ASSET PURCHASE AGREEMENT

Exhibit 10.1

[EXECUTION COPY]

ASSET PURCHASE AGREEMENT

by and between

IP UNITY

and

IP UNITY PEACH, INC.

and

GLENAYRE ELECTRONICS, INC.

and

GLENAYRE TECHNOLOGIES, INC.

DATED DECEMBER 14, 2006

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EXHIBITS

SCHEDULE

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT, dated as of December 14, 2006, is made and entered into by and between IP Unity Peach, Inc., a Delaware corporation (the “ Purchaser ”), IP Unity, a California corporation (solely for purposes of Section 6.16) (“ IPU ”) and Glenayre Electronics, Inc., a Colorado corporation (the “ Seller ”) and Glenayre Technologies, Inc., a Delaware corporation (the “ Parent ”).

RECITALS

WHEREAS, the Seller is engaged in the business of providing integrated network-based messaging and communications systems, software and related installation, training, professional services, customization, project management and support services that enable messaging applications including voice messaging, text messaging, multimedia messaging, voice mail, fax mail, video mail, video portal, and missed call notification to communications service providers, including wireless and fixed network carriers, as well as broadband and cable service providers around the world, including the product lines listed on Schedule A (the “ Messaging Business ”); and

WHEREAS, upon and subject to the terms and conditions set forth herein, the Seller proposes to sell to the Purchaser, and the Purchaser proposes to purchase from the Seller, substantially all of the assets used or held for use by the Seller and certain of its subsidiaries in the conduct of the Messaging Business, and the Purchaser proposes to assume certain of the liabilities and obligations of the Seller and such subsidiaries.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, each Party hereby agrees as follows:

ARTICLE I.

DEFINITIONS

Section 1.1          Certain Definitions . For purposes of this Agreement, the following terms when capitalized shall have the meanings set forth below:

“ Affiliate ” with respect to any specified Person, means any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

“ Agreement ” means this Asset Purchase Agreement, as amended from time to time.

“ Acquired Subsidiary ” means those Messaging Subsidiaries whose capital stock or equity interests owned by the Seller will be transferred to the Purchaser at the Messaging Subsidiary Closing in accordance with Section 6.15 hereto.

“ Bankruptcy and Equity Exception ” means except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights

generally and (ii) is subject to general principles of equity, whether considered in a proceeding at Law or in equity.

“ Bankruptcy Law ” means any national, federal, state, local or foreign law for relief of debtors applicable to the Seller, and including Title 11 of the U.S. Code or similar laws of the United States.

“ Benefits Liabilities ” means, with respect to any Seller Employee Benefit Plan or any ERISA Affiliate Plan, any and all claims, debts, liabilities, commitment and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever or however arising, including all costs and expenses relating thereto, and including those debts, liabilities and obligations arising under law, rule, regulation, permits, action or proceeding before any court or regulatory agency or administrative agency, order or consent decree or any award of any arbitrator of any kind, and those arising under contract, commitment or undertaking.

“ Business Day ” means any day except Saturday, Sunday or any day on which banks are generally not open for business in the City of New York, New York.

“ Closing Date Indebtedness ” means any indebtedness of the Seller or the Selling Subsidiaries with respect to (a) borrowed money, (b) notes payable, (c) capital leases, and (d) installment sale Contracts or other Contracts relating to the deferred and unpaid purchase price of property or services, including any interest accrued thereon and prepayment or similar penalties and expenses, as of the Closing Date.

“ COBRA Continuation Coverage ” means the continuation coverage requirements under Code Section 4980B and Part 6 of Title I of ERISA.

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

“ Contract ” means any written contract, sub-contract, agreement, lease, license, note, loan agreement or any other binding agreement, arrangement, or understanding of any kind.

“ Copyrights ” means all works of authorship, copyrights, mask works, databases, copyright and mask work registrations and applications.

“ Effective Time ” 12:01 a.m. EST on the Closing Date.

“ Employment Agreement ” means any contract respecting the terms and conditions of employment or payment of compensation in respect to any employee.

“ Employee Benefit Plan ” means, with respect to any Person, each plan, fund, program, agreement, arrangement or scheme, including each plan, fund, program, agreement, arrangement or scheme maintained or required to be maintained under applicable Laws, that is sponsored or maintained or required to be sponsored or maintained by such Person or to which such Person makes or has an obligation to make, contributions providing benefits to the current and former employees, officers and directors or their dependents, including, but not limited to (a) each deferred compensation, bonus, incentive compensation, pension, retirement, stock

purchase, stock option, profit sharing or deferred profit sharing, stock appreciation, phantom stock plan and other equity compensation plan, “welfare” plan (within the meaning of Section 3(1) of ERISA, determined without regard to whether such plan is subject to ERISA), (b) each “pension” plan (within the meaning of Section 3(2) of ERISA, determined without regard to whether such plan is either subject to ERISA or is tax-qualified under the Code), (c) each severance plan or agreement, and each other plan providing health, vacation, supplemental unemployment benefit, hospitalization insurance, medical, dental, disability, life insurance, death or survivor benefits or fringe benefits and (d) each other employee benefit plan, fund, program, agreement or arrangement.

“ Environmental Laws ” means all Laws and any enforceable judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to pollution or protection of the environment or the use, storage, handling, transportation, release, discharge or disposal of Hazardous Materials.

“ ERISA ” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder.

“ ERISA Affiliate ” means any Person that together with the Seller would be deemed a “single employer” within the meaning of Section 414 of the Code.

“ ERISA Affiliate Plan ” means each Employee Benefit Plan sponsored or maintained or required to be sponsored or maintained by any ERISA Affiliate, or to which such ERISA Affiliate makes, or has, or could have, an obligation to make, contributions.

“ Excluded Subsidiaries ” means those subsidiaries of the Seller set forth on Schedule 1.1(a) .

“ Excluded Working Capital ” means the current assets and current liabilities that are listed as “Corporate Items” or “Non Transferable Items” on Exhibit 1.1(b) (the Reference Calculations) and therefore not included in the current assets or current liabilities in the Working Capital Schedule or Final Working Capital Schedule.

“ Final Working Capital Schedule ” means the Working Capital Schedule as of the Closing and, solely with regard to the Messaging Subsidiary Working Capital, as of the Messaging Subsidiary Closing, in each case as finally determined pursuant to Section 3.4.

“ Financial Statements ” means the financial statements included in the Disclosure Schedule pursuant to Section 4.4.

“ GAAP ” means United States generally accepted accounting principles as in effect on the date hereof.

“ Governmental Entity ” means any (i) federal, state, local, municipal or foreign government, (ii) federal, state, local or foreign governmental authority or (iii) governmental body exercising or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority, including any court or administrative agency.

“ Group Health Plan ” means, collectively, all of the Code Section 105 group health plans offered by (as specified in the text) the Seller Affiliates or the Purchaser.

“ HIPAA ” means the Health Insurance Portability and Accountability Act of 1996.

“ Hazardous Materials ” shall mean any substance to the extent presently listed, defined, designated or classified as hazardous, toxic or radioactive under any applicable Environmental Law, including petroleum and any derivative or by-products thereof, PCBs, asbestos and urea-formaldehyde and all substances listed as hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to the United States Resource Conservation and Recovery Act of 1976, as amended, and the regulations promulgated pursuant to said laws.

“ Knowledge ” with respect to the Seller, means the actual (but not constructive or imputed) knowledge of the persons listed in Schedule 1.1(b) , after reasonable inquiry, as of the date of this Agreement.

“ Law ” means all laws, statutes, common law, rules, codes, regulations, restrictions, ordinances, orders, decrees, approvals, directives, judgments, rulings, injunctions, writs, awards and decrees of, or issued or entered by, all Governmental Entities.

“ Licenses ” means all licenses, permits (including environmental, construction and operation permits), franchises, certificates, approvals, registrations and authorizations issued by any Governmental Entity.

“ Liens ” means all mortgages, liens, pledges, security interests, charges, claims, restrictions and encumbrances of any nature whatsoever.

“ Leased Real Property ” means the parcels of real property used in connection with the Messaging Business of which the Seller or any Messaging Subsidiary is the lessee or sublessee (together with all fixtures and improvements thereon).

“ Material Adverse Effect ” means any event, change, circumstance, effect or state of facts that has had or would reasonably be expected to have or result in a material adverse effect on (i) the business, assets, condition (financial or otherwise) or operations of the Messaging Business or (ii) the ability of the Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby; provided , however , that “Material Adverse Effect” shall not include the effect of any circumstance, change, development, event or state of facts arising out of or primarily attributable to any of the following, either alone or in combination: (1) the markets in which the Messaging Business operates generally, provided that neither the Seller nor the Messaging Business are materially disproportionately effected, (2) general economic conditions, (3) any public announcement of this Agreement, the pendency of the transactions contemplated hereby or of the consummation of the transactions contemplated hereby, (4) the failure by the Messaging Business to meet internal published or other estimates, predictions or forecasts of revenue, net income or any other measure of financial performance for any period, which, for avoidance of doubt, shall not include the underlying basis for such failure; (5) acts of war (whether or not declared), sabotage or terrorism, military actions or the escalation thereof or other force majeure events occurring

after the date hereof; (6) compliance with the terms of, or the taking of any action required or otherwise contemplated by, this Agreement; (7) the taking of any action by the Purchaser permitted or contemplated by this Agreement or any action approved or consented to by the Purchaser; (8) any breach of this Agreement by the Purchaser; (9) any action required to be taken under applicable laws, rules, regulations or agreements; or (10) any changes in applicable laws, regulations or rules, including accounting rules.

“ Messaging Business Employees ” means all individuals listed on Schedule 1.1(c) .

“ Messaging Subsidiaries ” means the subsidiaries of the Seller set forth on Schedule 1.1(d) .

“ Net Working Capital ” means the current assets included in the Transferred Assets less the current liabilities included in the Assumed Liabilities, as reflected on the Final Working Capital Schedule.

“ Owned Real Property ” means the parcels of real property commonly known as 11360 Lakefield, Duluth, GA, including all land, buildings, structures, fixtures, furniture, building service equipment, and improvements located thereon, and all permits, governmental approval, zoning, development, and use rights, and other benefits and appurtenances thereto.

“ Party ” or “ Parties ” means, individually, the Purchaser and the Seller and, collectively, the Purchaser and the Seller.

“ Patents ” means all utility models and design and utility patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof.

“ Permitted Liens ” means (a) Liens for current Taxes not yet due or delinquent (or which may be paid without interest or penalties) or the validity or amount of which is being contested in good faith by appropriate proceedings, (b) mechanics’, carriers’, workers’, repairers’ and other similar Liens arising or incurred in the ordinary course of business securing obligations which are Assumed Liabilities and as to which there is no default on the part of the Seller or any Messaging Subsidiaries, (c) pledges, deposits or other liens securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation) which are Assumed Liabilities, (d) with respect to the Owned Real Property, the exceptions to title described in the Title Report attached hereto as Schedule 1.1(e) , (e) with respect to Leased Real Property zoning, entitlement, conservation restriction and other land use and environmental regulations by Governmental Authorities, and exceptions, restrictions, easements, imperfections of title, charges, rights-of-way that do not materially interfere with the present use of the Transferred Assets in the Messaging Business as currently conducted or currently planned by the Seller to be conducted.

“ Person ” means any individual, corporation, partnership, joint venture, limited liability company, trust, unincorporated organization or Governmental Entity.

“ Pre-Closing Taxes ” has the meaning set forth in Section 2.4(c), provided further in the case of any taxable period that includes (but does not end on) the Closing Date (a “ Straddle Period ”): (A) real, personal and intangible property taxes (“ Property Taxes ”) for the Pre-Closing Tax Period shall be equal to the amount of such Property Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that are in the Pre-Closing Tax Period and the denominator of which is the number of days in the Straddle Period; and (B) taxes (other than Property Taxes) for the Pre-Closing Tax Period shall be computed as if such taxable period ended as of the close of business on the Closing Date, and, in the case of any taxes attributable to the ownership of any equity interest in any partnership or other “flowthrough” entity, as if a taxable period of such partnership or other “flowthrough” entity ended as of the close of business on the Closing Date provided that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions), other than with respect to property placed in service after the Closing, shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each period.

“ Reference Calculations ” mean the methodology used to prepare the sample calculation of “Working Capital” as set forth in the balance sheet potion of the Financial Statements, including the assumptions used to determine whether items are part of the Messaging Business or relate to corporate functions of the Seller and the specific line items included in the calculation of Working Capital.

“ Seller Employee Benefit Plan ” means (i) each Employee Benefit Plan with respect to the Seller and/or its Affiliates, and/or (ii) each ERISA Affiliate Plan.

“ Seller IP Rights ” means any of the IP Rights owned by the Seller or any of its Messaging Subsidiaries and used or held for use in the Messaging Business as currently conducted.

“ Seller Retained Environmental Liabilities ” means any and all obligations and liabilities now or hereafter arising or asserted against Seller or Purchaser (i) to investigate, remediate, remove, monitor or otherwise respond to any Hazardous Material present on or about the Leased Real Property or the Owned Real Property prior to the Closing (including without limitation, any Hazardous Material disclosed in the Disclosure Schedule or discovered by Purchaser prior to the Closing), (ii) as a consequence of any exposure of any employee or purchaser of the products of the Messaging Business to a Hazardous Material prior to the Closing, and (iii) as a result of any violation or breach by Seller (with respect to the Messaging Business) or any Messaging Subsidiary of any law, permit requirement, contract requirement or other legal obligation with respect to Hazardous Materials (“ Environmental Violation ”) prior to the Closing (whether or not such violation or breach is disclosed in the Disclosure Schedule).

“ Selling Subsidiaries ” means those Messaging Subsidiaries who will transfer to the Purchaser substantially all of the assets used or held for use by such Messaging Subsidiary in the conduct of the Messaging Business at the Messaging Subsidiary Closing in accordance with Section 6.15 hereto.

“ Shared Corporate Records ” means any tax records, financial materials, work papers and other books and records that are not exclusively related to the Messaging Business but which are included in physical or electronic records or software systems that are otherwise included in the Transferred Assets and can not reasonably be separated or copied prior to the Closing or the expiration of the Parties obligations pursuant to Section 6.2(b), including those items described on Exhibit 6.2(b) .

“ Software ” means any computer software program and code, including assemblers, applets, source code, object code (including image and sound data), development tools, design tools and user interfaces, together with any error corrections, updates, modifications, or enhancements thereto, in any format.

“ Target Working Capital Range ” means Net Working Capital between $6.0 million and $7.0 million.

“ Taxes ” means (i) any and all federal, state, local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts; (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group for any period (including, without limitation, any liability under Treas. Reg. Section 1.1502-6 or any comparable provision of foreign, state or local law); and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity.

“ Tax Return ” means any report, return, declaration or other information, in whatever form or medium, required to be supplied to a Governmental Entity in connection with Taxes, including estimated returns and reports of every kind with respect to Taxes.

“ Technology ” means technology, technical and business information and all tangible embodiments of IP Rights, including Software, development tools, systems, files, records, databases, drawings, artwork, designs, displays, audio-visual works, devices, hardware, apparatuses, documentation, manuals, specifications, flow charts, web pages, customer lists, electronic and other data, and other tangible embodiments of, or materials describing or disclosing, technical or business data, concepts, know-how, show-how, techniques, trade secrets, inventions (whether patentable or unpatentable), algorithms, formulae, processes, routines, databases, works of authorship and the like.

“ Third-Party IP Rights ” means any Third Party Technology licensed to the Seller or its Messaging Subsidiaries and used or held for use in the Messaging Business as currently conducted.

“ Third-Party Technology ” means any Technology or IP Rights of a third party or in the public domain, including open source, public source or freeware Technology or any modification or derivative work thereof, including any version of any Software licensed pursuant to any GNU general public license or limited general public license.

“ Trademarks ” means all trade names, logos, trademarks and service marks; and trademark and service mark registrations and applications.

“ Welfare Benefits ” means the types of benefits described in the definition of “Welfare Plan” (whether or not covered by ERISA).

“ Welfare Plan ” means any employee welfare benefit plan within the meaning of Section 3(1) of ERISA, any short-term disability program classified as a “payroll practice,” any group health plan within the meaning of Code Section 105, any cafeteria plan within the meaning of Code Section 125, any dependent care assistance program within the meaning of Code Section 129, any adoption assistance plan within the meaning of Code Section 137, and any tuition assistance plan within the meaning of Code Section 127.

“ Working Capital Deficit ” means the amount by which the Net Working Capital is below the lowest dollar amount of the Target Working Capital Range.

“ Working Capital Schedule ” means a statement of the current assets included in the Transferred Assets and the current liabilities included in the Assumed Liabilities as of the close of business on the Closing Date, including adjustments to reflect the pro forma Net Working Capital of the Messaging Subsidiaries had the Messaging Subsidiary Closing been effected on the Closing, calculated in accordance with the Reference Calculations and excluding the Excluded Working Capital.

“ Working Capital Surplus ” means the amount by which the Net Working Capital exceeds the highest dollar amount of the Target Working Capital Range.

Section 1.2          Other Definitions . Each of the following terms is defined in the Section set forth opposite such term:

Section 1.3         Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP.

ARTICLE II.

PURCHASE AND SALE

Section 2.1         Agreement to Purchase and Sell . Subject to the terms and conditions hereof, at the Closing and, with respect to the Messaging Subsidiaries, at the Messaging Subsidiary Closing, as applicable, the Seller shall, and shall cause the Selling Subsidiaries to, sell, assign, transfer and deliver to the Purchaser, and the Purchaser shall purchase and acquire from the Seller and the Selling Subsidiaries, all right, title and interest of the Seller and the Selling Subsidiaries in and to, except for the Excluded Assets, all of the assets, properties and rights owned or leased by and used or held for use in the conduct of, or otherwise constituting the Messaging Business, including all assets and properties of the Messaging Business located at the Seller’s property in 11360 Lakefield Dr., Duluth, Georgia 30097 and at the Seller’s manufacturing facility in Edward Schneidman Industrial Park, Quincy, Illinois (such assets, properties and rights, being referred to as the “ Transferred Assets ”), free and clear of all Liens, other than Permitted Liens. The Transferred Assets shall include, without limitation, the Seller’s and the Selling Subsidiaries’ right, title and interest in and to the following assets, properties and rights of the Messaging Business:

(a)          all of the Seller’s and the Messaging Subsidiaries’ cash and cash equivalents reflected on the Final Working Capital Schedule;

(b)          inventory, including finished goods, supplies, raw materials, works in progress, and other inventory property located at, stored on behalf of or in transit to the Seller or the Selling Subsidiaries (the “ Inventory ”);

(c)          fixed assets, equipment, machinery, tools, furnishings, computer hardware, fixtures, photocopy machines, vehicles, telephones and other tangible personal property owned or leased by the Seller or the Selling Subsidiaries and used or held for use in the conduct of the Messaging Business, including, without limitation, those listed on Schedule 2.1(c) ;

(d)          prepaid and other current assets to the extent included in the Final Working Capital Schedule;

(e)          the Leased Real Property and the leases and subleases identified in Schedule 2.1(e) ;

(f)           the IP Rights and Technology of the Seller and the Selling Subsidiaries used or held for use in the conduct of the Messaging Business (other than the Patents subject to the Patent License Agreements), and any rights of Seller and the Selling Subsidiaries to Third Party IP Rights, owned, leased or licensed by the Seller or Selling Subsidiaries and used or held for use in the conduct of the Messaging Business, including, without limitation, those listed on Schedule 2.1(f) ;

(g)          all accounts receivable, notes receivable and other receivables to the extent included in the Final Working Capital Schedule;

(h)         all rights to past (to the extent related to Transferred Assets or Assumed Liabilities), present and future causes of action, lawsuits, judgments, claims and demands of any nature in favor of the Seller or the Selling Subsidiaries to the extent relating to the Messaging Business or the Transferred Assets, whether arising by way of counterclaim or otherwise;

(i)           all express or implied guarantees, warranties, representations, covenants, indemnities and similar rights of any nature in favor of the Seller or the Selling Subsidiaries to the extent relating to the Messaging Business or the Transferred Assets;

(j)           all Licenses relating to the Messaging Business or the Transferred Assets, to the extent transferable, including such Licenses used or held for use in the conduct of the Messaging Business at the Owned Real Property and Leased Real Property as presently conducted;

(k)          all of the Seller’s and the Selling Subsidiaries’ right, title and interest under the Contracts which are identified on Schedule 2.1(k) , other Contracts which are substantially similar in all material respects with the standard form Contracts used by the Seller, which standard forms are listed on Schedule 2.1(k) , and purchase orders entered into in the ordinary course of the Messaging Business (collectively, the “ Assigned Contracts ”);

(l)           the Shared Corporate Records as finally agreed pursuant to Section 6.2(b) and subject to the confidentiality restrictions and access provision of Section 6.2, and all other books, records, tax records, financial materials and work papers of the Seller and the Selling Subsidiaries exclusively related to, derived from or used in the operation of the Messaging Business, the ownership or operation of the Transferred Assets or related to the Assumed Liabilities, including, without limitation, all customer lists, supplier lists, distributor lists and contracts and records, price lists, telephone numbers and listings (to the extent assignable), advertising materials and marketing plans, regulatory filings and approvals, business plans, operations manuals, repair or service manuals, fire, safety or environmental reports, and litigation files and other records, in each case, related to the Messaging Business;

(m)           the Owned Real Property;

(n)          all of the Seller’s and the Selling Subsidiaries’ right, title and interest in those services and products under development for use in the Messaging Business, including, without limitation, in respect of push mail services, content delivery services, advertisement based services, video solutions and short messaging services;

(0)           the bank accounts of the Acquired Subsidiaries; and

(p)          the capital stock or other equity interests owned by the Seller, directly or indirectly, of each of the Acquired Subsidiaries.

Section 2.2         Excluded Assets . Notwithstanding anything to the contrary set forth herein, the Transferred Assets shall not include the following assets, properties and rights of the Seller and the Messaging Subsidiaries (collectively, the “ Excluded Assets ”):

(a)         all of the Seller’s and the Messaging Subsidiaries’ cash and cash equivalents, except to the extent the cash and cash equivalents of the Messaging Subsidiaries and any restricted cash are reflected on the Final Working Capital Schedule;

(b)          rights to refunds of Taxes paid by the Seller or the Messaging Subsidiaries, whether paid directly by the Seller or a Messaging Subsidiary, as the case may be, or indirectly by a third party on the Seller’s or a Messaging Subsidiary’s behalf, regardless of whether such rights have arisen or hereafter arise;

(c)          all of (i) the capital stock, units or other equity interests owned by the Seller, directly or indirectly, of Entertainment Distribution Company LLC or (ii) assets owned by Seller or any of the Messaging Subsidiaries related to the business conducted by Entertainment Distribution Company LLC and its subsidiaries and listed on Schedule 2.2(c) ;

(d)          all of the capital stock or other equity interests owned by the Seller, directly or indirectly, of the Excluded Subsidiaries;

(e)          all of the Seller’s and the Messaging Subsidiaries’ corporate overhead assets listed on Schedule 2.2(e) ;

(f)           all Contracts to which the Seller or any of the Selling Subsidiaries is a party, or by which any of their respective assets are bound, other than the Assigned Contracts;

(g)          the Seller’s and the Selling Subsidiaries’ corporate books and records of internal corporate proceedings, tax records, financial materials, work papers and books and records relating to the Messaging Business that the Seller or a Selling Subsidiary is required by Law to retain;

(h)          the certificates of incorporation and bylaws (or similar organizational documents), minute books, and stock ledgers and stock records of the Seller and the Selling Subsidiaries;

(i)           Inventory and other property and assets that have been transferred or disposed of by the Seller in the ordinary course of business without violation of this Agreement;

(j)           all rights of the Seller under this Agreement and any other contract, document or instrument entered into in connection herewith;

(k)          all rights, claims and causes of action relating to any Excluded Asset or any Excluded Liability;

(l)           except as may be provided in Section 6.3 or included in the Final Working Capital Schedule, any of the Seller Employee Benefit Plans and assets relating to any Seller Employee Benefit Plans;

(m)         all software used in connection with the Parent’s equity-based incentive plans;

(n)         current assets that are part of the Excluded Working Capital and are therefore not included in the Final Working Capital Schedule;

(o)          any contracts of insurance in respect of the Messaging Business, any reimbursement for, or other benefit associated with, prepaid insurance, and any rights associated with any prepaid expense for which Purchaser will not receive the benefit after the Closing Date, including, without limitation, any insurance proceeds with respect to events occurring prior to the Closing Date;

(p)          as set forth in Section 6.8, certain rights to use the name “Glenayre” by the Parent, Seller and the Selling Subsidiaries;

(q)          all of the Patents of the Seller and/or any of the Selling Subsidiaries listed on Schedule 2.2(q) ; and

(r)          the assets listed on Schedule 2.2(r) .

Section 2.3         Assumed Liabilities . In connection with the purchase and sale of the Transferred Assets, the Purchaser shall assume all of the following liabilities and obligations of the Messaging Business (collectively, the “ Assumed Liabilities ”):

(a)          the obligations of the Seller and the Selling Subsidiaries under each Assigned Contract, including, without limitation, customer warranty claims and all infringement or potential infringement claims other than those that are known by the Seller or the Messaging Subsidiaries as of the date of this Agreement and not set forth in the Disclosure Schedule;

(b)          all trade accounts payable of the Seller and the Selling Subsidiaries that remain unpaid and are not delinquent as of the Effective Time, to the extent reflected on the Final Working Capital Schedule;

(c)          all other current liabilities of the Seller and the Selling Subsidiaries set forth in the balance sheet as of September 30, 2006 included in the Financial Statements, and any other current liabilities of the Seller and the Selling Subsidiaries incurred after September 30, 2006 in the ordinary course of business consistent with past practice, in each case, only to the extent reflected on the Final Working Capital Schedule, and, in each case, other than Closing Date Indebtedness;

(d)          all accrued and unused vacation time of each of the Transferred Employees, to the extent reflected on the Final Working Capital Schedule;

(e)          those severance and other obligations and liabilities specified in Section 6.3 hereof;

(f)           all obligations and liabilities relating to Transferred Employees to the extent reflected on the Final Working Capital Schedule or to the extent included in any Assigned Contracts, except as otherwise specifically provided in Section 6.3 hereof;

(g)          the retention bonus obligations set forth on Schedule 2.3(g) ;

(h)          all liabilities with respect to all actions, suits, proceedings, disputes, claims or investigations arising out of or related principally to the Messaging Business or that otherwise arise out of or are related principally to the Transferred Assets, unless either (i) the facts or circumstances that give rise to such action, suit, proceeding, dispute, claim or investigation are known by the Seller or the Messaging Subsidiaries as of the date of this Agreement and not set forth in the Disclosure Schedule in a manner such that it is reasonably apparent that it is an action, suit, proceeding, dispute, claim or investigation, or (ii) such action, suit, proceeding, dispute, claim or investigation relates to an item specifically set forth in Section 2.4 as an Excluded Liability;

(i)           all liabilities accruing, arising out of or relating to the conduct or operation of the Messaging Business or the ownership of the Transferred Assets from and after the Closing Date (other than the Seller Retained Environmental Liabilities); and

(j)           all liabilities and obligations of the Acquired Subsidiaries (other than the Seller Retained Environmental Liabilities).

Section 2.4         Excluded Liabilities . Except for the Assumed Liabilities specifically set forth in Section 2.3 above, Purchaser is not assuming, and the Assumed Liabilities expressly exclude, any other debt, liability, duty or obligation, whether known or unknown, fixed or contingent, of Seller or Seller Subsidiaries, (the “ Excluded Liabilities ”), including, without limitation, the following:

(a)          any liability or obligation (including accounts payable) owed to the shareholder of the Seller or any Affiliate of the Seller (other than accrued salary, wages, commissions or bonuses that are primarily related to the Messaging Business and any intercompany transactions reflected on the Final Working Capital Schedule);

(b)          current liabilities that are part of the Excluded Working Capital and are therefore not included in the Final Working Capital Schedule;

(c)          all Taxes arising from or with respect to the Transferred Assets or the Messaging Business that were incurred in or attributable to any period, or any portion of any period, ending on or prior to the Closing Date (the “ Pre-Closing Tax Period ”) and all Taxes of the Acquired Subsidiaries incurred or attributable to Pre-Closing Tax Periods (except to the extent such liability is taken into account in the Final Working Capital Schedule, collectively, “ Pre-Closing Taxes ”);

(d)          any Closing Date Indebtedness;

(e)          the payment of any retention bonus required to be paid by the Seller or any of the Messaging Subsidiaries upon consummation of the transactions contemplated hereby;

(f)           except as provided in Section 6.3, any severance, bonus, or deferred compensation obligations, Benefits Liabilities or any of the liabilities or obligations pertaining

to any of the Transferred Employees, Seller Employee Benefit Plans or any ERISA Affiliate Plans, and all obligations and liabilities related to Messaging Business Employees who are not Transferred Employees;

(g)          any liability retained by the Seller or the Selling Subsidiaries arising in respect of or relating to any Employee Benefit Plan or any ERISA Affiliate Plans not assumed by Purchaser;

(h)          (x) obligations and liabilities under this Agreement, the Transaction Documents and any other agreement, certificate or other document executed by the Seller or the Selling Subsidiaries in connection with this Agreement; (y) obligations and liabilities arising or incurred in connection with the negotiation, preparation and execution of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and (z) any fees and expenses of counsel, accountants, brokers, financial advisors or other experts of the Seller, including fees and expenses of Jefferies Broadview International LLC;

(i)           all known liabilities as of the date of this Agreement not set forth on the Disclosure Schedule with respect to all actions, suits, proceedings, disputes, claims or investigations arising out of or related principally to the Messaging Business or that otherwise arise out of or are related to the Transferred Assets arising prior to the Closing Date;

(j)          the Seller Retained Environmental Liabilities;

(k)          all workers’ compensation, product liability, automobile liability and general liability claims of the Seller or the Messaging Subsidiaries relating principally to the Messaging Business which occurred prior to the Closing Date, or any incident arising prior to the Closing Date; and

(l)           obligations and liabilities under any Contract which is not an Assigned Contract.

ARTICLE III.

PURCHASE PRICE; ADJUSTMENTS; ALLOCATIONS

Section 3.1          Purchase Price . Subject to adjustment pursuant to Section 3.4(b), the aggregate amount to be paid for the Transferred Assets (the “ Purchase Price ”) shall be $25,000,000. In addition to the foregoing payment, as consideration for the sale, assignment, transfer and delivery of the Transferred Assets, the Purchaser shall assume and discharge the Assumed Liabilities.

Section 3.2          Statement of Closing Date Indebtedness . Not less than two (2) Business Days prior to the Closing Date, the Seller shall deliver to the Purchaser a statement (the “ Closing Date Indebtedness Statement ”), signed by the chief financial officer of the Seller, which sets forth, by creditor, the aggregate amount of the Closing Date Indebtedness (other than intercompany debt between or among the Seller and/or any of the Messaging Subsidiaries). Copies of the Payoff Letters, delivered in accordance with Section 8.2(h) hereof, shall be attached to the Closing Date Indebtedness Statement.

(b)          Within five (5) Business Days following the determination of the Final Working Capital Schedule, if there is a Working Capital Deficit, the Seller shall pay to the Purchaser an amount equal to the Working Capital Deficit (the “ Seller Working Capital Payment ”) and if there is a Working Capital Surplus, the Purchaser shall pay to the Seller an amount equal to the Working Capital Surplus (the “ Purchaser Working Capital Payment ”); provided , that, in no event shall the Purchaser Working Capital Payment, if any, exceed $1.0 million plus an amount equal to any cash included in the Final Working Capital Schedule and the value of any “Non Transferable Items” as defined on Exhibit 1.1(b) included on the Final Working Capital Schedule to the extent such Non Transferable Items result in an increase in the calculation of Net Working Capital; provided, further , that in no event shall the Seller Working Capital Payment, if any, exceed $1.0 million plus an amount equal to the value of any items that are not intended to be part of the Messaging Business working capital but must be transferred and thus are included on the Final Working Capital Schedule, to the extent such items result in a decrease in the calculation of Net Working Capital. If a dispute exists between the Seller and the Purchaser regarding the amount of the Working Capital Deficit (and the related Seller Working Capital Payment) or the Working Capital Surplus (and the related Purchaser Working Capital Payment) reflected in the Working Capital Schedule delivered pursuant to Section 3.4(a), the appropriate Party shall pay to the other appropriate Party the uncontested amount prior to the determination of the disputed amount in accordance with Section 3.4(c).

(c)          All payments required under this Section 3.3 or any other provision hereof shall be made in cash by wire transfer of immediately available funds to such bank account as shall be designated in writing by the Person to whom the applicable payment is due.

(a)          Within 90 days following the Closing Date, the Purchaser shall prepare and deliver to the Seller the Working Capital Schedule and its calculation of the Working Capital Deficit (and related Seller Working Capital Payment) or Working Capital Surplus (and related Purchaser Working Capital Payment), if any, based thereon, together with such working papers used in connection with the preparation thereof. The Working Capital Schedule shall be

prepared in accordance with the bases and policies that are set forth, and in the order shown, below:

(b)          The Seller shall have 15 days following receipt of the Working Capital Schedule delivered pursuant to Section 3.4(a) during which to notify the Purchaser of any dispute of any item contained therein, which notice shall set forth in detail the basis for such dispute. The Purchaser and the Seller shall cooperate in good faith to resolve any such dispute as promptly as possible, and upon such resolution, the Working Capital Schedule shall be prepared in accordance with the agreement of the Purchaser and the Seller. In the event the Seller does not notify the Purchaser of any such dispute within such fifteen day period or notifies the Purchaser within such period that it does not dispute any item contained therein, the Working Capital Schedule delivered pursuant to Section 3.4(a) and the Purchaser’s calculation of the Working Capital Deficit (and the related Seller Working Capital Payment) or Working Capital Surplus (and the related Purchaser Working Capital Payment), if any, shall be final and binding upon the Parties.

(c)          In the event the Purchaser and the Seller are unable to resolve any dispute regarding the Working Capital Schedule delivered pursuant to Section 3.4(a) within 15 days following the Purchaser’s receipt of notice of such dispute, such dispute shall be submitted to, and all issues having a bearing on such dispute shall be resolved by, a nationally recognized accounting firm selected by the Purchaser and the Seller (the “ Accounting Referee ”). In resolving any such dispute, the Accounting Referee shall consider only those items or amounts in the Working Capital Schedule as to which the Seller has disagreed and shall apply the same accounting bases and policies and order of priority as in Section 3.4(a). The Accounting Referee’s determination of the Working Capital Schedule and the Working Capital Deficit (and related Seller Working Capital Payment) or Working Capital Surplus (and related Purchaser Working Capital Payment), if any, based thereon shall be final and binding on the Parties. The Accounting Referee shall use commercially reasonable efforts to complete its work within thirty (30) days following its engagement. The expenses of the Accounting Referee shall be shared equally by the Seller on the one hand and the Purchaser on the other hand.

(d)          The Purchaser and Seller agree that the dispute resolution provisions set forth in this Section 3.4 are the sole and exclusive remedy for disputes related to the working capital adjustment or Final Working Capital Schedule.

(e)         As of the Messaging Subsidiary Closing, the Final Working Capital Schedule will be amended by the Purchaser to reflect the Net Working Capital of the Messaging Subsidiaries as of the Messaging Subsidiary Closing. Within thirty (30) days following the Messaging Subsidiary Closing, Purchaser shall deliver such amended Final Working Capital Schedule to Seller. The Parties thereafter agree to comply with the provisions of this Section 3.4 and Sections 3.3(b) and (c) (including the provisions regarding deadlines for response, as if such amended Final Working Capital Schedule is the Working Capital Schedule) to determine whether an additional Seller Working Capital Payment or an additional Purchaser Working Capital Payment shall be required and to make such payment as a result of a change in any Working Capital Deficit or Working Capital Surplus, respectively; provided, however , that any changes in Net Working Capital resulting from Messaging Business Services provided to the Purchaser by any of the Messaging Subsidiaries shall be excluded from the Final Working Capital Schedule solely in determining whether an additional Seller Working Capital Payment or an additional Purchaser Working Capital Payment is required pursuant to this paragraph; and provided , further , that the Parties agree that if any cash of any Messaging Subsidiary is assumed by the Purchaser at the Messaging Subsidiary Closing, in addition to any other amounts due, as an additional Purchaser Working Capital Payment, but only to the extent such cash was excluded from Net Working Capital in the Final Working Capital Schedule, as amended by this Section 3.4(e).

Section 3.5         Allocation of Purchase Price . The Purchaser shall prepare an allocation of the Purchase Price, plus Assumed Liabilities required to be allocated, all in conformity with Section 1060 of the Code and the rules and regulations promulgated thereunder (the “ Allocation ”), and shall deliver such Allocation to Seller within ninety (90) days after Closing; provided , that , for purposes of the Allocation and for determining any transfer taxes assessed in connection with the transfer of the Owned Real Property, the Parties agree that the fair market value of such Owned Real Property is $8.0 million. Seller shall have a right the right to review and approve such Allocation, which approval shall not be unreasonably withheld, conditioned or delayed. If the Seller does not notify the Purchaser in writing of any dispute with respect to the Allocation within ten (10) days of receipt, such Allocation shall be final and binding upon the Parties. If the Seller provides notice of a dispute with respect to the Allocation, then the procedures of Sections 3.4(b) and (c) shall apply. Any adjustment to the Purchase Price pursuant to Section 3.4 shall be allocated pursuant to Section 1060 of the Code. Within thirty (30) days after the Messaging Subsidiary Closing, the Allocation shall be amended to reflect the purchase and sale of the Transferred Assets and/or capital stock or equity interests of the Messaging Subsidiaries in conformity with Section 1060 of the Code and the rules and regulations promulgated thereunder; provided , that , the Seller shall be provided with the same review and approval rights of such amended Allocation as were provided with respect to the initial Allocation; provided , further , that the Parties agree that the amounts allocated to the Transferred Assets of a Selling Subsidiary shall not exceed the tax net book value of such Transferred Assets, provided that the tax net book value of such Transferred Assets does not violate applicable Law. The Purchaser and the Seller shall file their Tax Returns (including IRS Form 8594) on the basis of such allocation, as it may be amended, and neither Party shall thereafter take a Tax Return position inconsistent with such allocation unless such inconsistent position shall arise out of or through an audit or other inquiry or examination by the Internal Revenue Service or other Governmental Entity.

Section 3.6         Delivery of Transferred Assets . On the Closing Date and on the date of the Messaging Subsidiary Closing, as applicable, the Seller shall, at its sole cost, in the manner and form, and to the locations, reasonably specified by the Purchaser, (i) deliver to the Purchaser all of the Transferred Assets, and (ii) in the case of all IP Rights included in the Transferred Assets or other intangible assets, deliver such instruments as are necessary or desirable to document and to transfer title to such assets from the Seller to the Purchaser. To the extent that the Seller cannot grant possession of certain assets to the Purchaser as of the Closing, those assets shall be held by the Seller for and on behalf of Purchaser until such time as Purchaser or its designee is granted possession thereof.

Section 3.7          Further Assurances; Post-Closing Cooperation . At any time or from time to time after the Closing, at Purchaser’s reasonable request and without any further consideration, the Seller shall: (i) execute and deliver to the Purchaser such other instruments of sale, transfer, conveyance, assignment and confirmation (including, but not limited to copyright registrations, patent applications, and other documents pertaining thereto); (ii) provide such materials and information; and (iii) take such other actions, as Purchaser may reasonably deem necessary or desirable in order to transfer, convey and assign more effectively to the Purchaser, and to confirm Purchaser’s title to, all of the Transferred Assets, and, to the full extent permitted by law, to put Purchaser in actual possession and operating control of the Transferred Assets and to assist Purchaser in exercising all rights with respect thereto, and otherwise to cause the Seller to fulfill their obligations under this Agreement and the Transaction Documents.

ARTICLE IV.

REPRESENTATIONS, AND WARRANTIES OF SELLER

Except as set forth in the Disclosure Schedule attached hereto (the “ Disclosure Schedule ”) (provided that the disclosure of an item in one section of the Disclosure Schedule shall be deemed to modify both (i) the representations and warranties contained in the section of this Agreement to which it corresponds in number and (ii) any other representation and warranty of the Seller in this Agreement to the extent that it is reasonably apparent from a reading of such disclosure item that it would also qualify or apply to such other representation and warranty), the Seller covenants, represents, and warrants to the Purchaser as of the date hereof as follows:

(a)          The Seller and each of the Messaging Subsidiaries is an entity duly organized, validly existing, and in good standing under the Laws of its state of jurisdiction and has all requisite power and authority to own, lease and operate its properties, including the Transferred Assets, and to conduct the Messaging Business as now conducted. Except as would not reasonably be expected to have a Material Adverse Effect, the Seller and each of the Messaging Subsidiaries has qualified to do business and is in good standing in each of the jurisdictions where the nature of its business requires such qualification.

(b)         The Disclosure Schedule sets forth all Persons owning any shares of capital stock or equity interests of the Seller and each of the Messaging Subsidiaries and the percentage ownership of each class or series of stock or equity interests owned by such Person.

(a)          All outstanding shares of capital stock or other equity interest of each Messaging Subsidiary are duly authorized, validly issued, fully paid and non-assessable and free of pre-emptive rights. All of the outstanding shares of capital stock or other equity interests of each Messaging Subsidiary are owned of record by the Seller.

(b)          There are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock or other equity interests to which any Messaging Subsidiary is a party obligating any Messaging Subsidiary to (i) issue, transfer or sell any shares of capital stock or other equity interests of such Messaging Subsidiary or securities convertible into or exchangeable for such shares or equity interests, (ii) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement, arrangement or commitment to repurchase, (iii) redeem or otherwise acquire any such shares of capital stock or other equity interests, or (iv) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any of its subsidiaries. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar stock or other equity-based rights of any Messaging Subsidiary.

(c)          No Messaging Subsidiary has any outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders or other equity holders of such Messaging Subsidiary on any matter.

(d)          There are no voting trusts or other agreements or understandings to which any Messaging Subsidiary is a party with respect to the voting of the capital stock or other equity interest of such Messaging Subsidiary.

Section 4.3         Authority . The Seller has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by the Seller of this Agreement and the performance by the Seller of the obligations undertaken by the Seller herein have been duly authorized by all necessary actions of the Seller. This Agreement is a binding, valid and enforceable agreement and obligation of the Seller (subject to the Bankruptcy and Equity Exception). Execution and delivery of this Agreement and consummation of the transactions contemplated hereby will not (i) result in any violation of or default under any term or provision of the Seller’s or any of the Messaging Subsidiaries’ certificate of incorporation or bylaws (or other comparable organizational documents), (ii) result in any violation of, default under or acceleration or rights or obligations under any indenture, mortgage, deed to secure debt, security agreement, loan agreement contract, agreement, lease, license, permit, franchise, concession, or other instrument or obligation to which the Seller or a Messaging Subsidiary is party or by which the Seller or a Messaging Subsidiary or any of their respective assets is bound or (iii) conflict with or violate

any Law or any judicial or administrative decree, judgment or order to which the Seller or a Messaging Subsidiary is a party or by which the Seller or a Messaging Subsidiary is bound, except in the case of (ii) and (iii), as would not reasonably be expected to have a Material Adverse Effect.

Section 4.4          Financial Statements . The Disclosure Schedule contains the Financial Statements. Except as disclosed in the Disclosure Schedule or the Financial Statements, such Financial Statements fairly present in all material respects the financial condition and the results of operations of the Messaging Business as at the respective dates of and for the periods referred to in such Financial Statements, subject, in the case of interim financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be materially adverse); provided , however , that the Financial Statements present such information in accordance with the Seller’s historical accounting principles consistent with Seller’s past practices and do not conform to GAAP and further, that all deviations of the Financial Statements from GAAP are set forth on the Disclosure Schedule. The Financial Statements have been prepared from and are in accordance with the books and records of the Seller and the Messaging Business. The Purchaser acknowledges that (i) the Seller has not prepared and does not prepare separate financial statements for the Messaging Business although Parent has prepared certain financial reporting by segment in its periodic filings with the Securities and Exchange Commission and (ii) the Financial Statements may not be indicative of the financial position or results of operations that would have existed if the Messaging Business had been operated as a stand-alone company or companies as a result of, among other things, Parent’s provision of certain corporate and other overhead services. Except as disclosed in the Financial Statements, the Seller has no liabilities, whether absolute, accrued, contingent or otherwise, which are, individually or in the aggregate, material to the Messaging Business or the financial condition of the Seller and the Messaging Subsidiaries, except for (w) liabilities incurred since the most recent balance sheet included in the Financial Statements in the ordinary course of business consistent with past practices, (x) liabilities under any Contract, (y) liabilities incurred pursuant to this Agreement and (z) liabilities otherwise disclosed in the Disclosure Schedule.

(a)          The personal property owned or leased by the Seller and the Messaging Subsidiaries and included in the Transferred Assets are in all material respects free from defects (patent and latent), have been maintained in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are sufficient to permit the Seller and the Messaging Subsidiaries to conduct their business in all material respects in the same manner as it is being conducted as of the date of this Agreement.

(b)          At the Closing, the Transferred Assets conveyed by the Seller to the Purchaser pursuant to this Agreement will be free and clear of all Liens (other than Permitted Liens).

(c)          The Seller and the Selling Subsidiaries have good and valid title to or, in the case of the Leased Real Property or leased personal property, valid leasehold interests in, the respective Transferred Assets, free and clear of all Liens (other than Permitted Liens). Each

of the Acquired Subsidiaries have good and valid title to or, in the case of the Leased Real Property or leased personal property, valid leasehold interests in, their respective material assets, free and clear of all Liens (other than Permitted Liens).

(a)          The Disclosure Schedule contains a true and complete list of all Leased Real Property, and for each Leased Real Property, identifies the street address of such Leased Real Property. Complete copies of all agreements under which the Seller or a Messaging Subsidiary is the landlord, sublandlord, tenant, subtenant, or occupant (each a “ Real Property Lease ”) that have not been terminated or expired as of the date hereof have been made available to the Purchaser.

(b)          None of the Owned Real Property is subject to any lease, sublease, license or other agreement granting to any other Person any right to the use, occupancy or enjoyment of such Owned Real Property.

(c)          Each Real Property Lease is in full force and effect and constitutes the valid and legally binding obligation of the Seller or the applicable Messaging Subsidiary, as applicable, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception), and, except as would not reasonably be expected to have a Material Adverse Effect, there is no default under any material Real Property Lease or, to the Knowledge of the Seller, by any other party thereto.

(d)          There does not exist any pending litigation, arbitration, condemnation or eminent domain proceedings or public improvements that affect any Owned Real Property or the taxation thereof or, to the Knowledge of the Seller, any such proceedings that affect any Leased Real Property or, to the Knowledge of the Seller, any threatened litigation, arbitration, condemnation or eminent domain proceedings or public improvements that affect any Owned Real Property or Leased Real Property or the taxation thereof, and the Seller and the Messaging Subsidiaries have not received any written notice of the intention of any Governmental Entity or other Person to take or use any Owned Real Property or Leased Real Property or to institute any litigation, arbitration or other proceeding with respect to any of such properties.

(e)          The Owned Real Property is in good condition and repair, is structurally sound, and free from material leaks and material defects and the Leased Real Property is in a condition reasonably suitable for the conduct of the Messaging Business as presently conducted. The Owned Real Property and the Leased Real Property have been maintained in a manner consistent with similar properties. All communications, electrical, water, sewer, gas, and other utilities and services required for the conduct of the Messaging Business as concurrently conducted, or in the case of the Owned Real Property, required for the conduct of general R&D and office uses, are available at the property upon payment of customary utility/service consumption charges.

(f)           The Owned Real Property and the Lease Real Property, and the uses thereof, comply with all laws, rules, regulations, statutes, covenants, conditions, and restrictions applicable thereto, except where non-compliance would not reasonably be expected to have a

Material Adverse Effect or, in the case of the Owned Real Property, materially detract from the value of such property. No portion of the Owned Real Property is located in an area designated as “wetland”, flood plain, or flood hazardous area.

(g)          There are no defaults by the Seller or any Messaging Subsidiary or, to the Knowledge of the Seller, by any other party to any lease, sublease or other contract affecting the Owned Real Property or the Leased Real Property.

(h)          At the Closing, the Owned Real Property and the Leased Real Property will be in the condition existing on the effective date of this Agreement (except for casualty damage for which insurance proceeds sufficient to complete restoration of such damage have been included in the Transferred Assets conveyed to the Purchaser at the Closing); and there will be no written or oral contracts for any alterations, decommissioning, improvements on the Owned Real Property or the Leased Real Property which have not been fully paid.

(i)           Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of Code and no portion of the purchase price applicable to the Owned Real Property is subject to federal income tax withholding.

Section 4.7          Contracts . The Disclosure Schedule sets forth a correct and complete list of the following Contracts currently in force, or under which the Seller or any of the Messaging Subsidiaries have continuing liabilities and/or obligations, related to the Messaging Business, the Owned Real Property, or the leasing, decommissioning, or operation of the Leased Real Property (other than the insurance policies and Employee Benefit Plans listed in the Disclosure Schedule under Sections 4.8 and 4.14, respectively):

(a)          bonds, debentures, notes, credit or loan agreements or loan commitments, mortgages, indentures, guarantees or other Contracts relating to the borrowing of money or the deferred purchase price of property or binding upon any properties or assets (real, personal or mixed, tangible or intangible) of the Seller or a Messaging Subsidiary;

(b)          leases of any personal property, involving an annual commitment or payment of more than $50,000 by the Seller or a Messaging Subsidiary;

(c)          Contracts that limit or restrict the Seller or any of the Messaging Subsidiaries from engaging in any business or other activity in any jurisdiction;

(d)          Contracts for capital expenditures or the acquisition or construction of fixed assets requiring the payment by the Seller or any of the Messaging Subsidiaries of an amount in excess of $25,000;

(e)          Contracts with any officer, director or other Affiliates of the Seller or any of the Messaging Subsidiaries;

(f)           Contracts granting to any Person an option or a right of first refusal, first-offer or similar preferential right to purchase or acquire any assets of the Seller or any of the Messaging Subsidiaries;

(g)         Contracts with the Seller or any of the Messaging Subsidiaries and any sales agent or representative providing for the payment of commissions that are not terminable without penalty on ninety (90) days’ or less notice;

(h)          joint venture or partnership Contracts and all other Contracts providing for the sharing of any profits, in each case, to which the Seller or any of the Messaging Subsidiaries is a party;

(i)          Contracts with Customers or Suppliers;

(j)           Contracts granting the Seller or any of the Messaging Subsidiaries rights in Third-Party IP Rights or Third-Party Technology for use in the Messaging Business or included in the Transferred Assets, other than licenses for commercially available off-the-shelf or “shrinkwrap” software and other than licenses for Third-Party Technology which the Seller or a Messaging Subsidiary pays a license fee of less than $50,000 per annum;

(k)          Contracts granting any Person rights in the IP Rights of Seller or any of the Messaging Subsidiaries, other than such Contracts entered into with customers in the ordinary course of business;

(l)           Contracts pursuant to which Seller or any of the Messaging Subsidiaries are required to escrow source code;

(m)         Contracts pursuant to which Seller or any of the Messaging Subsidiaries guaranty obligations or performance of any Person other than Seller or such Messaging Subsidiary;

(n)          Contracts including warranty or indemnity obligations of Seller or any of the Messaging Subsidiaries, other than such Contracts entered into in the ordinary course of business;

(o)          Employment Agreements with Messaging Business Employees; and

(p)          Contracts (other than those described in subsections (a) through (o) of this Section 4.7 and other than customer Contracts for purchases or maintenance entered into in the ordinary course of business) to which the Seller or any of the Messaging Subsidiaries is a party or by which its properties or assets are bound involving an annual commitment or annual payment to or from the Seller or any of the Messaging Subsidiaries of more than $100,000 individually.

Correct and complete copies of all Contracts listed on the Disclosure Schedule in respect to this Section 4.7 (the “ Material Contracts ”) have been made available to the Purchaser. Except where it would not have a Material Adverse Effect, (i) such Material Contracts are legal, valid, binding and enforceable in accordance with their respective terms with respect to the Seller and the Messaging Subsidiaries, as applicable, and, to the Knowledge of the Seller, each other party to such Material Contracts (subject to the Bankruptcy and Equity Exception) and (ii) there is no existing default or breach of the Seller or any of the Messaging Subsidiaries under any such Material Contract (or event or condition that, with notice or lapse

of time or both, could constitute a default or breach) and, to the Knowledge of the Seller, there is no such default or breach (or event or condition that, with notice or lapse of time or both, could constitute a default or breach) with respect to any third party to any such Material Contract. To the Knowledge of Seller, no party to any Material Contract has made, asserted or has any defense, setoff or counterclaim under such Material Contract or has exercised any option granted to it to cancel, terminate or shorten the term of such Material Contract.

Section 4.8         Insurance . The Disclosure Schedule sets forth a correct and complete list of all insurance policies maintained as of the date of this Agreement by or on behalf of the Seller or any of the Messaging Subsidiaries and relating to the Messaging Business, indicating the type of coverage and the name of the insurance carrier or underwriter. All such insurance policies are in full force and effect, and, to the Knowledge of the Seller, neither the Seller nor any of the Messaging Subsidiaries is in default with respect to its material obligations under any such insurance policy.

(a)