ASSET PURCHASE AGREEMENT

EXHIBIT 2.2

EXECUTION COPY

ASSET PURCHASE AGREEMENT

by and among

DYNAMIC DETAILS INCORPORATED, SILICON VALLEY,

DYNAMIC DETAILS, INC.,

VMS, LLC,

and

VERITEK MANUFACTURING SERVICES, LLC

August 8, 2006

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (this “ Agreement ”) is made and entered into as of this 8th day of August 2006, by and among, and Dynamic Details Incorporated, Silicon Valley, a Delaware corporation (“ Seller ”), solely for the purpose of guaranteeing the performance of all obligations of Seller under Section 8.2 of this Agreement, Dynamic Details, Incorporated, a California corporation (“ Seller Guarantor ”), VMS, LLC, a Delaware limited liability company (“ Buyer ”), and, solely for the purpose of guaranteeing the performance of all obligations of Buyer under Section 8.3 of this Agreement, VERITEK Manufacturing Services, LLC, a Delaware limited liability company (“ Buyer Guarantor ”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in ARTICLE 1 of this Agreement.

RECITALS

      WHEREAS , Seller operates the value added business of Seller Guarantor by providing assembly, configuration, and testing services for complex electronic systems and subsystems such as printed circuit boards, backpanels, and wire harnesses for makers of communications and networking gear, computers, medical instruments, and military equipment;

      WHEREAS , Seller desires to sell certain of the assets and liabilities of the Business to Buyer on the terms and conditions set forth in this Agreement;

      WHEREAS , Buyer desires to acquire such assets and liabilities from Seller on the terms and conditions set forth in this Agreement;

      WHEREAS , Seller and Buyer further desire to contemporaneously enter into (i) a Supply Agreement pursuant to which Seller will supply certain products to Buyer, (ii) a Transition Services Agreement whereby Seller will provide certain transitional services to Buyer on a short term basis, (iii) a License Agreement whereby Seller will license certain intellectual property to Buyer, (iv) an Escrow Agreement pursuant to which Buyer will deposit a portion of the purchase price for the assets being acquired pursuant to this Agreement for the purpose of securing certain indemnification obligations of Seller and (v) a Non-Competition Agreement whereby Seller shall be restricted in its ability to compete with the Business;

      WHEREAS , Buyer Guarantor owns a controlling interest in Buyer and will benefit from the Transactions, and Buyer Guarantor is entering into this Agreement to guarantee the payment and performance by Buyer of all of its obligations hereunder; and

      WHEREAS , Seller Guarantor owns a controlling interest in Seller and will benefit from the Transactions, and Seller Guarantor is entering into this Agreement to guarantee the payment and performance by Seller of all of its obligations hereunder.

TERMS AND CONDITIONS

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth below, and subject to the terms and conditions set forth herein, the parties agree as follows:

ARTICLE 1

DEFINITIONS

     As used in this Agreement, the following terms shall have the meanings indicated below:

     “ Accepting Employees ” shall mean those Employees who accept Buyer’s offer of employment as contemplated by Section 3.1 and who commence employment with Buyer as of the Closing Date.

     “ Accounts Receivable ” shall mean all rights to payment, in whatever form, which arise or accrue before the Closing Date exclusively with respect to the Business whether disputed or undisputed, including all rights to payment for goods sold or services rendered, all royalties, commissions, supplier credits, licensor credits, rebates, accounts, and general intangibles and all other intangible personal property of the Business that would be included within the category “accounts receivable” in the “current assets” section of the balance sheet of the Business prepared as of the Closing Date in accordance with GAAP.

     “ Accountant ” shall have the meaning set forth in Section 2.8(b) .

     “ Accountant’s Determination ” shall have the meaning set forth in Section 2.8(b) .

     “ Acquired Assets ” shall have the meaning set forth in Section 2.1 .

     “ Action ” shall mean any demand, action, claim, suit, countersuit, arbitration, inquiry, subpoena, discovery request, proceeding or investigation by or before any court or grand jury, any Governmental Entity or any arbitration or mediation tribunal.

     “ Affiliate ” shall mean, in respect of any specified Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with, such specified Person.

     “ Agreement ” shall have the meaning set forth in the Preamble.

     “ Ancillary Agreements ” shall mean the Supply Agreement, the Transition Services Agreement, the License Agreement, the Escrow Agreement and the Non-Competition Agreement.

     “ Assignment and Assumption Agreement ” shall have the meaning set forth in Section 2.7(a)(iii) .

     “ Assumed Contracts ” shall have the meaning set forth in Section 2.1(e) .

     “ Assumed Liabilities ” shall have the meaning set forth in Section 2.3(a) .

     “ Bill of Sale ” shall have the meaning set forth in Section 2.7(a) .

     “ Bulk Sales Laws ” shall have the meaning set forth in Section 6.9 .

     “ Business ” means the value added business of Seller and Seller Guarantor, which provides assembly, configuration, and testing services for complex electronic systems and subsystems such as printed circuit boards, backpanels, and wire harnesses for makers of communications and networking gear, computers, medical instruments, and military equipment through facilities located at 2150 Commerce Drive, San Jose, California, and 2120 Miller Drive, Suite A, Longmont, Colorado, but excluding the Excluded Business.

     “ Business Day ” means any day, other than Saturday or Sunday or days in which banks in the State of California are entitled to close.

     “ Business Material Adverse Effect ” shall mean any change or effect that is, individually or in the aggregate, materially adverse to the business, operations, assets, condition (financial or otherwise) or results of operations of the Business other than any change or effect (a) arising out of the announcement or pendency of the Transactions, (b) arising out of compliance by Seller with the terms of this Agreement, or (c) arising out of any action taken or announced by a Buyer or taken or announced by Seller at the request or direction of a Buyer, or any inaction or failure to act by Seller at the request or direction of a Buyer. Notwithstanding the foregoing, the parties acknowledge and agree that there shall be deemed to have been a Business Material Adverse Effect in the event there is a material breach or material modification of any Contract listed on Exhibit 6.10 that materially and adversely effects the business, operations, assets, condition (financial or otherwise) or results of operation of the Business.

     “ Buyer ” shall have the meaning set forth in the Preamble.

     “ Buyer Guarantor ” shall have the meaning set forth in the Preamble.

     “ Buyer Indemnitees ” shall have the meaning set forth in Section 8.2 .

     “ Buyer Losses ” shall have the meaning set forth in Section 8.2 .

     “ Buyer Obligations ” shall have the meaning set forth in Section 10.10(b) .

     “ Closing ” shall have the meaning set forth in Section 2.6 .

     “ Closing Balance Sheet ” shall have the meaning set forth in Section 2.8(a) .

     “ Closing Net Assets Statement ” shall have the meaning set forth in Section 2.8(d) .

     “ Closing Payment ” shall have the meaning set forth in Section 2.4 .

     “ Closing Date ” shall have the meaning set forth in Section 2.6 .

     “ COBRA ” shall have the meaning set forth in Section 3.7 .

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

     “ Contracts ” shall mean any agreements, contracts, instruments, obligations, promissory notes, chattel paper, purchase orders, work orders, customer and vendor arrangements, promises or undertakings (whether written or oral) including personal property leases, conditional sales contracts and the like, that are legally binding or operationally effective and to which Seller is a party or is bound; but excluding all contracts, agreements, or plans relating to employment, employees or employment benefits and all Employee Plans.

     “ Current Liability ” or “ Current Liabilities ” shall mean all Liabilities of the Business arising prior to the Effective Time, but only to the extent that such Liabilities would be accrued as “current liabilities” on the balance sheet of the Business prepared as of the Closing Date in accordance with GAAP; provided , however , that no current accrual of a Liability that is an Excluded Liability pursuant to Section 2.3(b) shall be deemed a Current Liability hereunder.

     “ Customer Assets ” shall mean furniture, fixtures, equipment, supplies, inventory (including raw materials, work in process and finished goods) or other tangible personal property located at the Real Property but owned by a customer or customers of the Business and not by Seller.

     “ Defaulting Party ” shall have the meaning set forth in Section 9.3 .

     “ Disclosure Schedules ” shall mean the schedules containing lists required by, and disclosing exceptions or qualifications to, Seller’s representations and warranties, which are being delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement, as such may be amended by Seller and accepted by Buyer pursuant to Section 2.7(a)(viii) .

     “ Effective Time ” shall be 11:59 p.m. Pacific time on the Closing Date.

     “ Employee ” shall mean any employee of the Business, a list of which is set forth at Schedule 4.13 .

     “ Employee Plans ” shall have the meaning set forth in Section 4.14.

     “ Encumbrance ” means (i) any mortgage, deed of trust, pledge, lien, security interest, hypothecation, charge, claim, reservation, condition, easement, right of way, covenant, lease, sublease, right of occupancy, encroachment, title defect, imposition, tenancy, option, mineral rights agreement, or any other exception to title any Acquired Asset, whether land, tangible or intangible personal property or any interest therein, including any community property interest, equitable interest, option, right of first refusal, adverse claim, or any restriction on use, disposition, transfer, right to income, or exercise of any other attribute of ownership, and (ii) the interest of any vendor or lessor under any conditional sale agreement, financing lease or other title retention agreement relating to such Acquired Asset.

     “ Environmental Laws ” shall mean all Laws concerning (a) public health and safety relating to toxic or Hazardous Substances or (b) pollution or protection of the environment or natural resources.

     “ Equipment ” shall mean all machinery, presses, equipment, boilers, heating and cooling systems, racking systems, fork lifts, trailers, motorized vehicles, production, material handling, communication and testing machinery and equipment, molds, dies, machine tools, mechanical and electrical parts, repair parts, tools, office equipment, computer hardware and accessories, instruments, controls, mechanical and electrical systems, and telephone systems.

     “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, and the rules and regulations issued pursuant to that Act.

     “ Escrow Account ” shall mean the “Escrow Account”, as that term shall be defined in the Escrow Agreement.

     “ Escrow Agent ” shall mean an Escrow Agent mutually agreeable to the parties that will administer the Escrow Account in accordance with the Escrow Agreement.

     “ Escrow Agreement ” shall mean the Escrow Agreement among the Escrow Agent, Buyer and Seller, to be executed by Buyer and Seller prior to Closing in a mutually acceptable form.

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

     “ Excluded Business ” shall mean Seller’s and Seller Guarantor’s printed circuit board manufacturing business.

     “ Excluded Liability ” or “ Excluded Liabilities ” shall have the meaning set forth in Section 2.3(b) .

     “ Final Determination Date ” shall have the meaning set forth in Section 2.8(c) .

     “ GAAP ” shall mean generally accepted accounting principals of the United States of America, as consistently applied by Seller with respect to the Business in the Ordinary Course.

     “ Governing Documents ” shall mean (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) any charter, certificate of partnership, partnership agreement or similar document adopted or filed in connection with the creation, formation or organization of any other entity; and (c) any amendment or supplement to any of the foregoing.

     “ Governmental Authorizations ” shall mean any consent, license, registration or permit issued, granted, given or otherwise made available by or under the authority of any Governmental Entity or pursuant to any Legal Requirement, including, without limitation, environmental permits.

     “ Governmental Entity ” shall mean any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

     “ Hazardous Substance ” shall mean any substance that is regulated by a Governmental Entity and is defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as “hazardous substances,” “hazardous materials,” “hazardous wastes” or “toxic substances.”

     “ Holdback Amount ” shall have the meaning set forth in Section 2.4 .

     “ Income Statement ” shall have the meaning set forth in Section 4.3 .

     “ Indemnified Party ” shall have the meaning set forth in Section 8.4 .

     “ Indemnifying Party ” shall have the meaning set forth in Section 8.4 .

     “ Insolvent ” shall have the meaning set forth in Section 4.22 and Section 5.6 , as the context requires.

     “ Intellectual Property ” shall mean patents, inventions, trade secrets, processes, copyrights, trademarks, service marks, trade names, logos, designs, screens, film, art and artwork libraries, packaging, trade secrets, confidential business information, research, marketing, technical know-how, technical data, licenses and license rights, formulas, compositions, manufacturing or production processes, designs, drawings, patterns, computer software and related documentation and source codes, all business application software, UPC codes, and all translations, adaptations, derivations, and combinations thereof, all license agreements, rights of use, applications, registrations, and renewals in

connection therewith and all rights to royalties or other payments with respect thereto or arising therefrom.

     “ Inventory ” or “ Inventories ” shall mean all inventories, raw materials, work in process, finished goods, supplies (including office supplies), spare parts, packaging materials, samples and other tangible personal property exclusively of the Business, whether held at a location controlled by Seller, Seller’s Affiliates, independent contractors or suppliers or their Affiliates, contractors or suppliers, in storage, in customs, or in transit, that would be included within the category “inventory” in the “current assets” section of the balance sheet of the Business prepared as of the Closing Date in accordance with GAAP.

     “ Knowledge ” or “ Known ” or other similar terms evidencing awareness on the part of Seller shall mean the actual knowledge of Mikel Williams, currently employed by Seller Guarantor as its Chief Executive Officer, Brad Tesch, currently employed by Seller Guarantor as its Chief Operations Officer or David Lane, currently employed by Seller as its Vice President — Operations.

     “ Law ” or “ Laws ” shall mean any constitutional provision, statute, ordinance or other law, rule or regulation of any Governmental Entity.

     “ Leases ” shall mean collectively the leases related to the Real Property.

     “ Lease Assignment and Assumption ” shall have the meaning set forth in Section 2.7(a)(v) .

     “ Legal Requirements ” shall mean any federal, provincial, state, local, municipal, foreign, international, multinational or other administrative order, constitution, Law, ordinance, principle of common law, regulation, statute or treaty applicable to the Business.

     “ Liability ” or “ Liabilities ” shall mean with respect to any Person, any liability or obligation of such Person, whether absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

     “ License Agreement ” shall have the meaning set forth in Section 2.7(a)(vi) .

     “ Licenses ” shall have the meaning set forth in Section 4.12 .

     “ Logos ” shall have the meaning set forth in Section 2.2(f) .

     “ Longmont Facility ” shall mean Seller’s manufacturing facility located at 2120 Miller Drive, Suite A, Longmont, Colorado.

     “ Material Contracts ” shall have the meaning set forth in Section 4.15 .

     “ Mirrored Shared Contracts ” shall have the meaning set forth in Section 6.11(c) .

     “ Names ” shall have the meaning set forth in Section 2.2(f) .

     “ Net Assets Statement ” shall have the meaning set forth in Section 4.3(a) .

     “ Net Working Capital ” shall have the meaning set forth in Section 2.8(c) .

     “ Non-Competition Agreement ” shall have the meaning set forth in Section 2.7(a)(x) .

     “ Non-Defaulting Party ” shall have the meaning set forth in Section 9.3 .

     “ Notice of Adjustment ” shall have the meaning set forth in Section 2.8(a) .

     “ Objection Notice ” shall have the meaning set forth in Section 2.8(b) .

     “ Ordinary Course of Business ” or “ Ordinary Course ” shall mean actions taken in the ordinary course of the Business that are consistent with past practice in the day-to-day operation of the Business.

     “ Overpayment ” shall have the meaning set forth in Section 2.8(c) .

     “ Payee Party ” shall have the meaning set forth in Section 6.11(c) .

     “ Payor Party ” shall have the meaning set forth in Section 6.11(c) .

     “ Permitted Encumbrance ” means (i) any Encumbrance for Taxes that are either not yet due and payable or are being contested; (ii) mechanic’s, materialmen’s, workmen’s, warehousemen’s and other similar Encumbrances incurred in the Ordinary Course of Business with respect to obligations which are not past due or which are being contested; (iii) such liens, imperfections of title, easements on real property or leasehold estates, and other Encumbrances to title to the Real Property in existence as of the Effective Date; (iv) Encumbrances arising in the Ordinary Course of Business pursuant to Assumed Contracts; (v) Encumbrances set forth in the written terms of Assumed Contracts; and (vi) zoning, entitlement, conservation restriction and other land use and environmental regulations imposed by Governmental Entities or pursuant to Legal Requirements upon the use or ownership of the Acquired Assets; provided , however , that no Encumbrance that will exist at any time after the Effective Time arising from or with respect to an Excluded Liability shall be a Permitted Encumbrance.

     “ Person ” shall mean any individual, corporation, partnership, limited liability company, joint venture, or other entity.

     “ Prepayments ” means all credits, prepaid royalties, prepaid expenses, rental payments, deferred charges, advance payments, security deposits, funds advanced to customers and prepaid items exclusively relating to, or exclusively arising out of, the Business, the Acquired Assets, the Assumed Liabilities, the Assumed Contracts, the Real Property or the Leases that would be reflected in the balance sheet of the Business prepared as of the Closing Date in accordance with GAAP within the category “prepayments and other current assets” in the “current assets” section of such balance sheet.

     “ Proposed Closing Net Assets Statement ” shall have the meaning set forth in Section 2.8(a) .

     “ Purchase Price ” shall have the meaning set forth in Section 2.4 .

     “ Real Property ” shall mean the real property located at 2150 Commerce Drive, San Jose, California, and the property located at 2120 Miller Drive, Suite A, Longmont, Colorado.

     “ Required Consents ” shall having the meaning set forth in Section 6.10 .

     “ Retained Names and Marks ” shall have the meaning set forth in Section 2.2(f) .

     “ San Jose Facility ” shall mean Seller’s manufacturing facility located at 2150 Commerce Drive, San Jose, California.

     “ Seller ” shall have the meaning set forth in the Preamble.

     “ Seller Guarantor ” shall have the meaning set forth in the Preamble.

     “ Seller Indemnitees ” shall have the meaning set forth in Section 8.3 .

     “ Seller Losses ” shall have the meaning set forth in Section 8.4 .

     “ Seller Obligations ” shall have the meaning set forth in Section 10.10(a) .

     “ Settlement Agreement ” shall have the meaning set forth in Section 2.8(b) .

     “ Shared Contracts ” shall mean Contracts between Seller and any of its Affiliates, on the one hand, and one or more third parties, on the other hand, that directly benefit both the Business and any other businesses conducted by Seller or its Affiliates, all of which are set forth on Schedule 4.15 of the Disclosure Schedules.

     “ Shared Contractual Liabilities ” shall means Liabilities arising out of Shared Contracts.

     “ Statement Date ” shall have the meaning set forth in Section 4.3 .

     “ Supply Agreement ” shall have the meaning set forth in Section 2.7(a)(ix) .

     “ Tax ” or “ Taxes ” shall mean any and all taxes imposed or required to be collected by any federal, state or local taxing authority under any statute or regulation, including all income, gross receipts, sales, use, personal property, occupancy, business occupation, mercantile, ad valorem, transfer, license, withholding, payroll, employment, excise, real estate, environmental, capital stock, franchise, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including any interest, penalties and other additions thereto.

     “ Tax Return ” shall mean 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.

     “ Threatened ” shall mean, as to Seller, that Seller has Knowledge that a demand or statement has been made, or that notice has been given, to Seller (whether written, oral or electronic) that an Action is threatened, being considered or may be commenced against the Business or Seller (with respect to the Business).

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

     “ Transition Services Agreement ” shall have the meaning set forth in Section 2.7(a)(iv) .

     “ Thirty-Day Period ” shall have the meaning set forth in Section 2.8(b) .

     “ Underpayment ” shall have the meaning set forth in Section 2.8(c) .

     “ WARN Act ” shall mean the Worker Adjustment and Retraining Notification Act of 1988, Pub. L. 100-379, as amended from time to time.

ARTICLE 2
PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

      2.1 Acquired Assets

          Upon the terms and subject to the conditions set forth in this Agreement, at the Closing and effective as of the date set forth in the applicable bill of sale, Seller shall, except to the extent excluded by Section 2.2 , sell, transfer, assign, and deliver to Buyer, free and clear of all Encumbrances other than Permitted Encumbrances, all of Seller’s right, title, and interest in and to the following assets and property of the Business (all such assets and property shall herein be referred to collectively as the “ Acquired Assets ”):

          (a) Accounts Receivable . All Accounts Receivable ( Exhibit 2.1(a) sets forth the Accounts Receivable as of June 30, 2006);

          (b) Inventories . All Inventories ( Exhibit 2.1(b) sets forth the Inventories as of June 30, 2006);

          (c) Prepayments . All Prepayments ( Exhibit 2.1(c) sets forth the Prepayments as of June 30, 2006);

          (d) Other Tangible Personal Property . All furniture, fixtures, leasehold improvements, Equipment, and other tangible personal property other than Inventory used exclusively in the Business, wherever located, including without limitation all such property located at the Real Property or held by Employees (such as Seller-owned laptop computers, PDA’s and the like), including those assets set forth on Exhibit 2.1(d) (which reflects such assets as of June 30, 2006), but excluding Customer Assets, landlord-owned assets, employee-owned assets and assets used in connection with the Excluded Business;

          (e) Contracts . All material Contracts and Leases exclusively related to the Business, including those Contracts listed on Exhibit 2.1(e) , and all benefits and liabilities arising therefrom (the “ Assumed Contracts ”);

          (f) Intangible Personal Property and Goodwill . The Business, the goodwill of the Business, all licenses, permits, vendor or customer numbers or codes, all other rights, permissions and identifications of every kind or nature and all other intangible personal property related exclusively to the Business (other than cash, cash equivalents, Accounts Receivable, Prepayments and inter-company obligations), including all such assets that would be reflected in the balance sheet of the Business prepared as of the Closing Date in accordance with GAAP;

          (g) Intellectual Property . All Intellectual Property described on Exhibit 2.1(g) and any and all Intellectual Property rights arising after the Effective Time from Assumed Contracts;

          (h) Documents . All bills of lading, documents of title, documents required to clear customs, and shipping and storage documentation, and all other documents and instruments or every kind and nature evidencing or establishing ownership, title, right to payment or any other rights to any of the Acquired Assets or the location, status, condition or any requirements for claiming any of the Acquired Assets, in each case in the possession or control of Seller on the date hereof;

          (i) Certain Rights . All guarantees, warranties, indemnities and similar rights exclusively with respect to, or exclusively covering, any of the Acquired Assets and all rights of Seller to possession and use of Customer Assets, landlord-owned assets

located at the Real Property, personal property leased from third-parties and used by Seller exclusively in the Business;

          (j) Marketing Materials and Records . (i) All marketing and advertising materials used exclusively in the Business, including, without limitation, all customer and referral information, customer lists, prospect lists, contact lists, advertising and promotional arrangements, forms, labels, shipping materials, brochures, artwork, photographs, brochures, sales and promotional materials and other such items and (ii) all books, records, data and other documents related exclusively to the Business, the Acquired Assets, the Assumed Contracts, the Assumed Liabilities, the Real Property or the Leases, in each case in the possession or control of Seller, including, without limitation, research and development reports, production reports, manufacturing reports, equipment logs, operating guides and manuals, manuals, engineering data, designs, drawings, blueprints, plans, specifications, supplier lists, parts lists, engineering data, computer media, software and software documentation, correspondence, environmental compliance records, purchase and sales records, accounting records and backup, accounts payable, accounts receivables, journals, personnel records and payroll records of all Accepting Employees, purchasing and sales records, and other materials, information and data whether written or in electronic or computer media; and

          (k) Government Authorizations . To the extent transferable, or subject to reissue, the Governmental Authorizations held by Seller exclusively for the benefit of the Business.

      2.2 Excluded Assets

     Notwithstanding any provision of Section 2.1 to the contrary, the following assets and property of Seller shall not be transferred to Buyer pursuant to this Agreement (collectively, the “ Excluded Assets ”):

          (a) Cash . All cash or cash equivalents, securities and negotiable instruments of Seller on hand, in lock boxes, in financial institutions or elsewhere, including, without limitation, all cash residing in any collateral cash account securing any obligation or contingent obligation of Seller or any Affiliate of Seller;

          (b) Inter-Company Receivables . All Accounts Receivable of the Business that are payable by Seller or any Affiliate of Seller;

          (c) Insurance Proceeds . All rights under and to Seller insurance policies, benefits and proceeds;

          (d) Certain Overpayments . All rights to any overpayment of tariffs or import duties made on or prior to the Closing Date with respect to the Business;

          (e) Certain Personnel Records . All personnel and other records that Seller is required by Law to retain in its possession (provided that to the extent consistent with Law copies relating to the Employees shall be provided to Buyer);

          (f) Certain Intellectual Property and Related Materials . All of the Intellectual Property and other intangible rights and property owned by or licensed to Seller or any of its Affiliates other than Intellectual Property described in Section 2.1(g), including, without limitation, all names, marks, trade names, trademarks, service names and service marks (collectively “ Names ”) set forth on Exhibit 2.2(f) together with all variations thereof and all symbols or logos (collectively, “ Logos ”) incorporating such Names and all registered and unregistered trademarks, service marks, domain names, trade names, trade dress, corporate names and other identifiers of source containing, incorporating any of the foregoing (the “ Retained Names and Marks ”) and all packaging, labeling, and other materials and supplies that would not be readily usable by Buyer because they bear Retained Names and Marks;

          (g) Employment Contracts . All contracts, agreements, or plans relating to employment, employees or employment benefits and all Employee Plans;

          (h) Assets of Other Businesses Units . All assets of the Excluded Business and all other assets of Seller or any other Affiliate or business unit of Seller Guarantor other than the Acquired Assets;

          (i) Corporate Records . The company seal, minute books, charter documents, stock or equity record books and such other books and records as pertain to the organization, existence or capitalization of Seller, as well as any other records or materials relating to Seller generally and not involving or related to the Acquired Assets or the operations of the Business;

          (j) Rights Under this Agreement . All rights of Seller and Affiliates of Seller under this Agreement and the Ancillary Agreements; and

          (k) Certain Listed Assets . All assets listed in the attached Exhibit 2.2(k) .

     All of the Excluded Assets shall be and remain solely the property and assets of Seller, and Buyer shall acquire no title or interest in any Excluded Asset.

      2.3 Liabilities

          (a) Assumed Liabilities . On the Closing Date and effective as of the Effective Time, Buyer shall, except to the extent excluded pursuant to Section 2.3(b), assume and agree to discharge the Liabilities of the Business (“ Assumed Liabilities ”), including:

          (i) Current Liabilities . All Current Liabilities; provided , however , that the aggregate amount of Current Liabilities assumed under this Section 2.3(a)(i), including the amount of Current Liabilities assumed pursuant to Section 2.3(a)(iii), shall not exceed the aggregate amount reflected under “current liabilities” on the Closing Net Assets Statement;

          (ii) Post-Closing Liabilities . All Liabilities arising from the conduct of the Business after the Effective Time, including, without limitation, Liabilities arising or accruing after the Effective Time with respect to any of the Assumed Contracts, the Acquired Assets, or any Environmental Law;

          (iii) Liabilities Under Assumed Contracts . All Liabilities that arise under any of the Assumed Contracts;

          (iv) Warranty Claims . Subject to Section 2.3(b)(vii) , all Liabilities for product warranty service claims relating to products of the Business; and

          (v) Labor Liabilities . All Liabilities (including, without limitation, termination and severance costs) (A) arising out of, or relating to, the WARN Act or California Labor Code Sections 1400-1408 due to or arising from actions or omissions of Buyer, including, without limitation, Buyer’s failure to offer employment to a number of the Employees that is sufficient to avoid triggering a “mass layoff” or “plant closing” under such Laws, (B) for workers’ compensation allocated to Buyer pursuant to Section 3.7 , (C) for COBRA allocated to Buyer pursuant to Section 3.7 , and (D) for commissions payable to Accepting Employees after the Effective Time (including any commissions accrued for as of the Effective Time).

          (b) Excluded Liabilities . Seller shall retain full responsibility and liability for the following Liabilities (“ Excluded Liabilities ”) and Buyer shall have no responsibility, liability, or obligation with respect to any such Liability:

          (i) Certain Labor Liabilities . All Liabilities of Seller arising out of, or relating to, the WARN Act, California Labor Code Sections 1400-1408, or any other labor or employment Law other than due to or arising from actions or omissions of Buyer;

          (ii) Taxes, Import Duties, Etc . All Liabilities of Seller (or any Affiliate of Seller) for Taxes, tariffs and import duties that accrue prior to the Effective Time, other than Taxes to be paid by Buyer pursuant to Section 2.9 ;

          (iii) Inter-Company Liabilities . All Liabilities of the Business arising prior to the Effective Time that are payable to Seller or its Affiliates;

          (iv) Employee Liabilities . All Liabilities of the Business with respect to Employees who are not Accepting Employees (other than the Labor Liabilities assumed by Buyer under Section 2.3(a)(v) ) and all Liabilities with respect to Accepting Employees (other than Current Liabilities for commissions which shall be Assumed Liabilities) including Liabilities that arise prior to the Effective Time and Liabilities under contracts, agreements, or plans relating to employment, such employees or employment benefits that were effective prior to the Effective Time, Liabilities for workers’ compensation allocated to Seller pursuant to Section 3.7 and Liabilities for COBRA benefits allocated to Seller pursuant to Section 3.7 ;

          (v) Product Liability Claims . All product liability claims arising with respect to an item sold by the Business prior to the Effective Time;

          (vi) Liabilities under Employee Plans . All Liabilities arising under or with respect to any Employee Plan;

          (vii) Certain Warranty Claims . Liabilities for product warranty service claims relating to products of the Business sold prior to the Effective Date that arise within 12 months of the Closing Date in excess of US$25,000; provided , however , that the Liabilities excluded pursuant to this Section 2.3(b)(vii) shall in no event exceed US$250,000; and

          (viii) Liabilities Not Reflected on the Closing Net Assets Statement . All Liabilities that arose or accrued before the Effective Time that are not reflected on the Closing Net Assets Statement; provided , however , that no post-closing Liabilities assumed by Buyer pursuant to Section 2.3(a)(ii) , no Liabilities under Assumed Contracts assumed by Buyer pursuant to Section 2.3(a)(iii), no warranty claims assumed by Buyer pursuant to Section 2.3(a)(iv) and no Labor Liabilities assumed by Buyer pursuant to Section 2.3(a)(v) shall be Excluded Liabilities.

     All of the Excluded Liabilities shall be and remain the sole responsibility, liability, and obligation of Seller, and Buyer shall have no responsibility or liability for any Excluded Liability.

      2.4 Purchase Price

     The aggregate purchase price for the Acquired Assets (the “ Purchase Price ”) shall be US$12,000,000, payable at Closing, plus the assumption of Assumed Liabilities. The purchase price shall be paid at Closing by the delivery of US$11,500,000 to Seller (the “ Closing Payment ”) and US$500,000 to the Escrow Account (“ Holdback Amount ”). The Purchase Price shall be subject to adjustment as provided in Section 2.8 .

      2.5 Allocation of Purchase Price

     Prior to Closing, the parties shall agree in good faith, and in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder, to an allocation of the Purchase Price (including the Assumed Liabilities) among the Assets (by category with respect to assets not subject to sales and use tax and by asset with respect to assets subject to sales and use tax). The parties agree that a purchase price of US$500,000 shall be allocated to the Non-Competition Agreement. Within twenty (20) days following the settlement of any post-Closing adjustments pursuant to Section 2.8 , the parties shall negotiate in good faith and allocate any such adjustments among the Assets in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder. After the Closing, the parties shall make consistent use of the allocation agreed upon pursuant to this Section 2.5 for all purposes (including financial accounting and Tax purposes) and in all filings, declarations, and reports to State Agencies or the Internal Revenue Service in respect thereof, including the reports required to be filed under Section 1060 of the Code and the Treasury Regulations promulgated thereunder.

      2.6 Closing

     The purchase and sale (the “ Closing ”) provided for in this Agreement will take place at the offices of Paul, Hastings, Jonfsky & Walker, LLP in Costa Mesa, California on the fifth (5 ^th ) Business Day following the date on which the conditions to the obligations of the parties specified in Sections 7.1 and 7.2 shall have been satisfied or waived or at such other date, time, or place as the parties may agree in writing. Subject to the provisions of ARTICLE 9 , failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 2.6 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement. The date and time that the Closing actually takes place is referred to as the “ Closing Date .”

      2.7 Closing Obligations

          (a) At the Closing, Seller will deliver:

          (i) a certificate executed by Seller as required by Section 7.2(d) ;

          (ii) a bill of sale for all of the Assets in the form of Exhibit 2.7(a)(ii) (the “ Bill of Sale ”) duly executed by Seller;

          (iii) assignment and assumption agreements for the Assumed Contracts substantially in the form of Exhibit 2.7(a)(iii) (the “ Assignment and Assumption Agreement ”);

          (iv) a transition services agreement in a form mutually acceptable to Buyer and Seller (the “ Transition Services Agreement ”), duly executed by Seller;

          (v) an assignment of leases (“ Lease Assignment and Assumption ”) in a form mutually acceptable to Buyer and Seller, duly executed by Seller;

          (vi) an intellectual property license agreement in a form mutually acceptable to Buyer and Seller (the “ License Agreement ”), duly executed by Seller;

          (vii) the Required Consents listed at Exhibit 6.10 in a form mutually acceptable to Buyer and Seller, duly executed by all of the parties whose consent is required;

          (viii) updated Disclosure Schedules, if necessary, delivered by Seller, in such form and substance as is reasonably acceptable to Buyer in good faith;

          (ix) a supply agreement in a form mutually acceptable to Buyer and Seller (the “ Supply Agreement ”), duly executed by Seller;

          (x) a non-competition agreement in the form of Exhibit 2.7(a)(x) (the “ Non-Competition Agreement ”), duly executed by Seller;

          (xi) the Escrow Agreement duly executed by Seller; and

          (xii) such additional documents as are reasonably required by a Buyer pursuant to Section 6.8 .

          (b) At the Closing, Buyer will deliver:

          (i) the Closing Payment in immediately available funds to such account as may be specified by Seller in writing prior to the Closing;

          (ii) the Holdback Amount in immediately available funds to the Escrow Account;

          (iii) all sales, use, and transfer Taxes payable pursuant to Section 2.9 , if any, in immediately available funds to the Escrow Account or a resale certificate or other certificate or certificates establishing that no such taxes are payable;

          (iv) certificates executed by each Buyer as required by Section 7.1(d) ;

          (v) the Bill of Sale duly executed by Buyer;

          (vi) the Assignment and Assumption Agreement duly executed by Buyer;

          (vii) the Transition Services Agreement duly executed by Buyer;

          (viii) the Assignment and Assumption of Leases duly executed by Buyer;

          (ix) the License Agreement duly executed by Buyer;

          (x) the Supply Agreement duly executed by Buyer;

          (xi) the Escrow Agreement duly executed by Buyer; and

          (xii) such additional documents as are reasonably required by Seller pursuant to Section 6.8 .

      2.8 Post-Closing Adjustment

          (a) Closing Balance Sheet and Proposed Closing Net Assets Statement . As promptly as practicable following the Closing Date (but in no event later than thirty (30) Business Days after the Closing Date), Seller shall complete preparation of (i) an unaudited closing balance sheet for the Business immediately prior to the Effective Time (the “ Closing Balance Sheet ”) prepared through full and consistent application of the conventions and procedures detailed in Section 4.3(d), and (ii) a net asset statement in substantially the same form as the Net Assets Statement detailing the Acquired Assets and Assumed Liabilities derived from the Closing Balance Sheet (the “ Proposed Closing Net Assets Statement ”), prepared through full and consistent application of the conventions and procedures detailed in Section 4.3(b) . The Proposed Closing Net Assets Statement shall be supported by schedules detailing each account in reasonably full detail. Upon completion of the Proposed Closing Net Assets Statement, Seller shall promptly deliver the same to Buyer with a notice setting forth its proposed adjustment to the Purchase Price, if any (the “ Notice of Adjustment ”). During the preparation of and after the completion of the Proposed Closing Net Assets Statement until the Final Determination Date, Seller shall provide Buyer and its advisors with timely access to the work papers, trial balances and similar materials used in connection with the preparation of the Proposed Closing Net Assets Statement.

          (b) Determination of Closing Net Assets Statement . Following receipt of the Notice of Adjustment, Buyer shall have thirty (30) Business Days (the “ Thirty-Day

Period ”) to review the Closing Balance Sheet, the Proposed Closing Net Assets Statement and the Notice of Adjustment. At or before the end of the Thirty-Day Period, Buyer will either (A) accept the Proposed Closing Net Assets Statement in its entirety or (B) deliver to Seller a written notice (the “ Objection Notice ”) containing a reasonably detailed written explanation of those items in the Proposed Closing Net Assets Statement which Buyer disputes, in which case the items identified by Buyer shall be deemed to be in dispute. If Buyer delivers the Objection Notice in a timely manner, then, within ten (10) Business Days from the end of the Thirty-Day Period the parties and, if desired, their accountants, will attempt to resolve in good faith any disputed items and reach a written agreement (the “ Settlement Agreement ”) determining the final Closing Balance Sheet and Closing Net Assets Statement. Failing such resolution, the unresolved disputed items will promptly be referred for final binding resolution to a nationally recognized auditing firm other than any auditor of a Buyer or Seller, reasonably acceptable to Buyer and Seller, each acting in good faith (the “ Accountant ”), the fees and expenses of which shall be borne equally by Buyer on the one hand, and Seller, on the other hand and in such case the Closing Balance Sheet and Closing Net Assets Statement will be as determined by the Accountant. Such determination (the “ Accountant’s Determination ”) shall be (A) in writing, (B) prepared through full and consistent application of the conventions and procedures set forth in Section 4.3(b) and 4.3(d), as applicable, (C) furnished to Buyer and Seller as soon as practicable after the items in dispute have been referred to the Accountant, and (D) non-appealable and incontestable by Buyer, Seller and each of their respective Affiliates and successors and not subject to collateral attack for any reason. The Closing Balance Sheet and Closing Net Assets Statement, however finally determined, shall contain supporting schedules fully detailing each balance sheet account.

          (c) Payment of Post-Closing Adjustment . If the Net Working Capital as reflected on the Closing Net Assets Statement is greater than US$7,400,000, the aggregate amount of such excess shall be referred to herein as the “ Underpayment ”. If the Net Working Capital as reflected on the Closing Net Assets Statement is less than US$7,400,000, the aggregate amount of such deficiencies shall be referred to herein as the “ Overpayment ”. If there is an Underpayment, then Buyer shall pay the amount of the Underpayment to Seller by wire transfer of immediately available funds at the direction of Seller, within ten (10) Business Days following the Final Determination Date. If there is an Overpayment, then Seller shall pay the amount of the Overpayment to Buyer by wire transfer of immediately available funds at the direction of Buyer, within ten (10) Business Days following the Final Determination Date.

          (d) Definitions . “ Net Working Capital ” shall mean the total current Acquired Assets minus the total current Assumed Liabilities. “ Final Determination Date ” shall mean the earliest to occur of (A) the 31 ^st Business Day following the receipt by Buyer of the Notice of Adjustment if Buyer shall have failed to deliver the Objection Notice to Seller within the Thirty-Day Period, (B) the date on which either Buyer or Seller gives the other a written notice to the effect that such party has no objection to the

other party’s determination of the Closing Net Assets Statement, (C) the date on which Buyer and Seller execute and deliver a Settlement Agreement or (D) the date as of which Buyer and Seller shall have received the Accountant’s Determination. “ Closing Net Assets Statement ” shall mean (A) the Proposed Closing Net Assets Statement if agreed by Buyer within the Thirty-Day Period, (B) the Proposed Closing Net Assets Statement if Buyer shall have failed to deliver the Objection Notice to Seller within the Thirty-Day Period, (C) a closing net assets statement agreed to between the parties in writing, (D) a closing net assets statement provided for in a Settlement Agreement or (E) the closing net assets statement provided for in the Accountant’s Determination.

      2.9 Sale, Use, Transfer Taxes and Fees

     Buyer shall be responsible for paying at Closing any transfer, sales, use, and similar Taxes or customs duties imposed by reason of the transfer of the Acquired Assets and the Assumed Liabilities provided hereunder.

ARTICLE 3
EMPLOYMENT

      3.1 Employees

     Buyer will give many of those employees of the Business listed on Schedule 4.13 of the Disclosure Schedules the opportunity to become employees of Buyer on the Closing Date. Those employees who accept an offer of employment from Buyer will be referred to herein as “Accepting Employees.” With regard to matters occurring after the Closing, Buyer assumes, to the extent permitted by applicable Legal Requirements, all of the immigration related rights, obligations and liabilities of Seller with respect to Accepting Employees who are foreign Employees in nonimmigrant status.

      3.2 No Plant Closing

     Buyer will neither engage in, within ninety (90) days after the Closing Date, a “plant closing,” “relocation,” “lay off,” “mass layoff,” or “termination” or cause any “employment loss” (as such terms are defined in the WARN Act or Sections 1400-1408 of the California Labor Code) with respect to the Business nor engage in any workforce reductions that, taken with any such reductions by Seller prior to Closing, would constitute an “employment loss,” “plant closing,” “relocation,” “lay off,” “mass layoff,” or “termination.”

      3.3 Non-Solicitation of Employees

     Except as contemplated by this Agreement or as provided in Section 3.1 , for a period of two (2) years from the Closing Date, Buyer will not, and will not permit any of its Affiliates to, solicit, offer to employ or retain the services of, or otherwise interfere with the relationship of Seller with any Person employed by or otherwise engaged to perform services for Seller in connection with its ongoing operations, unless such Employee (i) resigns voluntarily (without any solicitation from or on behalf of a Buyer or any of its Affiliates) or (ii) is terminated by Seller or any of its Affiliates. For a period of two (2) years from the Closing Date, each Seller will not, and will not permit any of its Affiliates to, solicit, offer to employ or retain the services of, or otherwise interfere with the relationship of Buyer with any Person employed by or otherwise engaged to perform services for Buyer in connection with its ongoing operations including the operation of the Business unless such Employee (i) resigns voluntarily (without any solicitation from or on behalf of a Buyer or any of its Affiliates) or (ii) is terminated by Seller or any of its Affiliates. Notwithstanding the foregoing, however, nothing in this Section shall be construed to prohibit Buyer or Seller or any of their Affiliates from circulating general advertisements for employment in the geographic region of Seller or Buyer and of hiring persons in response to such advertisements.

      3.4 Equitable Relief

     The covenants contained in Section 3.3 relate to matters that are of a special, unique, and extraordinary character and a violation of any of the terms of Section 3.3 will cause irreparable injury, the amount of which will be impossible to estimate or determine and for which there is no adequate remedy at law. Therefore, the party whose rights have been violated (whether a Buyer or a Seller) will be entitled to an injunction, restraining order, or other equitable relief from any court of competent jurisdiction in the event of any breach of Section 3.3 , and each party hereto hereby consents to the granting by such court of an injunction or other equitable relief, without the necessity of posting a bond, in order that the breach or threatened breach of such provisions may be effectively restrained. The rights