ASSET PURCHASE AGREEMENT

EXHIBIT 2.1

EXECUTION COPY

ASSET PURCHASE AGREEMENT

among

HUDSON HIGHLAND GROUP, INC.,

HUDSON GLOBAL RESOURCES HOLDINGS, INC., and

HUDSON GLOBAL RESOURCES MANAGEMENT, INC.

and

SYSTEM ONE HOLDINGS, LLC

Dated as of February 4, 2008

TABLE OF CONTENTS

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ii

SCHEDULES

EXHIBITS

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ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated as of February 4, 2008 (this “ Agreement ”), among HUDSON HIGHLAND GROUP, INC., a Delaware corporation (“ Parent ”), HUDSON GLOBAL RESOURCES HOLDINGS, INC., a Delaware corporation and a wholly owned subsidiary of Parent (“ Holdings ”), HUDSON GLOBAL RESOURCES MANAGEMENT, INC., a Pennsylvania corporation and a wholly owned subsidiary of Holdings (“ Management ;” Parent, Holdings and Management are referred to herein collectively as “ Sellers ”), SYSTEM ONE HOLDINGS, LLC, a Delaware limited liability company (“ Buyer ”), and, solely for the purposes of Section 5.11 , Troy Gregory.

RECITALS

WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase and assume from Sellers, substantially all of the assets and liabilities of the engineering and technical staffing division of Sellers (the “ Business ”), upon the terms and subject to the conditions of this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement, the members of the management team of the Business identified on Schedule A , annexed hereto and made a part hereof, have entered into restrictive covenants agreements with Buyer, in the form of Exhibit A , which will become effective upon the Closing; and

WHEREAS, capitalized terms used but not defined in the context of the Section in which such terms first appear shall have the meaning set forth in Section 11.17(a) .

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Purchase and Sale of Assets; Assumption of Liabilities

1.1. Transfer of Assets . On the basis of the representations, warranties, covenants and agreements and subject to the satisfaction or waiver of the conditions set forth in this Agreement, on the Closing Date and subject to the provisions of Section 1.2 , Sellers shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Sellers, all of Sellers’ right, title and interest in the assets, rights, properties, claims, contracts, business and goodwill of Sellers at the Closing Date that are utilized primarily in the Business of every kind, nature, character and description, tangible and intangible, real, personal or mixed, wherever located, including, without limiting the foregoing, the following (hereinafter referred to collectively as the “ Assets ”):

(a) Rights under the leases with respect to real property leased by Sellers identified on Schedule 1.1(a) , together with all improvements and fixtures thereon;

(b) All office equipment, furniture, phone systems, personal computers, supplies and other tangible personal property (x) located and utilized in each office location identified on Schedule 1.1(a) , and/or (y) identified on Schedule 1.1(b) , in each case, which is owned by Sellers and utilized primarily in the Business;

(c) All Sellers Intellectual Property (other than Sellers Intellectual Property specifically identified as an Excluded Asset on Schedule 3.1(j) );

(d) All management information systems and software related primarily to the ownership of the Assets, including, for the avoidance of doubt, all such systems and software set forth on Schedule 1.1(d) ;

(e) Rights under all contracts, arrangements, agreements, purchase or sale commitments for materials and services, advertising and promotional agreements, leases and other agreements (“ Contracts ”) to which a Seller is a party or by which a Seller is bound that are primarily related to the Business, whether or not entered into in the ordinary course of the Business, including those Contracts set forth on Schedule 3.1(g) , but excluding those Contracts listed on Schedule 1.2(e) (the Contracts described in Section 1.1(a) and this Section 1.1(e) are hereinafter referred to as the “ Assumed Contracts ”);

(f) All licenses, permits or franchises issued by any federal, state or municipal authority relating primarily to the development, use, maintenance or occupation of the Business (“ Business Permits ”);

(g) Accounts receivable of Sellers (whether or not billed) to the extent attributable to services of the Business, excluding all intercompany receivables and the Hershey Receivables;

(h) All prepaid expenses, deposits and other accruals and all rights to goods and services and all other economic benefits arising out of prepayments, payments in advance and deposits by Sellers, to the extent related primarily to the Business;

(i) Records to the extent related exclusively to, or containing information exclusively about, the Business or the other Assets described in this Section 1.1 ;

(j) All claims for collection, indemnity rights and other claims and causes of action arising out of occurrences before or after the Closing and other intangible rights and assets in each case relating primarily to the other Assets described in this Section 1.1 or to the Assumed Liabilities;

(k) All rights and claims of the Sellers, whether mature, contingent or otherwise, against third parties, whether in tort, contract or otherwise, including, without limitation, causes of action, unliquidated rights and claims under or pursuant to all warranties, representations and guarantees made by manufacturers, suppliers or vendors, claims for refunds, rights of off-set and credits of all kinds and all other general intangibles, in each case, only to the extent relating primarily to or used primarily in connection with the Business; provided , however , that such rights and claims shall not include rights and claims established by this Agreement or the other agreements contemplated hereby; and

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(l) All goodwill generated by or associated with the Business.

1.2. Excluded Assets . It is expressly understood and agreed that the Assets shall not include the following (collectively, the “ Excluded Assets ”):

(a) Any equity interest in Holdings or Management and any rights in each Seller’s franchise to be a corporation, its charter, corporate seal, stock books, minute books and other corporate records relating to the corporate organization and capitalization of such Seller;

(b) Any of the Business’ assets that are consumed, sold or disposed of in the ordinary course of business consistent with past practice;

(c) Any refunds or credits with respect to any Taxes paid or incurred by Sellers (plus any related interest received or due from the relevant taxing authority), any prepaid Taxes of Sellers and any other rights related to Taxes paid or incurred by the Sellers with respect to any Pre-Closing Tax Periods;

(d) Any assets of Sellers not utilized primarily in the Business and all rights of Sellers under this Agreement or related to the transactions contemplated by this Agreement;

(e) Sellers’ right, title and interest in and to the Contracts listed on Schedule 1.2(e) ;

(f) All intercompany receivables and the Hershey Receivables of Sellers;

(g) Cash and cash equivalents or similar type investments, deposits in transit, certificates of deposit, treasury bills and other marketable securities of Sellers, whether or not reflected as assets of the Business;

(h) Any rights in or to the use of the name, mark, trade name, trademark or service mark incorporating “Hudson” and any corporate symbols or logos related thereto, except to the extent provided in Section 5.8 ;

(i) Any insurance policies, or rights under such policies, held by Sellers;

(j) Any rights of Sellers with respect to (i) any Benefit Plan or Benefit Arrangement that is a defined benefit or defined contribution retirement plan or (ii) any assets held under the trust agreement or other funding arrangement related to any Benefit Plan or Benefit Arrangement that is a defined benefit or defined contribution retirement plan;

(k) All Records of Sellers (i) relating to accounting or financial matters or to Taxes or associated returns other than Records transferred to Buyer pursuant to Section 1.1(i) , (ii) relating primarily to any of the other Excluded Assets described in this Section 1.2 or (iii) that do not contain information exclusively about or relating exclusively to the Business or the Assets described in Section 1.1 ;

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(l) All prepaid items (including security deposits), claims for collection, indemnity rights and other claims and causes of action arising out of occurrences before or after the Closing and other intangible rights relating primarily to the other Excluded Assets described in this Section 1.2 or to the Excluded Liabilities described in Section 1.4 , and all privileges relating thereto;

(m) All medical records of Business Employees that are not permitted by Law to be transferred to Buyer; and

(n) Any assets identified on Schedule 1.2(n) .

1.3. Assumed Liabilities . Subject to the terms and conditions of this Agreement, on the Closing Date, Buyer shall assume and agree to pay, perform and discharge when due, subject to the provisions of Section 1.5 , all of the Liabilities of Sellers to the extent relating to the Business or the Assets, whether arising before or after the Closing Date, to the extent the same are unpaid, undelivered or unperformed on the Closing Date, but only (except in the case of Section 1.3(c) ) to the extent such Liabilities are, in the case of Liabilities that GAAP requires to be included in financial statements, both (x) liabilities of the type included in or reflected on the Financial Statements or the Recent Balance Sheet, and (y) included in the Net Working Capital calculation (collectively, the “ Assumed Liabilities ”), including:

(a) All Liabilities arising under the Assumed Contracts;

(b) All Liabilities arising under the Business Permits;

(c) All Liabilities that arise on account of Buyer’s conduct of the Business, use of the Assets and/or delivery of services by Buyer, in each case, on or after the Closing Date, including Liabilities associated with continuing the litigation set forth in Item 1 of Schedule 3.1(h) ;

(d) All current Liabilities and accrued Liabilities (excluding Taxes described in Section 1.4(a) ) identified on Schedule 1.3(d) and all other current Liabilities and accrued Liabilities (excluding Taxes described in Section 1.4(a) ) of the type identified on Schedule 1.3(d) that are incurred in the ordinary course of business and included in the Net Working Capital calculation; and

(e) All other Liabilities included in the Net Working Capital calculation and not otherwise listed above.

Buyer is not assuming, nor shall it be deemed to have assumed, any other Liabilities of Sellers of any kind or nature whatsoever, except as expressly provided in this Agreement or any instrument delivered pursuant to Section 9.3(b) .

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1.4. Excluded Liabilities . It is expressly understood and agreed that Assumed Liabilities shall not include the following Liabilities of Sellers (collectively, the “ Excluded Liabilities ”):

(a) All Liabilities for Taxes imposed on or relating to (i) any Seller (including, without limitation, any liability for Taxes of any person other than such Seller under Treas. Reg. Sec. 1.1502-6 or any comparable provision of state, local or foreign law, as a transferee or successor, by contract, or otherwise, including without limitation any indemnification obligation), the Business, or the Assets or the use thereof for any Pre-Closing Tax Period (or any portion thereof) other than liabilities included in the Net Working Capital calculation, and (ii) any Seller after the Closing Date;

(b) All intercompany Liabilities and Liabilities arising under or related to any indebtedness for borrowed money;

(c) Liabilities covered by the insurance policies of Sellers in effect on or prior to the Closing Date, but only to the extent Sellers receive proceeds thereunder from third party insurers; provided , however , that, after the Closing Date, if any third party insurer seeks recoupment, refund or return of such proceeds from Buyer, then any such Liability to such third party insurer shall be deemed an Excluded Liability;

(d) Liabilities arising under any special incentive or other bonus agreements or arrangements between any Seller and any of its employees relating exclusively to the consummation of the transactions contemplated by this Agreement, including without limitation liabilities under the Retention Bonus Agreements entered into and to-be-entered into between Parent and the persons identified on Schedule 1.2(e) , including without limitation liabilities for any severance payments thereunder;

(e) All Liabilities that do not arise primarily out of or relate primarily to the Business or the Assets except as otherwise provided herein;

(f) Any Liability arising under or otherwise relating to any Benefit Plan or Benefit Arrangement, none of which plans or arrangements are being assumed by Buyer, other than liabilities of the type listed on Exhibit B to Schedule 1.3(d) that are included in the Net Working Capital calculation;

(g) Liabilities arising under the Contracts listed on Schedule 1.2(e) ; and

(h) Any Liability for any claim incurred or asserted by a Business Employee prior to the Closing, regardless of whether such claim is made or filed before or after the Closing, including without limitation Liabilities based upon breach of employment contract, employment discrimination, wrongful termination, wage and hour or health and safety requirements, workers compensation, ERISA, the Consolidated Omnibus Budget Reconciliation Act, the Worker Adjustment Retraining Notification Act of 1988, as amended, the Occupational Safety and Health Act of 1970, as amended, constructive termination, wrongful termination, failure to give reasonable notice or pay-in-lieu-of-notice, severance pay, termination pay, medical (and related) claims of Business Employees covered under Sellers’ health and welfare plans, workers’ compensation

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claims, and accrued vacation of Business Employees up to and including the Closing Date, other than liabilities of the type listed on Exhibit B to Schedule 1.3(d) that are included in the Net Working Capital calculation;

(i) All Liabilities other than liabilities included in the Net Working Capital calculation relating to independent contractors or independent subcontractors of the Business issued a Form 1099 (“ 1099 Contractors ”) or independent contractors or employees hired or retained and paid by the Business on an hourly basis to perform services for the Business regardless of whether or not such independent contractors or employees are performing such services (“ Bench Employees ”);

(j) All Liabilities relating to actions, suits, proceedings, disputes, claims or investigations arising primarily out of or related primarily to the Business or the Assets relating to actions taken, or conduct occurring, prior to the Closing Date, other than Liabilities associated with continuing the litigation set forth in Item 1 of Schedule 3.1(h) ;

(k) All Liabilities of Sellers for any violation of or failure to comply with Laws or Orders;

(l) All Liabilities relating to any rebate amounts owing to any customers of the Business for any work performed by Sellers prior to the Closing Date to the extent such liabilities are not included in the Net Working Capital calculation;

(m) Any Liabilities identified on Schedule 1.4(m) ; and

(n) All Liabilities of the Sellers, including all Liabilities relating to the operation or ownership of the Business or the Assets prior to the Closing Date, which are not otherwise expressly identified as an “Assumed Liability” in Section 1.3 .

1.5. Nonassignable Contracts and Rights . Notwithstanding anything to the contrary in this Agreement, no Contracts, properties, rights or other assets of Sellers shall be deemed sold, transferred or assigned to Buyer pursuant to this Agreement if the attempted sale, transfer or assignment thereof to Buyer without the consent or approval of another party or Government Entity would be ineffective or would constitute a breach of Contract or a violation of any Law or would in any other way materially adversely affect the rights of Sellers (or Buyer as transferee or assignee) and such consent or approval is not obtained on or prior to the Closing Date. In such case, to the extent possible, (a) the beneficial interest in or to such Contracts, properties, rights or other assets (collectively, the “ Beneficial Rights ”) shall in any event pass as of the Closing Date to Buyer under this Agreement; and (b) pending such consent or approval, and so long as Sellers transfer and turn over all Beneficial Rights with respect to each such Contract, Buyer shall assume or discharge the Liabilities of Sellers under such Beneficial Rights (to the extent such obligations are Assumed Liabilities) as agent for Sellers, and Sellers shall act as Buyer’s agent in the receipt of any benefits, rights or interest received from the Beneficial Rights. Buyer and Sellers shall use their commercially reasonable efforts (provided that no party shall be required to expend any money (other than reasonable attorney’s fees), incur any liability, commence any litigation or offer or grant any accommodation (financial or otherwise) to any third party), to obtain and secure any and all consents and approvals that may be necessary to

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effect the legal and valid sale, transfer or assignment of the Contracts, properties, rights or other assets underlying the Beneficial Rights, including their formal assignment or novation, if advisable. Buyer and Sellers will make or complete such transfers as soon as reasonably possible and cooperate with each other in any other reasonable arrangement designed to provide for Buyer the Beneficial Rights including enforcement at the cost and for the account of Buyer of any and all rights of Sellers against the other party thereto arising out of the breach or cancellation thereof by such other party or otherwise, and to provide for the discharge of any Liability arising under such Contracts, properties, rights or other assets, to the extent such Liability constitutes an Assumed Liability. To the extent any Contract may not be transferred or assigned to Buyer by reason of the absence of any such consent, then, notwithstanding anything in this Agreement to the contrary, Buyer shall not be required to assume any Assumed Liabilities arising under such Contract other than as expressly set forth in clause (b) of the second sentence of this Section 1.5 .

2. Payment of Purchase Price; Net Working Capital Adjustment

2.1. Purchase Price and Payment . In consideration for the Assets, and subject to the terms and conditions of this Agreement, Buyer shall on the Closing Date:

(a) assume the Assumed Liabilities as provided in Section 1.3 ;

(b) issue and deliver to Parent a Subordinated Secured Note in the aggregate principal amount of $5,000,000 (the “ Subordinated Note ”) pursuant to, and in the form set forth in, the Financing Agreement in the form attached hereto as Exhibit B (the “ Subordinated Loan Agreement ”);

(c) issue and deliver to Parent a warrant in the form attached hereto as Exhibit C (the “ Warrant ”);

(d) transfer cash to the Escrow Agent in the amount of $600,000; and

(e) transfer cash to Parent in the amount of $11,561,000 (the “ Initial Cash Purchase Price ”), subject to the following adjustments:

(i) An increase equal to the amount, if any, by which the Net Working Capital as reflected on the Estimated Closing Statement is greater than the Target Net Working Capital; or

(ii) A reduction equal to the amount, if any, by which the Net Working Capital as reflected on the Estimated Closing Statement is less than the Target Net Working Capital.

The amount of the Initial Cash Purchase Price payable pursuant to this Section 2.1 shall be paid on the Closing Date by wire transfer of immediately available funds to an account Parent has designated, at least two (2) business days prior to the Closing Date, in writing to Buyer.

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The value tendered by Buyer pursuant to this Section 2.1 , as adjusted pursuant to the provisions of Section 2.2 , shall be hereinafter referred to as the “ Purchase Price ”.

2.2. Determination of Net Working Capital; Post-Closing Adjustment .

(a) Estimated Closing Statement . For purposes of determining an estimate of the Net Working Capital to be reflected on the Closing Statement and the Purchase Price payable by Buyer at the Closing, not less than three (3) business days prior to the Closing Date, Parent shall, in consultation with Buyer, prepare and deliver to Buyer a statement that shall represent Parent’s reasonable estimate of the Closing Statement. In the event Buyer shall object to any of the information set forth on such statement or accompanying schedules as presented by Parent, the parties shall negotiate in good faith and attempt to agree on appropriate adjustments so that such statement and accompanying schedules reflect a reasonable estimate of the Closing Statement and of the Net Working Capital to be reflected on the Closing Statement, but in the absence of such agreement, the good faith determination of the statement by Parent shall control (the statement as agreed to by the parties pursuant to this Section 2.2(a) , or in the absence of such agreement, the statement as prepared and delivered by Parent, is herein referred to as the “ Estimated Closing Statement ”). In connection with the determination of the Estimated Closing Statement, Parent shall provide to Buyer such information and detail as Buyer shall reasonably request.

(b) Closing Statement . Within forty-five (45) days following the Closing, Parent shall prepare, or cause to be prepared, and deliver to Buyer an unaudited statement (the “ Closing Statement ”), which shall set forth the Net Working Capital as of the Closing Date, and, except as set forth on Exhibit D , shall be prepared (i) in a manner consistent with the preparation of the Recent Balance Sheet as to accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodologies, and otherwise in accordance with GAAP, as in effect on the date of such preparation, except that the Closing Statement shall reflect only the Current Assets and the Current Liabilities, and (ii) based only on the information relating to the content of the Closing Statement that is known to Buyer or Parent on the Closing Date or becomes known by Buyer or Parent prior to the date on which Parent delivers the Closing Statement to Buyer if such information relates to an event that occurred prior to the Closing Date.

(c) Disputes Regarding Closing Statement . Buyer shall, within thirty (30) days after the delivery by Parent of the Closing Statement, complete its review of the Net Working Capital derived from the Closing Statement. If Buyer determines that the Closing Statement has not been prepared in accordance with Section 2.2(b) and Exhibit D , then Buyer shall inform Parent on or before the last day of such thirty (30) day period by delivering a written notice to Parent (“ Buyer’s Objection ”) (i) setting forth a specific description of the basis of Buyer’s Objection and the adjustments to Net Working Capital that Buyer believes should be made and (ii) only including objections based on mathematical errors or based on the Closing Statement not being prepared in accordance with Section 2.2(b) and Exhibit D . Parent shall then have thirty (30) days to review and respond to Buyer’s Objection. Parent and Buyer shall seek in good faith to

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resolve in writing any differences which they may have with respect to any matter specified in Buyer’s Objection and Parent shall have full access to the working papers of Buyer prepared in connection with Buyer’s preparation of Buyer’s Objection. If Parent and Buyer are unable to resolve all of their disagreements with respect to the determination of the foregoing items within twenty (20) days following the completion of Parent’s review of Buyer’s Objection, then Parent and Buyer shall refer their remaining differences to Grant Thornton LLP or another nationally recognized firm of independent public accountants as to which Parent and Buyer mutually agree (the “ CPA Firm ”), who shall, acting as accounting experts and not as arbitrators, determine on the basis of the standards set forth in Section 2.2(b) and Exhibit D , and only with respect to the remaining accounting-related differences so submitted by Buyer to Parent (and not by independent review), whether and to what extent, if any, Net Working Capital as derived from the Closing Statement requires adjustment. In making such determination, the CPA Firm shall consider only those items or amounts in the Closing Statement and Parent’s calculation of the Net Working Capital as to which Buyer has disagreed in Buyer’s Objection duly delivered pursuant to this Section 2.2(c) and may not assign a value greater than the greatest positive or negative adjustment requested by a party and in no event shall the Net Working Capital be more than Parent’s calculation of the Net Working Capital delivered pursuant to Section 2.2(b) or less than Buyer’s calculation of the Net Working Capital delivered pursuant to this Section 2.2(c) . In connection with the engagement of the CPA Firm, Parent and Buyer shall execute reasonable engagement letters with the CPA Firm. Parent and Buyer shall direct the CPA Firm to use its reasonable best efforts to render its determination within forty-five (45) days. The CPA Firm’s determination shall be conclusive and binding upon Buyer and Parent. The fees and disbursements of the CPA Firm shall be shared equally by Buyer and Parent. Buyer and Parent shall make readily available to the CPA Firm all relevant books and records and any work papers (including those of the parties’ respective accountants) relating to the Closing Statement and all other items reasonably requested by the CPA Firm. The “ Adjusted Closing Statement ” shall be (i) the Closing Statement in the event that (x) no Buyer’s Objection is delivered to Parent during the thirty (30) day period specified above, or (y) Parent and Buyer so agree, (ii) the Closing Statement, adjusted in accordance with Buyer’s Objection in the event that Parent does not respond to Buyer’s Objection within the thirty (30) day period following receipt by Parent of Buyer’s Objection, or (iii) the Closing Statement, as adjusted by either (x) the agreement of Parent and Buyer or (y) the CPA Firm.

(d) Cooperation . Each of Buyer and Parent agrees that, following the Closing, it will not take any actions with respect to its accounting books, records, policies and procedures of the Business that would obstruct or prevent the preparation of the Closing Statement. Buyer shall cooperate with Parent in the preparation of the Closing Statement including, but not limited to, (i) providing Parent and Parent’s representatives with full access during normal business hours to the books, records (including work papers, schedules, memoranda and other documents), facilities and Business Employees, (ii) causing employees of the Business to provide Parent as promptly as practicable following the Closing Date (but in no event later than ten (10) days after the Closing Date) with normal year-end closing financial information for the Business for the period ending as of the close of business on the day immediately prior to the Closing Date, and

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(iii) cooperating fully with Parent and Parent’s representatives, including the provision on a timely basis of all other information necessary or useful in connection with the preparation of the Closing Statement. Buyer and its accountants shall have full access to all information used by Parent in preparing the Closing Statement, including the work papers of its accountants.

(e) Adjustment Payment to Buyer . In the event the Net Working Capital as derived from the Adjusted Closing Statement is less than the Net Working Capital as reflected on the Estimated Closing Statement, Parent shall make an adjustment payment to Buyer in an amount equal to the difference between (i) the Net Working Capital as reflected on the Estimated Closing Statement and (ii) the Net Working Capital as derived from the Adjusted Closing Statement. Any payment required by the first sentence of this Section 2.2(e) shall be made by Parent to Buyer, together with interest thereon at the annual rate published by The Wall Street Journal as the “prime rate” at large U.S. money center banks as of the Closing Date (the “ Applicable Rate ”) calculated on the basis of the number of days elapsed from and including the Closing Date to and excluding the date of payment, in immediately available funds within five (5) business days after the determination of the Adjusted Closing Statement.

(f) Adjustment Payment to Parent . In the event the Net Working Capital as derived from the Adjusted Closing Statement is greater than the Net Working Capital as reflected on the Estimated Closing Statement, Buyer shall make an adjustment payment to Parent in an amount equal to the difference between (i) the Net Working Capital as reflected on the Estimated Closing Statement and (ii) the Net Working Capital as derived from the Adjusted Closing Statement. Any payment required by the first sentence of this Section 2.2(f) shall be made by Buyer to Parent, together with interest thereon at the Applicable Rate calculated on the basis of the number of days elapsed from and including the Closing Date to and excluding the date of payment, in immediately available funds within five (5) business days after the determination of the Adjusted Closing Statement.

2.3. Allocation of Purchase Price . The aggregate Purchase Price shall be allocated among the Assets for tax purposes on the basis of the relative fair market values of such properties as of the Closing Date. Such values, and the value of the aggregate Purchase Price, shall be reasonably determined by Buyer and delivered to Parent as soon as practicable after the Closing (and in any event within one hundred eighty (180) days following the Closing Date) and shall be subject to Parent’s consent, which consent shall not be unreasonably withheld or conditioned. Sellers and Buyer will follow and use such allocation in all tax returns, filings or other related reports made by them to any Government Entities. To the extent that disclosures of this allocation are required to be made by the parties to the IRS under the provisions of Section 1060 of the Code, or any regulations thereunder, Buyer and Parent will disclose such reports to the other prior to filing with the IRS.

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3. Representations and Warranties

3.1. Representations and Warranties of Parent . Each Seller, jointly and severally, represents and warrants to Buyer as follows:

(a) Due Organization and Power . Each of Parent and Holdings is duly organized and validly existing under the laws of Delaware and Management is duly organized and validly existing under the laws of Pennsylvania. Each Seller has the requisite power and authority to own, operate and lease its properties and to conduct the Business as now conducted. Each Seller has all requisite power and authority to enter into this Agreement and any other agreement contemplated hereby and to perform its obligations hereunder and thereunder, including the power and authority to convey good title to Buyer with respect to the Assets owned by each Seller. Each Seller is duly authorized, qualified or licensed to do business as a foreign corporation in each of the jurisdictions in which its right, title or interest in or to any of the Assets, or the conduct of the Business, requires such authorization, qualification or licensing, except where the failure to so qualify or to be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.

(b) Authorization and Validity of Agreement . The execution, delivery and performance by each Seller of this Agreement and any other agreements contemplated hereby and the consummation by each Seller of the transactions contemplated hereby and thereby have been duly authorized by the board of directors of each Seller. No other corporate action is necessary for the authorization, execution, delivery and performance by each Seller of this Agreement and any other agreements contemplated hereby and the consummation by each Seller of the transactions contemplated hereby or thereby. This Agreement has been, and the other agreements contemplated hereby have been, or will be prior to or at Closing, duly executed and delivered by each Seller, and each constitutes, or will when so executed and delivered constitute, a valid and legally binding obligation of each Seller, enforceable against it in accordance with its respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws relating to or affecting creditors rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(c) No Governmental Approvals or Notices; No Conflict with Instruments . Except as described in Schedule 3.1(c) , the execution, delivery and performance of this Agreement and any other agreements contemplated hereby by each Seller and the consummation by each Seller of the transactions contemplated hereby and thereby (i) will not violate (with or without the giving of notice or the lapse of time or both), or require any authorization, consent, approval, filing or notice under, any provision of any Law or Order applicable to such Seller, except for such violations the occurrence of which, and such consents, approvals, filings or notices the failure of which to obtain or make, would not, individually or in the aggregate, have a Material Adverse Effect and except for such consents, approvals, filings or notice requirements which become applicable solely as a result of the specific regulatory status of Buyer or any of its Affiliates, and (ii) will not conflict with, or result in the breach or termination of any provision of, or constitute a

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default under, or result in the acceleration of the performance of the obligations of such Seller under, or result in the creation of the right to accelerate, terminate, modify or cancel, or result in the creation of a lien, charge or encumbrance upon a portion of the Assets pursuant to, or require any notice under, the charter or by-laws of such Seller or the express terms of any Contract to which such Seller is a party or by which such Seller or any of the Assets is bound, except for such conflicts, breaches, terminations, defaults, accelerations or liens which would not, individually or in the aggregate, have a Material Adverse Effect.

(d) Financial Statements . Schedule 3.1(d) contains (i) an unaudited balance sheet of the Business as of September 30, 2007 (the “ Recent Balance Sheet ”) and an unaudited statement of income of the Business for the nine months then ended, and (ii) an unaudited balance sheet of the Business as of December 31, 2006 and statements of income for the Business for the fiscal years ended December 31, 2006 and 2005 (collectively, the “ Financial Statements ”). Except as set forth on Schedule 3.1(d) , the Financial Statements were prepared in accordance with GAAP, as in effect on the date of such Financial Statements and applied on a consistent basis in such financial statements (except as may be indicated in the notes or comments to such Financial Statements), and such Financial Statements and notes or comments fairly present, in all material respects, the financial position and results of operations of the Business as of their respective dates and for the respective periods covered thereby giving effect to certain estimated allocations and charges for services disclosed on Schedule 3.1(d) .

(e) Leased Real Property . Schedule 3.1(e) contains a list that is complete and correct in all material respects of the real property leased by Sellers that is used by the Business.

(f) Title to Properties; Absence of Encumbrances; Sufficiency of Assets .

(i) Except as set forth on Schedule 3.1(f) , all of the Assets owned by Sellers are held free and clear of all claims, liens, security interests, charges, mortgages, pledges, easements, leases, encumbrances, licenses or sublicenses, conditional sales or other title retention agreements (an “ Encumbrance ”) other than Permitted Encumbrances. Upon payment for the Assets as contemplated herein, Sellers shall convey to Buyer all of Sellers’ right, title and interest in and to the Assets free and clear of all Encumbrances, except in each case (i) as specifically set forth in Schedule 3.1(f) , (ii) for Encumbrances for current Taxes and assessments not yet due and payable or being contested in good faith by appropriate proceedings for which reserves have been included in the Financial Statements, and (iii) for Encumbrances that are not material to the Business (such exceptions, collectively, the “ Permitted Encumbrances ”). Upon consummation of the transactions contemplated hereby, except for Permitted Encumbrances, Buyer shall acquire good and marketable title to the Assets.

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(ii) Except for services and assets to be provided through the Transition Services Agreement and except as set forth on Schedule 3.1(f) , the Assets are sufficient for the conduct of the Business immediately following the Closing in substantially the same manner as currently conducted.

(iii) Except with respect to the representations and warranties contained in this Section 3.1(f) , Buyer is acquiring the Assets AS IS, WHERE IS. SELLERS DISCLAIM ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE DESIGN, CONDITION, CAPACITY, VALUE, UTILITY, PERFORMANCE OR QUALITY OF THE ASSETS, AND SELLERS MAKE NO IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT THERETO.

(g) Material Contracts . Schedule 3.1(g) sets forth a list as of the date of this Agreement of each of the following types of written Contracts to which Sellers are a party that relate primarily to the Business:

(i) Any employment Contract with any Business Employee that has future liability in excess of $25,000 per annum and is not terminable by notice of not more than sixty (60) calendar days for a cost of less than $25,000;

(ii) Any covenant not to compete that materially restricts the operation of the Business;

(iii) Any Contract to lease personal property which has future liability in excess of $25,000 per annum and is not terminable by notice of not more than sixty (60) calendar days for a cost of less than $25,000;

(iv) Any Contract for loaning any money or directly or indirectly guaranteeing Liabilities of others (other than endorsements for the purpose of collection, loans made to employees for relocation, travel or other employment-related purposes, purchases of equipment or materials made under conditional sales contracts, in each case in the ordinary course of the Business), in each case having an outstanding principal amount or aggregate future liability (excluding interest) in excess of $25,000;

(v) Any Contract under which any other person has directly or indirectly guaranteed Liabilities of Sellers (other than endorsements for the purpose of collection in the ordinary course of the Business), in each case having an outstanding principal amount or aggregate future liability (excluding interest) in excess of $25,000;

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(vi) Any other Contract, in each case of a type not described in any of clauses (i)  through (v)  above (without reference to disclosure thresholds set forth therein), to which Sellers are a party or by or to which any of their respective assets are bound or subject which has future liability in excess of $50,000 per annum and is not terminable by such Seller by notice of not more than sixty (60) calendar days for a cost of less than $50,000 (other than Contracts of Sellers in the ordinary course of the Business consistent with past practice); or

(vii) Any Contract involving the obligation of Sellers to deliver services to a customer of Sellers for which the customer will have an obligation under the Contract for payment after the date of this Agreement of more than $200,000.

Sellers have made available to Buyer a copy of each Contract listed on Schedule 3.1(g) as amended to date. Except as disclosed on Schedule 3.1(g) , to the knowledge of Parent, each Contract described on Schedule 3.1(e) and Schedule 3.1(g) (collectively, the “ Material Contracts ”) is valid, binding and in full force and effect and is enforceable by the applicable Seller in accordance with its terms. Except as disclosed in Schedule 3.1(g) or the other Schedules hereto, Sellers have, and to the knowledge of Parent, each counterparty thereto has, performed all material obligations required to be performed by them to date under the Material Contracts and Sellers are not, and to the knowledge of Parent, each counterparty thereto is not (with or without the lapse of time or the giving of notice, or both), in material breach or default thereof. As of the date hereof, no Seller has received any written or, to the knowledge of Parent, oral notice that any counterparty to any Material Contract threatened to terminate, suspend or not renew any Material Contract.

(h) Legal Proceedings . Except as described in Schedule 3.1(h) , there is no litigation, proceeding or governmental investigation pending or, to the knowledge of Parent, threatened (in a reasonably serious manner in writing) to which any Seller is a party relating primarily to the Assets or the Business or the transactions contemplated by this Agreement.

(i) Employees .

(i) Schedule 3.1(i) contains a true and complete list of:

(A) all employee handbooks, policies and manuals relating to the Business Employees of each Seller, copies of which have been delivered (or made available) to Buyer;

(B) all employees of the Business (each a “ Business Employee ”), together with (i) the job title, current rate of base salary or hourly wage, full- or part-time status, most recent annual bonus or commission, accrued sick, personal and vacation dates, date of hire and current employment status (e.g., leave of absence

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and cause therefore, together with date that leave commenced and is expected to end) for each administrative, sales or back office Business Employee and (ii) the job description, employment status and employment class of each billable energy, engineering and Hershey Business Employee. Except as set forth on Schedule 3.1(i) , the employment of each Business Employee is at will;

(C) each consultant or independent contractor who currently provides services to the Business, including each 1099 Contractor and Benched Employee (each, a “ Business Consultant ”). A copy of each agreement between the Seller and each Business Consultant has been delivered (or made available) to Buyer.

(ii) Except as set forth in Schedule 3.1(i) , each Seller is in compliance in all material respects with all applicable Laws relating to the employment of each Business Employee, including without limitation, all Laws relating to wages, hours, employment standards, discrimination, safety and health, worker’s compensation, and the Worker Adjustment and Retraining Notification Act of 1988 (the “ WARN Act ”), and any similar state, local or layoff statute. No claim by any past or present employee of the Business that such employee was subject to a wrongful discharge or any employment discrimination arising out of or relating to such employee’s race, sex, age, religion, national origin, ethnicity, handicap or any other protected characteristic under applicable Laws is outstanding.

(iii) None of the Sellers nor any affiliate thereof, is a party to any agreement or contract with any union, labor organization or employee group which affects the employment of any Business Employee, including but not limited to, any collective bargaining agreements or labor contracts.

(iv) There has not been any strike, slowdown, picketing, work stoppage or labor dispute or, to the knowledge of Parent, any attempt by a labor union to organize the Business Employees.

(v) The Business has not, directly or through agents and independent contractors, employed any unauthorized aliens, as defined in 8 U.S.C. Section 1324a(h)(3). The Business has complied, or caused any such agent or independent contractor, to comply in all material respects with the employment verification and record-keeping requirements of 8 U.S.C. Section 1324a and 8 C.F.R. Section 274a, as amended. The Business is in compliance in all material respects with the Immigration and Nationality Act and the Immigration Reform and Control Act.

(vi) Except as set forth on Schedule 3.1(i) , there are no pending, or to the knowledge of Parent, threatened claims or actions as of the date of this Agreement by any Business Employee under any worker’s compensation policy or long-term disability policy.

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(vii) No “mass layoff” (as defined in the WARN Act), “plant closing” (as defined in such Act) or similar event has occurred with respect to the Business.

(viii) Except as set forth on Schedule 3.1(i) , there are no pending grievances, arbitrations or other disputes relating to Business Employees that would, individually or in the aggregate, have a Material Adverse Effect.

(j) Intellectual Property .

(i) Schedule 3.1(j) lists all Registered Intellectual Property owned by Sellers that is primarily used or primarily held for use in the Business as of the date hereof (the “ Sellers Intellectual Property ”). Schedule 3.1(j) also lists any proceedings or actions before any Government Entity (including the United States Patent and Trademark Office) related to any Sellers Intellectual Property.

(ii) Except as set forth in Schedule 3.1(j) , no claims are pending or, to the knowledge of Parent, threatened, against Sellers by any person with respect to the ownership, validity, enforceability, effectiveness or use in the Business of any Intellectual Property.

(iii) Except as set forth in Schedule 3.1(j) , all Sellers Intellectual Property that is material to the Business is fully transferable, alienable or licensable to Buyer by the Sellers without restriction and without payment of any kind to any third party. Each item of Sellers Intellectual Property is free and clear of any Encumbrances. Each Seller owns, or has acquired the necessary licenses to use, all Sellers Intellectual Property that are necessary to the operation or conduct of the Business as currently conducted and have been conducted within the twelve months prior to the date of this Agreement. No third party has any rights to any Sellers Intellectual Property owned by Sellers (other than non-exclusive license rights).

(iv) Except as set forth in Schedule 3.1(j) , no Seller has received any written notice from any third party claiming that the operation of the Business or any act, product, technology or service of any Seller infringes, misappropriates, or dilutes any intellectual property right of any person.

(v) Except as set forth in Schedule 3.1(j) , no Sellers Intellectual Property owned by any Seller with respect to the Business is subject to any proceeding or outstanding order that restricts and/or conditions in any manner the use, transfer or licensing thereof by any Seller of such Sellers Intellectual Property.

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(k) Government Licenses, Permits and Related Approvals . Except as described on Schedule 3.1(k) , Sellers have all licenses, permits, consents, approvals, authorizations, qualifications and orders of Government Entities required for the conduct of the Business as presently conducted by them, except insofar as any failure to have such licenses, permits, consents, approvals, authorizations, qualifications and orders would not, individually or in the aggregate, have a Material Adverse Effect.

(l) Conduct of Business in Compliance with Regulatory Requirements . Except as described on Schedule 3.1(l) , to the knowledge of Parent, Sellers are conducting the Business so as to comply with all applicable Laws, except insofar as any failure to comply with such Laws would not, individually or in the aggregate, have a Material Adverse Effect.

(m) Employee Benefit Plans and Arrangements .

(i) Schedule 3.1(m) hereto identifies:

(A) Each “employee benefit plan”, as such term is defined in Section 3(3) of ERISA, that is maintained or otherwise contributed to by Sellers for the benefit of Business Employees and that is covered by ERISA (collectively, the “ Benefit Plans ”), copies of which have been provided or made available to Buyer.

(B) Each material Benefit Arrangement, copies of which have been provided or made available to Buyer.

(ii) Subject to the exceptions set forth on Schedule 3.1(m) , each Benefit Plan and Benefit Arrangement has been maintained and administered at all times substantially in compliance with its terms and all applicable Laws, including ERISA and the Code, applicable to such Benefit Plan or Benefit Arrangement, except where the failure to do so would not reasonably be expected to result in a material liability to Buyer.

(iii) No Benefit Plan or Benefit Arrangement has terms requiring assumption by Buyer.

(iv) None of the Sellers nor any ERISA Affiliate currently has any obligation or liability with respect to any “defined benefit plan” as such term is defined in Section 3(35) of ERISA or to any “multiemployer plan” (as defined in Section 3(37) of ERISA). For purposes of this Agreement, the term “ERISA Affiliate” means each business, person or entity which would be treated as a “single employer” with either of the Sellers under Sections 414(b), (c), (m) or (o) of the Code or under Section 4001(b) of ERISA.

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(v) There is no pending, or to the knowledge of Parent, threatened in writing, material claim, suit or other proceeding (other than ordinary and usual claims for benefits by participants and beneficiaries, including routine claims pursuant to domestic relations orders) with respect to any Benefit Plan or Benefit Arrangement that would have a material impact on this transaction or result in material liability to Buyer or result in the imposition of a material lien or other material claim against any of the Assets. To the knowledge of Parent, no Benefit Plan or Benefit Arrangement is under audit or investigation by the IRS, Department of Labor or other Government Entity or agency, nor has any such audit or investigation been threatened in writing.

(vi) Except as set forth in Schedule 3.1(m) , neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will, either alone or in combination with another event, result in the payment to any Business Employee, 1099 Contractor, Benched Employee or Business Consultant of any money or other property or accelerate or provide any other rights or benefits to any Business Employee, 1099 Contractor, Benched Employee or Business Consultant.

(vii) Each Benefit Plan and Benefit Arrangement intended to be qualified under Section 401(a) of the Code is so qualified and is the subject of a currently effective favorable determination letter issued by the IRS with respect to the qualification of such Benefit Plan or Benefit Arrangement under the Code. No event has occurred, and no condition exists, which could adversely affect the tax-qualified status of any such Benefit Plan or Benefit Arrangement.

(viii) Each Seller has complied in good faith with the requirements of Section 409A of the Code with respect to each applicable Benefit Plan and Benefit Arrangements that covers Business Employees.

(n) Environmental Matters . Except as set forth on Schedule 3.1(n) , to the knowledge of Parent, Sellers’ conduct of the Business complies with all applicable Laws regarding protection of the environment (including those protecting the quality of the ambient air, soil, surface water or groundwater, or those regarding the handling, storage, treatment, disposal, release or discharge of hazardous substances, or those requiring registration of tanks or permits for emissions to air, soil, surface water or ground water) in effect as of or, to the extent applicable, at any time prior to the date of this Agreement, except insofar as any failure to comply with such Laws would not, individually or in the aggregate, have a Material Adverse Effect.

(o) Certain Fees . Neither Sellers nor any of their respective officers, directors or employees, have employed any broker or finder or incurred any other liability for any brokerage fees, commissions or finders’ fees in connection with the transactions contemplated hereby, except for those brokers whose fees will be paid by Parent.

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(p) Taxes . Except where a failure to file Tax Returns, a failure of any such Tax Return to be complete and accurate in any respect or the failure to pay any Tax, individually or in the aggregate, would not have a Material Adverse Effect and except as set forth on Schedule 3.1(p) : (i) each Seller has filed all Tax Returns required to be filed by it; (ii) all such Tax Returns are complete and accurate in all material respects; and (iii) all Taxes owed by each Seller (whether or not shown on any Tax Return) have been duly and timely paid, except with respect to matters contested in good faith in appropriate proceedings and disclosed to Buyer in writing. Except as set forth on Schedule 3.1(p) , (iv) there are no outstanding agreements or waivers extending any statute of limitations in respect of Taxes; (v) there is no action, suit, investigation, audit, claim or assessment pending or proposed, or, to the knowledge of any Seller, threatened, with respect to Taxes of any Seller; (vi) to the knowledge of Parent, no claim has ever been made by any Government Entity in a jurisdiction where a Seller does not file Tax Returns that such Seller is or may be subject to Taxes by such jurisdiction; (vii) all deficiencies asserted or assessments made as a result of any examination of any Tax Return of any Seller have been paid in full; (viii) there are no Encumbrances upon any of any Seller’s assets arising in connection with any failure (or alleged failure) to pay any Tax; (ix) each Seller (A) has complied in all material respects with all Laws relating to the payment and withholding of Taxes from wages, salaries, or other payments to any employee or independent contractor of the Business; (B) has paid over to the proper Government Entity all amounts required to be so withheld; and (C) is not liable for any Taxes for failure to comply with such Laws; (x) none of the Sellers is a party to any Tax allocation or sharing agreement; (xi) none of the Assumed Liabilities is an obligation to make any payment