ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (“ Agreement ”) is made and entered into as of the 25th day of October, 2006 (the “ Effective Date ”), by and among RAC Nutrition Corporation, a Delaware corporation, (the “ Buyer ”), and Millennium Biotechnologies Group, Inc., a Delaware corporation (the “ Parent ” or the “ Company ”), together with its wholly owned subsidiary Millennium Biotechnologies, Inc., a Delaware corporation (the “ Seller ” or the “ Subsidiary ”), and RAC Nutrition Holdings LLC, a Delaware limited liability company (“LLC”) and their respective successors and assigns.

(A)   WHEREAS, Seller is engaged in the distribution and sale of nutraceuticals under the “Resurgex” name and mark (the “ Business ”), and;

(B)   WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, substantially all of the assets used in connection with the Business, as provided herein, together with certain liabilities as defined herein (the sale of such assets of the Business and certain liabilities by Seller to Buyer referred to herein as the “ Transaction ”).

(C)   WHEREAS, for United States Federal income tax purposes, it is intended that the Transaction shall qualify as a “reorganization” under Section 368(a) of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “ Code ”), and that this Agreement shall be, and hereby is, adopted as a plan of reorganization for purposes of Section 368 of the Code.

NOW, THEREFORE, in consideration of the premises above and of the mutual covenants, representations, warranties, and agreements set forth herein, the parties hereby agree as follows:

Section 1.1    Certain Definitions . As used herein, the following capitalized terms have the following meanings:

“ Accounts Receivable ” has the meaning set forth in Section 2.1(k) .

“ Adjustment Report ” has the meaning set forth in Section 2.7(b) .

“ Affiliate ” means, as to any Person, (a) any subsidiary of such Person and (b) any other Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person and includes, in the case of a Person other than an individual, each officer, director, general partner or member of such Person, and each Person who is the beneficial owner of twenty-five percent (25%) or more of such Person’s outstanding stock having ordinary voting power of such Person. For the purposes of this definition, “ control ” means the possession of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ Agreement ” has the meaning set forth in the Preamble.

“ Assignment Agreement ” has the meaning set forth in Section 2.10(a)(ii) .

“ Assumed Obligations ” has the meaning set forth in Section 2.3 .

“ Big Four ” means Ernst & Young, Deloitte Touche Tohmatsu, PricewaterhouseCoopers and KPMG, collectively.

“ Bill of Sale ” has the meaning set forth in Section 2.10(a)(i) .

“ Business ” has the meaning set forth in the Recitals.

“ Business Day ” means any day other than Saturday, Sunday, and any day on which commercial banks in the State of New York are authorized by Law to be closed.

“ Business Employees ” means, collectively, the individuals who are employed by Seller (or an Affiliate of Seller) on a full-time or permanent basis principally at or with respect to the business of the Company immediately prior to the Closing and who are identified on Schedule 3.27(c) .

“ Business Intellectual Property ” has the meaning set forth in Section 2.1(h) .

“ Buyer ” has the meaning set forth in the Preamble.

“ Buyer Common Stock ” means shares of common stock of Buyer, par value $0.001 per share.

“ Buyer Common Stock Issuance Calculation ” means an amount equal to 10,000,000 shares of Buyer Common Stock less the number of shares equal to Estimated Qualified Liabilities divided by $1.00.

“ Certificate of Good Standing ” means a certificate of good standing issued by a Secretary of State of a competent jurisdiction evidencing the good standing of the Company or the Subsidiary.

“ Claim ” means any demand, suit, claim or other assertion of liability by third parties.

“ Closing ” has the meaning set forth in Section 2.9 .

“ Closing Date ” has the meaning set forth in Section 2.9 .

“ Closing Statement ” has the meaning set forth in Section 2.7(b) .

“ COBRA ” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code.

“ Code ” has the meaning set forth in the Recitals.

“ Collected Receivables ” has the meaning set forth in Section 2.6 .

“ Company ” has the meaning set forth in the Preamble.

“ Company Common Stock ” has the meaning set forth in Section 5.8(a) .

“ Company Stockholders ” has the meaning set forth in Section 5.8(a) .

“ Confidentiality Agreements ” has the meaning set forth in Section 2.10(a)(xii) .

“ Consent Contract ” has the meaning set forth in Section 2.5 .

“ Contract ” and “ Contracts ” have the meaning given to them in Section 2.1(f) .

“ Current Liabilities ” shall include all Accounts Payable, accrued expenses and accrued Tax liabilities of the Company on the Closing Date net of any and all accrued interest on any long-term or short-term debt obligations of Seller.

“ Damages ” has the meaning set forth in Section 9.1 .

“ Distributor Contracts ” has the meaning set forth in Section 2.1(a) .

“ Domain Names ” means URL addresses and all other internet and world wide web addresses and designations.

“ Effective Date ” has the meaning set forth in the Preamble.

“ Employee Benefit Plan ” means any (a) nonqualified deferred compensation or retirement plan or arrangement; (b) qualified defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan; (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan); (d) Employee Welfare Benefit Plan; (e) material fringe benefit including vacation pay or paid sick leave; and (f) other retirement, bonus, severance, change in control, vacation, incentive, profit sharing, equity-incentive, employee group insurance, hospitalization, disability or other employee benefit plan, program policy or agreement, whether formal or informal, and whether or not subject to ERISA in each case that is sponsored, contributed to or maintained by Seller or to which Seller has an obligation to contribute.

“ Employer ” means the entity designated by Buyer (which may be the Buyer, its Affiliate or other entity) that employs the Transferred Employees as of the Transfer Date.

“ Encumbrances ” has the meaning set forth in Section 3.7 .

“ Environmental, Health and Safety Requirements ” has the meaning set forth in Section 3.23 .

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations adopted pursuant thereto.

“ ERISA Affiliate ” means with respect to the Seller, any trade or business (whether or not incorporated) under common control with Seller or which, together with the Seller is treated as a single employer within the meaning of Sections 414(b),(c) or (m) of the Code.

“ Estimated Qualified Liabilities ” has the meaning set forth in Section 2.7(a) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended and the rules and regulations adopted pursuant hereto.

“ Excluded Assets ” has the meaning set forth in Section 2.2 .

“ Exclusivity Period ” has the meaning set forth in Section 10.1(a) .

“ Fairness Advisor Opinion ” has the meaning set forth in Section 7.2(k) .

“ Fee ” has the meaning set forth in Section 10.1(a) .

“ Financial Statements ” has the meaning set forth in Section 3.5 .

“ 401(k) Plan ” means an Employee Pension Benefit Plan that is intended to meet the requirements of a qualified cash or deferred arrangement under section 401(k) of the Code.

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board.

“ Governmental Authority ” means any federal, state, local or foreign government or governmental regulatory body and any of their respective subdivisions, agencies, instrumentalities, authorities, courts or tribunals.

“ Headquarters Lease ” means the Lease Agreement, dated October __, 2001, for the commercial real estate located at 664 Martinsville Road, Suite 219, Basking Ridge, New Jersey 07920.

“ Indebtedness ” shall mean (a) obligations for borrowed money; (b) obligations evidenced by bonds, debentures, notes or other similar instrument; (c) obligations under a lease that are required to be classified and accounted as capital lease obligation under GAAP; (d) obligations for reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; and (e) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (a) through (d) above.

“ Indemnitee ” has the meaning set forth in Section 9.5 .

“ Indemnitor ” has the meaning set forth in Section 9.5 .

“ Independent Auditors ” has the meaning set forth in Section 2.7(d) .

“ Intellectual Property ” has the meaning set forth in Section 2.1(h) .

“ Inventory ” has the meaning set forth in Section 2.1(d) .

“ Key Employee ” means the employee listed in Schedule 2.10(a)(xi) .

“ Key Employment Agreement ” has the meaning set forth Section 2.10(a)(xi) .

“ Law ” means any federal, state, local or foreign law, ordinance, order, rule, regulation, license or permit, and any order, writ, judgment, award, injunction, or decree of any court or arbitrator or any Governmental Authority of the United States of America, any state or political subdivision thereof or any foreign Governmental Authority.

“ Letter of Intent ” means that certain Letter of Intent by and among the Company, the Subsidiary and Aisling Capital II, L.P., dated April 5, 2006.

“ Lien ” means any charge, claim, community property interest, condition, equitable interest, lien (including any Tax lien), mortgage, option, pledge, security interest, right of first refusal, easement, servitude, right of way, or other encumbrance or restriction of any kind, including any restrictions on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

“ LLC ” has the meaning set forth in Section 7.1(e) .

“ LLC Interest ” means a one hundred percent (100%) membership interest in the LLC.

“ Material Adverse Effect ” means, when used with respect to Seller, any event, condition, change, occurrence or circumstance which has a material adverse effect on the Purchased Assets, operations, business, assets, liabilities, results of operations, financial condition or prospects of the Business on the whole, as now conducted by Seller.

“ Operating Agreement ” has the meaning set forth in Section 7.1(e) .

“ Organizational Documents ” has the meaning set forth in Section 3.1 .

“ Other Businesses ” has the meaning set forth in Section 9.1(b) .

“ Other Contracts ” has the meaning set forth in Section 2.1(f) .

“ Parent ” has the meaning set forth in the Preamble.

“ Patent Assignment Agreement ” has the meaning set forth in Section 2.10(a)(xv) .

“ Permits ” has the meaning set forth in Section 2.1(g) .

“ Permitted Encumbrances ” has the meaning set forth in Section 3.7 .

“ Person ” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, or unincorporated association, or any Governmental Authority, officer, department, commission, board, bureau or instrumentality thereof.

“ Personal Property Leases ” has the meaning set forth in Section 2.1(j) .

“ Proxy Statement ” has the meaning set forth in Section 5.8(c) .

“ Purchase Price ” has the meaning set forth in Section 2.6 .

“ Purchased Assets ” has the meaning set forth in Section 2.1 .

“ Qualified Liabilities ” has the meaning set forth in Section 2.4 .

“ Representatives ” has the meaning set forth in Section 10.1(a)

“ Restricted Area ” has the meaning set forth in Section 6.3(a) .

“Royalty Agreement ” has the meaning set forth in Section 2.10(a)(xiii) .

“ SEC ” has the meaning set forth in Section 5.8(c) .

“ SEC Reports ” has the meaning set forth in Section 3.4 .

“ Securities Act ” has the meaning set forth in Section 5.8(c) .

“ Seller ” has the meaning set forth in the Preamble.

“ Solvency Opinion ” has the meaning set forth in Section 7.2(l) .

“ Solvent ” has the meaning set forth in Section 3.33 .

“ Stock Purchase Agreement ” has the meaning set forth in Section 2.10(b)(x) .

“ Straddle Period ” has the meaning set forth in Section 5.9(c)(ii) .

“ Stockholders’ Meeting ” has the meaning set forth in Section 5.8(a) .

“ Sublease ” has the meaning set forth in Section 2.10(a)(xiv) .

“ Subsidiary ” has the meaning set forth in the Preamble.

“ Superior Proposal ” has the meaning set forth in Section 10.1(b) .

“ Superior Transaction ” has the meaning set forth in Section 10.1(b) .

“ Survival Period ” has the meaning set forth in Section 9.4(a) .

“ Tax Audit ” has the meaning set forth in Section 3.20(a)(v) .

“ Tax Deficiency ” has the meaning set forth in Section 3.20(a)(vii) .

“ Tax ” (including, with correlative meaning, “ Taxes ” and “ Taxable ”) means (i)(A) any net income, gross income, business and occupation, admissions, gross receipts, sales, use, value added, ad valorem, transfer, transfer gains, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, rent, recording, occupation, premium, real or personal property, intangibles, environmental or windfall profits tax, alternative or add-on minimum tax, customs duty or other tax, fee, duty, levy, impost, assessment or charge of any kind whatsoever (including but not limited to taxes assessed to or on real property and water and sewer rents relating thereto), together with (B) all interest, any penalties, additions to tax or additional amounts imposed by any taxing or other governmental body, authority or jurisdiction (domestic or foreign) (a “ Tax Authority ”); (ii) any liability for the payment of any amount of the type described in the immediately preceding clause (i) as a result of being a member of an affiliated, unitary, consolidated or combined group with any other corporation at any time prior to the Closing Date; and (iii) any liability for the payment of an amount of the type described in the preceding clause (i) by reason of a contractual obligation to any other Person.

“ Tax Return ” means any report, return, document, declaration or other information (including any attached schedules or amendments thereto) required to be supplied to or filed with any Tax Authority) with respect to any Tax, including an information return, any document with respect to or accompanying Tax payments or estimated Taxes, or with respect to or accompanying requests for an extension of time in which to file any such report, return document, declaration or other information.

“ Terminated Employees ” has the meaning set forth in Section 6.1(a) .

“ Third Party ” has the meaning set forth in Section 10.1(a) .

“ Third Party Acquisition ” has the meaning set forth in Section 10.1(a) .

“ Third Party Licenses ” has the meaning set forth in Section 2.1(c) .

“ Third Party Proposal ” has the meaning set forth in Section 10.1(b) .

“ Trademark and Domain Name Assignment Agreement ” has the meaning set forth in Section 2.10(a)(xvi) .

“ Transaction ” has the meaning set forth in the Recitals.

“ Transaction Documents ” has the meaning set forth in Section 2.2(b) .

“ Transferred Employees ” has the meaning set forth in Section 6.1(a) .

“ Transfer Date ” has the meaning set forth in Section 6.1(b) .

“ Transfer Taxes ” means all excise, sales, value added, use, registration, stamp, transfer, gains, real estate transfer and other taxes imposed with respect to a change in the ownership of any asset or of its direct or indirect owners.

“ UCC ” means the Uniform Commercial Code in effect from time to time in the jurisdiction in which a security interest is located.

“ Unassumed Liabilities ” has the meaning set forth in Section 2.4 .

“ Uniform Resource Locator ” or “ URL ” means a string of characters that refers to a resource on the internet by its location.

“ Updated Schedules ” has the meaning set forth in Section 5.2 .

“ Vendor Contracts ” has the meaning set forth in Section 2.1(b) .

“ Warrant ” has the meaning set forth in Section 2.6 .

“ Warrant Shares ” has the meaning set forth in Section 2.6 .

“ Working Capital Adjustment Payment ” has the meaning set forth in Section 2.7 .

Section 2.1    Purchase and Sale . Except for the Excluded Assets, as of the Closing Date, Seller will sell, assign, transfer, convey, and deliver to Buyer, and Buyer will purchase, accept and assume from Seller, all of Seller’s right, title and interest in and to all of the Seller’s property and assets, real or personal, tangible or intangible, relating to, reasonably necessary in and/or used in connection with the Business as set forth below (collectively, the “ Purchased Assets ”), free and clear of all Encumbrances other than Permitted Encumbrances. The Purchased Assets shall consist of:

(a)    All of Seller’s right, title and interest in and to all written customer contracts, distributor contracts, reseller contracts, and contracts with sales agents or representatives, to which either Seller is a party that are related to the Business and that are listed in Schedule 2.1(a) , including, but not limited to, contracts, agreements, outstanding proposals and commitments with such distributors, reseller, dealers and sales agents (the “ Distributor Contracts ”);

(b)    All of Seller’s right, title and interest in and to the vendor purchase orders and contracts, that are related to the Business and that are listed in Schedule 2.1(b) (the “ Vendor Contracts ”);

(c)    All of Seller’s right, title and interest in and to third party commercial computer software and related maintenance contracts relating to the Business to which either Seller is a party and that are listed in Schedule 2.1(c) (the “Third Party Licenses ”);

(d)    All of Seller’s inventory items relating to the Business whether new, used, excess or obsolete, both in and out of service, inventory held for sale, if any, including, but not limited to, all inventory currently being held to supply Seller’s contractual commitments to customers, and all other similar items of inventory all of which are listed in Schedule 2.1(d) (the “ Inventory ”);

(e)    Seller’s marketing and sales materials relating to the Business;

(f)    All of Seller’s right, title and interest in and to any written contracts (including any solicitation or outstanding offers for contract), agreements, outstanding price quotes, commitments from service providers, customers and/or manufacturers, other than the Distributor Contracts, Vendor Contracts and Third Party Licenses that relate to the Business to which either Seller is a party and that are listed in Schedule 2.1(f) (the “ Other Contracts ”) (the Distributor Contracts, Vendor Contracts, Third Party Licenses, and Other Contracts are sometimes referred to collectively as the “ Contracts ” and individually as a “ Contract ”);

(g)    All of Seller’s right, title and interest in and to the licenses, permits, certificates, approvals, exemptions, franchises, registrations, variances, accreditations or authorizations that relate to the Business and are listed in Schedule 2.1(g) (the “ Permits ”);

(h)    All of Seller’s right, title and interest in and to the “ Intellectual Property ,” (as such term is hereinafter defined) that relate to the Business and as set forth in Schedule 2.1(h) (the “ Business Intellectual Property ”). “ Intellectual Property ” shall mean, for purposes of this Agreement: patents, patent rights, patent applications, patent disclosures, and inventions and designs that are not disclosed in any patent, patent application, or patent disclosure; registered and unregistered trademarks, trade names, and service marks, brand marks, brand names, copyrights, copyright registrations, and any applications therefore; all designs, diagrams, specifications, schematics, molds, tooling and assembly, installation and other key processes; licenses granted by or to a party; trade secrets relating to or arising from any monetary process; proprietary computer software, hardware and databases, including source code and documentation corresponding thereto and any software and source or object code; symbols and logos and all applications therefor, registrations thereof and licenses and sublicenses or agreements in respect thereof; improvements to any of the foregoing (whether or not completed); all filings, registrations or issuances of any of the foregoing with or by any federal, state, local or foreign regulatory, administrative or governmental office; and other tangible and intangible proprietary information owned or licensed by a party; including goodwill and going concern value; technology, and know-how related to, reasonably necessary in and used to support the Business and not embodied in any of the foregoing; and other tangible and intangible proprietary information owned or licensed by a party;

(i)    The machinery, equipment, furniture, fixtures, furnishings, supplies, office equipment, accessories, vehicles, personal computers, notebook computers, cellular phones, pagers, copiers, calculators, workstations, office automation software, printers, facsimile machines, and other property relating to the Business, and as listed in Schedule 2.1(i) ;

(j)    All leases of equipment, machinery or other tangible personal property to which either Seller is a party, solely used in conducting the Business as listed in Schedule 2.1(j) (the “ Personal Property Leases ”);

(k)    All accounts, notes, contracts or other receivables of Seller generated in connection with the Business existing as of the Closing Date that are listed in Schedule 2.1(k) and are not listed as Excluded Assets herein, and rights and benefits of any security interests and corresponding financing statements filed under the UCC (the “ Accounts Receivable ”);

(l)    All of Seller’s books and records relating exclusively to the Business (other than Seller’s Tax returns and Seller’s organizational books and records) including, without limitation, lists of customers, vendors and suppliers, records with respect to pricing, volume, billing and payment history, cost, inventory, machinery and equipment, mailing lists, distribution lists, sales, purchasing and materials, technical processes, production and testing techniques and procedures, marketing research, design and manufacturing drawings and specifications and other engineering data, promotional or sales literature, training, operations, equipment and other manuals, quotation, correspondence, and other miscellaneous information, including any such records which are maintained on computer or any storage media;

(m)    All service manuals, databases, and knowledge bases, in their current forms, listed in Schedule 2.1(m) relating to the operation of the Business as currently operated by Seller;

(n)    Seller’s backlog on orders relating to the Business;

(o)    Seller’s claims, demands, actions or causes of actions, which either Seller has or may have against any other person or entity relating to the Business, rights to judgments, and proceeds resulting from the matters listed in Schedule 2.1(o) ; and

(p)    All of Seller’s domain names, internet names, web addresses and internet locations, links to other relevant sites and applicable related registrations related to the Business, and as listed on Schedule 2.1(p) .

Section 2.2    Excluded Assets . Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere in this Agreement, the following assets of Seller (collectively, the “ Excluded Assets ”) are not part of the sale and purchase contemplated hereunder, are excluded from the Purchased Assets and shall remain the property of Seller after the Closing Date:

(a)    All property and assets of Seller that are not related to the Business;

(b)    All rights of either Seller under this Agreement and the other documents, agreements and instruments executed or delivered in connection with this Agreement (together with this Agreement, the “ Transaction Documents ”) including all monies to be received by either Seller, and all other rights of Seller under the Transaction Documents, including without limitation, the Purchase Price (as defined herein);

(c)    all real estate and real property leases, including the Headquarters Lease ;

(d)    all minute books, transfer records and corporate seals of Seller;

(e)    all cash, cash equivalents, bank accounts, certificates of deposit, commercial paper, annuities, treasury notes, bills and other marketable securities of Seller;

(f)    all rights of Seller relating to claims, refunds, causes of action, rights of recovery, rights of set-off, deposits and prepaid expenses and claims for refunds and rights to offset of every kind and nature whether or not related to the Business and related to time periods prior to the Closing Date, except for Accounts Receivable claims pertaining to the Business and other matters set out in Schedule 2.1(o) ;

(g)    all insurance policies of Seller and rights thereunder, including, without limitation, all rights to receive proceeds of insurance policies and all rights of offset, counterclaims and insurance coverage thereunder;

(h)    any tax credits and refunds;

(i)    Intellectual Property of the Seller not related to the Business and any rights or obligations associated therewith;

(j)    all severance, pension, retirement and other Employee Benefit Plans and administration and services contracts related thereto, or funding arrangements,

(k)    all of Seller’s distributor contracts, purchase contracts and other contracts that are not related to the Business; and

(l)    all of Seller’s Domain Names not related to the Business.

Section 2.3    Assumed Obligations. At the Closing, Purchaser shall assume, and agree to pay, perform, fulfill and discharge, the following obligations of Seller that relate to or arise out of the Purchased Assets (the “ Assumed Obligations ”). The Assumed Obligations shall include, but not be limited to, the following:

(a)    Obligations which are required to be performed under the Contracts, Permits, Personal Property Leases and Intellectual Property, except where (i) such obligations are not fully disclosed in accordance with the Agreement or arise in contravention of this Agreement, or (ii) such obligations arise due to any breach of contract, breach of warranty, tort, infringement, or violation of Law or arose out of any Claim, provided, such breach, tort, infringement, violation or Claim arose out of events occurring prior to the Closing, or (iii) the consent of any third party is required for the assignment of such Contract, Permit or Personal Property Lease and such consent has not been obtained;

(b)    Obligations and liabilities set forth on the face of the balance sheet as of June 30, 2006 included in the Financial Statements (rather than in any notes thereto), and all liabilities which have arisen after June 30, 2006 in the ordinary course of business of the Business; provided that such Assumed Obligations (i) do not include any Indebtedness; (ii) are reflected in the calculation of the Purchase Price; (iii) are fully disclosed to Buyer pursuant to this Agreement and do not arise in contravention of this Agreement; and (iv) do not relate to any breach of contract, breach of warranty, tort, infringement, or violation of Law or arise out of any Claim,; it being understood that the number of shares of Buyer Common Stock to be delivered to the LLC pursuant to Section 2.6 shall be reduced in the manner specified in Section 2.6 and 2.7 to the extent that the value of Qualified Liabilities exceeds zero; and

(c)    Obligations arising after the Closing Date with respect to Transferred Employees as set forth in Section 6.1 .

Section 2.4    No Other Liabilities Assumed. Anything in this Agreement to the contrary notwithstanding, neither Buyer nor any of its Affiliates shall assume, and shall not be deemed to have assumed, any debt, claim, obligation or other liability of Seller or any of its Affiliates, whether known or unknown, now or hereafter existing, accrued or contingent, other than as specifically set forth in Section 2.3 including, but not limited to (i) any environmental costs and liabilities, (ii) any of Seller’s liabilities in respect of Taxes, (iii) any income, transfer, sales, use, and other Taxes arising in connection with the consummation of the transactions contemplated hereby (other than as expressly provided in this Agreement), (iv) any brokers or finders’ fees, or other liability of Seller for costs and expenses (including legal fees and expenses) incurred in connection with this Agreement or the consummation of the transactions contemplated hereby, (vi) any liabilities or obligations arising out of the Royalty Agreements, (vii) any liability or obligation of Seller under this Agreement, (viii) any Indebtedness, (ix) any obligations or liabilities, including severance, for Seller’s employees who are not Transferred Employees, (x) any liabilities of the Seller or any of its ERISA affiliates relating to any Employee Benefit Plan to which any of the Seller or its ERISA Affiliates contributes or has any obligation to contribute, or with respect to which any of the Seller or Seller’s Affiliates has any liability or potential liability (including, without limitation any such liability (a) relating to benefits payable under any Employee Benefit Plan, (b) relating to Title IV of ERISA (c) relating to a multiemployer plan, (d) with respect to noncompliance with the notice and benefit continuation requirements of COBRA, or (e) with respect to any noncompliance with ERISA or any other applicable laws), (xi) any liability or obligation of Seller in respect of pending or threatened claims listed on Schedule 3.14 , (xii) any obligation or liability arising as a result of or whose existence is a breach of Seller’s representations, warranties, agreements or covenants, or (xiii) any Qualified Liabilities (as defined below) to the extent that the aggregate value of the Qualified Liabilities is greater than $500,000 (collectively, “ Unassumed Liabilities ”). Each of the Seller and Parent hereby agrees to pay, perform and discharge all of the obligations that are Unassumed Liabilities hereunder. “ Qualified Liabilities ” shall mean liabilities assumed by Purchaser pursuant to Section 2.3(b) .

Section 2.5    Non-Assignment of Certain Property . To the extent that the assignment hereunder of any of the Permits, Personal Property Leases or Contracts shall require the consent of any other party (or in the event that any of the same shall be nonassignable) (each, a “ Consent Contract ”), neither this Agreement nor any action taken pursuant to its provisions shall constitute an assignment or an agreement to assign if such assignment or attempted assignment would constitute a breach thereof; provided, however, that in each such case, Seller shall use its commercial reasonable efforts to obtain the consents of such other party to an assignment to Buyer on or prior to the Closing. If any such consent has not been obtained as of the Closing Date, the parties shall continue to use its commercially reasonable efforts to obtain such consent after the Closing Date. Pending the receipt of any such consents, the Seller shall cooperate with the Buyer in any commercially reasonable arrangement designed to provide for the Buyer all of the benefits under all of the Consent Contracts, and for the Buyer to discharge the corresponding obligations. At the Buyer’s request and expense, the Seller shall take all commercially reasonable best efforts requested by the Buyer to enforce, for the benefit of the Buyer, any and all rights of the Seller under any Consent Contract. Seller agrees to remit promptly, and to cause their Affiliates to remit promptly (but in no event later than three (3) Business Days after receipt), to the Buyer all collections or payments received by them or their Affiliates in respect of all Consent Contracts following the Closing Date, and shall hold all such collections or payments for the benefit of and in trust and as a fiduciary for and promptly pay the same over to, the Buyer. When such consents to the transfer, conveyance and assignment of a Consent Contract have been obtained, if ever, such Consent Contract shall thereupon automatically be transferred, conveyed and assigned to Buyer, and the obligations and liabilities of either Seller under such Consent Contract shall automatically cease to be excluded from the Assignment Agreement (as hereinafter defined) by reason of this Section 2.5 , without the payment of any additional consideration.

Section 2.6    Purchase Price . In consideration for the sale, transfer and assignment by the Seller of the Purchased Assets, the Buyer shall: (i) assume the Assumed Obligations; provided, however, in no event shall the value of the Qualified Liabilities assumed by the Buyer exceed Five Hundred Thousand Dollars ($500,000.00); (ii) issue a certificate evidencing the LLC Interest to the Parent; and (iii) issue to the LLC a performance vesting warrant to purchase up to an additional Two Million Five Hundred Thousand (2,500,000) shares of Buyer Common Stock (the “ Warrant Shares ”) upon the terms and conditions set forth in the form of warrant reasonably agreed by Buyer and Seller (the “ Warrant ”). The Warrant shall be exercisable for a period of five years at an exercise price of $1.00 and shall further provide that the holder may not exercise the Warrant unless and until Buyer has (i) aggregate net revenues for the preceding four quarters of at least $50.0 million and (ii) pre-tax net income of at least $5.0 million for the preceding four quarters. For purposes of this Agreement, the term “ Purchase Price ” shall mean, initially, $10,000,000, consisting of (y) the value of Assumed Obligations (provided, pursuant to the terms of this Agreement, Qualified Liabilities to be assumed by the Buyer may range from zero to $500,000), and (z) the LLC Interest (having an assumed value equal to the $10,000,000, less the value of the Qualified Liabilities). At the Closing, the Buyer shall deliver to the LLC a number of shares of Buyer Common Stock equal to (i) 10,000,000, less (ii) a number of shares equal to (A) the Estimated Qualified Liabilities (as defined below) less $300,000, divided by (B) $1.00.

Section 2.7    Purchase Price Payment Adjustment .

(a)    At least ten (10) days prior to the Closing, the Sellers shall provide to the Buyer an estimate as of the Closing Date, which, absent manifest error, shall be the basis for calculating, on a preliminary basis, of the value of the Qualified Liabilities for purposes of determining the number of shares of Buyer Common Stock to be issued to the LLC at Closing (the “ Estimated Qualified Liabilities ”).

(b)    Not later than sixty (60) days after the Closing, the Buyer at its own cost, shall prepare and deliver to the Sellers a statement of the value of the Qualified Liabilities as of the Closing Date (the “ Closing Statement ”), prepared in accordance with GAAP, applied consistently with the Sellers’ past practices. A failure by the Buyer to deliver the Closing Statement within the required sixty (60) day period shall constitute its acceptance of the Estimated Qualified Liabilities. Within fifteen (15) days after the Closing Statement is delivered to the Sellers pursuant to this Section 2.7(b) , the Sellers at their own cost, shall complete its examination thereof, and provide for the examination thereof by its accountants, if necessary, and shall deliver to the Buyer either (i) a written acknowledgment accepting the determination of the value of the Qualified Liabilities or (ii) a written report of an independent accounting firm engaged by the Sellers setting forth in reasonable detail any proposed adjustments to the value of the Qualified Liabilities (“ Adjustment Report ”). A failure by the Sellers to deliver the Adjustment Report within the required fifteen (15) day period shall constitute its acceptance of the Closing Statement. The Buyer shall, and shall cause its independent auditors to, cooperate with the Sellers and its accountants in the course of the preparation of the Adjustment Report.

(c)    Following the Closing, the number of shares of Common Stock issued to the LLC in satisfaction of the Purchase Price shall be decreased by a number of shares equal to (i) the amount, if any, by which the value of the Qualified Liabilities as specified on the Closing Statement exceeds the Estimated Qualified Liabilities, divided by (ii) $1.00; provided, if the Qualified Liabilities as specified in the Closing Statement is less than $300,000, there shall be no adjustment to the number of shares of Common Stock pursuant to this Section 2.7(c).

(d)    During a period of fifteen (15) days following the receipt by the Buyer of the Adjustment Report, the Buyer and Sellers shall attempt to resolve any difference they may have with respect to the matters raised in the Adjustment Report. In the event the Buyer and Sellers fail to agree on all of the proposed adjustments contained in the Adjustment Report within such fifteen (15) day period, then the Buyer and the Sellers mutually agree that the New York office of KPMG, or such other “Big Four” accounting firm mutually acceptable to the Buyer and the Sellers (the “ Independent Auditors ”), shall make the final determination with respect to the correctness of the proposed adjustments in the Adjustment Report in light of the terms and provisions of this Agreement. The decision of the Independent Auditors shall be final and binding on the Buyer and Sellers, and may be used in a court of law by either the Buyer or the Sellers for the purpose of enforcing such decision. The costs and expenses of the Independent Auditors and their services rendered pursuant to this clause (d) shall be borne by the non-prevailing party or, if neither party prevails, equally by the Buyer and the Sellers.

Section 2.8    Prorations . At Closing, the parties hereto shall determine the proration of any expenses, if necessary.

Section 2.9    Closing . The closing of the transactions contemplated in this Agreement (the “ Closing ”) shall take place at the offices of Andrews Kurth LLP, 450 Lexington Avenue, 15th Floor, New York, NY, 10017, or such other location as the parties may select, within thirty (30) calendar days of the clearance of the Proxy Statement by the SEC or at such other time and place as the Purchaser, in its sole discretion, may agree (the “ Closing Date ”).

Section 2.10    Deliveries at Closing

(a)    Deliveries by Seller . At the Closing, Seller shall deliver or cause to be delivered to Buyer the following documents, instruments, certificates and agreements (which shall be in form and substance reasonably satisfactory to Buyer and its counsel):

(i)    an executed counterpart to the Bill of Sale in a form to be mutually agreed upon (the “ Bill of Sale ”), duly executed by Seller;

(ii)    an executed counterpart to the Assignment and Assumption Agreement in a form to be mutually agreed upon (the “ Assignment Agreement ”), duly executed by Seller;

(iii)    such other deeds, bills of sale, assignments and other instruments of sale, in form and substance reasonably satisfactory to Buyer’s counsel, as shall be required or as may be desirable to vest in Buyer good and marketable title to the Purchased Assets, free and clear of all Encumbrances other than the Permitted Encumbrances;

(iv)    a Certificate signed by an authorized officer of each of the Seller and dated as of the Closing Date, certifying that the representations and warranties of Seller contained in this Agreement are true and correct on the Closing Date as if such representations and warranties were made on the Closing Date;

(v)    an incumbency and specimen certificate with respect to the officer(s) of Seller executing the Transaction Documents to which such entity is a party;

(vi)    a Certificate of Good Standing for Seller issued not earlier than thirty (30) days prior to the Closing Date by the Secretary of State of Delaware as applicable;

(vii)    the Fairness Opinion;

(viii)    The Solvency Opinion

(ix)    a release of Liens as may be identified by the Buyer prior to the Closing;

(x)    all of the required consents of third Persons set forth in Schedule 2.10(a)(x) ;

(xi)    an executed employment contract between the buyer and the individual listed in Schedule 2.10(a)(xi) (the “ Key Employee ”) (the “ Key Employment Agreement ”);

(xii)    executed copies of certain Confidentiality Agreements and Assignment of Invention Agreements by any Transferred Employees who are employed prior to Closing (the “ Confidentiality Agreements ”);

(xiii)    evidence satisfactory to the Buyer that the Seller has obtained releases with respect to all royalty agreements between the Company and the following individuals: (i) P. Elayne Wishart; (ii) Jane Swon; (iii) Jerry T. Swon; (iv) John Swon; (v) David Miller; and (vi) Carl Germano (collectively, the “ Royalty Agreements ”), provided, that the Buyer shall have the option to waive such requirement;

(xiv)    an executed counterpart of the sublease under the Headquarters Lease, in form and substance satisfactory to Buyer (the “ Sublease ”); in a form reasonably acceptable to the Buyer and the Seller, pursuant to which Buyer subleases the premises covered by the Headquarters Lease;

(xv)    an executed counterpart of the Patent Assignment Agreement (the “ Patent Assignment Agreement ”) in a form reasonably acceptable to the Buyer and Seller, pursuant to which the Seller shall assign all of the patents contained in the Purchased Assets to Buyer;

(xvi)    an executed counterpart of Trademark and Domain Name Assignment Agreement (the “ Trademark and Domain Name Assignment Agreement ”) in a form reasonably acceptable to Buyer and Seller, pursuant to which the Seller shall assign all of the trademarks and domain names contained in the Purchased Assets to the Buyer;

(xvii)    evidence satisfactory to the Buyer regarding payoff, conversion or release of all Indebtedness; and

(xviii)    Operating Agreement executed by the Parent.

(b)    Deliveries by Buyer . At the Closing, Buyer shall deliver or cause to be delivered to Seller the following documents, instruments, certificates and agreements (which shall be in form and substance reasonably satisfactory to Seller and its counsel):

(i)    a counterpart to the Bill of Sale, duly executed by Buyer;

(ii)    a counterpart to the Assignment Agreement, duly executed by Buyer;

(iii)    a certificate signed by an authorized officer of Buyer and dated as of the Closing Date, certifying that the representations and warranties of Buyer contained in this Agreement are true and correct in all material respects on the Closing Date as if such representations and warranties were made on the Closing Date;

(iv)    an incumbency and specimen certificate with respect to the officer(s) of Buyer executing the Transaction Documents to which Buyer is party;

(v)    a counterpart to the Patent Assignment Agreement;

(vi)    a counterpart to the Trademark and Domain Name Assignment Agreement;

(vii)    the LLC Interest;

(viii)    a copy of the Warrant issued to the LLC;

(ix)    a copy of the Operating Agreement, duly executed by Buyer;

(x)    a counterpart to the Key Employment Agreement duly executed by Buyer;

(xi)    a counterpart to the Sublease duly executed by Buyer;

(xii)    evidence satisfactory to Seller that Buyer has been capitalized in an amount not less than $15 million through the sale of its Series A Convertible Preferred Stock in accordance with the Series A Preferred Stock Purchase Agreement by and among the Buyer and the purchasers named therein (the “ Stock Purchase Agreement ”).

Each of Parent and Seller represent and warrant to Buyer as of the Effective Date and agree to represent and warrant to Buyer as of the Closing Date as follows:

Section 3.1    Organization . The Company is a corporation duly organized and validly existing under the Laws of the State of Delaware. Subsidiary is a corporation duly organized and validly existing under the laws of the State of Delaware. Both Company and Subsidiary have (i) the requisite power and authority to conduct the Business as now conducted and (ii) the necessary corporate power and authority to execute, deliver and perform their obligations under the Transaction Documents and to consummate the transactions contemplated herein and therein. Complete and correct copies of the Certificates of Incorporation and Bylaws of Company and of Subsidiary have previously been delivered to Buyer (such documents, the “ Organizational Documents ”). Each of Company and Subsidiary are is duly qualified to do business in every jurisdiction in which the nature of its business makes such qualifications necessary, except where such failure would not have a Material Adverse Effect. Each of Company and Subsidiary have the full right, power, and authority to engage in the Business as it is now conducted, and has all necessary licenses and permits to operate the Business as it is presently being operated.

Section 3.2    Authority . Each of Company and Subsidiary now have, or will have, all requisite organizational authority to execute, deliver and perform each Transaction Document to which it is a party, and to perform its obligations and consummate the transactions contemplated under the Transaction Documents to which it is a party, subject to receipt of shareholder approval, if the Board of Directors of the Company determines that such approval is required. Subject to receipt of shareholder approval, the execution and the delivery of each Transaction Document to which either Company or Subsidiary is a party, and the performance of the transactions contemplated by such Transaction Documents, have been duly authorized by each of Company and Subsidiary and all necessary corporate or organizational actions by each of Company and Subsidiary for the execution, delivery and performance of each Transaction Document to which such Company or Subsidiary is a party and the consummation of the transactions contemplated hereby and thereby have been taken, and no further corporate or organizational authorization will be necessary to authorize the execution and delivery by each of Company and Subsidiary, and the performance of its obligations under, each Transaction Document to which such Company or Subsidiary is a party.

Section 3.3    Execution and Delivery . Each Transaction Document to which either Company or Subsidiary is a party has been validly executed and delivered by such party and constitutes valid and binding obligations of each such party, enforceable against each such party in accordance with its terms, except (i) as such enforceability may be limited by or subject to any bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, (ii) as such obligations are subject to general principles of equity and (iii) as rights to indemnity may he limited by federal or state securities laws or by public policy.

Section 3.4    SEC Reports . The Seller has timely filed all forms, reports, statements and documents required to be filed by it with the SEC and with any other governmental body, agency, official or authority (collectively, the “ SEC Reports ”). Each SEC Report (i) was prepared in accordance with the requirements of the Securities Act, the Exchange Act and the rules and regulations thereunder (ii) did not at the time it was filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each of the financial statements (including, in each case, any notes thereto) contained in the SEC Reports was prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the absence of footnotes and subject to normal year end adjustments, which adjustments are not material) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and each presented fairly the financial position of Buyer as at the respective dates thereof, and results of operations, stockholders' equity and cash flows for the respective periods indicated therein, except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring immaterial year-end adjustments).

Section 3.5    Financial Statements . Seller has delivered the balance sheet of the Parent as of June 30, 2006 and the related statements of income, stockholders’ equity, changes in financial position and cash flow (the “ Financial Statements ”). Seller represent that, to Seller’s actual knowledge, and subject to adjustments recommended by Seller’s independent auditors, the Financial Statements (i) are true and correct: in accordance with the books of account and records of Parent and Subsidiary in all material respects; and (ii) accurately and fairly reflect in all material respects all assets and liabilities of Parent and Subsidiary. To Seller’s actual knowledge, neither Parent nor Subsidiary has any indebtedness or liability, absolute or contingent, which is not reflected in the financial statements, or that has not been specifically identified herein to Buyer, other than liabilities or indebtedness incurred in the ordinary course of business.

Section 3.6    No Conflict or Default . The execution and performance of this Agreement, the compliance with its provisions by each of Company and Subsidiary, and the transfer of the Purchased Assets to Buyer on the Closing Date will not conflict with or result in any breach of any of the terms, conditions, or provisions of any agreement, indenture, mortgage, or other instrument to which either Seller is a party or by which it is bound, except for any such breach which would not in the aggregate reasonably be expected to have a Material Adverse Effect or as set forth in Schedule 3.6 . Further, subject to shareholder approval, the execution and performance of this Agreement, the compliance with its provisions by Seller, and the transfer of the Purchased Assets to Buyer on the Closing Date will materially comply with all Laws of any Governmental Authority applicable to the Business or any of the Purchased Assets and will not conflict with, or result in, the breach of any of the terms of any Organizational Documents. Except as set forth in Schedule 3.6 , the consummation of the transactions contemplated by this Agreement will not require the consent of any Person with respect to the rights, licenses, franchises, leases, contracts or agreements (including but not limited to the Contracts) of Seller and will not have a Material Adverse Effect upon any such rights, licenses, franchises, leases or agreements.

Section 3.7    Title to Assets . Seller has or shall have good and marketable title, or valid leasehold rights (in the case of leased property) to all of the Purchased Assets, free and clear of all security interests, liabilities, conditions, pledges, liens, mortgages, licenses in favor of any Person other than either Seller, conditional sales contracts, attachments, hypothecations, judgments, easements, claims, and encumbrances of every kind and nature (collectively, “ Encumbrances ”), except for those set forth in Schedule 3.7 (the “ Permitted Encumbrances ”). At the Closing, Seller will sell, assign, transfer, convey, and deliver good and marketable title to the Purchased Assets, or, in the case of assets constituting Purchased Assets which are leased or licensed by either Seller pursuant to Personal Property Leases or other Contracts, valid leasehold interests or licenses to such Personal Property Leases or other Contracts, free and clear of all Encumbrances other than Permitted Encumbrances.

Section 3.8    Contracts . All of the Contracts are in full force and are enforceable against Company or Subsidiary, as the case may be, in accordance with their terms. To the Company’s and Subsidiary’s knowledge and except as set forth in Schedule 3.8 and except a default or breach which is capable of being, and shall be, cured prior to the Closing, (i) none of the Contracts is in breach or default due to the action of Company or Subsidiary, or to Seller’s knowledge, of any other party thereto; and (ii) no event exists which is a default or breach due to the action of Company or Subsidiary, under any of the Contracts, or which after the passage of time or giving of notice or both would constitute a breach or default, due to the action of Company or Subsidiary. Except as set forth in Schedule 3.8 , all duties and obligations required to be performed by any party to the Contracts prior to Closing have been so performed or will be performed prior to Closing. Except as set forth in Schedule 3.8 , the Contracts are freely assignable, or if the consent of the contracting party to the assignment is required, Seller shall have obtained such consent prior to Closing, or if the giving of notice of such assignment is required, Seller has provided such notice prior to the Closing. To Seller’s actual knowledge: (x) no party to any of the Contracts is threatened with insolvency; and (y) there exists no fact or circumstance which may cause a party to one of the Contracts to fail to perform such Contract. The execution, delivery, consummation and performance of this Agreement and the transactions contemplated herein will not cause either Seller to be in breach or default of any of the Contracts. Schedules 2.1(a) , (b) , (c) , and   (f) collectively constitute accurate, correct and complete lists of the Contracts.

Section 3.9    No Other Contracts . Other than the Contracts or the Excluded Assets, there are no written or oral or contractual commitments, contracts or agreements that relate to the Business to which Seller is a party that will be binding upon Buyer, or that will affect Buyer or the Purchased Assets, on or after the Closing.

Section 3.10    Permits . Other than the Contracts or the Excluded Assets, the Permits listed in Schedule 2.1(g) constitute all of the licenses, permits, certificates, approvals, exemptions, franchises, registrations, variances, accreditations or authorizations related to, reasonably necessary in, currently used in or required for the operation of the Business. The Permits are valid and in full force and effect and there are no pending proceedings which could result in the termination, revocation, limitation or impairment of any of the Permits. The Seller has not received notice of any violations in respect of any of the Permits. Schedule 2.1(g) contains an accurate, correct and complete list of the Permits that are reasonably necessary in, currently used in or required for the operation of the Business.

Section 3.11    Intellectual Property . Other than the Contracts or the Excluded Assets, the Business Intellectual Property listed in Schedule 2.1(h) constitutes all of the Intellectual Property owned or licensed by Seller that is currently used solely in the conduct of the Business, and any license for any of the foregoing in each case. Seller owns, or licenses or otherwise possesses, legally enforceable rights to use the Business Intellectual Property that is listed in Schedule 2.1(h) and such Business Intellectual Property is sufficient for the conduct of the Business of Seller as it is currently being conducted on the date hereof. Except as disclosed in Schedule 3.11 , neither the manufacture, marketing, license, sale or intended use of any tangible product currently sold by the Business violates any license or agreement between either Seller and any third party relating to such product or, to Seller’s knowledge, infringes any Intellectual Property right of any other party. The Seller has not received any written charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that either Seller must license or refrain from using any Intellectual Property rights of any Person relating to the Business Intellectual Property), nor is there any pending claim or litigation contesting the validity of the Business Intellectual Property or Seller’s ownership or right to use, sell, license or dispose of the Business Intellectual Property. The Seller has not received any notice asserting that any of the Business Intellectual Property or the proposed use, sale, license or disposition thereof conflicts or will conflict with the rights of any other party, and the Seller has not licensed the use of the Business Intellectual Property to any third party nor permitted the use by any third party of the same in a manner which would infringe the trademark rights of Seller. Seller will make available to Buyer complete and correct copies of all reasonably accessible user and technical documentation related to the Business Intellectual Property that is listed in Schedule 2.1(h) . Except as disclosed in Schedule 3.11 , the Seller has not received any notice that any of their current or prior members, officers, employees or consultants claim an ownership interest in any of the Business Intellectual Property as a result of having been involved in the development of such property while employed by or consulting to the Business or otherwise.

Section 3.12    Inventory . Except as set forth in Schedule 3.12 , Sellers are not in possession of any inventory that is not owned by them. All of the Inventory has been valued at cost on a first-in, first-out basis.

Section 3.13    No Real Property Owned by Seller . Seller owns no real property used in the Business. Except as set forth in Schedule 3.13 , the Headquarters Lease may be freely assigned, assumed or sublet, is valid and in full force and effect, and to Seller’s knowledge there is not pending or threatened any proceedings which could result in the termination revocation, limitation or impairment of the Headquarters Lease.

Section 3.14    Litigation . Except as set forth in Schedule 3.14 , there is no litigation, proceeding, or governmental investigation pending in front of any court, arbitration board, administrative agency, or tribunal against or relating to Seller that would prevent or affect the Purchased Assets, the Business, or the consummation of this Agreement or the sale, transfer or assignment of the Purchased Assets by Seller.

Section 3.15    Compliance with Law . Except as set forth in Schedule 3.15 , Seller has been and are in, and the Business has been and is being conducted in, compliance in all material respects with all Laws that are applicable to or binding upon the Business or the Purchased Assets, and Seller has not received any written or oral notice of any violation or alleged violation of any Law.

Section 3.16    Investment Company . Seller is not an “investment company”, or an “affiliated person” of an “investment company”, or a company “controlled” by an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended, and Buyer is not an “investment adviser” or an “affiliated person” of an “investment adviser” as such terms are defined in the Investment Advisers Act of 1940, as amended.

Section 3.17    Brokers’ Fees . Except as set forth in Schedule 3.17 , 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 the Transaction Documents.

Section 3.18    No Material Adverse Effect . Since June 30, 2006, there have been no changes that would have a Material Adverse Effect. Since June 30, 2006, Seller has operated the Business in the ordinary course of business consistent with past practices and Seller has used reasonable efforts to keep the Business intact.

Section 3.19    Accounts Receivable . Except as set forth on Schedule 3.19 , all Accounts Receivable of the Business arose from valid transactions and in the ordinary course of business for goods sold or services rendered and are not subject to any valid counterclaims or setoffs known to Seller with respect to any such Accounts Receivable. The list of Accounts Receivable listed in Schedule 2.1(k) is a true, accurate and complete list of such accounts generated in connection with the Business and existing as of the date thereof.

Section 3.20    Taxes

(a)    Except as set forth in Schedule 3.20 (a) , as of the Closing Date:

(i)    The Seller has timely filed or, if not yet due, will timely file all Tax Returns required to be filed by them on or before the Closing Date and all such Tax Returns are or, in the case of Tax Returns not yet filed, will be, true, correct and complete in all respects.

(ii)    The Seller has paid all Taxes with respect to all Taxable periods ending on or before the Closing Date and all Taxable periods starting before and ending after the Closing Date to the extent attributable to the portion of such periods up to and including the Closing Date, except to the extent the failure to pay any such Taxes would not reasonably expected to have a Material Adverse Effect.

(iii)    The Seller has made or will make available to Buyer signed copies of all Tax Returns filed by the Seller relating to all Taxable periods ending on or before the Closing Date as to which the statute of limitations remains open.

(iv)    No extension of time has been requested or granted for the Seller to file any Tax Return that has not yet been filed or to pay any Tax that has not yet been paid, and the Seller has not granted a power of attorney that remains out