ASSET PURCHASE AGREEMENT

Exhibit 10.1
Execution Version

ASSET PURCHASE AGREEMENT

dated as of

May 31, 2007

TOLLGRADE COMMUNICATIONS, INC.

and

TERADYNE, INC.

ARTICLE I DEFINITIONS					1
1.01.		Definitions			1
1.02.		Interpretation			10
ARTICLE II PURCHASE AND SALE					10
2.01.		Purchase and Sale			10
2.02.		Excluded Assets			12
2.03.		Assumption of Liabilities			13
2.04.		Excluded Liabilities			14
2.05.		Assignment of Contracts and Rights			16
2.06.		Licensed Intellectual Property			16
2.07.		Purchase Price; Closing			16
2.08.		Post-Closing Purchase Price Adjustment			18
2.09.		British Telecom Adjustment			19
2.10.		Allocation of Purchase Price			21
2.11.		Accounts Receivable			21
2.12.		Transfer of IP Assets			21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER					22
3.01.		Corporate Existence and Power; Qualification			22
3.02.		Corporate Authorization			22
3.03.		Governmental Authorization			23
3.04.		Non-Contravention			23
3.05.		Financial Statements			23
3.06.		Absence of Certain Changes or Events			23
3.07.		Consents			24
3.08.		Purchased Assets			24
3.09.		Litigation			25
3.10.		Contracts			26
3.11.		Compliance with Laws			28
3.12.		Seller’s Proprietary Rights			28
3.13.		Employees; Employee Benefits			30
3.14.		Finders’ Fees			33
3.15.		Absence of Undisclosed Liabilities			33
3.16.		Affiliate Transactions			33
3.17.		Accounts Receivable			33
3.18.		Inventory			33
3.19.		Taxes			33
3.20.		Labor Matters			34
3.21.		Insurance			34
3.22.		Licenses and Approvals			35
3.23.		Environmental			35
3.24.		Customers and Suppliers			35
3.25.		Trade Compliance			35
3.26.		Products			36
3.27.		Product Liabilities			36

Table of Contents
(continued)

				Page
3.28.		Books and Records			36
3.29.		Competition/Antitrust Law			36
3.30.		Compliance			37
3.31.		No Fraudulent Intent			37
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER					37
4.01.		Corporate Existence			37
4.02.		Corporate Authorization			37
4.03.		Governmental Authorization			38
4.04.		Non-Contravention			38
4.05.		Finders’ Fees			38
4.06.		Litigation			38
4.07.		Financial Ability			38
4.08.		No Other Representations or Warranties of Seller			38
ARTICLE V COVENANTS OF SELLER					38
5.01.		Conduct of the Business			38
5.02.		No Negotiation with Third Parties			40
5.03.		Access to Information			41
5.04.		Supplemental Disclosure			41
5.05.		Non-Interference, Non-Solicitation and Non-Competition Agreement			41
5.06.		Audited Financial Statements			42
5.07.		Excess Warranty Claims			43
5.08.		Inventory Schedule			43
ARTICLE VI COVENANTS OF PARTIES					43
6.01.		Notices of Certain Events			43
6.02.		Further Assurances			44
6.03.		Certain Filings			44
6.04.		Public Announcements			45
6.05.		Confidentiality Agreement			45
ARTICLE VII TAX MATTERS					45
7.01.		Tax Definitions			45
7.02.		Tax Cooperation; Allocation of Taxes			46
7.03.		Value Added Tax			47
ARTICLE VIII EMPLOYEE MATTERS					47
8.01.		Employment Matters Relating to United States Employees			47
8.02.		Employment Matters Relating to EU Employees			49
8.03.		Pensions			51
8.04.		No Third Party Beneficiaries			51
ARTICLE IX CONDITIONS TO CLOSING					51
9.01.		Conditions to the Obligations of Each Party			51

Table of Contents
(continued)

				Page
9.02.		Conditions to Obligation of Buyer			51
9.03.		Condition to Obligations of Seller			52
ARTICLE X SURVIVAL; INDEMNIFICATION					52
10.01.		Survival			52
10.02.		Indemnification			53
10.03.		Certain Limitations			54
10.04.		Procedure for Indemnification			55
10.05.		Remedies Exclusive			55
ARTICLE XI TERMINATION					56
11.01.		Grounds for Termination			56
11.02.		Effect of Termination			56
ARTICLE XII MISCELLANEOUS					57
12.01.		Notices			57
12.02.		Amendments; Waivers			58
12.03.		Expenses			58
12.04.		Successors and Assigns			58
12.05.		Governing Law; Jurisdiction and Venue			58
12.06.		WAIVER OF JURY TRIAL			58
12.07.		Counterparts; Effectiveness			59
12.08.		Entire Agreement			59
12.09.		Bulk Sales Laws			59
12.10.		Severability			59
12.11.		Headings			59
12.12.		Terms			59
12.13.		No Third Party Beneficiaries			59
12.14.		Captions			60

Table of Contents
(continued)

				Page
SCHEDULES
Schedule 1.01(a)		Seller’s Premises
Schedule 1.01(b)		German Pension Plan Employees
Schedule 2.01(a)		Purchased Assets — Personal Property
Schedule 2.01(b)		Purchased Assets — Assigned Contracts
Schedule 2.01(d)		Purchased Assets — Licenses and Approvals
Schedule 2.01(e)		Purchased Assets — Accounting Books and Records
Schedule 2.01(f)		Purchased Assets — Real Property Leases
Schedule 2.01(g)		Purchased Assets — Patents and Trademarks
Schedule 2.01(h)		Purchased Assets — Copyrights and Software
Schedule 2.01(j)		Purchased Assets — Accounts Receivable
Schedule 2.02(i)		Other Excluded Assets
Schedule 2.03(j)		Other Assumed Liabilities
Schedule 2.08(b)		Closing Balance Sheet Line Items
Schedule 2.10		Allocation Statement
Schedule 3.03		Governmental Authorization
Schedule 3.04		Non-Contravention
Schedule 3.05		Reference Statement
Schedule 3.06		Absence of Certain Changes or Events
Schedule 3.07		Consents
Schedule 3.08(d)		Permitted Liens
Schedule 3.08(e)		Locations of Purchased Assets
Schedule 3.09		Litigation
Schedule 3.10(a)		Assigned Contracts
Schedule 3.10(b)		Defaults under Assigned Contracts
Schedule 3.10(c)		Conflicting Contracts
Schedule 3.12(b)		Software Programs
Schedule 3.12(c)		License Agreements
Schedule 3.12(e)		Restrictions on Seller Intellectual Property
Schedule 3.12(g)		Infringement by Seller
Schedule 3.12(h)		Royalties, Fees and Other Payments
Schedule 3.12(j)		Infringement by Others
Schedule 3.12(k)		Source Code
Schedule 3.13(b)		Collective Bargaining and Labor Agreements
Schedule 3.13(c)		Employee Benefits
Schedule 3.13(e)		EU Employees
Schedule 3.14		Finders’ Fees of Seller
Schedule 3.15		Absence of Undisclosed Liabilities
Schedule 3.16		Affiliate Transactions
Schedule 3.17		Accounts Receivable
Schedule 3.21		Insurance

Table of Contents
(continued)

				Page
SCHEDULES
Schedule 3.22		Licenses and Approvals
Schedule 3.23		Environmental
Schedule 3.24		Customers and Suppliers
Schedule 3.25		Trade Compliance
Schedule 4.03		Governmental Authorization
Schedule 4.05		Finders’ Fees of Buyer
Schedule 5.01		Conduct
Schedule 5.05		Non-Competition
Schedule 8.01(b)		US Transferred Employees
Schedule 8.02(b)		EU Employees
Schedule 9.02(f)		Closing Consents

EXHIBITS

Exhibit A — Assignment and Assumption Agreement
Exhibit B — Bill of Sale
Exhibit C — Copyright Assignment
Exhibit D — Deerfield Letter Agreement
Exhibit E — Intellectual Property Agreement
Exhibit F — Lease Assignments
Exhibit G — Patent Assignment
Exhibit H — Sublease Agreement
Exhibit I — Trademark Assignment
Exhibit J— Transition Services Agreement
Exhibit K — Disclosure Schedule

ASSET PURCHASE AGREEMENT

      AGREEMENT dated as of May 31, 2007, by and among (i) TOLLGRADE COMMUNICATIONS, INC., a Pennsylvania corporation and/or, subject to the provisions of Section 12.04 , one or more of its direct or indirect wholly-owned subsidiaries to be designated (collectively, “ Buyer ”) and (ii) TERADYNE, INC., a Massachusetts corporation (“ Seller ”). Buyer and Seller are sometimes referred to herein individually as a “ Party ” and, collectively, as the “ Parties ”.

WITNESSETH:

      WHEREAS, Seller currently operates the Business (as defined below); and

      WHEREAS, Buyer desires to purchase the assets, and to assume certain of the liabilities, related to the Business identified herein from Seller, and Seller desires to sell the assets, and to assign certain of the liabilities, related to the Business identified herein to Buyer, upon the terms and subject to the conditions hereinafter set forth.

      WHEREAS, Buyer desires to hire certain of Seller’s employees employed in the Business;

      NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

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

          “ Access Period ” has the meaning specified in Section 5.03.

          “ Accounting Referee ” means that independent nationally recognized accounting firm mutually agreed upon by Buyer and Seller.

          “ Accounts Receivable ” has the meaning specified in Section 2.01(j) .

          “ Affiliate ” means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with such other Person.

          “ Allocation Statement ” has the meaning specified in Section 2.10.

          “ Ancillary Documents ” means the Assignment and Assumption Agreement, the Bill of Sale, the Transition Services Agreement, the Intellectual Property License Agreement, the Patent Assignment, the Copyright Assignment, the Lease Assignments, the Deerfield Letter Agreement, the Sublease Agreement, the Trademark Assignment and each of the other agreements, certificates and instruments to be executed and delivered by all or some of the Parties in connection with the transactions contemplated hereby.

          “ Ancillary Transfer Documents ” means the Intellectual Property License Agreement, the Assignment and Assumption Agreement, the Bill of Sale, the Copyright Assignment, the Patent Assignment and the Trademark Assignment.

          “ Apportioned Obligations ” has the meaning specified in Section 7.02(b).

          “ Assigned Contracts ” has the meaning specified in Section 2.01(b) .

          “ Assignment and Assumption Agreement ” means one or more Assignment and Assumption Agreements, substantially in the form attached hereto as Exhibit A .

          “ Assumed Liabilities ” has the meaning specified in Section 2.03.

          “ Beckmann Claim ” means all losses, costs, liabilities, expenses, actions, proceedings, claims and demands incurred or paid as a result of any claim by or in respect of any EU Employee directly or indirectly arising out of:

               (i) the decision of the European Court of Justice in Beckmann v Dynamco Whicheloe Macfarlane Limited or Martin v South Bank University or any legislation or judgment (including any tribunal or Pensions Ombudsman decision) introduced or promulgated directly or indirectly as a result of such decision; or

               (ii) any failure by the Buyer to provide to or in respect of any EU Employee occupational pension scheme benefits other than those relating to old age, invalidity and survivors (as referred to in Article 3 of the Directive) enjoyed by the EU Employees prior to Closing.

          “ Benefit Arrangement ” means an employment, severance or similar contract, arrangement or policy and each plan or arrangement providing for severance, insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, pension or retirement benefits or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits that is not an Employee Plan, and is or was maintained or contributed to by Seller or any of its ERISA Affiliates (as such term is defined in Section 3(3) of ERISA) and covers any employee of the Seller engaged in the operation of the Business.

          “ Bill of Sale ” means one or more Bills of Sale, substantially in the form attached hereto as Exhibit B .

          “ Book and Records ” has the meaning specified in Section 2.01(e) .

          “ BT Amendment ” has the meaning specified in Section 2.09(b) .

          “ BT Certificate ” has the meaning specified in Section 2.09(a)(i) .

          “ BT Contract ” means Post Acceptance Support for the Teradyne Line Test/Celerity System Agreement (Contract Number 673751), dated as of December 23, 2004, by

2

and between British Telecommunications plc and Teradyne Limited, as amended on April 12, 2007, as amended, modified or supplemented from time to time, including any renewal, extension, restatement or replacement thereof.

          “ BT Measurement Period ” means the twelve month period commencing on the Closing Date and ending on the first anniversary thereof.

          “ BT Revenues ” means the actual revenues recognized by Buyer, as determined under GAAP, and attributable to the BT Contract.

          “ Business ” means the business and commercial operations of Seller’s Broadband Test Division as they are currently conducted by Seller.

          “ Business Claims ” has the meaning specified in Section 2.01(c) .

          “ Business Day ” means any day other than a Saturday, Sunday or day on which banks in New York, New York are authorized or required by law to close.

          “ Business Licenses ” has the meaning specified in Section 3.12(c).

          “ Buyer ” has the meaning specified in the preamble.

          “ Buyer Benefit Arrangements and Plans ” means an employment, severance, salary continuation or similar contract, arrangement or policy and each plan or arrangement providing for severance, salary continuation, insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, pension or retirement benefits or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits that is maintained or contributed to by Buyer or any of its ERISA Affiliates and covers any employee of Buyer, and shall include each “employee benefit plan” maintained or contributed to by Buyer or any of its ERISA Affiliates, as such term is defined in Section 3(3) of ERISA.

          “ Buyer’s Field ” means test and measurement applications for telephone and cable service providers and specifically for long line DSL and CATV high speed data and voices services networks.

          “ Claims ” has the meaning specified in Section 2.01(c) .

          “ Closing ” has the meaning specified in Section 2.07(b) .

          “ Closing Balance Sheet ” has the meaning specified in Section 2.08(b).

          “ Closing Consents ” has the meaning specified in Section 9.02(f).

          “ Closing Date ” means the date of the Closing.

          “ Closing Net Asset Value ” has the meaning specified in Section 2.08(b).

          “ Closing Purchase Price ” has the meaning specified in Section 2.07(a).

          “ COBRA ” has the meaning specified in Section 3.13(a) .

          “ Confidentiality Agreement ” means the confidentiality agreement dated April 26, 2007, between Buyer and Seller.

          “ Consent ” has the meaning specified in Section 3.07.

          “ Contracts ” means all customer accounts of the Business and all of Seller’s and Seller’s Affiliates’ rights to service such customer accounts, and all rights under all current and open customer purchase orders, customer contracts, vendor contracts, licenses, leases (other than the Real Property Leases) and any other agreements, contracts, promises, commitments, undertakings, guarantees, warranties, representations, grant of rights, licenses, permits, registrations and authorizations (whether oral or written and whether express or implied) to which Seller or any of Seller’s Affiliates is a party, to the extent related to the Business and related documents.

          “ Copyright Assignment ” means that certain Copyright Assignment, substantially in the form of Exhibit C .

          “ Copyrights ” means all copyrights, including in and to works of authorship and all other rights corresponding thereto throughout the world, whether published or unpublished, including rights to prepare, reproduce, perform, display and distribute copyrighted works and copies, compilations and derivative works thereof.

          “ Deerfield Letter Agreement ” means a letter agreement substantially in the form of Exhibit D , to be entered into between Seller and Buyer with respect to the treatment of lease abatement charges at the Deerfield, Illinois facility.

          “ Directive ” means the Acquired Rights Directive and applicable national laws implementing that directive including: (a) in the United Kingdom, the Transfer of Undertakings (Protection of Employment) Regulations 2006; (b) in Germany, Section 613a Civil Code (BGB); (c) in Belgium, Chapter II of the Collective Bargaining Agreement No. 32bis of 7 June 1985; (d) in the Czech Republic, the Labour Code (as currently in effect) and (e) in the Netherlands, Book 7, Title 10, Section 8 Dutch Civil Code, each as amended, or replaced by similar legislation, from time-to-time.

          “ Disclosure Schedule ” has the meaning specified in the introduction of Article III .

          “ Disputed Items ” has the meaning specified in Section 2.09(a)(iii) .

          “ Disputed Items Notice ” has the meaning specified in Section 2.09(a)(ii) .

          “ Employee List ” has the meaning specified in Section 3.13(a) .

          “ Employee Plan ” means each “employee benefit plan”, as such term is defined in Section 3(3) of ERISA, that is maintained or contributed to by Seller or any of its ERISA Affiliates, as such term is defined in Section 3(3) of ERISA, and covers any employees of the Seller engaged in the operation of the Business.

          “ Environmental Laws ” means all applicable federal, state, local and foreign statutes, laws, rules, regulations, ordinances, by-laws, directives, orders, decrees and other provisions having the force and effect of law, all judicial and administrative orders and determinations, and all common law relating to the quality or protection of public health and safety, or the environment or the production, generation, use, storage, transportation, treatment, distribution, labeling, testing, processing, discharge, release, threatened release, cleanup, handling or disposal of Hazardous Material, including the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. (“ CERCLA ”), the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (“ RCRA ”), the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251 et seq., and the Clean Air Act, 42 U.S.C. § 7401 et seq., as presently in effect.

          “ Environmental Liabilities ” means any and all costs, damages, expenses, liabilities, obligations or other responsibilities arising from or under any Environmental Law, including without limitation obligations to pay the amount of any judgment or settlement, the cost of complying with any settlement, judgment or order for injunctive or other equitable relief, the cost of compliance or corrective action, the amount of any civil penalty or criminal fine, and any court costs and attorney’s fees, fees for experts and consultants.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

          “ EU Employees ” has the meaning specified in Section 3.13(e) .

          “ EU Employment Liabilities ” has the meaning specified in Section 2.03(a) .

          “ EU Transferred Employees ” has the meaning specified in Section 8.02(b) .

          “ Excluded Assets ” has the meaning specified in Section 2.02.

          “ Excluded Liabilities ” has the meaning specified in Section 2.04.

          “ Financials ” has the meaning specified in Section 3.05.

          “ Financial Statement Expense ” has the meaning specified in Section 5.06.

          “ First Year BT Contract Revenue ” means the BT Revenues recognized by Buyer during the BT Measurement Period.

          “ GAAP ” means U.S. generally accepted accounting principles, consistently applied.

          “ German Pension Plan ” means the Teradyne Gmbh Pension Plan effective as of July 1, 2003.

          “ German Pension Plan Employees ” means those employees whose names are set forth on Schedule 1.01(b) .

          “ German Pension Plan Liabilities ” means all liabilities under the German Pension Plan to the German Pension Plan Employees, whether arising before or after Closing.

          “ German Pension Plan Reduction Amount ” means an amount per German Pension Plan Employee who becomes an EU Transferred Employee, as set forth on Schedule 1.01(b) .

          “ Governmental Authority ” means any agency, authority, body, board, commission, court, instrumentality, legislature and office of any nature whatsoever of any government, quasi-governmental unit or political subdivision, whether foreign, federal, state, county, district, municipality, city or otherwise.

          “ Hazardous Material ” means any substance, chemical, waste, compound or other material:

               (i) the presence of which requires notification, investigation monitoring, or remediation under any Environmental Law; or

               (ii) that is or becomes defined as a “toxic substance”, “hazardous waste”, “hazardous material”, “hazardous substance”, “pollutant” or “contaminant” under any Environmental Law;

               (iii) that is toxic, explosive, corrosive, reactive, flammable, infectious, radioactive, carcinogenic, teratogenic, mutagenic or otherwise hazardous and is or becomes subject to the jurisdiction of any Governmental Authority;

               (iv) the presence of which on, within, or beneath the Seller’s Premises causes or threatens to cause a nuisance on, in, or emanating from the Seller’s Premises or onto adjacent properties or poses or threatens to pose a hazard to the Seller’s Premises or to the health or safety of persons on or about the Seller’s Premises;

               (v) that contains gasoline, diesel fuel or other petroleum hydrocarbons or volatile organic compounds; or

               (vi) that contains polychlorinated biphenyls (“PCBs”), lead paint, radon gas, asbestos or urea formaldehyde foam insulation.

          “ Indemnified Party ” has the meaning specified in Section 10.04(a).

          “ Indemnifying Party ” has the meaning specified in Section 10.04(a).

          “ Insurance Policies ” has the meaning specified in Section 3.21.

          “ Intellectual Property Assets ” has the meaning specified in Section 2.12.

          “ Intellectual Property License Agreement ” means that license agreement between Buyer and Seller substantially in the form set forth in Exhibit E hereto.

          “ Inventory ” has the meaning specified in Section 2.01(i) .

          “ Lease Assignments ” means the Assignment and Assumption Agreements substantially in the form of Exhibit F hereto, to be entered into between the Seller and Buyer at the Closing with respect to the Seller’s facilities in Deerfield, Illinois, Kontich, Belgium and Wuppertal, Germany.

          “ Letter Agreement ” means that certain letter agreement dated May 31, 2007, by and between Buyer and Seller.

          “ Licensed Intellectual Property ” means the intellectual property licensed by Seller to Buyer pursuant to the Intellectual Property License Agreement.

          “ Licenses and Approvals ” has the meaning specified in Section 2.01(d) .

          “ Lien ” means any mortgage, lien (including any mechanics, warehousemen, laborers and landlords liens), claim, pledge, charge, security interest, equitable interest, right-of-way, encumbrance, restriction on or conditions to transfer or assignment, defects, claims or similar restrictions of any kind.

          “ Loss ” has the meaning specified in Section 10.02(a) .

          “ Major Customers ” has the meaning specified in Section 3.24.

          “ Major Suppliers ” has the meaning specified in Section 3.24.

          “ Material Adverse Effect ” means, with respect to Seller, any change, circumstances, event or effect with respect to the Business that, individually or in the aggregate (taking into account all other such changes, circumstances, events or effects), is, or could reasonably be expected to have a material adverse effect on the Business, assets (including intangible assets), condition (financial or otherwise), or results of operations of the Business taken as a whole or the ability of Seller to timely consummate the transactions contemplated hereby or on the rights of Buyer under this Agreement, other than any such effect or change, directly or indirectly, (a) resulting from or arising in connection with (i) general political, economic, financial, capital market or industry-wide conditions which do not have a disproportionate impact on the Business or its material assets taken as a whole, (ii) regulatory changes, (iii) this Agreement, the transactions contemplated hereby or the authorized announcement or other disclosure of this Agreement or the transactions contemplated hereby, (iv) any breach by Buyer of this Agreement or (v) any failure by the Business to meet any projections or forecast (but not the underlying material adverse change, event, circumstance or development, if any, giving rise thereto), or (b) attributable to the fact that the prospective owner of the Business, the Purchased Assets and the Assumed Liabilities is the Buyer or any Affiliate of the Buyer.

          “ Moral Rights ” means collectively, rights to claim authorship of a work, to object to or prevent any modification of a work, to withdraw from circulation or control the publication or distribution of a work, and any similar rights, whether existing under judicial or statutory law of any country or jurisdiction worldwide, or under any treaty or similar legal authority, regardless of whether such right is called or generally referred to as a “moral right.”

          “ Party ” has the meaning specified in the preamble.

          “ Patent Assignment ” means the Patent Assignment substantially in the form of Exhibit G hereto.

          “ Permitted Lien ” has the meaning specified in Section 3.08(d) .

          “ Person ” means an individual, corporation, partnership, association, limited liability company, joint venture, association, trust or other entity or organization, including a Governmental Authority.

          “ Personal Data ” has the meaning given to it in the UK Data Protection Act 1998.

          “ Personal Property ” has the meaning specified in Section 2.01(a) .

          “ Post-Closing Tax Period ” has the meaning specified in Section 7.01.

          “ Pre-Closing Tax Period ” has the meaning specified in Section 7.01.

          “ Purchase Price ” has the meaning specified in Section 2.10.

          “ Purchased Assets ” has the meaning specified in Section 2.01.

          “ PwC ” has the meaning specified in Section 5.06.

          “ Real Property Leases ” has the meaning specified in Section 2.01(f) .

          “ Reference Net Asset Value ” has the meaning specified in Section 2.08.

          “ Reference Statement ” has the meaning specified in Section 3.05.

          “ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment of any Hazardous Materials.

          “ Representatives ” means the representatives of a recognized trade union or, if there are none, existing works council representatives or, if there are none, representatives elected specifically to represent EU Employees for the purpose of information and/or consultation obligations under the Directive.

          “ SEC ” has the meaning specified in Section 5.06.

          “ Seller ” has the meaning specified in the preamble.

          “ Seller Intellectual Property ” has the meaning specified in Section 2.01(h) .

          “ Seller’s Knowledge ” or “ to the Knowledge of Seller ” shall mean the actual knowledge of a particular fact or other matter, after reasonable inquiry, of Grant Cushney, Neil Owen, James Dawson, Jeff Hotchkiss and Fletcher Bishop.

          “ Seller’s Premises ” means the real property leased by the Seller identified on Schedule 1.01(a) .

          “ Software Programs ” has the meaning specified in Section 3.12(b) .

          “ Special Representations ” has the meaning specified in Section 10.01(c) .

          “ Sublease Agreement ” means the underlease agreement and the license to sublet part substantially in the form of Exhibit H hereto, to be entered into between Buyer and Seller at the Closing with respect to Seller’s facility in Bracknell, U.K.

          “ Target First Year BT Contract Revenue ” means $2,700,000.

          “ Tax ” has the meaning specified in Section 7.01.

          “ Tax Code ” has the meaning specified in Section 7.01.

          “ Tax Information ” has the meaning specified in Section 2.02(e) .

          “ Tax Returns ” has the meaning specified in Section 7.01 .

          “ Technology ” means algorithms, data, databases, hardware, inventions (whether or not patentable), know-how, processes, proprietary information, protocols, specifications, software, software code (in any form including source code and executable or object code), techniques, works of authorship, and other information, materials and technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

          “ Trademark Assignment ” means the trademark assignment in substantially the form of Exhibit I hereto.

          “ Transferred Employees ” means collectively the EU Transferred Employees and the US Transferred Employees.

          “ Transferred IP Assets ” has the meaning specified in Section 3.12(e) .

          “ Transition Services Agreement ” means the transition services agreement between Buyer and Seller substantially in the form set forth in Exhibit J hereto.

          “ Unidentified Employee ” has the meaning specified in Section 8.02(h).

          “ US Terminated Employees ” has the meaning specified in Section 8.01(a).

          “ US Transferred Employees ” has the meaning specified in Section 8.01(b).

          “ VAT ” has the meaning specified in Section 7.01.

          “ WARN Act ” has the meaning specified in Section 3.13(a) .

          “ Warranty Limitation Amount ” has the meaning specified in Section 5.07 .

      1.02. Interpretation . Unless the context otherwise requires, the terms defined in Section 1.01 shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms defined herein. All accounting terms defined in Section 1.01 , and those accounting terms used in this Agreement not defined in Section 1.01 , except as otherwise expressly provided herein, shall have the meanings customarily given thereto in accordance with GAAP. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” When a reference is made in this Agreement to “ordinary course of business”, such reference shall be deemed to be followed by the words “consistent with past practice.” All payments required to be made hereunder shall be made in US dollars, all references to any monetary amounts hereunder are references to US dollars and, in the event any amount is determined hereunder based on a currency other than US dollars, such amount shall be converted to US dollars based on the exchange rate published by the Wall Street Journal as of the end of the Business Day such amount is fixed.

ARTICLE II

PURCHASE AND SALE

      2.01. Purchase and Sale . Subject to Section 2.02 , upon the terms and subject to the conditions of this Agreement and in reliance on the representations, warranties, covenants and agreements of Seller herein, Buyer agrees to purchase from Seller and Seller agrees to sell, transfer, assign and deliver, or cause to be sold, transferred, assigned and delivered (in the case of any assets owned by Affiliates of Seller), to Buyer at Closing, free and clear of all Liens other than Permitted Liens, the Purchased Assets. As used in this Agreement, the term “ Purchased Assets ” shall mean the assets identified below in this Section 2.01 :

          (a) Subject to Section 2.02(i) , (i) the personal property and equipment used in the operation of the Business at any time during the twelve (12) month period preceding the date of this Agreement and located at the Seller’s Premises and (ii) such other personal property and equipment used in the Business and set forth on Schedule 2.01(a) (collectively, the “ Personal Property ”);

          (b) Subject to Sections 2.02 and 2.05 , the rights under the Contracts identified on Schedule 2.01(b) (the “ Assigned Contracts ”);

          (c) Seller’s and any of Seller’s Affiliates’ rights, claims, credits, causes of action or rights of set-off against third parties (“ Claims ”) exclusively relating to the Business

(“ Business Claims ”), including unliquidated rights under manufacturers’ and vendors’ warranties, and any other Claims that would exclusively relate to the Business if severed from a Claim that relates to other operations of Seller;

          (d) the licenses, government certificates, permits, approvals or other governmental authorizations identified on Schedule 2.01(d) (collectively, the “ Licenses and Approvals ”);

          (e) the books, records, files and papers used exclusively in the Business, whether in hard copy or computer format, including engineering information; product drawings; bill of materials; production routings; manuals and data; service and warranty records; sales and purchase correspondence; catalogs; brochures; sales, promotion and creative materials; market studies; analyses; projections; pricing and other marketing information and similar data; lists of present and former suppliers, customers, subcontractors and distributors; personnel and employment records relating directly to the operation of Business (but excluding Tax Information), provided, however, that with respect to accounting books and records, only those specific accounting books and records identified on Schedule 2.01(e) , and with respect to personnel and employment records, only to the extent permitted by applicable law with respect to Transferred Employees (collectively, the “ Books and Records ”);

          (f) a sublease and/or assignment of the leasehold interests in the real property or a portion thereof that is leased to Seller and to any of Seller’s Affiliates or used by Seller and any of Seller’s Affiliates with respect to the operation of the Business under the leases identified on Schedule 2.01(f) (collectively, the “ Real Property Leases ”), in each case subject to the terms and conditions of the Deerfield Letter Agreement, the Lease Assignments and Sublease Agreement;

          (g) all (i) patents, patent applications and patent disclosures listed on Schedule 2.01(g) ; (ii) trademarks, service marks, trade dress, trade names, logos, corporate names and other commercial product or service designations (in each case, whether registered or unregistered) listed on Schedule 2.01(g) ; and (iii) any and all other rights to existing and future registrations and applications for any of the foregoing and all other proprietary rights in, or relating to, any of the foregoing, including remedies against and rights to sue for past infringements, and rights to damages and profits due or accrued in or relating to any of the foregoing; subject to the Intellectual Property License Agreement and rights and restrictions contained in the licenses or agreements with third parties identified on Schedule 2.01(g) ;

          (h) all (i) Copyrights (registered or unregistered) and copyrightable works and registrations and applications for registration thereof; (ii) computer software, data, data bases and documentation thereof; (iii) trade secrets and other confidential information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information); (iv) Moral Rights; and (v) domain names, in each case under (i) through (v), only to the extent either listed on Schedule 2.01(h) or owned by Seller and exclusively used in the Business (or, if not yet in use, were developed for the exclusive use in the Business) and

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further subject to the rights and restrictions contained in licenses or agreements with third parties identified on Schedule 2.01(h) (collectively with the assets described in Section 2.01(g) , the “ Seller Intellectual Property ”);

          (i) all inventory as of the Closing Date used by Seller and any of Seller’s Affiliates or held by or on behalf of Seller and any of Seller’s Affiliates for use exclusively in connection with the Business, wherever located, including raw materials, work-in-process, finished goods, component parts, supplies and other inventories, marketing materials and production, shipping and packaging supplies, and all rights of Seller and any of Seller’s Affiliates in and to materials held by Seller and any of Seller’s Affiliates on consignment and consigned inventory which is in the possession of others but for which Seller retains title (collectively, the “ Inventory ”);

          (j) all (i) trade accounts receivable and other rights to payment from customers of Seller and Seller’s Affiliates arising from the Business and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered to customers of Seller and Seller’s Affiliates in connection with the Business, (ii) all other accounts or notes receivable of Seller and any Affiliate of Seller arising from the Business and the full benefit of all security for such accounts or notes, and (iii) any claim, remedy or other right related to any of the foregoing (collectively, the “ Accounts Receivable ”) including, without limitation, those items identified on Schedule 2.01(j) ;

          (k) all refunds, deposits, prepayments or prepaid expenses and similar items relating to the Business or the Assigned Contracts, but in each case only to the extent set forth on the Reference Statement; and

          (l) all goodwill relating exclusively to the Purchased Assets or the Business.

      2.02. Excluded Assets . Buyer expressly understands and agrees that the assets and properties of Seller and Seller’s Affiliates, whether related to the Business or otherwise, that are not specifically identified as Purchased Assets herein (collectively the “ Excluded Assets ”) shall be excluded from the Purchased Assets, including, without limitation, the following assets:

          (a) Seller’s and Seller’s Affiliates’ cash and cash equivalents on hand and in banks;

          (b) the real property owned by Seller in Deerfield, Illinois together with the buildings, fixtures, and improvements erected thereon, excluding, for avoidance of doubt, any items specified on Schedule 2.01(a) ;

          (c) subject to Buyer’s purchase of the Accounts Receivable hereunder, Inventory sold or otherwise disposed of in the ordinary course of the operation of the Business during the period from the date hereof until the Closing Date;

          (d) the refunds or rebates or similar payments of Taxes and VAT to the extent such Taxes or VAT were paid by or on behalf of Seller or any Affiliate of Seller and result from

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the conduct of the Business by Seller for the taxable periods ending on or before the Closing, or would not otherwise constitute an Assumed Liability;

          (e) Seller’s and Seller’s Affiliates returns, declarations, reports, claims for refund, information statements and the other documents relating to Taxes and VAT, including any schedule or attachment thereto and including any amendment thereof (the “ Tax Information ”);

          (f) all assets of any Benefit Arrangement or Employee Plan;

          (g) Seller’s rights under this Agreement and any other agreement, document or instrument entered into pursuant to this Agreement;

          (h) All intellectual property owned by Seller or Seller’s Affiliates or which Seller or any of Seller’s Affiliates have rights to, other than the Seller Intellectual Property; and

          (i) any of the Contracts and assets identified on Schedule 2.02(i) .

      2.03. Assumption of Liabilities . Upon and subject to the terms, conditions, representations and warranties of Seller contained herein, and subject to Section 2.04 , Buyer agrees, effective at the time of Closing, to assume only the following liabilities and no others (collectively, the “ Assumed Liabilities ”):

          (a) liabilities arising in connection with or related to the operation of the Business by Buyer subsequent to the Closing, including without limitation any liability or obligation to Transferred Employees arising or accruing after the Closing under any of Buyer’s contracts with, or Buyer Benefit Arrangements and Plans covering, such Transferred Employees, or, unless constituting an Excluded Liability under Section 2.04 hereof, under applicable federal, state, local, foreign or other laws (including the Directive) and regulations relating to wages, benefits, hours, collective bargaining, unemployment insurance, leaves of absence, workers’ compensation, military service, immigration control, the payment and withholding of employment Taxes, and equal employment opportunity, but only to the extent that such liabilities relate to the period subsequent to the Closing; provided, however, that for avoidance of doubt, (i) subject to the provisions of clause (ii) of this Section 2.03(a) , liabilities which either are not asserted or matured until after the Closing but which arise or relate to facts or circumstances prior to or on the Closing Date are not Assumed Liabilities hereunder, and (ii) liabilities arising under applicable foreign laws and regulations (including the Directive) on account of Buyer’s failure to provide benefits and compensation to EU Transferred Employees following the Closing as required by applicable law shall be Assumed Liabilities (collectively, “ EU Employment Liabilities ”);

          (b) all liabilities or obligations of Seller arising under either (i) the Assigned Contracts set forth on Schedule 2.01(b) , or (ii) any other Contract for which Buyer assumes the benefit after Closing, which liabilities or obligations either accrue following the Closing or are expressly included within the reserves reflected on the Reference Statement as a separate line item (but only to the extent of such reserves);

          (c) all liabilities or obligations of Seller arising in connection with or relating to the operation of the Business (except for the liabilities or obligations owed to Seller or any Affiliate of any Seller that do not relate to bona fide products delivered or services rendered on arms-length terms), including liabilities in respect of trade creditors, but only to the extent that such liabilities are (i) set forth on the Reference Statement or (ii) incurred after the date of the Reference Statement, to the extent the liabilities and obligations were incurred in the ordinary course of business consistent with past practice of the Business and are included in the calculation of Closing Net Asset Value;

          (d) all product warranty liabilities of Seller incurred prior to and after the Closing in the operation of the Business and incurred in the ordinary course of business but only to the extent of the Warranty Limitation Amount;

          (e) Environmental Liabilities that first arise and are created after the Closing related to the operation of the Business after the Closing;

          (f) the disposal of Hazardous Materials (the release of which first occurs after the Closing) by Buyer after the Closing;

          (g) all utilities being furnished to the Business after the Closing;

          (h) all German Pension Plan Liabilities, but only to the extent associated with any German Pension Plan Employee who becomes an EU Transferred Employee;

          (i) all liabilities or obligations arising under the Real Property Leases pursuant to the Lease Assignments, Sublease Agreement and Deerfield Letter Agreement; and

          (j) other liabilities listed or described on Schedule 2.03(j) .

      2.04. Excluded Liabilities . Notwithstanding any provision in this Agreement or any other writing to the contrary, Buyer is assuming only the Assumed Liabilities and is not assuming any other liability or obligation of Seller or any Affiliate of Seller (or any predecessor owner of all or part of its business and assets) of whatever nature whether presently in existence or arising or asserted hereafter. All such other liabilities and obligations shall be retained by and remain obligations and liabilities of Seller or its Affiliates (all such liabilities and obligations not being assumed being herein referred to as the “ Excluded Liabilities ”). Without limiting the generality of the foregoing, Buyer shall not assume any of the following liabilities and obligations of Seller:

          (a) all liabilities and obligations of Seller or its Affiliates relating to its operations other than the Business;

          (b) all liabilities and obligations of Seller relating to its operation of the Business for periods on or prior to the Closing Date (unless such liabilities are expressly identified as Assumed Liabilities hereunder) regardless of when such liabilities or obligations arise;

          (c) all liabilities and obligations under contracts, agreements, arrangements and understandings of Seller or its Affiliates other than the Assigned Contracts;

          (d) subject to Section 2.03(d) , all liabilities and obligations under any Assigned Contract which arises after the Closing but which arises out of or relates to a breach of such Assigned Contract occurring on or prior to the Closing;

          (e) all intercompany debts or other liabilities between the Business and Seller or any shareholder or Affiliate of Seller;

          (f) all litigation (regardless of when filed), liabilities and obligations of any type whatsoever (whether in tort, contract or otherwise) not included in the Assumed Liabilities and arising out of or relating to actions, omissions or occurrences taking place in connection with the Business on or prior to the Closing, whether or not Seller or any or its Affiliate has received notice of any such litigation or obligations;

          (g) all liabilities and obligations relating to Seller’s or any of its Affiliates’ current or former employees, agents, consultants or contractors including any liability or obligation related to any Benefit Arrangement or Employee Plan, including without limitation the German Pension Plan (other than the German Pension Plan Liabilities associated with any German Pension Plan Employee who becomes an EU Transferred Employee) and any liability or obligation for wages, bonuses, insurance, benefits, pension funds, stock options, employment agreements, or other amounts owed to or payable on behalf of any such employees, agents, consultants or contractors accrued against Seller or any Affiliate of Seller on or before the Closing or as a result of the consummation of the transactions contemplated hereby, except (i) liabilities or obligations to Transferred Employees for employment or services provided to Buyer after Closing and (ii) EU Employment Liabilities;

          (h) subject to the provisions of Article VII , all liabilities for Taxes;

          (i) all liabilities and obligations to any broker, finder, investment banker or any other Person for any brokerage, finder’s fee, transaction costs, expenses or other fee or commission in connection with this Agreement or the transactions contemplated hereby owed or alleged to be owed by Seller or its Affiliates;

          (j) all claims, actions, proceedings and obligations arising on or prior to the Closing under Seller’s or any of its Affiliates’ insurance and self-insurance programs, including workmen’s compensation, automobile or general liabilities;

          (k) all liabilities and obligations with respect to the Excluded Assets;

          (l) all liabilities and obligations with respect to the presence or former presence of any Hazardous Materials on, under, about, in, or migrating to or from any real property subject to the Real Property Leases or any other location currently or formerly owned or occupied by Seller or any of its Affiliates or any former owner or operator of the Business, the Release of which commenced prior to or as of the Closing Date and all associated environmental response actions of any kind (including, but not limited to, investigation, remediation, removal,

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abatement or encapsulation) arising from or relating in any way to said presence or former presence of Hazardous Materials; and

          (m) Environmental Liabilities arising from or relating to the ownership or operation of the Business or the Purchased Assets on or prior to the Closing.

      2.05. Assignment of Contracts and Rights . Anything in this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any Assigned Contract which would be included in the Purchased Assets but for the failure to obtain the applicable Consent. Seller agrees that prior to and after the Closing Date, Seller shall use commercially reasonable efforts (but without any payment of money by Seller or Buyer) and shall cooperate with Buyer to obtain all Consents, including such Consents as are listed on Schedule 3.07 . If any Consent is not obtained, or if an attempted assignment would be ineffective or would adversely affect the rights of Seller under any such Purchased Asset, contract, claim or right or any benefit arising thereunder so that Buyer would not in fact receive all such rights, Seller shall reasonably cooperate with Buyer in a mutually agreeable arrangement under which Buyer would obtain the benefits and assume the post-Closing obligations thereunder in accordance with this Agreement, including subcontracting, sub-licensing, or subleasing to Buyer, or under which Seller would enforce for the benefit of Buyer, with Buyer assuming Seller’s obligations, any and all rights of Seller against a third party thereto. Seller will promptly pay (or cause to be paid) to Buyer when received all amounts received by Seller under any such Purchased Asset, contract or any claim or right or any benefit arising thereunder, except to the extent the same represents an Excluded Asset.

      2.06. Licensed Intellectual Property . At the Closing, Buyer and Seller shall enter into the Intellectual Property License Agreement in the form attached hereto as Exhibit E .

      2.07. Purchase Price; Closing .

          (a) Subject to Section 2.08 hereof, the purchase price for the Purchased Assets shall be the sum of (i) $12,000,000 less (ii) the sum of the applicable German Pension Plan Reduction Amounts (the “ Closing Purchase Price ”) plus the Assumed Liabilities.

          (b) Subject to the terms and conditions of this Agreement, the closing (the “ Closing ”) of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities hereunder shall take place at the offices of Choate, Hall & Stewart LLP in Boston, Massachusetts as soon as possible, but in no event later than three (3) Business Days after satisfaction of the conditions set forth in Article IX (Conditions to Closing); provided, however, that to facilitate an orderly transition for accounting purposes, such Closing may be delayed by Seller up until the last day of the calendar month in which such conditions are satisfied.

          (c) At the Closing, Seller shall deliver to Buyer a duly executed Bill of Sale covering the Purchased Assets and any other transfer document to be executed by Seller to the extent required to be filed with any Governmental Authority upon the Closing, together with the following instruments and agreements, each in form reasonably satisfactory to counsel for Buyer:

               (i) one or more duly executed Assignment and Assumption Agreements relating to the Assumed Liabilities;

               (ii) one or more duly executed Trademark Assignments;

               (iii) one or more duly executed Intellectual Property License Agreements;

               (iv) one or more duly executed Lease Assignments;

               (v) one or more duly executed Sublease Agreements (Buyer and Seller acknowledge and agree that “Landlord” (as defined in the License to Sublet Part) may require some changes to the form of License to Sublet Part that is attached as part of Exhibit H to this Agreement and each party agrees that it will accept any such required changes by Landlord as long as such change does not materially alter the substantive business terms of this Agreement);

               (vi) one or more duly executed Transition Services Agreements;

               (vii) a duly executed Deerfield Letter Agreement;

               (viii) releases, satisfactions or terminations of all mortgages, financing statements or other evidences of any Lien with respect to the Purchased Assets (except for Permitted Liens);

               (ix) certificates of the appropriate officers of the State of Illinois, dated no earlier than the date of this Agreement, certifying that Seller is qualified to do business and is in good standing as a foreign corporation in such state;

               (x) the certificate referred to in Section 9.02(c) ;

               (xi) one or more duly executed Patent Assignments;

               (xii) one or more duly executed Copyright Assignments;

               (xiii) all records referred to in section 49 of VATA 1994; and

               (xiv) such other documents and instruments as shall be required to consummate the transaction contemplated hereunder.

          (d) At the Closing, Buyer shall deliver to Seller, each in form reasonably satisfactory to counsel for Seller:

               (i) a certified or official bank check payable to the order of Seller, or make a wire transfer to an account designated by Seller, in the amount of the Closing Purchase Price in immediately available funds;

               (ii) duly executed counterparts of those documents referred to in Sections 2. 07(c)(i) , (ii), (iii), (iv), (v), (vi), (vii), (xi) and (xii) and the documents referred to in Section 2.07(xiii) ;

               (iii) the certificate referred to in Section 9.03(c) ; and

               (iv) such other documents and instruments as shall be required to consummate the transaction contemplated hereunder.

      2.08. Post-Closing Purchase Price Adjustment .

          (a) General . As an adjustment to the Purchase Price, Seller shall pay Buyer the amount, if any, by which Reference Net Asset Value exceeds the Closing Net Asset Value.

          (b) Definitions . The following terms, as used herein, have the following meanings:

          “ Closing Balance Sheet ” means a balance sheet for the Business, prepared in a manner consistent with the audited financial statements referenced in Section 5.06 and in accordance with GAAP (except as otherwise stated therein and except for the omission of other financial statements and footnotes), excluding Excluded Assets and Excluded Liabilities, as of the close of business on the day immediately preceding the Closing Date. The Closing Balance Sheet will present fairly, in all material respects, the financial condition of the Business as of such date, and will be prepared from the books and records of the Seller on a basis consistent with the method by which the Reference Statement was prepared. The Closing Balance Sheet will contain those line items set forth on Schedule 2.08(b) .

          “ Closing Net Asset Value ” means that dollar amount as is equal to the dollar amount of the Purchased Assets (and excluding Excluded Assets), as reflected on the Closing Balance Sheet, less the dollar amount of the Assumed Liabilities (and excluding Excluded Liabilities), as reflected on the Closing Balance Sheet.

          “ Reference Net Asset Value ” means $0.

          (c) Preparation of Closing Balance Sheet . As promptly as practicable after the Closing Date, but not later than seventy-one (71) days after the Closing Date, Seller will provide to the Buyer the Closing Balance Sheet and the calculation of Closing Net Asset Value.

          (d) Disagreement by Buyer . If Buyer disagrees with Seller’s calculation of Closing Net Asset Value, Buyer may, within thirty (30) days after receipt of the documents referred to in Section 2.08(c) , deliver a notice to Seller disagreeing with such calculation, a reasonably detailed explanation of the reasons for such disagreement and setting forth Buyer’s calculation of the Closing Balance Sheet and Closing Net Asset Value. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees and Buyer shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet.

          (e) Dispute Resolution . If a notice of disagreement shall have been delivered by Buyer pursuant to Section 2.08(d) , the Parties shall, during the thirty (30) days following said delivery, use their best efforts to reach agreement on the disputed items or amounts in order to determine the Closing Net Asset Value. If, during such period, the Parties are unable to reach agreement, they shall promptly thereafter cause the Accounting Referee promptly to review this

Agreement and the disputed items or amounts for the purpose of calculating Closing Net Asset Value. In making such calculation, the Accounting Referee shall consider only those items or amounts in the Closing Balance Sheet as to which Buyer has disagreed. The Accounting Referee shall deliver to Seller and Buyer, as promptly as practicable, a report setting forth such calculation. Such report shall be final and binding upon the Parties hereto. The cost of such review and report shall be borne (i) by Buyer if Seller’s calculation of Closing Net Asset Value is closer to the final calculation of Closing Net Asset Value determined by the Accounting Referee than Buyer’s calculation thereof, (ii) by Seller if the reverse is true and (iii) otherwise equally by Buyer and Seller.

          (f) Cooperation . The Parties hereto agree that they will, cooperate and assist in the preparation of the Closing Balance Sheet and the calculation of Closing Net Asset Value.

          (g) Time of Payment . Any payment pursuant to this Section 2.08 shall be made at a mutually convenient time and place (i) within thirty (30) days after delivery by Seller of the documents referred to in Section 2.08(c) if no notice of disagreement with respect to Closing Net Asset Value is delivered by Buyer within the thirty (30) day period described above in Section 2.08(d) or (ii) if a notice of disagreement with respect to Closing Net Asset Value is so delivered then within ten (10) days after the earlier of (A) agreement between the parties pursuant to Section 2.08(e) with respect to Closing Net Asset Value and (B) delivery of the calculation of Closing Net Asset Value by the Accounting Referee pursuant to Section 2.08(e) .

          (h) Method of Payment . Any payments pursuant to this Section 2.08 shall be made by delivery by Seller, or Buyer, as the case may be, of a certified or official bank check payable in funds to Buyer or Seller, as the case may be, or by causing such payments to be credited to such account of Seller or Buyer as may be designated by Seller or Buyer. The amount of any payment to be made pursuant to this Section 2.08 shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the rate publicly announced from time to time by Citibank N.A. as its base or prime rate in New York City in effect from time to time during the period from the Closing Date to the date of payment. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days for which due.

2.09. British Telecom Adjustment.

          (a) Determination of British Telecom Adjustment .

               (i) Within one hundred twenty (120) days after the first anniversary of the Closing Date, the Buyer will deliver to Seller a certificate (the “ BT Certificate ”) executed by the Buyer setting forth the First Year BT Contract Revenue.

               (ii) If the Seller objects in good faith to any one or more matters set forth in the BT Certificate, Seller shall deliver written notice (the “ Disputed Items Notice ”) to the Buyer within thirty (30) days after receipt by the Seller of the BT Certificate, stating that the Seller objects to any items in the BT Certificate, specifying in reasonable detail the basis for such objection and setting forth the Seller’s proposed modification to the BT Certificate. Thereafter,

the Buyer and Seller will attempt to resolve and finally determine and agree upon the First Year BT Contract Revenue as promptly as practicable.

               (iii) If the Buyer and the Seller are unable to agree upon the First Year BT Contract Revenue within thirty (30) days after delivery of the Disputed Items Notice, they shall refer the matter to the Accounting Referee to resolve the items set forth in the Disputed Items Notice (the “ Disputed Items ”). The Accounting Referee will (i) resolve the Disputed Items and (ii) make a determination of the First Year BT Contract Revenue using the calculations set forth in the BT Certificate, as modified only by the Accounting Referee’s resolution of the Disputed Items. The determination of the Accounting Referee will be made within sixty (60) days after being selected and will be final and binding on the Parties. The fees, costs and expenses of the Accounting Referee will be borne by the Party whose positions generally did not prevail in such determination, as determined by such Accounting Referee, or if the Accounting Referee determines that neither party could be fairly found to be the prevailing party, then such fees, costs and expenses will be borne 50% by the Buyer and 50% by the Seller.

               (iv) If the Seller does not deliver the Disputed Item Notice to the Buyer within thirty (30) days after receipt by the Seller of the BT Certificate, the First Year BT Contract Revenue specified in the BT Certificate will be conclusively presumed to be true and correct in all respects and will be final and binding upon the parties.

               (v) At such time as the First Year BT Contract Revenue is finally determined, the Seller shall pay the Buyer an aggregate amount equal to the excess, if any, of the Target First Year BT Contract Revenue over the First Year BT Contract Revenue.

          (b) Renewal of BT Contract . In the event that Seller has not finalized a renewal of the BT Contract on or prior to the Closing Date, Buyer shall use its reasonable best efforts, consistent with Seller’s past practices, to negotiate and execute an amendment, modification, supplement, renewal, extension, restatement or replacement (a “ BT Amendment ”) of the BT Contract on terms that provide for the receipt of BT Revenues in the Measurement Period at least equal to the Target First Year BT Contract Revenue; provided, however, that in the event that Buyer uses such reasonable best efforts, and British Telecommunications plc or one or more of its Affiliates declines to execute a BT Amendment, Buyer shall be entitled to receive the amount provided in Section 2.09(a)(v) in accordance with the terms hereof; and provided , further , that in the event Buyer fails to use such reasonable best efforts, Seller shall have no obligation to make any payment to Buyer under Section 2.09(a)(v) .

          (c) Operation of Buyer under BT Contract . Following the Closing, Buyer shall use its reasonable best efforts, consistent with Seller’s past practices, to (a) maintain the BT Contract in full force and effect and (b) provide services under the BT Contract in a manner that (i) is consistent with the requirements of the BT Contract and (ii) is designed to maximize the receipt by Buyer of revenues under the BT Contract during the BT Measurement Period. Buyer shall not breach or fail to perform any of its material obligations under the BT Contract.

          (d) Information . Buyer will furnish monthly and quarterly reports, within twenty (20) days after each month and three-month period during the Measurement Period, containing the calculation of BT Revenues for each such monthly and three-month period.

Buyer will also furnish other information relating to the Buyer’s relationship with British Telecom and Buyer’s operations under the BT Contract, as Seller may from time to time reasonably request.

          (e) Inspection . Buyer will permit the Seller and its advisors, on reasonable notice and during normal business hours, and in a manner not unduly disruptive to the operations of the Buyer, to visit and inspect any of the properties of the Buyer, to examine its books, records and other materials relating thereto (and to make copies thereof and take extracts therefrom) and to discuss its affairs, finances and accounts with Buyer’s personnel, in each case only as the same pertains to the BT Contract.

          (f) Breach . If Buyer breaches any of its material obligations under the BT Contract during the first year thereof, the Target First Year BT Contract Revenue shall be deemed to be reduced by the amount of recognizable revenue Buyer does not receive as a result of such breach.

          (g) Exclusive Remedy . This Section 2.09 shall be the exclusive remedy of Buyer for monetary damages relating to any failure by Buyer or Seller to enter into a BT Amendment or any claim relating to a loss of revenue under the BT Contract or the failure of Buyer to realize revenue following the Closing under the BT Contract.

      2.10. Allocation of Purchase Price .

          (a) Schedule 2.10 sets forth the methodology for allocating the purchase price among the Purchased Assets and the Assumed Liabilities (for purposes of this Section 2.10 , the “ Purchase Price ”). The Parties shall mutually agree upon an allocation of the Purchase Price within thirty (30) days after Closing to reflect the agreed value of the Purchased Assets and the book value of the Assumed Liabilities as of the Closing Date (the “ Allocation Statement ”).

          (b) Seller and Buyer agree to report the purchase of the Purchased Assets and the assumption of the book value of the Assumed Liabilities in a manner entirely consistent with the Allocation Statement, and agree to act in accordance with such Allocation Statement in the preparation of financial statements and filing of all tax returns (including filing Form 8594 with its Federal income tax return for the taxable year that includes the date of the Closing) and in the course of any tax audit, tax review or tax litigation relating thereto.

          (c) No later than (10) days prior to the filing of their respective Forms 8594 relating to this transaction, each Party shall deliver to the other Party a copy of its Form 8594.

      2.11. Accounts Receivable . Seller shall promptly transfer and deliver to Buyer any cash or other property which it may receive on or after the Closing Date in respect of the Accounts Receivable, from customers of the Business, prior to applying any such cash or other property to accounts receivable of any division or business of Seller.

      2.12. Transfer of IP Assets . Seller shall deliver the tangible, including electronic, embodiments of all elements of intellectual property rights, materials and Technology that are Seller Intellectual Property (such tangible, including electronic, embodiments collectively, the “ Intellectual Property Assets ”) through the transfer of facilities, personal property contained

therein, and Transferred Employees prior to or at Closing. Without limiting the generality of the foregoing, with respect to any Intellectual Property Assets that, through inadvertence or for any other reason, are not delivered via the transfer of facilities, personal property contained therein, and Transferred Employees, Seller shall promptly deliver, at no charge, such assets following the Closing to those locations reasonably designated by Buyer. If Seller discovers Intellectual Property Assets that were required to be, but were not, delivered to Buyer prior to or at Closing, Seller shall promptly inform Buyer of any such error and promptly deliver, at no charge, all such Intellectual Property Assets to those locations reasonably designated by Buyer. If Buyer discovers that it did not receive any of the Intellectual Property Assets that were required to be delivered, Seller shall promptly deliver, at no charge, such Intellectual Property Assets to the locations reasonably designated by Buyer upon receiving written notice thereof from Buyer.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

     Except as disclosed by Seller to Buyer in the disclosure schedule attached hereto as Exhibit K (the “ Disclosure Schedule ”), (it being understood that the disclosures in any section of the Disclosure Schedule shall, to the extent reasonably apparent from the context, qualify all other sections in this Agreement), Seller hereby represents and warrants to Buyer that each of the statements contained in this Article III is true and correct as of the date hereof and will be true and correct as of the Closing Date. Except for the representations and warranties set forth in this Article III , Seller makes no other representation or warranty (either express or implied) herein or with respect to the transactions contemplated hereby.

      3.01. Corporate Existence and Power; Qualification . Seller is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to own, lease and operate the properties used in, and to carry on the operation of, the Business as now conducted. Seller is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of the Business makes such qualification or licensing necessary except where a failure so to qualify or be licensed is not reasonably likely to have a Material Adverse Effect.

      3.02. Corporate Authorization . The execution, delivery and performance by Seller of this Agreement and the Ancillary Documents, and the consummation by Seller of the transactions contemplated hereby and thereby are within Seller’s corporate powers and have been duly authorized by all necessary corporate action on the part of Seller, and no other corporate proceedings are necessary to authorize such execution, delivery and performance. This Agreement and the Ancillary Documents have been or will be duly executed and delivered by Seller and each such agreement constitutes or will constitute a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors’ rights generally and to the effect of general principles of equity which may limit the availability of remedies (whether in a proceeding at law or in equity).

      3.03. Governmental Authorization . The execution, delivery and performance by Seller of this Agreement and each of the Ancillary Documents to which Seller is or will be party require no action, consent, approval, waiver, authorization, permit by or in respect of, or filing with, any Governmental Authority other than those set forth on Schedule 3.03 .

      3.04. Non-Contravention . Except as set forth in Schedule 3.04 , the execution, delivery and performance by Seller of this Agreement and the Ancillary Documents do not and will not (i) contravene or conflict with the corporate charter or bylaws of Seller, or any resolutions adopted by the board of directors or stockholders of Seller; (ii) contravene or conflict with or constitute a violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon or applicable to ownership of the Purchased Assets or the operation of the Business, except in those cases where such contravention or conflict is not reasonably likely to have a Material Adverse Effect; (iii) assuming the receipt of the Consents set forth on Schedule 3.07 , constitute a default under or give rise to any right of termination, amendment, cancellation or acceleration of any right or obligation of Seller relating to the Purchased Assets or Assumed Liabilities or to a loss of any benefit relating to the Purchased Assets or Assumed Liabilities to which Seller is entitled under any provision of any agreement, contract or other instrument or by which any of the Purchased Assets is or may be bound; or (iv) result in the creation or imposition of any Lien on any Purchased Asset other than Permitted Liens.

      3.05. Financial Statements . Seller has delivered to Buyer its unaudited (a) statement of net assets for the Business as at December 31, 2006, and a statement of operations for the Business for the twelve (12) month period ended December 31, 2006, and (b) a statement of net assets for the Business as at April 1, 2007 (the “ Reference Statement ,” which is attached hereto as Schedule 3.05 ) (the Reference Statement and financial statements described in clause (a) are collectively referred to herein as the “ Financials ”). The Financials: (i) were prepared in accordance with the books, records and accounts of Seller and on the same basis, and consistent with the principles utilized, by Seller in the preparation of such accounts for inclusion in Seller’s consolidated financial statements for such periods; and (ii) present fairly in all material respects the financial condition and results of operations for the Business as of and for the periods referred to in such Financials. Seller makes no representations or warranties with respect to any projections or future financial results of the Business.

      3.06. Absence of Certain Changes or Events . Except as set forth in Schedule 3.06 , since the date of the Reference Statement:

          (a) the Purchased Assets have not been mortgaged, pledged or subjected to any Lien other than Permitted Liens;

          (b) the Purchased Assets have not been sold, leased or transferred other than sales of Inventory and disposal of obsolete, damaged or defective Inventory or other Purchased Assets, in each case in the ordinary course of business;

          (c) there has not been any payment by Seller of any bonuses, or increase by Seller of any salaries, or other compensation to any employee, contractor or consultant involved in the Business other than in the ordinary course of business, consistent with past practice, or

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entry into any employment, severance, or similar contract or agreement with any employee involved in the Business;

          (d) the Business has been operated in the ordinary course of business and there has not been a material change in the relationship of the Business with its customers and suppliers (including its marketing, selling and pricing practices and policies);

          (e) there has not been any transaction, contract, commitment, or obligation by Seller rela