ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

Between

ZILA, INC.,

ZILA PHARMACEUTICALS, INC.,

3M COMPANY

and

3M INNOVATIVE PROPERTIES COMPANY

Dated as of May 31, 2007

TABLE OF CONTENTS

				Page
		ARTICLE 1
		DEFINITIONS
1.01		Certain Defined Terms			1
1.02		Other Definitions			6
1.03		Interpretation and Rules of Construction			6
		ARTICLE 2
		PURCHASE AND SALE
2.01		Purchase and Sale of Assets			7
2.02		Assumption and Exclusion of Liabilities			9
2.03		Purchase Price; Allocation of Purchase Price			10
2.04		Closing			11
2.05		Closing Deliveries by the Sellers			11
2.06		Closing Deliveries by the Purchaser			11
2.07		Third Party Consents			12
		ARTICLE 3
		REPRESENTATIONS AND WARRANTIES OF THE SELLERS
3.01		Organization, Authority and Qualification of the Sellers			12
3.02		No Conflict			13
3.03		Governmental Consents and Approvals			13
3.04		Financial Information			13
3.05		Absence of Undisclosed Material Liabilities			14
3.06		Conduct in the Ordinary Course			14
3.07		Litigation			14
3.08		Compliance with Laws			14
3.09		Environmental Matters			14
3.10		Intellectual Property			15
3.11		Purchased Assets			16
3.12		Taxes			16
3.13		Material Contracts			16
3.14		Brokers			17
3.15		Disclaimer of the Sellers			17

TABLE OF CONTENTS
(continued)

				Page
		ARTICLE 4
		REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.01		Organization and Authority of the Purchaser			18
4.02		No Conflict			18
4.03		Governmental Consents and Approvals			19
4.04		Financing			19
4.05		Litigation			19
4.06		Brokers			19
4.07		Independent Investigation; Sellers’ Representations			19
		ARTICLE 5
		ADDITIONAL AGREEMENTS
5.01		Confidentiality			20
5.02		Retained Names and Marks			20
5.03		Bulk Transfer Laws			20
5.04		Further Action			20
5.05		Tax Cooperation and Exchange of Information			20
5.06		Conveyance Taxes			21
5.07		Proration of Taxes and Certain Charges			21
5.08		Covenant Not to Compete			22
		ARTICLE 6
		CONDITIONS TO CLOSING
6.01		Conditions to Obligations of the Sellers			22
6.02		Conditions to Obligations of the Purchaser			23
		ARTICLE 7
		INDEMNIFICATION
7.01		Survival of Representations and Warranties			23
7.02		Indemnification by the Sellers			24
7.03		Indemnification by the Purchaser			24
7.04		Limits on Indemnification			24
7.05		Notice of Loss; Third Party Claims			25
7.06		Tax Treatment			26
7.07		Remedies			26

TABLE OF CONTENTS
(continued)

				Page
		ARTICLE 8
		TERMINATION, AMENDMENT AND WAIVER
8.01		Termination			26
8.02		Effect of Termination			26
		ARTICLE 9
		GENERAL PROVISIONS
9.01		Expenses			27
9.02		Notices			27
9.03		Public Announcements			28
9.04		Severability			28
9.05		Entire Agreement			28
9.06		Assignment			28
9.07		Amendment			28
9.08		Waiver			28
9.09		No Third Party Beneficiaries			29
9.10		Governing Law			29
9.11		Waiver of Jury Trial			29
9.12		Counterparts			29

TABLE OF CONTENTS
(continued)

EXHIBITS
					Page
1.01	(a)			Form of Bill of Sale, Assignment and Assumption Agreement
1.01	(b)			Sellers’ Knowledge
1.01	(c)			Inventory
2.03	(b)			Allocation of Purchase Price

          ASSET PURCHASE AGREEMENT (this “ Agreement ”), dated as of May 31, 2007, between Zila, Inc., a Delaware corporation (“ Seller Shareholder” ), Zila Pharmaceuticals, Inc., a Nevada corporation (the “ Seller Subsidiary ”, together with Seller Shareholder, the “ Sellers ”), 3M Company, a Delaware corporation, and 3M Innovative Properties Company, a Delaware corporation, (together with 3M Company, the “ Purchaser ”).

          WHEREAS, the Seller Subsidiary is engaged in the business of developing, marketing, selling and licensing prescription periodontal rinse products under its proprietary Peridex ^® brand and other applications and developments related to chlorhexidine gluconate (the “ Business ”);

          WHEREAS, the Seller Subsidiary wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller Subsidiary, the Business, and in connection therewith the Purchaser is willing to assume from the Seller Subsidiary all of the Assumed Liabilities (as hereinafter defined), all upon the terms and subject to the conditions set forth herein; and

          WHEREAS, the Board of Directors of Seller Shareholder has determined that the sale of the Business, pursuant to the terms and conditions hereof, is in the best interests of the Seller Shareholder and declared its advisability and approved the sale of the Business and the other transactions contemplated thereby.

          NOW, THEREFORE, in consideration of the promises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, the Sellers and the Purchaser hereby agree as follows:

ARTICLE 1

DEFINITIONS

     SECTION 1.01 Certain Defined Terms . For purposes of this Agreement:

          “ ANB Payable ” means the monies to be owed to Xttrium relating to purchase order #ANB-445, dated May 9, 2007, in connection with a corresponding order from Associated National Brokerage Inc., dated June 9, 2007.

          “ ANB Receivable ” means the account receivable to be due from Associated National Brokerage, Inc. related to the ANB Payable.

          “ Action ” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

          “ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

          “ Bill of Sale, Assignment and Assumption Agreement ” means the Bill of Sale, Assignment and Assumption Agreement to be executed by the Sellers and the Purchaser at the Closing, substantially in the form of Exhibit 1.01(a).

          “ Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the city of Phoenix, Arizona.

          “ Code ” means the Internal Revenue Code of 1986, as amended through the date hereof.

          “ control ” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise.

          “ Conveyance Taxes ” means all sales, use, value added, transfer, stamp, stock transfer, real property transfer or gains and similar Taxes.

          “ Disclosure Schedule ” means the Disclosure Schedule attached hereto, dated as of the date hereof delivered by the Sellers to the Purchaser in connection with this Agreement. Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosures contained in any section of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other section of the Disclosure Schedule as though fully set forth in such other section for which the applicability of such information and disclosure is reasonably apparent on the face of such information or disclosure.

          “ Encumbrance ” means any security interest, pledge, hypothecation, mortgage, lien or encumbrance, other than any licenses of Intellectual Property.

          “ Environmental Law ” means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, consent decree or judgment, in each case in effect as of the date hereof, relating to pollution or protection of the environment.

          “ Environmental Liability ” means any claim, demand, order, suit, obligation, liability, cost (including the cost of any investigation, testing, compliance or remedial action), consequential damages, loss or expense (including reasonable and incurred attorney’s and consultant’s fees and expenses) arising out of, relating to or resulting from any Environmental Law or environmental, health or safety matter or condition, including natural resources, and related in any way to the Purchased Assets or to this Agreement or its subject matter.

          “ Environmental Permits ” means any permit, approval, identification number, license and other authorization required under or issued pursuant to any applicable Environmental Law.

          “ Excluded Taxes ” means all Taxes relating to the Purchased Assets or the Business for any Pre-Closing Period. For purposes of this Agreement, in the case of any Straddle Period, (i) Property Taxes relating to the Purchased Assets allocable to the Pre-Closing Period shall be equal to the amount of such Property Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that fall within the Pre-Closing Period and the denominator of which is the number of days in the entire Straddle Period, and (ii) Taxes (other than Property Taxes) relating to the Purchased Assets for the Pre-Closing Period shall be computed as if such taxable period ended as of the close of business on the date of the Closing.

          “ GAAP ” means United States generally accepted accounting principles and practices in effect from time to time applied consistently throughout the periods involved.

          “ Governmental Authority ” means any federal, national, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

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

          “ Hazardous Material ” means (a) any petroleum, petroleum products, by products or breakdown products, radioactive materials, asbestos containing materials or polychlorinated biphenyls or (b) any chemical, material or substance defined or regulated as toxic or hazardous or as a pollutant, contaminant or waste under any Environmental Law.

          “ Indemnified Party ” means a Purchaser Indemnified Party or a Seller Indemnified Party, as the case may be.

          “ Indemnifying Party ” means the Sellers pursuant to Section 7.02 and the Purchaser pursuant to Section 7.03, as the case may be.

          “ Intellectual Property ” means (a) patents and patent applications, (b) trademarks, service marks, trade names, trade dress and domain names, together with the goodwill associated exclusively therewith, (c) copyrights, including copyrights in computer software, (d) confidential and proprietary information, including trade secrets and know how, and (e) registrations and applications for registration of the foregoing.

          “ Inventories ” means all inventory, merchandise, finished goods, work in progress and raw materials solely related to the Business and maintained, held or stored by or for the Sellers, as of the Closing, and any prepaid deposits for any of the same, each as set forth on Exhibit 1.01(c).

          “ IRS ” means the Internal Revenue Service of the United States.

          “ Law ” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

          “ Liabilities ” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking.

          “ Material Adverse Effect ” means any circumstance, change in or effect on the Business that is materially adverse to the results of operations or the financial condition of the Business, taken as a whole.

          “ Permitted Encumbrances” means statutory liens for current Taxes not yet due or delinquent (or which may be paid without interest or penalties) or the validity or amount of which is being contested in good faith by appropriate proceedings.

          “ Person ” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

          “ Pre-Closing Period ” means any taxable period (or portion thereof) ending on or prior to the date of the Closing.

          “ Product Liabilities ” means, with respect to any products designed, manufactured, tested, marketed, distributed or sold in connection with the Business, all Liabilities resulting from actual or alleged harm, injury, damage or death to persons, property or business, irrespective of the legal theory asserted.

          “ Property Taxes ” means real and personal ad valorem property Taxes and any other Taxes imposed on a periodic basis and measured by the level of any item.

          “ Proprietary Information ” means all information about the Sellers furnished by the Sellers to Purchaser in connection with its due diligence review of the Business, whether oral or written, and regardless of the manner or form in which it is furnished, including, but not limited to all notes, analyses, compilations, studies, forecasts, interpretations or other documents regarding the Sellers. Proprietary Information does not include, however, information which (a) is or becomes generally available to the public other than as a result of a disclosure by Purchaser or its representatives in violation of this Agreement or other obligation of confidentiality, (b) was available to Purchaser on a nonconfidential basis prior to its disclosure by Sellers, or (c) becomes available to Purchaser on a nonconfidential basis from a person (other than Sellers) who is not prohibited from disclosing such information to Purchaser by a legal, contractual or fiduciary obligation to Sellers.

          “ Purchase Price Bank Account ” means a bank account in the United States to be designated by the Sellers in a written notice to the Purchaser at least five Business Days before the Closing.

          “ Receivables ” means any and all accounts receivable, notes and other amounts receivable from third parties, including customers, arising primarily from the conduct of the Business before the Closing, whether or not in the ordinary course, together with any unpaid financing charges accrued thereon.

          “ Regulations ” means the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes.

          “ Regulatory Filings ” means (i) all New Drug Applications, as defined in the Food and Drug Administration Act, which are required to be filed with the Food and Drug Administration before beginning clinical testing of a product of the Business, or any successor application or procedure, or the equivalent application filed with the relevant Governmental Authority in a country other than the United States and all study data, materials and information supporting or pertaining to the applications and (ii) all correspondence between Sellers and the Governmental Authorities primarily relating to the Business.

          “ Sellers’ Knowledge ,” “ Knowledge of the Sellers ” or similar terms used in this Agreement mean the actual (but not constructive or imputed) knowledge of the Persons listed in Exhibit 1.01(b) as of the date of this Agreement (or, with respect to a certificate delivered pursuant to this Agreement, as of the date of delivery of such certificate) after reasonable investigation of such listed Persons.

          “ Straddle Period ” means any taxable period beginning on or prior to and ending after the date of the Closing.

          “ Tax ” or “ Taxes ” means any and all taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority.

          “ Tax Returns ” means any and all returns, reports and forms (including, elections, declarations, amendments, schedules, information returns or attachments thereto) required to be filed with a Governmental Authority with respect to Taxes.

          “ Transferred Intellectual Property ” means all Intellectual Property owned by the Sellers used exclusively in the Business.

          “ Transferred IP Agreements ” means all (i) licenses of Intellectual Property to the Sellers, and (ii) licenses of Intellectual Property by the Sellers to third parties, in each case, that are solely related to the Business or that are material to the operation of the Business as currently conducted.

     SECTION 1.02 Other Definitions . The following terms have the meanings set forth in the Sections set forth below:

Definition		Location
“Agreement”		Preamble
“Allocation”		2.03(b)
“Assumed Liabilities”		2.02(a)
“Business”		Recitals
“Cap”		7.04(b)
“Closing”		2.04
“Excluded Assets”		2.01(b)
“Excluded Liabilities”		2.02(b)
“Excluded Claims”		7.04(b)
“Financial Statements”		3.04(a)
“Fundamental Reps”		7.01
“Independent Accounting Firm”		2.07(b)
“Interim Financial Statements”		3.04(a)
“Loss”		7.02
“Material Contracts”		3.15
“Mini-Threshold”		7.04(b)
“Purchaser”		Preamble
“Purchase Price”		2.03(a)
“Purchased Assets”		2.01(a)
“Purchaser Indemnified Party”		8.02
“Retained Names and Marks”		5.05
“Sellers”		Preamble
“Seller Indemnified Party”		7.03
“Seller Shareholder”		Preamble
“Seller Subsidiary”		Preamble
“Third Party Claims”		7.05(b)
“Threshold”		7.04(b)

     SECTION 1.03 Interpretation and Rules of Construction . In this Agreement, except to the extent otherwise provided or that the context otherwise requires:

               (a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

               (b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

               (c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;

               (d) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

               (e) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

               (f) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

               (g) references to a Person are also to its successors and permitted assigns; and

               (h) the use of “or” is not intended to be exclusive unless expressly indicated otherwise.

ARTICLE 2

PURCHASE AND SALE

     SECTION 2.01 Purchase and Sale of Assets . (a) Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller Subsidiary shall sell, assign, transfer, convey and deliver, or cause to be sold, assigned, transferred, conveyed and delivered, to the Purchaser, and the Purchaser shall purchase from the Seller Subsidiary, all of the Seller Subsidiary’s right, title and interest in and to the following assets (the “ Purchased Assets ”):

                    (i) the Inventories;

                    (ii) the books of account, general, financial and tax records, invoices, shipping records, supplier lists, correspondence and other documents, records and files and any rights thereto owned, primarily associated with or primarily employed by the Seller Subsidiary in the conduct of the Business to the extent separable from those of the Seller Shareholder and Seller Subsidiary;

                    (iii) the Transferred Intellectual Property and the Transferred IP Agreements (to the extent transferable);

                    (iv) the sales, marketing and promotional literature and materials, customer lists and other sales-related materials of the Seller Subsidiary solely related to the Business;

                    (v) the rights of the Seller Subsidiary under any contracts (whether written or oral) associated with or employed by the Sellers in the conduct of the Business (to the extent such contracts are transferable), other than Transferred IP Agreements;

                    (vi) the municipal, state and federal franchises, permits, licenses, approvals, registrations, agreements, waivers and authorizations to the extent held or

used by the Seller Shareholder or the Seller Subsidiary solely in connection with, the Business, to the extent transferable;

                    (vii) claims , causes of action, refunds, rights of recovery, rights of setoff and rights of recoupment of any kind of Sellers against third parties relating to the Purchased Assets or any contract assumed by the Purchaser, known or unknown, contingent or otherwise, in each case, other than to the extent relating to a matter that is an Excluded Liability;

                    (viii) all rights under express or implied warranties relating to the Purchased Assets;

                    (ix) all information, files, records, data, plans, contracts and recorded knowledge, including customer and supplier lists primarily related to the conduct of the Business to the extent separable from those of the Seller Shareholder and Seller Subsidiary;

                    (x) the Regulatory Filings; and

                    (xi) the ANB Receivable.

               (b) Notwithstanding anything in Section 2.01(a) to the contrary, the Sellers shall not sell, convey, assign, transfer or deliver, nor cause to be sold, conveyed, assigned, transferred or delivered, to the Purchaser, and the Purchaser shall not purchase, and the Purchased Assets shall not include, the Sellers’ right title and interest to any assets of the Sellers not expressly included in the Purchased Assets (the “ Excluded Assets ”), including:

                    (i) the Purchase Price Bank Account;

                    (ii) all cash and cash equivalents, securities, and negotiable instruments of the Selling Subsidiary on hand, in lock boxes, in financial institutions or elsewhere, including all cash residing in any collateral cash account securing any obligation or contingent obligation of the Seller Subsidiary or any Affiliate;

                    (iii) any rights to Tax refunds, credits or similar benefits attributable to Excluded Taxes;

                    (iv) the company seal, minute books, charter documents, stock or equity record books and such other books and records as pertain to the organization, existence or capitalization of the Seller Subsidiary, as well as any other records or materials relating to the Seller Subsidiary generally and not involving or related to the Purchased Assets or the operations of the Business;

                    (v) the Retained Names and Marks;

                    (vi) all rights of the Sellers under this Agreement and the Bill of Sale, Assignment and Assumption Agreement;

                    (vii) Tax Returns of the Sellers, other than those relating solely to the Purchased Assets or the Business;

                    (viii) all current and prior insurance policies of the Sellers and all rights of any nature with respect thereto, including all insurance recoveries thereunder and rights to assert claims with respect to any such insurance recoveries; and

                    (ix) the Receivables (other than the ANB Receivable).

     SECTION 2.02 Assumption and Exclusion of Liabilities . (a) Upon the terms and subject to the conditions set forth in this Agreement, the Purchaser shall, by executing and delivering, at the Closing, the Bill of Sale, Assignment and Assumption Agreement, assume, and agree to pay, perform and discharge when due, any and all of the Liabilities of the Sellers relating to the Business or the Purchased Assets and arising exclusively from the operation of the Business after the date of the Closing, other than the Excluded Liabilities set forth in Section 2.02(b) below (the “ Assumed Liabilities ”):

                    (i) all Liabilities arising out of or resulting from the conduct of the Business by the Purchaser on or after the date of the Closing, including under the contracts set forth on Section 3.13(a) of the Disclosure Schedule hereof;

                    (ii) all Liabilities for product warranty service claims (to the extent consistent with historical levels) relating to products of the Business and all Product Liabilities related to the operation of the Business on or after the date of Closing;

                    (iii) all Environmental Liabilities related exclusively to the operation of the Business on or after the date of the Closing;

                    (iv) all Taxes relating to the Purchased Assets or the Business other than Excluded Taxes to the extent accrued and clearly stated on the Financial Statements and Interim Financial Statements relating to the Business; and

                    (v) the ANB Payable.

               (b) The Sellers shall retain, and shall be responsible for paying, performing and discharging when due, and the Purchaser shall not assume or have any responsibility for, the following Liabilities (the “ Excluded Liabilities ”):

                    (i) all Excluded Taxes;

                    (ii) all Liabilities relating to or arising out of the Excluded Assets;

                    (iii) the Seller’s obligations under this Agreement;

                    (iv) all Product Liabilities related to the operation of the Business before the date of the Closing;

                    (v) all Liabilities (other than the Assumed Liabilities set forth in Section 2.02(a)(iv) and (v)) arising from the actions of the Sellers or events related to the Business occurring prior to the date of Closing;

                    (vi) any Liability arising prior to the date of the Closing relating to any employee(s), former employee(s), agents or independent contractors of the Sellers, whether or not employed by Purchaser after the date of the Closing, or under any compensation or benefit arrangement with respect thereto, including but not limited to liabilities to third parties with respect to any such benefit arrangement. For purposes of this subparagraph (vi), the term “employees” shall include without limitation former employees as well as the family members of current and former employees;

                    (vii) any Environmental Liabilities related exclusively to the operation of the Business before the date of Closing;

                    (viii) any Liability of the Sellers arising or incurred in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby and fees and expenses of the Sellers’ counsel, accountants and other experts utilized in connection with this Agreement and the transactions related thereto;

                    (ix) all Liabilities relating to claims for adjustment by a Governmental Authority or other commercial entity made after Closing relating to rebates, fees, credits, refunds, or pricing adjustments associated with products of the Business sold prior to Closing, including Liabilities arising after Closing to the extent based on prices allegedly improperly extended to the U.S. federal government or other commercial entity by Sellers prior to Closing; or

                    (x) all Liabilities arising out of user or other similar fees payable to the Food and Drug Administration or other Governmental Authority to the extent that such fees are payable on account of the operation of the Business prior to the Closing Date.

     SECTION 2.03 Purchase Price; Allocation of Purchase Price . (a) The purchase price for the Purchased Assets shall be $9,500,000 (nine million five hundred thousand dollars) (the “ Purchase Price ”).

               (b) The sum of the Purchase Price and the Assumed Liabilities shall be allocated among the Purchased Assets as of the Closing in accordance with Exhibit 2.03(b) (the “ Allocation ”). Any subsequent adjustments to the sum of the Purchase Price and Assumed Liabilities shall be reflected in the Allocation in a manner consistent with Section 1060 of the Code and the Regulations thereunder. For all Tax purposes, the Purchaser and the Sellers agree that the transactions contemplated by this Agreement shall be reported in a manner consistent with the terms of this Agreement, including the Allocation, and that neither of them will take any position inconsistent therewith in any Tax Return, in any refund claim, in any litigation, or otherwise. Each of the Sellers and the Purchaser agrees to cooperate with the other in preparing IRS Form 8594, and to furnish the other with a copy of such form prepared in draft form within a reasonable period before its filing due date.

     SECTION 2.04 Closing . Subject to the terms and conditions of this Agreement, the sale and purchase of the Purchased Assets and the assumption of the Assumed Liabilities contemplated by this Agreement shall take place at a closing (the “ Closing ”) to be held at the offices of Snell & Wilmer L.L.P., One Arizona Center, Phoenix, AZ 85004 at 12:00 P.M.

Phoenix, Arizona time on the date hereof or at such other place or at such other time or on such other date as the Sellers and the Purchaser may mutually agree upon in writing.

     SECTION 2.05 Closing Deliveries by the Sellers . At the Closing, the Sellers shall deliver or cause to be delivered to the Purchaser:

               (a) the Bill of Sale, Assignment and Assumption Agreement and such other instruments, in form and substance reasonably satisfactory to the Purchaser, as may be reasonably requested by the Purchaser to effect the transfer of the Purchased Assets to the Purchaser or evidence such transfer on the public records, in each case duly executed by the Sellers, as appropriate;

               (b) a receipt for the Purchase Price;

               (c) a true and complete copy, certified by the Secretary or an Assistant Secretary of the Sellers, of the resolutions duly and validly adopted by the Board of Directors of each of the Sellers evidencing its authorization of the execution and delivery of this Agreement and the Bill of Sale, Assignment and Assumption Agreement s and the consummation of the transactions contemplated hereby and thereby; and

               (d) a certificate of a duly authorized officers certifying (i) that the officers signing this Agreement and any ancillary agreement related thereto are duly elected officers of the Sellers, (ii) the genuineness of such executing officer’s signature, and (iii) that such officer is duly authorized to sign this Agreement and any ancillary agreement related thereto on behalf of the Sellers.

     SECTION 2.06 Closing Deliveries by the Purchaser . At the Closing, the Purchaser shall deliver to the Sellers:

               (a) the Purchase Price by wire transfer in immediately available funds to the Purchase Price Bank Account;

               (b) executed counterparts of the Bill of Sale, Assignment and Assumption Agreement, and such other instruments, in form and substance satisfactory to the Seller Shareholder, as may be requested by the Seller Shareholder to effect the assumption by the Purchaser of the Assumed Liabilities and to evidence such assumption on the public records; and

               (c) a certificate by the Secretary or an Assistant Secretary of the Purchaser evidencing the Purchaser’s authorization of the execution and delivery of this Agreement and the Bill of Sale, Assignment and Assumption Agreement and the consummation of the transactions contemplated hereby and thereby; and

               (d) a certificate of a duly authorized officers certifying (i) that the officers signing this Agreement and any ancillary agreement related thereto are duly elected officers of the Purchaser, (ii) the genuineness of such executing officer’s signature, and (iii) that such officer is duly authorized to sign this Agreement and any ancillary agreement related thereto on behalf of the Purchaser.

     SECTION 2.07 Third Party Consents . To the extent that the Sellers’ rights under any agreement, contract, commitment, lease, authorization or other Purchased Asset to be assigned to Purchaser hereunder may not be assigned without the consent of another person which has not been obtained prior to or as of Closing, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Sellers, at their expense, agree to use their commercially reasonable efforts to obtain any such required consent(s), if material to the Purchaser, as promptly as possible after Closing. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would materially impair Purchaser’s rights under the Purchased Assets, the Sellers, to the maximum extent permitted by law and the agreement or contract at issue, shall act after the Closing as the Purchaser’s agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by law and the agreement or contract at issue, with the Purchaser in any other reasonable arrangement designed to provide such material benefits to the Purchaser.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

          The Sellers hereby represents and warrants to the Purchaser, as of the date hereof or, if a representation or warranty is made as of a specified date, as of such date, as follows:

     SECTION 3.01 Organization, Authority and Qualification of the Sellers . The Sellers are corporations duly organized, validly existing and in good standing under the laws of the jurisdiction of their respective incorporation and have all necessary corporate power and authority to enter into this Agreement and the Bill of Sale, Assignment and Assumption Agreement, to carry out their respective obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The Sellers are duly licensed or qualified to do business and are in good standing in each jurisdiction which the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed, qualified or in good standing would not adversely affect the ability of the Sellers to carry out their respective obligations under, and to consummate the transactions contemplated by, this Agreement and the Bill of Sale, Assignment and Assumption Agreement. The execution and delivery of this Agreement and the Bill of Sale, Assignment and Assumption Agreement by the Sellers, the performance by the Sellers of their obligations hereunder and thereunder and the consummation by the Sellers of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Sellers. This Agreement has been, and upon their execution the Bill of Sale, Assignment and Assumption Agreement shall have been, duly executed and delivered by the Sellers, and (assuming due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and upon their execution the Bill of Sale, Assignment and Assumption Agreement shall constitute, legal, valid and binding obligations of the Sellers, enforceable against the Sellers in accordance with their respective terms. No shares of any corporation or any ownership or other investment interest, either of record, beneficially or equitably, in any association, partnership, joint venture or other legal entity are included in the Purchased Assets. There are no existing agreements, options, commitments or rights with, of or to any person to acquire any of Sellers’ assets, properties or rights included in the Purchased Assets or any interest therein.

     SECTION 3.02 No Conflict . Assuming that all consents, approvals, authorizations and other actions described in Section 3.03 of the Disclosure Schedule have been obtained, all filings and notifications listed in Section 3.03 of the Disclosure Schedule have been made and any applicable waiting period has expired or been terminated, and except as may result from any facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of this Agreement and the Bill of Sale, Assignment and Assumption Agreement by the Sellers do not and will not (a) violate, conflict with or result in the breach of the certificate of incorporation or bylaws (or similar organizational documents) of the Sellers, (b) conflict with or violate any Law or Governmental Order applicable to the Sellers or (c) except as set forth in Section 3.02(c) of the Disclosure Schedule, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, acceleration or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Sellers are a party, except in the case of clauses (b) and (c), as would not have