TABLE OF CONTENTS

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ARTICLE I	PURCHASE AND SALE OF TRANSFERRED ASSETS				1
SECTION 1.01.			Purchase and Sale		1
SECTION 1.02.			Transferred Assets and Excluded Assets		1
SECTION 1.03.			Consents to Certain Assignments		4
SECTION 1.04.			Assumption of Liabilities		5
ARTICLE II	CLOSING AND PURCHASE PRICE				6
SECTION 2.01.			Closing		6
SECTION 2.02.			Transactions To Be Effected at the Closing		6
SECTION 2.03.			Holdback Amount		7
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF SELLER				8
SECTION 3.01.			Organization and Standing		8
SECTION 3.02.			Authority; Execution and Delivery, Enforceability		9
SECTION 3.03.			No Conflicts or Violations; No Consents or Approvals Required		9
SECTION 3.04.			Financial Statements		9
SECTION 3.05.			Assets Other than Real Property Interests		10
SECTION 3.06.			Sufficiency of Transferred Assets		10
SECTION 3.07.			Intellectual Property		11
SECTION 3.08.			Contracts		12
SECTION 3.09.			Permits		14
SECTION 3.10.			Taxes		14
SECTION 3.11.			Proceedings		15
SECTION 3.12.			Employees; Seller Benefit Plans		16
SECTION 3.13.			Absence of Changes or Events; No Undisclosed Liability		16
SECTION 3.14.			Product Liability and Warranty		16
SECTION 3.15.			Compliance with Applicable Laws		17
SECTION 3.16.			Environmental Matters		17
SECTION 3.17.			Ethical Practices		18
SECTION 3.18.			Insolvency		18
SECTION 3.19.			Inventories		18
SECTION 3.20.			Subsidiaries		18
SECTION 3.21.			Third Party Rights		19
SECTION 3.22.			Bank Accounts		19
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF PURCHASER				19
SECTION 4.01.			Organization and Standing		19
SECTION 4.02.			Authority; Execution and Delivery; Enforceability		19
SECTION 4.03.			No Conflicts or Violations; No Consents or Approvals Required		19
SECTION 4.04.			Proceedings		20
SECTION 4.05.			Availability of Funds; Solvency		20

 

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ARTICLE V							COVENANTS				21
SECTION 5.01.									Covenants Relating to Conduct of Business		21
SECTION 5.02.									Access to Information		22
SECTION 5.03.									Confidentiality		22
SECTION 5.04.									Commercially Reasonable Efforts		23
SECTION 5.05.									Brokers or Finders		23
SECTION 5.06.									Intentionally Deleted		23
SECTION 5.07.									Joint Development Arrangement		23
SECTION 5.08.									Cooperation After Closing		24
ARTICLE VI						EMPLOYMENT MATTERS					24
SECTION 6.01.									Continuation of Employment; Credited Service; COBRA		24
ARTICLE VII				CONDITIONS TO CLOSING							25
SECTION 7.01.									Conditions to Each Party’s Obligation		25
SECTION 7.02.									Conditions to Obligation of Purchaser		26
SECTION 7.03.									Conditions to Obligations of Seller		26
SECTION 7.04.									Frustration of Closing Conditions		27
ARTICLE VIII					TERMINATION; EFFECT OF TERMINATION						27
SECTION 8.01.									Termination		27
SECTION 8.02.									Effect of Termination		28
ARTICLE IX			INDEMNIFICATION								28
SECTION 9.01.									Indemnification by Seller		28
SECTION 9.02.									Indemnification by Purchaser		28
SECTION 9.03.									Indemnification Procedures		29
SECTION 9.04.									Limitations on Indemnification		30
SECTION 9.05.									Calculation of Indemnity Payments		31
SECTION 9.06.									Tax Treatment of Indemnification		31
SECTION 9.07.									Survival		31
ARTICLE X		TAX MATTERS									31
SECTION 10.01.									Tax Matters		31
ARTICLE XI				NON-SOLICITATION; NON-COMPETITION							33
SECTION 11.01.									Covenant Not To Solicit for Employment		33
SECTION 11.02.									Seller’s Covenant Not To Compete		33
ARTICLE XII	ADDITIONAL AGREEMENTS										34
SECTION 12.01.									Publicity		34
SECTION 12.02.									No Use of Certain Names		34
SECTION 12.03.									Post-Closing Information		34

 

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SECTION 12.04.			Records		34
SECTION 12.05.			Bulk Transfer Laws		35
SECTION 12.06.			Refunds and Remittances		35
SECTION 12.07.			Collection of Receivables		35
ARTICLE XIII	MISCELLANEOUS				36
SECTION 13.01.			Assignment		36
SECTION 13.02.			No Third-Party Beneficiaries		36
SECTION 13.03.			Expenses		36
SECTION 13.04.			Notices		36
SECTION 13.05.			Headings; Certain Definitions		37
SECTION 13.06.			Counterparts		39
SECTION 13.07.			Integrated Contract; Exhibits and Schedules		39
SECTION 13.08.			Severability; Enforcement		39
SECTION 13.09.			Governing Law		39
SECTION 13.10.			Jurisdiction		39
SECTION 13.11.			Service of Process		39
SECTION 13.12.			Waiver of Jury Trial		39
SECTION 13.13.			Amendments		40
SECTION 13.14.			Other Remedies; Specific Performance		40

 

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SCHEDULE AND EXHIBITS

Schedule 1.02(a)(ii)		Transferred Equipment
Schedule 1.02(a)(iv)		Transferred Intellectual Property
Schedule 1.02(a)(v)		Transferred Technology
Schedule 1.02(a)(vi)		Transferred Permits
Schedule 1.02(a)(vii)		Transferred Contracts
		(Cross-referencing Schedules 3.06 & 3.08)
Schedule 1.02(b)(i)		Excluded Assets – Generally
Schedule 1.02(b)(xi)		Excluded Assets – Name and Mark “Clarient”
Schedule 1.02(b)(iv)		Excluded Assets – Certain Claims
Schedule 1.04(a)(v)		Certain Assumed Liabilities
Schedule 2.03		Holdback Amount
Schedule 3		Disclosure Schedule
Schedule 5.01		Covenants Relating to Conduct of Business
Schedule 6.01		Business Employees
Schedule 7.01(d)		Third Party Consents
Schedule 12.02		Certifications and Filings
Exhibit 2.02(a)		Form of Bill of Sale
Exhibit 2.02(b)		Form of Assumption Agreement
Exhibit 13.05(b)(1)		License Agreement
Exhibit 13.05(b)(2)		Sublease
Exhibit 13.05(b)(3)		Transition Services Agreement

 

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GLOSSARY OF DEFINED TERMS

		Location of
Definition		Defined Terms
Accrued Vacation		Section 6.01(d)
Acquisition		Section 1.01
affiliate		Section 13.05(b)
Agreement		Preamble
Allocation		Section 10.01(a)
Ancillary Agreements		Section 13.05(b)
Applicable Law		Section 3.03
Apportioned Taxes		Section 10.01(b)
Assumed Liabilities		Section 1.04(a)
Business		Section 13.05(b)
Business Contracts		Section 3.08(b)
business day		Section 13.05(b)
Business Employee		Section 6.01(a)(i)
Business Material Adverse Effect		Section 13.05(b)
Claims		Section 1.02(a)(viii)
Closing		Section 2.01
Closing Date		Section 2.01
CLRT		Section 1.02(a)(iii)
Code		Section 3.10(a)
Competitive Activities		Section 11.02
Confidentiality Agreement		Section 5.03
Consent		Section 3.03
Contract		Section 3.08(a)
Dako		Section 13.05(b)
Disclosure Schedule		Article III; opening sentence
Effective Date		Section 1.02(a)(i)
Environmental Laws		Section 3.16(d)
Excluded Assets		Section 1.02(b)
Exclusivity Period		Section 5.06
GAAP		Section 3.04
Geographical Area		Section 11.02
Governmental Entity		Section 3.03
Hazardous Material		Section 3.16(d)
Hazardous Waste		Section 3.16(d)
including		Section 13.05(b)
Indemnified Party		Section 9.03(a)
Indemnifying Party		Section 9.03(a)
Judgment		Section 3.03
knowledge of Seller		Section 13.05(b)
Leased Real Property		Section 3.05(b)
License Agreement		Section 13.05(b)(1)
Liens		Section 3.05(a)
Losses		Section 9.01
Med One Agreement		Section 13.05
Med One Escrow Accounts		Section 1.02(a)

 

 

 

Names		Section 12.02
Parent		Section 6.01(b)
Pension Plan		Section 3.12
Permits		Section 1.02(a)(vi)
Permitted Liens		Section 3.05(a)
person		Section 13.05(b)
Personnel		Section 1.02(a)(vii)
Post-Closing Tax Period		Section 10.01(b)
Pre-Closing Tax Period		Section 10.01(b)
Proceeding		Section 1.04(b)(viii)
Products		Section 3.14
Purchaser		Preamble
Purchaser Indemnitees		Section 9.01
Purchaser Material Adverse Effect		Section 4.01
Purchaser’s Medical Plans		Section 6.01(e)
Representatives		Section 5.03
Restricted Persons		Section 5.06
Retained Liabilities		Section 1.04(b)
Seller		Preamble
Seller Benefit Plans		Section 3.12(b)
Seller Indemnitees		Section 9.02
Seller Insurance Policies		Section 5.01(b)
Seller Parties Transferred Inventory		Section 13.05(b)
Seller Party and Seller Parties		Section 13.05(b)
Straddle Period		Section 10.01(b)
Sublease		Section 13.05(b)(2)
subsidiary		Section 13.05(b)
Tax		Section 3.10(a)
Taxes		Section 3.10(a)
Taxing Authority		Section 3.10(a)
Tax Return		Section 3.10(a)
Third Party Claim		Section 9.03(a)
Third Party Consent		Section 3.01(a)
Transfer Taxes		Section 3.10(a)
Transferred Assets		Section 1.02(a)
Transferred Contracts		Section 1.02(a)(vii)
Transferred Employee		Section 6.01(a)(i)
Transferred Equipment		Section 1.02(a)(ii)
Transferred Intellectual Property		Section 1.02(a)(iv)
Transferred Inventory		Section 1.02(a)(i)
Transferred Permits		Section 1.02(a)(vi)
Transferred Software		Section 1.02(a)(v)
Transferred Technology		Section 1.02(a)(v)
Transition Services Agreement		Section 13.05(b)(3)
Treasury Regulations		Section 3.10(a)
Trestle Holdings		Section 13.05(b)
Vacation Policy		Section 6.01(d)
Welfare Plan		Section 3.12

 

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ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT dated as of March 8, 2007 (this “ Agreement ”), between CLARIENT INC., a Delaware corporation (“ Seller” ), CARL ZEISS MERCURY, INC., a Delaware corporation (“ Purchaser ”), and CARL ZEISS MICROIMAGING, INC., a New York corporation (“ Parent ”).

RECITAL

WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to purchase from Seller the Transferred Assets (as defined below), upon the terms and subject to the conditions of this Agreement.

WHEREAS, Parent owns 100% of the capital stock of Purchaser and will benefit from the transactions contemplated hereby.

AGREEMENT

NOW, THEREFORE, the parties hereby agree as follows:

ARTICLE I

Purchase and Sale of Transferred Assets

SECTION 1.01.       Purchase and Sale .  Upon the terms and subject to the conditions of this Agreement, at the Closing Seller agrees to sell, transfer, assign and deliver to Purchaser, and Purchaser agrees to purchase, acquire and accept from Seller, at Closing, all of Seller’s right, title and interest in, to and under the Transferred Assets for (i) an aggregate purchase price of $12,500,000, with $11,000,000 payable at the Closing as set forth in Section 2.02(b) (subject to adjustment under Section 2.04) (the “ Closing Consideration ”) and the remaining $1,500,000 payable, if at all, as set forth in Section 2.03 (the “ Holdback Amount ”), and (ii) the assumption of the Assumed Liabilities.  The purchase and sale of the Transferred Assets and the assumption of the Assumed Liabilities are collectively referred to in this Agreement as the “ Acquisition .”

SECTION 1.02.       Transferred Assets and Excluded Assets .

(a)            The term “ Transferred Assets ” means all of Seller’s right, title, and interest in and to the following assets, but excluding the Excluded Assets:

(i)             all raw materials, work-in-process, finished goods, supplies, parts and other inventories owned by Seller on the Closing Date that are used or held for use primarily in the operation or conduct of the Business (the “ Transferred Inventory ”), including the items listed in Schedule 1.02(a)(i);

(ii)            all tangible personal property and interests therein, including all machinery, equipment, furniture, furnishings, vehicles, communications equipment, computer equipment and hardware, of Seller that are used or held for use primarily in the operation or conduct of the Business, including the items listed in Schedule 1.02(a)(ii) (the “ Transferred Equipment ”);

(iii)           all of the membership interests in CLRT Acquisition, LLC, a Delaware limited liability company (“ CLRT ”);

 

(iv)           all trademarks, trademark registrations and trademark applications, service marks, trade names, copyrights, copyright registrations, copyright applications and all rights to any of the foregoing, in each case specifically identified in Schedule 1.02(a)(iv) as well as the patent applications and patents identified in Schedule 1.02(a)(iv) and any application claiming the benefit of priority from such patent applications and patents (including all reissues, divisions, continuations and extensions thereof) (collectively, the “ Transferred Intellectual Property ”);

(v)            all trade secrets, inventions (whether patentable or unpatentable and whether or not reduced to practice), proprietary data, know-how, formulae, processes, procedures, research records, records of inventions, test information, manufacturing and production processes and techniques, technical data, designs, drawings, customer and supplier lists, pricing and cost information, business and marketing plans and proposals, market surveys and marketing know-how that are used or held for use primarily by Seller in the operation or conduct of the Business and the source code, the object code and the documentation for software that is primarily used in the operation of Seller’s telepathology, virtual microscopy and/or automated imaging instruments (including, but not limited to, Seller’s ACIS® systems) or any similar products or derivations thereof (the “ Transferred Software ”), including those items listed on Schedule 1.02(a)(v)) (collectively, the “ Transferred Technology ”);

(vi)           all permits, licenses, franchises, approvals or authorizations from any Governmental Entity (as defined in Section 3.03) (“ Permits ”) owned by Seller that are used or held for use primarily in the operation or conduct of the Business, to the extent transferable, including those listed on Schedule 1.02(a)(vi) (the “ Transferred Permits ”);

(vii)          all written contracts, leases, subleases, licenses, agreements, commitments and all other undertakings of any kind, whether written or oral, to which a Seller Party is a party or by which a Seller Party is bound (i) that are listed in Schedule 1.02(a)(vii), (ii) that relate primarily to the Business and which are entered into after the date hereof and prior to the Closing Date in compliance with this Agreement,  (iii) that are listed in Schedule 3.08 or that are used or held for use primarily in, or that arise primarily out of, the operation or conduct of the Business and that are not required to be disclosed on Schedule 3.08, or (iv) that are entered into (including agreements governing inventions, computer software rights and works-made-for-hire) with personnel, including Transferred Employees and employees, agents, consultants and contractors who have contributed to or participated in the conception and development of the Transferred Intellectual Property or Transferred Technology (“ Personnel ”) relating to the ownership of intellectual property to the extent such intellectual property constitutes a Transferred Asset, and any confidentiality and non-disclosure agreements with such Personnel or Transferred Employees to the extent relating to the Business (collectively, the “ Transferred Contracts ”);

(viii)         all rights, claims, credits, rights of set-off and causes of action to the extent relating to any  Transferred Asset, any Assumed Liability (as defined below) or the Business (collectively, “ Claims ”), other than (i) except to the extent contemplated by Section (x) below, any such items arising under insurance policies, (ii) Claims described on Schedule 1.02(b)(iv) and (iii) all rights to assert claims, demands, actions, suits and causes of action, whether class, individual or otherwise in nature, in law or in equity, including any claim, demand, action, suit or cause of action for damages, injunctive relief, declaratory relief or other relief, under the antitrust laws of any foreign country or the United States or any State thereof, unfair competition, unfair practices, price discrimination, unitary pricing, consumer protection, fraud prevention or trade practice laws (in any such case, domestic or foreign) that Seller, in any capacity, ever had, now has or may or shall have in the future, whether known or unknown, relating in any way to the Seller’s purchase or procurement of any good, service or product

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with respect to the Business, in either case, at any time up until the Effective Date, along with any and all recoveries by settlement, judgment or otherwise in connection with any such Claims;

(ix)            (A) all books of account, Tax Returns and Tax records relating exclusively to the Business or CLRT, (B) all general, financial, accounting and personnel records relating exclusively to the Business, and (C) all files, invoices, customers’ and suppliers’ lists, other distribution lists, billing records, sales and promotional literature, manuals and customer and supplier correspondence owned by Seller that are used or held for use primarily in, or that arise primarily out of, the operation or conduct of the Business, except to the extent relating to the Excluded Assets or the Retained Liabilities (as defined in Section 1.04(b));

(x)             all insurance proceeds (except to the extent relating to Excluded Assets or Retained Liabilities), net of any retrospective premiums, deductibles, retention or similar amounts (in each case except to the extent relating to Excluded Assets or Retained Liabilities), arising out of or related to damage, destruction or loss of any property or asset of or used primarily in connection with the Business to the extent of any damage or destruction that remains unrepaired, or to the extent any property or asset remains unreplaced on the Closing Date;

(xi)            all bids from suppliers of the Business or open purchase orders of the Business to the extent attributable to the Business;

(xii)           the escrow account(s) of each Seller Party established in connection with the Med One Agreement (the “ Med One Escrow Accounts ”) and Seller’s server dedicated exclusively to servicing obligations to Med One (the “ Med One Server ”); and

(xiii)          all accounts receivable arising primarily from the operation of the Business from and after the Effective Date.

(b)            The term “ Excluded Assets ” means:

(i)             all assets identified in Schedule 1.02(b)(i);

(ii)            all accounts receivable of the Seller Parties arising out of the operation or conduct of the Business prior to the Effective Date;

(iii)           all cash and cash equivalents of Seller Parties (other than the Med One Escrow Accounts);

(iv)           all rights, claims, credits, rights of set-off and causes of action of Seller set forth on Schedule 1.02(b)(iv) and/or relating to any Excluded Asset or any Retained Liability, including (A) any such items arising under insurance policies (except as provided in Section 1.02(a)(x)) and (B) all rights, claims, credits, rights of set-off and causes of action to the extent relating to any Excluded Asset or any Retained Liability that Seller, in any capacity, ever had, now has or may or shall have in the future, whether known or unknown, relating in any way to Seller’s purchase or procurement of any good, service or product for, or on behalf of, the Business, in either case, at any time up until the Closing and to the extent relating to any Excluded Asset or Retained Liability; along with any and all recoveries by settlement, judgment or otherwise in connection with any such Claims;

(v)            any shares of capital stock of any affiliate of Seller (other than CLRT);

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(vi)           any assets relating to any employee benefit plan in which any employees of Seller or any of its affiliates participate;

(vii)          any refunds or credits, claims for refunds or credits or rights to receive refunds or credits from any Taxing Authority (as defined in Section 3.10(a)) with respect to Taxes paid or to be paid by either Seller Party or any of their affiliates relating to periods or portions thereof ending on or prior to the Closing Date;

(viii)         unless specifically included in Section 1.02(a), any taxpayer and other identification numbers, Tax Returns, Tax information, records (including accounting records) related to Taxes (as defined in Section 3.10(a)) paid or payable by either Seller Party or any of their affiliates (including copies of such information and records relating to Taxes assumed by Purchaser) and all financial and Tax records relating to the Business that form part of such Seller Party’s or any of its affiliates’ general ledger;

(ix)            all records prepared in connection with the sale of the Business, including bids received from third persons and analyses relating to the Business;

(x)             all rights of Seller under this Agreement and any other agreements, certificates and instruments relating to the sale of the Business (or any portion thereof) or otherwise delivered in connection with this Agreement;

(xi)            the name and mark “Clarient” (in any style or design) and the other names and marks (in any style or design) identified on Schedule 1.02(b)(xi), and any name or mark derived from or including any of the foregoing;

(xii)                           all information technology network infrastructure (including servers, mass storage devices, routers, switches, hubs, ports, access nodes, Storage Array Networks, firewalls, phone systems, voicemail systems and the software for the management of any of the foregoing), except that the Med One Server shall be included in the Transferred Assets;

(xiii)          all corporate-level assets ( e.g. , assets used by management and corporate level employees that primarily relate to corporate-level services and/or are used both in connection with the Business and the Company’s other business(es));

(xiv)         except to the extent contemplated by the Sublease, all rights of Seller in and to real property and real property leases, including Seller’s facility located at 31 Columbia, Aliso Viejo, California; and

(xv)          all assets primarily used in connection with Seller’s and its affiliates’ diagnostic laboratory services business and any other assets of Seller that are not identified as Transferred Assets.

SECTION 1.03.       Consents to Certain Assignments .

(a)            Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any asset or any claim or right or any benefit arising under or resulting from such asset if an attempted assignment thereof, without the consent of a third party (a “ Third Party Consent ”), would constitute a breach, default, violation or other contravention of the rights of such third party, would be ineffective with respect to any party to an agreement concerning such asset, claim or right, or would in any way adversely affect the rights of Seller or, upon transfer, Purchaser under such

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asset, claim or right.  If any transfer or assignment by Seller to Purchaser, or any assumption by Purchaser of, any interest in, or liability, obligation or commitment under, any asset, claim or right requires a Third Party Consent, then such transfer or assignment or assumption shall be made subject to such Third Party Consent being obtained.

(b)            If any such consent is not obtained prior to the Closing, the Closing shall nonetheless take place on the terms set forth herein and, thereafter, Purchaser and Seller shall use their respective commercially reasonable efforts to secure all consents listed on Schedule 3.03 that have not been obtained prior to Closing as promptly as practicable after the Closing (it being understood that nothing in this Section 1.03(b) shall require Purchaser to waive the conditions to Closing set forth in Sections 7.01(c) and (d).  Subject to obtaining such consents, Seller and Purchaser shall endeavor to secure lawful and commercially reasonable arrangements under which (i) Purchaser shall obtain (without infringing upon the legal rights of such third party or violating any Applicable Law) the economic claims, rights and benefits (net of the amount of any related Tax costs imposed on Seller or any of its affiliates) under the asset, claim or right with respect to which the consent has not been obtained in accordance with this Agreement, and (ii) Purchaser shall assume any related economic burden (including the amount of any related Tax costs imposed on, Seller or any of its affiliates) with respect to the asset, claim or right with respect to which the consent has not been obtained in accordance with this Agreement.

SECTION 1.04.       Assumption of Liabilities .

(a)            Upon the terms and subject to the conditions of this Agreement, Purchaser hereby assumes, effective as of the Effective Date, and agrees to pay, perform and discharge when due, and indemnify, defend and hold harmless from and after the Effective Date, Seller and each of its affiliates and each of their respective officers, directors, employees, stockholders, agents and representatives from and against any and all obligations, liabilities and commitments of any nature, whether known or unknown, express or implied, primary or secondary, direct or indirect, liquidated, absolute, accrued, contingent or otherwise and whether due or to become due, arising out of the following (collectively, the “ Assumed Liabilities ”):

(i)             all obligations, liabilities and commitments of Seller arising from and after the Effective Date under (A) the Transferred Contracts (including, for the avoidance of doubt, obligations in respect of deferred revenue incurred prior to the Effective Date required to be performed after the Effective Date) and (B) the Transferred Permits;

(ii)            all accounts payable and other obligations arising from the operation of the Business from and after the Effective Date (except that, without limiting or affecting the provisions of Section 2.04, Assumed Liabilities in respect of Taxes shall consist of all obligations in respect of Taxes arising from the operation of the Business from and after the Closing);

(iii)           all obligations with respect to service and maintenance of products manufactured or sold by Seller prior to the Effective Date arising in the ordinary course of business;

(iv)           all obligations and liabilities related to the employment of the Business Employees (by Seller or Purchaser) after the Effective Date and all obligations and liabilities assumed by Purchaser pursuant to Article VI hereof (and only to the extent provided in Article VI hereof); and

(v)            all obligations and liabilities with respect to the matters described in Schedule 1.04(a)(v).

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(b)            Purchaser shall not assume or otherwise be responsible for any liabilities of Seller other than the Assumed Liabilities (all such liabilities other than the Assumed Liabilities, collectively the “ Retained Liabilities ”), including but not limited to:

(i)             except as otherwise provided herein (and without limiting or affecting the provisions of Section 2.4), all Taxes now or hereafter owed by the Seller Parties and their affiliates, or attributable to the ownership, operation or use of the Transferred Assets or the Business, relating to any taxable periods ending prior to the Closing and the portion ending prior to the Closing of any taxable period that includes (but does not end at) the Closing;

(ii)            all obligations, liabilities and commitments of the Seller Parties to the extent relating to or arising out of Excluded Assets;

(iii)           all accounts payable and other liabilities of the Seller Parties arising out of the operation or conduct of the Business and the Transferred Assets prior to the Effective Date that are not Assumed Liabilities;

(iv)           all liabilities of the Seller Parties for borrowed money;

(v)            all obligations and liabilities related to the employment of the Business Employees by the Seller Parties prior to the Effective Date;

(vi)           except for the Assumed Liabilities relating to service and maintenance described in Section 1.04(a)(iii), all liabilities, obligations and claims for product liability in respect of any and all products manufactured or sold in the Business by the Seller Parties prior to the Effective Date;

(vii)          any contracts that are not Transferred Contracts; and

(viii)         except as set forth on Schedule 1.04(a)(v), all obligations, liabilities and commitments of the Seller Parties in respect of actions, claims, arbitrations, audits, hearings, investigations, litigation, proceedings or suits (whether civil, criminal, administrative or investigative), pending or threatened (“ Proceedings ”), including claims whether or not presently asserted, to the extent arising out of the operation or conduct of the Business, prior to the Effective Date, the Excluded Assets, or any other Retained Liability.

ARTICLE II

Closing and Purchase Price

SECTION 2.01.       Closing .

The closing of the Acquisition (the “ Closing ”) shall take place at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California, 90071, on March 8, 2007 or at such other place, time and date as may be agreed by Seller, on the one hand, and Purchaser, on the other hand.  The date on which the Closing occurs is referred to in this Agreement as the “ Closing Date ”.

SECTION 2.02.       Transactions To Be Effected at the Closing . At the Closing:

(a)            Seller shall deliver or cause to be delivered to Purchaser (i) such appropriately executed deeds, bills of sale, assignments and other instruments of transfer relating to the Transferred Assets (other than the Transferred Intellectual Property), including the Bill of Sale attached hereto as

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Exhibit 2.02(a), (ii) duly executed assignments of the trademark registrations and applications included in the Transferred Intellectual Property, in a form reasonably acceptable to Purchaser, (iii) duly executed assignments of the patent applications and patents included in the Transferred Intellectual Property, in a form reasonably acceptable to Purchaser and general assignments of all other Transferred Intellectual Property (it being understood that such deeds, bills of sale, assignments and other instruments of transfer shall not require Seller to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement), (iii) each duly executed Ancillary Agreement, and (iv) the duly executed certificate contemplated by Section 7.02(e) ; and

(b)            Purchaser shall deliver to Seller (i) payment, by wire transfer of immediately available funds to one or more accounts designated in writing by Seller (such designation to be made at least one business day prior to the Closing Date), in an amount equal to the Closing Consideration (as adjusted pursuant to Section 2.04), and (ii) appropriately executed counterparts to such deeds, bills of sale, assignments and other instruments of transfer, and appropriately executed assumption agreements and other instruments of assumption providing for the assumption of the Assumed Liabilities in the form attached hereto as Exhibit 2.02(b), (iii) duly executed counterparts to each Ancillary Agreement, and (iv) the duly executed certificate contemplated by Section 7.03(f).

SECTION 2.03.       Holdback Amount .

Purchaser and Parent jointly and severally agree to pay (or to the extent applicable retain) all or a portion of the Holdback Amount as provided in Schedule 2.03 and to comply with the provisions set forth in Schedule 2.03.  Any payments of all or a portion of the Holdback Amount shall be made by wire transfer of immediately available funds to one or more accounts designated in writing by Seller.

SECTION 2.04.       Adjustment to Closing Consideration .

(a)            Following the Closing, the Closing Consideration paid at Closing shall be adjusted as set forth in this Section 2.04.  The Closing Consideration shall be (i) decreased by (A) the amount of any cash receipts of the Business received after the Effective Date and prior to the Closing with respect to accounts receivable arising after the Effective Date and prior to the Closing (other than, for the avoidance of doubt, payments under this Agreement) and (B) by the amount of any Tax credits or Tax refunds to Seller generated by the operation of the Business during such period (other than Tax credits or Tax refunds arising from the consummation of the transactions contemplated by this Agreement) without regard to the existence of any Tax liabilities that may be offset by such Tax Credits or Tax refunds and (ii) increased by (A) the amount of any cash expenses of the Business paid by the Company following the Effective Date and prior to the Closing (including overhead allocable to the Business) with respect to accounts payable or liabilities incurred following the Effective Date and prior to Closing and (B) the amount of any Tax obligations of Seller generated by the operation of the Business during such period (other than Tax obligations arising from the consummation of the transactions contemplated by this Agreement) without regard to the availability of any Tax attributes that may offset such Tax obligations.  The net adjustment to the Closing Consideration contemplated by this Section 2.04(a) is referred to as the “Adjustment  Amount” (which shall be a positive number if the Closing Consideration is to be increased or a negative number if the Closing Consideration is to be decreased).   Within five business days following the Closing, Seller shall deliver to Purchaser an estimate of the Adjustment Amount (the “Estimated Adjustment Amount”).  If the Estimated Adjustment Amount is a positive number, then Purchaser shall pay Seller an amount equal to the Estimated Adjustment Amount.  If the Estimated Adjustment Amount is a negative number, then Seller shall pay Purchaser an amount equal to the absolute value of the Estimated Adjustment Amount.  All

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such payments shall be made by wire transfer of immediately available funds to an account designated by the payee and shall be made no later than five Business Days following Purchaser’s receipt of Seller’s calculation of the Estimated Adjustment Amount.

(b)            No later than 90 calendar days following the Closing Date, Seller shall prepare and deliver to the Purchaser a calculation of the final Adjustment Amount together with reasonably detailed schedules with respect to such calculation (the “Adjustment Statement”).  If the Purchaser shall disagree with Seller’s calculation of the Adjustment Amount, it shall notify Seller of such disagreement in writing specifying in detail the particulars of such disagreement within 15 business days after the Purchaser’s receipt of the Adjustment Statement.  Purchaser and Seller shall use their reasonable efforts for a period of 30 calendar days after the Purchaser’s delivery of such notice (or such longer period as Purchaser and Seller shall mutually agree upon) to resolve any disagreements raised by Purchaser with respect to the calculation of the Adjustment Amount.  If, at the end of such period, Purchaser and Seller are unable to resolve such disagreements, Purchaser and Seller shall jointly select an independent auditor of recognized national standing to resolve any remaining disagreements; provided that Ernst & Young LLP will be the independent auditor if Purchaser and Seller cannot agree on the selection of such independent auditor.  The determination by such independent auditor shall be final, binding and conclusive on the parties.  Purchaser and Seller shall use their reasonable efforts to cause the independent auditor to make its determination within 30 calendar days of accepting its selection.  The fees and expenses of such independent auditor shall be borne by Purchaser and Seller in proportion to the aggregate amount of all disputed items as to which such party’s claim was unsuccessful ( i.e. , if there are $100,000 of disputed items and the independent auditor determines that Seller’s claim prevails with respect to $25,000 of such disputed items and Purchaser’s claim prevails with respect to $75,000 of such disputed items, then Seller would be obligated to pay 75% of the fees and expenses and Purchaser would be obligated to pay 25% of the fees and expenses).

(c)            If the final Adjustment Amount exceeds the Estimated Adjustment Amount, then Purchaser shall pay Seller the amount of such excess.  If the final Adjustment Amount is less than the Estimated Adjustment Amount, then Seller shall pay Purchaser the amount of such difference.  All such payments shall be made by wire transfer of immediately available funds to an account designated by the payee and shall be made no later than five Business Days following the date that the final Adjustment Amount is determined pursuant to Section 2.04(b) (e.g. within five Business Days of the date that is the earlier to occur of (i) the date that Purchaser and Seller agree upon the Adjustment Amount, (ii) fifteen Business Days following Purchaser’s receipt of the Adjustment Statement if Purchaser does not object to Seller’s calculation of the Adjustment Amount or (iii) the date that the Adjustment Amount is determined by an independent auditor pursuant to Section 2.04(b)).

ARTICLE III

Representations and Warranties of Seller

Seller hereby represents and warrants to Purchaser as follows, except as otherwise set forth on the Disclosure Schedule delivered by Seller to Purchaser concurrently herewith and identified as the “ Disclosure Schedule .”

SECTION 3.01.       Organization and Standing .  Each Seller Party is validly existing and in good standing under the laws of the State of Delaware.  Seller has the corporate power and authority to enable it to own, lease or otherwise hold the Transferred Assets owned, leased or otherwise held by it and to conduct the Business as presently conducted by it.  CLRT has the limited liability company power and authority to enable it to own, lease or otherwise hold the assets owned, leased or otherwise held by it and

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to conduct its business as presently conducted by it.  Each Seller Party is duly qualified to do business as a foreign corporation in each jurisdiction where the character of the Transferred Assets held by it or the nature of the Business makes such qualification necessary for it to conduct the Business as currently conducted by it, except such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Business Material Adverse Effect.

SECTION 3.02.       Authority; Execution and Delivery, Enforceability . Seller has full corporate power and authority to execute this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and to consummate the transactions contemplated to be consummated by it by this Agreement and such Ancillary Agreements, as applicable.  Seller has taken all corporate action required by its Certificate of Incorporation and By-laws, to authorize the execution and delivery of this Agreement and the Ancillary Agreements to which it is, or is specified to be, a party and to authorize the consummation of the transactions contemplated to be consummated by it by this Agreement and such Ancillary Agreements.  Seller has duly executed and delivered this Agreement and as of the Closing will have duly executed and delivered each Ancillary Agreement to which it is, or is specified to be, a party, and this Agreement constitutes, and each Ancillary Agreement to which it is, or is specified to be, a party will after the Closing constitute, its legal, valid and binding obligation, enforceable against it in accordance with its terms subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles.

SECTION 3.03.       No Conflicts or Violations; No Consents or Approvals Required . The execution and delivery of this Agreement by Seller do not, the execution and delivery by Seller of each Ancillary Agreement to which it is, or is specified to be, a party will not, and the consummation of the transactions contemplated to be consummated by it by this Agreement and such Ancillary Agreements will not conflict with, or result in any breach of or constitute a default under, or result in the creation of any Lien upon any of the Transferred Assets under any provision of (i) Seller’s Certificate of Incorporation or By-laws or CLRT’s Certificate of Formation or Amended and Restated Limited Liability Company Agreement dated September 15, 2006, (ii) except as set forth in Schedule 3.03, any Transferred Contract to which either Seller Party is a party or by which any of the Transferred Assets is bound, or (iii) any judgment, order or decree (“ Judgment ”) or any federal, state, local, municipal, foreign, international, multinational or other administrative statute, law, ordinance, interpretation, principle of common law, judicial decision, treaty, rule or regulation applicable to either Seller Party in respect of the Business or any of the Transferred Assets (“ Applicable Law ”), other than, in the case of clauses (ii) and (iii) above any such items that would not reasonably be expected to have a Business Material Adverse Effect.  Except as set forth in Schedule 3.03, no consent, approval or authorization (“ Consent ”) of, or registration, declaration or filing with, any Federal, state, local or foreign court of competent jurisdiction, tribunal, judicial body, government, governmental agency, authority, instrumentality or regulatory body (a “ Governmental Entity ”) is required to be obtained or made by or with respect to either Seller Party in connection with the execution, delivery and performance of this Agreement, the Ancillary Agreements or the consummation of the Acquisition, other than (A) those that may be required solely by reason of Purchaser’s (as opposed to any other third party’s) participation in the Acquisition and the other transactions contemplated hereby and by the Ancillary Agreements and (B) those the failure of which to obtain or make would not reasonably be expected to have a Business Material Adverse Effect.

SECTION 3.04.       Financial Statements .

(a)            The financial statements of Seller included in the quarterly and annual reports filed by Seller under the Securities Exchange Act of 1934, as amended, since January 1, 2003 and Seller’s financial statements as of and for the period ended December 31, 2006 attached as Schedule 3.04(a) are incorporated herein by reference and have been prepared in accordance with United States

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generally accepted accounting principles applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, are complete and correct and fairly present in all material respects the financial position of the Seller and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(b)            The unaudited pro-forma financial statements attached as Schedule 3.04(b) fairly present in all material respects (except as described on Schedule 3.04) the financial position of the Business of the Business (including CLRT) as of the date(s) thereof (in the case of balance sheets) and the results of operations for the periods then ended (in the case of income statements).

SECTION 3.05.       Assets Other than Real Property Interests .

(a)            At the Closing, (i) Seller will transfer to Purchaser good and valid title to or a valid leasehold interest in all Transferred Assets, in each case free and clear of all mortgages, liens, charges, claims, pledges, easements, restrictive covenants, encroachments, options, encumbrances or similar restrictions of any kind (collectively, “ Liens ”) and (ii) the assets of CLRT shall be free and clear of all Liens, except, in each case: (A) such Liens as are set forth in Schedule 3.05, (B) mechanics’, carrier’s, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business, and (C) Liens for Taxes and other governmental charges that are not due and payable, or that are not delinquent, or that are being contested in good faith and for which adequate reserves have been established, and (D) other imperfections of title or encumbrances that do not materially impair the continued use and operation of the assets to which they relate in the conduct of the Business as presently conducted (the Liens described in clauses (A) through (D) above are referred to collectively as “ Permitted Liens ”).

(b)            Neither Seller nor CLRT owns any real property relating to or used by the Business.  Schedule 3.05(b) includes a true and complete list of all leases (together with any amendments thereof) pursuant to which the Parties lease, sublease or otherwise occupy (whether as landlords, tenants, subtenants or other occupancy arrangement) any real property relating to or used by the Business (the “ Leased Real Property ”).  Each lease, sublease, agreement or arrangement relating to the Leased Real Property is in full force and effect, no extant notice of default has been given by either party thereto, and, to Seller’s Knowledge, no event has occurred which, with the giving of notice or the passage of time or both, would constitute a default thereunder.  The Transferred Assets do not include any real property.  Notwithstanding the foregoing, the Sublease to be entered into by the parties hereto is intended to govern the use of the Leased Real Property by Purchaser pursuant to the terms and conditions set forth therein.

(c)            This Section 3.05 does not relate to the Transferred Intellectual Property, such items being the subject of Section 3.07.

SECTION 3.06.       Sufficiency of Transferred Assets .  Except as set forth in Schedule 3.06 or as contemplated by the Transition Services Agreement, the License Agreement and the Sublease, and assuming that Purchaser has the ability to provide to the Business all corporate-level services of the type currently provided to the Business by Seller or its affiliates (other than those provided for in the Transition Services Agreement), the Transferred Assets constitute, and on the Closing Date will constitute, all of the material assets that are sufficient to permit Purchaser to conduct the Business from and after the Closing in substantially the same manner as heretofore conducted by the Seller Parties.  All

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material tangible properties and assets included in the Transferred Assets (other than obsolete inventory and instrument systems (including returned equipment and inventory)) are in good operating condition (normal wear and tear excepted), and normal maintenance and repair has not been deferred.

SECTION 3.07.       Intellectual Property .

(a)            Schedule 1.02(a)(iv) sets forth a list of the registered Transferred Intellectual Property.  With respect to the patent, trademark and copyright registrations and applications included in the Transferred Intellectual Property, Schedule 1.02(a)(iv) sets forth a list that identifies the jurisdictions where such Transferred Intellectual Property is registered or where applications have been filed, and all registration and application numbers.  As of the Closing Date, all Transferred Intellectual Property shall be in good standing with all fees and filings due as of the Closing Date having been duly paid.

(b)            Except as set forth in Schedule 3.07, Seller Parties have not granted any license or right of any kind relating to any Transferred Technology or Transferred Intellectual Property, except nonexclusive licenses to end-users in the ordinary course of business.  Neither Seller Party is bound by or a party to any option, license or similar Contract with any other person for the use of Transferred Intellectual Property or Transferred Technology, except (i) as set forth in Schedule 3.07, (ii) for nonexclusive licenses to end-users of machinery and equipment in the ordinary course of business and (iii) for so-called “shrink-wrap” and other non-customized license agreements relating to computer software licensed to Seller Parties in the ordinary course of business.  Except as set forth in Schedule 3.07, Seller or CLRT, as applicable, has all rights necessary to assign such Seller Party’s rights in the Transferred Intellectual Property and Transferred Technology.

(c)            At Closing, Purchaser will acquire (or CLRT will hold, as the case may be) good and valid title to all of the Transferred Intellectual Property and Transferred Technology free and clear of all Liens.  Except as contemplated by the License Agreement, no right, title or interest in or to any of the Transferred Intellectual Property and Transferred Technology shall be retained by Seller on or after the Closing Date.

(d)            Except as set forth in Schedule 3.07 and as contemplated by the License Agreement, no license, royalty or other fees of any kind in respect of any Transferred Intellectual Property or Transferred Technology to third parties are required for the use by Seller Parties of the Transferred Intellectual Property or Transferred Technology in the conduct of the Business as currently conducted in the jurisdictions where the Transferred Intellectual Property is currently used and will not be required immediately following the Closing as a result of the consummation of the transactions contemplated hereby.

(e)            To the knowledge of Seller, the Transferred Intellectual Property and Transferred Technology as used in the Business do not in any material respect infringe upon, misappropriate, or violate any contractual or patent, copyright, trademark, service mark, trade secret or other intellectual property or proprietary right of any third party.  Except as set forth in Schedule 3.07, no claims are pending or, to the knowledge of Seller Parties, threatened, as of the date of this Agreement against Seller Parties by any person claiming infringement or misappropriation by use of the Transferred Intellectual Property or Transferred Technology as presently used.  As of the date of this Agreement, Seller has not received notice of any claims challenging the validity, effectiveness or ownership by Seller Parties of any of the Transferred Intellectual Property.

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(f)             Neither Seller nor CLRT has agreed to indemnify any third party for or against any interference, infringement, misappropriation or other conflict with respect to any item of the Transferred Intellectual Property or Transferred Technology.

(g)            All personnel, including employees, agents, consultants and contractors, who have contributed to or participated in the conception and development of the Transferred Intellectual Property or Transferred Technology have executed confidentiality agreements and either (i) have been a party to an enforceable “work-for-hire” arrangement or agreements with Seller or CLRT, as applicable, in accordance with applicable law that has accorded Seller or CLRT, as applicable, full, effective, exclusive and original ownership of all tangible and intangible property thereby arising, or (ii) have executed appropriate instruments of assignment in favor of Seller or CLRT, as applicable, as assignee that have conveyed to Seller or CLRT, as applicable, effective and exclusive ownership of all tangible and intangible property thereby arising.

(h)            To the knowledge of the Seller, the Transferred Software has been maintained in strict confidence and have been disclosed by Seller Parties only to those of its employees or consultants who have a “need to know” the contents thereof in connection with the performance of their duties to Seller Parties and who have executed confidentiality agreements with Seller Parties.

(i)             It is Seller Parties’ practice to routinely scan the Transferred Software with the virus scan software described on Schedule 3.07.  Based on such scans, the Transferred Software contains no “viruses.”  For the purposes of this Agreement, “virus” shall mean any computer code intentionally designed to disrupt, disable or harm in any manner the operation of any software or hardware.  To the knowledge of Seller, none of the Transferred Software contains any worm, bomb, backdoor, clock, timer, or other disabling device code, design or routine which causes the software to be erased, inoperable, or otherwise incapable of being used, either automatically or upon command by any party.  The Transferred Software has not manifested any significant operating problems, other than any such problems as have been corrected or are correctable in the ordinary course of business.

(j)             The Transferred Software is not, in whole or in part, governed by a Public License and do not otherwise incorporate open source software.  A “ Public License ” is any license that requires, as a condition of use, modification and/or distribution of software subject to the Public License, that such software and/or other software combined and/or distributed with such software be (x) disclosed or distributed in source code form; (y) licensed for the purpose of making derivative works; or (z) redistributable at no charge.

(k)            To the knowledge of Seller, Seller Parties have not taken any action that could cause, or failed to take any action, the failure of which could cause, (x) the Transferred Software or any other Transferred Technology to be made available to any person or otherwise placed in the public domain or (y) any other material adverse affect to the protection of the Transferred Software or Transferred Technology under trade secret, copyright or other intellectual property laws.

SECTION 3.08.       Contracts .

(a)           Schedule 3.08 sets forth all contracts, agreements, and other commitments, whether oral or written (each, a “ Contract ”) to which any Seller Party is a party or by which any Seller Party is bound as of the date hereof that is used and held for use primarily in or that arises primarily out of the operation or conduct of the Business (other than any such contracts, agreement or other commitments entered into after the date of this Agreement in the ordinary course of business and which will be disclosed to Purchaser prior to Closing) in the following categories:

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(i)             an employee collective bargaining agreement or other Contract with any labor union;

(ii)            a Contract containing any covenant limiting the freedom of any Seller Party in respect of the Business or the operations of the Business to compete with any person in any geographic area if such Contract will be binding on Purchaser after Closing;

(iii)           a (A) continuing Contract for the future purchase of materials, supplies, equipment, raw materials, packaging or commodities (including purchase contracts and orders for inventory), (B) management, service, commission, consulting, representative, agency, franchise, development, distribution or other similar Contract, or (C) marketing or advertising Contract, in each case which has an aggregate future liability to any person in excess of $25,000 and is not terminable by a Seller Party by notice of not more than 30 days for a cost of less than $25,000 ;

(iv)           a Contract under which either Seller Party has borrowed any money from, or issued any note, bond, debenture or other evidence of indebtedness to, any person or any other note, bond, debenture or other evidence of indebtedness of such Seller Party (other than in favor of such Seller Party) in any such case which, individually, is in excess of $25,000;

(v)            a Contract (including so-called take-or-pay or keep well agreements) under which (A) any person has directly or indirectly guaranteed indebtedness, liabilities or obligations of such Seller Party or (B) a Seller Party has directly or indirectly guaranteed indebtedness, liabilities or obligations of any person (in each case other than endorsements for the purpose of collection in the ordinary course of business), in any such case which, individually, is in excess of $25,000;

(vi)           a lease, sublease or similar Contract with any person under which a Seller Party is a lessor or sublessor of, or makes available for use to any person (A) any Leased Real Property or (B) any portion of any premises otherwise occupied by such Seller Party;

(vii)          a lease or similar Contract with any person under which a Seller Party is lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any person which lease or similar Contract has an aggregate future liability in excess of $25,000 and is not terminable by such Seller Party by notice of not more than 30 days for a cost of less than $25,000;

(viii)         a Contract relating to the disposition or acquisition of the assets of, or any interest in, any business enterprise which primarily relates to the Business other than in the ordinary course of business;

(ix)            a partnership, joint venture, teaming or other similar Contract primarily relating to the Business;

(x)             any other Contract that has an aggregate future liability to any person in excess of $25,000 and is not terminable by a Seller Party by notice of not more than 30 days for a cost of less than $25,000 (other than purchase orders and sales orders).

(b)            Except as set forth on Schedule 3.08(b), all Transferred Contracts which are listed on Schedule 3.08(a) (the “ Business Contracts ”) are valid, binding and in full force and effect and are enforceable by the applicable Seller Party in accordance with their terms subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles, except for such failures to be valid, binding, in full force and effect or enforceable that would not reasonably be expected to have a Business Material

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Adverse Effect.  Unless otherwise specified on Schedule 3.08, each Seller Party has performed all material obligations required to be performed by it to date under the Business Contracts, and the Seller Parties are not in breach or default of any material obligation thereunder, and to the knowledge of Seller, no other party to any Business Contract, as of the date hereof, is in breach or default of any material obligation thereunder, and Seller does not have knowledge of any fact or circumstance which could reasonably be expected to constitute a breach or default or any material obligation thereunder.

SECTION 3.09.       Permits . Except as set forth in Schedule 3.09, (i) all Transferred Permits that are required by any Governmental Entity or other person to permit a Seller Party, its Representatives or affiliates to engage in or operate the Business as heretofore conducted are validly held by the applicable Seller Party, and each Seller Party has complied in all material respects with the terms and conditions thereof, (ii) as of the date of this Agreement, Seller has not received written notice of any Proceeding relating to the revocation or modification of any such Transferred Permits, and (iii) each Transferred Permit is, or will be as of the Closing Date, transferable by Seller to Purchaser, and none of such Transferred Permits will be subject to suspension, modification, revocation or nonrenewal as a result of the execution and delivery of this Agreement, the Ancillary Agreements or the consummation of the transactions contemplated hereby and thereby.  This Section 3.09 does not relate to environmental matters, such items being the subject of Section 3.14(b).

SECTION 3.10.       Taxes .

(a)            For purposes of this Agreement:

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

“ Tax ” or “ Taxes ” shall mean all taxes, however denominated, including any interest, penalties or other additions to tax that may become payable in respect thereof, (A) imposed by any federal, territorial, state, local or foreign government or any agency or political subdivision of any such government, which taxes shall include, without limiting the generality of the foregoing, all income or profits taxes (including but not limited to, federal, state and foreign income taxes), payroll and employee withholding taxes, unemployment insurance contributions, social security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, withholding taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, and other obligations of the same or of a similar nature to any of the foregoing, which are required to be paid, withheld or collected, or (B) any liability for amounts referred to in (A) as a result of any obligations to indemnify another person or as a transferee or successor.

“ Taxing Authority ” shall mean any Federal, territorial, state, local or foreign government, any subdivision, agency, commission or authority thereof or any quasi-governmental body exercising tax regulatory authority.

“ Tax Return ” shall mean any report, return, document, declaration or other information or filing required to be supplied to any Taxing Authority with respect to Taxes, including any amendment made with respect thereto.

“ Transfer Taxes ” shall mean all sales (including bulk sales), use, transfer, recording, ad valorem, privilege, documentary, gross receipts, registration, conveyance, excise, license, stamp or similar Taxes and fees (including any penalties and interest) arising out of, in connection with or attributable to the transactions effectuated pursuant to this Agreement.

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“ Treasury Regulations ” shall mean the United States Treasury Regulations promulgated under the Code.

(b)            (i)             To the extent that Purchaser would have liability as a successor to Seller Parties or transferee of the Transferred Assets, all material Tax Returns of Seller Parties relating to the Transferred Assets required by law to be filed as of the date hereof have been properly prepared and timely filed, and all such Tax Returns (including information provided therewith or with respect thereto) are true, complete and correct in all material respects to the extent they relate to the Transferred Assets.

(ii)            To the extent that Purchaser would have liability as a successor to Seller Parties or transferee of the Transferred Assets and except as otherwise provided herein, Seller Parties have fully and timely paid all Taxes of Seller Parties required to be paid relating to the Transferred Assets (whether or not shown on any Tax Return) or have established an adequate reserve therefor in accordance with GAAP in Seller’s financial statements for the period ended December 31, 2006 referenced in Section 3.04(a), except for any liabilities with respect to Taxes that have been incurred in the ordinary course of business since the date of such financial statements.

(iii)           There are no Liens for Taxes upon the Transferred Assets or properties of CLRT, except for Permitted Liens.

(b)            As of the date hereof, no audit of any portion of any Tax Returns of Seller Parties relating to the Transferred Assets by a Taxing Authority is in process, or, to the Seller’s knowledge, threatened, and Seller has not been notified in writing that any such audit is pending.  There is no material dispute or claim with respect to, and no deficiencies have been asserted in writing, or