TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS		- 1 -
1.1.	Definitions	- 1 -
1.2.	Interpretation	- 14 -
1.3.	Knowledge	- 14 -
ARTICLE II. THE PURCHASE AND SALE		- 15 -
2.1.	Sale and Purchase	- 15 -
2.2.	Purchase Price	- 15 -
2.3.	Base Purchase Price	- 15 -
2.4.	Lockbox Accounts	- 18 -
2.5.	Contingent Purchase Price	- 18 -
2.6.	Closing Date Unbilled Amount Statement	- 22 -
2.7.	Payment of Per Customer Unbilled Amounts	- 23 -
2.8.	Purchase Price Allocation	- 23 -
2.9.	Excluded Assets and Liabilities	- 24 -
2.10.	Closing	- 24 -
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF ADP		- 26 -
3.1.	Organization, Existence and Standing	- 26 -
3.2.	Authorization and Validity of Agreements	- 26 -
3.3.	No Violations	- 27 -
3.4.	Required Consents	- 27 -
3.5.	Financial Statements	- 27 -
3.6.	Absence of Undisclosed Liabilities	- 28 -
3.7.	Conduct of Business	- 28 -
3.8.	No Change in Transferred Business	- 29 -
3.9.	Title to Properties; Encumbrances; Sufficiency	- 29 -
3.10.	Contracts	- 30 -
3.11.	Litigation	- 32 -
3.12.	Taxes	- 32 -
3.13.	Compliance with Laws	- 32 -
3.14.	Transferred Intellectual Property	- 32 -
3.15.	Insurance	- 33 -
3.16.	Employees	- 33 -
3.17.	Real Property	- 36 -
3.18.	Customers and Suppliers	- 36 -
3.19.	Environmental Laws and Regulations	- 37 -
3.20.	Broker’s or Finder’s Fees	- 37 -
3.21.	No Other Representations and Warranties	- 37 -
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER		- 37 -
4.1.	Existence and Good Standing of Purchaser; Power and Authority	- 37 -
4.2.	No Violations	- 38 -

 

 

 

4.3.	Consents	- 38 -
4.4.	Litigation	- 38 -
4.5.	Reliance By Purchaser	- 38 -
4.6.	Financing	- 38 -
4.7.	Broker’s or Finder’s Fees	- 39 -
4.8.	Solvency	- 39 -
ARTICLE V. ADDITIONAL AGREEMENTS		- 39 -
5.1.	Conduct of Business Prior to Closing	- 39 -
5.2.	Access to Information	- 39 -
5.3.	Regulatory and Other Authorizations; Consents	- 40 -
5.4.	Books, Records and Information	- 41 -
5.5.	Covenant Not to Compete; Non-Solicitation	- 42 -
5.6.	Accounts Receivable	- 44 -
5.7.	Mail	- 44 -
5.8.	Certain Names and Logos; No disparagement	- 44 -
5.9.	Further Action	- 45 -
5.10.	Employee Relations	- 45 -
5.11.	Tax Matters	- 46 -
5.12.	Lease Guaranty	- 47 -
5.13.	Pre-Closing Assumed Contracts	- 48 -
5.14.	Post-Closing Transfer of Assets	- 48 -
ARTICLE VI. EMPLOYEE MATTERS		- 48 -
6.1.	Offer of Employment to Employees	- 48 -
6.2.	Transferring Employees’ Benefits	- 48 -
ARTICLE VII. CONDITIONS TO PURCHASER’S OBLIGATIONS		- 50 -
7.1.	Performance of Agreements	- 50 -
7.2.	Representations and Warranties	- 50 -
7.3.	No Order	- 51 -
7.4.	Material Adverse Effect	- 51 -
7.5.	Employment Agreements	- 51 -
7.6.	Required Consents	- 51 -
7.7.	Named Employee Non-Compete, Confidentiality and Severance Agreements	- 51 -
7.8.	Employee Acknowledgments	- 51 -
7.10.	Closing Deliveries	- 51 -
ARTICLE VIII. CONDITIONS TO ADP’S OBLIGATIONS		- 51 -
8.1.	Performance of Agreements	- 51 -
8.2.	Representations and Warranties	- 52 -
8.3.	No Order	- 52 -
8.4.	Required Consents	- 52 -
8.5.	Closing Deliveries	- 52 -
ARTICLE IX. TERMINATION		- 52 -
9.1.	Termination	- 52 -
9.2.	Effect on Obligations	- 52 -
ARTICLE X. SURVIVAL AND INDEMNIFICATION		- 53 -
10.1.	Survival of Representations and Warranties	- 53 -

 

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10.2.	Indemnification	- 53 -
10.3.	Indemnification Procedures	- 53 -
10.4.	Limitation of Liability	- 56 -
ARTICLE XI. MISCELLANEOUS		- 58 -
11.1.	Entire Agreement	- 58 -
11.2.	Successors and Assigns	- 58 -
11.3.	Counterparts	- 59 -
11.4.	Headings	- 59 -
11.5.	Amendments	- 59 -
11.6.	No Third Party Beneficiary Rights	- 59 -
11.7.	Expenses	- 59 -
11.8.	Notices	- 59 -
11.9.	Governing Law	- 60 -
11.10.	Publicity	- 60 -
11.11.	Severability	- 60 -
11.12.	WAIVERS OF TRIAL BY JURY	- 61 -

 

SCHEDULES

 

1.1(a)	ADP Accounting Policies
1.1(b)-1	Prepaid Amounts and Deposits
1.1(b)-2	Other Assets
1.1(c)	Assumed Contracts
1.1(d)-1	Assumed Balance Sheet Liabilities
1.1(d)-2	Other Assumed Liabilities
1.1(g)	Other Excluded Assets
1.1(h)	Field Trainers
1.1(i)	Leased Properties
1.1(j)	Named Employees
1.1(k)	Permitted Encumbrances
1.1(l)	Tangible Personal Property
1.1(n)	Transferred Intellectual Property
1.1(o)	Reference Date Statement of Net Assets
2.3(b)	ADP Wire Transfer Instructions
3.3	No Violations; Consents
3.5	Non-Occurring Items
3.6	Undisclosed Liabilities
3.7	Certain Events
3.9(c)	Mixed Use Contracts and Mixed Use Assets
3.9(e)	Location of Tangible Personal Assets
3.10(c)	Bids and Proposals
3.11	Litigation
3.13	Permits
3.14(c)	Certain Infringements

 

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3.14(d)	Options, Licenses or Agreements Relating to Transferred Intellectual Property
3.15	Insurance
3.16(a)	Employees
3.16(b)	Employee Benefit Plan
3.16(c)	Certain Employee Benefit Plans
3.16(d)	Certain Bonuses
3.16(e)	Certain Employment Terminations
3.16(g)	Employment-Related Claims
3.17	Real Property
3.18	Customers and Supplies
4.3	Purchaser Consents
4.6	Certain Purchaser Conditions
6.1	Offer of Employment to Employees
6.2	Purchaser Benefit Plans

 

EXHIBITS
A	Form of Assignment and Assumption Agreement
B	Form of Bill of Sale
C	Form of Facility Sharing Agreement
D	Financial Statements
E-1 through E-4	Forms of Key Employee Employment Agreements
F	Form of Landlord Certificates
G	Form of Named Employee Non-Compete, Confidentiality and Severance Agreement
H	Form of Transition Agreement
I	Form of Customer List
J	Intentionally Omitted
K	Purchase Price Allocation
L-1, L-2	Forms of Opinion of Sonnenschein Nath & Rosenthal LLP and of ADP’s Legal Department
M	Form of ADP Officer’s Certificate
N-1, N-2	Forms of Assignments
O	Form of Purchaser Officer’s Certificate
P	Form of Acknowledgement

 

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT, dated December 22, 2006, is made by and between ADP, Inc., a Delaware corporation (“ ADP ”), and General Physics Corporation, a Delaware corporation (the “ Purchaser ”).

W I T N E S S E T H :

WHEREAS, ADP is involved, among other things, in the business of providing training, consulting and marketing products and services to the motor vehicle industry; and

WHEREAS, Purchaser desires to acquire from ADP, and ADP desires to sell to Purchaser, the Purchased Assets (as defined herein), all upon the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises, covenants, representations and warranties made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows:

ARTICLE I.
DEFINITIONS

1.1.                               Definitions .  As used in this Agreement and in the schedules (including the Disclosure Schedules) attached hereto, the defined terms set forth below have the respective meanings set forth below (each such meaning to be equally applicable to both the singular and plural forms of the respective terms so defined).

“ ACDelco ”: the ACDelco business unit of GM.

“ ACDelco Training ”: the e-business and WISE sales and application function training to the extent provided to ACDelco.

“ Accounts Receivable ”: the meaning specified in the definition of “Excluded Assets.”

“ Acquisition Debt ”:  the meaning specified in Section 4.8 hereof.

“ Action ”:  any claim, action, suit, arbitration, inquiry or proceeding by or before any Governmental Authority or arbitrator (including any administrative action).

“ ADP ”:  the meaning set forth in the Preamble to this Agreement.

“ ADP Accounting Policies ”: the accounting policies used by ADP to prepare the Financial Statements, as such policies are described on Schedule 1.1(a) attached hereto.

 

“ ADP Dealer Services ”: the business unit of ADP commonly known as “ADP Dealer Services”, and any successor thereto.

“ ADP Deductible ”:  Three Hundred Thousand Dollars ($300,000).

“ Affiliate ”: with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such specified Person.  As used in this definition, “control” of a Person (or any derivative of the word “control”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through ownership of voting securities, by Contract or otherwise.

“ Agreed Rate ”:  eight percent (8%) per annum.

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

“ Ancillary Agreements ”:  collectively, the Bill of Sale, the Assumption Agreement, the Transition Agreement, the Facility Sharing Agreement, the Employment Agreements, the Assignments and the other agreements executed by ADP or Purchaser pursuant to the terms and conditions of this Agreement.

“ Assets ”: all of ADP’s (and any of its Affiliates’) right, title and interest in ( i ) all Assumed Contracts (including all Claims, Actions, rights and interests with respect thereto), and ( ii ) all assets, properties, rights, Actions, Claims and goodwill of every kind and description, whether real personal or mixed, choate or inchoate, known or unknown, accrued, absolute, contingent or otherwise, wherever located and whether or not reflected on the Books and Records, in each case owned, used or held for use exclusively in connection with the Transferred Business as conducted as of the Closing Date, including all of ADP’s right, title and interest in the following, but in each case only to the extent used exclusively in the Transferred Business as conducted as of the Closing Date:  ( a ) all Tangible Personal Property; ( b ) all Transferred Intellectual Property; ( c ) all Books and Records; ( d ) all prepaid amounts and deposits set forth on Schedule 1.1(b)-1 ; ( e ) all Permits to the extent assignable; ( f ) all Other Intangibles; ( g ) all other assets reflected on the Pre-Closing Statement; ( h ) the assets set forth on Schedule 1.1(b)-2 ; and ( i ) to the extent assignable, all insurance proceeds with respect to any Assets specified in subclauses ( a ), ( g ) and ( h ) of clause ( ii ) of this definition that have been damaged or destroyed prior to the Closing Time and not replaced prior to the Closing Time.

“ Assignments ”:  the meaning specified in Section 2.10(a)(viii).

“ Assumed Contracts ”:  all Contracts set forth on Schedule 1.1(c)

“ Assumed Liabilities ”: any and all debts, liabilities and obligations of ADP arising out of or incurred in connection with or otherwise related to ( i ) the Purchased Assets to the extent arising after the Closing Time; ( ii ) the performance and/or the operations of the Transferred Business after the Closing Time; ( iii ) the executory portions of the Assumed Contracts to be

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performed after the Closing Time; (i v ) liabilities of the type set forth on Schedule 1.1(d)-1 , to the extent specifically accrued on the Closing Date Balance Sheet; ( v ) liabilities accruing after the Closing Time pursuant to the Troy Lease Guaranty; and ( vi ) those liabilities set forth in Schedule 1.1(d)-2 .

“ Assumption Agreement ”:  the Assignment and Assumption Agreement dated the Closing Date, executed by Purchaser and ADP, substantially in the form of Exhibit A .

“ Audience-of-One ”:  the product provided by Sandy Corporation to car manufacturers, truck manufacturers and hotel and leisure companies whereby Sandy Corporation develops and produces customer loyalty print (and, for industries other than the automotive industry, electronic) publications which have been partially customized (using available household and consumer data) to consumers’ individual interests, and mails hard copies (and/or, for industries other than the automotive industry, emails electronic copies) of such publications to purchasers of the products and services of such car manufacturers, truck manufacturers and hotel and leisure companies.

“ Automatic ”:  Automatic Data Processing, Inc., a corporation organized under the laws of the State of Delaware.

“ Banking Change ”: ( i ) any additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, ( ii ) a general banking moratorium shall have been established by Federal, Illinois, New Jersey or New York authorities, or ( iii ) a war involving the United States shall have been declared, or any conflict involving the armed forces of the United States shall have escalated, or any other national emergency related to the effective operation of government or the financial community shall have occurred, in each case referred to in this clause ( iii ) which could reasonably be expected to adversely affect the industry in which the Transferred Business operates (to the extent that it does not disproportionately affect the Transferred Business).

“ Base Purchase Price ”:  the meaning specified in Section 2.3 hereof.

“ Base Purchase Price Notice ”:  the meaning specified in Section 2.3(e) hereof.

“ Basket Eligible Representations and Warranties ”:  all representations and warranties in Article III hereof, other than the representations and warranties contained in Sections 3.1(a), 3.2(a) and 3.9(a).

“ Bill of Sale ”:  the Bill of Sale, dated the Closing Date, executed by ADP in respect of the Purchased Assets, substantially in the form of Exhibit B .

“ Books and Records ”:  all originals and copies, on any media whatsoever (including computerized records), of ( i ) all books, records, files, data, drawings, blueprints, schematics,

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reports, formulae, plans, processes, certificates, files of correspondence, and other documents related to the Transferred Business, the Purchased Assets or the Assumed Liabilities; ( ii ) all sales and promotional literature, customer and supplier lists, telephone numbers with respect to current and past customers and suppliers, and credit and sales records used or held for use in connection with the conduct of the Transferred Business; ( iii ) all accounting, financial, inventory and tax books and records and other financial records related to the Transferred Business; ( iv ) all past or pending customer proposals (including backup documentation and work papers) submitted in connection with the Transferred Business, ( v ) all I-9 Forms for Transferring Employees, and ( vi ) all Specified Transferred Employee Information , in the case of each item listed in clauses ( i ) through ( v ) above, only to the extent related to the conduct of the Transferred Business, the Purchased Assets or the Assumed Liabilities; it being agreed that the Specified Transferred Employee Information shall be delivered to Purchaser no later than ten (10) calendar days after the Closing Date.

“ Business Day ”:  any day other than a Saturday, a Sunday or a day on which banks in the City of New York are authorized or required by law or other governmental action to close.

“ Cash Adjustment ”: the absolute value of the value of the line item entitled “Deferred Revenue” as set forth on the Closing Date Balance Sheet.  For the avoidance of doubt, if the Closing Time had occurred on the Reference Date, the Cash Adjustment would have been equal to $5,242,998, which is the absolute value of negative $5,242,998 (being the value of the line item entitled “Deferred Revenue” before any adjustments as set forth on the Reference Date Statement of Net Assets).

“ Certificate ”:  the meaning specified in Section 10.3(a) hereof.

“ Claim ”: any claim, cause of action, audit, dispute, litigation, arbitration, grievance, investigation, suit or proceeding.

“ Closing ”:  the meaning specified in Section 2.10 hereof.

“ Closing Date ”:  the meaning specified in Section 2.10 hereof.

“ Closing Date Balance Sheet ”: a balance sheet of the Transferred Business as of immediately prior to the Closing Time, prepared in accordance with the ADP Accounting Policies, consistently applied, reflecting the same line items, assets, liabilities and adjustments as reflected on the Reference Date Statement of Net Assets and in the form of Schedule 1.1(o) .

“ Closing Date Statement ”:  the meaning specified in Section 2.3(c) hereof.

“ Closing Date Unbilled Amount Statement ”:  the meaning specified in Section 2.6(b).

“ Closing Time ”: 12:01 a.m., local time in New York, New York, on the Closing Date.

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“ Closing Date Working Capital ”: the value of the line item entitled “Equity” as set forth on the Closing Date Balance Sheet.  For the avoidance of doubt, if the Closing Time had occurred on the Reference Date, the Closing Date Working Capital would have been equal to $305,636 (being the value of the line item entitled “Equity” as set forth on the Reference Date Statement of Net Assets).

“ Code ”:  the Internal Revenue Code of 1986, as amended, together with the regulations and rulings promulgated thereunder.

“ Competitive Business ”: the meaning specified in Section 5.5(a)(ii).

“ Contingent Purchase Price ”:  the meaning specified in Section 2.5 hereof.

“ Contract ”: any agreement, commitment, contract, mortgage, deed of trust, bond, indenture, lease, license, note, franchise, certificate, option, warrant, right or other instrument, document, obligation or arrangement, whether written or oral, including in each case all amendments, modifications and supplements thereto, including any executory contracts.

“ Dealer Training ”: car or truck manufacturer-sponsored vehicle product training services for dealership employees.

“ Disclosure Schedules ”: the Disclosure Schedules dated the date hereof and attached hereto as a part of the Schedules and incorporated herein by reference and made a part hereof.

“ Dollars ” or “ $ ”:  U.S. dollars.

“ DMS ”: dealer management computer system.

“ Earnout Installment ”:  the meaning specified in Section 2.5 hereof.

“ Earnout Notice ”:  the meaning specified in Section 2.5(d) hereof.

“ Earnout Period ”:  the meaning specified in Section 2.5(f) hereof.

“ Earnout Statement ”:  the meaning specified in Section 2.5(d) hereof.

“ Employee Benefits Plan ”:  any health and welfare, defined contribution, defined benefit, or other employee or retiree benefit plan (including ( i ) any “employee benefit plan” as defined in Section 3(3) of ERISA or ( ii ) any savings, retirement, fringe benefit, stock option, bonus, incentive compensation, deferred compensation, excess or supplemental executive compensation, employee stock purchase, vacation, sickness, disability, severance or separation, restricted stock plan, policy or arrangement), in which any of the Transferring Employees participate.

“ Employees ”: the meaning set forth in Section 3.16(a) hereof.

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“ Employment Agreements ”:  collectively, the Key Employee Employment Agreements and the Named Employee Non-Compete, Confidentiality and Severance Agreements.

“ Encumbrances ”:  liens, security interests, options, rights of first refusal, easements, mortgages, charges, indentures, deeds of trust, rights-of-way, restrictions, encroachments, licenses, leases, permits, or any other encumbrances or other restrictions or limitations on the use of real or personal property, or limitations or restrictions on, or irregularities in, title thereto.

“ Environmental Laws ”:  Laws relating to Hazardous Materials, environmental matters, public (including employee and worker) health or public safety or otherwise relating to the environment and any other Law relating to or imposing liability or standards of conduct with respect to the importation, manufacture, packaging, labeling, storage, transportation, sale, distribution or use of any chemical products or substances, and/or with respect to emissions, discharges, releases or threatened releases of any Hazardous Material, pollutant or contaminant into the environment, air (including both ambient and within buildings and other structures), surface water, ground water or land or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.

“ ERISA ”:  the Employee Retirement Income Security Act of 1974, as amended, together with the regulations and rulings promulgated thereunder.

“ Estimated Base Purchase Price ”:  the meaning specified in Section 2.3(a) hereof.

“ Exchange Act ”:  the Securities Exchange Act of 1934, as amended, together with the regulations and rulings promulgated thereunder.

“ Excluded Assets ”:   ( a ) any and all assets and properties of ADP and its Affiliates not specifically set forth in the definition of “Assets”, including all direct and indirect right, title and interest in and to any of the following, whether owned by, possessed by, or relating to ADP or any of its Affiliates:  ( i ) all cash and cash equivalents; ( ii ) all accounts receivable owing to ADP (including those owing from ADP or any of its Affiliates) attributable to the conduct of any business (including the Transferred Business) prior to the Closing Time to the extent invoiced prior to the Closing Time, except to the extent such accounts receivable are included as an asset on the Closing Date Balance Sheet as “Receivables – Trade” or “Accrued Receivables” (“ Accounts Receivable ”); ( iii ) all supplies, equipment, office furnishings, computer equipment, fixtures, assets and rights under contracts and other property not used exclusively in the Transferred Business as conducted as of the Closing Date; ( iv ) all Retained Intellectual Property; ( v ) all agreements, purchasing programs and other similar arrangements to which ADP is a party or in which ADP participates as an Affiliate of Automatic and which are not listed in Schedule 1.1(c) as Assumed Contracts or otherwise specifically included in the definition of “Assets”; ( vi ) all Employee Benefits Plans and all trusts related thereto; ( vii ) all of ADP’s rights in the names “ADP”, “ADP, Inc.”, “Automatic Data Processing, Inc.”, or any derivative or variation thereof; and ( viii ) all of ADP’s rights under this Agreement and under the Ancillary Agreements; ( b ) all assets and rights which are owned or possessed by ADP or its Affiliates of every kind and

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description, whether real personal or mixed, choate or inchoate, accrued, absolute, contingent or otherwise, wherever located and whether or not reflected on the Books and Records, in each case not used exclusively in the Transferred Business; and ( c ) the assets specifically listed on Schedule 1.1(g) , provided that , for the avoidance of doubt, no Assumed Contracts shall be Excluded Assets under this Agreement.

“ Excluded Liabilities ”: any and all debts, liabilities, and obligations of ADP and its Affiliates not specifically set forth in the definition of Assumed Liabilities, including any and all debts, liabilities and obligations arising out of or incurred in connection with: ( a ) any Indebtedness of the Transferred Business existing on or prior to the Closing Time, ( b ) any Tax liabilities of the Transferred Business (whether or not such Tax liabilities result in the creation of Permitted Encumbrances) to the extent arising or relating to the period at or prior to the Closing Time (except for Purchaser’s obligation to pay certain Taxes pursuant to Section 5.11(b) hereof and any Taxes which are specifically set forth in the definition of Assumed Liabilities or the Schedules referred to in such definition), ( c ) any Action or Claim arising at or prior to the Closing Time, ( d ) any release or threatened release of any Hazardous Materials for which ADP is alleged to be responsible or on the Leased Property or other real property owned, leased or used in connection with the Transferred Business, in each case to the extent such release or threatened release relates to periods at or prior to the Closing Time, ( e ) any Environmental Laws, to the extent relating to the period prior to the Closing Time, ( f ) any Contracts other than the Assumed Contracts, ( g ) any debts, liabilities and obligations arising out of or incurred in connection with any Employee Benefits Plan, including those associated with ADP’s obligation to make matching contributions under its 401(k) plan and to pay prorated bonuses to any Transferring Employees in respect of the period beginning July 1, 2006 and ending at the Closing Time (other than any such debts, liabilities or obligations which are specifically set forth in the definition of Assumed Liabilities or the Schedules referred to in such definition), ( h ) compliance with ERISA to the extent arising at or prior to the Closing Time, ( i ) any Excluded Assets or the Retained Business, ( j ) bulk sales Laws to the extent arising at or prior to the Closing Time, or ( k ) the Claim related to the July 17, 2006 Charge of Discrimination filed against ADP set forth as Item 1 on Schedule 3.11 .

“ Facility Sharing Agreement ”: the Facility Sharing Agreement, dated the Closing Date, between Purchaser and ADP, substantially in the form of Exhibit C .

“ Field Trainers ”: the Employees identified on Schedule 1.1(h) .

“ Financial Statements ”: the P&L Statements, together with the Reference Date Statement of Net Assets and the Historical Statements of Net Assets, all as set forth as Exhibit D .

“ Ford ”: Ford Motor Company, a Delaware corporation, together with those of its Affiliates that are manufacturers of cars or trucks.

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“ GAAP ”:  United States generally accepted accounting principles, as in effect from time to time.

“ GloveBox Portfolios ”:  the manufacturer-brand specific portfolios produced by Sandy Corporation for car and truck manufacturers that are installed in the gloveboxes (or other custom-fitted locations within the vehicle) of new cars and trucks at the time of vehicle assembly and which are used by retail salespeople to explain vehicle features to new or prospective vehicle owners and by car and truck owners for tracking vehicle service information and referencing vehicle operating procedures.

“ Governmental Authority ”:  any federal, state, district, commonwealth, territorial or local government within the U.S., its territories and possessions (or any national, state or local government outside of the U.S.) and any political subdivision or quasi-governmental authority of any of the same, including any court, tribunal, department, commission, board, bureau, agency, county, municipality, province, parish or other instrumentality of any of the foregoing.

“ GM ”: General Motors Corporation, a Delaware corporation, together with those of its Affiliates that are manufacturers of cars or trucks.

“ GM Services ”: the training and coaching custom-designed and offered to employees of GM dealers on GM’s “Vehicle Order Management” software and GM’s “Workbench” software series to the extent sponsored and provided at the cost of GM.

“ Hazardous Materials ”:  all hazardous substances, wastes, materials or constituents, solid wastes, special wastes, toxic substances, pollutants, contaminants, petroleum or petroleum derived substances or wastes, radioactive materials, mold, asbestos, urea formaldehyde, polychlorinated biphenyls, radon gas and related materials, including any such materials defined, listed, identified under or described in, or the presence, use, handling, treatment storage or disposal of which is regulated by, any applicable Environmental Laws.

“ Historical Statements of Net Assets ”:  the unaudited statements of net assets of the Transferred Business as of the Reference Date, June 30, 2006, June 30, 2005 and June 30, 2004, respectively, prepared in accordance with the ADP Accounting Policies, consistently applied.

“ Indebtedness ”:  all ( i ) indebtedness for borrowed money or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money, including credit facilities and loans from any stockholder; ( ii ) indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security; ( iii ) overdrafts; ( iv ) obligations under any guaranty, letter of credit, performance credit or other Contract having the effect of assuring a creditor against loss; and ( v ) any interest accrued through the Closing Time and any fees (including prepayment fees) relating to Indebtedness described in ( i ) – ( iv ) above.

“ Indemnified Party ”:  the meaning specified in Section 10.3(a) hereof.

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“ Indemnifying Party ”:  the meaning specified in Section 10.3(a) hereof.

“ Independent Accountants ”:  the meaning specified in Section 2.3(f) hereof.

“ Intellectual Property ”:  all intellectual property, in the United States or foreign, including the following: ( i ) all technology, know-how, trade secrets, confidential business information (including procedures, processes, systems, methods of operation, discoveries, inventions, formulae, drawings, specifications, manuals, designs, plans, proposals, technical data, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information) and all other proprietary information; ( ii ) all computer programs and software, together with the operating codes, source codes, updates, upgrades, modifications, enhancements and any user and technical documentation or utilities with respect thereto; ( iii ) all patents, patent licenses, patent applications, patent disclosures and improvements thereto, and all reissuances, continuances, continuations-in-part, divisionals, revisions, extensions and re-examinations thereof and shop rights; ( iv ) all works of authorship in all media (such as documents, reports, drawings, graphical materials and the like) and all copyrights and copyright registrations and applications; ( v ) the content on all Internet websites, all domain name registrations, URLs, secure sockets layer certificates and all other Internet-related or website-related assets; ( vi ) all trademarks, trade names, trade dress, service marks, logos and corporate names (including any registration and any application for registration (including any pending intent-to-use application) of any of the foregoing) and any goodwill associated therewith, ( vii ) all other rights to existing and future registrations and applications for any of the foregoing and all other proprietary rights in, or relating to, any of the foregoing, including remedies against and rights to sue for past infringements, and rights to damages and profits due or accrued in or relating to any of the foregoing, ( viii ) all shoprights; and ( ix ) all other intellectual property, and the goodwill associated therewith.

“ Key Employee Employment Agreements ”:  the Key Employee Employment Agreements, each dated the Closing Date, between Purchaser and the Key Employees, in the forms attached as Exhibits E-1 through E-4 , respectively.

“ Key Employees ”:  Fred Strickland, Dave Gugala, Ernest Graham and Michael Tuson.

“ knowledge ”, “ known ” or “ knows ”:  the meaning specified in Section 1.3 hereof.

“ Landlord Certificates ”:  the Landlord Consent and/or Landlord Estoppel Certificates, in the form attached hereto as Exhibit F .

“ Laws ”:  any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, permit, policy, Order or rule of common law now in effect and in each case as amended to date and any judicial or administrative interpretation thereof.

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“ Lease Liability ”:  the meaning specified in Section 10.2(a) hereof.

“ Leased Properties ”:  the real property located at 1500 West Big Beaver Road, Troy Michigan and 110 Pine Avenue, Suite 1300, Long Beach, California, as further described in Schedule 1.1(i) .

“ Leases ”: the meaning set forth in Section 3.17 hereof.

“ Lockbox Account Agreements ”: the meaning set forth in Section 2.4 hereof.

“ Lockbox Accounts ”: the meaning set forth in Section 2.4 hereof.

“ Lockboxes ”: the meaning set forth in Section 2.4 hereof.

“ Loss ” and “ Losses ”: any and all costs, losses, damages, expenses, penalties, deficiencies, Orders or liabilities (including reasonable attorneys’ fees, interest and any penalties, and including those incurred in the absence of any third party claim).

“ Marine Master Dealer Program ”: the Sea Ray “Master Dealer” dealership operating standards certification programs, but only to the extent offered to (a) the marine companies which are owned by Brunswick Corporation, (b) Pursuit Boats (a division of Holland, Michigan based S2 Yachts, Inc.), and (c) MasterCraft Boat Company, Inc.

“ Material Adverse Effect ”:  any change in, or effect on, the Purchased Assets or the Transferred Business that is materially adverse to the results of operations or the financial condition of the Purchased Assets or the Transferred Business, taken as a whole, or that adversely affects the ability of ADP to consummate the transactions contemplated by this Agreement in any material respect, in each case other than ( a ) a change in general economic conditions (to the extent that any such change or effect does not disproportionately affect the Transferred Business), ( b ) the announcement or consummation of the transactions contemplated by this Agreement, or ( c ) any Banking Change.

“ Material Assumed Contracts ”: the meaning specified in Section 3.10(b).

“ Mixed Use Assets ”:  the assets which are used by ADP in the Transferred Business as conducted on the date hereof which are not used exclusively in the Transferred Business.

“ Mixed Use Contracts ”:  the Contracts which relate to the Transferred Business as conducted on the date hereof which do not relate exclusively to the Transferred Business.

“ Named Employees ”: the Employees identified on Schedule 1.1(j) .

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“ Named Employee Non-Compete, Confidentiality and Severance Agreements ”:  the Non-Compete, Confidentiality and Severance Agreements between each Named Employee and Purchaser, in substantially the form attached hereto as Exhibit G and dated the Closing Date.

“ Non-Disclosure Agreement ”:  the Confidentiality Agreement, executed by Purchaser on April 28, 2006, between Citigroup Capital Strategies on behalf of ADP and Purchaser.

“ Nonsolicitation Period ”:  the meaning specified in Section 5.5(b) hereof.

“ Offer ” the meaning specified in Section 5.5(a)(ii).

“ Order ”:  any order, judgment, injunction, award, decree or writ issued by or at the order of a court of law, judge, magistrate, arbitrator or any other Governmental Authority.

“ Other Employee ”: any Employee that is not a Key Employee or a Named Employee.

“ Other Intangibles ”: All intangible assets (other than Contracts and Intellectual Property), including Claims, unfilled customer orders, going concern value, relationships with customers and suppliers and memberships, if any.

“ P&L Statements ”:  the unaudited statements of profit and loss for the Transferred Business for the fiscal years ended June 30, 2006, June 30, 2005 and June 30, 2004, and for the period beginning July 1, 2006 and ending on the Reference Date, prepared in accordance with the ADP Accounting Policies, consistently applied.

“ Per Customer Unbilled Amounts ”:  the meaning specified in Section 2.6(a).

“ Permits ”: all municipal, state and federal and other governmental permits, licenses, registrations, agreements, consents, waivers and authorizations held or used by ADP or any of its Affiliates exclusively in connection with the Transferred Business or the Purchased Assets.

“ Permitted Encumbrances ”:  all Encumbrances ( i ) consisting of easements, permits and other encumbrances, restrictions or limitations on the use of real property or irregularities in title thereto, in each case which do not, individually or in the aggregate, materially detract from the value of, or materially impair the use of, such real property in the operation of the Transferred Business as conducted by Purchaser on the Closing Date, ( ii ) for current Taxes and other assessments or governmental charges or levies on property not yet due and payable, and ( iii ) set forth in Schedule 1.1(k) .

“ Person ”:  any individual, partnership, association, joint venture, corporation or division thereof, company, business, trust, organization, government or political subdivision thereof, governmental agency or other entity.

“ Post Closing Billed Amounts ”: the meaning specified in Section 2.7.

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“ Pre-Closing Unbilled Amount Statement ”:  the meaning specified in Section 2.6(a) hereof.

“ Pre-Closing Statement ”:  the meaning specified in Section 2.3(a) hereof.

“ Prohibited Business ”:  the business conducted by Sandy Corporation during the twelve (12) month period ending on the date hereof to the extent conducted through the offering of the following products or services, in each case to the extent offered by Sandy Corporation on the date hereof: (i ) Audience of One; (ii ) GloveBox Portfolios; (iii) the Marine Master Dealer Program, (iv) the Dealer Training, (v) the ACDelco Training, (vi) the GM Services, (vii) the GM sponsored training offered to dealership employees on the “Certified Used Vehicle” program operated by GM, (viii) the Ford sponsored training offered to dealership employees on the “Certified Pre-Owned” program offered by Ford, and/or (ix) the TechLink Publication.

“ PTO ”:  the meaning specified in Section 6.2(a) hereof.

“ Purchase Price ”:  the meaning specified in Section 2.2 hereof.

“ Purchase Price Allocation ”:  the meaning specified in Section 2.8(a) hereof.

“ Purchased Assets ”:  the meaning specified in Section 2.1 hereof.

“ Purchaser ”:  the meaning set forth in the Preamble to this Agreement.

“ Purchaser Benefit Plans ”:  the meaning set forth in Section 6.2(a) hereof.

“ Purchaser Deductible ”:  Three Hundred Thousand Dollars ($300,000).

“ Purchaser Retirement Plans ”:  the meaning set forth in Section 6.2(c) hereof.

“ Reference Date ”:  November 30, 2006.

“ Reference Date Statement of Net Assets ”:  the unaudited statement of net assets of the Transferred Business as of the Reference Date, prepared in accordance with the ADP Accounting Policies, consistently applied, a copy of which is attached hereto as Schedule 1.1(o) .

“ Required Consents ”:  the meaning set forth in Section 3.4 hereof.

“ Retained Business ”: all business operations, functions and activities conducted on the date hereof by ADP other than the Transferred Business.

“ Retained Intellectual Property ”:  all Intellectual Property of ADP and its Affiliates not used exclusively in the Transferred Business as conducted as of the Closing Date.

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“ Revenues ”:  the meaning specified in Section 2.5(c) hereof.

“ Sandy Corporation ”:  the unincorporated division of ADP through which ADP conducts the Transferred Business.

“ Specified Transferred Employee Information ”: (a) information verifying the education and employment backgrounds of each of the Transferred Employees, and (b) the information related to drug testing and background checks for the specific Transferred Employees who work on the project referred to in the Outsourcing Agreement, dated as of January 17, 2006, by and between Toyota Motor Sales, U.S.A., Inc. and Sandy Corporation, which is required to be maintained pursuant to the terms of such Outsourcing Agreement.

“ Tangible Personal Property ”:  all supplies, equipment, vehicles, office furnishings, computer equipment, fixtures and other tangible personal property (other than inventory) used exclusively in connection with the Transferred Business, including the tangible personal property listed on Schedule 1.1(l) .

“ Target ” the meaning specified in Section 5.5(a)(ii).

“ Tax ”:  any federal, foreign, state, country, local and other tax (including net income, gross income, gross receipts, transfer, excise, property, franchise, profits, license, lease, sales, use, data processing, ad valorem, goods and services, value added, withholding, estimated, occupancy, capital, employment, unemployment compensation, payroll related, social security, severance, stamp import duties and other governmental charges and assessments), whether or not measured in whole or in part by net income, and including deficiencies, interest, additions to tax or interest, and penalties with respect thereto.

“ Tax Return ”:  any return, claim for refund or information return relating to, or required to be filed in connection, with any Taxes, including any schedule, form, attachment or amendment.

“ TechLink Publication ”: the service technical publication (in both print and electronic formats) produced for the Service Parts Operation of GM, but only to the extent sold or otherwise provided to the Service Parts Operation of GM.

“ Transaction ”:  the meaning specified in Section 2.5(g) hereof.

“ Transferred Business ”:  the business operations, functions and activities conducted by Sandy Corporation within the twelve (12) month period ending on the date hereof in providing performance improvement services, including training, consulting, product launch and marketing services primarily (but not exclusively) related to the motor vehicle industry (including both manufacturers and dealerships), through or with: (i ) Audience of One; (ii ) GloveBox Portfolios; (iii) the Marine Master Dealer Program, (iv) the Dealer Training, (v) the ACDelco Training, (vi) the GM Services, (vii) the GM sponsored training offered by ADP on the date hereof to

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dealership employees on the “Certified Used Vehicle” program operated by GM, (viii) the Ford sponsored training offered by ADP on the date hereof to dealership employees on the “Certified Pre-Owned” program offered by Ford, and/or (ix) the TechLink Publication.

“ Transferred Intellectual Property ”:  all Intellectual Property exclusively used in the Transferred Business including the trade names “Sandy Corporation,” “Audience of One” and “GloveBox Portfolio” and the Intellectual Property listed in Schedule 1.1(n) .

“ Transferring Employee ”:  the meaning specified in Section 6.2(a) hereof.

“ Transition Agreement ”: the Transition Services Agreement, dated the Closing Date, between Purchaser and ADP, substantially in the forms of Exhibit H .

“ Troy Lease Guaranty ”:  the meaning specified in Section 5.12 hereof.

“ Troy Property ”:  the meaning specified in Section 5.12 hereof.

“ Unbilled Amount Notice ”:  the meaning specified in Section 2.6(d) hereof.

“ Working Capital Adjustment ”: the meaning specified in Section 2.3 hereof.

“ Working Capital Statement ”:  the meaning specified in Section 2.3(c) hereof.

1.2.                               Interpretation .  As used in this Agreement, the terms “hereof”, “herein”, “hereunder” and comparable terms refer to this Agreement in its entirety and not to any particular article, section or other subdivision hereof.  Unless otherwise indicated, references in this Agreement to any “Section”, “Article”, “Schedule” or “Exhibit” means a section or article of this Agreement or a Schedule or Exhibit attached to this Agreement, as the case may be.  Any headings or captions on any Article, Section, Schedule or Disclosure Schedule are for convenience of reference only.  The term “including” as used in this Agreement shall mean “including, without limitation”, and shall not be deemed to indicate an exhaustive enumeration of the items at issue.  No party, nor its counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all provisions of this Agreement shall be construed in accordance with their fair meaning, and not strictly for or against any party.

1.3.                               Knowledge .

(a)                                   All references to ADP’s “ knowledge ”, or phrases of similar import (such as “ known ” or “ knows ”), shall mean (i) the actual (not imputed) knowledge, after reasonable inquiry of the Named Employees, at the time of execution of this Agreement by ADP and/or such other times as any representation or warranty is made by ADP, of any Key Employee, or (ii) the actual (not imputed) knowledge gained in the course of working on the transactions contemplated by this Agreement, at the time of execution of this Agreement by ADP and/or such other times as any representation or warranty is made

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by ADP, of (A) Manny Cofresi, (B) with respect to suppliers or customers or Contracts with any of these only, Lisa Rescoe, or (C) with respect to human resources matters only, Debbie Zuchlewski.

(b)                                  All references to the Purchaser’s “ knowledge ”, or phrases of similar import (such as “ known ” or “ knows ”), shall mean the actual (not imputed) knowledge, after reasonable inquiry, at the time of execution of this Agreement by the Purchaser and/or such other times as any representation or warranty is made by the Purchaser, of Karl Baer, Ann Blank, Jennifer Cola, Michael Dugan, Sharon Esposito-Mayer, Scott Greenberg, Tammy Heiser, Jeffrey Klein, Doug Sharp or Matt Young.

ARTICLE II.
THE PURCHASE AND SALE

2.1.                               Sale and Purchase .  Subject to the terms and conditions of this Agreement, Purchaser shall purchase from ADP, and ADP shall sell, convey, transfer, assign and deliver to Purchaser, or cause to be sold, conveyed, transferred, assigned and delivered to Purchaser, on the Closing Date, all of the Assets other than the Excluded Assets, free and clear of all Encumbrances except Permitted Encumbrances (all of the Assets being acquired hereby are collectively called the “ Purchased Assets ”).

2.2.                               Purchase Price .  In consideration of the sale, conveyance, transfer, assignment and delivery of the Purchased Assets to Purchaser by ADP, Purchaser shall (a) pay to ADP an amount (the “ Purchase Price ”) equal to the sum of (i) the Base Purchase Price, and (ii) the Contingent Purchase Price, if any, and (b) assume the Assumed Liabilities.

2.3.                               Base Purchase Price .  The “ Base Purchase Price ” shall be (A) Eleven Million, Seven Hundred Thousand Dollars ($11,700,000), (B) minus the Cash Adjustment, (C) minus the amount, if any, by which the Closing Date Working Capital is more than $140,545, (D) plus the amount, if any, by which the Closing Date Working Capital is more negative than negative $59,545 (the adjustments referred to in clauses (C) and (D) above, the “ Working Capital Adjustment ”), it being understood that positive equity is reflected on the Reference Date Statement of Net Assets, and will be reflected on the Closing Date Balance Sheet, as a negative number and that negative equity is reflected on the Reference Date Statement of Net Assets, and will be reflected on the Closing Date Balance Sheet, as a positive number.

(a)                                   At least three (3) Business Days before the Closing Date, ADP shall furnish to Purchaser ADP’s good faith estimate of the Closing Date Balance Sheet, together with a statement (the “ Pre-Closing Statement ”) reflecting ADP’s good faith estimate of the Cash Adjustment, the Working Capital Adjustment and the Base Purchase Price as of the Closing Time (the “ Estimated Base Purchase Price ”).  Such Pre-Closing Statement shall be prepared in accordance with the ADP Accounting Policies, consistently applied.

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(b)                                  At the Closing, Purchaser shall pay the Estimated Base Purchase Price to ADP by delivering to ADP, at the Closing, the Estimated Base Purchase Price in cash by wire transfer of immediately available funds pursuant to the wire transfer instructions set forth in Schedule 2.3(b) or as otherwise instructed by ADP no later than two (2) Business Days prior to the Closing.

(c)                                   Following the Closing Date, ADP shall prepare the Closing Date Balance Sheet and a statement (the “ Closing Date Statement ”) reflecting the actual Cash Adjustment, the actual Working Capital Adjustment and the actual Base Purchase Price.  The Closing Date Statement shall be prepared in accordance with the ADP Accounting Policies, consistently applied.  ADP shall deliver the Closing Date Balance Sheet and the Closing Date Statement (collectively, the “ Working Capital Statement ”) to Purchaser as promptly as practicable and in any event within fifteen (15) calendar days after the Closing Date.  Purchaser shall be entitled to object to any matter in the Working Capital Statement in accordance with Section 2.3(e) below, but only on one or more of the following bases: (i) the inaccuracy of such matter, whether factually or numerically, (ii) the omission of a matter, or (iii) the Working Capital Statement was not prepared as provided in this Agreement.

(d)                                  If Purchaser does not object to the Working Capital Statement in accordance with Section 2.3(e) within thirty (30) calendar days following its receipt of the Working Capital Statement, the Working Capital Statement and the Base Purchase Price set forth therein shall become final and binding on the parties for all purposes of this Agreement.

(e)                                   If Purchaser objects to any matter in the Working Capital Statement, Purchaser shall, within thirty (30) calendar days after receipt of the Working Capital Statement, give ADP written notice of such objection (the “ Base Purchase Price Notice ”), which notice shall contain (i) reasonable details about each objected item and provide reasonable backup materials or information therefor, and (ii) as reasonably possible, the calculation by Purchaser of the Cash Adjustment, the Working Capital Adjustment and Base Purchase Price as of the Closing Date.

(f)                                     The parties shall negotiate in good faith to resolve any disputes as promptly as practicable.  If the parties are unable to resolve all disputes within thirty (30) calendar days of receipt by Purchaser of the Base Purchase Price Notice, then only the unresolved disputes shall be submitted by either party for resolution to Grant Thornton LLP, or to such other firm of independent certified public accountants of national standing and which is not affiliated with the Purchaser or ADP or their Affiliates and which firm is agreed to in writing by the Purchaser and ADP.  The accounting firm so selected to resolve any such disputes is hereinafter referred to as the “ Independent Accountants .”  Each of the parties shall furnish, at its own expense, the Independent Accountants and the other party with such documents and information as the Independent

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Accountants may reasonably request.  Each party may also furnish to the Independent Accountants such other information and documents as it deems relevant with copies or notifications being given to the other party.  The Independent Accountants may, at their discretion, conduct a conference concerning the disagreement with the Purchaser and ADP, at which conference each party shall have the right to present additional documents, materials and other information and to have present its advisors, counsel and accountants.  In connection with such process, there shall be no hearings, oral examinations, testimony, depositions, discovery or other similar proceedings conducted by any party or by the Independent Accountants.  The Independent Accountants’ decision on each disputed item shall be within the range of amounts claimed by the parties.  The Independent Accountants shall promptly, and in any event within sixty (60) calendar days after submission of any disputed items to the Independent Accountants pursuant to this Section 2.3(f), render their decision on the matters in dispute in writing and finalize the Base Purchase Price and the Working Capital Statement, which decision shall be final and binding on the parties.  The Independent Accountants shall also determine the proportion of their fees and expenses to be paid by each of the Purchaser and ADP, based on the degree to which the Independent Accountants have accepted the positions of the respective parties.  The Independent Accountants’ jurisdiction to resolve disputes pursuant to this Agreement shall be limited to accounting matters and the fee and expenses matters expressly contemplated by this Agreement, and neither party shall be limited or precluded, by virtue of this Section 2.3(f), from bringing any arbitration proceeding or legal Action relating to other matters, including fraud or the breach of any representation, warranty, covenant, obligation or agreement hereunder.

(g)                                  If the Base Purchase Price set forth on the Working Capital Statement as finally determined pursuant to this Section 2.3 is greater than the Estimated Base Purchase Price, then the Purchaser shall promptly pay to ADP the amount of such excess.  If the Base Purchase Price set forth on the Working Capital Statement so determined is less than the Estimated Base Purchase Price, then ADP shall pay to the Purchaser in cash the amount of such deficit.  Any payments and adjustments pursuant to this Section 2.3(g) shall be made within five (5) Business Days after the final determination of the Base Purchase Price pursuant to this Section 2.3.

(h)                                  During ADP’s preparation of the Working Capital Statement and the Closing Date Unbilled Amount Statement (as hereinafter defined) and the period of any dispute within the contemplation of this Section 2.3 and Section 2.6, for purposes of preparing the Closing Date Statement and the Closing Date Unbilled Amount Statement, Purchaser shall (i) provide ADP and ADP’s authorized representatives with reasonable access to the books, records and work papers related to the Assets and the Assumed Liabilities and the employees of Purchaser knowledgeable regarding such books, records and work papers (including, for the fifteen (15) calendar day period following the Closing Date, the services of Michael Tuson as reasonably necessary to assist ADP in the preparation of the Working Capital Statement and Closing Date Unbilled Amount

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Statement), and (ii) cooperate with ADP and ADP’s authorized representatives, including providing, on a timely basis, such additional information as may be reasonably necessary to prepare the Working Capital Statement and Closing Date Unbilled Amount Statement; provided any such access or examination shall be conducted with reasonable notice and at reasonable times and under reasonable circumstances so as to minimize any disruption to or impairment of the Transferred Business.

2.4.                               Lockbox Accounts .  The parties acknowledge that Sandy Corporation currently uses the Lockboxes and the Lockbox Accounts in connection with its operation of the Transferred Business, but that the Contracts between ADP and the financial institutions at which the Lockboxes and the Lockbox Accounts are located (collectively, the “ Lockbox Account Agreements ”) are Mixed-Use Contracts which are Excluded Assets.  Notwithstanding the foregoing, if, at least three (3) Business Days prior to the Closing Date, Purchaser provides ADP with written notice that either or both of the financial institutions at which the Lockboxes and the Lockbox Accounts are maintained have agreed to permit Purchaser to use the Lockboxes and the account numbers associated with the Lockbox Accounts after the Closing pursuant to an agreement or agreements between such financial institution(s) and Purchaser, then, ADP shall, no later than the first (1 st ) Business Day after the Closing Date, deliver to each financial institution which so permits Purchaser to use such Lockboxes and account numbers a letter notifying such financial institution that ADP no longer controls such Lockboxes or account numbers.  For purposes of this Agreement, the “ Lockbox Accounts ” are (a) the account maintained by ADP at JP Morgan Chase Bank as Account #41034, and (b) the account maintained by ADP at Comerica Bank as Account #2411011261, and the “ Lockboxes ” are the post office boxes maintained by ADP at such banks for use exclusively in connection with the Transferred Business.

2.5.                               Contingent Purchase Price .  The “ Contingent Purchase Price ,” if any, shall be determined based on the Revenues of the Prohibited Business achieved in each of the two (2) twelve (12) month periods ending on the first and second anniversary of the last day of the month immediately preceding the month during which the Closing Date occurs (or, if the Closing Date is not the first day of a month, the first and second anniversary of the last day of the month in which the Closing Date occurs), and shall be paid in two (2) annual installments (each, an “ Earnout Installment ”) in cash, by wire transfer of immediately available funds pursuant to the wire transfer instructions set forth in Schedule 2.3(b) or as otherwise instructed by ADP by written notice.

(a)                                   The amount of the first Earnout Installment, which shall be paid to ADP no later than sixty (60) calendar days after the first anniversary of the Closing Date (or, if the Closing Date is not the first day of a month, sixty (60) calendar days after the first anniversary of the last day of the month in which the Closing Date occurs), shall be equal to the amount set forth below in the right column corresponding to the applicable level of the Revenues of the Prohibited Business for the twelve (12) month period ending on the day prior to the first anniversary of the Closing Date (or, if the Closing Date is not the

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first day of a month, the first anniversary of the last day of the month in which the Closing Date occurs):

Revenues of Prohibited Business		Amount of First Earnout Installment
$50,000,000 to $52,000,000.99		$	1,000,000
$52,000,001 to $54,000,000.99		$	1,500,000
$54,000,001 to $56,000,000.99		$	2,000,000
$56,000,001 to $60,000,000.99		$	2,500,000
$60,000,001 to $62,799,999.99		$	3,000,000
$62,800,000 or greater		$	4,000,000

 

(b)                                  The amount of the second Earnout Installment, which shall be paid to ADP no later than sixty (60) calendar days after the second anniversary of the Closing Date (or, if the Closing Date is not the first day of a month, sixty (60) calendar days after the second anniversary of the last day of the month in which the Closing Date occurs), shall be equal to the amount set forth below in the right column corresponding to the applicable level of the Revenues of the Prohibited Business for the twelve (12) month period ending on the day prior to the second anniversary of the Closing Date (or, if the Closing Date is not the first day of a month, the second anniversary of the last day of the month in which the Closing Date occurs):

Revenues of Prohibited Business		Amount of Second Earnout Installment
$50,000,000 to $52,000,000.99		$	1,000,000
$52,000,001 to $54,000,000.99		$	1,500,000
$54,000,001 to $56,000,000.99		$	2,000,000
$56,000,001 to $60,000,000.99		$	2,500,000
$60,000,001 to $66,999,999.99		$	3,000,000
$67,000,000 or greater		$	4,000,000

 

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(c)                                   For purposes of this Section 2.5, “ Revenues ” shall mean the revenues (including travel and expense pass-throughs included in recognized revenue and without deduction for bad debt, returns or credits (except for credits or discounts mandated by clients that are not as a result of Purchaser’s breach under the terms of the applicable Contract(s)), as determined in accordance with the GAAP and reported in Purchaser’s financial statements, related to the delivery of products and services within the United States.

(d)                                  Purchaser will deliver to ADP, concurrently with each Earnout Installment, a statement of the Revenues of the Prohibited Business for the twelve (12) month period to which such Earnout Installment relates (each, an “ Earnout Statement ”), together with reasonable back up documentation detailing the sources and amounts of all Revenues of the Prohibited Business reflected on the Earnout Statement.  If ADP objects to any Earnout Statement provided to ADP by Purchaser, then within thirty (30) calendar days of ADP’s receipt of such Earnout Statement, ADP shall give written notice (the “ Earnout Notice ”) to Purchaser, which Earnout Notice shall contain reasonable details about each objected item.  During such thirty (30) calendar day period, Purchaser and its accountants shall, upon reasonable notice and during normal business hours, provide ADP and its accountants, and use commercially reasonable efforts to cause Purchaser’s accountants to provide to ADP and its accountants, access to all books, records, work papers and personnel of Purchaser reasonably necessary for ADP and its accountants to calculate Revenues of the Prohibited Business for the applicable period(s), subject to the execution of a customary confidentiality agreement.  If Purchaser has not received the Earnout Notice within such thirty (30) day period, ADP shall be deemed to have no objection to such Earnout Statement, which shall become final and binding on the parties hereto for all purposes of this Agreement.

(e)                                   The parties shall negotiate in good faith to resolve any disputes regarding the Earnout Statement as promptly as practicable.  If the parties are unable to resolve all disputes within thirty (30) calendar days of receipt by Purchaser of an Earnout Notice, then only the unresolved disputes shall be submitted and resolved in accordance with the same procedures and rules set forth in Section 2.3(f) hereof; provided that, for the purpose of this Section 2.5(e), the term “Base Purchase Price Notice” in Section 2.3(f) shall be replaced by “Earnout Notice”, and the terms “Base Purchase Price” and “Working Capital Statement” therein shall be replaced by “Earnout Installment” and “Earnout Statement,” respectively.

(f)                                     If at any time during the period (the “ Earnout Period ”) commencing on the Closing Date and ending on the day prior to the second anniversary of the Closing Date (or, if the Closing Date is not the first day of a month, the second anniversary of the last day of the month in which the Closing Date occurs): ( i ) Purchaser operates the Prohibited Business other than in good faith or in a manner that is knowingly designed or intended to (A) reduce the amount of the Contingent Purchase Price other than in the ordinary course

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of business or in response to competitive pressures, or (B) circumvent Purchaser’s obligation to pay the Contingent Purchase Price; ( ii ) either Purchaser or its Affiliates engages in activities or transactions which would be reasonably likely to have the effect of deferring the receipt or recognition of Revenues of the Prohibited Business beyond the Earnout Period, in a manner knowingly designed or intended to circumvent Purchaser’s obligation to pay the Contingent Purchase Price; ( iii ) Purchaser fails to prepare the budgets for the Prohibited Business in good faith, (i v ) Purchaser fails to compute the Revenues of the Prohibited Business for any sales of products of the Prohibited Business to Affiliates of Purchaser, or its successors or assigns based on the invoice price to the unrelated third party customers of such Affiliates, ( v ) Purchaser (or its Affiliates) changes its fee structures or fees with respect to Revenue of the Prohibited Business in a manner designed or knowingly intended to reduce the Revenue of the Prohibited Business for the Earnout Period, other than in the ordinary course of business or in response to competitive pressures, or ( vi ) offers a ny sales or promotional discounts and other sales, marketing and other promotional programs to customers of the Prohibited Business other than in good faith and in a manner that is not knowingly designed or intended to circumvent Purchaser’s obligation to pay the Contingent Purchase Price , then, upon the occurrence of any of ( i ) through ( vi ) above, the amount of each Earnout Installment which is based upon any periods after such occurrence shall be based upon the total Revenues of the Prohibited Business during the twelve (12) most recently completed calendar months (utilizing the P&L Statements for any pre-Closing periods, as applicable) preceding such occurrence.

(g)                                  Subject to Section 2.5(f) above, if during the Earnout Period, Purchaser and/or any of its Affiliates that owns all or substantially all of the assets of the Prohibited Business ( i ) sells all, substantially all or a material portion of its assets (other than sales of inventory in ordinary course of business) used in the Prohibited Business to generate Revenues of the Prohibited Business (whether in a single transaction or a series of related transactions) which are not promptly replaced, ( ii ) sells all or substantially all of its assets (whether in a single transaction or a series of related transactions), ( iii ) undergoes any reorganization, consolidation or merger of or other transaction (or series of transactions) pursuant to which the holders of a majority of the voting power of such entity(ies) before such transaction(s) would beneficially own 50% or less of the voting power of the surviving entity after such transaction, or ( iv ) effects a material change in its accounting practices (other than as required by GAAP or applicable Laws) (each of the foregoing, a “ Transaction ”) and, in any such case in ( i ) through ( iii ) above, the inclusion or exclusion of such Transaction in or from the Revenues of the Prohibited Business would have a material adverse effect upon the calculation of the Contingent Purchase Price, then the amount of each Earnout Installment which is based upon any periods after such occurrence shall be based upon the total Revenues of the Prohibited Business during the twelve (12) most recently completed calendar months (utilizing the P&L Statements for any pre-Closing periods, as applicable) preceding such Transaction.

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2.6.                               Closing Date Unbilled Amount Statement .

(a)                                   At least three (3) Business Days before the Closing Date, ADP shall furnish to Purchaser a statement (the “ Pre-Closing Unbilled Amount Statement ”), reflecting ADP’s good faith estimate of, for each Contract with each customer ( i ) the total amount payable to ADP for all services and products to be provided pursuant to such Contract, ( ii ) the total amount of such services and products delivered to such customer through the Closing Time, ( iii ) the total amount of such services and products delivered to such customer through the Closing Time for which ADP has billed or invoiced such customer prior to the Closing Time, and (i v ) the total amount of such services and products delivered to such customer through the Closing Time for which ADP has not billed or invoiced such customer prior to the Closing Time (such amount for each Contract with each customer, the “ Per Customer Unbilled Amount ”).  The Pre-Closing Unbilled Amount Statement shall be prepared in accordance with the ADP Accounting Policies, consistently applied.

(b)                                  Following the Closing Date, ADP shall prepare a statement containing a calculation of the actual values of the items set forth on the Pre-Closing Unbilled Amount Statement as of the Closing Time (the “ Closing Date Unbilled Amount Statement ”).  The Closing Date Unbilled Amount Statement shall be prepared in accordance with ADP’s Accounting Policies, consistently applied.  ADP shall deliver the Closing Date Unbilled Amount Statement to Purchaser as promptly as practicable and in any event within fifteen (15) calendar days after the Closing Date.  Purchaser shall be entitled to object to any matter in the Closing Date Unbilled Amount Statement in accordance with Section 2.6(d) below, but only on one or more of the following bases: (i) the inaccuracy of such matter, whether factually or numerically, (ii) the omission of a matter, or (iii) the Closing Date Unbilled Amount Statement was not prepared as provided in this Agreement.

(c)                                   If Purchaser does not object to the Closing Date Unbilled Amount Statement in accordance with Section 2.6(d) within twenty (20) calendar days following its receipt of the Closing Date Unbilled Amount Statement (or notifies ADP in writing that it accepts such Closing Date Unbilled Amount Statement), the Closing Date Unbilled Amount Statement and the Per Customer Unbilled Amounts set forth therein shall become final and binding on the parties for all purposes of this Agreement.

(d)                                  If Purchaser objects to any matter in the Closing Date Unbilled Amount Statement, Purchaser shall, within twenty (20) calendar days after receipt of the Closing Date Unbilled Amount Statement, give ADP written notice of such objection (the “ Unbilled Amount Notice ”), which notice shall contain (i) reasonable details about each objected item and reasonable backup materials or information therefor, and (ii) the calculation by Purchaser of any disputed amounts set forth on the Closing Date Unbilled Amount Statement (including any Per Customer Unbilled Amount) as of the Closing

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Date, to the extent reasonably possible to provide within the time constraints set forth in this section.

(e)                                   The parties shall negotiate in good faith to resolve any disputes regarding the Closing Date Unbilled Amount Statement as promptly as practicable.  If the parties are unable to resolve all disputes within thirty (30) calendar days of receipt by Purchaser of an Unbilled Amount Notice, then only the unresolved disputes shall be submitted to and resolved by the Independent Accountants in accordance with the same procedures and rules set forth in Section 2.3(f) hereof; provided that, for the purpose of this Section 2.6(e), the term “Base Purchase Price Notice” in Section 2.3(f) shall be replaced by “Unbilled Amount Notice”, and the terms “Base Purchase Price” and “Closing Date Statement” therein shall be replaced by “Per Customer Unbilled Amounts” and “Closing Date Unbilled Amount Statement,” respectively.

2.7.                               Payment of Per Customer Unbilled Amounts .  Following the Closing Date, Purchaser shall bill or invoice each customer of the Transferred Business for the Per Customer Unbilled Amounts related to such customers as soon as permitted pursuant to the terms of the applicable Contract.  Purchaser shall use its commercially reasonable efforts during the nine (9) months after the Closing Date to collect all amounts so billed or invoiced.  No later than ten (10) Business Days after Purchaser’s receipt of any portion of the Per Customer Unbilled Amounts, Purchaser shall remit such portion to ADP; it being agreed that if an invoice or bill which is paid by a customer contains both Per Customer Unbilled Amounts and amounts (the “ Post-Closing Billed Amounts ”) related to products and services provided after the Closing Time, and the payment by the customer does not equal the full amount of such invoice or bill, then the amount payable by Purchaser to ADP shall be computed as follows: (a) if the customer indicates which portions of the Per Customer Unbilled Amounts and/or Post-Closing Billed Amounts and/or other amounts are being paid or not being paid, Purchaser shall pay ADP in accordance with such indication, and (b) if the customer does not so indicate, Purchaser shall pay ADP the amount paid by such customer multiplied by a fraction, the numerator of which is the Per Customer Unbilled Amount included on such invoice or bill and the denominator is the full amount of such invoice or bill.

2.8.                               Purchase Price Allocation .

(a)                                   The Purchase Price shall be allocated among the Purchased Assets in accordance with the applicable provisions of Section 1060 of the Code and the parties, therefore, agree that the fair market value of the Purchased Assets and the Assumed Liabilities (or groups of such assets) is set forth in Exhibit K , as such allocation shall be adjusted by the mutual, reasonable agreement of the parties within thirty (30) calendar days after the Closing Date to ensure the accurate recording of liabilities and  based on any changes in the respective asset and liability balances set forth in the Reference Date Statement of Net Assets as compared to those respective asset and liability balances set forth in the Closing Date Balance Sheet (the “ Purchase Price Allocation ”), which

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Purchase Price Allocation shall be binding upon each of ADP and Purchaser for all purposes, including financial accounting and Tax purposes.  ADP and Purchaser shall file all Tax Returns and report the federal, state, municipal, local and other Tax consequences of the purchase and sale hereunder in a manner consistent with the Purchase Price Allocation and shall not take any position inconsistent therewith in connection with any Tax Return, Claim or otherwise.  The parties shall each execute and timely file an IRS Form 8594 consistent with such Purchase Price Allocation, after exchanging mutually acceptable drafts of such form (and any equivalent state, local or foreign Tax forms).  Notwithstanding the foregoing, Purchaser’s cost