ASSET PURCHASE AGREEMENT

Exhibit 10.1

ASSET PURCHASE AGREEMENT

B Y AND B ETWEEN

BFT ACQUISITION, LLC

AS P URCHASER

AND

EMERGE INTERACTIVE, INC.,

AS S ELLER

MARCH 1, 2007

Table of Contents

 

 

(i)

INDEX OF SCHEDULES AND EXHIBITS

 

 

 

(ii)

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (as amended, supplemented or modified from time to time, this “Agreement”), dated as of March 1, 2007, by and between EMERGE INTERACTIVE, INC., a Delaware corporation (the “Seller”), and BFT ACQUISITION, LLC, a Nebraska limited liability company (the “Purchaser”).

RECITALS

A. The Biegert Family Irrevocable Trust, Dated June 11, 1998 (the “Trust”), and Seller have executed a Letter of Intent, dated February 14, 2007 (the “LOI”), pursuant to which the Trust expressed its desire to purchase the Purchased Assets and the Assumed Contracts, and the Seller expressed its desire to sell all right, title and interest in, to and under the Purchased Assets and the Assumed Contracts (both as more specifically defined below) relating primarily to Seller’s “Animal Information Systems” or “CattleLog” businesses and certain related assets and contracts.

B. The Trust has caused the Purchaser (with the Trust as the sole member of Purchaser) to be formed for the purpose of taking title to the Purchased Assets and assuming the Assumed Contracts and Assumed Liabilities.

C. The Seller does not have the liquidity to continue pursuing its long-term business plan, and, as a result, filed for voluntary petition under Chapter 11 of the United States Bankruptcy Code in the federal bankruptcy court for the Southern District of Florida, West Palm Beach division, on February 14, 2007.

D. The Purchaser and Seller have agreed that the sale of the Purchased Assets and the assumption and assignment of the Assumed Contracts and Assumed Liabilities shall be accomplished pursuant to Sections 363 and 365 of the Bankruptcy Code (as defined below) and pursuant to the terms of this Agreement.

E. The Purchaser has agreed that the terms of this Agreement and the Seller’s commitments herein shall be subject to the Seller receiving approval by the Bankruptcy Court.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

ARTICLE II

General Definitions

Section 2.1 Definitions . The following terms, as used herein, have the following meanings:

“Affiliate” means (i) any Person that directly, or indirectly through one or more intermediaries, controls the Seller or the Purchaser (a “Controlling Person”) or (ii) any Person (other than the Seller or the Purchaser) which is controlled by or is under common control with a Controlling Person.

“Agreement” means this Agreement, including the Schedules, as amended from time to time in accordance with its terms.

“Assignment and Assumption Agreement” means one or more assignment and assumption agreements in form and substance reasonably satisfactory to Purchaser and Seller.

“Assumed Contracts” has the meaning set forth in Section 3.1(b).

“Assumed Liabilities” has the meaning set forth in Section 3.2.

“Auction Procedures Order” means the final and non-appealable order entered by the Bankruptcy Court on February 23, 2007, a copy of which is annexed hereto as Exhibit A , (i) approving the terms of the LOI as the “Stalking-Horse Bid” for the Purchased Assets, (ii) authorizing the Seller to conduct an auction for the Purchased Assets , and (iii) establishing procedures for the conduct of the Auction.

“Bankruptcy Case” means the legal proceeding to be commenced by the Seller in the Bankruptcy Court (Case Number: 9:07-BK-10932-SHF) seeking to liquidate the Seller’s business pursuant to Chapter 11 of the Bankruptcy Code.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101-1330, as heretofore and hereafter amended.

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Florida, West Palm Beach division.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and Official Forms that govern procedure in cases under the Bankruptcy Code, as heretofore and hereafter amended.

“Bill of Sale” means one or more bills of sale in form and substance reasonably satisfactory to Purchaser and Seller, which shall include detailed schedules of the Purchased Assets as of the Closing Date.

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the City of West Palm Beach, Florida.

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

“Closing Date” has the meaning set forth in Section 9.1.

“Contract” means any written agreement, arrangement, understanding, lease, license, order, purchase order or instrument or other contractual or similar arrangement.

“Control” (including the terms “Controlled by” and “under common Control with”) means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of capital stock, including as trustee (other than a Chapter 11 trustee) or executor, by contract or credit arrangement or otherwise.

“Cure Costs” means all monetary liabilities, including pre-petition monetary liabilities, of Seller that must be paid or otherwise satisfied to cure all of the Seller’s monetary defaults under the Assumed Contracts, if any, at the time of the assumption thereof and assignment to Purchaser as provided hereunder as such amounts are determined by the Bankruptcy Court.

“Encumbrance” means (except for any lien for Taxes or materialmans, contractors or other similar statutory liens, in each case with respect to amounts not yet due) any claim, liability, charge, lease, covenant, easement, encumbrance, security interest, lien, option, pledge, right of others, mortgage, hypothecation, conditional sale or restriction (whether on voting, sale, transfer, defenses, set-off or recoupment rights, disposition or otherwise) against or with respect to tangible or intangible property or rights, whether imposed by agreement, understanding, Law, equity or otherwise, except for any restrictions on transfer generally arising under any applicable federal or state securities Law.

“Excluded Assets” has the meaning set forth in Section 3.1.

“Governmental Authority” means any United States federal, state or local, or any foreign, government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Law” means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law.

“Permitted Encumbrances” means (i) any Encumbrance for Taxes not yet due or delinquent or being contested in good faith by appropriate proceedings, (ii) any statutory Encumbrance arising in the ordinary course of business by operation of Law with respect to a liability that is not yet due or delinquent, (iii) any minor imperfection of title or similar Encumbrance which individually or in the aggregate with other such Encumbrances could not reasonably be expected to materially adversely affect the condition of the related Purchased Assets or (iv) any Assumed Liabilities.

“Person” means an individual, corporation, partnership, association, limited liability company, trust, joint venture, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended).

“Petition Date” means February 14, 2007, the date on which the Bankruptcy Case commenced.

“Purchase Price” has the meaning set forth in Section 4.1(a).

“Purchased Assets” has the meaning set forth in Section 3.1.

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

“Purchaser Representatives” has the meaning set forth in Section 7.3(a).

“Sale Hearing” means the hearing before the Bankruptcy Court to approve this Agreement and the consummation of the transactions contemplated by this Agreement.

“Sale Motion” means a motion filed with the Bankruptcy Court on the Petition Date seeking entry of the Sale Order.

“Sale Order” means an order of the Bankruptcy Court in substantially the form attached to this Agreement as Exhibit B .

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

“Seller’s Knowledge” means the actual knowledge of Susan D. Mermer, David C. Warren, Robert E. Drury or Tim Niedecken.

“Tax” or “Taxes” means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Tax authority.

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

“Transfer Tax” has the meaning set forth in Section 6.1.

Section 2.2 Terms Generally . As used in this Agreement: (i) words in the singular shall be held to include the plural and vice versa, (ii) words of one gender shall be held to include the other genders as the context requires, (iii) the terms “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement, (iv) references to Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement, unless otherwise specified, (v) the word “including” and words of similar import when used in this Agreement, shall mean “including, without limitation,” unless otherwise specified, and (vi) the word “or” shall not be exclusive.

ARTICLE III

Purchase And Sale Of Assets; Assumption Of Liabilities

Section 3.1 Purchase and Sale of the Purchased Assets . On the Closing Date, Seller shall transfer, sell, assign and deliver to the Purchaser, and Purchaser shall purchase, accept and assume from Seller, on the terms and subject to the conditions set forth in this Agreement and the Sale Order, all of Seller’s right, title and interest in, to and under the following assets, other than the Excluded Assets (as hereinafter defined) (all such assets and properties are referred to in this Agreement as the “Purchased Assets”), free and clear of all Encumbrances, other than Permitted Encumbrances including, without limitation, the following:

(a)(i) All of Seller’s right, title and interest in, to and under the following property relating primarily to Seller’s “Animal Information Solutions” or “CattleLog” businesses, whether now owned, as of the date hereof, or hereafter acquired (each of the following capitalized terms in this Section 3.1(a) shall have the meanings ascribed to such terms in Article 9 of the Uniform Commercial Code): General Intangibles; Documents; Equipment; Goods; Inventory; trademarks, copyrights and/or patents; and those certain accounts receivable listed on Schedule 3.1(a)(i) to this Agreement; provided , however , that the Purchased Assets shall not, in any event, include the Excluded Assets. For purposes of this Agreement, “Excluded Assets” means (i) those assets listed on Schedule 3.1(a)(ii) to this Agreement, which are all of the assets primarily relating to, used in or useful to Seller’s Food Safety Technologies business, and (ii) any and all cash and cash equivalents of Seller as of the Closing Date; and

(b) All of Seller’s right, title and interest in the Assumed Contracts (as defined and described below). Schedule 3.1(b) sets forth a list of all executory contracts related to Seller’s “Animal Information Solutions” or “CattleLog” businesses (the “Assumed Contracts”). The procedures for assumption and assignment of the Assumed Contracts shall be mutually acceptable to Purchaser and Seller. Seller shall take all action reasonably necessary in order to assume and assign the Assumed Contracts to Purchaser in accordance with Sections 365(a) and (f) of the Bankruptcy Code, and Seller shall pay all costs and expenses associated with such assumption and assignment, including without limitation any Cure Cost. Upon entry of the Sale Order, which order shall include provisions authorizing the assignment and assumption of the Assumed Contracts, such Assumed Contracts shall be assumed by Seller and assigned to Purchaser, and Purchaser shall accept such assignment and assume the Assumed Contracts, and such assumption and assignment shall be effective as of the Closing of this transaction. The assignment of the Assumed Contracts to Purchaser shall be contemporaneous with the Closing.

Section 3.2 Assumption of Contracts and Liabilities . On and as of the Closing Date, in connection with its acquisition of the Purchased Assets, Seller shall assign and transfer, and Purchaser shall accept, assume, and indemnify, defend and hold Seller harmless with respect to, the following contracts, liabilities and obligations of Seller and no others (collectively, the “Assumed Liabilities”):

(a) Assumed Contracts. All rights and obligations of Seller under the Assumed Contracts; provided , however , that Seller shall pay all Cure Costs owing under any of the Assumed Contracts prior to the Closing.

(b) Taxes. Subject to Section 6.2, any liability for Taxes with respect to the ownership of the Purchased Assets for any taxable period (or portion thereof) beginning on or after the Closing Date.

PURCHASER SHALL NOT ASSUME AND SHALL NOT BE LIABLE FOR ANY LIABILITIES AND OBLIGATIONS OF SELLER, REGARDLESS OF THE TYPE OR NATURE OF SUCH LIABILITIES OR OBLIGATIONS, OTHER THAN THE ASSUMED LIABILITIES.

ARTICLE IV

Purchase Price

Section 4.1 Payment of Purchase Price .

(a) The purchase price for the Purchased Assets shall be a sum necessary to satisfy in full, as of the Closing Date, any and all amounts (including principal, accrued interest and fees) outstanding under the Revolving Loan Agreement, Promissory Note and Security Agreement, dated as of October 16, 2006, by and between Seller and Purchaser (the “Promissory Note”) (the “Purchase Price”).

(b) On the Closing Date, the Purchaser shall deliver to Seller (i) the original Promissory Note marked “cancelled, paid in full” and (ii) a UCC termination statement terminating UCC financing statement 63597192 filed with the Delaware Secretary of State on October 18, 2006.

ARTICLE V

Representations And Warranties And Related Undertakings

Section 5.1 Representations and Warranties of Seller . Seller hereby represents and warrants to Purchaser as follows:

(a) Organization and Standing. Seller is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware.

(b) Authorization; Enforceability. The execution, delivery and performance by Seller of this Agreement, and all of the documents and instruments contemplated hereby to which Seller is a party, are within the corporate power of Seller and have been duly authorized by all necessary corporate action of Seller. This Agreement has been duly executed and delivered by Seller. This Agreement is, and the other documents and instruments required hereby to which Seller is a party will be, subject to the Bankruptcy Code and the Bankruptcy Rules and approval of the Bankruptcy Court, when executed and delivered by the parties thereto, the valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

(c) No Conflict or Violation. Upon entry of the Sale Order, the execution, delivery and performance of this Agreement, and of all of the documents and instruments contemplated hereby to which Seller is a party, by Seller do not and will not: (i) conflict with or result in a breach of the certificate of incorporation or bylaws of Seller or (ii) violate any Law or Governmental Order to which Seller is a party or to which Seller is subject.

(d) Litigation. Except claims by Micro Beef Technologies, Inc. (“Micro Beef”) that certain of the Purchased Assets infringe on patents held by Micro Beef, which claims Seller disputes, there is no action, suit, investigation or proceeding pending against, or to Seller’s Knowledge, threatened against Seller before any Governmental Authority which challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

(e) Consents and Approvals. Except for consents, approvals or authorizations of, or filings with, the Bankruptcy Court, and except as included on Schedule 5.1(e) to this Agreement, the execution, delivery and performance of this Agreement, and the other documents and instruments required hereby to which Seller is a party, do not and will not: (i) constitute a violation or breach of any material contract or agreement to which Seller is a party or by which Seller is bound, or require the consent or approval of any party to any such contract or agreement, or give any party to any such contract or agreement a right of termination, cancellation, acceleration or modification thereunder, except where such violation or breach or the failure to obtain such consent or approval would not, in the aggregate, have a material adverse effect on Seller’s ability to consummate the transactions contemplated hereby or perform its obligations hereunder, or (ii) result in, require or permit the creation or imposition of any Encumbrance, other than Permitted Encumbrances, upon or with respect to the Purchased Assets or the Assumed Contracts.

(f) Title to Purchased Assets. Seller owns good and valid title to the Purchased Assets free and clear of any Encumbrances except the Permitted Encumbrances.

(g) Sufficiency of Assets. Except for the United States Department of Agriculture-approved Process Verified Program, the Purchased Assets and Assumed Contracts include all of the assets and contract rights necessary as of the Closing Date for the operation of the Purchased Assets in the ordinary course in accordance with Seller’s past practice (excluding the Excluded Assets).

(h) Brokers. Except for AgriCapital Corporation and B. Riley & Co., there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Seller who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement. Seller shall be responsible for payment of any such fee or commission.

(i) Assumed Contracts. Seller is not in material default under any of the Assumed Contracts, and there do not exist any defaults by Seller, material or otherwise, under any of the Assumed Contracts, which such defaults would prevent any such Assumed Contract from being assumed by, and assigned to, Purchaser.

Section 5.2 Representations and Warranties of Purchaser . Purchaser hereby represents and warrants to Seller the following:

(a) Organization and Standing. Purchaser is a limited liability company duly organized, validly existing and in good standing under the Laws of Nebraska. The Trust is the sole member of Purchaser.

(b) Authorization; Enforceability. The execution, delivery and performance by Purchaser of this Agreement, and all of the documents and instruments contemplated hereby to which Purchaser is a party, are within the limited liability company power of Purchaser and have been duly authorized by all necessary limited liability company action of Purchaser. This Agreement has been duly executed and delivered by Purchaser. This Agreement is, and the other documents and instruments required hereby to which Purchaser is a party will be, subject to the

Bankruptcy Code and the Bankruptcy Rules and approval of the Bankruptcy Court, when executed and delivered by the parties thereto, the valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms.

(c) No Conflicts or Violation. The execution, delivery and performance of this Agreement, and all of the documents and instruments contemplated hereby to which Purchaser is a party, by Purchaser do not and will not: (i) conflict with or result in a breach of the Articles of Organization or Operating Agreement of Purchaser or (ii) violate any Law or Governmental Order to which Purchaser is a party or to which Purchaser is subject.

(d) Litigation. There is no action, suit, investigation or proceeding pending or, to the knowledge of Purchaser, threatened against Purchaser before any Governmental Authority which challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

(e) Consents and Approvals. Except for consents, approvals or authorizations of, or filings with, the Bankruptcy Court, and except as included on Schedule 5.2(e) to this Agreement, the execution, delivery and performance of this Agreement, and the other documents and instruments required hereby to which Purchaser is a party, do not and will not: (i) constitute a violation or breach of any material contract or agreement to which Purchaser is a party or by which Purchaser is bound, or require the consent or approval of any party to any such contract or agreement, or give any party to any such contract or agreement a right of termination, cancellation, acceleration or modification thereunder, except where such violation or breach or the failure to obtain such consent or approval would not, in the aggregate, have a material adverse effect on Purchaser’s ability to consummate the transactions contemplated hereby or perform its obligations hereunder, or (ii) result in, require or permit the creation or imposition of any Encumbrance, other than Permitted Encumbrances, upon or with respect to the Purchased Assets or the Assumed Contracts.

(f) Brokers. There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Purchaser who might be entitled to any fee or commission from Seller in connection with the transactions contemplated by this Agreement.

Section 5.3 “AS IS” TRANSACTION . PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER MAKES NO (AND SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY) REPRESENTATIONS OR WARRANTIES OF ANY KIND, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES OR ANY OTHER MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE ENFORCEABILITY, VALIDITY OR SCOPE OF ANY OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE VALUE OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE TRANSFERABILITY OR ASSIGNABILITY OF THE PURCHASED ASSETS, ASSUMED

CONTRACTS OR ASSUMED LIABILITIES, THE TITLE TO THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, THE MERCHANTABILITY OR FITNESS OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES. PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES AS PURCHASER DEEMED NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION AND ASSUMPTION OF THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH HEREIN, PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, PURCHASER WILL ACCEPT THE PURCHASED ASSETS, ASSUMED CONTRACTS OR ASSUMED LIABILITIES AT THE CLOSING “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS.” THE PARTIES HEREBY ACKNOWLEDGE THAT MICRO BEEF CLAIMS THAT CERTAIN OF THE PURCHASED ASSETS INFRINGE ON PATENTS HELD BY MICRO BEEF (WHICH CLAIMS SELLER DISPUTES), AND THE PARTIES HEREBY AGREE THAT SUCH CLAIMS OR ANY RESOLUTION OF SUCH CLAIMS SHALL NOT IN ANY WAY IMPACT THE PARTIES’ RESPECTIVE RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, PURCHASER’S OBLIGATIONS TO PAY THE PURCHASE PRICE TO SELLER BY CANCELING THE PROMISSORY NOTE AT CLOSING.

ARTICLE VI

Tax Matters

Section 6.1 Transfer Taxes . Purchaser and Seller shall cooperate to obtain an order of the Bankruptcy Court exempting the sale of the Purchased Assets under this Agreement from sales, use, transfer, stamp, duty and value added Taxes, and other similar Taxes and fees which may be payable by reason of the sale of the Purchased Assets under this Agreement or the transactions contemplated herein, to the extent such Taxes exist and are applicable to the transactions contemplated herein (collectively, “Transfer Taxes”). In the event that Purchaser and Seller do not obtain such an exemption order of the Bankruptcy Court and any such Transfer Taxes are assessed at any time thereafter, such Transfer Taxes incurred as a result of the transactions contemplated hereby shall be paid by Seller. Purchaser and Seller agree to provide each other reasonable assistance in the preparation and filing of any and all required Tax Returns for or with respect to such Transfer Taxes with any and all appropriate taxing authorities. Purchaser and Seller shall cooperate to minimize the amount of any such Transfer Taxes to the extent reasonably feasible and shall cooperate in providing each other with any appropriate resale exemption certifications and other similar documentation.

Section 6.2 Proration of Personal Property Taxes . The parties agree that all property Taxes imposed on or with respect to the Purchased Assets (including, without limitation, property Taxes payable by the tenant or lessee under any lease) will be pro-rated as of the Closing Date and that, notwithstanding any other provision of this Agreement, the economic burden of any such property Tax will be borne by Seller for all periods (or portions thereof) through the Closing Date (“Pre-Closing Period”) and by Purchaser for all periods (or portions thereof) after the Closing Date (“Post-Closing Period”). Accordingly, notwithstanding any other provision of this Agreement, (i) if Seller pays any such property Tax with respect to a Post-Closing Period, Purchaser will reimburse Seller upon demand for the amount of such property Tax; and (ii) if Purchaser pays any such property Tax with respect to a Pre-Closing Period, Seller will reimburse Purchaser upon demand for the amount of such property Tax. Moreover, Seller agrees that any claim or lien asserted by the Indian River County (Florida) Tax Collector for property taxes owed with respect to the Pre-Closing Period will attach to the Seller’s cash.

Section 6.3 Cooperation .

(a) Purchaser and Seller agree to furnish or cause to be furnished to each other, as promptly as practicable, such information and assistance relating to the Purchased Assets, the Assumed Contracts and the Assumed Liabilities as is reasonably necessary for the preparation and filing of any Tax Return or other required or optional filings relating to Tax matters, for the preparation for and proof of facts relating to any Tax audit, for the preparation for any Tax protest, for the prosecution or defense of any suit or other proceeding relating to Tax matters and for the answer to any governmental or regulatory inquiry relating to Tax matters.

(b) Purchaser agrees to retain possession, at its own expense, of all accounting, business, financial and Tax records and information (i) relating to the Purchased Assets, the Assumed Contracts or the Assumed Liabilities that are in existence on the Closing Date and transferred to Purchaser hereunder and (ii) coming into existence after the Closing Date that relate to the Purchased Assets, the Assumed Contracts or the Assumed Liabilities before the Closing Date, for a period of at least three years from the Closing Date; provided , however , that the Purchaser, until the expiration of a period ending six years after the Closing Date, shall not dispose of any accounting, business, financial and Tax records and information relating to the Purchased Assets, the Assumed Contracts or the Assumed Liabilities without first notifying the Seller of its intent to do so and giving the Seller a reasonable time to retrieve such records or information. In addition, from and after the Closing Date, Purchaser agrees that it will provide access to Seller and its attorneys, accountants and other representatives (after reasonable notice, during normal business hours and in a manner so as not to interfere with the normal business operations of Purchaser), to the books, records, documents and other information relating to the Purchased Assets or the Assumed Liabilities as Seller may reasonably deem necessary to (A) properly prepare for, file, prove, answer, prosecute or defend any Tax Return, Tax audit, Tax protest, suit or proceeding or (B) administer or complete the Bankruptcy Case.

Section 6.4 Allocation of Purchase Price . The Purchase Price and the amount of the Assumed Liabilities (to the extent they constitute part of the amount realized by Seller for federal

income tax purposes) shall be allocated among the Purchased Assets by the parties as soon as practicable after the Closing Date in compliance with the allocation method required by Section 1060 of the Internal Revenue Code, and the parties shall cooperate to comply with all procedural requirements of Section 1060 and the regulations thereunder. Purchaser and Seller agree that they will not take nor will either of them permit any affiliated person to take, for income tax purposes, any position inconsistent with such allocation; provided, however, that (i) Purchaser’s cost for the Purchased Assets may be greater than the amount allocated to reflect Purchaser’s capitalized acquisition costs not included in the total amount so allocated, and (ii) Seller’s amount realized may be less than the amount allocated to reflect Seller’s costs that reduce the amount realized.

ARTICLE VII

Covenants And Additional Agreements

Section 7.1 Approval Proceedings .

(a) Seller shall use its commercially reasonable efforts to obtain, and shall refrain from knowingly taking any action that would be likely to delay, prevent, impede or result in the revocation of the entry by the Bankruptcy Court of, the Auction Procedures Order and the Sale Order.

(b) Seller shall provide notice of the proposed sale of the Purchased Assets, in form and substance reasonably acceptable to Purchaser and in such manner as may be required by Law, to Seller’s creditors, all Governmental Authorities that have filed a notice of appearance in the Bankruptcy Case, all parties to the Assumed Contracts and all parties entitled to notice of the Sale Motion by such date as shall allow sufficient time for the Sale Order to be entered by the Bankruptcy Court on March 15, 2007.

Section 7.2 Operation of the Business . During the period from the execution of this Agreement until the Closing Date, Seller agrees that it will conduct the businesses supported by the Purchased Assets and the Assumed Contracts in the same manner as would a reasonable person in similar circumstances, subject to applicable bankruptcy and creditor protection provisions, which such conduct shall take into account Seller’s current business and financial situation but, to the fullest extent possible, shall be in accordance with Seller’s past custom and practice.

Section 7.3 Access to Information; Confidentiality .

(a) Seller and its officers, employees, auditors and other agents shall afford Purchaser and its Affiliates, officers, employees, auditors, representatives and other agents (collectively, “Purchaser Representatives”) reasonable access during normal business hours and in a manner so as not to interfere with the normal business operations of Seller to the officers, employees, agents, properties, offices, plants and other facilities of Seller and to all books and records of Seller, and shall furnish Purchaser with all financial, operating and other data and information with respect to the Purchased Assets and properties of Seller as Purchaser, its respective officers, employees or agents may reasonably request.

(b) Seller shall promptly provide Purchaser with drafts of all documents, motions, orders, filings or pleadings that Seller proposes to file with the Bankruptcy Court that relate to (i) this Agreement or the transactions contemplated hereunder, (ii) entry of the Auction Procedures Order, (iii) entry of the Sale Order and (iv) the sale of the Purchased Assets by Seller and assignment and assumption of the Assumed Contracts and Assumed Liabilities by Purchaser, and all such documents, motions, orders, filings, or pleadings shall be in a form and substance reasonably acceptable to Purchaser.

(c) Until the Closing Date, except as may be required by Law, neither Purchaser nor any of Purchaser Representatives will disclose to any third party the information concerning Seller that it may have acquired from Seller without the prior written consent of Seller; provided , however , that Purchaser Representatives may disclose any such information which (i) is or becomes generally available to the public other than as a result of a breach of this Agreement by the Purchaser Representatives, (ii) was within the possession of the Purchaser Representatives prior to its being furnished to the Purchaser Representatives by Seller, provided that the source of such information was not known by the Purchaser Representatives to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to Seller or any other party or (iii) is or becomes available to the Purchaser Representatives on a nonconfidential basis from a source other than Seller, provided that such source was not known by the Purchaser Representatives to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, Seller or any other party with respect to such information. If the transactions contemplated hereby are not consummated, the Purchaser Representatives will return to Seller or destroy the confidential information. In the event that Purchaser or any Purchaser Representative is required by Law or legal process to disclose all or any part of any such confidential information, Purchaser shall promptly notify Seller of the existence, terms and circumstances surrounding such a request so that Seller may seek an appropriate protective order, at Seller’s sole cost and expense, prior to Purchaser’s disclosure of such information.

Section 7.4 Notification of Certain Matters . Seller and Purchaser shall give prompt notice to one another of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would be likely to cause any representation or warranty contained in this Agreement to be materially untrue or inaccurate or (ii) any failure of Seller or Purchaser to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.

Section 7.5 Further Action .

(a) Upon the terms and subject to the conditions hereof, each of the parties hereto shall use their commercially reasonable efforts to take or cause to be taken all appropriate actions and to do or cause to be done all things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this Agreement as promptly as practicable.

(b) Each party hereto agrees to cooperate in obtaining any other consents and approvals that may be required in connection with the transactions contemplated by this Agreement; provided , however , that no party hereto shall be required to compensate any third party to obtain any such consent or approval.

Section 7.6 Litigation . Seller and Purchaser will promptly supply to the other party copies of all litigation or legal proceedings pertaining to the Purchased Assets, Assumed Contracts or Assumed Liabilities which may arise subsequent to the execution of this Agreement but prior to the Closing Date and also will advise the other party promptly in writing of any written threat of litigation or other legal proceeding (including actions or motions in the Bankruptcy Court) which is made between the date of this Agreement and the Closing Date pertaining to the Purchased Assets, Assumed Contracts or Assumed Liabilities or Seller’s or Purchaser’s ability to perform its obligations under this Agreement.

Section 7.7 Filings and Authorizations . Each of Seller and Purchaser, as promptly as practicable, shall (i) make, or cause to be made, all such filings or submissions under Laws applicable to them as may be required for them to consummate the transactions contemplated herein, (ii) use their commercially reasonable efforts to obtain, or cause to be obtained, all authorizations, approvals, consents and waivers from all Persons and Governmental Authorities necessary to be obtained by them in order for them to consummate such transactions and (iii) use their commercially reasonable efforts to take, or cause to be taken, all other actions necessary, proper or advisable in order for them to fulfill their respective obligations hereunder.

Section 7.8 Removal of Purchased Assets . Within sixty (60) days after the Closing, Purchaser shall cause the Purchased Assets to be removed from Seller’s premises at its sole cost and expense; provided , however , that the Purchaser shall pay to the Seller a pro rata portion of the Seller’s monthly rent expense beginning on the Closing Date and ending on the date on which all of the Purchased Assets are removed from the Seller’s premises (to the Seller’s reasonable satisfaction), for the Seller’s leased office space located at 10305 102nd Terrace in Sebastian, Florida. The Purchaser’s pro rata portion of the Seller’s monthly rent expense shall be no more than $4,000 per month, which is approximately 50% of the Seller’s monthly rent expense (representing the approximate percentage of the total rental office space that is utilized by the Purchased Assets, including, without limitation, any employees associated therewith); provided , however , that in the event the monthly rent expense with respect to the office space is discounted at any time, the Purchaser’s pro rata portion of the rent expense shall be reduced accordingly. Purchaser further agrees that from and after the Closing Date risk of loss of the Purchased Assets shall reside with the Purchaser, and Purchaser shall indemnify and hold harmless Seller, its officers, directors, stockholders and agents, from and against any and all loss, liability or expense (including attorneys’ fees) arising from or related to the presence of the Purchased Assets on, or the removal of the Purchased Assets from, Seller’s premises.

Section 7.9 Cash Collateral . Purchaser agrees to allow Seller to use Seller’s cash collateral, subject to a budget, attached hereto as Exhibit C , and a cash collateral order, attached hereto as Exhibit D , that are reasonably satisfactory to Purchaser, until March 15, 2007.

Section 7.10 Employees. Seller and Purchaser agree and acknowledge that Purchaser shall not (except as provided in this Section 7.10), on the Closing Date, be obligated to offer employment to or hire any of Seller’s employees associated with the Purchased Assets and the Assumed Contracts and that Seller may, in its sole and absolute discretion, terminate, at any time

on or after the Closing Date, any of Seller’s employees associated with the Purchased Assets and the Assumed Contracts. Purchaser hereby agrees that, prior to the date that is 60 days following the Closing Date, it will consider offering employment to Seller’s employees associated with the Purchased Assets and the Assumed Contracts, at base salaries that are not less than the employees’ base salaries in effect on the date each such employee separates from service from Seller, such that Seller would not have any obligations under Seller’s Severance Plan to those Seller employees offered employment by Purchaser pursuant to this Section 7.10.

ARTICLE VIII

Conditions To The Closing

Section 8.1 Conditions to Obligations of Purchaser . The obligations of Purchaser to effect the Closing shall be subject to the prior and/or simultaneous satisfaction or written waiver by Purchaser of each of the following conditions:

(a) Sale Order. The Sale Order (i) shall have been entered by the Bankruptcy Court, (ii) shall not have been stayed, modified, amended, dissolved, revoked or rescinded without Purchaser’s consent and (iii) shall be in full force and effect on the Closing Date.

(b) Representations and Warranties. The representations and warranties of Seller set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that to the extent such representations and warranties expressly speak as of an earlier date, such representations and warranties shall be true and correct in all material respects as of such specified date), and Purchaser shall have received a certificate, dated the Closing Date and signed by an officer of Seller, to that effect.

(c) Covenants. Seller shall have performed in all material respects all of the obligations, covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date, and Purchaser shall have received a certificate, dated the Closing Date and signed by an officer of Seller, to that effect.

(d) No Governmental Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, injunction or other Governmental Order (whether temporary, preliminary or permanent) that is in effect and has the effec