not have any Indebtedness.

     

    3.5  Taxes.

     

    (a)  All
      material Tax Returns required to have been filed through and including the
      date
      hereof by the Acquired Company have been filed, and each such Tax Return is
      true, correct and complete in all material respects. All Taxes shown on such
      Tax
      Returns as due have been paid by or on behalf of the filing entity or
      entities.

     

    (b)  Except
      as
      set forth on Section 3.5(b)
      of the
      Acquired Company Disclosure Schedule, there is no audit currently pending
      against the Acquired Company in respect of any Taxes.
      There
      are no material Liens on any of the assets of the Acquired Company that arose
      in
      connection with any failure (or alleged failure) to pay any Tax, other than
      Liens for Taxes not yet due and payable.

     

    (c)  The
      Acquired Company has withheld and paid all material Taxes required to have
      been
      withheld and paid in connection with amounts paid or owing to any third
      party.

     

    (d)  The
      Acquired Company has not waived any statute of limitations in respect of any
      taxable year or other period relating to any Taxes or agreed to any extension
      of
      time with respect to a Tax assessment or deficiency.

     

    (e)  The
      Acquired Company is not a party to any Tax allocation or sharing
      agreement.

     

    3.6  Compliance
      with Law; Authorizations.

     

    (a)  The
      Acquired Company is, and at all times has been, in compliance in all material
      respects with all Laws to which it is or was subject, except for any
      noncompliance as would not, individually or in the aggregate, (i) prohibit
      or
      materially impair the ability of the Acquired Company to consummate the
      Contemplated Transactions hereunder or (ii) result in a material fine or penalty
      or (iii) require by Law compliance activity at material expense to the Acquired
      Company.

     

    (b)  The
      Acquired Company owns, holds, possesses or lawfully uses in the operation of
      its
      business all Authorizations which are necessary for the conduct of such business
      as currently conducted or for the ownership and use of the assets owned, used
      or
      held for use by the Acquired Company except for the absence of which would
      not
      be expected to result in any material fine, penalty or expense. Such
      Authorizations are final, valid, in full force and effect and, to the Knowledge
      of the Acquired Company, are not subject to review or appeal or subject to
      any
      pending or threatened legal proceeding.

     

     

     

    
      
        
        

      

      
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    (c)  The
      Acquired Company has not and its Affiliates on behalf of the Company have not,
      directly or indirectly made, authorized or received any payment contribution
      or
      gift of money, property or services in violation of applicable Law (i) as a
      kickback or bribe to any Person or (ii) to any political organization or
      the holder of, or any aspirant to, any elective or appointive office of any
      Governmental Entity.

     

    3.7  Title
      to Personal Property.

     

    (a)  The
      Acquired Company has good title to, or a valid interest in, all tangible
      personal property used in the conduct of the business of the Acquired Company,
      free and clear of all Liens (other than Permitted Liens), except for any such
      property disposed of since the date hereof in the ordinary course of business
      consistent with past practice. To the Knowledge of the Acquired Company, all
      such tangible personal property currently in use by the Acquired Company,
      considering their age and years of service, is structurally sound; in good
      operating condition and repair, ordinary wear and tear excepted; and maintained
      in all material respects in accordance with normal 

    industry
      practice. The personal property owned, used or held for use by Acquired Company
      is sufficient for the continued conduct of the Acquired Company’s business after
      Closing in substantially the same manner as conducted prior to Closing. After
      the Closing, as a result of the Contemplated Transactions, the Buyer will own
      or
      will have a valid right to use (through its ownership of the Acquired Company
      and the Real Property) all of the personal property and assets necessary to
      operate the Acquired Company and its business in substantially the same manner
      as currently conducted.

     

    (b)  This
      Section 3.7
      does not
      relate to (i) real property or any interest therein, such items being the
      subject of Section 3.8,
      or
      (ii) to Intellectual Property, such items being the subject of Section 3.9.

     

    3.8  Real
      Property.

     

    (a)   Section 3.8(a)
      of the
      Acquired Company Disclosure Schedules contains a complete and accurate list
      of
      all real property used or held for use by the Acquired Company. To the Knowledge
      of the Acquired Company, on or prior to the date hereof, all certificates of
      occupancy, permits, licenses, approvals and other authorizations required in
      connection with the present operation of the business of the Acquired Company
      on
      the Real Property have been lawfully issued to Rivergate and/or the Acquired
      Company and are, as of the date hereof, in full force and effect, and to the
      Knowledge of the Acquired Company, Rivergate and the Acquired Company are in
      material compliance with all applicable zoning ordinances, regulations and
      permits and all of the Real Property has adequate access to public roads and
      utilities.

     

    (b)  Section 3.8(b)
      of the
      Acquired Company Disclosure Schedules contains a complete and accurate list
      of
      all leases and subleases of the real property under which the Acquired Company
      is either lessor or lessee (collectively, the “Leases”).
      The
      Seller has delivered or made available to Buyer’s Guarantor or its counsel a
      true and complete copy of every Lease. To the Knowledge of the Acquired Company,
      the Acquired Company is not in default in the performance, observance or
      fulfillment of any material obligation, covenant or condition contained in
      any
      Lease (with or without the giving of notice or lapse of time, or both). The
      Leases are valid and binding agreements which are enforceable in accordance
      with
      their respective terms, except as such enforceability may be limited by
      (i) bankruptcy, insolvency, 

     

     

    
      
        
        

      

      
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    reorganization,
      moratorium or other similar laws affecting or relating to creditors’ rights
      generally, and (ii) the availability of injunctive relief and other
      equitable remedies. No event has occurred or circumstances exist (to the
      Knowledge of the Acquired Company with respect to actions of the other party)
      that (with or without the giving of notice or lapse of time, or both) will
      contravene, conflict with or result in a material violation or breach or give
      the other party the right to declare default in the performance, observance
      or
      fulfillment of any obligations, exercises or conditions contained in any
      Lease.

     

    (c)  The
      Real
      Property is in suitable condition for the conduct of the business of the
      Acquired Company as currently conducted. Upon consummation of the transactions
      contemplated by the Agreement of Purchase and Sale and Joint Escrow
      Instructions, the Buyer will have a valid right to use all of the Real Property
      necessary to operate the Acquired Company and its business in substantially
      the
      same manner as presently conducted.

     

    (d)  The
      Acquired Company does not own any real property and has not owned, leased or
      used any real property other than as set forth on Section 3.8(d)
      the
      Acquired Company Disclosure Schedules.

     

    (e)  Neither
      the Acquired Company nor any of the Sellers have received any written notice
      of
      any condemnation or eminent domain proceedings, lawsuits or administrative
      actions related to the Real Property that could reasonably be expected to
      materially, adversely affect the current use, occupancy, transferability or
      value of the Real Property.

     

    (f)  Except
      for the Acquired Company, there are no adverse parties in possession of the
      Real
      Property or of any part thereof.

     

    (g)  To
      the
      Knowledge of the Acquired Company, all utilities necessary to service the Real
      Property and to conduct the business of the Acquired Company as now conducted
      at
      the Real Property, are connected to the Real Property and available to
      Rivergate.

     

    (h)  The
      Acquired Company has not received written notice (i) of any public plans or
      proposals for changes in zoning, road grade, access or other municipal
      improvements which would materially adversely affect the Real Property and
      (ii)
      that any ordinance authorizing improvements, the costs of which might be
      assessed against the Buyer or the Real Property, is pending.

     

    (i)  The
      representations and warranties contained in Sections 3.6(a)
      and (b), 3.8, 3.14 and 3.17
      are the
      Acquired Company’s sole representations and warranties with respect to Real
      Property and interests therein.

     

    3.9  Intellectual
      Property.

     

    (a)  “Intellectual
      Property”
means
      trade secrets, inventions, know-how, formulae and processes, patents (including
      all reissues, divisions, continuations and extensions thereof), patent
      applications, trademarks, trademark registrations, trademark applications,
      tradedress rights, service marks, service mark registrations, service mark
      applications, copyrights, copyright registrations, copyright applications,
      domain names, fictitious business names and trade names, customer lists,
      software, data processing technology, manufacturing processes and product
      formulations and recipes.

     

     

     

    
      
        
        

      

      
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    (b)  Section 3.9(b)
      of the
      Acquired Company Disclosure Schedule sets forth a list that includes all
      material Intellectual Property owned by the Acquired Company (the “Acquired
      Company Owned Intellectual Property”)
      that
      is registered or the subject of an application for registration.

     

    (c)  The
      “Material
      Intellectual Property”
is
      the
      Intellectual Property that is necessary for the operation of the Acquired
      Company’s business in substantially the same manner as presently conducted. The
      Acquired Company (i) is the owner of all right, title, and interest or
      (ii) has a valid right to use, each of the Material Intellectual
      Property.

     

    (d)  Section
      3.9(d)
      of the
      Acquired Company Disclosure Schedules sets forth a list of any Contract
      (i) pursuant to which any third party is authorized to use any Acquired
      Company Owned Intellectual Property (the “Acquired
      Company Licenses”)
      and/or
      (ii) pursuant to which the Acquired Company is licensed to use Intellectual
      Property owned by a third party and which is material to the business of the
      Acquired Company (the “Third
      Party Licenses,”
and
      together with the Acquired Company Owned Intellectual Property, the
“Acquired
      Company Intellectual Property”).
      The
      Acquired Company is not in default in the performance, observance or fulfillment
      of any obligation, covenant or condition contained in any Acquired Company
      License or Third Party License, except where such default would not reasonably
      be expected to have an Acquired Company Material Adverse Effect or would not
      result in the imposition of a material fine, penalty or expense.

     

    (e)  As
      of the
      date hereof: (i) there are no claims pending or threatened in writing against
      the Acquired Company alleging that its business as now conducted infringes
      or
      otherwise violates the Intellectual Property rights of any Person; and
      (ii) to the Knowledge of the Acquired Company, no other Person is
      infringing or otherwise violating any Acquired Company Owned Intellectual
      Property.

     

    (f)  The
      Acquired Company has taken reasonable measures, as appropriate, to maintain
      and
      protect the proprietary nature of the Acquired Company Intellectual Property,
      and to maintain the secrecy of the trade secrets that the Acquired Company
      or
      any of its Subsidiaries uses.

     

    (g)  The
      representations and warranties contained in this Section 3.9
      are the
      Acquired Company’s sole representations and warranties with respect to
      intellectual property matters.

     

    3.10  Absence
      of Certain Changes or Events

     

    .
      Since
      the Balance Sheet Date to the date of this Agreement, no event has occurred
      that
      has had an Acquired Company Material Adverse Effect and the Acquired Company
      has
      not taken any of the actions specified in Section 6.2.

     

    3.11  Inventory
      and Accounts Receivable.

     

    (a)  To
      the
      Knowledge of the Acquired Company, the Acquired Company is not expected to
      experience, in the foreseeable future, any material difficulty in obtaining,
      in
      the desired quantity and quality, the raw materials, supplies or component
      products required for the production or sale of its products.

     

     

     

    
      
        
        

      

      
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    (b)  The
      inventory of the Acquired Company reflected in the Balance Sheet and/or the
      Closing Date Balance Sheet, consists (or will consist as the case may be) of
      a
      quantity and quality useable and saleable in the ordinary course of business,
      except for obsolete items and items of below standard quality, all of which
      have
      been written off or written down to net realizable value in the Balance Sheet
      or
      on the accounting records of the Acquired Company as of the Closing Date, as
      the
      case may be. The quantities of each item of inventory are not excessive, but
      are
      reasonable in the ordinary course of business.

     

    (c)  All
      accounts receivable of the Acquired Company reflected in the Balance Sheet
      and
      all accounts receivable of the Acquired Company that have arisen since the
      Balance Sheet Date (except such accounts receivable as have been collected
      since
      such dates) are valid and enforceable claims, and the goods and services sold
      and delivered that gave rise to such accounts were actually sold and delivered
      by the Acquired Company in the ordinary course of business. Section 3.11
      of the
      Acquired Company Disclosure Schedule contains a true and complete aging of
      each of the accounts receivable of the Acquired Company as of the Balance Sheet
      Date, which is true and correct in all respects.

     

    3.12  No
      Undisclosed Liabilities.
      The
      Acquired Company does not have any Liabilities except (i) to the extent set
      forth or provided for in the Financial Statements or the notes thereto,
      (ii) as set forth on the Acquired Company Disclosure Schedule,
      (iii) for non-material Liabilities incurred in the ordinary course of
      business since the Balance Sheet Date, or (iv) for Liabilities under
      Contracts that do not arise out of or result from a breach by the Acquired
      Company, except for such Liabilities that would not individually or in the
      aggregate reasonably be expected to have an Acquired Company Material Adverse
      Effect.

     

    3.13  Contracts.

     

    (a)  Section 3.13(a)
      of the
      Acquired Company Disclosure Schedule contains a complete and accurate list,
      and
      Sellers have delivered or made available to Buyer’s Guarantor true and complete
      copies (with the exception of certain exhibits or schedules thereto), or written
      descriptions if not in writing, of the following Contracts to which the Acquired
      Company is a party and that are currently in effect:

     

    (i)  each
      Contract that involves performance of services, or delivery of goods or
      materials by the Acquired Company of an amount or value in excess of
      $50,000;

     

    (ii)  each
      Contract that involves the performance of services or delivery of goods or
      materials to the Acquired Company of an amount in excess of
      $50,000;

     

    (iii)  each
      Contract that is presently expected to result in a loss upon completion or
      performance thereof in an amount in excess of $50,000;

     

    (iv)  each
      licensing Contract with respect to Intellectual Property assets that are
      material to the business of the Acquired Company, including agreements with
      current or former employees or consultants or Contracts regarding the
      appropriation or the nondisclosure of the Intellectual Property
      Assets;

     

     

     

    
      
        
        

      

      
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    (v)  each
      collective bargaining agreement to or with any labor union or other employee
      representative of a group of employees and any Contract with any employee,
      officer or director of the Acquired Company in the nature of a compensation
      or
      employment arrangement;

     

    (vi)  each
      joint venture, partnership, and other Contract (however named) involving a
      sharing of profits, losses, costs, or liabilities by the Acquired Company with
      any other Person;

     

    (vii)  each
      Contract containing covenants that restrict the business activity of the
      Acquired Company or limit the freedom of the Acquired Company to compete with
      any Person;

     

    (viii)  each
      Contract providing for payments to or by any Person based on sales, purchases,
      or profits, other than direct payments for goods;

     

    (ix)  each
      Contract for capital expenditures with a remaining balance to be paid in excess
      of $50,000;

     

    (x)  all
      documents creating any existing Indebtedness of the Acquired
      Company;

     

    (xi)  any
      Contract (or group of related Contracts with the same party) that includes
      provisions regarding minimum volumes or volume discounts having a value in
      excess of $50,000 per year;

     

    (xii)  any
      Contract pursuant to which a rebate, discount, bonus, commission (including
      but
      not limited to broker or distributor Contracts) or other payment with respect
      to
      the sale of any product of the Acquired Company that cannot be terminated by
      the
      Acquired Company without penalty upon thirty (30) days notice;

     

    (xiii)  any
      Contract involving any Seller and the Acquired Company or relating to any Seller
      and any Equity Securities;

     

    (xiv)  each
      power of attorney on behalf of the Acquired Company;

     

    (xv)  each
      amendment, supplement, and modification (whether oral or written) in respect
      of
      any of the foregoing; and

     

    (xvi)  each
      written warranty, guaranty, and or other similar undertaking with respect to
      Contractual performance extended by the Acquired Company other than in the
      ordinary course of business (such as continuing guarantees customarily provided
      to the Acquired Company’s customers in connection with the sale of food
      products).

     

     

     

    
      
        
        

      

      
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    (b)  Section 3.13(b)
      of the
      Acquired Company Disclosure Schedule contains a true and complete list of
      all material Contracts binding on the Acquired Company, with any officer,
      director or Affiliate of the Acquired Company; in each case a true and complete
      copy of such written Contract or a true and complete summary of such oral
      Contract has been delivered or made available to Buyer’s Guarantor
      heretofore.

     

    (c)  Each
      Contract required to be listed in Section 3.13(a)
      of the
      Acquired Company Disclosure Schedule (collectively, the “Material
      Contracts”)
      is a
      valid and binding agreement and enforceable against the Acquired Company, and
      to
      the Knowledge of the Acquired Company, enforceable against the other party
      thereto, in accordance with its terms, except as such enforceability may be
      limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
      similar laws affecting or relating to creditors’ rights generally, and
      (ii) the availability of injunctive relief and other equitable remedies. No
      event has occurred or circumstances exist (to the Knowledge of the Acquired
      Company with respect to actions of the other party) that (with or without the
      giving of notice or lapse of time, or both) will result in a violation or breach
      of or give the other party the right to declare default in the material
      performance, observance or fulfillment of any obligation, covenant or condition
      contained in any Material Contract.

     

    (d)  This
      Section 3.13
      does not
      relate to Leases, such items being the subject of Section 3.8,
      or to
      Acquired Company Licenses or Third Party Licenses, such items being the subject
      of Section 3.9.

     

    3.14  Litigation.

     

    (a)  Except
      as
      set forth on Section
      3.14(a)
      of the
      Acquired Company Disclosure Schedule, as of the date hereof, there is no action,
      suit or proceeding, claim, arbitration, litigation or formal investigation
      by
      any Governmental Entity (each, an “Action”)
      pending or threatened in writing. To the Knowledge of the Acquired Company,
      no
      event has occurred or circumstances exist that would likely give rise to or
      serve as a basis for the commencement of any Action against the Acquired Company
      or any of the properties, assets or business of the Acquired
      Company.

     

    (b)  There
      are
      no Actions pending or threatened in writing that may challenge or have the
      effect of delaying, making illegal or otherwise interfering with any of the
      Contemplated Transactions.

     

    3.15  Employee
      Benefits.

     

    (a)  Section 3.15(a)(i)
      of the
      Acquired Company Disclosure Schedule sets forth a list of each material Acquired
      Company Benefit Plan. For purposes of this Agreement, an “Acquired
      Company Benefit Plan”
means
      any Benefit Plan that is maintained or contributed to by the Acquired Company
      for the benefit of the Affected Employees. Except as set forth in Section 3.15(a)(ii)
      of the
      Acquired Company Disclosure Schedule, each Acquired Company Benefit Plan has
      been established and administered in all material respects in accordance with
      its terms and in compliance with the applicable provisions of ERISA, the Code
      and other applicable Laws, and each Acquired Company Benefit Plan intended
      to
      qualify under section 401(a) of the Code is the subject of a favorable
      determination or opinion letter from the U.S. Internal Revenue Service as to
      its
      qualified status and no event has occurred and no condition exists which would
      be reasonably likely to result in the revocation of any such determination
      or
      opinion.

     

     

     

    
      
        
        

      

      
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    (b)  With
      respect to each Acquired Company Benefit Plan, the Acquired Company has made
      available to the Buyer copies of (i) the most recent annual report on
      Form 5500 required to have been filed for each Acquired Company Benefit
      Plan, including all schedules thereto; (ii) the most recent determination
      or opinion letter, if any, from the IRS for any Acquired Company Benefit Plan
      that is intended to qualify under Section 401(a) of the Code and each trust
      intended to qualify under Section 501(a) of the Code; (iii) the plan
      documents and summary plan descriptions; and (iv) any related trust
      agreements, insurance contracts, insurance policies or other documents of any
      funding arrangements.

     

    (c)  Neither
      the Acquired Company, any of the Acquired Company’s Subsidiaries nor any of
      their respective ERISA Affiliates has ever maintained, participated in or
      contributed to (or been obligated to contribute to) (i) an Acquired Company
      Benefit Plan subject to Section 412 of the Code or Title IV of ERISA,
      (ii) a “multiemployer plan” (as defined in Section 4001(a)(3) of
      ERISA), or (iii) a “multiple employer plan” as defined in ERISA or the
      Code. No Acquired Company Benefit Plan is funded by, associated with or related
      to a “voluntary employee’s beneficiary association” within the meaning of
      Section 501(c)(9) of the Code.

     

    (d)  There
      are
      no legal proceedings pending or threatened in writing on behalf of or against
      any Acquired Company Benefit Plan, the assets of any trust under any Acquired
      Company Benefit Plan, or the plan sponsor, plan administrator or, any fiduciary
      of any Acquired Company Benefit Plan (in the fiduciary’s capacity as such),
      other than routine claims for benefits that have been or are being handled
      through an administrative claims procedure.

     

    (e)  No
      Acquired Company Benefit Plan that is a “welfare benefit plan” within the
      meaning of Section 3(1) of ERISA provides benefits to former employees of
      the Acquired Company or its ERISA Affiliates, other than pursuant to
      Section 4980B of the Code or any similar legal requirements.

     

    (f)  All
      contributions, premiums and other payments required to have been made with
      respect to any Acquired Company Benefit Plan have been timely made, accrued
      or
      reserved for in all material respects.

     

    (g)  Except
      as
      set forth in Section 3.15(g)
      of the
      Acquired Company Disclosure Schedule or as contemplated by this Agreement,
      neither the execution or delivery of this Agreement nor the consummation of
      the
      transactions contemplated by this Agreement will (i) result in any payment
      or benefit becoming due or payable, or required to be provided, to any director,
      employee or independent contractor of the Acquired Company or any of its
      Subsidiaries, (ii) increase the amount or value of any benefit or
      compensation otherwise payable or required to be provided to any such director,
      employee or independent contractor, or (iii) result in the acceleration of
      the time of payment, vesting or funding of any such benefit or
      compensation.

     

     

     

    
      
        
        

      

      
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    (h)  There
      has
      been no “Prohibited transaction” as such term is defined in Section 406 of
      ERISA and Section 4957 of the Code with respect to any Acquired Company
      Benefit Plan, which would result in Liability for the Acquired
      Company.

     

    3.16  Labor
      and Employment Matters.

     

    (a)  Section 3.16(a)
      of the
      Acquired Company Disclosure Schedule sets forth a list of (i) each full,
      part time and hourly employees of the Acquired Company as of the date of this
      Agreement, which delineates each such employee’s (A) date of hire,
      (B) title or job description, (C) the base salary, bonus and
      commission opportunity in effect for the current fiscal year, (D) accrued
      and unused vacation, sick and other paid time off and (E) current leave
      status (if applicable) and (ii) each consultant or other independent
      contractor to the Acquired Company who currently renders services to the
      Acquired Company (other than Persons who are retained through temporary agencies
      for periods of less than ninety (90) days).

     

    (b)  The
      Acquired Company is not a party to any written employment agreement. The
      Acquired Company is not a party or subject to any labor union or collective
      bargaining Contract. There are no pending labor disputes, work stoppages,
      requests for representation, pickets, work slow-downs due to labor disagreements
      or any actions or arbitrations which involve the labor or employment relations
      of the Acquired Company.

     

    (c)  To
      the
      Knowledge of the Acquired Company, no officer, employee or director of the
      Acquired Company is a party, or is otherwise bound by, any Contract, including
      any confidentiality, non-competition or proprietary rights agreement, between
      such officer, employee or director and any other person, including any Seller
      or
      the Acquired Company that in any way adversely affects: (i) the performance
      of his duties as an officer, employee or director of the Acquired Company,
      or
      (ii) the ability of the Acquired Company to conduct its
      business.

     

    3.17  Environmental.
      Except
      as set forth on Section 3.17
      of the
      Acquired Company Disclosure Schedule:

     

    (a)  No
      Hazardous Material (i) has been released, placed, stored, generated, used,
      manufactured, treated, deposited, spilled, discharged, released or disposed
      of
      on, under or into the air at any Real Property currently owned or leased by
      the
      Acquired Company or is presently located on or under any Real Property (or
      any
      property adjoining or adjacent to any Real Property) in violation of any Law,
      (ii) is presently maintained, used, generated, or permitted to remain in
      place by the Acquired Company in violation of any Law or (iii) is required
      by any Governmental Entity pursuant to any Law to be removed, treated or
      remediated by the Acquired Company, given the nature of its present condition,
      location, material or maintenance, except in the case of clauses (i) - (iii)
      as
      would not result in the imposition of a material fine, penalty or
      expense.

     

    (b)  No
      written notice, citation, summons, directive or order has been received by
      the
      Acquired Company and no penalty has been assessed (which have not been paid
      or
      satisfied) and the Acquired Company has not received any written notice of
      any
      pending or threatened investigation or review by any Governmental Entity, with
      respect to (i) any alleged material violation by the Acquired Company of
      any Law or (ii) any alleged material failure by the Acquired Company to
      have any environmental permit, certificate, license, approval, registration
      or
      authorization required in connection with its business or properties, or
      (iii) any use, possession, generation, treatment, storage, recycling,
      transportation, release or disposal by or on behalf of the Acquired Company
      of
      any Hazardous Material.

     

     

     

    
      
        
        

      

      
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    (c)  The
      Acquired Company has not received any written request for information, notice
      of
      claim, demand or notification that indicates that it may be a “potentially
      responsible party” with respect to any investigation or remediation of any
      threatened or actual release of any Hazardous Material.

     

    (d)  No
      written notice has been received by the Acquired Company with respect to the
      listing or proposed listing of any property currently or previously owned,
      operated or leased by the Acquired Company or any of its Subsidiaries on the
      National Priorities List promulgated pursuant to CERCLA or CERCLIS.

     

    (e)  Section 3.17(e)
      of the
      Acquired Company Disclosure Schedule lists all environmental reports, studies,
      evaluations, analyses and similar documents, prepared within the five (5) year
      period prior to the date hereof, commissioned by or for the Acquired Company
      or
      Rivergate, or in the possession of the Acquired Company or Rivergate and related
      primarily to compliance with Environmental Laws or the presence of or release
      of
      any Hazardous Materials on the Real Property used by the Acquired Company and
      the Acquired Company has provided or made available to Buyer’s Guarantor copies
      of the same.

     

    (f)  The
      Acquired Company is, and at all times has been, in compliance in all material
      respects with all Environmental Laws to which it is or was subject, except
      for
      any noncompliance as would not, individually or in the aggregate, (i) prohibit
      or materially impair the ability of the Acquired Company to consummate the
      Contemplated Transactions hereunder or (ii) result in a material fine or penalty
      or (iii) require by Law compliance activity at material expense to the Acquired
      Company.

     

    3.18  Insurance.

     

    (a)  Section 3.18
      of the
      Acquired Company Disclosure Schedule sets forth a list of each material
      insurance policy (including all endorsements, amendments and modifications
      thereto) maintained by the Acquired Company which covers the Acquired Company
      or
      the Real Property or the business, property or assets or any director, officer
      or employee of the Acquired Company (the “Policies”).
      Such
      Policies are in full force and effect in all material respects and the Acquired
      Company is not in default with respect to its obligations under any such Policy
      in such a manner that would negatively impact the ability of the Acquired
      Company to seek recovery under any such policy.

     

    (b)  Acquired
      Company has delivered or made available to Buyer’s Guarantor:

     

    (i)  true
      and
      complete copies of all policies of insurance (including all endorsements,
      amendments and modifications thereto) to which the Acquired Company is a party
      and under which the Acquired Company, or any director of the Acquired Company,
      is or has been covered at any time within the five (5) years preceding the
      date
      of this Agreement;

     

     

     

    
      
        
        

      

      
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    (ii)  all
      obligations of the Acquired Company to third parties with respect to insurance
      and have identified the policy under which such coverage is provided;
      and

     

    (iii)  any
      arrangements or Contract for the transfer or sharing of any risk by the Acquired
      Company other than a policy of insurance.

     

    (c)  All
      insurance maintained by the Acquired Company during the five most recent fiscal
      years of the Acquired Company provides a guaranteed coverage on an occurrence
      basis.

     

    (d)  With
      respect to all insurance policies maintained by the Acquired Company as of
      the
      date hereof, the Acquired Company has paid all premiums due, and has otherwise
      performed all of their material respective obligations, under each policy to
      which the Acquired Company is a party or that provides coverage to the Acquired
      Company or director thereof. All of the Acquired Company’s current insurance
      policies shall remain in full force and effect after consummation of the
      Contemplated Transactions. No such insurance policy provides for retro-premium
      adjustments. The Acquired Company has not made any materially false statements
      in or omitted any material facts from applications for such
      insurance.

     

    (e)  With
      respect to insurance policies maintained by the Acquired Company as of the
      date
      hereof, the Sellers have not received (i) any refusal of coverage or any
      notice that a defense will be afforded with reservation of rights, or
      (ii) any notice of cancellation or any other indication that any insurance
      policy is no longer in full force or effect or will not be renewed or that
      the
      issuer of a policy is not willing or able to perform its obligations there
      under.

     

    (f)  The
      Acquired Company has given notice to the insurer of all claims or occurrences
      that may be insured under the policies of insurance maintained by the Acquired
      Company as of the date hereof.

     

    3.19  Affiliated
      Transactions. 

     

    (a)  Except
      as
      set forth in Section 3.19
      of the
      Acquired Company Disclosure Schedule, none of the Sellers nor any Affiliate
      of
      any Seller nor any officer, director, stockholder or Key Employee of the
      Acquired Company or any of its Affiliates has in the past five years, directly
      or indirectly, held (i) an interest in any Person that (A) furnishes
      or sells, or proposes to furnish or sell, services or products that are
      furnished or sold by the Acquired Company or (B) purchases from or sells or
      furnishes to, or proposes to purchase from or sell or furnish to, the Acquired
      Company any goods or services or (ii) a beneficial interest in any Contract
      to which the Acquired Company is a party or by which the Acquired Company or
      any
      of its assets are bound or affected.

     

    (b)  No
      Seller, nor any director, officer, nor employee of the Acquired Company has
      outstanding any loan or other payment obligation of any kind owed to the
      Acquired Company of an amount in excess of $10,000, all of which amounts will
      be
      repaid on or prior to the Closing. The Acquired Company has no outstanding
      loan
      or other payment obligation of any kind (other than ordinary wages, salary
      and
      benefit obligations or except as otherwise provided pursuant to the Contemplated
      Transaction) to any Seller, director, officer or employee of the Acquired
      Company of an amount in excess of $10,000, all of which amounts will be repaid
      on or prior to the Closing.

     

     

     

    
      
        
        

      

      
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    3.20  Brokers.
      No
      broker, finder or investment banker is entitled to any brokerage, finder’s,
      investment banker’s or other fee or commission in connection with the
      transactions contemplated by this Agreement or the Ancillary Agreements based
      upon arrangements made by or on behalf of any of the Acquired Company or Sellers
      that will give rise to any payment obligation or other Liability on the part
      of
      Buyer or its Affiliates (including the Acquired Company after
      Closing).

     

    3.21  Books
      and Records.
       The
      Organizational Documents of the Acquired Company, all of which have been made
      available to Buyer, are complete and correct in all material respects. The
      minute books of the Acquired Company contain accurate and complete records
      of
      all meetings held of, and material corporate action taken by, the stockholders
      and the board of directors, and no meeting of any such stockholders or board
      of
      directors has been held for which minutes have not been prepared and are not
      contained in such minute books. At the Closing, all of those books and records
      will be in the possession of the Acquired Company.

     

    3.22  Customers. 
      Section 3.22
      of the
      Acquired Company Disclosure Schedule sets forth a list the Acquired Company’s
      ten (10) largest customers based on gross sales for the fiscal twelve months
      ended June 30, 2006 (“Material
      Customers”).
      Except as set forth in Section
      3.22
      of the
      Acquired Company Disclosure Schedule, to the Knowledge of the Acquired Company
      (a) no Material Customer has terminated, expects to terminate or is actively
      considering termination of its current business with the Acquired Company and
      (b) no Material Customer is currently undertaking a category review of the
      types
      of food products the Acquired Company produces or has proposed that the Acquired
      Company take a reduction in the price of goods sold to such Material Customer,
      except in the case of clause (a) or (b) where such event is caused by
      (i) general political, economic, financial, capital market or industry wide
      conditions, (ii) a prospective change arising out of any adopted
      legislation, or other enactment by any Governmental Entity (in the case of
      (i)
      and (ii) not having a unique or disproportionate effect on the Acquired
      Company), (iii) the public announcement of this Agreement or the
      consummation of the Contemplated Transactions contemplated by this Agreement,
      or
      (iv) the Buyer or any of its Affiliates. To the Knowledge of the Acquired
      Company, no Material Customer could be reasonably expected to terminate or
      materially reduce its current business with the Acquired Company by reason
      of
      the Contemplated Transactions other than by the Buyer’s or its Affiliates’
involvement therein.

     

    3.23  FDA
      Compliance.
      Except
      as set forth in Section 3.23
      of the
      Acquired Company Disclosure Schedules:

     

    (a)  The
      Acquired Company is not in receipt of notice of, whether written or oral, nor
      is
      it subject to, any adverse inspection, finding of deficiency, finding of
      non-compliance, compelled or voluntary recall, investigation, penalty, fine,
      sanction, assessment, audit, request for corrective or remedial action, or
      other
      compliance or enforcement action, in each case relating to the products made,
      developed, under development, stored, sold by or to, or used by the Acquired
      Company ("Products"),
      by
      the United States Food and Drug Administration ("FDA")
      or any
      other federal, state, local or foreign authority having or asserting
      responsibility for the regulation of food products; and

     

     

     

    
      
        
        

      

      
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    (b)  To
      the
      Knowledge of the Acquired Company, the Acquired Company is in compliance in
      all
      material respects with the labeling requirements of the FDA relating to every
      Product currently sold by the Acquired Company and, the Acquired Company is
      in
      compliance in all material respects with all applicable regulations and
      requirements of the FDA and other similar Governmental Entities relating to
      every Product including, but not limited to, any requirements for investigating
      customer complaints and inquiries, labeling requirements and protocols, shipping
      requirements, bioterrorism registrations, record keeping and reporting
      requirements, monitoring requirements, packaging or repackaging requirements,
      laboratory controls, sterility requirements, production related record keeping
      and reporting requirements, inventory controls, and storage and warehousing
      procedures.

     

    3.24  Disclosure.
      No
      representation or warranty in this Agreement and no statement in the Acquired
      Company Disclosure Schedules attached hereto omits to state a material fact
      necessary to make the statements herein or therein, in light of the
      circumstances in which they were made, not misleading. 

     

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES RELATING TO SELLERS

     

    Each
      Seller severally represents and warrants to the Buyer that each statement
      contained in this Article IV
      to the
      extent it relates to such Seller is true and correct as of the date hereof
      and
      the same shall be true on the Closing Date (subject to any Seller Disclosure
      Schedule Supplement or other notice provided in accordance with Section
      6.6),
      except
      as set forth in the disclosure schedule accompanying this Agreement (with
      specific reference to the representations or warranties in this Article
      IV
      to which
      the information relates), which is attached to this Agreement and is designated
      therein as being the “Seller Disclosure Schedule” (the “Seller
      Disclosure Schedule”).
      Notwithstanding the foregoing, the representations and warranties made under
      Section 4.8 below are made solely by Rivergate. 

     

    4.1  Organization
      and Good Standing. 
      Seller
      is
      duly organized, validly existing and in good standing under the laws of its
      state of organization.

     

    4.2  Capitalization.

     

    (a)  Seller
      is
      the record and beneficial owner of, and holds good and valid title to, the
      Purchased Securities indicated as owned by it in Section 3.2
      of the
      Acquired Company Disclosure Schedule.

     

    (b)  Upon
      transfer of the Purchased Securities owned by the Seller to the Buyer in
      accordance with the terms of this Agreement, the Buyer will receive title to
      such Purchased Securities, free and clear of Liens (other than Liens created
      through the Buyer).

     

     

     

    
      
        
        

      

      
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    (c)  The
      Seller is not a party to or bound by any Contract to pledge, sell or otherwise
      dispose of or redeem, purchase, or otherwise acquire any Capital Stock or any
      other security of the Company or any other security exercisable or exchangeable
      for or convertible into any Capital Stock or other security of the Company.
      Except for this Agreement, the Seller is not a party to any option, warrant
      or
      other right to subscribed for or purchase or Contract with respect to any
      Capital Stock or other security of the Company or any security, exchangeable
      or
      exercisable into or for any Capital Stock or any other Security of the Company.
      The Seller is not a party to any voting agreement, stock appreciation, phantom
      stock, profit participation or other similar arrangement with respect to the
      Company.

     

    4.3  Authority
      and Enforceability.
      Seller
      has the requisite corporate power and authority to enter into this Agreement
      and
      to perform its obligations under this Agreement and the Ancillary Agreements
      to
      which it is a party. The execution and delivery of this Agreement performance
      of
      its obligations under this Agreement and (to the extent applicable) the
      Ancillary Agreements to which it is a party have been duly authorized by all
      necessary corporate action on the part of Seller. This Agreement has been duly
      executed and delivered by Seller and, assuming due authorization, execution
      and
      delivery by the Buyer, constitutes the valid and binding obligation of Seller,
      enforceable against it in accordance with its terms, except as such
      enforceability may be limited by (a) bankruptcy, insolvency,
      reorganization, moratorium or other similar laws affecting or relating to
      creditors’ rights generally, and (b) the availability of injunctive relief
      and other equitable remedies.

     

    4.4  No
      Conflicts; Consents.

     

    (a)  The
      execution and delivery of this Agreement by Seller does not, and the
      consummation of the Acquisition of the Purchased Securities owned by Seller
      will
      not, (i) violate the provisions of any of the Organizational Documents of
      Seller, (ii) violate any Contract (without the giving of notice, lapse of
      time or both) to which Seller is a party, or (iii) assuming compliance with
      the matters referred to in Section 4.4(b),
      violate
      any Order or any material provision of any Law Authorization applicable to
      Seller on the date hereof.

     

    (b)  Except
      as
      set forth in Section 3.3(b)
      of the
      Acquired Company Disclosure Schedule, no Authorization or Order of,
      registration, declaration or filing with, or notice to any Governmental Entity
      is required by Seller in connection with the execution and delivery of this
      Agreement or any Ancillary Agreement to which it is a party or the performance
      of Seller’s obligation under this Agreement or any Ancillary Agreement to which
      it is a party.

     

    4.5  Capacity.
      Each
      Seller has the capacity and financial capability to comply with and perform
      all
      of such Seller’s covenants and obligations under this Agreement and the
      Ancillary Agreements to which it is a party.

     

    4.6  No
      Orders or Actions.
      Seller
      is not subject to any Order that will have an adverse effect on such Seller’s
      ability to comply with or perform any of the Seller’s covenants or obligations
      under this Agreement and the Ancillary Agreements to which it is a party. There
      is no Action pending and no Person has threatened, in writing or otherwise,
      to
      commence any Action that will have an adverse effect on the ability of the
      Seller to comply with or perform any of Seller’s covenants or obligations under
      this Agreement and the Ancillary Agreements to which it is a party. To the
      Seller’s knowledge, no event has occurred and no claim, dispute or other
      condition or circumstance that might give rise to or serve as a basis for the
      commencement of any such Action.

     

     

     

    
      
        
        

      

      
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    4.7  Absence
      of Certain Changes or Events.
      Since
      the Balance Sheet Date to the date of this Agreement, no event has occurred
      that
      has had or is reasonably expected to have a Seller Material Adverse Effect
      and
      the Sellers have not taken any of the actions specified in Section 6.2
      on
      behalf of the Acquired Company.

     

    4.8  Additional
      Representations by Rivergate.
      

     

    (a)  Section 3.8(a)
      of the
      Acquired Company Disclosure Schedules contains a complete and accurate list
      of
      all real property owned by Rivergate and used or held for use by the Acquired
      Company (“Real
      Property”).
      Rivergate has good and marketable title to the Real Property, free and clear
      of
      all Liens other than Permitted Liens.

     

    (b)  Section 4.8(b)
      of the
      Seller Disclosure Schedule sets forth an accurate legal description of each
      parcel of Real Property. To the Knowledge of Rivergate, all Property Documents
      (as defined in the Agreement of Purchase and Sale and Joint Escrow Instructions)
      submitted to Buyer or the Buyer’s Guarantor for Buyer’s approval pursuant to the
      Agreement of Purchase and Sale and Joint Escrow Instructions are true, correct
      and complete copies thereof as of the date of submission thereof.

     

    (c)  To
      the
      Knowledge of Rivergate, except as set forth in Section
      4.8(c)
      of the
      Seller Disclosure Schedule, there are no management, service, supply or
      maintenance contracts affecting the Real Property to which Rivergate is a party
      which shall affect the Property on or following the closing of the transactions
      contemplated by the Agreement of Purchase and Sale and Joint Escrow
      Instructions. There are no leases, licenses or rights to occupancy of the Real
      Property other than the Lease. Rivergate or the Acquired Company has delivered
      or made available to Buyer’s Guarantor copies of the deeds and other instruments
      (as recorded) by which Rivergate acquired such Real Property and copies of all
      title insurance policies, abstracts and surveys in the possession of Rivergate
      and relating to such Real Property. 

     

    (d)  Rivergate
      is not a “foreign person” within the meaning of Section 1445 of the
      Code.

     

    (e)  Rivergate
      has not authorized any broker or finder to act on its behalf in connection
      with
      the sale and purchase of the Real Property pursuant to the Agreement of Purchase
      and Sale and Joint Escrow Instructions and Rivergate has not dealt with any
      broker or finder purporting to act on behalf of Rivergate or
      otherwise.

     

     

    ARTICLE
      V

     

    REPRESENTATIONS
      AND WARRANTIES OF THE BUYER

     

    The
      Buyer
      represents and warrants to each of the Sellers and the Acquired Company that
      each statement contained in this Article V
      is true
      and correct as of the date hereof and the same shall be true on the Closing
      Date, except as set forth in the disclosure schedule accompanying this
      Agreement, which is attached to this Agreement and is designated therein as
      being the “buyer disclosure schedule” (the 

     

     

     

    
      
        
        

      

      
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    “Buyer
      Disclosure Schedule”).
      The
      Buyer Disclosure Schedule has been arranged in sections corresponding to the
      Sections of this Article
      V.
      Each
      section of the Buyer Disclosure Schedule shall be deemed to incorporate by
      reference all information disclosed in any other section of the Buyer Disclosure
      Schedule to the extent that it is reasonably apparent from a reading of the
      disclosure that such disclosure is applicable to such other
      section.

     

    5.1  Organization
      and Good Standing.
      The
      Buyer is a corporation or other legal entity duly organized, validly existing
      and in good standing under the Laws of the jurisdiction of its incorporation
      or
      formation, has all requisite power to own, lease and operate its properties
      and
      to carry on its business as now being conducted, and is duly qualified to do
      business and is in good standing as a foreign corporation in each jurisdiction
      in which it owns or leases property or conducts any business so as to require
      such qualification, except where the failure to be so qualified would not
      reasonably be expected to have a Buyer Material Adverse Effect.

     

    5.2  Authority
      and Enforceability.
      The
      Buyer has the requisite power and authority to enter into this Agreement and
      each of the Ancillary Agreements and to consummate the transactions contemplated
      hereby and thereby. The execution and delivery of this Agreement and each of
      the
      Ancillary Agreements and the consummation of the transactions contemplated
      hereby and thereby have been duly authorized by all necessary action on the
      part
      of the Buyer. This Agreement has been duly executed and delivered by the Buyer
      and when delivered, each of the Ancillary Agreements will be duly executed
      and
      delivered by the Buyer. Assuming due authorization, execution and delivery
      by
      the Seller, this Agreement constitutes, and when executed each of the Ancillary
      Agreements will constitute, the valid and binding obligation of the Buyer,
      enforceable against it in accordance with its terms, except as such
      enforceability may be limited by (i) bankruptcy, insolvency,
      reorganization, moratorium or other similar laws affecting or relating to
      creditors’ rights generally, and (ii) the availability of injunctive relief
      and other equitable remedies.

     

    5.3  No
      Conflicts; Consents.

     

    (a)  The
      execution and delivery of this Agreement and the Ancillary Agreements by the
      Buyer do not, and the consummation of the transactions contemplated hereby
      and
      thereby (in each case, with or without the giving of notice or lapse of time,
      or
      both) will not, (i) violate the provisions of any Organizational Document
      of the Buyer, (ii) violate or constitute a default under any Contract to
      which the Buyer is a party, or (iii) to the Knowledge of the Buyer, violate
      or conflict with any material provision of any Law, Authorization or Order
      applicable to the Buyer on the date hereof. To the Knowledge of the Buyer as
      of
      the date hereof, no Material Customer could be reasonably expected to terminate
      or materially reduce its current business with the Acquired Company by reason
      of
      the Contemplated Transactions.

     

    (b)  No
      Authorization, Order of, registration, declaration or filing with, or notice
      to
      any Governmental Entity is required by the Buyer in connection with the
      execution and delivery of this Agreement and the Ancillary Agreements and the
      consummation of the transactions contemplated hereby and thereby.

     

     

     

    
      
        
        

      

      
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    5.4  No
      Orders or Actions.
      The
      Buyer is not subject to any Order that will have an adverse effect on the
      Buyer’s ability to comply with or perform any of the Buyer’s covenants or
      obligations under this Agreement. There is no Action pending and no Person
      has
      threatened, in writing or otherwise, to commence any Action that will have
      an
      adverse effect on the ability of the Buyer to comply with or perform any of
      the
      Buyer’s covenants or obligations under this Agreement or any Ancillary
      Agreement. To the Knowledge of the Buyer, no event has occurred and no claim,
      dispute or other condition or circumstance that might give rise to or serve
      as a
      basis for the commencement of any such Action.

     

    5.5  Purchase
      for Investment.
      The
      Purchased Securities purchased by the Buyer pursuant to this Agreement are
      being
      acquired for investment only and not with a view to any public distribution
      thereof, and the Buyer shall not offer to sell or otherwise dispose of, the
      Purchased Securities so acquired by it in violation of any of the registration
      requirements of the Securities Act of 1933, as amended.

     

    5.6  Availability
      of Funds.
      The
      Buyer has sufficient access to cash or borrowings to the extent necessary for
      the Buyer to perform its obligations under this Agreement and the Ancillary
      Agreements and to pay all fees and expenses related to the transactions
      contemplated hereby and thereby.

     

    5.7  Brokers.
      No
      broker, finder or investment banker is entitled to any brokerage, finder’s,
      investment banker’s or other fee or commission in connection with the
      transactions contemplated by this Agreement and the Ancillary Agreements based
      upon arrangements made by or on behalf of the Buyer or any Affiliate of the
      Buyer that will give rise to any payment obligation or other Liability on the
      part of Seller or its Affiliates.

     

    5.8  No
      Other Representations.
      The
      Buyer acknowledges and agrees that, except as expressly set forth in this
      Agreement or in any certificate contemplated hereby and delivered by the
      Acquired Company or the Ancillary Agreements in connection herewith, neither
      the
      Acquired Company nor any of the Sellers has made or is making any representation
      or warranty whatsoever, express or implied, including any representation as
      to
      the merchantability or fitness for a particular purpose.

     

     

    ARTICLE
      VI

     

    COVENANTS
      OF THE ACQUIRED COMPANY AND SELLERS

     

    6.1  Conduct
      of Business.
      During
      the period from the date of this Agreement and continuing until the earlier
      of
      the termination of this Agreement or the Closing Date, except (i) as
      otherwise contemplated by this Agreement or any Ancillary Agreement,
      (ii) with the prior written consent of the Buyer (which consent shall not
      be unreasonably withheld, conditioned or delayed) or (iii) as required by
      applicable Law, the Acquired Company shall use its commercially reasonable
      efforts to (a) carry on the business of the Acquired Company in the
      ordinary course consistent with its past practice, (b) comply in all
      material respects with all Legal Requirements, (c) preserve intact the
      Acquired Company’s goodwill and material business relationships with customers,
      suppliers, distributors and others having business dealings with it, and
      (d) keep available the services of the Acquired Company officers and Key
      Employees

     

     

     

    
      
        
        

      

      
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    6.2  Negative
      Covenants.
      During
      the period from the date of this Agreement and continuing until the earlier
      of
      the termination of this Agreement or the Closing Date, except (i) as
      otherwise contemplated by this Agreement or any Ancillary Agreement,
      (ii) with the prior written consent of the Buyer (which consent shall not
      be unreasonably withheld, conditioned or delayed) or (iii) as required by
      applicable Law, the Acquired Company shall not do any of the
      following:

     

    (a)  sell,
      lease or make any other disposition of any material property or assets used
      or
      held for use by the Acquired Company, except in the ordinary course of
      business;

     

    (b)  except
      in
      the ordinary course of business (i) enter into any collective bargaining
      agreement with any labor organization or union, (ii) enter into any
      employment, severance or similar Contract with any employee (iii) increase
      any bonus, salary or other rate of compensation to any employee;

     

    (c)  except
      in
      the ordinary course of business, enter into any Contract that would be required
      to be listed as a Material Contract if such Contract were in effect on the
      date
      hereof or amend, modify, cancel or waive any rights under any such Contract
      other than in the ordinary course of business;

     

    (d)  mortgage,
      pledge or subject to Liens, other than Permitted Liens, any material assets
      or
      properties of the Acquired Company except pursuant to existing
      Contracts;

     

    (e)  amend
      its
      Organizational Documents;

     

    (f)  except
      as
      provided in Section 6.5,
      issue,
      amend or cause to be created a Lien with respect to, its Equity
      Securities;

     

    (g)  make
      any
      changes in its accounting methods, principles or practices;

     

    (h)  change
      its method of Tax accounting or settle any claim relating to Taxes;

     

    (i)  except
      in
      the ordinary course of business, enter into or terminate any license,
      distributorship, dealer or sales representative, joint venture, or credit or
      similar agreement;

     

    (j)  cancel
      or
      waive any claim or right with a value to the Acquired Company in excess of
      $50,000;

     

    (k)  guaranty
      the repayment of indebtedness of another person;

     

    (l)  incur
      any
      capital expenditures in excess of the amount budgeted therefor; or

     

    (m)  agree,
      whether in writing or otherwise, to do any of the foregoing.

     

     

     

    
      
        
        

      

      
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    6.3  Access
      to Information.
      Prior
      to the Closing, the Acquired Company shall afford to the Buyer and its
      accountants, counsel and other representatives full access, upon reasonable
      notice during normal business hours, to the personnel, properties, books,
      Contracts and records of the Acquired Company as Buyer may reasonably request;
      provided, however, that such access does not unreasonably disrupt the normal
      operations of the Acquired Company; provided, further, that any such access
      shall be conducted at the Buyer’s expense and the Buyer shall not have access to
      individual performance or evaluation records, medical histories or other
      information that in the written opinion of the Acquired Company’s legal counsel
      could reasonably be expected to subject Seller or the Acquired Company to risk
      of liability and the Buyer shall not be entitled to conduct any invasive
      sampling or testing with respect to the properties of any Person; provided,
      further, that such access shall comply with applicable Law.

     

    6.4  Resignations.
      On the
      Closing Date, the Acquired Company shall cause to be delivered to the Buyer
      duly
      signed resignations, effective immediately upon the Closing, of all directors
      of
      their position as a director (and, if requested by the Buyer in writing at
      least
      ten (10) Business Days prior to Closing, of officers of their position as
      an officer) of the Acquired Company; provided, however, that no such resignation
      by any individual shall be a resignation from employment with the Acquired
      Company, if such individual is so employed.

     

    6.5  Distribution
      of Cash
      and Cash Equivalents.
      On or
      prior to the Closing Date, the Acquired Company shall make a distribution to
      the
      Sellers of all cash and cash equivalents of the Acquired Company, including
      investments of the Acquired Company held in brokerage accounts.

     

    6.6  Notification.

     

    (a)  The
      Sellers shall cause the Acquired Company to promptly notify the Buyer in writing
      of the existence or happening of any event or occurrence which
      (i) constitutes or results in a breach by the Acquired Company of, or a
      failure by the Acquired Company to comply with any agreement or covenant in
      this
      Agreement applicable to it in any material respect or (ii) should be
      included in the Acquired Company Disclosure Schedule in order to make the
      representations and warranties set forth in Article
      III
      true and
      correct in all material respects as of the Closing Date (each such additional
      written disclosure, an “Acquired
      Company Disclosure Schedule Supplement”),
      it
      being understood and agreed that the delivery of such information shall not
      in
      any manner constitute a waiver by the Buyer of any of the conditions precedent
      to the Closing hereunder or any of the Buyer’s remedies hereunder; provided,
      however,
      that in
      determining whether there is a breach of any representation or warranty
      contained in Article
      III
      for
      purposes of the indemnification to be provided by the Sellers pursuant to
Article
      XI,
      such
      representation or warranty shall be qualified by any information provided
      pursuant to this Section 6.6;
      provided that such information: (A) identifies only events or developments
      not materially adverse to the Acquired Company occurring after the date hereof
      in the ordinary course of business consistent with past practices or (B) if
      the fact, events or occurrence identified in the information has been consented
      to in writing by the Buyer;

     

    (b)  Each
      Seller shall promptly notify the Buyer in writing of the existence or happening
      of any event or occurrence which (i) constitutes or results in a breach by
      the Acquired Company of, or a failure by the Acquired Company to comply with
      any
      agreement or 

     

     

    
      
        
        

      

      
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    covenant
      in this Agreement applicable to it or (ii) should be included in the Seller
      Disclosure Schedule in order to make the representations and warranties of
      such Seller set forth in Article
      IV
      true and
      correct in all material respects as of the Closing Date (each such additional
      written disclosure, a “Seller
      Disclosure Schedule Supplement”),
      it
      being understood and agreed that the delivery of such information shall not
      in
      any manner constitute a waiver by the Buyer of any of the conditions precedent
      to the Closing hereunder or any of the Buyer’s remedies hereunder; provided,
      however, that in determining whether there is a breach of any representation
      or
      warranty contained in Article IV
      for
      purposes of the indemnification to be provided by Seller pursuant to
Article XI,
      such
      representation or warranty shall be qualified by any information provided
      pursuant to this Section 6.6;
      provided that such information: (A) identifies only events or developments
      not materially adverse to the Acquired Company occurring after the date hereof
      in the ordinary course of business consistent with past practices or (B) if
      the fact, events or occurrence identified in the information has been consented
      to in writing by the Buyer.

     

    6.7          
      Competing Ofers; Merger or Liquidation.  From and after the date
      hereof and until the earlier of (i) the Closing Date or (ii) the
      termination of this Agreement:

     

    (a)  neither
      the Acquired Company nor any Seller shall directly or indirectly, through any
      officer, director, employee, agent, partner or otherwise, solicit, initiate,
      consider, encourage or participate in discussions, or negotiations with, or
      encourage the submissions of bids, offers or proposals by (or commence
      negotiations with or provide any information to), any Person with respect to
      an
      acquisition of the Acquired Company or any interest therein or any of its
      assets, other than by the Buyer, and neither the Acquired Company nor Seller
      shall engage any broker, financial advisor or other consultant on a basis which
      might provide such broker, financial advisor or consultant with an incentive
      to
      initiate or encourage proposals or offers from other parties with respect to
      the
      Acquired Company or any of its assets;

     

    (b)  neither
      the Acquired Company nor any Seller shall directly or indirectly, through any
      officer, director, agent or otherwise, engage in negotiations concerning any
      such transaction with, or provide information to, any Person other than the
      Buyer and its representatives, with a view to engaging, or preparing to engage,
      that Person with respect to any matters referenced in this Section 6.7;

     

    (c)  the
      Acquired Company shall not commence any proceeding to merge or consolidate
      or
      obligate itself to do so; and

     

    (d)  the
      Acquired Company shall advise the Buyer of the terms of any written offer or
      proposal that it receives regarding the acquisition of the Acquired Company
      or
      any of its assets.

     

     

    ARTICLE
      VII

     

    COVENANTS
      OF THE BUYER

     

    7.1  Confidentiality.
      The
      Buyer acknowledges that the information being provided to it in connection
      with
      the consummation of the transactions contemplated by this Agreement and the
      Ancillary Agreements are subject to the terms of the Confidentiality Agreement,
      the terms of which are incorporated herein by reference and shall continue
      in
      full force and effect and survive the Closing, except that the non-disclosure
      and 

     

     

     

    
      
        
        

      

      
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    non-use
      obligations of the Buyer under the Confidentiality Agreement shall terminate
      at
      the Closing with respect to information to the extent related to the Acquired
      Company. If this Agreement is, for any reason, terminated prior to the Closing,
      the Confidentiality Agreement shall nonetheless continue in full force and
      effect in accordance with its terms.

     

    7.2  Employee
      Matters.

     

    (a)  Affected
      Employees.
      For the
      purposes of this Agreement, “Affected
      Employee”
means
      each individual who is employed by the Acquired Company on the Closing Date,
      including any such individuals on approved leave of absence (including maternity
      and paternity leave, vacation, sick leave, short term or long term disability,
      military leave, jury duty and death leave). For a three
      (3) year period immediately following the Closing Date, the Buyer shall
      cause the Acquired Company to provide each Affected Employee with terms and
      conditions of employment, including base wage or base salary and bonus
      opportunities and Benefit Plans (listed on Section
      3.15(a)
      of the
      Acquired Company Disclosure Schedules) that are substantially the same as those
      in effect immediately prior to the Closing Date. Provided the Acquired Company’s
      pre-tax income for that fiscal year is no less than $7,500,000, for each of
      2007, 2008 and 2009, the Buyer shall cause the Acquired Company to contribute
      to
      the Acquired Company’s 401(k) Profit Sharing Plan as a profit sharing
      contribution no less than the lesser of (i) 10% of compensation (as defined
      in the plan) or (ii) the maximum amount that may be contributed to the plan
      as a profit sharing contribution subject to the limits of the plan and
      applicable Law; provided, however, that the contribution on behalf of “highly
      compensated employees,” as defined for purposes of the tax-qualified retirement
      plan rules, may be made to a non-qualified deferred compensation plan if
      necessary to avoid a violation of the tax-qualified plan rules applicable to
      the
      Acquired Company’s 401(k) Profit Sharing Plan for any of such years, subject to
      the requirements set forth in Schedule
      7.2(a).
      On or
      after the Closing Date, Buyer shall cause the Acquired Company to provide credit
      to the Affected Employees for all periods of service with the Acquired Company
      prior to the Closing for all purposes under any benefit plans or policies
      maintained by the Buyer or any of its Subsidiaries for the benefit of the
      Affected Employees except to the extent such service credit would result in
      the
      duplication of benefit accrual for the same period of service. In connection
      with coverage of each of the Affected Employees under any of the welfare benefit
      plans made available by the Buyer or any of its Subsidiaries, the Buyer agrees
      (A) to cause each such plan to waive any applicable preexisting condition,
      waiting periods and actively at work requirements, and (B) to cause each
      such plan to honor any expenses incurred by such Affected Employees and their
      beneficiaries under similar plans of the Acquired Company during the portion
      of
      the applicable plan year prior to the date on which such Affected Employees
      commences participation in the Buyer or Subsidiary welfare benefit plans for
      purposes of satisfying applicable deductible, co-insurance and maximum
      out-of-pocket expenses. In the event of any conflict between the terms and
      conditions of this Section 7.2(a)
      and the
      terms and conditions of any Employment Agreement, the terms and conditions
      of
      the Employment Agreement shall prevail.

     

     

     

    
      
        
        

      

      
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    (b)  Employee
      Supplemental Retention Plan.
      On or
      prior to the Closing Date, the Buyer shall deposit with the Trustee by wire
      transfer of immediately available funds to the account designated by the Trustee
      in accordance with the Trust an amount designated by the Acquired Company no
      later than five (5) Business Days prior to the Closing Date (the “Employee
      Supplemental Retention Amount”),
      which
      amount shall be distributed in accordance with the Employee Supplemental
      Retention Plan to be adopted by the Acquired Company on or prior to the Closing
      Date subject to and effective as of the Closing. Within two (2) Business Days
      after the designation of the Employee Supplemental Retention Amount by the
      Acquired Company, the Buyer shall provide the Acquired Company with written
      notice of the Employee Supplemental Plan Tax Benefit Amount calculated in
      accordance with the methodology set forth in Schedule
      7.2(b).

     

    (c)  Management
      Supplemental Retention Plan.
      On or
      prior to the Closing Date, the Buyer shall deposit with the Trustee by wire
      transfer of immediately available funds to the account designated by the Trustee
      in accordance with the Trust an amount designated by the Acquired Company no
      later than five (5) Business Days prior to the Closing Date (the “Management
      Supplemental Retention Amount”),
      which
      amount shall be distributed in accordance with the Management Supplemental
      Retention Plan to be adopted by the Acquired Company on or prior to the Closing
      Date subject to and effective as of the Closing.

     

    (d)  Remedy
      for Breach.
      The
      Buyer acknowledges and agrees that in the event of a breach by the Buyer of
      any
      of the provisions of this Section
      7.2,
      monetary damages shall not constitute a sufficient remedy. Consequently, in
      the
      event of any such breach, the Sellers, Sellers’ Representative and/or their
      respective successors or assigns shall be entitled to, in addition to the other
      rights and remedies existing in their favor, specific performance and/or
      injunctive or other relief in order to enforce or prevent any violations of
      the
      provisions hereof from any court of competent jurisdiction, in each case without
      the requirement of posting a bond or proving actual damages.

     

    ARTICLE
      VIII

     

    COVENANTS
      OF THE BUYER, THE SELLERS AND THE ACQUIRED COMPANY

     

    8.1  Regulatory
      and Other Approvals.
      Prior
      to the Closing, upon the terms and subject to the conditions of this Agreement,
      the Buyer and the Acquired Company will (a) take all commercially
      reasonable steps necessary or desirable, and proceed diligently and in good
      faith and use all commercially reasonable efforts, as promptly as practicable
      to
      obtain all consents, approvals or actions of, to make all filings with and
      to
      give all notices to Governmental Entities or any other Person required to
      consummate the transactions contemplated hereby and by the Ancillary Agreements,
      including, without limitation, those required under the HSR Act (b) provide
      such other information and communications to such Governmental Entities or
      other
      Persons as such Governmental Entities or other Persons may reasonably request
      and (c) cooperate with each other as promptly as practicable in obtaining
      all consents, approvals or actions of, making all filings with and giving all
      notices to Governmental Entities or other Persons required to consummate the
      transactions contemplated hereby and by the Ancillary Agreements. In addition,
      no party hereto shall take any action after the date hereof that could
      reasonably be expected to delay the obtaining of, or result in not obtaining,
      any permission, approval or consent from any Governmental Entity or other Person
      required to be obtained prior to Closing. Nothing contained in this Agreement
      shall require the Acquired Company or any Seller to pay any consideration to
      any
      other Person (other than nominal filing and application fees to Governmental
      Entities) from whom any such approvals, authorizations, consents, orders,
      licenses, permits, qualifications, exemptions or waivers are
      requested.

     

     

     

    
      
        
        

      

      
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    8.2  Public
      Announcements.
      During
      the period from the date of this Agreement and continuing until the earlier
      of
      the termination of this Agreement or the Closing Date, no party hereto shall,
      nor shall any of their respective Affiliates, without the approval of the other
      parties, issue any press releases or otherwise make any public statements with
      respect to the transactions contemplated by this Agreement, except as may be
      required by applicable Law or by obligations pursuant to any listing agreement
      with any national securities exchange or stock market, in which case the party
      required to make the release or announcement shall allow the other party
      reasonable time to comment on such release or announcement in advance of such
      issuance; provided, however, that each of the parties may make internal
      announcements to their respective employees or limited or general partners
      that
      are consistent with the parties’ prior public disclosures regarding the
      Acquisition, and the Acquired Company may communicate with its suppliers and
      customers in a manner consistent with the parties’ prior public disclosures
      regarding the Acquisition.

     

    8.3  Further
      Assurances.
      Each
      party hereto shall execute such documents and other instruments and take such
      further actions as may reasonably be required or desirable to carry out the
      provisions hereof and consummate the Acquisition. Upon the terms and subject
      to
      the conditions hereof, each party hereto shall use its commercially reasonable
      efforts (subject, in the case of the Sellers, to Section 8.1)
      to
      (a) take or cause to be taken all actions, and to do or cause to be done
      all other things, necessary, proper or advisable to consummate the Acquisition
      as promptly as practicable, and (b) obtain in a timely manner all necessary
      waivers, consents and approvals and to effect all necessary registrations and
      filings. The obligations of Sellers under this Section 8.3 shall be solely
      with respect to such Seller and not with respect to any other entity, including,
      without limitation, the Acquired Company.

     

    8.4  Real
      Property Covenants. 

     

    (a)  Notwithstanding
      anything to the contrary in the Agreement of Purchase and Sale and Joint Escrow
      Instructions and subject to the representations and warranties of the Acquired
      Company and Rivergate herein and therein, Buyer shall not be deemed to have
      voluntarily and knowingly waived its right to object to any information
      contained in any Property Documents identified in Exhibit H of the Agreement
      of
      Purchase and Sale and Joint Escrow Instructions (which Exhibit H may be modified
      from time to time prior to the execution Agreement of Purchase and Sale and
      Joint Escrow Instructions) if within five (5) Business Days after the later
      of
      (i) the date of this Agreement or (ii) Buyer’s or Buyer’s Guarantor’s receipt of
      such Property Documents, Buyer shall have notified the Acquired Company in
      writing as to whether it objects to any information contained in any such
      Property Documents; provided, however Buyer has reviewed Property Documents
      listed as items 1, 2, 3, 4, 6, 7, 8, 9 and 15 in Exhibit H, and except as set
      forth in Sections 8.5(b) and (c) below, Buyer voluntarily and knowingly waives
      its right to object to any information disclosed in such Property Documents
      subject to the representations and warranties of the Acquired Company and
      Rivergate set forth in this Agreement and the Agreement of Purchase and Sale
      and
      Joint Escrow Instructions. Additionally, Buyer does not require any action
      by
      Rivergate or the Acquired Company with respect to the parking discrepancy
      identified in the Buyer’s counsel’s letter dated October 9, 2006, addressed to
      the Acquired Company’s counsel.

     

     

     

    
      
        
        

      

      
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    (b)  On
      or
      before the closing of the transactions contemplated by the Agreement of Purchase
      and Sale and Joint Escrow Instructions, Rivergate shall cause to be removed
      from
      the exceptions to title those exceptions listed as Items No. 6, 8, 9, 16 and
      17
      in that certain Preliminary Title Report dated August 22, 2006 prepared by
      Fidelity National Title Insurance Company (the “Preliminary
      Title Report”).

     

    (c)  Seller
      shall cause the title policy to be issued pursuant to the Agreement
      of Purchase and Sale and Joint Escrow Instructions
      to
      include a CLTA 103.1 or 103.3 endorsements for the following easements:
      Exception No. 3 of the Preliminary Title Report (private underground utility
      easement designated as “C” on that
      certain ALTA/ACSM Land Title Survey dated September 29, 2006, as revised on
      October 16, 2006, prepared by Baumbach and Piazza, Inc,
      (the
“Survey”)
      lying
      under the most southwesterly building on the Real Property, and the public
      utility easement designated as “B” on the Survey, situated within or adjacent to
      the 60’ easement reserved for future street) and Exception No. 11 of the
      Preliminary Title Report (public utility easement designated as “F” on the
      Survey) located along and partially under the southeasterly portion of an
      existing building.

     

    ARTICLE
      IX

     

    CONDITIONS
      TO CLOSING

     

    9.1  Conditions
      to Obligations of the Buyer and the Sellers.
      The
      obligations of the Buyer and the Sellers to consummate the transactions
      contemplated by this Agreement are subject to the satisfaction on or prior
      to
      the Closing Date of the following conditions:

     

    (a)  All
      Authorizations and Orders of, declarations and filings with, and notices to
      any
      Governmental Entity, required to permit the consummation of the transactions
      contemplated by this Agreement shall have been obtained or made and shall be
      in
      full force and effect, and all applicable waiting periods (including any
      extensions thereof) required under the HSR Act shall have expired or been
      terminated.

     

    (b)  No
      temporary restraining order, preliminary or permanent injunction or other Order
      preventing the consummation of the transactions contemplated by this Agreement
      shall be in effect. No Law shall have been enacted or shall be deemed applicable
      to the transactions contemplated by this Agreement which makes the consummation
      of such transactions illegal.

     

    (c)  A
      release
      pursuant to terms and conditions mutually acceptable to the Buyer and the
      Acquired Company of the guaranty of the Acquired Company described in
Section 3.4(b)
      of the
      Acquired Company Disclosure Schedule.

     

     

     

    
      
        
        

      

      
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    9.2  Conditions
      to Obligation of the Buyer.
      The
      obligation of the Buyer to consummate the transactions contemplated by this
      Agreement is subject to the satisfaction (or waiver by the Buyer in its sole
      discretion) of the following further conditions:

     

    (a)  Each
      of
      the representations and warranties of the Acquired Company set forth in this
      Agreement without giving effect to materiality or Acquired Company Material
      Adverse Effect qualifications shall be in all material respects true and correct
      at and as of the Closing Date as if made at and as of the Closing Date and
      each
      of such representations and warranties that is not so qualified shall be true
      and correct in all material respects at and as of the Closing Date as if made
      at
      and as of the Closing Date (in each case, without giving effect to any Acquired
      Company Disclosure Schedule Supplement), except (i) to the extent that
      such representations and warranties refer specifically to an earlier date,
      in
      which case such representations and warranties shall have been true and correct
      as of such earlier date, and (ii) for changes contemplated by Section 6.6.

     

    (b)  Each
      of
      the representations and warranties of the Sellers set forth in this Agreement
      without giving effect to materiality or Seller Material Adverse Effect
      qualifications shall be true and correct in all material respects at and as
      of
      the Closing Date as if made at and as of the Closing Date and each of such
      representations and warranties that is not so qualified shall be true and
      correct in all material respects at and as of the Closing Date as if made at
      and
      as of the Closing Date (in each case, without giving effect to the Seller
      Disclosure Schedule Supplement), except (i) to the extent that such
      representations and warranties refer specifically to an earlier date, in which
      case such representations and warranties shall have been true and correct as
      of
      such earlier date, (ii) for changes contemplated by Section 6.6.

     

    (c)  The
      Acquired Company shall have performed or complied in all material respects
      with
      its obligations and covenants required by this Agreement to be performed or
      complied with at or prior to the Closing Date.

     

    (d)  The
      Sellers shall have performed or complied in all material respects with their
      obligations and covenants required by this Agreement to be performed or complied
      with at or prior to the Closing Date.

     

    (e)  The
      Buyer
      shall have received a certificate dated the Closing Date signed by an officer
      of
      the Acquired Company to the effect that (i) the conditions set forth in
Section 9.2(a)
      and
9.2(c)
      have
      been satisfied and (ii) no Acquired Company Material Adverse Effect has occurred
      since the date of this Agreement.

     

    (f)  The
      Buyer
      shall have received a certificate dated the Closing Date signed by the Sellers’
Representative to the effect that (i) the conditions set forth in Section 9.3(b)
      and 9.3(d)
      have
      been satisfied with respect to Sellers and (ii) no Seller Material Adverse
      Effect has occurred since the date of this Agreement.

     

    (g)  The
      Sellers and the Acquired Company shall have entered into the Escrow
      Agreement.

     

    (h)  Rivergate
      and the Acquired Company shall have entered into the Lease
      Amendment.

     

     

     

    
      
        
        

      

      
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    (i)  Rivergate
      shall have entered into the Agreement of Purchase and Sale and Joint Escrow
      Instructions.

     

    (j)  Each
      of
      the Key Employees shall have entered into his respective Employment
      Agreement.

     

    (k)  The
      Sellers shall have delivered to the Buyer all executed agreements and other
      documents required to be delivered by the Seller to the Buyer pursuant to
Section 2.3(b).

     

    (l)  The
      Acquired Company shall have delivered to the Buyer an opinion dated as of the
      Closing Date of legal counsel to the Acquired Company covering the matters
      addressed in Exhibit
      G
      hereto,
      subject to appropriate assumptions, qualifications, limitations and exceptions.
      

     

    (m)  The
      Sellers shall have obtained and delivered to Buyer an ALTA survey and title
      commitment for title insurance from a title company reasonably acceptable to
      Buyer related to the Real Property reflecting no Liens other than Permitted
      Liens.

     

    (n)  Each
      Seller shall deliver to Buyer a release executed by each Seller in the form
      attached hereto as Exhibit
      H.

     

    (o)  The
      Buyer
      or the Buyer’s Guarantor shall have received all Organizational Documents of the
      Acquired Company in the possession of the Acquired Company or the
      Sellers.

     

    (p)  The
      Sellers shall have obtained and delivered to Buyer a certificate of status
      of
      the Acquired Company from the Secretary of State of California.

     

    (q)  The
      Sellers shall have delivered to Buyer the resignations set forth in Section 6.4
      of this
      Agreement.

     

    (r)  The
      creditors of the Acquired Company shall have released all Liens associated
      with
      any of the Acquired Company’s Indebtedness to be paid at Closing or shall have
      executed and delivered payoff letters reasonably acceptable to Buyer evidencing
      the release of their respective Liens upon satisfaction of each creditor’s
      portion of Indebtedness.

     

    9.3  Conditions
      to Obligations of the Sellers.
      The
      obligation of each of the Sellers to consummate the transactions contemplated
      by
      this Agreement is subject to the satisfaction (or waiver by such Seller in
      its
      sole discretion) of the following further conditions:

     

    (a)  Each
      of
      the representations and warranties of the Buyer set forth in this Agreement
      that
      is qualified by materiality shall be true and correct at and as of the Closing
      Date as if made at and as of the Closing Date and each of such representations
      and warranties that is not so qualified shall be true and correct in all
      material respects at and as of the Closing Date as if made at and as of the
      Closing Date, except to the extent that such representations and warranties
      refer specifically to an earlier date, in which case such representations and
      warranties shall have been true and correct as of such earlier
      date.

     

     

     

    
      
        
        

      

      
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    (b)  The
      Buyer
      shall have performed or complied in all material respects with all obligations
      and covenants required by this Agreement to be performed or complied with at
      or
      prior to the Closing Date.

     

    (c)  The
      Sellers shall have received a certificate dated the Closing Date signed on
      behalf of the Buyer by an officer of the Buyer to the effect that the conditions
      set forth in Section 9.3(a)
      and
9.3(b)
      have
      been satisfied.

     

    (d)  The
      Buyer
      shall have entered into the Escrow Agreement.

     

    (e)  The
      Acquired Company shall have entered into the Employment Agreements with each
      Key
      Employee that is a party thereto.

     

    (f)  The
      Acquired Company shall have entered into the Lease Amendment.

     

    (g)  Buyer
      (or
      one of its Subsidiaries) shall have entered into the Agreement of Purchase
      and
      Sale and Joint Escrow Instructions.

     

    (h)  The
      Buyer
      shall have delivered all agreements, funds and other documents required to
      be
      delivered by the Buyer pursuant to Sections 2.3(a)
      and
7.2.

     

     

    ARTICLE
      X

     

    TERMINATION

    10.1  Termination.

     

    (a)  This
      Agreement may be terminated and the transactions contemplated hereby may be
      abandoned at any time prior to the Closing:

     

    (i)  by
      mutual
      written consent of the Buyer and the Sellers;

     

    (ii)  by
      the
      Sellers’ Representative or the Buyer if the Closing does not occur on or before
      November 30, 2006; provided,
      however,
      that
      the right to terminate this Agreement under this clause (ii) shall not be
      available to any party whose breach of a representation, warranty, covenant
      or
      agreement under this Agreement has been the cause of or resulted in the failure
      of the Closing to occur on or before such date;

     

    (iii)  by
      the
      Buyer (provided that the Buyer is not in material breach of any of its
      representations, warranties, covenants or other agreements contained herein)
      if
      the Acquired Company or any Seller is in material breach of any representation
      in this Agreement and such breach is not cured within ten (10) Business Days
      of
      receipt of written notice thereof given to Sellers’ Representative.

     

    (iv)  by
      the
      Sellers’ Representative (provided that none of the Sellers is in material breach
      of any of its representations, warranties, covenants or other agreements
      contained herein) if the Buyer is in material breach of any representation
      in
      this Agreement and such breach is not cured within ten (10) Business Days of
      receipt of written notice thereof given to Buyer;

     

     

     

    
      
        
        

      

      
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    (v)  by
      the
      Buyer or the Sellers’ Representative if a Governmental Entity shall have issued
      an Order or taken any other action, in any case having the effect of permanently
      restraining, enjoining or otherwise prohibiting the transactions contemplated
      by
      this Agreement, which Order or other action is final and
      non-appealable.

     

    (b)  The
      party
      desiring to terminate this Agreement pursuant to Section 10.1(a)(ii),
      (iii),
      (iv) or
      (v)
      shall
      give written notice of such termination to the other party hereto.

     

    10.2  Effect
      of Termination.
      In the
      event of termination of this Agreement as provided in Section 10.1,
      this
      Agreement shall immediately become void and there shall be no liability or
      obligation on the part of the Buyer, the Acquired Company or the Sellers or
      their respective officers, directors, stockholders or Affiliates, except that
      the provisions of this Section 10.2
      and
Sections
      7.1
      (Confidentiality), 8.2
      (Public
      Announcements) and Article XIV
      of this
      Agreement shall remain in full force and effect and survive any termination
      of
      this Agreement; provided however, that if this Agreement is terminated by a
      party because of the material breach of this Agreement by the other party or
      because one or more of the conditions to the terminating party’s obligations
      under this Agreement is not satisfied as a result of the other party’s failure
      to comply with its obligations under this Agreement, the terminating party’s
      right to pursue all legal recourse will survive such termination
      unimpaired.

     

    ARTICLE
      XI

     

    INDEMNIFICATION

     

    11.1  Survival.

     

    (a)  All
      representations and warranties contained in this Agreement, the Ancillary
      Agreements or in any Schedule, Exhibit or certificate delivered pursuant to
      this
      Agreement or the Ancillary Agreements shall survive the Closing for a period
      of
      eighteen (18) months following the Closing Date (except for claims in
      respect thereof pending at such time, which shall survive until finally resolved
      or settled); provided,
      however,
      that
      (i) the representations and warranties set forth in Sections 3.1,
      3.2,
      3.3,
      3.5,
      4.8(a)
      and
4.8(b)
      and
Article IV
      (the
“Transactional
      Reps”)
      shall
      survive for the applicable statute of limitations, and (ii) the
      representations and warranties set forth in Sections 3.9
      and
      3.17
      shall
      survive for four (4) years from the Closing Date or the expiration of the
      applicable statute of limitations, whichever occurs first.

     

    (b)  The
      period for which a representation or warranty survives the Closing is referred
      to herein as the “Applicable
      Survival Period.”
In
      the
      event notice of claim for indemnification under Section 11.2
      or
11.3
      is given
      within the Applicable Survival Period, the representation or warranty that
      is
      the subject of such indemnification claim shall survive with respect to such
      claim only until such claim is finally resolved.

     

     

     

    
      
        
        

      

      
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    11.2  Indemnification
      by the Seller.

     

    (a)  Subject
      to the limitations set forth herein, each of the Non-Compete Sellers shall
      indemnify and defend the Buyer and its Affiliates and their respective
      stockholders, members, managers, officers, directors, employees, agents,
      successors and assigns (the “Buyer
      Indemnitees”)
      against, and shall hold the Buyer Indemnitees harmless from, any loss,
      liability, claim, charge, action, suit, proceeding, assessed interest, penalty,
      damage, or expense, including costs of defense and reasonable attorneys’ fees
      (collectively, “Losses”),
      resulting from, arising out of, or incurred by the Buyer Indemnitee in
      connection with, or otherwise with respect to (i) any breach of any
      representation, warranty, covenant, any certificate delivered in connection
      with
      the Closing or agreement of the Acquired Company contained in this Agreement,
      (ii) the operation of the business of The Elizabeth, Inc. or Cottage Bakery
      Retail, Inc. prior to Closing, to the extent such operation results in a claim,
      demand, action, suit or proceeding by a third party against any Buyer Indemnitee
      or (iii) the matters disclosed in Section
      3.15(a)(ii)
      of the
      Acquired Company Disclosure Schedule.

     

    (b)  Subject
      to the limitations set forth herein, each Seller shall indemnify and defend
      the
      Buyer Indemnitees against, and shall hold the Buyer Indemnitees harmless from,
      any Losses resulting from, arising out of, or incurred by the Buyer Indemnitee
      in connection with, or otherwise with respect to (i) any breach of any
      representation or warranty of such Seller contained in Article IV
      (other
      than Section
      4.8)
      of this
      Agreement or in any certificate delivered in connection herewith to the extent
      relating to any representation or warranty of such Seller contained in
Article IV
      (other
      than Section
      4.8)
      of this
      Agreement and (ii) any breach of any covenant or agreement of such Seller
      contained in Article VI
      of this
      Agreement or in any certificate delivered in connection herewith to the extent
      relating to any breach of any covenant or agreement of Seller contained in
      Article VI
      of this
      Agreement.

     

    (c)  Subject
      to the limitations set forth herein, Rivergate shall indemnify and defend the
      Buyer Indemnitees against, and shall hold the Buyer Indemnitees harmless from,
      any Losses resulting from, arising out of, or incurred by the Buyer Indemnitee
      in connection with, or otherwise with respect to any breach of any
      representation, warranty, covenant or agreement of Rivergate contained in the
      Agreement of Purchase and Sale and Joint Escrow Instructions or breach of any
      representation or warranty of Rivergate in Section
      4.8
      of this
      Agreement.

     

    (d)  The
      Sellers shall not be liable for any Loss or Losses pursuant to Section
      11.2(a)(i),
      11.2(b)
      or
11.2(c)
      with
      respect to breaches of representations and warranties (i) unless the claim
      for such Loss or Losses is brought within the Applicable Survival Period,
      (ii) unless the claim for such Loss or Losses is first recovered from the
      Escrow Amount, and (iii) unless and until the aggregate amount of all
      Losses incurred by the Buyer Indemnitees exceeds $1,000,000 (the “Deductible”),
      and
      then only to the extent that such Losses exceed the Deductible; provided,
      however,
      that
      the cumulative indemnification and defense or any other obligation of the
      Sellers under this Article XI
      shall in
      no event exceed $60,000,000 (the “Indemnity
      Cap”);
      provided further for the avoidance of doubt, that the Deductible and Indemnity
      Cap shall not apply with respect to (A) any breaches of representations,
      warranties, covenants or agreements contained in Sections 3.1,
      3.2,
      3.3,
      3.5,
      4.8(a),
      4.8(b)
      and
Articles XII
      and
XIII,
      or (B)
      the breach by Rivergate of its obligation to consummate the transactions
      contemplated by the Agreement of Purchase and Sale and Joint Escrow Instructions
      or (C) the breach by Rivergate of its obligations under Section
      8.4(b) or (c)
      of this
      Agreement.

     

     

     

    
      
        
        

      

      
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    (e)  No
      Seller
      shall have any Liability or obligation to any Buyer Indemnitee whatsoever,
      and
      no claim shall be asserted against any Seller, for indemnification under
Section 11.2(a)
      for any
      individual claim for a Loss in excess of such Seller’s Pro Rata Portion of
      (i) such Loss or (ii) if the recovery of any Loss is limited by the
      Indemnity Cap, such Loss as limited.

     

    (f)  In
      addition to the limitations set forth in Sections 11.2(d)
      and
11.2(e),
      the
      Acquired Company and the Sellers shall not be obligated to indemnify the Buyer
      Indemnitees with respect to (i) any indirect, special or incidental damages
      or
      loss of profits to the extent they constitute consequential damages; (ii) any
      other consequential damages, except those arising out of the breach of any
      representation or warranty set forth in Sections
      3.8, 3.17 and 4.8;
      (iii) any matter to the extent such matter is reserved as a Liability or
      otherwise accounted for in the final determination of the Closing Date Net
      Asset
      Value, or (iv) any covenant or condition waived by the Buyer in writing on
      or prior to the Closing.

     

    (g)  Any
      Claims or causes of actions that Buyer has against any Seller in the nature
      of
      fraud shall not be subject to the limitations set
      forth
      in Article XI.

     

    (h)  Solely
      for purposes of calculating the amount of Losses incurred arising out of or
      relating to any breach of a representation or warranty (and not for purposes
      of
      determining whether or not a breach has occurred), the references to “Acquired
      Company Material Adverse Effect,” “Seller Material Adverse Effect;” or “Buyer
      Material Adverse Effect” or any other materially qualifications (or correlative
      terms), including as expressed in accounting concepts, shall be
      disregarded.

     

    (i)  The
      Buyer
      acknowledges and agrees that, should the Closing occur, except for fraud of
      the
      Sellers or breaches by the Sellers of the Transactional Reps, the
      sole
      and exclusive remedy of the Buyer Indemnitees with respect to any and all
      matters arising out of, relating to or connected with this Agreement, the
      Ancillary Agreements, the Acquired Company and its Subsidiaries and their
      respective assets and liabilities, the Acquisition and the Purchased Securities
      (excluding the Employment Agreement, Articles XII
      and
XIII
      hereof
      and the availability of equitable or injunctive relief) shall be pursuant to
      the
      indemnification provisions set forth in this Article XI.

     

    11.3  Indemnification
      by Buyer.
      The
      Buyer shall indemnify and defend each of the Sellers, each of their Affiliates
      and their respective stockholders, members, managers, officers, directors,
      employees, agents, successors and assigns (the “Seller
      Indemnitees”)
      against, and shall hold the Seller Indemnitees harmless from, any Loss resulting
      from, arising out of, or incurred by the Seller Indemnitees in connection with,
      or otherwise with respect to (a) any breach of any representation, warranty,
      covenant or certificate delivered in connection with the Closing or agreement
      of
      the Buyer contained in this Agreement or any of the Ancillary Agreements or
      (b)
      the operation of the business of the Acquired Company after Closing, to the
      extent that such operation results in a claim, demand, action, suit or
      proceeding by a third party against any Seller Indemnitee, including, but not
      limited to, any claim, demand, action, suit or proceeding asserted or brought
      by
      any Affected Employee with respect to Buyer’s breach of Section 7.2 of this
      Agreement. The Sellers acknowledge and agree that, should the Closing occur,
      the
      sole and exclusive remedy of the Seller Indemnitees with respect to any and
      all
      matters arising out of, relating to or connected with this Agreement, the
      Ancillary Agreements, and the Acquisition shall be pursuant to the
      indemnification provisions set forth in this Article XI.

     

     

     

    
      
        
        

      

      
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    11.4  Indemnification
      Procedure for Third Party Claims.

     

    (a)  In
      the
      event that any claim or demand, or other circumstance or state of facts is
      known
      to give rise to any claim or demand, for which an Indemnitor may be liable
      to an
      Indemnitee hereunder is asserted or sought to be collected by a third party
      (a
“Third
      Party Claim”),
      the
      Indemnitee shall as soon as practicable notify the Indemnitor in writing of
      such
      Third Party Claim (a “Notice
      of Claim”).
      Failure or delay in notifying the Indemnitor will not relieve the Indemnitor
      of
      any Liability it may have to the Indemnitee, except and only to the extent
      that
      such failure or delay causes actual harm to the Indemnitor with respect to
      such
      Third Party Claim. The Notice of Claim shall (i) state that the Indemnitee
      has paid or properly accrued Losses or anticipates that it will incur liability
      for Losses for which such Indemnitee is entitled to indemnification pursuant
      to
      this Agreement, and (ii) specify in reasonable detail each individual item
      of Loss included in the amount so stated, the date (if any) such item was paid
      or properly accrued, the basis for any anticipated liability and the nature
      of
      the misrepresentation, breach of warranty, breach of covenant, breach of
      agreement or other claim to which each such item is related and the computation
      of the amount to which such Indemnitee claims to be entitled hereunder. The
      Indemnitee shall enclose with the Notice of Claim a copy of all papers served
      with respect to such Third Party Claim, if any, and any other documents
      evidencing such Third Party Claim.

     

    (b)  The
      Indemnitor will have thirty (30) days from the date on which the Indemnitor
      received the Notice of Claim to notify the Indemnitee that the Indemnitor
      desires to assume the defense or prosecution of such Third Party Claim and
      any
      litigation resulting therefrom with counsel of its choice (subject to approval
      by the Indemnitee which will not be unreasonably withheld) and at its sole
      cost
      and expense (a “Third
      Party Defense”).
      If
      the Indemnitor assumes the Third Party Defense in accordance herewith,
      (i) the Indemnitee may retain separate co-counsel at its sole cost and
      expense and participate in the defense of the Third Party Claim but the
      Indemnitor shall control the investigation, defense and settlement thereof
      using
      legal counsel reasonably satisfactory to Indemnitee, (ii) the Indemnitee
      will not file any papers or consent to the entry of any judgment or enter into
      any settlement with respect to the Third Party Claim without the prior written
      consent of the Indemnitor and (iii) the Indemnitor will not consent to the
      entry of any judgment or enter into any settlement or waiver with respect to
      the
      Third Party Claim without the consent of Indemnitee which consent shall not
      be
      unreasonably withheld, conditioned or delayed. The parties will use commercially
      reasonable efforts to minimize Losses from Third Party Claims and will act
      in
      good faith in responding to, defending against, settling or otherwise dealing
      with such claims. The parties will also cooperate in any such defense and give
      each other reasonable access to all information relevant thereto. Whether or
      not
      the Indemnitor has assumed the Third Party Defense, such Indemnitor will not
      be
      obligated to indemnify the Indemnitee hereunder for any settlement entered
      into
      or any judgment that was consented to without the Indemnitor’s prior written
      consent.

     

     

     

    
      
        
        

      

      
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    (c)  If
      the
      Indemnitor does not assume the Third Party Defense within thirty (30) days
      of receipt of the Notice of Claim, the Indemnitee will be entitled to assume
      the
      Third Party Defense, at the cost and expense of the Indemnitor (or, if it is
      finally determined that the Indemnitee incurred a Loss with respect to the
      matter in question for which the Indemnitee is not entitled to indemnification
      pursuant to Section 11.2
      or 11.3,
      as
      applicable, at the expense of the Indemnitee) upon delivery of notice to such
      effect to the Indemnitor; provided,
      however,
      that
      the (i) Indemnitor shall have the right to participate in the Third Party
      Defense at its sole cost and expense, but the Indemnitee shall control the
      investigation, defense and settlement thereof; and (ii) the Indemnitor may
      at any time thereafter assume the Third Party Defense using counsel reasonably
      satisfactory to Indemnitee, in which event the Indemnitor shall bear the
      reasonable fees, costs and expenses of the Indemnitee’s counsel incurred prior
      to the assumption by the Indemnitor of the Third Party Defense; (iii) the
      Indemnitee shall not consent to the entry of any judgment or enter into any
      settlement with respect to any Third Party Claim so defended without the consent
      of the Indemnitor, which consent may not be unreasonably withheld, conditioned
      or delayed and (iv) the assumption of the Third Party Defense by the Indemnitee
      shall not constitute a waiver of any right of such Indemnitee to indemnification
      pursuant to
      Section 11.2 or 11.3.
      If the
      Indemnitee assumes the defense of any such Claim, the Indemnitee shall keep
      the
      Indemnitor reasonably informed of the progress of any such defense.

     

    11.5  Indemnification
      Procedures for Non-Third Party Claims.
      The
      Indemnitee will notify the Indemnitor in writing promptly of its discovery
      of
      any matter (the failure to give such notice shall not limit the Indemnitor’s
      liability owed to Indemnitee unless but only to the extent such failure or
      delay
      causes actual harm to the Indemnitor with respect to the matter) that does
      not
      involve a Third Party Claim, such notice to contain the information set forth
      in
      the following sentence. The Notice of Claim shall (i) state that the
      Indemnitee has paid or properly accrued Losses or anticipates that it will
      incur
      liability for Losses for which such Indemnitee is entitled to indemnification
      pursuant to this Agreement, and (ii) specify in reasonable detail each
      individual item of Loss included in the amount so stated, the date such item
      was
      paid or properly accrued, the basis for any anticipated liability and the nature
      of the misrepresentation, breach of warranty, breach of covenant, breach of
      agreement or other claim to which each such item is related and the computation
      of the amount to which such Indemnitee claims to be entitled hereunder. In
      the
      event that the Indemnitor does not notify the Indemnitee that it disputes such
      claim within thirty (30) days from receipt of such Notice of Claim, the
      Indemnitor will be deemed to have acknowledged liability for such claim and
      the
      Escrow Agent or Indemnitor, as the case may be, shall promptly pay such claim.
      The Indemnitee will reasonably cooperate and assist the Indemnitor in
      determining the validity of any claim for indemnity by the Indemnitee and in
      otherwise resolving such matters. Such assistance and cooperation will include
      providing reasonable access to and copies of information, records and documents
      relating to such matters, furnishing employees to assist in the investigation,
      defense and resolution of such matters and providing legal and business
      assistance with respect to such matters.

     

    11.6  Calculation
      of Indemnity Payments.

     

    (a)  The
      Indemnitee agrees to use its commercially reasonable efforts to pursue and
      collect on any recovery available under any insurance policies. The amount
      of
      Losses payable under this Article XI
      by the
      Indemnitor shall be reduced by any and all amounts 

     

     

     

    
      
        
        

      

      
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    recovered
      by the Indemnitee under applicable insurance policies (net of any retroactive
      premium increases) or from any other Person responsible therefor and the Buyer
      (on behalf of itself and each of the Buyer Indemnitees) and each of the Seller
      (each on behalf of itself and each of the applicable Seller Indemnitees) hereby
      waives any subrogation rights under the applicable insurance policies with
      respect to such recovered amounts. If the Indemnitee receives any amounts under
      applicable insurance policies or from any other Person responsible for any
      Losses, subsequent to an indemnification payment by the Indemnitor, then such
      Indemnitee shall promptly reimburse the Indemnitor for any payment made or
      expense incurred by such Indemnitor in connection with providing such
      indemnification up to the amount received by the Indemnitee, net of any expenses
      incurred by such Indemnitee in collecting such amount.

     

    (b)  The
      amount of Losses incurred by an Indemnitee shall be reduced to take account
      of
      any net Tax benefit actually realized by the Indemnitee arising from the
      incurrence or payment of any such indemnified amount under this Article
      XI
      or
Article
      XII.

     

    (c)  Each
      Person seeking indemnification hereunder shall use its commercially reasonable
      efforts to mitigate any Losses that he, she or it asserts under this
Article
      XI or
      Article
      XII.

     

    11.7  Characterization
      of Indemnification Payments.
      Except
      as otherwise required by applicable law, the parties shall treat any
      indemnification payment made hereunder as an adjustment to the Purchase
      Price.

     

     

    ARTICLE
      XII

     

    TAX
      MATTERS

     

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

     

    12.1  Tax
      Indemnification.
      The
      Sellers shall indemnify the Buyer and its Affiliates and hold them harmless
      from
      and against any Losses attributable to all Taxes (or the non-payment thereof)
      of
      the Acquired Company for all Pre-Closing Tax Periods. The Buyer shall indemnify
      and hold the Sellers harmless from and against any Losses attributable to all
      Taxes (or the non-payment thereof) of the Acquired Company for all Post-Closing
      Tax Periods. The Sellers shall reimburse the Buyer for any Taxes of the Acquired
      Company which are the responsibility of the Sellers pursuant to this
Section 12.1
      within
      fifteen (15) Business Days after payment of such Taxes by the Buyer or the
      Acquired Company. The Buyer shall reimburse the Sellers for any Taxes of the
      Acquired Company which are the responsibility of the Buyer pursuant to this
      Section 12.1
      within
      fifteen (15) Business Days after payment of such Taxes by the
      Sellers.

     

    12.2  Straddle
      Period.
      In
      the
      case of any Straddle Period, the amount of any Taxes for the portion of the
      Straddle Period included in the Pre-Closing Tax Period shall be determined
      as
      follows: (a) any Taxes based on or measured by income or receipts of the
      Acquired Company for the Pre-Closing Tax Period shall be determined based on
      an
      interim closing of the books as of the close of business on the Closing Date
      and
      (b) the amount of other Taxes of the Acquired Company for the Pre-Closing
      Tax Period shall be deemed to be the amount of 

     

     

     

    
      
        
        

      

      
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    such
      Tax
      for the entire taxable period multiplied by a fraction the numerator of which
      is
      the number of days included in the portion of the Straddle Period ending on
      the
      Closing Date and the denominator of which is the number of days in such Straddle
      Period. No later than fifteen (15) Business Days prior to the due date of
      any Tax Return with respect to a Straddle Period, the Sellers shall pay to
      the
      Acquired Company the amount of Taxes shown due which are attributable to the
      pre-Closing portion of the Straddle Period.

     

    12.3  Tax
      Returns Filed after the Closing Date.
      The
Sellers’
      Representative shall prepare or cause to be prepared and file or cause to be
      filed all Tax Returns for the Acquired Company due after the Closing Date
      relating to periods ending on or prior to the Closing Date, including the
      short-year tax returns for the period from July 1, 2006, through the Closing
      Date (the “Short
      Year Returns”)
      and
      for Straddle Periods, which are required to be filed after the Closing Date.
      The
      Tax Returns for periods which end on or before the Closing Date or for any
      Straddle Period shall be prepared in a manner consistent with past practice
      of
      the Acquired Company, unless a contrary treatment is required by an intervening
      change in the applicable Law. The Buyer
      and
      the Sellers agree to report all transactions not in the ordinary course of
      business that occur on the Closing Date after the Buyer’s purchase of the
      Purchased Securities on the Buyer’s U.S. federal Tax Return to the extent
      permitted by Section 1.1502-76(b)(1)(ii)(B) of the Treasury Regulations. In
      respect of the Short Year Returns and Tax Returns of the Acquired Company for
      Straddle Periods, the Sellers’ Representative shall provide the Buyer with such
      Tax Returns (or, in the case of Tax Returns required to be filed on behalf
      of an
      Affiliated Group of which the Acquired Company is a member, a pro forma Tax
      Return that is prepared with respect to the Acquired Company on a separate
      company basis) no later than twenty (20) days prior to the due date therefore,
      for the Buyer’s review, comment, and approval, such approval not to be
      unreasonably withheld or delayed. Concurrent with the Buyer’s approval of such
      Tax Returns, the Buyer shall complete and executed Form 2848, Power of Attorney,
      authorizing the Sellers’ Representative to execute such Tax Returns on behalf of
      the Acquired Company. The
      Sellers shall pay and discharge all Taxes shown to be due by the Acquired
      Company on Tax Returns (or, in the case of pro forma Tax Returns prepared with
      respect to the Acquired Company on a separate company basis, the amount of
      tax
      shown to be due on such pro forma Tax Return) filed
      for
      all Pre-Closing Tax Periods. The Buyer shall pay and discharge all Taxes shown
      to be due by the Acquired Company on Tax Returns (or in the case of pro forma
      Tax Returns prepared with respect to the Acquired company on a separate company
      basis) filed for all Post-Closing Tax Periods. Notwithstanding anything to
      the
      contrary in this Agreement, the Sellers shall not file, or permit the Acquired
      Company to file, any amended Tax Return relating to the Acquired Company (or
      otherwise change such Tax Returns or make an election) with respect to any
      Pre-Closing Tax Periods without the written consent of the Buyer if such
      amendment adversely affects the Buyer or the Acquired Company, unless required
      to do so by Law. Notwithstanding anything to the contrary in this Agreement,
      the
      Buyer shall not file, or permit the Acquired Company to file, any amended Tax
      Return related to the Acquired Company or any Subsidiary (or otherwise change
      such Tax Returns or make an election) with respect to Pre-Closing Tax Periods,
      without the written consent of the Sellers, unless required to do so by
      Law.

     

    12.4  Cooperation
      on Tax Matters.
      Buyer
      and Sellers’ Representative agree to furnish or cause to be furnished to each
      other, and each at their own expense, as promptly as practicable, such
      information (including access to books and records) and assistance, including
      making employees available on a mutually convenient basis to provide additional
      information and explanations of any material provided, relating to the Acquired
      Company as is reasonably necessary for the preparation and filing of any Tax
      Return and
      any
      audit, litigation or other proceeding with respect to Taxes.

     

     

     

    
      
        
        

      

      
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    12.5  Certain
      Taxes.
      The
      Buyer, on the one hand, and the Sellers, on the other hand, shall each pay
      one
      half all Transfer Taxes, if any, arising out of or in connection with the
      transactions effected pursuant to this Agreement. The Buyer shall file all
      necessary documentation and Tax Returns with respect to such Transfer Taxes,
      if
      any, with the reasonable cooperation of the Sellers.

     

    12.6  Tax
      Refunds.
      Any
      refund of Taxes received (or utilized against Taxes due for Post- Closing Tax
      Periods) by the Acquired Company after the Closing Date shall be retained by
      the
      Acquired Company, provided, however, that in the event the Acquired Company
      shall receive a refund of Taxes after the Closing Date (or utilize such refund
      as a credit against Taxes due for Post-Closing Tax Periods) with respect to
      a
      Tax Return of the Acquired Company relating to a Pre-Closing Taxable Period
      (other than a refund or credit arising by reason of a carryback of any time
      incurred after the Closing Date), then the amount of such refund, net of Taxes
      payable by the Acquired Company on receipt thereof, shall be reimbursed by
      the
      Acquired Company to the Sellers within ten (10) Business Days after the
      Acquired Company’s receipt of such refund or the filing of any Tax Return under
      which such refund is utilized as a credit.

     

    12.7  Tax
      Proceedings.

     

    (a)  In
      the
      event that any audit or examination shall be instituted or any deficiency
      asserted or assessment made, or any administrative or court proceeding commenced
      by the Internal Revenue Service or any other taxing authority (a “Tax
      Proceeding”)
      with
      respect to any Pre-Closing Taxable Period for which the Sellers have liability
      pursuant to Section 12.1
      (the
“Indemnifiable
      Tax”),
      the
      Buyer shall promptly cause written notice of the Tax Proceeding to be forwarded
      to the Sellers.

     

    (b)  The
      Sellers shall have the right to elect, at their sole option and expense, to
      represent the interests of the Acquired Company in the Tax Proceeding and
      collect, settle or pay any amount due or owed by the Acquired Company with
      respect to any Indemnifiable Tax or to file any claim for refund with counsel
      of
      their choice, reasonably satisfactory to the Buyer. In the event the Sellers
      elect to represent the Acquired Company in the Tax Proceeding, the Sellers
      shall
      within five (5) Business Days (or sooner, if the nature of the Tax
      Proceeding so requires) notify the Buyer of its intent to do so and the Buyer
      shall cause the Acquired Company to appoint the Sellers or one of the Sellers,
      as selected by the Sellers, as attorney in fact with the exclusive authority
      to
      represent the Acquired Company in the Tax Proceeding. The Buyer shall
      (i) cooperate fully with the Sellers and their counsel in the defense
      against or compromise of any claim in any Tax Proceeding and (ii) have
      (x) the right to participate fully in the Tax Proceeding, including through
      separate counsel of its own choosing at its sole cost and expense, (y) the
      right to receive reasonable advance notice from the Sellers of any meetings,
      hearings, or proceedings, and (z) the right, if possible, to review in
      advance and comment on any pleadings, briefs, or other documents to be filed.
      The Sellers may consent to any judgment or enter into any settlement, closing
      or
      other agreement with respect to any Tax Proceeding without the prior consent
      of
      the Buyer provided that the Sellers provide the Buyer with reasonable assurances
      that the Sellers shall pay any Indemnifiable Tax related thereto.

     

     

     

    
      
        
        

      

      
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    (c)  If
      the
      Sellers elect not to represent the Acquired Company in the Tax Proceeding or
      fail to timely notify the Buyer of their election as provided herein or contest
      their obligation to indemnify the Buyer, then the Buyer may represent the
      interest of the Acquired Company in any Tax Proceeding in any manner that it
      reasonably may deem appropriate and except in the case of a successful contest
      by the Sellers of any obligation to indemnify the Buyer, the Sellers shall
      (i) be obligated to indemnify the Buyer to the extent provided in
Section 12.1
      and
      (ii) cooperate fully with the Buyer and its counsel in the defense against
      or compromise of any claim in any Tax Proceeding.

     

    12.8  Disputes.
      In
      the
      event that a dispute arises between the Sellers and the Buyer as to the amount
      of Taxes or indemnification or any matter relating to Taxes attributable to
      the
      Acquired Company, the Buyer and the Sellers shall attempt in good faith to
      resolve such dispute, and any agreed upon amount shall be paid to the
      appropriate party. If such dispute is not resolved within thirty (30) days,
      the
      Buyer and the Sellers shall submit the dispute to the Independent Accountants
      for resolution, which resolution shall be final, conclusive and binding on
      the
      parties. Notwithstanding anything in this Agreement to the contrary, the fees
      and expenses of the Independent Accounts in resolving this dispute shall be
      borne equally by the Sellers and the Buyer.

     

    12.9  Payment
      of Management Incentive Plan Tax Benefit Amount.
      No
      later than fifteen (15) Business Days after the end of each fiscal quarter
      of
      the Buyer in which a tax benefit is realized by, or utilized against Taxes
      due,
      for the Acquired Company, Buyer or its Affiliates with respect to a payment
      has
      been made under the Management Supplemental Retention Plan, the Buyer shall
      (a)
      prepare and deliver to the Sellers’ Representative a statement setting forth in
      sufficient detail its calculation of the actual amount of the tax benefit
      realized by, or utilized against Taxes due, for the Acquired Company, Buyer
      or
      its Affiliates with respect to such payment (the “Management
      Incentive Plan Tax Benefit Amount”)
      and
      (b) pay to the Sellers’ Representative the Management Incentive Plan Tax Benefit
      Amount by wire transfer of immediately available funds to an account or accounts
      designated from time to time by the Sellers’ Representative. The Management
      Incentive Plan Tax Benefit Amount shall be disbursed by the Sellers’
Representative to the Sellers in accordance with Section
      2.5(d).
      Buyer
      agrees to furnish to the Sellers’ Representative as promptly as practicable,
      such information (including access to books and records) and assistance,
      including making employees available on a mutually convenient basis to provide
      additional information and explanations of any material provided, relating
      to
      the Buyer, Acquired Company and their Affiliates as is reasonably requested
      by
      the Sellers’ Representative necessary or appropriate to determine the
      calculation of the Management Incentive Plan Tax Benefit Amount.

     

     

    ARTICLE
      XIII

     

    POST
      CLOSING COVENANTS
      OF THE SELLER

     

    13.1  Covenant
      Not to Compete and
      Confidentiality. 
      Each of the Sellers excluding Church Resource Ministries and Bethel Tabernacle
      (a/k/a Bethel Open Bible Church) (the “Non-Compete
      Sellers”)
      understands that the Buyer would not have entered into this Agreement absent
      the
      provisions of this Article XIII. For the period beginning on the Closing Date
      and ending on the fifth anniversary of the date Terry Knutson ceases to be
      employed by the Acquired Company (the “Non-Compete
      Period”),
      each
      Non-Compete Seller severally agrees that such Non-Compete Seller shall
      not:

     

     

     

    
      
        
        

      

      
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    (a)  engage
      (whether as an owner, operator, investor, manager, employee, officer, director,
      consultant, advisor, representative or otherwise), in the Restricted Territory,
      directly
      or indirectly in any business that develops, produces, manufactures, markets,
      promotes or sells the following bakery products including: (i) frozen dough
      for breads, pastries, doughnuts, bagels, cookies and other baked goods; and
      (ii) partially baked and frozen (or par baked) goods, including breads,
      rolls, bagels, pastries, doughnuts, cookies, cupcakes and muffins (the products
      described in Section 13.1(a)(i) and (ii) are collectively referred to as the
      “Competitive
      Products”);
      provided, however, that ownership of less than five percent (5%) of the
      outstanding stock of any publicly-traded corporation shall not be deemed to
      be
      engaging solely by reason thereof in any of its businesses.
      Notwithstanding the foregoing, no Non-Compete Seller shall be prohibited from
      (A) owning, operating, investing in or otherwise working for a retail bakery
      that sells fresh baked items that are sold on-site to customers provided such
      retail bakery is not located within a retail grocery store; or (B) after the
      first anniversary of the Closing Date, being employed by a grocery retailer
      in
      an executive, management, operations, purchasing or buying function so long
      as
      not engaged in the sale of Competitive Products to other grocery
      retailers. If
      the
      final judgment of a court of competent jurisdiction declares that any term
      or
      provision of this Section 13.1
      is
      invalid or unenforceable, the parties agree that the court making the
      determination of invalidity or unenforceability shall have the power to reduce
      the scope, duration, or area of the term or provision, to delete specific words
      or phrases, or to replace any invalid or unenforceable term or provision with
      a
      term or provision that is valid and enforceable and that comes closest to
      expressing the intention of the invalid or unenforceable term or provision,
      and
      this Agreement shall be enforceable as so modified after the expiration of
      the
      time with which the judgment may be appealed;

     

    (b)  induce
      or
      attempt to induce any customer, supplier, lender or other business relation
      of
      the Acquired Company or any subsidiary of the Acquired Company to cease doing
      business with the Acquired Company or any of its Affiliates; or

     

    (c)  disparage
      the Acquired Company or any Affiliate of the Acquired Company or of the
      directors, officers or employees of the Acquired Company or any of its
      Affiliates.

     

    13.2  Non-Solicitation/Non-Hire. 
      Each Non-Compete Seller severally agrees that during the Non-Compete Period,
      he
      shall not: (a) directly or indirectly, contact, approach or solicit for the
      purposes of offering employment to any Person employed by the Acquired Company
      at any time after the date hereof and prior to the Closing Date or during the
      five year period following the Closing Date, or (b) hire (whether as an
      employee, consultant, agent, independent contractor or otherwise) any of the
      Key
      Employees (other than Terry Knutson, Kevin Knutson or Lance Knutson), without
      the prior written consent of the Buyer’s Guarantor. The term “indirectly” as
      used in this Section 13.2
      with
      respect to a Person is intended to mean any acts authorized or directed by
      or on
      behalf of such Person or any Person controlled by such Person.

     

     

     

    
      
        
        

      

      
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    13.3  Confidentiality. 
      Each Seller severally agrees to (a) treat and hold as confidential any
      confidential or proprietary information concerning the business and affairs
      of
      the Acquired Company that is not or does not become generally available to
      the
      public or is known or becomes known to others not bound by a duty of
      confidentiality other than as a result of a disclosure in violation of this
      Agreement (the “Confidential
      Information”),
      (b)
      refrain from using any of the Confidential Information except in connection
      with
      this Agreement or as necessary or appropriate in making any filing or obtaining
      any consent or approval in connection with the Contemplated Transactions, and
      (c) deliver promptly to Buyer or destroy, at the request and option of Buyer,
      all tangible embodiments (and all copies) of the Confidential Information which
      are in Seller’s possession or under Seller’s control. In the event that a
      Non-Compete Seller is requested or required (by oral question or request for
      information or documents in any legal proceeding, interrogatory, subpoena,
      civil
      investigative demand, or similar process) to disclose any Confidential
      Information, such Non-Compete Seller shall notify Buyer promptly of the request
      or requirement so that Buyer may seek an appropriate protective order or waive
      compliance with the provisions of this Section 13.3.
      If, in
      the absence of a protective order or the receipt of a waiver hereunder, such
      Non-Compete Seller is, on the written advice of counsel, compelled to so
      disclose any Confidential Information, such Non-Compete Seller may disclose
      the
      Confidential Information as so required; provided that such Non-Compete Seller
      shall use his best efforts to obtain, at the request of Buyer an order or other
      assurance that confidential treatment shall be accorded to such portion of
      the
      Confidential Information required to be disclosed as Buyer shall
      designate.

     

    13.4  Remedy
      for Breach.
       Each Non-Compete Seller acknowledges and agrees that in the event of a
      breach by Non-Compete Seller of any of the provisions of this Article
      XIII,
      monetary damages shall not constitute a sufficient remedy. Consequently, in
      the
      event of any such breach, the Acquired Company, Buyer and/or their respective
      successors or assigns shall be entitled to, in addition to the other rights
      and
      remedies existing in their favor, specific performance and/or injunctive or
      other relief in order to enforce or prevent any violations of the provisions
      hereof from any court of competent jurisdiction, in each case without the
      requirement of posting a bond or proving actual damages.

     

     

    ARTICLE
      XIV

     

    MISCELLANEOUS

     

    14.1  Notices.
      Any
      notice, request, demand, waiver, consent, approval or other communication which
      is required or permitted hereunder shall be in writing and shall be deemed
      given: (a) on the date established by the sender as having been delivered
      personally, (b) on the date delivered by a private courier as established
      by the sender by evidence obtained from the courier, (c) on the date sent
      by facsimile, with confirmation of transmission, if sent during normal business
      hours of the recipient, if not, then on the next Business Day, or (d) on
      the fifth Business Day after the date mailed, by certified or registered mail,
      return receipt requested, postage prepaid. Such communications, to be valid,
      must be addressed as follows:

     

     

     

    
      
        
        

      

      
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    If
      to the
      Buyer, to:

     

    Ralcorp
      Holdings, Inc.

    800
      Market Street

    Suite
      2900

    St.
      Louis, Missouri 63101

    Attn:
      CEO

    Facsimile:
      (314) 877-7748

    

     

    With
      a
      required copy to:

     

    Ralcorp
      Holdings, Inc.

    800
      Market Street

    Suite
      2900

    St.
      Louis, Missouri 63101

    Attn:
      General Counsel

    Facsimile:
      (314) 877-7748

    

    If 
      to Acquired Company, to:

     

    Cottage
      Bakery, Inc.

    40
      E.
      Neuharth Drive

                                                                    Lodi,
      California 95241

                                                                  
      Attn: Terry Knutson, President

                                                                  
      Facsimile: (209) 365-5478

     

    With
      a
      required copy to:

     

    Pillsbury
      Winthrop Shaw Pittman LLP

                                                                   
      725 South Figueroa Street, Suite 2800

                                                                   
      Los Angeles, California 90017

                                                                   
      Attn: Edward A. Perron, Esq.

                                                                   
      Facsimile: (213) 629-1033

     

    If
      to any
      of the Sellers, to:

     

    Terry
      Knutson

    1562
      Edgewood Drive

    Lodi,
      California 95240

    Facsimile:
      (209) 365-5478

     

     

     

    
      
        
        

      

      
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    With
      a
      required copy to:

     

    Pillsbury
      Winthrop Shaw Pittman LLP

    725
      South
      Figueroa Street, Suite 2800

    Los
      Angeles, California 90017

    Attn:
      Edward A. Perron, Esq.

    Facsimile:
      (213) 629-1033

     

    or
      to
      such other address or to the attention of such Person or Persons as the
      recipient party has specified by prior written notice to the sending party
      (or
      in the case of counsel, to such other readily ascertainable business address
      as
      such counsel may hereafter maintain). If more than one method for sending notice
      as set forth above is used, the earliest notice date established as set forth
      above shall control.

     

    14.2  Sellers’
      Guaranty.

     

    (a)  Sellers’
      Guarantor irrevocably and unconditionally guarantees the prompt, complete and
      punctual performance, compliance and payment of the obligations of any Seller
      under Section
      2.3(b),
      Section
      2.4,
      Article
      XI
      and
Article
      XII
      of this
      Agreement. Sellers’ Guarantor further agrees that its obligations under the
      Agreement shall not be affected by any event, condition or circumstances
      whatsoever (with or without notice to, or knowledge of, Sellers, Sellers’
Representative or Sellers’ Guarantor) including without limitation any which
      constitutes, or might be construed to constitute, a legal or equitable discharge
      of the Sellers for their obligations under the Agreement or of Seller’ Guarantor
      of its guaranty hereunder. In furtherance of the foregoing and without limiting
      the generality thereof, Sellers’ Guarantor agrees that (i) its guaranty
      hereunder (this “Sellers’
      Guaranty”)
      is a
      guaranty of payment and performance when due and not collectability;
      (ii) this Sellers’ Guaranty is a primary obligation of Sellers’ Guarantor
      and not merely a contract or surety; and (iii) payment or performance by
      Sellers’ Guarantor of a portion, but not all of the obligations under this
      Agreement shall in no way limit, affect, modify or abridge any liability of
      Sellers’ Guarantor for any portion of the obligations which have not been paid
      or performed. 

     

    (b)  Sellers’
      Guarantor waives all diligence, presentment, protest and demand, and also notice
      of dishonor, demand, protest and nonpayment. No failure by the Buyer or Buyer
      Guarantor to assert any right or pursue any remedy with respect to the Sellers
      or under this Seller Guaranty shall relieve Sellers’ Guarantor from its
      obligations hereunder; provided, however, that notwithstanding anything to
      the
      contrary herein, the obligation of the Sellers’ Guarantor under the Sellers’
Guaranty is subject to the Buyer or other Buyer Idemnitee first recovering
      any
      claim for a Loss or Losses or other amounts from the Escrow
      Account.

     

    (c)  Sellers’
      Guarantor agrees that this Sellers’ Guaranty shall not be diminished or affected
      in any way, by any bankruptcy, reorganization, arrangement, liquidation or
      similar proceeding with respect to the Sellers or by dissolution of the Sellers.
      This Sellers’ Guaranty shall continue in full force and effect, notwithstanding
      any merger, consolidation, sale of assets or any other similar transaction
      by
      the Seller or Sellers’ Guarantor.

     

     

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    (d)  Sellers’
      Guarantor further agrees to pay all reasonable costs and expenses, including
      without limitation, reasonable attorneys’ fees at any time paid or incurred by
      or on behalf of the Buyer in enforcing this Sellers’ Guaranty.

     

    14.3  Buyer
      Guaranty.

     

    (a)  Buyer
      Guarantor irrevocably and unconditionally guarantees the prompt, complete and
      punctual performance, compliance and payment of all of the obligations of the
      Buyer including but not limited to Buyer’s obligations under Article XI
      of this
      Agreement. Buyer Guarantor further agrees that its obligations under the
      Agreement shall not be affected by any event, condition or circumstances
      whatsoever (with or without notice to, or knowledge of Buyer or Buyer Guarantor)
      including without limitation any which constitutes, or might be construed to
      constitute, a legal or equitable discharge of the Buyer for its obligations
      under the Agreement or of Buyer Guarantor of its guaranty hereunder. In
      furtherance of the foregoing and without limiting the generality thereof, Buyer
      Guarantor agrees that (i) its guaranty hereunder (this “Buyer
      Guaranty”)
      is a
      guaranty of payment and performance when due and not collectability;
      (ii) this Buyer Guaranty is a primary obligation of Buyer Guarantor and not
      merely a contract or surety; and (iii) payment or performance by Buyer
      Guarantor of a portion, but not all of the obligations under this Agreement
      shall in no way limit, affect, modify or abridge any liability of Buyer
      Guarantor for any portion of the obligations which have not been paid or
      performed.

     

    (b)  Buyer
      Guarantor waives all diligence, presentment, protest and demand, and also notice
      of dishonor, demand, protest and nonpayment. No failure by the Sellers, Seller
      Representative or Sellers’ Guarantor to assert any right or pursue any remedy
      with respect to the Buyer or under this Buyer Guaranty shall relieve Buyer
      Guarantor from its obligations hereunder.

     

    (c)  Buyer
      Guarantor agrees that this Buyer Guaranty shall not be diminished or affected
      in
      any way, by any bankruptcy, reorganization, arrangement, liquidation or similar
      proceeding with respect to the Buyer or by dissolution of the Buyer. This Buyer
      Guaranty shall continue in full force and effect, notwithstanding any merger,
      consolidation, sale of assets or any other similar transaction by the Buyer
      or
      Buyer Guarantor.

     

    (d)  Buyer
      Guarantor further agrees to pay all reasonable costs and expenses, including
      without limitation, reasonable attorneys’ fees at any time paid or incurred by
      or on behalf of the Sellers or the Sellers’ Representative in enforcing this
      Buyer Guaranty.

     

    14.4  Amendments
      and Waivers.

     

    (a)  Any
      provision of this Agreement may be amended or waived if, and only if, such
      amendment or waiver is in writing and is signed, in the case of an amendment,
      by
      each party to this Agreement, or in the case of a waiver, by the party against
      whom the waiver is to be effective.

     

    (b)  No
      failure or delay by any party in exercising any right or privilege hereunder
      shall operate as a waiver thereof, nor shall any single or partial exercise
      thereof preclude any other or further exercise thereof or the exercise of any
      other right, power or privilege.

     

     

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    14.5  Expenses.
      Except
      as
      otherwise provided in this Agreement, each party shall bear its own costs and
      expenses in connection with this Agreement, the Ancillary Agreements and the
      transactions contemplated hereby and thereby, including all legal, accounting,
      financial advisory, consulting and all other fees and expenses of third parties,
      whether or not the Acquisition is consummated; provided, however, in the event
      of the termination of this Agreement, the Ancillary Agreements or the
      Contemplated Transactions, the obligation of each party to pay its own expenses
      will be subject to any rights of such party arising from a breach of this
      Agreement or Ancillary Agreement by another party.

     

    14.6  Successors
      and Assigns.
      This
      Agreement may not be assigned by either party hereto without the prior written
      consent of the other party; provided, however, that, without such consent,
      the
      Buyer may transfer or assign, in whole or in part or from time to time, to
      one
      or more of its Affiliates, the right to purchase all or a portion of the
      Purchased Securities, but no such transfer or assignment will relieve the Buyer
      of its obligations hereunder. Subject to the foregoing, all of the terms and
      provisions of this Agreement shall inure to the benefit of and be binding upon
      the parties hereto and their respective successors and assigns.

     

    14.7  Governing
      Law.
      This
      Agreement and the exhibits and schedules hereto shall be governed by and
      interpreted and enforced in accordance with the Laws of the State of California,
      without giving effect to any choice of Law or conflict of Laws rules or
      provisions (whether of the State of California or any other jurisdiction) that
      would cause the application of the Laws of any jurisdiction other than the
      State
      of California.

     

    14.8  Consent
      to Jurisdiction.
      Each
      party hereto irrevocably submits to the exclusive jurisdiction of any state
      or
      Federal court located within the County of San Joaquin in the State of
      California for the purposes of any suit, action or other proceeding arising
      out
      of this Agreement or any transaction contemplated hereby, and agrees to commence
      any such action, suit or proceeding only in such courts. Each party further
      agrees that service of any process, summons, notice or document by U.S.
      registered mail to such party’s respective address set forth herein shall be
      effective service of process for any such action, suit or proceeding. Each
      party
      irrevocably and unconditionally waives any objection to the laying of venue
      of
      any action, suit or proceeding arising out of this Agreement or the transactions
      contemplated hereby in such courts, and hereby irrevocably and unconditionally
      waives and agrees not to plead or claim in any such court that any such action,
      suit or proceeding brought in any such court has been brought in an inconvenient
      forum.

     

    14.9  Counterparts.
      This
      Agreement may be executed in counterparts, and any party hereto may execute
      any
      such counterpart, each of which when executed and delivered shall be deemed
      to
      be an original and all of which counterparts taken together shall constitute
      but
      one and the same instrument. This Agreement shall become effective when each
      party hereto shall have received a counterpart hereof signed by the other party
      hereto. The parties agree that the delivery of this Agreement, and the delivery
      of the Ancillary Agreements and any other agreements and documents at the
      Closing, may be effected by means of an exchange of facsimile
      signatures.

     

     

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    14.10  No
      Third Party Beneficiaries.
      No
      provision of this Agreement is intended to confer upon any Person other than
      the
      parties hereto any rights or remedies hereunder.

     

    14.11  Entire
      Agreement.
      This
      Agreement, the Ancillary Agreements, the Schedules and the other documents,
      instruments and agreements specifically referred to herein or therein or
      delivered pursuant hereto or thereto set forth the entire understanding of
      the
      parties hereto with respect to the transactions contemplated by this Agreement.
      All Schedules referred to herein are intended to be and hereby are specifically
      made a part of this Agreement. Any and all previous agreements and
      understandings between or among the parties regarding the subject matter hereof,
      whether written or oral, are superseded by this Agreement, except for the
      Confidentiality Agreement which shall continue in full force and effect in
      accordance with its terms.

     

    14.12  Captions.
      All
      captions contained in this Agreement are for convenience of reference only,
      do
      not form a part of this Agreement and shall not affect in any way the meaning
      or
      interpretation of this Agreement.

     

    14.13  Severability.
      Any
      provision of this Agreement which is invalid or unenforceable in any
      jurisdiction shall be ineffective to the extent of such invalidity or
      unenforceability without invalidating or rendering unenforceable the remaining
      provisions hereof, and any such invalidity or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other
      jurisdiction.

     

    14.14  Interpretation.
      The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement,
      and any
      rule of construction or interpretation otherwise requiring this Agreement to
      be
      construed or interpreted against any party by virtue of the authorship of this
      Agreement shall not apply to the construction and interpretation
      hereof.

     

    (signature
      pages follow)

     

    

     

     

     

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the date first above
      written.

     

    BUYER:

    RH
      FINANCIAL CORPORATION

     

    

     

    By:     
      /s/ Kevin J.
      Hunt              

    Name: 
      Kevin J. Hunt

    Title:   
      Chief Executive Officer

    

     

    BUYER
      GUARANTOR:

    RALCORP
      HOLDINGS, INC.

     

    By:     
      /s/ Kevin J.
      Hunt               
    

    Name: 
      Kevin J. Hunt

    Title:  
      Co-Chief Executive Officer & President

     

    ACQUIRED
      COMPANY:

    COTTAGE
      BAKERY, INC.

     

    By:        
      /s/ Terry R.
      Knutson             

    Name: Terry
      R.
      Knutson

    Title: President

     

    SELLERS:

     

    TERRY
      R. KNUTSON AND ROSE KNUTSON, AS CO-TRUSTEES OF THE TERRY AND ROSE KNUTSON 2000
      FAMILY TRUST UTA 6/21/00

     

    By:   
          /s/ Terry R.
      Knutson             

    Name: Terry
      R.
      Knutson

    Title: Co-Trustee

     

    By:       
      /s/ Rose Knutson        
         

    Name: Rose
      Knutson

    Title: Co-Trustee

     

     

     

     

     

    
      
        
        

      

      
        
          [Signature
            Page to Stock Purchase Agreement]

        

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the date first above
      written.

     

    

     

    CHURCH
      RESOURCE MINISTRIES:

     

    By:      
      /s/ Denise L.
      Snyder              
  

    Name: 
      Denise L. Snyder

    Title:  
      Vice President Finance

     

    BETHEL
      TABERNACLE 

    (A/K/A
      BETHEL OPEN BIBLE CHURCH):

    

    

    By:    
      /s/ Larry E.
      Beck                        
 

    Name: 
      Larry E. Beck

    Title:   
      CFO / Treasurer

     

    RIVERGATE
      PARTNERS, L.P.:

    

    
      	 	
              By:
                

            	
              Terry
                R. Knutson and Rose Knutson, as Co-Trustees of the Terry and Rose
                Knutson
                2000 Family Trust UTA 6/21/00

            

    

    Its:          
      General
      Partner

    

    By:  
      /s/ Terry R.
      Knutson            
  

    Name:  Terry
      R.
      Knutson

    Title:     Co-Trustee

     

    By:   
      /s/ Rose
      Knutson                
  

    Name: Rose
      Knutson

    Title:    Co-Trustee

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

     

     

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the date first above
      written.

     

    

    JAMISON
      PARTNERS, L.P.:

    

    
      	 	
              By:
                

            	
              Terry
                R. Knutson and Rose Knutson, as Co-Trustees of the Terry and Rose
                Knutson
                2000 Family Trust UTA 6/21/00

            

    

    Its:          
      General
      Partner

    

    

    By: 
      /s/ Terry R. Knutson       

    Name:  Terry
      R.
      Knutson

    Title: Co-Trustee

     

    By: 
      /s/ Rose Knutson       
     

    Name: Rose
      Knutson

    Title: Co-Trustee

     

    SELLERS’
      GUARANTOR:

     

     

     /s/
      Terry R. Knutson       
            

    Terry
      R.
      Knutson  

     

    

                                                                                    
      /s/ Rose
      Knutson             

                                                                                   
      Rose Knutson 

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        3Exhibit 4.5  

FORM OF WARRANT AGREEMENT  

        This Warrant Agreement is made as of                        , 2007
between Taliera Corporation, a Delaware corporation, with principal executive offices at 250 East
96th Street, Suite 415, Indianapolis, Indiana 46240 (the "Company"), and Continental Stock Transfer & Trust Company, a New York
corporation, with offices at 17 Battery Place, New York, New York 10004 (the "Warrant Agent"). 

        WHEREAS,
the Company is engaged in a public offering ("Public Offering") of units,
("Units"), consisting of one share of the Company's common stock, par value $0.0001 per share ("Common
Stock") and, one warrant, each warrant to purchase one share of Common Stock for $6.00, subject to adjustment as described herein, in connection therewith, and pursuant thereto
will issue and deliver up to (i) 8,625,000 warrants ("Public Warrants") to public investors and (ii) 550,000 warrants to Morgan
Joseph & Co. Inc. ("MJ") or its designees ("Representative's Warrants"); and 

        WHEREAS,
the Company has received a binding commitment from Taliera Holdings, LLC (the "Insider") to purchase in a private placement which
will occur simultaneously with the consummation of the Public Offering an aggregate of 1,416,667 warrants, each warrant evidencing the right of the Insider to purchase one share of the Common Stock
for a price of $6.00 ("Insider Warrants" and, together with the Public Warrants and Representative's Warrants, the
"Warrants"); and 

        WHEREAS,
the Company has filed with the Securities and Exchange Commission a Registration Statement on Form S-1, No. 333-136097
("Registration Statement"), for the registration, under the Securities Act of 1933, as amended ("Act")
of, among other securities, the Warrants and the Common Stock issuable upon exercise of the Warrants; and 

        WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer,
exchange, redemption and exercise of the Warrants; and 

        WHEREAS,
the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of
rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and 

        WHEREAS,
all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the
Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement. 

        NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: 

        1.    Appointment of Warrant Agent.    The Company hereby appoints the Warrant Agent to act as agent for the Company
with respect to the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement. 

        2.    Warrants.    

        2.1.    Form of Warrant.    Each Warrant shall be issued in registered form only, shall be in substantially the form
of Exhibit A attached hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the
Chairman of the Board of Directors, Chief Executive Officer or President, Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of the Company's seal. In the event the
person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued
with the same effect as if he or she had not ceased to serve in such capacity at the date of issuance. All of the Warrants shall initially be represented by one or more book-entry
certificates (each a "Book Entry Warrant Certificate"). Each Book Entry Warrant Certificate shall bear such legend or legends as may be required by the
Depository (as defined below) in order for it to accept the Warrants for its book-entry settlement system. The Holders (as defined below) shall, except with respect to Warrants evidenced
by a Book-Entry Certificate, be entitled to receive Warrants in physical, certificated form. 

        2.2.    Effect of Countersignature.    Unless and until countersigned by the Warrant Agent pursuant to this Agreement,
a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof. 

 

        2.3.    Registration.    

        2.3.1.    Warrant Register.    The Warrant Agent shall maintain books ("Warrant
Register") for registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and
register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. All of the
Warrants shall initially be represented by one or more Book-Entry Warrant Certificates deposited with the Depository Trust Company (the
"Depository") and registered in the name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests in the Warrants shall be
shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depository or its nominee for each Book-Entry Warrant Certificate, or
(ii) institutions that have accounts with the Depository (such institution, with respect to a Warrant in its account, a "Participant"). Prior to
the Detachment Date (as defined below), Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction
with, a transfer or exchange of such Unit. Furthermore, prior to the Detachment Date, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrant included
in such Unit. From and after the Detachment Date, these transfer restrictions shall be of no further force and effect. 

        If
the Depository subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding making other
arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have the Warrants available in, book-entry form,
the Warrant Agent shall provide written instructions to the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct
the Warrant Agent to deliver to the Depository definitive Warrant Certificates in physical form evidencing such Warrants. 

        A
Book-Entry Warrant Certificate may be exchanged for a new Book-Entry Warrant Certificate, or one or more new Book-Entry Warrant Certificates may be
issued, to reflect the issuance by the Company of additional Warrants. To effect such an exchange, the Company shall deliver to the Warrant Agent one or more new Book-Entry Warrant
Certificates duly executed on behalf of the Company. The Warrant Agent shall authenticate each new Book-Entry Warrant Certificate and shall deliver each new Book-Entry Warrant
Certificate to the Depository. The Warrant Agent shall cancel each Book-Entry Warrant Certificate delivered to it by the Depository in exchange for each new Book-Entry Warrant
Certificate it delivers to the Depository. 

        2.3.2.    Registered and Beneficial Holder.    Prior to due presentment for registration of transfer of any Warrant,
the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register ("Registered
Holder"), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate
made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary. The term "Beneficial Owner" shall mean any person in whose name ownership of a beneficial interest in the Warrants evidenced by
a Book-Entry Warrant Certificate is recorded in the records maintained by the Depository or its nominee, or by a Participant or, prior to the Detachment Date, the person in whose name the
Unit to which such Warrant Certificate was initially attached as registered upon the register relating to such Units. 

        Every
Registered Holder and every Beneficial Owner consents and agrees with the Company, the Warrant Agent and with every subsequent Registered Holder and Beneficial Owner that until the
Warrant Certificate is transferred on the books of the Warrant Agent, the Company and the Warrant Agent may treat the Registered Holder of such Warrant Certificate as the absolute owner of the
Warrants evidenced thereby for any purpose and as the person entitled to exercise the rights attaching to the Warrants evidenced thereby, any notice to the contrary notwithstanding. 

        2.4.    Detachability of Warrants.    The Warrants and Common Stock comprising the Units will not be separately
transferable until 90 days after the date hereof unless MJ informs the Company of its decision to allow earlier separate trading, but in no event will MJ allow separate trading of the Warrants
and Common Stock comprising the Units until the Company files a Current Report on Form 8-K which includes an audited balance sheet reflecting the receipt by the Company of the gross
proceeds of the Public Offering including the proceeds received by the Company from the exercise of the Underwriter's over-allotment option, if the over-allotment option is
exercised prior to the filing of the Form 8-K (such date being referred to herein as the "Detachment Date"). 

2

 

        2.5    Warrant Attributes.    The Representative's Warrants shall have the same terms and be in the same form as the
Public Warrants. The Insider Warrants shall have the same terms and be in the same form as the Public Warrants, except that, in consideration of the restrictions on transfer of the Insider Warrants,
they are exercisable on a cashless basis as provided in Section 3.3.1 hereof. 

        3.    Terms and Exercise of Warrants    

        3.1.    Warrant Price.    Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder
thereof, subject to the provisions of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $6.00 per whole
share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term
"Warrant Price" as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is
exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date; provided, however, that the any change in the Warrant Price must apply equally to
all of the Warrants. 

        3.2.    Duration of Warrants.    A Warrant may be exercised only during the period ("Exercise
Period") commencing on the later of the consummation by the Company of a merger, capital stock exchange, asset acquisition or other similar business combination
("Business Combination") (as described more fully in the Company's Registration Statement) or            , 2008, and all Warrants will
terminate at
5:00 p.m., New York City time on the earlier to occur of (i)                         , 2011 or (ii) upon redemption
of the Warrants as provided in  Section 6 of this Agreement ("Expiration Date"). Except with respect to the right to receive the
Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all
rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the
Warrants by delaying the Expiration Date; provided, however, that the Company will provide notice to Registered Holders of the Warrants of such extension of not less than twenty (20) days and,
that any expansion of the duration of the Warrants must apply equally to all of the Warrants. 

        3.3.    Exercise of Warrants.    

        3.3.1.    Exercise Procedure and Payment.    Subject to the provisions of the Warrant and this Warrant Agreement, a
Warrant, when countersigned by the Warrant Agent, may be exercised by the Registered Holder delivering, not
later than 5:00 P.M., New York City local time, on any Business Day during the Exercise Period (the "Exercise Date") to the Warrant Agent at its
corporate trust department, or at the office of its successor as Warrant Agent, (i) the Warrant Certificate evidencing the Warrants to be exercised, or in the case of a Book-Entry
Warrant Certificate, the Warrants to be exercised (the "Book-Entry Warrants") free on the records of the Depository to an account of the
Warrant Agent at the Depository signed for such purpose in writing by the Warrant Agent to the Depository from time to time, (ii) an election to purchase the shares underlying the Warrants to
be exercised ("Election to Purchase"), properly completed and executed by the Registered Holder on the reverse of the Warrant Certificate or, in the
case of a Book-Entry Warrant Certificate properly delivered by the Participant in accordance with the Depository's procedure, and (iii) the Warrant Price for each full share of
Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, as follows: 

        (a)   in
cash, good certified check or good bank draft payable to the order of the Company (or as otherwise agreed to by the Company); or 

        (b)   with
respect to any Insider Warrants, in the event of redemption pursuant to Section 6 hereof, so long as such Insider Warrants are held by the Insider or its
affiliates, by surrendering in lieu of payment of the Warrant Price the Insider Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of
the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the Fair Market Value (defined below) by (y) the Fair Market Value.
Solely for purposes of this Section 3.3.1, the "Fair Market Value" shall mean the average
reported last sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which the notice of redemption is sent to holders of Warrant
pursuant to Section 6 hereof. 

        If
any of (i) the Warrant Certificate or the Book-Entry Warrants, (ii) the Election to Purchase, or (iii) the Warrant Price therefor, is received by the
Warrant Agent after 5:00 P.M., New York City local time, on the specified Exercise Date, the Warrants will be deemed to be received and exercised on the Business Day next 

3

 

succeeding
the Exercise Date. If the date specified as the Exercise Date is not a Business Day, the Warrants will be deemed to be received and exercised on the next succeeding day that is a Business
Day. If the Warrants are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the
Registered Holder or Participant, as the case may be, as soon as practicable. In no event will interest accrue on funds deposited with the Warrant Agent in respect of an exercise or attempted exercise
of Warrants. The validity of any exercise of Warrants will be determined by the Company in its sole discretion and such determination will be final and binding upon the Registered Holder and the
Warrant Agent. Neither the Company nor the Warrant Agent shall have any obligation to inform a Holder of the invalidity of any exercise of Warrants. 

        The
Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in the account of the Company maintained with the Warrant Agent for such purpose and shall advise
the Company at the end of each day on which funds for the exercise of the Warrants are received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic
advice to the Company in writing. 

        The
Warrant Agent shall, by 11:00 A.M on the Business Day following the Exercise Date of any Warrant, advise the Company and the transfer agent and registrar in respect of the shares of
Common Stock (the "Shares") issuable upon such exercise as to the number of Warrants exercised in accordance with the terms and conditions
of this Agreement, the instructions of each Registered Holder or Participant, as the case may be, with respect to delivery of the Shares issuable upon such exercise, and the delivery of definitive
Warrant Certificates and, in case of a Book-Entry Warrant Certificate, the notation that shall be made to the records maintained by the Depository, its nominee for each
Book-Entry Warrant Certificate, or Participant, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise, and such other information as the Company or
such transfer agent and registrar shall reasonably require. 

        The
accrual of dividends, if any, on the Shares issued upon the valid exercise of any Warrant will be governed by the terms generally applicable to the Shares. From and after the
issuance of such Shares, the former holder of the Warrants exercised will be entitled to the benefits generally available to other holders of Shares and such former Registered Holder's right to
receive payments of dividends and any other amounts payable in respect of the Shares shall be governed by, and shall be subject to, the terms and provisions generally applicable to such Shares. 

        The
Company shall not be required to pay any stamp or other tax or governmental charge required to be paid in connection with any transfer involved in the issue of the Shares upon the
exercise of Warrants; and in the event that any such transfer is involved the Company shall not be required to issue or deliver any Shares until such tax or other charge shall have been paid or it has
been established to the Company's satisfaction that no such tax or other charge is due. 

        3.3.2.    Issuance of Certificates.    As soon as practicable after the exercise of any Warrant and the clearance of
the funds in payment of the Warrant Price, the Company shall issue to the Registered Holder of such Warrant a certificate or certificates for a whole number of Shares of Common Stock to which he is
entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to
which such Warrant shall not have been exercised. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a new Warrant Certificate for the number of unexercised Warrants
remaining shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 hereof, and delivered to the holder of this Warrant Certificate at the address
specified on the books of the Warrant Agent or as otherwise specified by such Registered Holder. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to
the exercise of a Warrant unless a registration statement under the Act with respect to the Common Stock is effective (and the prospectus contained therein is current). Warrants may not be exercised
by, or securities issued to, any Registered Holder in any state in which such exercise would be unlawful. In the event a registration statement under the Act with respect to the Common Stock
underlying the Warrants is not effective, or because such exercise would be unlawful with respect to a Registered Holder in any state, the Registered Holder shall not be entitled to exercise such
Warrants and such Warrants may have no value and expire worthless. In no event will the Company be obligated to pay such Registered Holder any cash or other consideration or otherwise
"net cash settle" the Warrant.    Furthermore, in the event that a registration statement is not effective under the Act with respect to the
Common Stock underlying the Warrants, the purchaser of a Unit containing such Warrant will have paid the full purchase price for the Unit solely for the shares included in such Unit. 

4

 

        3.3.3.    Valid Issuance.    All shares of Common Stock issued upon the proper exercise of a Warrant in conformity
with this Agreement shall be validly issued, fully paid and nonassessable. 

        3.3.4.    Date of Issuance.    Each person in whose name any such certificate for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant
was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books
are open. 

        4.    Adjustments.    

        4.1.    Stock Dividends—Split-Ups.    If after the date hereof, and subject to the provisions
of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by
a split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common
Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock. 

        4.2.    Aggregation of Shares.    If after the date hereof, and subject to the provisions of  Section 4.6, the number of
outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or
reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of
shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. 

        4.3    Adjustments in Warrant Price.    Whenever the number of shares of Common Stock purchasable upon the exercise of
the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall be
adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock
purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately
thereafter. 

        4.4.    Replacement of Securities upon Reorganization, etc.    In case of any reclassification or reorganization of
the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof
or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant
holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant
holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by  Section 4.1 or
4.2, then such adjustment shall be made pursuant to  Sections 4.1, 4.2, 4.3 and this  Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other transfers. 

        4.5.    Notices of Changes in Warrant.    Upon every adjustment of the Warrant Price or the number of shares issuable
upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is
based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such
event, the Company shall give written notice to each Warrant holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the event.
Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. 

5

 

        4.6.    No Fractional Shares.    Notwithstanding any provision contained in this Warrant Agreement to the contrary,
the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the
holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up or down to the nearest whole
number the number of the shares of Common Stock to be issued to the Warrant holder. 

        4.7.    Form of Warrant.    The form of Warrant need not be changed because of any adjustment pursuant to this  Section 4, and
Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not
affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed. 

        5.    Transfer and Exchange of Warrants.    

        5.1.    Registration of Transfer.    After the Detachment Date, the Warrant Agent shall register the transfer, from
time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer (taking into account the transfer restrictions set forth in Section 2.4). Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the
Company from time to time upon request; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant
Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another nominee of the Depository, to a successor depository, or to a
nominee of a successor depository. 

        5.2.    Procedure for Surrender of Warrants.    Warrants may be surrendered to the Warrant Agent, together with a
written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so
surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not
cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether
the new Warrants must also bear a restrictive legend. Upon any such registration of transfer, the Company shall execute, and the Warrant Agent shall countersign and deliver, in the name of the
designated transferee a new Warrant Certificate or Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants. 

        5.3.    Fractional Warrants.    The Warrant Agent shall not be required to effect any registration of transfer or
exchange which will result in the issuance of a warrant certificate for a fraction of a warrant. 

        5.4.    Service Charges.    No service charge shall be made for any exchange or registration of transfer of Warrants. 

        5.5.    Warrant Execution and Countersignature.    The Warrant Agent is hereby authorized to countersign and to
deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the
Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose. 

        6.    Redemption.    

        6.1.    Redemption.    Subject to Section 6.4 hereof, not less
than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon the
notice referred to in Section 6.2, at the price of $.01 per Warrant ("Redemption Price"),
provided that the last sales price of the Common Stock has been at least $11.50 per share (subject to adjustment in accordance with Section 4
hereof), on each of twenty (20) trading days within any thirty (30) trading day period ending on the third business day prior to the date on which notice of redemption is given. 

        6.2.    Date Fixed for, and Notice of, Redemption.    In the event the Company shall elect to redeem all of the
Warrants, the Company shall fix a date for the redemption (the "Redemption Date"). Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than thirty (30) days prior to the date fixed for redemption to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall 

6

 

appear
on the Warrant Register. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice. 

        6.3.    Exercise After Notice of Redemption.    The Warrants may be exercised, for cash (or, with respect to the
Insider Warrants, on a cashless basis in accordance with Section 3.3.1 of this Agreement) at any time after notice of redemption shall have been
given by the Company pursuant to Section 6.2 hereof and prior to the time and date fixed for redemption. On and after the Redemption Date, the
record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price. 

        6.4    Outstanding Warrants Only.    The Company understands that the redemption rights provided for by this  Section 6 apply
only to outstanding Warrants. To the extent a person holds rights to purchase Warrants, such purchase rights shall not be
extinguished by redemption. However, once such purchase rights are exercised, the Company may redeem the Warrants issued upon such exercise provided that the criteria for redemption is met. The
provisions of this Section 6.4 may not be modified, amended or deleted without the prior written consent of MJ. 

        7.    Other Provisions Relating to Rights of Holders of Warrants.    

        7.1.    No Rights as Stockholder.    A Warrant does not entitle the Registered Holder thereof to any of the rights of
a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter. 

        7.2.    Lost, Stolen, Mutilated, or Destroyed Warrants.    If any Warrant is lost, stolen, mutilated, or destroyed,
the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation
of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone. 

        7.3.    Reservation of Common Stock.    The Company shall at all times reserve and keep available a number of its
authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement. 

        7.4.    Registration of Common Stock.    The Company agrees that prior to the commencement of the Exercise Period, it
shall file with the Securities and Exchange Commission a post-effective amendment to the Registration Statement, or a new registration statement, for the registration, under the Act, of,
and it shall take such action as is necessary to qualify for sale, in those states, and solely in those states, in which the Warrants were initially offered by the Company, the Common Stock issuable
upon exercise of the Warrants. In either case, the Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement until the
expiration of the Warrants in accordance with the provisions of this Agreement. The provisions of this Section 7.4 may not be modified, amended
or deleted without the prior written consent of MJ. 

        8.    Concerning the Warrant Agent and Other Matters.    

        8.1.    Payment of Taxes.    The Company will from time to time promptly pay all taxes and charges that may be imposed
upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes
in respect of the Warrants or such shares. 

        8.2.    Resignation, Consolidation, or Merger of Warrant Agent.    

        8.2.1.    Appointment of Successor Warrant Agent.    The Warrant Agent, or any successor to it hereafter appointed,
may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days' prior written notice to the Company. If the office of the Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with
such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of
a successor Warrant Agent at the Company's cost. Any successor warrant agent, whether 

7

 

appointed
by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of
Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any
successor warrant agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an
instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company
shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers,
rights, immunities, duties, and obligations. 

        8.2.2.    Notice of Successor Warrant Agent.    In the event a successor warrant agent shall be appointed, the Company
shall give notice thereof to the predecessor warrant agent and the transfer agent for the Common Stock not later than the effective date of any such appointment. 

        8.2.3.    Merger or Consolidation of Warrant Agent.    Any corporation into which the Warrant Agent may be merged or
with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor warrant agent under this Agreement
without any further act. 

        8.3.    Fees and Expenses of Warrant Agent.    

        8.3.1.    Remuneration.    The Company agrees to pay the Warrant Agent reasonable remuneration for its services as
such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder. 

        8.3.2.    Further Assurances.    The Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of
the provisions of this Agreement. 

        8.4.    Liability of Warrant Agent.    

        8.4.1.    Reliance on Company Statement.    Whenever in the performance of its duties under this Warrant Agreement,
the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, President or Chairman
of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this
Agreement. 

        8.4.2.    Indemnity.    The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or
bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted
by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent's negligence, willful misconduct, or bad faith. 

        8.4.3.    Exclusions.    The Warrant Agent shall have no responsibility with respect to the validity of this Agreement
or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or
responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common
Stock will when issued be valid and fully paid and nonassessable. 

        8.5.    Acceptance of Agency.    The Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and
pay to the 

8

 

Company,
all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants. 

        8.6.    Waiver.    The Warrant Agent hereby waives any and all right, title, interest or claim of any kind
("Claim") in or to any distribution of the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof,
by and between the Company and the Warrant Agent as trustee thereunder), and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Fund for any
reason whatsoever. 

        9.    Miscellaneous Provisions.    

        9.1.    Successors.    All the covenants and provisions of this Agreement by or for the benefit of the Company or the
Warrant Agent shall bind and inure to the benefit of their respective successors and assigns. 

        9.2.    Notices.    Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the
Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier
service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows: 

Taliera
Corporation

250 East 96th Street

Suite 415

Indianapolis, Indiana 46240

Attn:    J. Smoke Wallin, Chief Executive Officer 

Any
notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered
if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as follows: 

Continental
Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn:    Compliance Department 

with
a copy in each case to: 

Ice
Miller LLP

One American Square

Suite 3100

Indianapolis, Indiana 46282-0200

Attn:    Joseph E. DeGroff, Esq. 

and 

Graubard
Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Attn:    David Alan Miller, Esq. 

and

Morgan
Joseph & Co. Inc.

600 Fifth Avenue, 19th Floor

New York, New York 10020

Attn:    Michael Powell, Managing Director 

        9.3.    Applicable law.    The validity, interpretation, and performance of this Agreement and of the Warrants shall
be governed in all respects by the laws of the State of New York, without giving effect to conflict of laws. The Company hereby agrees that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District 

9

 

Court
for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenience forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such mailing shall be deemed personal service
and shall be legal and binding upon the Company in any action, proceeding or claim. 

        9.4.    Persons Having Rights under this Agreement.    Nothing in this Agreement expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the
Warrants and, for the purposes of Sections 6.4, 7.4 and 9.2 hereof, MJ, any right, remedy, or
claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. MJ shall be deemed to be a third-party beneficiary of this Agreement with
respect to Sections 6.4, 7.4 and 9.2 hereof. All
covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto (and MJ with respect to  Sections 6.4, 7.4 and 9.2 hereof) and their successors and assigns and of the registered holders
of the Warrants. 

        9.5.    Examination of the Warrant Agreement.    A copy of this Agreement shall be available at all reasonable times
at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to
submit his Warrant for inspection by it. 

        9.6.    Amendments.    (a) This Agreement and any Warrant Certificate may be amended by the parties hereto by
executing a supplemental warrant agreement (a "Supplemental Agreement"), without the consent of the Holder of any Warrant, for the purpose of
(i) curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this
Agreement that is not inconsistent with the provisions of this Agreement or the Warrant Certificates, (ii) evidencing the succession of another corporation to the Company and the assumption by
any such successor of the covenants of the Company contained in this Agreement and the Warrants, (iii) evidencing and providing for the acceptance of appointment by a successor Warrant Agent
with respect to the Warrants, (iv) evidencing and providing for the acceptance of appointment by a successor Depository with respect to each Book-Entry Warrant Certificate,
(v) issuing definitive Warrant Certificates, (vi) adding to the covenants of the Company for the benefit of the Holders or surrendering any right or power conferred upon the Company
under this Agreement, (vii) appointing a successor Warrant Agent, or (viii) amending this Agreement and the Warrants in any manner that the Company may deem to be necessary or desirable
and that will not adversely affect the interests of the Holders in any material respect. (b) The Company and the Warrant Agent may amend this Agreement and the Warrants by executing a
Supplemental Agreement with the consent of the Holders of not fewer than a majority of the unexercised Warrants affected by such amendment, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders under this Agreement; provided, however, that,
without the consent of each Holder of Warrants affected thereby, no such amendment may be made that (i) changes the Warrants so as to reduce the number of Shares purchasable upon exercise of
the Warrants or so as to increase the Exercise Price (other than as provided by Section 4), (ii) shortens the period of time during which
the Warrants may be exercised, (iii) otherwise adversely affects the exercise rights of the Holders in any material respect, or (iv) reduces the number of unexercised Warrants the
consent of the Holders of which is required for amendment of this Agreement or the Warrants. 

        9.7.    Merger, Consolidation, Sale, Transfer or Conveyance.    The Company may consolidate or merge with or into any
other corporation or sell, lease, transfer or convey all or substantially all of its assets to any other corporation; provided, that (i) either (x) the Company is the continuing
corporation or (y) the corporation (if other than the Company) that is formed by or results from any such consolidation or merger or that receives such assets is a corporation organized and
existing under the laws of the United States of America or a state thereof and such corporation assumes the obligations of the Company with respect to the performance and observance of all of the
covenants and conditions of this Agreement to be performed or observed by the Company and (ii) the Company or such successor corporation, as the case may be, must not immediately be in default
under this Agreement. If at any time there shall be any consolidation or merger or any sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of the Company,
then in any such event the successor or assuming corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein and in the Warrant Certificates as
the Company; the Company shall thereupon be relieved of any 

10

 

further
obligation hereunder or under the Warrants, and, in the event of any such sale, lease, transfer, conveyance (other than by way of lease) or other disposition, the Company as the predecessor
corporation may thereupon or at any time thereafter be dissolved, wound-up or liquidated. Such successor or assuming corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company, Warrant Certificates evidencing the Warrants not theretofore exercised, in exchange and substitution for the Warrant Certificates theretofore issued. Such
Warrant Certificates shall in all respects have the same legal rank and benefit under this Agreement as the Warrant Certificates evidencing the Warrants theretofore issued in accordance with the terms
of this Agreement as though such new Warrant Certificates had been issued at the date of the execution hereof. In any case of any such merger or consolidation or sale, lease, transfer, conveyance or
other disposition of all or substantially all of the assets of the Company, such changes in language and form (but not in substance) may be made in the new Warrant Certificates, as may be appropriate. 

        9.8.    Counterparts.    This Agreement may be executed in any number of original or facsimile counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 

        9.9.    Effect of Headings.    The Section headings herein are for convenience only and are not part of this Agreement
and shall not affect the interpretation thereof. 

*    *    *    *    *

(Signature Page Follows) 

11

 

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

	 	 	TALIERA CORPORATION
	

 	
 	

By:	

	 	 	 	Name: J. Smoke Wallin

Title: Chief Executive Officer
	

 	
 	

CONTINENTAL STOCK TRANSFER

& TRUST COMPANY
	

 	
 	

By:	

	 	 	 	Name:

Title:

12

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