ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated December 22, 2006 (together with all Schedules hereto, this " Agreement "), among American MediConnect Acquisition Corp., a New York corporation, with offices at 3265 Lawson Boulevard, Oceanside, New York 11572 (" Buyer "), and American Medical Alert Corp., a New York corporation with offices at 3265 Lawson Boulevard, Oceanside, New York, 11572, as guarantor of Buyer's obligations hereunder, on the one hand, and American MediConnect, Inc. (“MediConnect”) and Phone Screen, Inc. (“Phone Screen”, and together with MediConnect, the “Sellers”) each of which is an Illinois corporation having offices at 3232 North Elston Avenue, Chicago, IL 60618, and Janet Lifshitz, an individual and the sole stockholder of each of the Sellers, residing at 2722 Old Glenview Road, Wilmette, IL 60091 (the " Stockholder " or " Principal "), and Joseph Sameh, an individual and a director and officer of each of the Sellers, residing at 2722 Old Glenview Road, Wilmette, IL 60091 (the " Officer " or a " Principal ", and together with the Stockholder, the " Principals "), on the other hand.

A.   MediConnect is in the business of providing telephone answering services, message services, faxing services, paging services and other ancillary office services (collectively, the " TAS Business ").

B.   Phone Screen is in the business of providing clinical trial support services (the "Phone Screen Business", and together with the TAS Business, the "Business")

C.   Buyer desires to purchase from each of the Sellers, and each of Sellers desires to sell to Buyer, certain of each such Sellers’ assets and properties relating to the Business, on the terms and subject to the conditions set forth herein.

D.   The parties have drafted a disclosure schedule (the "Disclosure Schedule") corresponding to various provisions of this Agreement, in order to record various disclosures made pursuant to the various provisions hereof.

In consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.1   Sale and Purchase . Upon the terms and subject to the conditions contained in this Agreement, each of the Sellers, as of the date hereof (the “ Closing Date ”), hereby sells, assigns, transfers and delivers to Buyer, and Buyer, as of the Closing Date, purchases and accepts from each of the Sellers, all of the assets and rights of every nature, kind and description, tangible and intangible, wherever located, that are owned, used or held for use by each such Seller in or for each Seller's Business, as the same exists on the Closing Date (collectively, the " Purchased Assets "), free and clear of any and all liens, charges, claims, pledges, security interests or other encumbrances of any kind whatsoever (" Liens "), other than (i) cash, except for cash relating to Accounts Receivable belonging to Buyer as set forth in Section 1.6, (ii) all assets and rights in connection with the Employee Plans (as defined in Section 2.24 of this Agreement), except for those listed in Section 4.1 of the Disclosure Schedule, and (iii) all assets listed in Section 1.1 of the Disclosure Schedule hereto (collectively, the " Excluded Assets "). The Purchased Assets shall include, without limitation, the following, in each case, as used or held for use by each Seller in or for each Seller's Business:

(a)   customer accounts (both actual and prospective), including barter accounts, if any;

(b)   expenses prepaid by each of the Sellers;

(c)   customer and supplier lists, mailing lists, telephone numbers, DID numbers, catalogs, yellow pages advertising, brochures, promotional materials and handbooks relating to the Business;

(d)   other books, records, files, contracts, plans, notebooks, production and sales data and other data of each of the Sellers relating to the Business, including but not limited to book keeping records and ledgers, whether or not in tangible form or in the form of intangible computer storage media such as optical disks, magnetic disks, tapes and all similar storage media;

(e)   machinery, computers, file servers, networking hardware, software licensing and other data processing hardware (and all software related thereto or used therewith) and other tangible personal property of similar nature, including but not limited to all items set forth on each of Sellers’ fixed asset ledger attached to this Agreement on Section 2.5 of the Disclosure Schedule, the Amtelco telephony equipment and all telephony hardware and peripherals, including, but not limited to, telephony chassis, expansion cards, monitors, spare equipment, operator audio boxes, amplifiers and headsets;

(f)   office furniture, office equipment, fixtures and other tangible personal property of similar nature, as set forth in Section 2.5 of the Disclosure Schedule, and all other such items located in the premises identified in the Leases (as hereinafter defined), whether or not set forth in Section 2.5 of the Disclosure Schedule;

(g)   all inventory including, but not limited to, any pagers;

(h)   interests to the extent owned by each of the Sellers in any patent, copyright, trademark, trade name, brand name, service mark, service name, assumed name, domain name, website, logo, symbol, trade dress, design or representation or expression of any thereof, or registration or application for registration thereof, or any other invention, trade secret, technical information, know-how, proprietary right or intellectual property, technologies, methods, designs, drawings, software (including documentation and source code listings), processes and other proprietary properties or information (collectively, the " Intellectual Property ");

(i)   real property interests described in Section 2.8 of the Disclosure Schedule to this Agreement together with all licenses, leases, rights, privileges and appurtenances thereto including, without limitation, all leases, agreements and other rights to use, occupy or possess, or otherwise with respect to, real property or machinery, equipment, vehicles, and other tangible personal property of similar nature to which each of the Sellers is a party, and all rights arising under or pursuant to such leases, agreements and rights;

(j)   all rights under contracts, agreements, options, commitments, understandings, licenses, leases, permits and instruments relating to the Business including, without limitation, customer and supplier contracts, sales representative and distributor contracts and commission contracts with respect thereto, all as listed (the " Assigned Contracts ") on Schedule 1.1(j) of the Disclosure Schedule, but no Liabilities (as defined below) associated with any of the Assigned Contracts, except as set forth in Section 1.2 below;

(k)   all of the Sellers' rights, title and interest in and to the names “MediConnect" and "Phone Screen" and all variations thereof and all similar names and the goodwill associated therewith and with the Purchased Assets, together with all trademarks, service marks and trade names each of the of Sellers related to the Business, if any;

(l)   third party warranties and guarantees and other similar contractual rights as to third parties held by or in favor of each of the Sellers, and arising out of, resulting from or relating to the Business or the Purchased Assets, to the extent not included as part of the Assigned Contracts; and

(m)   rights to insurance and condemnation proceeds relating to any damage, destruction, taking or other similar impairment of any of the Purchased Assets and payable directly to either of the Sellers.

1.2   No Assumption of Liabilities . Except as provided herein, Buyer is not assuming any Seller's direct or indirect liabilities, obligations, undertakings, indebtedness, obligations under guaranties, endorsements, adverse claims, losses, damages, deficiencies, costs, expenses or responsibilities of any kind, fixed or unfixed, known or unknown, asserted or unasserted, due or undue, liquidated or unliquidated, secured or unsecured, accrued or unaccrued, contingent or non-contingent, subordinated or non-subordinated (collectively, " Liabilities "). Buyer will assume all Liabilities relating to the Purchased Assets and the Business to the extent arising from activity of Buyer relating to periods after the Closing Date (collectively, the " Assumed Liabilities ").

1.3   Purchase Price . The aggregate purchase price for the Purchased Assets is Two Million Twenty Eight Thousand Eight Hundred Thirty and 00/100 ($2,028,830.00) Dollars (the " Purchase Price "). The Purchase Price shall be payable as set forth below:

(a)   Nine Hundred Ninety Three Thousand Seven Hundred Thirty Nine and 50/100 ($993,739.50) Dollars, payable to MediConnect by wire transfer on the Closing Date (the " MediConnect Closing Cash Purchase Price ");  

(b)   Five Hundred Thousand ($500,000.00) Dollars, payable to Phone Screen by wire transfer on the Closing Date (the “ Phone Screen Closing Cash Purchase Price ”);

(c)   Thirty Five Thousand Nine Hundred Sixty Seven (35,967) shares of American Medical Alert Corp. ("AMAC"), the Buyer's indirect parent, common stock issued to MediConnect (the " AMAC Shares "); and

(d)   and Three Hundred Five Thousand Seven Sixty Six and 00/100 ($305,776.00) Dollars, plus interest accrued thereon at a rate of six (6%) percent per annum, payable to MediConnect upon the twelve month anniversary of the Closing Date; provided , however , that to the extent any such amounts are not paid because of a properly asserted claim pursuant to Section 6.4 hereof, such amounts shall not be deemed to be an amount payable under this Section 1.3(d);  

(e)   As additional consideration, the Buyer shall pay each Seller the amounts set forth in Section 1.7(a)-(c) hereof (the " Contingent Additional Good Will Payment "), and the amounts set forth in Section 1.7(f) hereof (the " Phone Screen Additional Good Will Payment "), in each case to the extent so payable.

1.4   Sellers’ and Principals’ Closing Deliveries . (a)   On or prior to the Closing Date, each of the Sellers and the Principals, will have delivered to Buyer each of the following documents (collectively, the " Seller's Closing Documents "):

(i) Certificate of Secretary . A certificate of the Secretary of each of the Sellers in the form of Exhibit A, setting forth a copy of the resolutions adopted by its board of directors and the Stockholder in her respective capacity as a stockholder of each of the Sellers, approving the execution and delivery of this Agreement, ratifying all past corporate action, and the other documents and instruments contemplated hereby to which it is a party (this Agreement and all other documents and instruments to which Buyer, the Sellers or the Principals is a party in connection herewith being sometimes collectively referred to herein as the " Purchase Documents ") and the consummation of the transactions contemplated hereby;

(ii) Instruments of Transfer . Two separate Bills of Sales and Assignment Agreements, in the form of Exhibit B attached hereto (the " Bill of Sale "), duly executed by each of the Sellers, respectively, that, among other things, conveys, transfers and sells to Buyer all right, title and interest of each of the Sellers in and to the Purchased Assets owned by each of the Sellers, respectively.

(iii) Legal Opinion of Counsel to Sellers and Principals. An opinion, in the form of Exhibit C attached hereto, from Stone, Pogrund & Korey, counsel to Sellers and the Principals .

(iv) Wire Transfer Instructions . Wire transfer instructions for the payment of each of the MediConnect and the Phone Screen Closing Cash Purchase Price, respectively, in the forms attached hereto as Exhibit E .

(v) Schedule of Receivables . A schedule of all receivables due to each of the Sellers as of the close of business on the Closing Date, including Sellers' standard aging report for each account.

(vi) Customer List . A complete and unrestricted list of all customers of each of the Sellers, including the name, address, telephone number and contact for each such customer, which list shall only be delivered and transferred to the Buyer either by electronic mail or by facsimile.

(vii) Management Employment Agreements . Employment agreements between the Buyer and each of the Stockholder and the Officer in the form of Exhibit D attached hereto (the " Management Employment Agreements "), duly executed by each of the Stockholder and the Officer, respectively.

(viii) Books and Records . All books and records of each of the Sellers relating to the Business.

(ix) Lease . (i) A one year lease for the premises at 3232 North Elston Avenue, Chicago, IL 60618 (the “Building”) between the Buyer and JSS Properties LLC (the “LLC”), in the form of Exhibit F hereto (the " Lease "), duly executed by the LLC, and (ii) a letter agreement between the LLC and MediConnect terminating the current lease for the relevant premises.

(x) Bank Debt/Payoff Letter . A payoff letter from Devon Bank (the "Bank") in a form reasonably acceptable to the Buyer as well as such bank's wire transfer instructions.

(xi) Amtelco Consent . The consent of Amtelco to the assignment of that certain Amtelco license agreement, from MediConnect to Buyer, in a form reasonably acceptable to the Buyer.

1.4A.   Deliveries of Buyer . On or prior to the Closing Date, Buyer will have delivered to the Sellers each of the following documents and payments (collectively " Buyer's Closing Documents "):

(i) Certificate of Secretary . A certificate of the Secretary of Buyer setting forth a copy of the resolutions adopted by its Board of Directors approving the execution and delivery of this Agreement and the other Purchase Documents and the consummation of transactions contemplated hereby and thereby.

(ii) Closing Cash Purchase Price . Each of the MediConnect and Phone Screen Closing Cash Purchase Price, respectively, in immediately available funds.

(iii) AMAC Shares . Irrevocable instructions to AMAC's transfer agent for the issuance of the AMAC Shares, as well as an opinion by AMAC's counsel relating to such issuance.

(iv) Management Employment Agreements . The Management Employment Agreements, duly executed by the Buyer.

1.5   Adjustments for Payables . Within 90 days after the Closing Date, Buyer will prepare an accrual based statement of accounts payable (including any payables outstanding as of the Closing Date, which are listed on Schedule 1.5 of the Disclosure Schedule (the "Payables")) as of the Closing Date with respect to each of the Sellers. Any such accounts payable which relate to any period prior to the Closing Date and which are paid by Buyer, shall be a credit in Buyer’s favor. Any amounts paid by either Seller prior to the Closing Date that relate to periods after the Closing Date shall also be scheduled and shall act as a credit in favor of such Seller. Buyer shall provide Sellers with an accounting of any sums claimed by Buyer from Sellers pursuant to this Section. The net amount shall be paid by the Buyer or Sellers, as the case may be, to the other within 30 days of the determination thereof. If either of the Sellers fails to timely pay any amounts due to Buyer pursuant to this Section, then such amounts may be debited from any amounts due to Sellers pursuant to this Agreement.

1.6   Adjustment for Receivables . [*].

1.7   Contingent Additional Good Will Payment and Phone Screen Additional Good Will Payment . [*].

Section 2.   Representations and Warranties of the Sellers and the Principals . In order to induce Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, each of the Sellers and the Principals, represent and warrant to Buyer that each of the following statements is true and correct as of the date hereof, and with respect to representations and warranties that speak as of a subsequent date, such representations and warranties will also be true and correct   in all material respects   as of such date. Each of the Sellers and the Principals acknowledge that the following representations and warranties are an essential inducement to Buyer's decision to enter into this Agreement and to consummate the transactions contemplated hereby and that any breach thereof shall be deemed to be a material breach of this Agreement (provided, however, that Buyer shall notify Sellers in writing of any such breach and the amount of Damages (as defined in Section 6.1) claimed as a result of such breach, and Sellers shall have fifteen (15) days to dispute such breach, during which time, any payment obligations of the Buyer (to the extent of the Damages claimed) under this Agreement or the Management Employment Agreements shall be tolled):

2.1   Organization . Each of the Sellers is an Illinois corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business and to own and operate its assets and properties as presently conducted and operated. The LLC is an Illinois limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, with full limited liability company power and authority to conduct its business and to own its assets and properties as presently conducted and operated. Except as set forth in Section 2.1 of the Disclosure Schedule, neither Seller does any business in any other jurisdiction in any manner which would require it to become qualified or licensed as a foreign entity. Each Seller has delivered to Buyer, as Section 2.1 of the Disclosure Schedule, true, correct and complete copies of such Seller’s articles of incorporation (the " Articles of Incorporation ") and by-laws (the " By Laws "), as currently in effect.

2.2   Title to Purchased Assets; Ownership of Stock or Membership Interests .  

(a)   Each Seller has good and marketable title to the Purchased Assets owned by it including, without limitation, all assets set forth on each Seller's respective fixed asset ledgers attached to this Agreement on Section 2.5 of the Disclosure Schedule, free and clear of all Liens, other than (i) Liens, if any, for personal property taxes and assessments not yet due and payable and (ii) Liens disclosed on Section 2.2 of the Disclosure Schedule. The LLC is the sole owner of the Building. Upon consummation of the transactions contemplated by this Agreement, Buyer will acquire all of each Seller's respective rights, title and interests in and to the Purchased Assets owned by it, free and clear of all Liens, other than those listed on Schedule 2.2 of the Disclosure Schedule, except that the Lien held by the Bank shall be extinguished in full on the Closing Date by Buyer wiring the amount of funds listed in, and in accordance with the wire transfer instruction provided by Sellers in, Exhibit E hereto.

(b)   The Stockholder is the sole record and beneficial owner of (i) 14,926 shares of MediConnect's common stock, no par value which constitute all of the outstanding capital stock of MediConnect, and (ii) 100 shares of Phone Screen's common stock, no par value, which constitute all of the outstanding capital stock of Phone Screen. No Person has any right, interest or claim to any of the Sellers’ capital stock (other than the Stockholder in the amounts set forth in the first sentence of this Section 2.2(b)) or the Purchased Assets. On or about April 19, 1989, the Officer purchased 500 shares of MediConnect's common stock from each of Richard Smith and Thomas Mulcahy, for a purchase price of $4.00 per share. There are no subscriptions, warrants, options, convertible securities or other rights (contingent or other) to purchase or acquire any shares of any class of capital stock of either Seller, issued or outstanding, and there is no commitment of either Seller to issue any shares, warrants, options or other such rights or to distribute to holders of any class of its capital stock, any evidences of indebtedness or assets. The Principals are the sole directors and officers of each of the Sellers. The Principals are the sole members and managers of the LLC.

2.3   Authorization; Validity of Agreement, Etc . Each of the Principals has the requisite capacity, and each of the Sellers has the full right, power and authority, to execute and deliver this Agreement and the other Purchase Documents to which, as applicable, it or they are a party and to consummate the transactions contemplated hereby and thereby, and to make the representations set forth herein and therein. The execution and delivery of this Agreement and the other Purchase Documents to which each Seller is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by each of the Sellers and no other proceedings on the part of either of the Sellers are necessary to authorize the execution and delivery of this Agreement and the other Purchase Documents to which each Seller is a party to or the consummation of the transactions contemplated hereby and thereby by each of the Sellers and the Principals. The execution and delivery of the Lease and the consummation of the transactions contemplated thereby have been duly and validly authorized by the LLC and no other proceedings on the part of the LLC are necessary to authorize the execution and delivery of the Lease. Each of this Agreement and the other Purchase Documents to which the Sellers are party have been duly and validly executed by each of the Sellers and constitute the valid and binding agreement of each of the Sellers, enforceable against each of the Sellers in accordance with its respective terms. Each of this Agreement and the other Purchase Documents to which the Principals are a party have been duly and validly executed by each of the Principals constitute the valid and binding obligation of each of the Principals, enforceable against each of the Principals in accordance with its respective terms. The Lease has been duly and validly executed by the LLC and constitutes the valid and binding obligation of the LLC, enforceable against the LLC in accordance with its terms.

2.4   Consents and Approvals; No Violation . Except as set forth in Section 2.4 of the Disclosure Schedule, and except as set forth below with respect to the MediConnect and Phone Screen customer contracts, the execution, performance and delivery by the each of the Sellers, and the Principals of this Agreement and each of the other Purchase Documents to which it or they are a party, as applicable, and the consummation by the Sellers and the Principals of the transactions contemplated hereby and thereby, respectively, and the compliance by each of the Sellers and the Principals with the provisions hereof and thereof will not: (a) conflict with or breach any provision of the Articles of Incorporation or Bylaws of either Seller; (b) violate or breach in any respect any provision of, or constitute a default (or an event which, with notice or lapse of time or both would constitute a default) under, any of the terms, covenants, conditions or provisions of, or give rise to a right to terminate or accelerate or increase the amount of payment due under, any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement or other instrument, commitment or obligation to which either of the Sellers or, either of the Principals is a party (collectively, " Contracts "), or by which either of the Sellers or, either of the Principals or any of their respective properties or assets, as applicable, may be bound or affected; (c) require either of the Sellers or either of the Principals to make any filing or registration with, or obtain any other permit, authorization, consent or approval of, any Person (as hereinafter defined) or Governmental Entity (as hereinafter defined); (d) result in the creation of any Lien on or affecting the Purchased Assets; (e) violate any order, writ, injunction, decree, judgment, or ruling of any court or governmental authority, applicable to either of the Sellers or either of the Principals or any of their respective properties or assets; or (f) violate any statute, law, rule or regulation applicable to either of the Sellers or any of their respective properties or assets. The standard customer contract of MediConnect requires consent of the customer for assignment. Most of the customer contracts of Phone Screen reuire consent of the customer for assignment. " Person " shall mean any individual, partnership, corporation, joint venture, limited liability company, trust, organization or any other entity. " Governmental Entity ” shall mean any foreign, provincial, United States federal, state, county, municipal or other local jurisdiction, political entity, body, organization, subdivision or branch, legislative or executive agency or department or other regulatory service, authority or agency.

2.5   Condition of Purchased Assets .   All items of machinery, equipment, tooling and other tangible personal property owned or leased by the Sellers and used in the conduct of the Business (other than items of inventory) are listed in the detailed fixed assets ledger of each of the Sellers attached to Section 2.5 of the Disclosure Schedule (collectively, the " Personal Property "). Although it may not be specifically identified in Section 2.5 of the Disclosure Schedule, the term "Personal Property" includes all of the telephony equipment hardware and peripherals, including, but not limited to, telephony chassis, expansion cards, monitors, spare equipment, operator audio boxes, amplifiers, headsets, and all computers, furniture, fixtures and machinery, in each case located in the premises identified in the Lease. The Personal Property conforms in all respects to all requirements of applicable laws. All items of machinery, equipment and tooling included within the Personal Property are in good operating condition and in good state of maintenance and repair and are adequate for use in conduct of each of the Sellers’ Business as currently being conducted.

2.6   Receivables. All accounts receivable of each of the Sellers as of the Closing Date, are reflected on Section 2.6 of the Disclosure Schedule and represent valid obligations arising from bona fide transactions in the ordinary course of each of the Sellers’ business consistent with past practice and established in the ordinary course of each of the Sellers’ business. To the best knowledge of each of the Sellers and each of the Principals, the accounts receivable of each of the Sellers are collectible, and there is no contest, claim, or right of set off, under any contract with any obligor of an accounts receivable relating to the amount or validity of such accounts receivable. All invoices of each of the Sellers' relate to and reflect services previously provided by the Sellers to their respective customers, including base fees and usage fees.

2.7   Taxes .

(a)   Except as set forth in Section 2.7(a) of the Disclosure Schedule:

(i)   Each Seller has (A) duly and timely filed or caused to be filed with the Internal Revenue Service, the State of Illinois or other applicable Governmental Entity (collectively, " Taxing Authorities ") all Tax Returns (as defined below) that are required to be filed by or on behalf of such Seller and that include or relate to the Purchased Assets or the Business, which Tax Returns are true, correct and complete, and (B) duly and timely paid in full or caused to be paid in full, or recorded a provision for such payment on the books and records of such Seller in accordance with GAAP for the payment of, all Taxes that are due and payable and any Taxes that could result in a Lien on any Purchased Asset or the Business. Each of the Sellers has adequate reserves for the payment of all Taxes that are not due and payable;

(ii)   Each Seller has duly and timely complied with all applicable Laws relating to the collection or withholding of Taxes, and the reporting and remittance thereof to the applicable Taxing Authorities;

(iii)   no audit, examination, investigation, reassessment or other administrative or court proceeding (collectively, a " Tax Proceeding ") is pending, proposed, or threatened, with regard to any Tax or Tax Return referred to in clause (i) above;

(iv)   there is no Lien for any Tax upon any of the Purchased Assets or the Business;

(v)   there is no outstanding request for a ruling from any Taxing Authority, closing agreement (within the meaning of Section 7121 of the Code or any analogous provision of applicable Law) relating to any Tax for which either of the Sellers is or may be liable or with respect to each Seller's income, assets or business, power of attorney relating to, or in connection with, any Tax that could result in a Lien on any Purchased Asset or the Business;

(vi)   none of the Purchased Assets is "tax-exempt bond financed property" or "tax-exempt use property" within the meaning of Section 168(g) or (h), respectively, of the Code or any similar provision of applicable Law;

(vii)   none of the Purchased Assets is required to be treated as being owned by any other person pursuant to the "safe harbor" leasing provisions of Section 168(f)(8) of the Internal Revenue Code of 1954 as in effect prior to the repeal of those "safe harbor" leasing provisions or any similar provision of applicable Law;

(viii)   no claim has ever been made by a Taxing Authority in a jurisdiction where either of the Sellers or either of the Principals has not paid any Tax or filed Tax Returns relating to the Business or any Purchased Asset asserting that such Seller or such Principal is or may be subject to Tax in such jurisdiction.

(ix)   MediConnect is, and has always been, an "S-Corp" for all Tax purposes. Phone Screen is, and has always been, an "C-Corp" for all Tax purposes (it being understood that Phone Screen may apply for S-Corp status in the future).

(b)   Each Seller has provided to Buyer true, complete and correct copies of (i) all Federal and Corporate Income Tax Returns relating to, and (ii) all audit reports relating to, each proposed adjustment, if any, made by any Taxing Authority with respect to any taxable period ending after December 31, 2001 and any and all Taxes with respect to which a Lien may be imposed on any Purchased Asset or the Business.

(c)   As used herein, (i) " Tax Return " means any return, declaration, report, information return or statement, and any amendment thereto, including without limitation any consolidated, combined or unitary return or other document (including any related or supporting information), filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection, payment, refund or credit of any federal, state, local or foreign Tax or the administration of any Laws relating to any Tax or ERISA, and (ii) "Tax" or "Taxes" means any and all taxes, charges, fees, levies, deficiencies or other assessments of whatever kind or nature including, without limitation, all net income, gross income, profits, gross receipts, excise, real or personal property, sales, ad valorem , withholding, social security, retirement, excise, employment, unemployment, minimum, estimated, severance, stamp, property, occupation, environmental, windfall profits, use, service, net worth, payroll, franchise, license, gains, customs, transfer, recording and other taxes, customs duty, fees assessments or charges of any kind whatsoever, imposed by any Taxing Authority, including any liability therefor as a transferee (including without limitation under Section 6901 of the Code or any similar provision of applicable Law), as a result of Treasury Regulation §1.1502-6 or any similar provision of applicable Law, or as a result of any Tax sharing or similar agreement, together with any interest, penalties or additions to tax relating thereto.

2.7B   Financial Statements . Attached to Section 2.7B of the Disclosure Schedules are the (i) unaudited balance sheets of each Seller as of December 31, 2005, and (ii) unaudited statements of income of each Seller for the 12 month period ended December 31, 2005 (collectively, the " Financial Statements "), together with a compilation report of the Sellers' independent accountants with respect to such Financial Statements. The Financial Statements, (i) are derived from, and agree with, the books and records of each of the Sellers, respectively, and (ii) fairly present the financial condition of each of the Sellers, respectively, as of the date thereof and the results of operations of each of the Sellers for the periods set forth therein, in each case prepared in accordance with United States generally accepted accounting principles, as in effect on the date hereof.

2.8   Real Property . Except as set forth in Section 2.8 of the Disclosure Schedule, the Sellers do not own any real property and are neither a landlord, sublandlord or licensor nor a tenant, subtenant or licensee under any lease, sublease, license or occupancy agreement with respect to real property. Section 2.8 of the Disclosure Schedule lists and briefly describes all leases, subleases and agreements by which real property is used or occupied by the Sellers in connection with the Business. With respect to each parcel of leased real property: (i) the leases and subleases described on Section 2.8 of the Disclosure Schedule, constitute all of the leases, subleases and agreements under which the Sellers hold any interest in any leased real estate used in connection with their business; (ii) the Sellers have delivered to Buyer and its counsel true, correct and complete copies of all of the leases, subleases and agreements described on Section 2.8 of the Disclosure Schedule; (iii) each such lease, sublease or agreement is in full force and effect and is a legal, valid, binding and enforceable obligations of the applicable Seller and, to the best knowledge of each of the Sellers and the Principals, each of the other parties thereto, and will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms after the Closing; (iv) none of the Sellers or, to the best knowledge of each of the Sellers and the Principals, any other party to any such lease, sublease or agreement is in breach or default thereof, and no event has occurred which, with notice or the lapse of time, or both, would constitute such a breach or default or permit termination, modification or acceleration thereof or thereunder; (v) to the best knowledge of each of the Sellers and the Principals, no other party to any such lease, sublease or agreement has repudiated any provision thereof; (vi) there are no disputes, oral agreements or forbearance programs in effect as to any such lease, sublease or agreement; (vii) no such lease, sublease or agreement has been modified in any respect, except to the extent disclosed in documents delivered to Buyer and its counsel; (viii) neither of the Sellers has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any leasehold or subleasehold; (ix) to the best knowledge of each of the Sellers and the Principals, all buildings, improvements and other property on the leased property have received all material approvals of governmental authorities (including certificates of occupancy, permits and licenses) required in connection with the operation thereof and have been operated and maintained in accordance with all material legal requirements and are not in violation of any material zoning, building code or subdivision ordinance, regulation, order or law or restrictions or covenants or record; (x) to the best knowledge of each of the Sellers and the Principals, all buildings, improvements and other property thereon are supplied with utitlies and other services necessary for the operation thereof (including gas, electricity, water, telephone, sanitary and storm sewers and access to public roads); (xi) there are no pending or, to the best knowledge of each of the Sellers and the Principals, threatened condemnation proceedings, lawsuits, or other administrative actions relating to such parcel or other matters affecting adversely the current use, occupancy, or value of such parcel; (xii) to the best knowledge of each of the Sellers and the Principals, the land does not serve any adjoining property for any purpose inconsistent with the use of the land, and the property is not located within any flood plain or subject to any similar type restriction for which any permits or licenses necessary to the use thereof have not been obtained; (xiii) other than the documents described on the attached Section 2.8 of the Disclosure, there are no leases, subleases, licenses, concessions, or other agreements, written or oral, by which the Sellers have granted to any Person the right of use or occupancy of any portion of such properties; (xiv) no Person (other than the Sellers) is in possession of such properties; and (xv) all such leased real property and improvements therein are in good operating condition and repair and are adequate and suitable for their intended use in the Business.

2.9   Intellectual Property . Section 2.9 of the Disclosure Schedule lists all Intellectual Property that is owned by each of the Sellers or any other Person and used by each of the Sellers in the operations of the Business, and there are no pending or, to the best knowledge of each of the Sellers and the Principals, threatened claims by any Person relating to either Seller's use of any Intellectual Property. With respect to such Intellectual Property, each Seller has, free and clear of all Liens, such rights of ownership or such rights of license, lease or other agreement to use the Intellectual Property as are necessary to permit such Seller to conduct its business and, except as set forth on Section 2.9 of the Disclosure Schedule, neither Seller is obligated to pay any royalty or similar fee to any Person in connection with such Seller's use or license of any of the Intellectual Property.

2.10   Material Contracts . Section 2.10 of the Disclosure Schedule sets forth a true, complete and correct list of every Contract that: (i) provides for aggregate future payments by each Seller or to each Seller of more than $1,000 (excluding purchase orders and invoices arising in the ordinary course of business); (ii) was entered into by any Seller with any of the Principals, or an officer, director or significant employee of each Seller; (iii) is a collective bargaining or similar agreement; (iv) guarantees or indemnifies or otherwise causes either Seller to be liable or otherwise responsible for the Liabilities of another or provides for a charitable contribution by either Seller; (v) involves an agreement with any bank, finance company or similar organization; (vi) restricts either of the Sellers or the Principals or the Business from engaging in any business or activity anywhere in the world; (vii) is an employment agreement, consulting agreement or similar arrangement with any employee of either of the Sellers; (viii) involves an agreement or any other Contract providing for payments from either Seller to any other Person, or by any Person to either Seller, based on sales, purchases or profits, other than direct payments for goods; or (ix) any other Contract that is material to the rights, properties, assets, business or operations of either Seller or the Business (the foregoing, collectively, " Material Contracts "). Each Seller has heretofore provided true, complete and correct copies of all of its Material Contracts to Buyer.

There is not, and to the best knowledge of each of the Sellers and the Principals, there has not been claimed or alleged by any Person with respect to any Material Contract, any existing default, or event that with notice or lapse of time or both would constitute a default or event of default, on the part of either Seller or, to the best knowledge of each of the Sellers and the Principals, on the part of any other party thereto, and no consent, approval, authorization or waiver from, or notice to, any Governmental Entity or other Person is required in order to maintain in full force and effect any of the Material Contracts, other than such consents and waivers that have been obtained and are unconditional and in full force and effect and such notices that have been duly given and copies of such consents, waivers and notices have been delivered to Buyer.

2.11   Customers, Suppliers and Distributors . Sellers have delivered to Buyer by electronic mail or facsimile dated December 12, 2006 (i) a list of all of each of the Sellers’ customers, (ii) the sales of each Seller for the 12 month period ended December 12, 2006, and (iii) the suppliers and distributors of each Seller during such period. Other than in the normal course of business, there has not been any adverse change in the business relationship of either Seller with any such customer, supplier or distributor, and neither of the Sellers or the Principals is aware of any threatened loss of any such customer, supplier or distributor.

Attached to Section 2.11 of the Disclosure Schedule is the most recent form of each of the Sellers’ standard customer agreement.

2.12   Litigation; Compliance with Laws; Licenses and Permits .

(a)   Except as set forth in Section 2.12 of the Disclosure Schedule, there is no claim, suit, action or proceeding (" Proceeding ") pending, nor, to the best knowledge of each of the Sellers or the Principals, is there any investigation or Proceeding threatened, that involves or affects either Seller or the Business, by or before any Governmental Entity, court, arbitration panel or any other Person.

(b)   Except as set forth in Section 2.12 of the Disclosure Schedule, each of the Sellers and the Business have complied with all applicable federal, state, county, municipal or other local criminal, civil or common laws, statutes, ordinances, orders, codes, rules, regulations, permits, policies, guidance documents, judgments, decrees, injunctions, or agreements of any Governmental Entity (collectively, " Laws "), including but not limited to Laws relating to zoning, building codes, antitrust, occupational safety and health, industrial hygiene, environmental protection, water, ground or air pollution, consumer product safety, product liability, hiring, wages, hours, employee benefit plans and programs, collective bargaining and the payment of withholding and social security taxes. Since January 1, 2002, neither Seller has received any notice of any violation of any Law.

(c)   Except as set forth in Section 2.12 of the Disclosure Schedule, each of the Sellers and the Business has every license, permit, certification, qualification or franchise issued by any Governmental Entity (each, a " License ") and every approval, authorization, waiver, variance, exemption, consent or ratification by or on behalf of any Person that is not a party to this Agreement (each, a " Permit ") required for it to conduct its business as presently conducted. All such Licenses and Permits are specified on Schedule 2.12. All such Licenses and Permits are in full force and effect and neither of the Sellers nor the Principals has received notice of any pending cancellation or suspension of any thereof nor, to the best knowledge of either of the Sellers or the Principals, is any cancellation or suspension thereof threatened. The applicability and validity of each such License and Permit will not be adversely affected by the consummation of the transactions contemplated by this Agreement. Each such License or Permit is set forth in Section 2.12 of the Disclosure Schedule.

2.13   Product or Service Claims . No product or service liability claim or a claim with respect to the conduct of the Business is pending, or to the best knowledge of each of the Sellers and the Principals, threatened, against either Seller or against any other party with respect to the products or services of the Business. Section 2.13 of the Disclosure Schedule lists all service and product liability claims asserted against each Seller with respect to the products or services of the Business or either Seller during the last five (5) years.

2.14   No Brokers . Neither of the Sellers or the Principals has employed, or otherwise engaged, any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders' fees or other similar fees in connection with the transactions contemplated by this Agreement.

2.15   Assets Utilized in the Business . Except as set forth in Section 2.15 of the Disclosure Schedule, the assets, properties and rights owned, leased or licensed by each Seller or used in connection with the Business and that are owned, leased or licensed by such Seller as of the date hereof, and all the agreements to which each Seller is a party, constitute all of the properties, assets and agreements necessary to such Seller in connection with the operation and conduct by such Seller of the Business as presently and as proposed to be conducted.

2.16   Related Party Transactions . Except as set forth in Section 2.16 of the Disclosure Schedule, neither of the Principals, nor any other director, officer or key employee of either of the Sellers (or any members of the immediate family (including spouse, brother, sister, descendant, ancestor or in-law) or affiliates of the aforementioned is (i) a party to any agreement, contract, commitment or transaction with either of the Sellers or affecting the Business, or has any interest in any property, whether real, personal or mixed, or tangible or intangible, used in or necessary to the business of either of the Sellers, or (ii) is a director, officer or employee of any customer or supplier of either of the Sellers.

2.17   Insurance . Section 2.17 of the Disclosure Schedule contains a complete and correct list of all policies of insurance of any kind or nature covering each Seller, including policies of life, fire, theft, casualty, product liability, workmen's compensation, business interruption, employee fidelity and other casualty and liability insurance, indicating the type of coverage, name of insured, the insurer, the expiration date of each policy, the amount of coverage and whether on an "occurrence" or "claims made" basis. All such policies are: (i) with insurance companies that are financially sound and reputable and are in full force and effect; (ii) sufficient for compliance with all material requirements of law and of all applicable material agreements; and (iii) valid, outstanding and enforceable policies. Complete and correct copies of such policies have been furnished to Buyer. All such insurance policies or comparable coverage shall continue in full force and effect through the Closing Date.

2.18   No Misstatements or Omissions . No representation or warranty by either of the Sellers or the Principals contained in this Agreement and no statement of each of the Sellers or the Principals contained in any certificate, list, Schedule, Exhibit or other instrument specified or referred to in this Agreement, whether heretofore furnished to Buyer or hereafter furnished to Buyer pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit any material fact necessary to make the statements contained therein, in light of the circumstances under which it was made, not misleading.

2.19   Labor Matters and Employment Matters . 

(a)   Set forth on Section 2.19(a) of the Disclosure Schedule is a list of all employees of each of the Sellers as of the date hereof and their respective positions, hire dates and, stated separately, their base wage rates and the nature and amount of any other compensation.

(b)   Set forth on Section 2.19(b) of the Disclosure Schedule is a list of (i) each oral or written employment agreement, contract or severance agreement existing as of the date hereof, individually or collectively, with a