Document:

remote10ksb093007ex10-18.htm

    
      

      

    

     

    STOCK
      PURCHASE
      AGREEMENT

    

    Agreement
      entered into effective December 1, 2007, by and among RemoteMDx, Inc., a Utah
      corporation (the "Buyer"), and David
      M.
      Rothbart, an individual residing in the State of Mississippi (the "Seller").  The
      Buyer and the Seller are referred to collectively herein as the "Parties."

    

    The
      Seller owns all of the outstanding capital stock of Court Programs, Inc., a
      Mississippi corporation ("CPI"), Court
      Programs
      of Northern Florida, Inc., a Florida corporation (“CPNF”), and Court
      Programs of Florida, Inc., a Florida corporation (“CPF”). CPI, CPNF,
      and
      CPF are sometimes referred to individually as a “CP Entity” and
      collectively in this Agreement as the “CP
      Entities”.

    

    This
      Agreement contemplates a transaction in which the Buyer will purchase from
      the
      Seller, and the Seller will sell to the Buyer, a minimum of 51% and up to 100%
      of the outstanding capital stock of the CP Entities in return for cash and
      shares of Buyer’s common stock or a combination thereof.

    

    Now,
      therefore, in consideration of the premises and the mutual promises herein
      made,
      and in consideration of the representations, warranties, and covenants herein
      contained, the Parties agree as follows.

    

    
      	
               

            	
              1.

            	
              Definitions.

            

    

    

    "Accredited
      Investor"
      has the meaning set forth in Regulation D promulgated under the Securities
      Act.

    

    "Adverse
      Consequences"
      means all actions, suits, proceedings, hearings, investigations, charges,
      complaints, claims, demands, injunctions, judgments, orders, decrees, rulings,
      damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
      obligations, Taxes, liens, losses, expenses, and fees, including court costs
      and
      reasonable attorneys' fees and expenses.

    

    "Affiliate"
      has the
      meaning set forth in Rule 12b-2 of the regulations promulgated under the
      Securities Exchange Act.

    

    "Affiliated
      Group"
      means any affiliated group within the meaning of Code §1504(a) or any similar
      group defined under a similar provision of state, local or foreign
      law.

    

    “Auditor”
means
      the
      independent registered public accounting firm selected by Buyer.

    

    "Basis"
      means any past
      or present fact, situation, circumstance, status, condition, activity, practice,
      plan, occurrence, event, incident, action, failure to act, or transaction that
      forms or could form the basis for any specified consequence.

    

    "Buyer"
      has the
      meaning set forth in the preface above.

    

    "Closing"
      has the
      meaning set forth in Section 2(c) below.

    

    "Closing
      Date" has the
      meaning set forth in Section 2(c) below.

    

    "COBRA"
      means the
      requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of
      any similar state law.

    

    "Code"
      means the
      Internal Revenue Code of 1986, as amended.

    

    
      
        
        

      

      
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    "Confidential
      Information" means any information concerning the businesses and affairs
      of the CP Entities that is not already generally available to the
      public.

    

    "Controlled
      Group" has
      the meaning set forth in Code §1563.

    

    "Deferred
      Intercompany
      Transaction" has the meaning set forth in
      Reg.  §1.1502-13.

    

    "Disclosure
      Schedule"
      has the meaning set forth in Section 4 below.

    

    "Employee
      Benefit
      Plan" means any "employee benefit plan" (as such term is defined in ERISA
      §3(3)) and any other material employee benefit plan, program or arrangement
      of
      any kind.

    

    "Employee
      Pension Benefit
      Plan" has the meaning set forth in ERISA §3(2).

    

    "Employee
      Welfare Benefit
      Plan" has the meaning set forth in ERISA §3(1).

    

    "Environmental,
      Health, and
      Safety Requirements" shall mean all federal, state, local and foreign
      statutes, regulations, ordinances and other provisions having the force or
      effect of law, all judicial and administrative orders and determinations, all
      contractual obligations and all common law concerning public health and safety,
      worker health and safety, and pollution or protection of the environment,
      including without limitation all those relating to the presence, use,
      production, generation, handling, transportation, treatment, storage, disposal,
      distribution, labeling, testing, processing, discharge, release, threatened
      release, control, or cleanup of any hazardous materials, substances or wastes,
      chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
      chemicals, petroleum products or byproducts, asbestos, polychlorinated
      biphenyls, noise or radiation, each as amended and as now or hereafter in
      effect.

    

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

    

    "ERISA
      Affiliate"
      means each entity which is treated as a single employer with any of the CP
      Entities for purposes of Code §414.

    

    "Excess
      Loss Account"
      has the meaning set forth in Reg. §1.1502-19.

    

    "Fiduciary"
      has the
      meaning set forth in ERISA §3(21).

    

    "Financial
      Statement"
      has the meaning set forth in Section 4(g) below.

    

    "GAAP"
      means United
      States generally accepted accounting principles as in effect from time to
      time.

    

    "Indemnified
      Party"
      has the meaning set forth in Section 8(d) below.

    

    "Indemnifying
      Party"
      has the meaning set forth in Section 8(d) below.

    

    "Intellectual
      Property" means (a) all inventions (whether patentable or unpatentable
      and whether or not reduced to practice), all improvements thereto, and all
      patents, patent applications, and patent disclosures, together with all
      reissuances, continuations, continuations-in-part, revisions, extensions, and
      reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
      trade names, and corporate names, together with all translations, adaptations,
      derivations, and combinations thereof and including all goodwill associated
      therewith, and all applications, registrations, and renewals in connection
      therewith, (c) all copyrightable works, all copyrights, and all applications,
      registrations, and renewals in connection therewith, (d) all mask works and
      all
      applications, registrations, and renewals in connection therewith, (e) all
      trade
      secrets and confidential business information (including ideas, research and
      development, know-how, formulas, compositions, manufacturing and production
      processes and techniques, technical data, designs, drawings, specifications,
      customer and supplier lists, pricing and cost information, and business and
      marketing plans and proposals), (f) all computer software (including data and
      related documentation), (g) all other proprietary rights, and (h) all copies
      and
      tangible embodiments thereof (in whatever form or medium).

    

    
      
        
        

      

      
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    "Knowledge"
      means
      actual knowledge after reasonable investigation.

    

    "Liability"
      means any
      liability (whether known or unknown, whether asserted or unasserted, whether
      absolute or contingent, whether accrued or unaccrued, whether liquidated or
      unliquidated, and whether due or to become due), including any liability for
      Taxes.

    

    "Most
      Recent Balance
      Sheet" means the balance sheet contained within the Most Recent Financial
      Statements.

    

    "Most
      Recent Financial
      Statements" has the meaning set forth in Section 4(g) below.

    

    "Most
      Recent Fiscal Month
      End" has the meaning set forth in Section 4(g) below.

    

    "Most
      Recent Fiscal Year
      End" has the meaning set forth in Section 4(g) below.

    

    "Multiemployer
      Plan"
      has the meaning set forth in ERISA §3(37).

    

    “Net
      Revenues” means
      gross revenues less returns and allowances determined in accordance with
      GAAP.

    

    "Ordinary
      Course of
      Business" means the ordinary course of business consistent with past
      custom and practice (including with respect to quantity and
      frequency).

    

    "Party"
      has the
      meaning set forth in the preface above.

    

    "PBGC"
      means the
      Pension Benefit Guaranty Corporation.

    

    "Person"
      means an
      individual, a partnership, a corporation, an association, a joint stock company,
      a trust, a joint venture, an unincorporated organization, or a governmental
      entity (or any department, agency, or political subdivision
      thereof).

    

    "Process
      Agent" has
      the meaning set forth in Section 10(p) below.

    

    "Prohibited
      Transaction" has the meaning set forth in ERISA §406 and Code
§4975.

    

    "Purchase
      Price" has
      the meaning set forth in Section 2(b) below.

    

    "Reportable
      Event" has
      the meaning set forth in ERISA §4043.

    

    "Securities
      Act" means
      the Securities Act of 1933, as amended.

    

    "Securities
      Exchange
      Act" means the Securities Exchange Act of 1934, as amended.

     

    

      
        
          
          

        

        
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    "Security
      Interest"
      means any mortgage, pledge, lien, encumbrance, charge, or other security
      interest, other than (a) mechanic's, materialmen's, and similar liens, (b)
      liens
      for Taxes not yet due and payable or for Taxes that the taxpayer is contesting
      in good faith through appropriate proceedings, (c) purchase money liens and
      liens securing rental payments under capital lease arrangements, and (d) other
      liens arising in the Ordinary Course of Business and not incurred in connection
      with the borrowing of money.

    

    "Seller"
      has the
      meaning set forth in the preface above.

     

    "Subsidiary"
      means any
      corporation with respect to which a specified Person (or a Subsidiary thereof)
      owns a majority of the common stock or has the power to vote or direct the
      voting of sufficient securities to elect a majority of the
      directors.

    

    "Tax"
      means any
      federal, state, local, or foreign income, gross receipts, license, payroll,
      employment, excise, severance, stamp, occupation, premium, windfall profits,
      environmental (including taxes under Code §59A), customs duties, capital stock,
      franchise, profits, withholding, social security (or similar), unemployment,
      disability, real property, personal property, sales, use, transfer,
      registration, value added, alternative or add-on minimum, estimated, or other
      tax of any kind whatsoever, including any interest, penalty, or addition
      thereto, whether disputed or not.

    

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

    

    "Third
      Party Claim"
      has the meaning set forth in Section 8(d) below.

    

    2.         Purchase
      and Sale of
      Shares.

    

    (a)        Sale
      of CP Entities
      Shares.  On and subject to the terms and conditions of this
      Agreement, the Buyer agrees to purchase from Seller, and Seller agrees to sell
      to the Buyer, that number of shares of the several CP Entities (the “Shares”) indicated
      opposite Seller’s name on the attached Schedule 2(a) in
      exchange for the consideration specified below in Section 2(b).

    

    (b)        Purchase
      Price.  In consideration for the sale of the Shares to Buyer,
      Buyer agrees to pay to the Seller at the Closing, $1,147,500 (the "Purchase Price") by
      delivery of (i) cash of $300,000 by wire transfer or delivery of other
      immediately available funds, and (ii) 212,000 shares of common stock of Buyer
      (the “Buyer
      Shares”) for the balance of the Purchase Price.

    

    (c)        The
      Closing.  The closing of the transaction contemplated by this
      Agreement (the "Closing") shall
      take
      place at the offices of Durham Jones & Pinegar in Salt Lake City, Utah,
      commencing at 10:00 a.m. local time on or before December 31, 2007, or such
      other date as the Parties may mutually determine, but in any event no later
      than
      January 20, 2007 (the "Closing
      Date");

    

    (d)        Deliveries
      at the
      Closing.  At the Closing, (i) the Seller will deliver to the
      Buyer the various certificates, instruments, and documents referred to in
      Section 7(a) below, (ii) the Buyer will deliver to the Seller the various
      certificates, instruments, and documents referred to in Section 7(b) below,
      (iii) Seller will deliver to the Buyer stock certificates representing the
      Shares as listed on Schedule 2(a),
      endorsed in blank or accompanied by duly executed assignment documents, and
      (iv)
      the Buyer will deliver to Seller the Purchase Price specified in Section 2(b)
      above.

     

    
      
        
        

      

      
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      (e)        Buyer’s
        Option.

      

      (i)         Option
        Price.  In consideration of the payment of the Purchase Price
        as provided above, Seller hereby grants to Buyer the right, at Buyer’s sole
        election and option, to purchase all remaining shares of the CP Entities
        (the
“Remaining
        Shares”) on or before March 1, 2009.  The price for such
        Remaining Shares shall be an amount equal to the Net Revenues of CPI for
        the 12
        months ending December 31, 2008, as determined by the Auditor multiplied
        by 49%
        (the “Buyer’s Option
        Price”).

       

    

    (ii)        Exercise
      of
      Option.  Buyer may exercise its option to purchase the
      Remaining Shares at any time on or after January 1, 2009, by giving Seller
      a
      minimum of fifteen (15) days written notice.  The closing of the
      purchase of the Remaining Shares under this Section 2(e) shall occur on or
      before March 1, 2009 or such later date as the Parties may then
      agree.  The Buyer’s Option Price may be paid, at the sole option of
      Buyer, in cash or in shares of Buyer’s common stock valued at the market price
      for such shares averaged over the five trading days immediately preceding the
      closing date for such purchase, or in a combination of cash and Buyer’s common
      stock.

    

    (iii)       
      Resolution of Personal
      Obligations.  Seller has personally guaranteed certain
      obligations of the CP Entities (the “Seller Guarantees”).
      Upon the exercise and closing of the Buyer’s Option granted above, the CP
      Entities shall undertake to obtain the release of Seller under any and all
      Seller Guarantees to relieve Seller of his personal liability
      thereunder.

    

    (f)         Registration
      of Buyer
      Shares. Subject to the terms and conditions of this Agreement, the Buyer
      shall prepare and file with the SEC, within 90 days from the issuance of the
      Buyer Shares as part of the Purchase Price as provided in Section 2(b) of this
      Agreement, a registration statement on SB-2 (or, if the Company is then
      eligible, on Form S-3) under the Securities Act for the registration of such
      shares for resale by Seller.

    

    3.         Representations
      and
      Warranties Concerning the Transaction.

    

    (a)        Representations
      and
      Warranties of the Seller.  Seller represents and warrants to
      the Buyer that the statements contained in this Section 3(a) are correct and
      complete as of the date of this Agreement and will be correct and complete
      as of
      the Closing Date (as though made then and as though the Closing Date were
      substituted for the date of this Agreement throughout this Section 3(a)), except
      as set forth in Schedule 3(a)
      attached hereto.

    

    (i)         Authorization
      of
      Transaction.  The Seller has full power and authority to
      execute and deliver this Agreement and to perform his obligations
      hereunder.  This Agreement constitutes the valid and legally binding
      obligation of the Seller, enforceable in accordance with its terms and
      conditions.  The Seller need not give any notice to, make any filing
      with, or obtain any authorization, consent, or approval of any government or
      governmental agency in order to consummate the transactions contemplated by
      this
      Agreement.

    

    (ii)        
      Noncontravention.  Neither
      the execution and the delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby, will (A) violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
      restriction of any government, governmental agency, or court to which the Seller
      is subject or (B) conflict with, result in a breach of, constitute a default
      under, result in the acceleration of, create in any party the right to
      accelerate, terminate, modify, or cancel, or require any notice under any
      agreement, contract, lease, license, instrument, or other arrangement to which
      the Seller is a party or by which he is bound or to which any of his assets
      is
      subject.

    
       

      
        
          
          

        

        
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    (iii)        Brokers'
      Fees.  The Seller has no Liability or obligation to pay any
      fees or commissions to any broker, finder, or agent with respect to the
      transactions contemplated by this Agreement for which the Buyer could become
      liable or obligated.

    

    (iv)       
      Investment.  The
      Seller (A) understands that the Buyer Shares have not been registered under
      the
      Securities Act, or under any state securities laws, and are being offered and
      sold in reliance upon federal and state exemptions for transactions not
      involving any public offering, (B) is acquiring the Buyer Shares solely for
      his
      own account for investment purposes, and not with a view to the distribution
      thereof, (C) is a sophisticated investor with knowledge and experience in
      business and financial matters, (D) has received certain information concerning
      the Buyer and has had the opportunity to obtain additional information as
      desired in order to evaluate the merits and the risks inherent in holding the
      Buyer Shares, (E) is able to bear the economic risk and lack of liquidity
      inherent in holding the Buyer Shares, and (F) is an Accredited
      Investor.

    (v)        Shares.  The
      Seller holds of record and owns beneficially the number of Shares set forth
      next
      to his name in Section 4(b) of the Disclosure Schedule, free and clear of any
      restrictions on transfer (other than any restrictions under the Securities
      Act
      and state securities laws), Taxes, Security Interests, options, warrants,
      purchase rights, contracts, commitments, equities, claims, and
      demands.  The Seller is not a party to any option, warrant, purchase
      right, or other contract or commitment that could require the Seller to sell,
      transfer, or otherwise dispose of any capital stock of the CP Entities (other
      than this Agreement).  The Seller is not a party to any voting trust,
      proxy, or other agreement or understanding with respect to the voting of any
      capital stock of the CP Entities.

    

    (b)        Representations
      and
      Warranties of the Buyer.  The Buyer represents and warrants to
      the Seller that the statements contained in this Section 3(b) are correct and
      complete as of the date of this Agreement and will be correct and complete
      as of
      the Closing Date (as though made then and as though the Closing Date were
      substituted for the date of this Agreement throughout this Section 3(b)), except
      as set forth in Schedule 3(b)
      attached hereto.

    

    (i)         Organization
      of the
      Buyer.  The Buyer is a corporation duly organized, validly
      existing, and in good standing under the laws of the jurisdiction of its
      incorporation.

    

    (ii)        Authorization
      of
      Transaction.  The Buyer has full power and authority (including
      full corporate power and authority) to execute and deliver this Agreement and
      to
      perform its obligations hereunder.  This Agreement constitutes the
      valid and legally binding obligation of the Buyer, enforceable in accordance
      with its terms and conditions.  The Buyer need not give any notice to,
      make any filing with, or obtain any authorization, consent, or approval of
      any
      government or governmental agency in order to consummate the transactions
      contemplated by this Agreement.

    

    (iii)       Noncontravention.  Neither
      the execution and the delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby, will violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
      restriction of any government, governmental agency, or court to which the Buyer
      is subject or any provision of its charter or bylaws.

    
      

      
        
          
          

        

        
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    (iv)       Brokers'
      Fees.  The Buyer has no Liability or obligation to pay any fees
      or commissions to any broker, finder, or agent with respect to the transactions
      contemplated by this Agreement for which Seller could become liable or
      obligated.

    

    (v)        Investment.  The
      Buyer is not acquiring the Shares with a view to or for sale in connection
      with
      any distribution thereof within the meaning of the Securities Act.

    

    4.         Representations
      and
      Warranties Concerning the CP Entities.  The Seller represents
      and warrants to the Buyer that the statements contained in this Section 4 are
      correct and complete as of the date of this Agreement and will be correct and
      complete as of the Closing Date (as though made then and as though the Closing
      Date were substituted for the date of this Agreement throughout this Section
      4),
      except as set forth in the disclosure schedule delivered by the Seller to the
      Buyer on the date hereof and initialed by the Parties (the "Disclosure
      Schedule").  Nothing in the Disclosure Schedule shall be deemed
      adequate to disclose an exception to a representation or warranty made herein,
      however, unless the Disclosure Schedule identifies the exception with reasonable
      particularity and describes the relevant facts in reasonable
      detail.  Without limiting the generality of the foregoing, the mere
      listing (or inclusion of a copy) of a document or other item shall not be deemed
      adequate to disclose an exception to a representation or warranty made herein
      (unless the representation or warranty has to do with the existence of the
      document or other item itself).  The Disclosure Schedule will be
      arranged in paragraphs corresponding to the lettered and numbered paragraphs
      contained in this Section 4.

     

    (a)        Organization,
      Qualification,
      and Corporate Power.  Each CP Entity is a corporation duly
      organized, validly existing, and in good standing under the laws of the
      jurisdiction of its incorporation.  Each CP Entity is duly authorized
      to conduct business and is in good standing under the laws of each jurisdiction
      where such qualification is required.  Each CP Entity has full
      corporate power and authority and all licenses, permits, and authorizations
      necessary to carry on the businesses in which it is engaged and in which it
      presently proposes to engage and to own and use the properties owned and used
      by
      it.  Section 4(a) of the Disclosure Schedule lists the directors and
      officers of each CP Entity.  The Seller has delivered to the Buyer
      correct and complete copies of the charter and bylaws of each CP Entity (as
      amended to date). The minute books (containing the records of meetings of the
      stockholders, the board of directors, and any committees of the board of
      directors), the stock certificate books, and the stock record books of each
      CP
      Entity are correct and complete.  No CP Entity is in default under or
      in violation of any provision of its charter or bylaws.

    

    (b)        Capitalization.  Section
      4(b) of the Disclosure Schedule sets forth for each CP Entity the authorized
      capital stock, the number of shares issued and outstanding, and the number
      of
      shares held in treasury.  All of the issued and outstanding Shares
      have been duly authorized, are validly issued, fully paid, and nonassessable,
      and are held of record by the Seller as set forth in Section 4(b) of the
      Disclosure Schedule.  There are no outstanding or authorized options,
      warrants, purchase rights, subscription rights, conversion rights, exchange
      rights, or other contracts or commitments that could require the CP Entities
      to
      issue, sell, or otherwise cause to become outstanding any of its capital
      stock.  There are no outstanding or authorized stock appreciation,
      phantom stock, profit participation, or similar rights with respect to the
      CP
      Entities.  There are no voting trusts, proxies, or other agreements or
      understandings with respect to the voting of the capital stock of the CP
      Entities.

    

    (c)        Noncontravention.  Neither
      the execution and the delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby, will (i) violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
      restriction of any government, governmental agency, or court to which any CP
      Entity is subject or any provision of the charter or bylaws of any CP Entity
      or
      (ii) conflict with, result in a breach of, constitute a default under, result
      in
      the acceleration of, create in any party the right to accelerate, terminate,
      modify, or cancel, or require any notice under any agreement, contract, lease,
      license, instrument, or other arrangement to which any CP Entity is a party
      or
      by which it is bound or to which any of its assets is subject (or result in
      the
      imposition of any Security Interest upon any of its assets).  No CP
      Entity needs to give any notice to, make any filing with, or obtain any
      authorization, consent, or approval of any government or governmental agency
      in
      order for the Parties to consummate the transactions contemplated by this
      Agreement.

    
       

      
        
          
          

        

        
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    (d)        Brokers'
      Fees.  No CP Entity has any Liability or obligation to pay any
      fees or commissions to any broker, finder, or agent with respect to the
      transactions contemplated by this Agreement.

    

    (e)        Title
      to
      Assets.  The CP Entities have good and marketable title to, or
      a valid leasehold interest in, the properties and assets used by them, located
      on their premises, or shown on the Most Recent Balance Sheet or acquired after
      the date thereof, free and clear of all Security Interests, except for
      properties and assets disposed of in the Ordinary Course of Business since
      the
      date of the Most Recent Balance Sheet.

    

    (f)         Subsidiaries.  Section
      4(f) of the Disclosure Schedule sets forth for each Subsidiary of the CP
      Entities (i) its name and jurisdiction of incorporation, (ii) the number of
      shares of authorized capital stock of each class of its capital stock, (iii)
      the
      number of issued and outstanding shares of each class of its capital stock,
      the
      names of the holders thereof, and the number of shares held by each such holder,
      and (iv) the number of shares of its capital stock held in
      treasury.  All of the issued and outstanding shares of capital stock
      of each Subsidiary of the CP Entities have been duly authorized and are validly
      issued, fully paid, and nonassessable.  the CP Entities or one of its
      Subsidiaries holds of record and owns beneficially all of the outstanding shares
      of each Subsidiary of the CP Entities, free and clear of any restrictions on
      transfer (other than restrictions under the Securities Act and state securities
      laws), Taxes, Security Interests, options, warrants, purchase rights, contracts,
      commitments, equities, claims, and demands.  There are no outstanding
      or authorized options, warrants, purchase rights, subscription rights,
      conversion rights, exchange rights, or other contracts or commitments that
      could
      require any CP Entity to sell, transfer, or otherwise dispose of any capital
      stock of any of its Subsidiaries or that could require any Subsidiary of the
      CP
      Entities to issue, sell, or otherwise cause to become outstanding any of its
      own
      capital stock.  There are no outstanding stock appreciation, phantom
      stock, profit participation, or similar rights with respect to any Subsidiary
      of
      the CP Entities.  There are no voting trusts, proxies, or other
      agreements or understandings with respect to the voting of any capital stock
      of
      any Subsidiary of the CP Entities.  No CP Entity controls directly or
      indirectly or has any direct or indirect equity participation in any
      corporation, partnership, trust, or other business association which is not
      a
      Subsidiary of the CP Entities.

     

    (g)        Financial
      Statements.  Attached hereto as Exhibit A are the following
      financial statements (collectively the "Financial
      Statements"): (i) unaudited balance sheets and statements of income for
      each CP Entity as of and for the fiscal years ended March 31, 2005, 2006 and
      2007 (the "Most Recent
      Fiscal Year End"); and (ii) unaudited balance sheets and statements of
      income for each CP Entity (the "Most Recent Financial
      Statements") as of and for the 8 months ended November 30, 2007 (the
      "Most Recent Fiscal
      Month End").  The Financial Statements (including the notes
      thereto) have not been prepared in accordance with GAAP, however Seller believes
      that they present fairly the financial condition of the CP Entities as of such
      dates and the results of operations of each CP Entity for such periods, are
      correct and complete, and are consistent with the books and records of the
      CP
      Entities (which books and records are correct and complete).

    

    (h)        Events
      Subsequent to Most
      Recent Fiscal Year End.  Since the Most Recent Fiscal Year End,
      there has not been any material adverse change in the business, financial
      condition, operations, results of operations, or future prospects of any CP
      Entity.  Without limiting the generality of the foregoing, since that
      date:

    

      
        
          
          

        

        
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    (i)         No
      CP Entity has sold, leased, transferred, or assigned any of its assets, tangible
      or intangible, other than for a fair consideration in the Ordinary Course of
      Business;

    

    (ii)        No
      CP Entity has entered into any agreement, contract, lease, or license (or series
      of related agreements, contracts, leases, and licenses) either involving more
      than $10,000 or outside the Ordinary Course of Business;

    

    (iii)       No
      party (including any CP Entity) has accelerated, terminated, modified, or
      cancelled any agreement, contract, lease, or license (or series of related
      agreements, contracts, leases, and licenses) involving more than $10,000 to
      which any CP Entity is a party or by which any of them is bound;

    

    (iv)       No
      CP Entity has imposed any Security Interest upon any of its assets, tangible
      or
      intangible;

    

    (v)        No
      CP Entity has made any capital expenditure (or series of related capital
      expenditures) either involving more than $10,000 or outside the Ordinary Course
      of Business;

    

    (vi)       No
      CP Entity has made any capital investment in, any loan to, or any acquisition
      of
      the securities or assets of, any other Person (or series of related capital
      investments, loans, and acquisitions) either involving more than $10,000 or
      outside the Ordinary Course of Business;

    

    (vii)      
      No CP Entity has issued any note, bond, or other debt security or created,
      incurred, assumed, or guaranteed any indebtedness for borrowed money or
      capitalized lease obligation either involving more than $10,000 singly or
      $10,000 in the aggregate;

    

    (viii)      No
      CP Entity has delayed or postponed the payment of accounts payable and other
      Liabilities outside the Ordinary Course of Business;

    

    (ix)       
      No CP Entity has cancelled, compromised, waived, or released any right or claim
      (or series of related rights and claims) either involving more than $10,000
      or
      outside the Ordinary Course of Business;

    

    (x)         No
      CP Entity has granted any license or sublicense of any rights under or with
      respect to any Intellectual Property;

    (xi)        There
      has been no change made or authorized in the charter or bylaws of any CP
      Entity;

    

    (xii)       No
      CP Entity has issued, sold, or otherwise disposed of any of its capital stock,
      or granted any options, warrants, or other rights to purchase or obtain
      (including upon conversion, exchange, or exercise) any of its capital
      stock;

    

    (xiii)      No
      CP Entity has declared, set aside, or paid any dividend or made any distribution
      with respect to its capital stock (whether in cash or in kind) or redeemed,
      purchased, or otherwise acquired any of its capital stock;

    

    (xiv)      No
      CP Entity has experienced any damage, destruction, or loss (whether or not
      covered by insurance) to its property;

     

    

      
        
          
          

        

        
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    (xv)       No
      CP Entity has made any loan to, or entered into any other transaction with,
      any
      of its directors, officers, and employees outside the Ordinary Course of
      Business;

    

    (xvi)      No
      CP Entity has entered into any employment contract or collective bargaining
      agreement, written or oral, or modified the terms of any existing such contract
      or agreement;

    

    (xvii)     No
      CP Entity has granted any increase in the base compensation of any of its
      directors, officers, and employees outside the Ordinary Course of
      Business;

    

    (xviii)    No
      CP Entity has adopted, amended, modified, or terminated any bonus,
      profit-sharing, incentive, severance, or other plan, contract, or commitment
      for
      the benefit of any of its directors, officers, and employees (or taken any
      such
      action with respect to any other Employee Benefit Plan);

    

    (xix)      No
      CP Entity has made any other change in employment terms for any of its
      directors, officers, and employees outside the Ordinary Course of
      Business;

    

    (xx)       No
      CP Entity has made or pledged to make any charitable or other capital
      contribution outside the Ordinary Course of Business;

    

    (xxi)      There
      has not been any other material occurrence, event, incident, action, failure
      to
      act, or transaction outside the Ordinary Course of Business involving any CP
      Entity; and

    

    (xxii)     No
      CP Entity has committed to any of the foregoing.

    

    (i)         Undisclosed
      Liabilities.  No CP Entity has any Liability (and there is no
      Basis for any present or future action, suit, proceeding, hearing,
      investigation, charge, complaint, claim, or demand against any of them giving
      rise to any Liability), except for (i) Liabilities set forth on the face of
      the
      Most Recent Balance Sheet (rather than in any notes thereto) and (ii)
      Liabilities which have arisen after the Most Recent Fiscal Month End in the
      Ordinary Course of Business (none of which results from, arises out of, relates
      to, is in the nature of, or was caused by any breach of contract, breach of
      warranty, tort, infringement, or violation of law).

    

    (j)         Legal
      Compliance.  Each of the CP Entities, its Subsidiaries, and
      their respective predecessors and Affiliates has complied with all applicable
      laws (including rules, regulations, codes, plans, injunctions, judgments,
      orders, decrees, rulings, and charges thereunder) of federal, state, local,
      and
      foreign governments (and all agencies thereof), and no action, suit, proceeding,
      hearing, investigation, charge, complaint, claim, demand, or notice has been
      filed or commenced against any of them alleging any failure so to
      comply.

     

    (k)        Tax
      Matters.

    

    (i)         Each
      CP Entity has filed all Tax Returns that it was required to file. All such
      Tax
      Returns were correct and complete in all respects. All Taxes owed by any CP
      Entity (whether or not shown on any Tax Return) have been paid. No CP Entity
      currently is the beneficiary of any extension of time within which to file
      any
      Tax Return. No claim has ever been made by an authority in a jurisdiction where
      any CP Entity does not file Tax Returns that it is or may be subject to taxation
      by that jurisdiction. There are no Security Interests on any of the assets
      of
      any CP Entity that arose in connection with any failure (or alleged failure)
      to
      pay any Tax.

    

    (ii)        
      Each CP Entity has withheld and paid all Taxes required to have been withheld
      and paid in connection with amounts paid or owing to any employee, independent
      contractor, creditor, stockholder, or other third party.

    

      
        
          
          

        

        
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    (iii)        No
      Seller or director or officer (or employee responsible for Tax matters) of
      any
      CP Entity expects any authority to assess any additional Taxes for any period
      for which Tax Returns have been filed. There is no dispute or claim concerning
      any Tax Liability of any CP Entity either (A) claimed or raised by any authority
      in writing or (B) as to which Seller and the directors and officers (and
      employees responsible for Tax matters) of the CP Entity has Knowledge based
      upon
      personal contact with any agent of such authority. Section 4(k) of the
      Disclosure Schedule lists all federal, state, local, and foreign income Tax
      Returns filed with respect to any CP Entity for taxable periods ended on or
      after December 31, 2000, indicates those Tax Returns that have been audited,
      and
      indicates those Tax Returns that currently are the subject of audit. The Seller
      has delivered to the Buyer correct and complete copies of all federal income
      Tax
      Returns, examination reports, and statements of deficiencies assessed against
      or
      agreed to by any CP Entity since December 31, 2000.

    

    (iv)        No
      CP Entity has waived any statute of limitations in respect of Taxes or agreed
      to
      any extension of time with respect to a Tax assessment or
      deficiency.

    

    (v)        
      No CP Entity has filed a consent under Code §341(f) concerning collapsible
      corporations.  No CP Entity has made any payments, is obligated to
      make any payments, or is a party to any agreement that under certain
      circumstances could obligate it to make any payments that will not be deductible
      under Code §280G.  No CP Entity has been a United States real property
      holding corporation within the meaning of Code §897(c)(2) during the applicable
      period specified in Code §897(c)(1)(A)(ii).  No CP Entity is a party
      to any Tax allocation or sharing agreement.  No CP Entity (A) has been
      a member of an Affiliated Group filing a consolidated federal income Tax Return
      (other than a group the common parent of which was one of the CP Entities)
      or
      (B) has any Liability for the Taxes of any Person (other than any CP Entity)
      under Reg.  §1.1502-6 (or any similar provision of state, local, or
      foreign law), as a transferee or successor, by contract, or
      otherwise.

    

    (vi)        Section
      4(k) of the Disclosure Schedule sets forth the following information with
      respect to each CP Entity (or, in the case of clause (B) below, with respect
      to
      each of the Subsidiaries) as of the most recent practicable date: (A) the basis
      of the CP Entities or any Subsidiary in its assets; (B) the basis of the
      stockholder(s) of the Subsidiary in its stock (or the amount of any Excess
      Loss
      Account); (C) the amount of any net operating loss, net capital loss, unused
      investment or other credit, unused foreign tax, or excess charitable
      contribution allocable to the CP Entities or a Subsidiary; and (D) the amount
      of
      any deferred gain or loss allocable to the CP Entities or a Subsidiary arising
      out of any Deferred Intercompany Transaction.

    

    (vii)       The
      unpaid Taxes of the CP Entities (A) did not, as of the Most Recent Fiscal Month
      End, exceed the reserve for Tax Liability (rather than any reserve for deferred
      Taxes established to reflect timing differences between book and Tax income)
      set
      forth on the face of the Most Recent Balance Sheet (rather than in any notes
      thereto) and (B) do not exceed that reserve as adjusted for the passage of
      time
      through the Closing Date in accordance with the past custom and practice of
      the
      CP Entities in filing their Tax Returns.

    (l)         Real
      Property.

    

    (i)         Section
      4(l)(i) of the Disclosure Schedule lists and describes briefly all real property
      that any CP Entity owns. With respect to each such parcel of owned real
      property:

     

    

      
        
          
          

        

        
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    (A)       The
      identified owner has good and marketable title to the parcel of real property,
      free and clear of any Security Interest, easement, covenant, or other
      restriction, except for installments of special assessments not yet delinquent
      and recorded easements, covenants, and other restrictions which do not impair
      the current use, occupancy, or value, or the marketability of title, of the
      property subject thereto;

    

    (B)       There
      are no pending or threatened condemnation proceedings, lawsuits, or
      administrative actions relating to the property or other matters affecting
      materially and adversely the current use, occupancy, or value
      thereof;

    

    (C)       The
      legal description for the parcel contained in the deed thereof describes such
      parcel fully and adequately, the buildings and improvements are located within
      the boundary lines of the described parcels of land, are not in violation of
      applicable setback requirements, zoning laws, and ordinances (and none of the
      properties or buildings or improvements thereon are subject to "permitted
      non-conforming use" or "permitted non-conforming structure" classifications),
      and do not encroach on any easement which may burden the land, and the land
      does
      not serve any adjoining property for any purpose inconsistent with the use
      of
      the land, and the property is not located within any flood plain or subject
      to
      any similar type restriction for which any permits or licenses necessary to
      the
      use thereof have not been obtained;

    

    (D)       All
      facilities have received all approvals of governmental authorities (including
      licenses and permits) required in connection with the ownership or operation
      thereof and have been operated and maintained in accordance with applicable
      laws, rules, and regulations;

    

    (E)        There
      are no leases, subleases, licenses, concessions, or other agreements, written
      or
      oral, granting to any party or parties the right of use or occupancy of any
      portion of the parcel of real property;

    

    (F)        There
      are no outstanding options or rights of first refusal to purchase the parcel
      of
      real property, or any portion thereof or interest therein;

    

    (G)       There
      are no parties (other than the CP Entities) in possession of the parcel of
      real
      property, other than tenants under any leases disclosed in Section 4(l)(i)
      of
      the Disclosure Schedule who are in possession of space to which they are
      entitled;

    

    (H)       All
      facilities located on the parcel of real property are supplied with utilities
      and other services necessary for the operation of such facilities, including
      gas, electricity, water, telephone, sanitary sewer, and storm sewer, all of
      which services are adequate in accordance with all applicable laws, ordinances,
      rules, and regulations and are provided via public roads or via permanent,
      irrevocable, appurtenant easements benefitting the parcel of real property;
      and

    

    (I)         Each
      parcel of real property abuts on and has direct vehicular access to a public
      road, or has access to a public road via a permanent, irrevocable, appurtenant
      easement benefitting the parcel of real property, and access to the property
      is
      provided by paved public right-of-way with adequate curb cuts
      available.

    
      

      
        
          
          

        

        
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    (ii)        Section
      4(l)(ii) of the Disclosure Schedule lists and describes briefly all real
      property leased or subleased to any CP Entity. Seller has delivered to the
      Buyer
      correct and complete copies of the leases and subleases listed in Section
      4(l)(ii) of the Disclosure Schedule (as amended to date). With respect to each
      lease and sublease listed in Section 4(l)(ii) of the Disclosure
      Schedule:

     

    (A)       The
      lease or sublease is legal, valid, binding, enforceable, and in full force
      and
      effect;

    

    (B)        The
      lease or sublease will continue to be legal, valid, binding, enforceable, and
      in
      full force and effect on identical terms following the consummation of the
      transactions contemplated hereby;

    

    (C)       no
      party to the lease or sublease is in breach or default, and no event has
      occurred which, with notice or lapse of time, would constitute a breach or
      default or permit termination, modification, or acceleration
      thereunder;

    

    (D)       No
      party to the lease or sublease has repudiated any provision
      thereof;

    

    (E)        There
      are no disputes, oral agreements, or forbearance programs in effect as to the
      lease or sublease;

    

    (F)        With
      respect to each sublease, the representations and warranties set forth in
      subsections (A) through (E) above are true and correct with respect to the
      underlying lease;

    

    (G)       No
      CP Entity has assigned, transferred, conveyed, mortgaged, deeded in trust,
      or
      encumbered any interest in the leasehold or subleasehold;

    

    (H)       All
      facilities leased or subleased thereunder have received all approvals of
      governmental authorities (including licenses and permits) required in connection
      with the operation thereof and have been operated and maintained in accordance
      with applicable laws, rules, and regulations;

    

    (I)         All
      facilities leased or subleased thereunder are supplied with utilities and other
      services necessary for the operation of said facilities; and

    

    (J)         the
      owner of the facility leased or subleased has good and marketable title to
      the
      parcel of real property, free and clear of any Security Interest, easement,
      covenant, or other restriction, except for installments of special easements
      not
      yet delinquent and recorded easements, covenants, and other restrictions which
      do not impair the current use, occupancy, or value, or the marketability of
      title, of the property subject thereto.

    

    (m)       Intellectual
      Property.

    

    (i)         the
      CP Entities own or have the right to use pursuant to license, sublicense,
      agreement, or permission all Intellectual Property necessary for the operation
      of the businesses of the CP Entities as presently conducted and as presently
      proposed to be conducted. Each item of Intellectual Property owned or used
      by
      any CP Entity immediately prior to the Closing hereunder will be owned or
      available for use by the CP Entities or the Subsidiary on identical terms and
      conditions immediately subsequent to the Closing hereunder. Each CP Entity
      has
      taken all necessary action to maintain and protect each item of Intellectual
      Property that it owns or uses.

    

      
        
          
          

        

        
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    (ii)        
      No CP Entity has interfered with, infringed upon, misappropriated, or otherwise
      come into conflict with any Intellectual Property rights of third parties,
      and
      none of the Seller and the directors and officers (and employees with
      responsibility for Intellectual Property matters) of the CP Entities has ever
      received any charge, complaint, claim, demand, or notice alleging any such
      interference, infringement, misappropriation, or violation (including any claim
      that any CP Entity must license or refrain from using any Intellectual Property
      rights of any third party). To the Knowledge of the Seller, no third party
      has
      interfered with, infringed upon, misappropriated, or otherwise come into
      conflict with any Intellectual Property rights of any CP Entity.

    

    (iii)        Section
      4(m)(iii) of the Disclosure Schedule identifies each patent or registration
      which has been issued to any CP Entity with respect to any of its Intellectual
      Property, identifies each pending patent application or application for
      registration which any CP Entity has made with respect to any of its
      Intellectual Property, and identifies each license, agreement, or other
      permission which any CP Entity has granted to any third party with respect
      to
      any of its Intellectual Property (together with any exceptions). The Seller
      has
      delivered to the Buyer correct and complete copies of all such patents,
      registrations, applications, licenses, agreements, and permissions (as amended
      to date). Section 4(m)(iii) of the Disclosure Schedule also identifies each
      trade name or unregistered trademark used by any CP Entity in connection with
      any of its businesses. With respect to each item of Intellectual Property
      required to be identified in Section 4(m)(iii) of the Disclosure
      Schedule:

    

    (A)       The
      CP Entities possess all right, title, and interest in and to the item, free
      and
      clear of any Security Interest, license, or other restriction;

    

    (B)       
      The item is not subject to any outstanding injunction, judgment, order, decree,
      ruling, or charge;

    

    (C)       No
      action, suit, proceeding, hearing, investigation, charge, complaint, claim,
      or
      demand is pending or is threatened which challenges the legality, validity,
      enforceability, use, or ownership of the item; and

    

    (D)       No
      CP Entity has ever agreed to indemnify any Person for or against any
      interference, infringement, misappropriation, or other conflict with respect
      to
      the item.

    

    (iv)        Section
      4(m)(iv) of the Disclosure Schedule identifies each item of Intellectual
      Property that any third party owns and that any CP Entity uses pursuant to
      license, sublicense, agreement, or permission. The Seller has delivered to
      the
      Buyer correct and complete copies of all such licenses, sublicenses, agreements,
      and permissions (as amended to date). With respect to each item of Intellectual
      Property required to be identified in Section 4(m)(iv) of the Disclosure
      Schedule:

    

    (A)       
      the license, sublicense, agreement, or permission covering the item is legal,
      valid, binding, enforceable, and in full force and effect;

    

    (B)       
      the license, sublicense, agreement, or permission will continue to be legal,
      valid, binding, enforceable, and in full force and effect on identical terms
      following the consummation of the transactions contemplated hereby (including
      the assignments and assumptions referred to in Section 2 above);

    

      
        
          
          

        

        
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    (C)        no
      party to the license, sublicense, agreement, or permission is in breach or
      default, and no event has occurred which with notice or lapse of time would
      constitute a breach or default or permit termination, modification, or
      acceleration thereunder;

     

    (D)       no
      party to the license, sublicense, agreement, or permission has repudiated any
      provision thereof;

    

    (E)        with
      respect to each sublicense, the representations and warranties set forth in
      subsections (A) through (D) above are true and correct with respect to the
      underlying license;

    

    (F)        the
      underlying item of Intellectual Property is not subject to any outstanding
      injunction, judgment, order, decree, ruling, or charge;

    

    (G)       no
      action, suit, proceeding, hearing, investigation, charge, complaint, claim,
      or
      demand is pending or is threatened which challenges the legality, validity,
      or
      enforceability of the underlying item of Intellectual Property; and

    

    (H)       no
      CP Entity has granted any sublicense or similar right with respect to the
      license, sublicense, agreement, or permission.

    

    (v)        To
      the Knowledge of Seller, no CP Entity will interfere with, infringe upon,
      misappropriate, or otherwise come into conflict with, any Intellectual Property
      rights of third parties as a result of the continued operation of its businesses
      as presently conducted and as presently proposed to be conducted.

    

    (n)        Tangible
      Assets.  the CP Entities own or lease all buildings, machinery,
      equipment, and other tangible assets necessary for the conduct of their
      businesses as presently conducted and as presently proposed to be
      conducted.  Each such tangible asset is free from defects (patent and
      latent), has been maintained in accordance with normal industry practice, is
      in
      good operating condition and repair (subject to normal wear and tear), and
      is
      suitable for the purposes for which it presently is used and presently is
      proposed to be used.

    

    (o)        Inventory.  The
      inventory of the CP Entities consists of raw materials and supplies,
      manufactured and purchased parts, goods in process, and finished goods, all
      of
      which is merchantable and fit for the purpose for which it was procured or
      manufactured, and none of which is slow-moving, obsolete, damaged, or defective,
      subject only to the reserve for inventory writedown set forth on the face of
      the
      Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for
      the
      passage of time through the Closing Date in accordance with the past custom
      and
      practice of the CP Entities.

    

    (p)        Contracts.  Section
      4(p) of the Disclosure Schedule lists the following contracts and other
      agreements to which any CP Entity is a party:

    

    (i)         any
      agreement (or group of related agreements) for the lease of personal property
      to
      or from any Person providing for lease payments in excess of $10,000 per
      annum;

    

    (ii)        
      any agreement (or group of related agreements) for the purchase or sale of
      raw
      materials, commodities, supplies, products, or other personal property, or
      for
      the furnishing or receipt of services, the performance of which will extend
      over
      a period of more than one year, result in a material loss to any CP Entity,
      or
      involve consideration in excess of $10,000;

     

    
      
         

      

      
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    (iii)       
      any agreement concerning a partnership or joint venture;

    

    (iv)       
      any agreement (or group of related agreements) under which it has created,
      incurred, assumed, or guaranteed any indebtedness for borrowed money, or any
      capitalized lease obligation, in excess of $10,000 or under which it has imposed
      a Security Interest on any of its assets, tangible or intangible;

    

    (v)        any
      agreement concerning confidentiality or noncompetition;

    

    (vi)       
      any agreement with any of the Seller and his Affiliates (other than the CP
      Entities);

    

    (vii)       any
      profit sharing, stock option, stock purchase, stock appreciation, deferred
      compensation, severance, or other material plan or arrangement for the benefit
      of its current or former directors, officers, and employees;

    

    (viii)      any
      collective bargaining agreement;

    

    (ix)        any
      agreement for the employment of any individual on a full-time, part-time,
      consulting, or other basis providing annual compensation in excess of $50,000
      or
      providing severance benefits;

    

    (x)        any
      agreement under which it has advanced or loaned any amount to any of its
      directors, officers, and employees outside the Ordinary Course of
      Business;

    

    (xi)        any
      agreement under which the consequences of a default or termination could have
      a
      material adverse effect on the business, financial condition, operations,
      results of operations, or future prospects of any CP Entity; or

    

    (xii)       any
      other agreement (or group of related agreements) the performance of which
      involves consideration in excess of $10,000.

    

    The
      Seller has delivered to the Buyer a correct and complete copy of each written
      agreement listed in Section 4(p) of the Disclosure Schedule (as amended to
      date)
      and a written summary setting forth the terms and conditions of each oral
      agreement referred to in Section 4(p) of the Disclosure
      Schedule.  With respect to each such agreement: (A) the agreement is
      legal, valid, binding, enforceable, and in full force and effect; (B) the
      agreement will continue to be legal, valid, binding, enforceable, and in full
      force and effect on identical terms following the consummation of the
      transactions contemplated hereby; (C) no party is in breach or default, and
      no
      event has occurred which with notice or lapse of time would constitute a breach
      or default, or permit termination, modification, or acceleration, under the
      agreement; and (D) no party has repudiated any provision of the
      agreement.

    

    (q)        Notes
      and Accounts
      Receivable.  All notes and accounts receivable of the CP
      Entities are reflected properly on their books and records, are valid
      receivables subject to no setoffs or counterclaims, are current and collectible,
      and will be collected in accordance with their terms at their recorded amounts,
      subject only to the reserve for bad debts set forth on the face of the Most
      Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
      passage of time through the Closing Date in accordance with the past custom
      and
      practice of the CP Entities.

     

    
      
        
        

      

      
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      (r)         Powers
        of
        Attorney.  There are no outstanding powers of attorney executed
        on behalf of any CP Entity.

      

      (s)        
        Insurance.  Section
        4(s) of the Disclosure Schedule sets forth the following information with
        respect to each insurance policy (including policies providing property,
        casualty, Liability, and workers' compensation coverage and bond and surety
        arrangements) to which any CP Entity has been a party, a named insured, or
        otherwise the beneficiary of coverage at any time within the past 10
        years:

       

    

    (i)         the
      name, address, and telephone number of the agent;

    

    (ii)        the
      name of the insurer, the name of the policyholder, and the name of each covered
      insured;

    

    (iii)        the
      policy number and the period of coverage;

    

    (iv)        the
      scope (including an indication of whether the coverage was on a claims made,
      occurrence, or other basis) and amount (including a description of how
      deductibles and ceilings are calculated and operate) of coverage;
      and

    

    (v)        a
      description of any retroactive premium adjustments or other loss-sharing
      arrangements.

    

    With
      respect to each such insurance policy: (A) the policy is legal, valid, binding,
      enforceable, and in full force and effect; (B) the policy will continue to
      be
      legal, valid, binding, enforceable, and in full force and effect on identical
      terms following the consummation of the transactions contemplated hereby; (C)
      neither any CP Entity nor any other party to the policy is in breach or default
      (including with respect to the payment of premiums or the giving of notices),
      and no event has occurred which, with notice or the lapse of time, would
      constitute such a breach or default, or permit termination, modification, or
      acceleration, under the policy; and (D) no party to the policy has repudiated
      any provision thereof.  Each CP Entity has been covered during the
      past 10 years by insurance in scope and amount customary and reasonable for
      the
      businesses in which it has engaged during the aforementioned
      period.  Section 4(s) of the Disclosure Schedule describes any
      self-insurance arrangements affecting any CP Entity.

    

    (t)         Litigation.  Section
      4(t) of the Disclosure Schedule sets forth each instance in which any CP Entity
      (i) is subject to any outstanding injunction, judgment, order, decree, ruling,
      or charge or (ii) is a party or is threatened to be made a party to any action,
      suit, proceeding, hearing, or investigation of, in, or before any court or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator.  None of the actions, suits,
      proceedings, hearings, and investigations set forth in Section 4(t) of the
      Disclosure Schedule could result in any material adverse change in the business,
      financial condition, operations, results of operations, or future prospects
      of
      any CP Entity.  None of the Seller and the directors and officers (and
      employees with responsibility for litigation matters) of the CP Entities has
      any
      reason to believe that any such action, suit, proceeding, hearing, or
      investigation may be brought or threatened against any CP Entity.

    

    (u)        Product
      Warranty.  Each product manufactured, sold, leased, or
      delivered by any CP Entity has been in conformity with all applicable
      contractual commitments and all express and implied warranties, and no CP Entity
      has any Liability (and there is no Basis for any present or future action,
      suit,
      proceeding, hearing, investigation, charge, complaint, claim, or demand against
      any of them giving rise to any Liability) for replacement or repair thereof
      or
      other damages in connection therewith, subject only to the reserve for product
      warranty claims set forth on the face of the Most Recent Balance Sheet (rather
      than in any notes thereto) as adjusted for the passage of time through the
      Closing Date in accordance with the past custom and practice of the CP
      Entities.  No product manufactured, sold, leased, or delivered by any
      CP Entity is subject to any guaranty, warranty, or other indemnity beyond the
      applicable standard terms and conditions of sale or lease.  Section
      4(u) of the Disclosure Schedule includes copies of the standard terms and
      conditions of sale or lease for each CP Entity (containing applicable guaranty,
      warranty, and indemnity provisions).

    
       

      
        
          
          

        

        
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    (v)        Product
      Liability.  No CP Entity has any Liability (and there is no
      Basis for any present or future action, suit, proceeding, hearing,
      investigation, charge, complaint, claim, or demand against any of them giving
      rise to any Liability) arising out of any injury to individuals or property
      as a
      result of the ownership, possession, or use of any product manufactured, sold,
      leased, or delivered by any CP Entity.

    (w)       Employees.  To
      the Knowledge of any of the Seller and the directors and officers (and employees
      with responsibility for employment matters) of the CP Entities, no executive,
      key employee, or group of employees has any plans to terminate employment with
      any CP Entity.  No CP Entity is a party to or bound by any collective
      bargaining agreement, nor have any of them experienced any strikes, grievances,
      claims of unfair labor practices, or other collective bargaining
      disputes.  No CP Entity has committed any unfair labor
      practice.  None of the Seller and the directors and officers (and
      employees with responsibility for employment matters) of the CP Entities has
      any
      Knowledge of any organizational effort presently being made or threatened by
      or
      on behalf of any labor union with respect to employees of any CP
      Entity.

    

    (x)        Employee
      Benefits

    

    (i)         Section
      4(x) of the Disclosure Schedule lists each Employee Benefit Plan that any CP
      Entity maintains, to which any CP Entity contributes or has any obligation
      to
      contribute, or with respect to which any CP Entity has any material Liability
      or
      potential Liability.

    

    (A)       Each
      such Employee Benefit Plan (and each related trust, insurance contract, or
      fund)
      has been maintained, funded and administered in accordance with the terms of
      such Employee Benefit Plan and complies in form and in operation in all material
      respects with the applicable requirements of ERISA, the Code, and other
      applicable laws.

    

    (B)       
      All required reports and descriptions (including annual reports (IRS Form 5500),
      summary annual reports, and summary plan descriptions) have been timely filed
      and/or distributed in accordance with the applicable requirements of ERISA
      and
      the Code with respect to each such Employee Benefit Plan. The requirements
      of
      COBRA have been met with respect to each such Employee Benefit Plan which is
      an
      Employee Welfare Benefit Plan subject to COBRA.

    

    (C)       All
      contributions (including all employer contributions and employee salary
      reduction contributions) which are due have been made within the time period
      prescribed by ERISA to each such Employee Benefit Plan which is an Employee
      Pension Benefit Plan and all contributions for any period ending on or before
      the Closing Date which are not yet due have been made to each such Employee
      Pension Benefit Plan or accrued in accordance with the past custom and practice
      of the CP Entities. All premiums or other payments for all periods ending on
      or
      before the Closing Date have been paid with respect to each such Employee
      Benefit Plan which is an Employee Welfare Benefit Plan.

    

    (D)       Each
      such Employee Benefit Plan which is intended to meet the requirements of a
      "qualified plan" under Code §401(a) has received a determination from the
      Internal Revenue Service that such Employee Benefit Plan is so qualified, and
      nothing has occurred since the date of such determination that could adversely
      affect the qualified status of any such Employee Benefit Plan.

    
       

      
        
          
          

        

        
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            18
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    (E)        The
      market value of assets under each such Employee Benefit Plan which is an
      Employee Pension Benefit Plan (other than any Multiemployer Plan) equals or
      exceeds the present value of all vested and nonvested Liabilities thereunder
      determined in accordance with PBGC methods, factors, and assumptions applicable
      to an Employee Pension Benefit Plan terminating on the date for
      determination.

    

    (F)        The
      Seller has delivered to the Buyer correct and complete copies of the plan
      documents and summary plan descriptions, the most recent determination letter
      received from the Internal Revenue Service, the most recent annual report (IRS
      Form 5500, with all applicable attachments), and all related trust agreements,
      insurance contracts, and other funding arrangements which implement each such
      Employee Benefit Plan.

     

    (ii)        With
      respect to each Employee Benefit Plan that any of the CP Entities, their
      Subsidiaries, and any ERISA Affiliate maintains, to which any of them
      contributes or has any obligation to contribute, or with respect to which any
      of
      them has any material Liability or potential Liability:

    

    (A)       No
      such Employee Benefit Plan which is an Employee Pension Benefit Plan (other
      than
      any Multiemployer Plan) has been completely or partially terminated or been
      the
      subject of a Reportable Event. No proceeding by the PBGC to terminate any such
      Employee Pension Benefit Plan (other than any Multiemployer Plan) has been
      instituted or threatened.

    

    (B)       
      There have been no Prohibited Transactions with respect to any such Employee
      Benefit Plan. No Fiduciary has any Liability for breach of fiduciary duty or
      any
      other failure to act or comply in connection with the administration or
      investment of the assets of any such Employee Benefit Plan. No action, suit,
      proceeding, hearing, or investigation with respect to the administration or
      the
      investment of the assets of any such Employee Benefit Plan (other than routine
      claims for benefits) is pending or threatened. None of the Seller and the
      directors and officers (and employees with responsibility for employee benefits
      matters) of the CP Entities has any Knowledge of any Basis for any such action,
      suit, proceeding, hearing, or investigation.

    

    (C)       No
      CP Entity has incurred, and none of the Seller and the directors and officers
      (and employees with responsibility for employee benefits matters) of the CP
      Entities has any reason to expect that any CP Entity will incur, any Liability
      to the PBGC (other than with respect to PBGC premium payments not yet due)
      or
      otherwise under Title IV of ERISA (including any withdrawal liability as defined
      in ERISA §4201) or under the Code with respect to any such Employee Benefit Plan
      which is an Employee Pension Benefit Plan, or under COBRA with respect to any
      such Employee Benefit Plan which is an Employee Welfare Benefit
      Plan.

    

    (iii)        None
      of the CP Entities, their Subsidiaries, and any ERISA Affiliate contributes
      to,
      has any obligation to contribute to, or has any Liability (including withdrawal
      liability as defined in ERISA §4201) under or with respect to any Multiemployer
      Plan.

    

    (iv)        No
      CP Entity maintains, contributes to or has an obligation to contribute to,
      or
      has any material Liability or potential Liability with respect to, any Employee
      Welfare Benefit Plan providing medical, health, or life insurance or other
      welfare-type benefits for current or future retired or terminated employees,
      their spouses, or their dependents (other than in accordance with
      COBRA).

     

    
      
        
        

      

      
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          19
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    (y)        Guaranties.  No
      CP Entity is a guarantor or otherwise is liable for any Liability or obligation
      (including indebtedness) of any other Person.

    

    (z)        Environmental,
      Health, and
      Safety Matters

    

    (i)         Each
      of the CP Entities, their Subsidiaries, and their respective predecessors and
      Affiliates has complied and is in compliance with all Environmental, Health,
      and
      Safety Requirements.

    

    (ii)        Without
      limiting the generality of the foregoing, each of the CP Entities, their
      Subsidiaries and their respective Affiliates has obtained and complied with,
      and
      is in compliance with, all permits, licenses and other authoriza­tions that
      are required pursuant to Environmental, Health, and Safety Requirements for
      the
      occupation of its facilities and the operation of its business; a list of all
      such permits, licenses and other authorizations is set forth on the attached
      "Environmental and
      Safety Permits Schedule."

     

    (iii)       
      Neither the CP Entities, their Subsidiaries, nor their respective predecessors
      or Affiliates has received any written or oral notice, report or other
      information regarding any actual or alleged violation of Environmental, Health,
      and Safety Requirements, or any liabilities or potential liabilities (whether
      accrued, absolute, contingent, unliquidated or otherwise), including any
      investigatory, remedial or corrective obligations, relating to any of them
      or
      its facilities arising under Environmental, Health, and Safety
      Requirements.

    

    (iv)        None
      of the following exists at any property or facility owned or operated by the
      CP
      Entities or their Subsidiaries: (1) underground storage tanks, (2)
      asbestos-containing material in any form or condition, (3) materials or
      equipment containing polychlorinated biphenyls, or (4) landfills, surface
      impoundments, or disposal areas.

    

    (v)         None
      of the CP Entities, their Subsidiaries, or their respective predecessors or
      Affiliates has treated, stored, disposed of, arranged for or permitted the
      disposal of, transported, handled, or released any substance, including without
      limitation any hazardous substance, or owned or operated any property or
      facility (and no such property or facility is contaminated by any such
      substance) in a manner that has given or would give rise to liabilities,
      including any Liability for response costs, corrective action costs, personal
      injury, property damage, natural resources damages or attorney fees, pursuant
      to
      the Comprehensive Environmental Response, Compensation and Liability Act of
      1980, as amended ("CERCLA"), the Solid
      Waste Disposal Act, as amended ("SWDA") or any
      other
      Environmental, Health, and Safety Requirements.

    

    (vi)        Neither
      this Agreement nor the consummation of the transaction that is the subject
      of
      this Agreement will result in any obligations for site investigation or cleanup,
      or notification to or consent of government agencies or third parties, pursuant
      to any of the so-called "transaction-triggered" or "responsible property
      transfer" Environmental, Health, and Safety Requirements.

    

    (vii)       Neither
      the CP Entities, their Subsidiaries, nor any of their respective predecessors
      or
      Affiliates has, either expressly or by operation of law, assumed or undertaken
      any Liability, including without limitation any obligation for corrective or
      remedial action, of any other Person relating to Environmental, Health, and
      Safety Requirements.

    

      
        
          
          

        

        
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            20
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    (viii)      No
      facts, events or conditions relating to the past or present facilities,
      properties or operations of the CP Entities, their Subsidiaries, or any of
      their
      respective predecessors or Affiliates will prevent, hinder or limit continued
      compliance with Environmental, Health, and Safety Requirements, give rise to
      any
      investigatory, remedial or corrective obligations pursuant to Environmental,
      Health, and Safety Requirements, or give rise to any other liabilities (whether
      accrued, absolute, contingent, unliquidated or otherwise) pursuant to
      Environmental, Health, and Safety Requirements, including without limitation
      any
      relating to onsite or offsite releases or threatened releases of hazardous
      materials, substances or wastes, personal injury, property damage or natural
      resources damage.

    

    (aa)      Certain
      Business
      Relationships with the CP Entities and Their
      Subsidiaries.  None of the Seller and his Affiliates has been
      involved in any business arrangement or relationship with any CP Entity within
      the past 12 months, and none of the Seller and his
      Affiliates
      owns any asset, tangible or intangible, which is used in the business of any
      CP
      Entity.

    

    (bb)      Disclosure.  The
      representations and warranties contained in this Section 4 do not contain any
      untrue statement of a material fact or omit to state any material fact necessary
      in order to make the statements and information contained in this Section 4
      not
      misleading.

     

    5.          Pre-Closing
      Covenants.  The Parties agree as follows with respect to the
      period between the execution of this Agreement and the Closing.

    

    (a)        General.  Each
      of the Parties will use his reasonable best efforts to take all action and
      to do
      all things necessary, proper, or advisable in order to consummate and make
      effective the transactions contemplated by this Agreement (including
      satisfaction, but not waiver, of the closing conditions set forth in Section
      7
      below).

    

    (b)        Notices
      and
      Consents.  The Seller will cause each CP Entity to give any
      notices to third parties, and will cause each CP Entity to use its reasonable
      best efforts to obtain any third party consents, that the Buyer reasonably
      may
      request in connection with the matters referred to in Section 4(c)
      above.  Each of the Parties will (and the Seller will cause each CP
      Entity to) give any notices to, make any filings with, and use its reasonable
      best efforts to obtain any authorizations, consents, and approvals of
      governments and governmental agencies in connection with the matters referred
      to
      in Section 3(a)(ii), Section 3(b)(ii), and Section 4(c) above.

    

    (c)        Operation
      of
      Business.  The Seller will not cause or permit any CP Entity to
      engage in any practice, take any action, or enter into any transaction outside
      the Ordinary Course of Business.  Without limiting the generality of
      the foregoing, the Seller will not cause or permit any CP Entity to (i) declare,
      set aside, or pay any dividend or make any distribution with respect to its
      capital stock or redeem, purchase, or otherwise acquire any of its capital
      stock, or (ii) otherwise engage in any practice, take any action, or enter
      into
      any transaction of the sort described in Section 4(h) above.

    

    (d)        Preservation
      of
      Business.  The Seller will cause each CP Entity to keep its
      business and properties substantially intact, including its present operations,
      physical facilities, working conditions, and relationships with lessors,
      licensors, suppliers, customers, and employees.

    

    (e)        Full
      Access.  Seller will permit, and Seller will cause each CP
      Entity to permit, representatives of the Buyer to have full access at all
      reasonable times, and in a manner so as not to interfere with the normal
      business operations the CP Entities, to all premises, properties, personnel,
      books, records (including Tax records), contracts, and documents of or
      pertaining to each CP Entity.

    
       

      
        
          
          

        

        
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    (f)         Notice
      of
      Developments.  The Seller will give prompt written notice to
      the Buyer of any material adverse development causing a breach of any of the
      representations and warranties in Section 4 above.  Each Party will
      give prompt written notice to the others of any material adverse development
      causing a breach of any of his own representations and warranties in Section
      3
      above.  No disclosure by any Party pursuant to this Section 5(f),
      however, shall be deemed to amend or supplement Schedule 3(a), Schedule 3(b),
      or
      the Disclosure Schedule or to prevent or cure any misrepresentation, breach
      of
      warranty, or breach of covenant.

    

    (g)        Exclusivity.  Seller
      will not (and Seller will not cause or permit any CP Entity to) (i) solicit,
      initiate, or encourage the submission of any proposal or offer from any Person
      relating to the acquisition of any capital stock or other voting securities,
      or
      any substantial portion of the assets, of any CP Entity (including any
      acquisition structured as a merger, consolidation, or share exchange) or (ii)
      participate in any discussions or negotiations regarding, furnish any
      information with respect to, assist or participate in, or facilitate in any
      other manner any effort or attempt by any Person to do or seek any of the
      foregoing.  Seller will not vote his Shares in favor of any such
      acquisition structured as a merger, consolidation, or share
      exchange.  The Seller will notify the Buyer immediately if any Person
      makes any proposal, offer, inquiry, or contact with respect to any of the
      foregoing.

     

    6.         Post-Closing
      Covenants.  The Parties agree as follows with respect to the
      period following the Closing.

    

    (a)        General.  In
      case at any time after the Closing any further action is necessary to carry
      out
      the purposes of this Agreement, each of the Parties will take such further
      action (including the execution and delivery of such further instruments and
      documents) as any other Party reasonably may request, all at the sole cost
      and
      expense of the requesting Party (unless the requesting Party is entitled to
      indemnification therefor under Section 8 below).  The Seller
      acknowledges and agrees that from and after the Closing the Buyer will be
      entitled to possession of all documents, books, records (including Tax records),
      agreements, and financial data of any sort relating to the CP
      Entities.

    

    (b)        Litigation
      Support.  In the event and for so long as any Party actively is
      contesting or defending against any action, suit, proceeding, hearing,
      investigation, charge, complaint, claim, or demand in connection with (i) any
      transaction contemplated under this Agreement or (ii) any fact, situation,
      circumstance, status, condition, activity, practice, plan, occurrence, event,
      incident, action, failure to act, or transaction on or prior to the Closing
      Date
      involving any CP Entity, each of the other Parties will cooperate with him
      or it
      and his counsel in the contest or defense, make available their personnel,
      and
      provide such testimony and access to their books and records as shall be
      necessary in connection with the contest or defense, all at the sole cost and
      expense of the contesting or defending Party (unless the contesting or defending
      Party is entitled to indemnification therefor under Section 8
      below).

    

    (c)        Transition.  Seller
      will not take any action that is designed or intended to have the effect of
      discouraging any lessor, licensor, customer, supplier, or other business
      associate of any CP Entity from maintaining the same business relationships
      with
      the CP Entities after the Closing as it maintained with the CP Entities prior
      to
      the Closing.

    

    (d)        Confidentiality.  Seller
      will treat and hold as such all of the Confidential Information, refrain from
      using any of the Confidential Information except in connection with this
      Agreement, and deliver promptly to the Buyer or destroy, at the request and
      option of the Buyer, all tangible embodiments (and all copies) of the
      Confidential Information which are in his possession.  In the event
      that 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, that Seller will notify the Buyer promptly of the request or
      requirement so that the Buyer may seek an appropriate protective order or waive
      compliance with the provisions of this Section 6(d).  If, in the
      absence of a protective order or the receipt of a waiver hereunder, Seller
      is,
      on the advice of counsel, compelled to disclose any Confidential Information
      to
      any tribunal or else stand liable for contempt, that Seller may disclose the
      Confidential Information to the tribunal; provided, however,
      that the disclosing Seller shall use his reasonable best efforts to obtain,
      at
      the reasonable request of the Buyer, an order or other assurance that
      confidential treatment will be accorded to such portion of the Confidential
      Information required to be disclosed as the Buyer shall
      designate.  The foregoing provisions shall not apply to any
      Confidential Information which is generally available to the public immediately
      prior to the time of disclosure.

    
      

      
        
          
          

        

        
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    (e)        Covenant
      Not to
      Compete.  For a period of five years from and after the closing
      of the sale of the Remaining Shares under either the Buyer’s Option or the
      Seller’s Option under Section 2, above, Seller will not engage directly or
      indirectly in any business that any CP Entity conducts as of the Closing Date
      in
      any geographic area in which any CP Entity conducts that business as of the
      Closing Date; provided, however,
      that no owner of less than 1% of the outstanding stock of any publicly-traded
      corporation shall be deemed to engage solely by reason thereof in any of its
      businesses.  If the final judgment of a court of competent
      jurisdiction declares that any term or provision of this Section 6(e) 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 within
      which the judgment may be appealed.

     

    (f)         Operation
      of
      Business.  Seller will not cause or permit the CP Entities to
      engage in any practice, take any action, or enter into any transaction outside
      the Ordinary Course of Business.  Without limiting the generality of
      the foregoing, Seller will not cause or permit the CP Entities or any Subsidiary
      of the CP Entities to (i) declare, set aside, or pay any dividend or make any
      distribution with respect to its capital stock or redeem, purchase, or otherwise
      acquire any of its capital stock, (ii) offer or sell any equity or debt
      securities for cash or other consideration, or (iii) otherwise engage in any
      practice, take any action, or enter into any transaction of the sort described
      in Section 4(h) above without the prior written consent of
      Buyer.  Following the Closing, the number of members of board of
      directors of the CP Entities will be adjusted to five, of which Buyer shall
      appoint three and Seller shall appoint two directors. Following the Closing,
      Buyer shall cause the CP Entities to remain current and in good standing under
      all loan and other agreements underlying the Seller Guarantees until those
      obligations have been paid in full or the requisite releases obtained as
      provided in Section 2(e)(iii) above.

    

    7.         
      Conditions to
      Obligation to Close.

    

    (a)        
      Conditions to
      Obligation of the Buyer.  The obligation of the Buyer to
      consummate the transactions to be performed by it in connection with the Closing
      is subject to satisfaction of the following conditions:

    

    (i)         The
      representations and warranties set forth in Section 3(a) and Section 4 above
      shall be true and correct in all material respects at and as of the Closing
      Date;

    

      
        
          
          

        

        
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    (ii)         The
      Seller shall have performed and complied with all of their covenants hereunder
      in all material respects through the Closing;

    

    (iii)        the
      CP Entities shall have procured all of the third party consents specified in
      Section 5(b) above;

    

    (iv)        No
      action, suit, or proceeding shall be pending or threatened before any court
      or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator wherein an unfavorable injunction,
      judgment, order, decree, ruling, or charge would (A) prevent consummation of
      any
      of the transactions contemplated by this Agreement, (B) cause any of the
      transactions contemplated by this Agreement to be rescinded following
      consummation, (C) affect adversely the right of the Buyer to own Shares and
      to
      control the CP Entities, or (D) affect adversely the right of any CP Entity
      to
      own its assets and to operate its businesses (and no such injunction, judgment,
      order, decree, ruling, or charge shall be in effect);

    

    (v)         The
      Seller shall have delivered to the Buyer a certificate to the effect that each
      of the conditions specified above in Section 7(a)(i)-(iv) is satisfied in all
      respects;

    

    (vi)        The
      Buyer shall have received from counsel to the Seller an opinion in form and
      substance as set forth in Exhibit B attached hereto, addressed to the Buyer,
      and
      dated as of the Closing Date;

    

    (vii)       All
      actions to be taken by the Seller in connection with consummation of the
      transactions contemplated hereby and all certificates, opinions, instruments,
      and other documents required to effect the transactions contemplated hereby
      will
      be reasonably satisfactory in form and substance to the Buyer.

    

    The
      Buyer
      may waive any condition specified in this Section 7(a) if it executes a writing
      so stating at or prior to the Closing.

    

    (b)        Conditions
      to Obligation of
      the Seller.  The obligation of the Seller to consummate the
      transactions to be performed by them in connection with the Closing is subject
      to satisfaction of the following conditions:

    

    (i)         The
      representations and warranties set forth in Section 3(b) above shall be true
      and
      correct in all material respects at and as of the Closing Date;

    

    (ii)        
      The Buyer shall have performed and complied with all of its covenants hereunder
      in all material respects through the Closing;

    

    (iii)        No
      action, suit, or proceeding shall be pending or threatened before any court
      or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator wherein an unfavorable injunction,
      judgment, order, decree, ruling, or charge would (A) prevent consummation of
      any
      of the transactions contemplated by this Agreement or (B) cause any of the
      transactions contemplated by this Agreement to be rescinded following
      consummation (and no such injunction, judgment, order, decree, ruling, or charge
      shall be in effect);

    

    (iv)        The
      Buyer shall have delivered to the Seller a certificate to the effect that each
      of the conditions specified above in Section 7(b)(i)-(iii) is satisfied in
      all
      respects;

     

     

    
      
         

      

      
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    (v)        
      The Seller shall have received from counsel to the Buyer an opinion in form
      and
      substance as set forth in Exhibit C attached hereto, addressed to the Seller,
      and dated as of the Closing Date; and

    

    (vi)        All
      actions to be taken by the Buyer in connection with consummation of the
      transactions contemplated hereby and all certificates, opinions, instruments,
      and other documents required to effect the transactions contemplated hereby
      will
      be reasonably satisfactory in form and substance to the Seller.

    

    The
      Seller may waive any condition specified in this Section 7(b) if he executes
      a
      writing so stating at or prior to the Closing.

    

    8.         Remedies
      for Breaches of
      This Agreement.

    

    (a)        Survival
      of Representations
      and Warranties.  All of the representations and warranties of
      the Parties contained in this Agreement shall survive the Closing hereunder
      (even if the damaged Party knew or had reason to know of any misrepresentation
      or breach of warranty or covenant at the time of Closing) and continue in full
      force and effect forever thereafter (subject to any applicable statutes of
      limitations).

    

    (b)        Indemnification
      Provisions
      for Benefit of the Buyer.

    

    (i)         In
      the event Seller breaches (or in the event any third party alleges facts that,
      if true, would mean the Seller has breached) any of his representations,
      warranties, and covenants contained herein (other than the covenants in Section
      2(a) above and the representations and warranties in Section 3(a) above), and,
      if there is an applicable survival period pursuant to Section 8(a) above,
      provided that the Buyer makes a written claim for indemnification against the
      Seller pursuant to Section 11(g) below within such survival period, then the
      Seller agrees to indemnify the Buyer from and against the entirety of any
      Adverse Consequences the Buyer may suffer through and after the date of the
      claim for indemnification (including any Adverse Consequences the Buyer may
      suffer after the end of any applicable survival period) resulting from, arising
      out of, relating to, in the nature of, or caused by the breach (or the alleged
      breach).

     

    (ii)         In
      the event Seller breaches (or in the event any third party alleges facts that,
      if true, would mean the Seller has breached) any of his covenants in Section
      2(a) above or any of his representations and warranties in Section 3(a) above,
      and, if there is an applicable survival period pursuant to Section 8(a) above,
      provided that the Buyer makes a written claim for indemnification against the
      Seller pursuant to Section 11(g) below within such survival period, then the
      Seller agrees to indemnify the Buyer from and against the entirety of any
      Adverse Consequences the Buyer may suffer through and after the date of the
      claim for indemnification (including any Adverse Consequences the Buyer may
      suffer after the end of any applicable survival period) resulting from, arising
      out of, relating to, in the nature of, or caused by the breach (or the alleged
      breach).

    

    (iii)        Seller
      agrees to indemnify the Buyer from and against the entirety of any Adverse
      Consequences the Buyer may suffer resulting from, arising out of, relating
      to,
      in the nature of, or caused by any Liability of any CP Entity (x) for any Taxes
      of the CP Entities with respect to any Tax year or portion thereof ending on
      or
      before the Closing Date (or for any Tax year beginning before and ending after
      the Closing Date to the extent allocable (determined in a manner consistent
      with
      Section 9(c)) to the portion of such period beginning before and ending on
      the
      Closing Date), to the extent such Taxes are not reflected in the reserve for
      Tax
      Liability (rather than any reserve for deferred Taxes established to reflect
      timing differences between book and Tax income) shown on the face of the Closing
      Balance Sheet, and (y) for the unpaid Taxes of any Person (other than any CP
      Entity) under Reg. §1.1502-6 (or any similar provision of state, local, or
      foreign law), as a transferee or successor, by contract, or
      otherwise.

    
      

      
        
          
          

        

        
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            25
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    (iv)           Seller
      agrees to indemnify the Buyer from and against the entirety of any Adverse
      Consequences the Buyer may suffer resulting from, arising out of, relating
      to,
      in the nature of, or caused by Seller’s conduct of the business of the CP
      Entities both before and after the Closing.

    

    (c)        Indemnification
      Provisions
      for Benefit of the Seller.  In the event the Buyer breaches (or
      in the event any third party alleges facts that, if true, would mean the Buyer
      has breached) any of its representations, warranties, and covenants contained
      herein, and, if there is an applicable survival period pursuant to Section
      8(a)
      above, provided that Seller makes a written claim for indemnification against
      the Buyer pursuant to Section 11(g) below within such survival period, then
      the
      Buyer agrees to indemnify Seller from and against the entirety of any Adverse
      Consequences the Seller may suffer through and after the date of the claim
      for
      indemnification (including any Adverse Consequences the Seller may suffer after
      the end of any applicable survival period) resulting from, arising out of,
      relating to, in the nature of, or caused by the breach (or the alleged
      breach).

    

    (d)        Matters
      Involving Third
      Parties.

    

    (i)         If
      any third party shall notify any Party (the "Indemnified Party")
      with respect to any matter (a "Third Party Claim")
      which may give rise to a claim for indemnification against any other Party
      (the
      "Indemnifying
      Party") under this Section 8, then the Indemnified Party shall promptly
      notify each Indemnifying Party thereof in writing; provided, however,
      that no delay on the part of the Indemnified Party in notifying any Indemnifying
      Party shall relieve the Indemnifying Party from any obligation hereunder unless
      (and then solely to the extent) the Indemnifying Party thereby is
      prejudiced.

     

    (ii)         Any
      Indemnifying Party will have the right to defend the Indemnified Party against
      the Third Party Claim with counsel of its choice reasonably satisfactory to the
      Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified
      Party in writing within 15 days after the Indemnified Party has given notice
      of
      the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
      Party from and against the entirety of any Adverse Consequences the Indemnified
      Party may suffer resulting from, arising out of, relating to, in the nature
      of,
      or caused by the Third Party Claim, (B) the Indemnifying Party provides the
      Indemnified Party with evidence reasonably acceptable to the Indemnified Party
      that the Indemnifying Party will have the financial resources to defend against
      the Third Party Claim and fulfill its indemnification obligations hereunder,
      (C)
      the Third Party Claim involves only money damages and does not seek an
      injunction or other equitable relief, (D) settlement of, or an adverse judgment
      with respect to, the Third Party Claim is not, in the good faith judgment of
      the
      Indemnified Party, likely to establish a precedential custom or practice
      materially adverse to the continuing business interests of the Indemnified
      Party, and (E) the Indemnifying Party conducts the defense of the Third Party
      Claim actively and diligently.

    

    (iii)        So
      long as the Indemnifying Party is conducting the defense of the Third Party
      Claim in accordance with Section 8(d)(ii) above, (A) the Indemnified Party
      may
      retain separate co-counsel at its sole cost and expense and participate in
      the
      defense of the Third Party Claim, (B) the Indemnified Party will not 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 Indemnifying Party (not
      to
      be withheld unreasonably), and (C) the Indemnifying Party will not 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 Indemnified Party (not
      to
      be withheld unreasonably).

    

      
        
          
          

        

        
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    (iv)        In
      the event any of the conditions in Section 8(d)(ii) above is or becomes
      unsatisfied, however, (A) the Indemnified Party may defend against, and consent
      to the entry of any judgment or enter into any settlement with respect to,
      the
      Third Party Claim in any manner it reasonably may deem appropriate (and the
      Indemnified Party need not consult with, or obtain any consent from, any
      Indemnifying Party in connection therewith), (B) the Indemnifying Parties will
      reimburse the Indemnified Party promptly and periodically for the costs of
      defending against the Third Party Claim (including reasonable attorneys' fees
      and expenses), and (C) the Indemnifying Parties will remain responsible for
      any
      Adverse Consequences the Indemnified Party may suffer resulting from, arising
      out of, relating to, in the nature of, or caused by the Third Party Claim to
      the
      fullest extent provided in this Section 8.

    

    (e)        Determination
      of Adverse
      Consequences.  All indemnification payments under this Section
      8 shall be deemed adjustments to the Purchase Price.

    

    (f)         Other
      Indemnification
      Provisions.  The foregoing indemnification provisions are in
      addition to, and not in derogation of, any statutory, equitable, or common
      law
      remedy (including without limitation any such remedy arising under
      Environmental, Health, and Safety Requirements) any Party may have with respect
      to the CP Entities, their Subsidiaries, or the transactions contemplated by
      this
      Agreement.  Seller hereby agrees that he will not make any claim for
      indemnification against any CP Entity by reason of the fact that het was a
      director, officer, employee, or agent of any such entity or was serving at
      the
      request of any such entity as a partner, trustee, director, officer, employee,
      or agent of another entity (whether such claim is for judgments, damages,
      penalties, fines, costs, amounts paid in settlement, losses, expenses, or
      otherwise and whether such claim is pursuant to any statute, charter document,
      bylaw, agreement, or otherwise) with respect to any action, suit, proceeding,
      complaint, claim, or demand brought by the Buyer against such Seller (whether
      such action, suit, proceeding, complaint, claim, or demand is pursuant to this
      Agreement, applicable law, or otherwise).

     

    9.          Tax
      Matters.  The following provisions shall govern the allocation
      of responsibility as between Buyer and Seller for certain tax matters following
      the Closing Date:

    

    (a)         Tax
      Periods Ending on or
      Before the Closing Date.  Buyer shall prepare or cause to be
      prepared and file or cause to be filed all Tax Returns for the CP Entities
      for
      all periods ending on or prior to the Closing Date which are filed after the
      Closing Date.  Buyer shall permit the CP Entities to review and
      comment on each such Tax Return described in the preceding sentence prior to
      filing.  Seller shall reimburse Buyer for Taxes of the CP Entities
      with respect to such periods within fifteen (15) days after payment by Buyer
      or
      the CP Entities of such Taxes to the extent such Taxes are not reflected in
      the
      reserve for Tax Liability (rather than any reserve for deferred Taxes
      established to reflect timing differences between book and Tax income) shown
      on
      the face of the Closing Balance Sheet.

    

    (b)         Tax
      Periods Beginning Before
      and Ending After the Closing Date.  Buyer shall prepare or
      cause to be prepared and file or cause to be filed any Tax Returns of the CP
      Entities for Tax periods which begin before the Closing Date and end after
      the
      Closing Date.  Seller shall pay to Buyer within fifteen (15) days
      after the date on which Taxes are paid with respect to such periods an amount
      equal to the portion of such Taxes which relates to the portion of such Taxable
      period ending on the Closing Date to the extent such Taxes are not reflected
      in
      the reserve for Tax Liability (rather than any reserve for deferred Taxes
      established to reflect timing differences between book and Tax income) shown
      on
      the face of the Closing Balance Sheet.  For purposes of this Section,
      in the case of any Taxes that are imposed on a periodic basis and are payable
      for a Taxable period that includes (but does not end on) the Closing Date,
      the
      portion of such Tax which relates to the portion of such Taxable period ending
      on the Closing Date shall (x) in the case of any Taxes other than Taxes based
      upon or related to income or receipts, be deemed to be the amount of such Tax
      for the entire Taxable period multiplied by a fraction the numerator of which
      is
      the number of days in the Taxable period ending on the Closing Date and the
      denominator of which is the number of days in the entire Taxable period, and
      (y)
      in the case of any Tax based upon or related to income or receipts be deemed
      equal to the amount which would be payable if the relevant Taxable period ended
      on the Closing Date.  Any credits relating to a Taxable period that
      begins before and ends after the Closing Date shall be taken into account as
      though the relevant Taxable period ended on the Closing Date.  All
      determinations necessary to give effect to the foregoing allocations shall
      be
      made in a manner consistent with prior practice of the CP Entities.

    

      
        
          
          

        

        
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    (c)         Cooperation
      on Tax
      Matters.

    

    (i)         Buyer,
      the CP Entities and Seller shall cooperate fully, as and to the extent
      reasonably requested by the other party, in connection with the filing of Tax
      Returns pursuant to this Section and any audit, litigation or other proceeding
      with respect to Taxes. Such cooperation shall include the retention and (upon
      the other party's request) the provision of records and information which are
      reasonably relevant to any such audit, litigation or other proceeding and making
      employees available on a mutually convenient basis to provide additional
      information and explanation of any material provided hereunder. the CP Entities
      and Seller agree (A) to retain all books and records with respect to Tax matters
      pertinent to the CP Entities relating to any taxable period beginning before
      the
      Closing Date until the expiration of the statute of limitations (and, to the
      extent notified by Buyer or Seller, any extensions thereof) of the respective
      taxable periods, and to abide by all record retention agreements entered into
      with any taxing authority, and (B) to give the other party reasonable written
      notice prior to transferring, destroying or discarding any such books and
      records and, if the other party so requests, the CP Entities or Seller, as
      the
      case may be, shall allow the other party to take possession of such books and
      records.

    

    (ii)         Buyer
      and Seller further agree, upon request, to use their best efforts to obtain
      any
      certificate or other document from any governmental authority or any other
      Person as may be necessary to mitigate, reduce or eliminate any Tax that could
      be imposed (including, but not limited to, with respect to the transactions
      contemplated hereby).

     

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

    

    (d)        Tax
      Sharing
      Agreements.  All tax sharing agreements or similar agreements
      with respect to or involving the CP Entities shall be terminated as of the
      Closing Date and, after the Closing Date, the CP Entities shall not be bound
      thereby or have any Liability thereunder.

    

    (e)        Certain
      Taxes.  All transfer, documentary, sales, use, stamp,
      registration and other such Taxes and fees (including any penalties and
      interest) incurred in connection with this Agreement, shall be paid by Seller
      when due, and Seller will, at his own expense, file all necessary Tax Returns
      and other documentation with respect to all such transfer, documentary, sales,
      use, stamp, registration and other Taxes and fees, and, if required by
      applicable law, Buyer will, and will cause its affiliates to, join in the
      execution of any such Tax Returns and other documentation.

    
      

      
        
          
          

        

        
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    10.       
      Termination.

    

    (a)         Termination
      of
      Agreement.  Certain of the Parties may terminate this Agreement
      as provided below:

    

    (i)         The
      Buyer and the Seller may terminate this Agreement by mutual written consent
      at
      any time prior to the Closing;

    

    (ii)         The
      Buyer may terminate this Agreement by giving written notice to the Seller on
      or
      before the 30th day following the date of this Agreement if the Buyer is not
      reasonably satisfied with the results of its continuing business, legal,
      environmental, and accounting due diligence regarding the CP
      Entities;

    

    (iii)        The
      Buyer may terminate this Agreement by giving written notice to the Seller at
      any
      time prior to the Closing (A) in the event the Seller has breached any material
      representation, warranty, or covenant contained in this Agreement in any
      material respect, the Buyer has notified the Seller of the breach, and the
      breach has continued without cure for a period of 15 days after the notice
      of
      breach or (B) if the Closing shall not have occurred on or before January 20,
      2008, by reason of the failure of any condition precedent under Section 7(a)
      hereof unless the failure results primarily from the Buyer itself breaching
      any
      representation, warranty, or covenant contained in this Agreement);
      and

    

    (iv)        The
      Seller may terminate this Agreement by giving written notice to the Buyer at
      any
      time prior to the Closing (A) in the event the Buyer has breached any material
      representation, warranty, or covenant contained in this Agreement in any
      material respect, Seller has notified the Buyer of the breach, and the breach
      has continued without cure for a period of 15 days after the notice of breach
      or
      (B) if the Closing shall not have occurred on or before January 20, 2008, by
      reason of the failure of any condition precedent under Section 7(b) hereof
      (unless the failure results primarily from Seller themselves breaching any
      representation, warranty, or covenant contained in this Agreement).

    

    (b)        Effect
      of
      Termination.  If any Party terminates this Agreement pursuant
      to Section 10(a) above, all rights and obligations of the Parties hereunder
      shall terminate without any Liability of any Party to any other Party (except
      for any Liability of any Party then in breach).

     

    11.        Miscellaneous.
      

    (a)        Press
      Releases and Public
      Announcements.  No Party shall issue any press release or make
      any public announcement relating to the subject matter of this Agreement prior
      to the Closing without the prior written approval of the Buyer and the Seller;
      provided,
      however, that any Party may make any public disclosure it believes in
      good faith is required by applicable law or any listing or trading agreement
      concerning its publicly-traded securities (in which case the disclosing Party
      will use its reasonable best efforts to advise the other Parties prior to making
      the disclosure).

    

    (b)        No
      Third-Party
      Beneficiaries.  This Agreement shall not confer any rights or
      remedies upon any Person other than the Parties and their respective successors
      and permitted assigns.

    

    (c)        Entire
      Agreement.  This Agreement (including the documents referred to
      herein) constitutes the entire agreement among the Parties and supersedes any
      prior understandings, agreements, or representations by or among the Parties,
      written or oral, to the extent they related in any way to the subject matter
      hereof.

     

    

      
        
          
          

        

        
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    (d)        Succession
      and
      Assignment.  This Agreement shall be binding upon and inure to
      the benefit of the Parties named herein and their respective successors and
      permitted assigns.  No Party may assign either this Agreement or any
      of his or its rights, interests, or obligations hereunder without the prior
      written approval of the Buyer and the Seller; provided, however,
      that the Buyer may (i) assign any or all of its rights and interests hereunder
      to one or more of its Affiliates and (ii) designate one or more of its
      Affiliates to perform its obligations hereunder (in any or all of which cases
      the Buyer nonetheless shall remain responsible for the performance of all of
      its
      obligations hereunder).

    

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

    

    (f)         Headings.  The
      section headings contained in this Agreement are inserted for convenience only
      and shall not affect in any way the meaning or interpretation of this
      Agreement.

    

    (g)        Notices.  All
      notices, requests, demands, claims, and other communications hereunder will
      be
      in writing.  Any notice, request, demand, claim, or other
      communication hereunder shall be deemed duly given if (and then two business
      days after) it is sent by registered or certified mail, return receipt
      requested, postage prepaid, and addressed to the intended recipient as set
      forth
      below:

    

    
      	 	
              If
                to the Seller:

            	 
	 	 	 
	 	 	
              David
                M. Rothbart

            
	 	 	
              c/o
                Court Programs

            
	 	 	
              4122
                123rd
                Trail N.

            
	 	 	
              West
                Palm Beach, FL 33411-8927

            
	 	 	 
	 	
              Copy
                to:

            	 
	 	 	
              n/a

            
	 	 	
              __________________________

            
	 	 	
              __________________________

            
	 	 	 
	 	
              If
                to the Buyer:

            	 
	 	 	 
	 	 	
              RemoteMDx,
                Inc.

            
	 	 	
              150
                West Civic Center Drive

            
	 	 	
              Suite
                400

            
	 	 	
              Sandy,
                Utah  84070

            
	 	 	 
	 	
              Copy
                to:

            	 
	 	 	
              Durham
                Jones & Pinegar, PC

            
	 	 	
              Attn:
                Kevin R. Pinegar, Esq.

            
	 	 	
              111
                East Broadway, Suite 900

            
	 	 	
              Salt
                Lake City, Utah 84111

            

    

    

    
      
        
        

      

      
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    Any
      Party
      may send any notice, request, demand, claim, or other communication hereunder
      to
      the intended recipient at the address set forth above using any other means
      (including personal delivery, expedited courier, messenger service, telecopy,
      telex, ordinary mail, or electronic mail), but no such notice, request, demand,
      claim, or other communication shall be deemed to have been duly given unless
      and
      until it actually is received by the intended recipient.  Any Party
      may change the address to which notices, requests, demands, claims, and other
      communications hereunder are to be delivered by giving the other Parties notice
      in the manner herein set forth.

    

    (h)        Governing
      Law.  This Agreement shall be governed by and construed in
      accordance with the domestic laws of the State of Utah without giving effect
      to
      any choice or conflict of law provision or rule (whether of the State of Utah
      or
      any other jurisdiction) that would cause the application of the laws of any
      jurisdiction other than the State of Utah.

    

    (i)         Amendments
      and
      Waivers.  No amendment of any provision of this Agreement shall
      be valid unless the same shall be in writing and signed by the Buyer and the
      Seller.  No waiver by any Party of any default, misrepresentation, or
      breach of warranty or covenant hereunder, whether intentional or not, shall
      be
      deemed to extend to any prior or subsequent default, misrepresentation, or
      breach of warranty or covenant hereunder or affect in any way any rights arising
      by virtue of any prior or subsequent such occurrence.

    

    (j)         Severability.  Any
      term or provision of this Agreement that is invalid or unenforceable in any
      situation in any jurisdiction shall not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction.

    

    (k)        Expenses.  Each
      of the Parties, the CP Entities, and their Subsidiaries will bear his or its
      own
      costs and expenses (including legal fees and expenses) incurred in connection
      with this Agreement and the transactions contemplated hereby.  The
      Seller agrees that no CP Entity has borne or will bear any of the Seller’s costs
      and expenses (including any of his legal fees and expenses) in connection with
      this Agreement or any of the transactions contemplated hereby.

    

    (l)         Construction.  The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement.  In the event an ambiguity or question of intent or
      interpretation arises, this Agreement shall be construed as if drafted jointly
      by the Parties and no presumption or burden of proof shall arise favoring or
      disfavoring any Party by virtue of the authorship of any of the provisions
      of
      this Agreement. Any reference to any federal, state, local, or foreign statute
      or law shall be deemed also to refer to all rules and regulations promulgated
      thereunder, unless the context requires otherwise.  The word
      "including" shall mean including without limitation.  The Parties
      intend that each representation, warranty, and covenant contained herein shall
      have independent significance.  If any Party has breached any
      representation, warranty, or covenant contained herein in any respect, the
      fact
      that there exists another representation, warranty, or covenant relating to
      the
      same subject matter (regardless of the relative levels of specificity) which
      the
      Party has not breached shall not detract from or mitigate the fact that the
      Party is in breach of the first representation, warranty, or
      covenant.

    

    (m)       Incorporation
      of Exhibits,
      Annexes, and Schedules.  The Exhibits, Annexes, and Schedules
      identified in this Agreement are incorporated herein by reference and made
      a
      part hereof.

     

    (n)        Specific
      Performance.  Each of the Parties acknowledges and agrees that
      the other Parties would be damaged irreparably in the event any of the
      provisions of this Agreement are not performed in accordance with their specific
      terms or otherwise are breached.  Accordingly, each of the Parties
      agrees that the other Parties shall be entitled to an injunction or injunctions
      to prevent breaches of the provisions of this Agreement and to enforce
      specifically this Agreement and the terms and provisions hereof in any action
      instituted in any court of the United States or any state thereof having
      jurisdiction over the Parties and the matter, in addition to any other remedy
      to
      which they may be entitled, at law or in equity.

     

    

      
        
          
          

        

        
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    (o)        Submission
      to
      Jurisdiction.  Each of the Parties submits to the jurisdiction
      of any state or federal court sitting in Salt Lake City, Utah, in any action
      or
      proceeding arising out of or relating to this Agreement and agrees that all
      claims in respect of the action or proceeding may be heard and determined in
      any
      such court.  Each of the Parties waives any defense of inconvenient
      forum to the maintenance of any action or proceeding so brought and waives
      any
      bond, surety, or other security that might be required of any other Party with
      respect thereto.  Nothing in this Section 10(o), however, shall affect
      the right of any Party to bring any action or proceeding arising out of or
      relating to this Agreement in any other court or to serve legal process in
      any
      other manner permitted by law or at equity.  Each Party agrees that a
      final judgment in any action or proceeding so brought shall be conclusive and
      may be enforced by suit on the judgment or in any other manner provided by
      law
      or at equity.

    

    *****

    

    [Signatures
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          32
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    IN
      WITNESS WHEREOF, the Parties hereto have executed this Agreement on December
      21,
      2007, effective December 1, 2007.

    

    REMOTEMDX,
      INC.

    

    

    By:          Michael
      G.
      Acton           

    Title:       Chief
      Financial Officer

    

    

    David
      M.
      Rothbart                        

    David
      M.
      Rothbart, (an individual)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    - 31 -Exhibit 10.1

 

OVERSTOCK.COM, INC.

RESTRICTED STOCK UNIT GRANT NOTICE

(2005 Equity Incentive Plan)

 

Overstock.com, Inc.
(the “Company”), pursuant to its 2005 Equity Incentive Plan (the “Plan”),
hereby grants to the participant under the Plan (the “Participant”) restricted
stock units (“RSUs”) constituting the right to purchase the number of shares of
the Company’s common stock (the “Common Stock”) set forth below (the “Award”).
This Award is subject to all of the terms and conditions as set forth in this
Restricted Stock Unit Grant Notice (the “Grant Notice”), the Restricted Stock
Unit Agreement attached hereto and the Plan, a copy of which has previously
been furnished to the Participant, all of which are incorporated herein in
their entirety.

 

	
  Participant:

  	
   

  	
  [Name]

  	
   

  
	
  Date of Grant:

  	
   

  	
  [Date]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares Subject to Award:

  	
   

  	
  [Number of Shares]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Purchase Price per Share:

  	
   

  	
  $0.0001

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Purchase Price:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  [Participant will vest in [vest percentage] of the RSUs awarded by
  this Agreement at the close of business on [date or dates], subject to the
  provisions of the Restricted Stock Unit Agreement attached hereto and the
  Plan.]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Payment:

  	
   

  	
  As described in the Restricted Stock Unit Agreement, the par value
  for the shares must be paid in cash, by check or as consideration for past
  services to the Company.

  	
   

  

 

Additional
Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands
and agrees to the terms and conditions of this Grant Notice, the Restricted
Stock Unit Agreement and the Plan, and agrees that his or her signature of this
Grant Notice shall also be deemed his or her signature of the attached
Restricted Stock Unit Agreement. 
Participant further acknowledges that as of the Date of Grant, this
Grant Notice, the Restricted Stock Unit Agreement and the Plan set forth the
entire understanding between Participant and the Company regarding the matters
addressed herein and therein and supersede all prior oral and written
agreements relating thereto, with the exception of any other awards previously
granted and delivered to Participant under the Plan.

 

 

	
  Overstock.com, Inc.

  	
   

  	
  Participant:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

OVERSTOCK.COM, INC.

RESTRICTED STOCK UNIT AGREEMENT

(2005 Equity Incentive Plan)

 

1. Grant. The
Company hereby grants to the Participant named in the Restricted Stock Unit
Grant Notice attached hereto an award of Restricted Stock Units (“RSUs”), as
set forth in the Restricted Stock Unit Grant Notice and subject to the terms
and conditions in this Agreement and the Company’s 2005 Equity Incentive Plan
(the “Plan”). When the Shares are issued pursuant to RSUs which vest in
accordance with the terms hereof, the par value per Share will be deemed paid
by the Participant as a result of services rendered by the Participant prior to
the applicable vesting date.  Terms used
but not defined herein have the meanings given them in the Plan.

 

2. Company’s
Obligation. Each RSU represents the right to receive one Share on the
vesting date of that RSU. Unless and until the RSUs vest, the Participant will
have no right to receive any Shares under such RSUs. Prior to actual
distribution of Shares pursuant to any vested RSUs, such RSUs will represent an
unsecured obligation of the Company, payable (if at all) only from the general
assets of the Company.

 

3. Vesting Schedule.
Subject to paragraph 4, the Participant will vest in the RSUs awarded by this
Agreement according to the vesting schedule specified in the Restricted Stock
Unit Grant Notice. Accordingly, such vesting may be tied to the attainment of
established Performance Goals and/or the completion of a specified period of
Service Provider status.

 

4. Administrator Discretion.
The Administrator, in its discretion, may accelerate the vesting of any or all
of the RSUs at any time, subject to the terms of the Plan. If so accelerated,
such RSUs will be considered as having vested as of the date specified by the
Administrator. If the Administrator, in its discretion, accelerates the vesting
of any or all of the RSUs, the Shares underlying those accelerated RSUs shall
nevertheless be issued at the same time or times as if such RSUs had vested in
accordance with the vesting schedule set forth in the Restricted Stock Unit
Grant Notice (whether or not the Participant remains in Service Provider status
as of such date(s)). Accordingly, there shall be no acceleration of the
issuance date of the Shares underlying the RSUs for which vesting is
accelerated pursuant to this paragraph 4.

 

5. Forfeiture upon
Termination as Service Provider. Notwithstanding any contrary provision of
this Agreement or the Restricted Stock Unit Grant Notice, if the status of the
Participant as a Service Provider is terminated for any reason or no reason
prior to vesting, the unvested RSUs awarded by this Agreement will thereupon
terminate and be forfeited at no cost to the Company and without any payment
(in Shares, cash or otherwise) to the Participant.

 

6. Payment upon
Vesting. Any RSUs that vest in accordance with paragraph 3 will be paid to
the Participant (or in the event of the Participant’s death, to his or her
estate or designated beneficiaries) in Shares on the date those RSUs vest in
accordance with the vesting schedule set forth in the Restricted Stock Unit
Grant Notice or as soon thereafter as practicable, subject to the tax
withholding provisions of paragraph 8. Any RSUs that vest in accordance with
paragraph 4 will be paid in Shares to the Participant (or in the event of the
Participant’s death, to his or her estate or designated beneficiaries) in
accordance with the provisions of such paragraph, subject to tax withholding
provisions of paragraph 8. In the event of any accelerated vesting of the RSUs
pursuant to the provisions of Section 16(c)(ii) of the Plan, the
Shares underlying those accelerated RSUs shall be issued on the accelerated
vesting date or as soon thereafter as administratively practicable, subject to
the tax withholding provisions of paragraph 8. For each RSU that vests, the
Participant will receive one Share. In no event shall the Shares be issued
later than the later of (i) the close of the calendar year in which the
Shares vest or (for vesting-accelerated RSUs under paragraph 4) would have
vested in the 

 

 

absence of such
acceleration or (ii) the fifteenth (15th) day of the third (3rd) calendar
month following such actual or deemed vesting date.  Notwithstanding anything herein to the
contrary, the Participant shall not be permitted, directly or indirectly, to
designate the taxable year in which the Shares shall be issued.

 

7. Payments after
Death. Any distribution or delivery of Shares to be made to the Participant
in accordance with the provisions of this Agreement will, if the Participant is
then deceased, be made to the administrator or executor of the Participant’s
estate or the designated beneficiary or beneficiaries of the RSUs. The Shares
shall be issued on the issuance date determined in accordance with the
provisions of paragraph 6. Any such administrator, executor or beneficiary must
furnish the Company with (a) written notice of his or her status as such
and (b) evidence satisfactory to the Company to establish the validity of
the transfer and compliance with any laws or regulations pertaining to said
transfer. The Participant may make a beneficiary designation with respect to
the RSUs by filing the appropriate form with the Administrator or its designate

 

8. Adjustment in
Shares. Should any event described in Section 16(a) of the Plan
occur, then equitable adjustments shall be made by the Administrator to the
total number and/or class of securities issuable pursuant to this Award as
permitted by the Plan. Such adjustments shall be made in such manner as the
Administrator deems appropriate so as to prevent dilution or enlargement of the
benefits intended to be made available hereunder.

 

9. Withholding of
Taxes. When the Shares are issued as payment for vested RSUs, the Company
will withhold a portion of the Shares that have an aggregate Fair Market Value
sufficient to pay the minimum federal, state and local income, employment and
any other applicable taxes required to be withheld by the Company, unless the
Company, in its sole discretion, either requires or otherwise permits the
Participant to make alternate arrangements satisfactory to the Company for such
withholdings in advance of the arising of any withholding obligations. The
number of Shares withheld pursuant to the prior sentence will be rounded up to
the nearest whole Share, with no cash payment due the Participant for the value
of any Share withheld in excess of the tax obligation as a result of such
rounding. Notwithstanding any contrary provision of this Agreement, no Shares
will be issued unless and until satisfactory arrangements (as determined by the
Company) have been made by the Participant with respect to the payment of any
income and other taxes which the Company determines must be withheld or
collected with respect to such Shares. In addition and to the maximum extent
permitted by law, the Company (or the employing Subsidiary) has the right to
retain without notice from salary or other amounts payable to the Participant,
cash having a sufficient value to satisfy any tax withholding obligations that
the Company determines cannot be satisfied through the withholding of otherwise
deliverable Shares. All income and other taxes related to the RSU award and any
Shares delivered in payment thereof are the sole responsibility of the
Participant. By accepting this RSU award, the Participant expressly consents to
the withholding of Shares and to any additional cash withholding as provided
for in this paragraph 9.

 

10. Rights as
Stockholder. Neither the Participant nor any person claiming under or
through the Participant will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder
unless and until certificates representing such Shares are issued, recorded on
the records of the Company or its transfer agents or registrars, and delivered
to the Participant or Participant’s broker.

 

11. No Right to
Employment. The Participant’s employment or other Service Provider status
with the Company and its Subsidiaries is on an at-will basis only. Accordingly,
the terms of the Participant’s employment or other Service Provider status with
the Company and its Subsidiaries will be determined from time to time by the
Company or the Subsidiary employing or retaining the Participant (as the case
may be), and the Company or the Subsidiary will have the right, which is hereby
expressly reserved, to terminate or change the terms of the employment or
service relationship of the Participant at any time for any reason whatsoever,
with or without good cause or notice.

 

 

12. Address
for Notices. Any notice to be given to the Company under the terms of this
Agreement must be addressed to the Company at 6350 South 3000 East, Salt Lake City, Utah 84121, Attn:
[Stock Administration], or at such other address as the Company may hereafter
designate in writing or electronically.

 

13. Grant Not
Transferable. Except to the limited extent provided in paragraph 7, this
grant and the rights and privileges conferred hereby shall not be transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this grant, or any right or privilege conferred hereby, or
upon any attempted sale under any execution, attachment or similar process,
this grant and the rights and privileges conferred hereby immediately will
become null and void.

 

14. Restrictions on
Sale of Securities. Subject to the provisions of paragraph 16, the Company
shall use its reasonable efforts to assure that the offering of Shares to be
issued in payment of the vested RSUs is registered under the federal securities
laws or qualifies for an available exemption from such registration
requirements. However, any sale of any Shares by the Participant will be
subject to the Company’s Insider Trading Policy as amended from time to time
and any other policies adopted by the Company relating to the sale of Company
Common Stock and any market blackout-period that may be imposed by the
Company.  Further, the Participant is
solely responsible for ensuring that any sale complies with all applicable
securities laws.

 

15. Binding Agreement.
Subject to the limitation on the transferability of this grant contained
herein, this Agreement will be binding upon and inure to the benefit of the
heirs, legatees, legal representatives, successors and assigns of the parties
hereto.

 

16. Additional
Conditions to Issuance of Stock. If at any time the Company determines, in
its discretion, that the listing, registration or qualification of the Shares
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory authority is necessary or desirable
as a condition to the issuance of Shares to the Participant (or his or her
estate or beneficiary), such issuance will not occur unless and until such
listing, registration, qualification, consent or approval have been effected or
obtained, free of any conditions not acceptable to the Company. The Company
will make all reasonable efforts to meet the requirements of any such state or
federal law or securities exchange and to obtain any such consent or approval
of any such governmental authority. In no event, however, shall any Shares be
issued in contravention of applicable federal and state securities laws or
other regulatory requirements.

 

17. Plan Governs.
This Agreement and the Restricted Stock Unit Grant Notice are subject to all
terms and provisions of the Plan. In the event of a conflict between one or
more provisions of this Agreement or the Restricted Stock Unit Grant Notice and
one or more provisions of the Plan, the provisions of the Plan will govern.

 

18. Administrator
Authority. The Administrator will have the power to interpret the Plan and
this Agreement and the Restricted Stock Unit Grant Notice and to adopt such rules for
the administration, interpretation and application of the Plan as are
consistent therewith and to interpret or revoke any such rules (including,
but not limited to, the determination of whether or not any RSUs have vested).
All actions taken and all interpretations and determinations made by the
Administrator in good faith will be final and binding upon Participant, the
Company and all other persons. No member of the Administrator will be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, the Restricted Stock Unit Grant Notice or this
Agreement.

 

 

19. Captions.
Captions provided herein are for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

 

20. Agreement
Severable. In the event that any provision in this Agreement will be held
invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Agreement.

 

21. Modifications to
the Agreement. This Agreement constitutes the entire understanding of the
parties regarding the subjects covered. The Participant expressly warrants that
he or she is not accepting this Agreement in reliance on any promises,
representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express written
contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves
the right to amend this Agreement as it deems necessary or advisable, in its
sole discretion and without the consent of the Participant, to comply with
applicable law, including without limitation Section 409A of the Code or
to otherwise avoid imposition of any additional tax or income recognition under
Section 409A of the Code prior to the actual payment of Shares pursuant to
this RSU award.

 

22. Amendment,
Suspension or Termination of the Plan. By accepting this RSU award, the
Participant expressly warrants that he or she has received a right to purchase
stock under the Plan, and has received, read and understood a description of
the Plan. The Participant understands that the Plan is discretionary in nature
and may be modified, suspended or terminated by the Company at any time.

 

23. Electronic
Delivery. The Company may, in its sole discretion, decide to deliver any
notices required or permitted hereunder or under the Plan and any documents
related to RSUs awarded under the Plan or future RSUs that may be awarded under
the Plan by electronic means or request the Participant’s consent to participate
in the Plan by electronic means. By accepting this RSU award, the Participant
hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.

 

24. Notice of
Governing Law. This RSU award shall be governed by, and construed in
accordance with, the laws of the State of Utah without regard to principles of
conflict of laws.

 

25. Section 409A.  
Payments under this Agreement are intended to be exempt from, or comply with,
the provisions of Section 409A of the Internal Revenue Code of 1986 (“Section 409A”)
and this Agreement shall be administered and construed accordingly. If any
payment, compensation or other benefit provided to the Participant in
connection with his or her employment termination is determined, in whole
or in part, to constitute “nonqualified deferred compensation” within the
meaning of Section 409A and the Participant is a specified employee
as defined in Section 409A(2)(B)(i), no part of such payments shall be
paid before the day that is six (6) months plus one (1) day after the
date of termination (the “New Payment Date”). The aggregate of any payments
that otherwise would have been paid to the Participant during the period
between the date of termination and the New Payment Date shall be paid to
the Participant in a lump sum on such New Payment Date.

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