ASSET PURCHASE AGREEMENT

Execution Version

ASSET PURCHASE AGREEMENT

by and among

GLOBAL MICROWAVE SYSTEMS, INC.,

THE ALLIED DEFENSE GROUP, INC.,

GMS COBHAM INC.

and

DTC COMMUNICATIONS, INC.

August 19, 2008

1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of August 19, 2008, by and among GMS Cobham Inc., a Delaware corporation (the "Buyer" ), DTC COMMUNICATIONS, INC., a New Hampshire corporation (the "Parent" ), GLOBAL MICROWAVE SYSTEMS, INC., a California corporation (the "Seller" ), and THE ALLIED DEFENSE GROUP, INC., a Delaware corporation (the "Shareholder" ). The Parent, the Buyer, the Seller and the Shareholder are sometimes hereinafter referred to individually as a "Party" and collectively as the "Parties."

RECITALS:

A. The Seller is engaged in the development, design, manufacturing, marketing and sale of miniature and subminiature analog and digital transmitters, receivers and related equipment (the "Business" ).

B. The Seller desires to sell and the Buyer desires to purchase the Business and certain assets of the Seller on the terms and conditions set forth in this Agreement. To induce the Buyer to enter into this Agreement, the Seller and the Shareholder are willing to agree to certain covenants contained in this Agreement. Parent enters into this Agreement for the purposes set forth herein.

NOW THEREFORE, to effect the transactions contemplated hereby and in consideration of the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
PURCHASE AND SALE OF ASSETS

1.1 Closing . The consummation of the transactions contemplated hereby (the "Closing" ) shall, unless the Parties agree to another date or place, take place at the offices of Baxter, Baker, Sidle, Conn & Jones, P.A. in Baltimore, Maryland on a date that shall be no later than three (3) Business Days after the date on which such conditions set forth in Article IV of this Agreement shall have been satisfied or waived (the "Closing Date" ).

1.2 Purchase and Sale . Subject to the terms and conditions of this Agreement, at the Closing the Seller shall sell and the Buyer shall purchase the Assets (as defined in Section 1.3), free and clear of all liens, encumbrances and security interests, and the Buyer shall pay to the Seller the consideration specified in Section 1.4.

1.3 Assets to be Transferred . The following is an identification of the assets to be transferred to Buyer at the Closing (the "Assets" ):

(a)  Tangible Assets . All tangible personal property of the Seller, including all machinery, production equipment, manufacturing and test instructions, manufacturing specifications, test equipment, tooling, manufacturing jigs, bills of materials, fixtures, computers, office furniture and equipment and all other vehicles or equipment (the "Tangible Assets" ), together with all of Seller’s books, records and operating data pertaining to the Assets, including books of account, ledgers, general, financial, accounting and personnel records, files, invoices, customer and supplier lists, billing records, sales, advertising and promotional literature, manuals and customer and supplier correspondence (in all cases, in any form or medium);

(b)  Intellectual Property . All intangible assets and intellectual property of the Seller including all goodwill, patents, patent applications, copyrights, copyright applications, trademarks, trade names (including the "Global Microwave Systems" name and all other names by which the operations of the Seller may be known), service marks, trademark and service mark applications, trade dress, logos, domain names, molds and other proprietary designs, computer programs and software, manufacturing and engineering drawings, manufacturing instructions and product test specifications, know-how, trade secrets, marketing files, customer lists, email addresses, websites and telephone numbers (collectively, the " Intellectual Property "); a complete list of (i) all of the Intellectual Property registered with the U.S. Patent and Trademark Office or any other government registration authority (state, local or foreign) and (ii) all trade names is set forth in Schedule 1.3(b) ;

(c)  Inventory. The inventory of the Seller, including supplies, raw materials, work in process and finished goods (the " Inventory ");

(d)  Contracts . Subject to Section 3.5(a) of this Agreement, all right, title and interest of the Seller in, to and under those contracts and purchase and sales commitments and orders to which the Seller is a party or by which the Seller or the properties of the Seller is or may be bound which relate to the Business or the products being manufactured or repaired, including all contracts and orders providing for the purchase, receipt, sale, sales agency or distribution of goods, products or services by the Seller, prepaid items, deposits with respect to those contracts (but excluding all contracts of employment and contracts relating to employees), third party warranties for the benefit of Seller and all distribution and sales representation agreements to which the Seller is a party (the " Contracts ");

(e)  Contract Bids . Subject to Section 3.5(a) of this Agreement, all outstanding customer orders and prepayments, pending contract bids and quotations of the Seller made in the ordinary course of conducting the Business, a complete list of which is included in Schedule 1.3(e) ;

(f)  Government Licenses, Permits and Authorizations . Subject to Section 3.5(a), all licenses, permits, approvals and other governmental or non-governmental authorizations or consents, including all product and facility approvals necessary to own all of the Seller’s properties and assets and to conduct its business as it is now being conducted (collectively the "Licenses" and each individually a "License" ), a complete list of which is set forth in Schedule 1.3(f) ;

(g)  Accounts Receivable . All accounts receivable from customers and other trade debtors of the Seller;

(h)  Leased Real Property . All leases and subleases for land, buildings and improvements leased by Seller, a complete list of which is set forth in Schedule 1.3(h) the "Leased Real Property" );

(i)  Leased Personal Property . All personal property leased by the Seller, a complete list of which together with a list of the assets subject to such leases are set forth in Schedule 1.3(i) ;

(j)  Insurance Claims and Rights . To the extent that liabilities relating to insurance claims and rights under any insurance policy, insurance reserves and accruals, insurance deposits, reserves, dividends, refunds or premium adjustments and prepayments (" Insurance Claims and Rights ") are taken into account in determining the Final Working Capital Amount (as defined in Section 1.10), such Insurance Claims and Rights; and

(k)  Assignment of Non-Compete . The non-compete provisions set forth in the Stock Purchase Agreement dated as of November 4, 2005 by and among the Shareholder, the Seller and Sam Nasiri (the "Stock Purchase Agreement").

1.4 Purchase Price for the Assets . As consideration for the purchase of the Assets, the Buyer shall pay to Seller Twenty-Six Million and No/100 Dollars ($26,000,000.00), as adjusted pursuant to Section 1.10 ( the "Purchase Price" ) payable as follows:

(a) $2,500,000 at Closing to Manufacturers and Traders Trust Company as escrow agent (the " Escrow Agent "), to be paid to Seller pursuant to the Escrow Agreement attached hereto as Schedule 1.4(a) (the " Escrow Agreement ");

(b) $3,350,000 plus all accrued and unpaid interest thereon through the Closing Date to Sam Nasiri pursuant to the promissory note dated November 1, 2005 made by Shareholder in favor of Sam Nasiri, as payment in full of Shareholder’s obligation pursuant to such promissory note; and

(c) the remainder to be payable to Seller at Closing (the "Closing Payment").

1.5 Manner of Payments . All payments of the Purchase Price required to be made hereunder shall be made by wire transfer to bank accounts designated by the Seller.

1.6 Allocation of Purchase Price . The Purchase Price shall be allocated among the Assets, in a manner consistent with the requirements set forth in Section 1060 of the Internal Revenue Code of 1986, as amended (the " Code ") and the Treasury regulations promulgated thereunder, as set forth in Schedule 1.6 . The Buyer and the Seller will each report, on IRS Form 8594 (Asset Acquisition Statement) and any other corresponding state or local form, the federal, state and local income and other tax consequences of the purchase and sale contemplated hereby in a manner consistent with such allocation and neither the Buyer nor the Seller shall take any position inconsistent with such allocation in any federal or state tax return, in any proceeding before any taxing authority or otherwise. In the event that the allocation is disputed by any Taxing Authority, the Party receiving notice of the dispute shall promptly notify the other Party hereto, and Seller and Buyer agree to use their commercially reasonable efforts to defend such allocation in any audit or similar proceeding. If adjustments are made pursuant to Section 1.10, the allocation among the Assets shall be revised to reflect such adjustment consistent with applicable law.

1.7 Assumption of Liabilities . Except as hereinafter provided, the Buyer is not assuming any liabilities of the Seller and the Buyer shall not be obligated to pay for any obligations or liabilities of Seller unless such obligation or liability is listed below (the " Assumed Liabilities "):

(a) The Seller’s liabilities that are taken into account in determining the Final Working Capital Amount (as defined in Section 1.10);

(b) To the extent that such obligations and liabilities are not Excluded Liabilities pursuant to Section 1.9, the Seller’s obligations and liabilities which accrue after the Closing pursuant to any of the Contracts included in the Assets (including but not limited to the real and personal property leases transferred pursuant to Sections 1.3(h) and 1.3(i)) and the Licenses which are transferred pursuant to Section 1.3(f);

(c) Seller’s Liabilities for any employee bonuses, vacation pay, sick pay, or other paid time off accrued prior to the Closing to the extent reflected in the Final Working Capital Amount; and

(d) Product Warranty Claims.

1.8 Excluded Assets . Expressly excluded from the purchase and sale contemplated hereby and from the definition of the term "Assets" are:

(a) The Seller’s cash and cash equivalents, including the Closing Payment.

(b) The corporate seal, minute books, charter documents, corporate stock record books and other records that pertain to the organization, existence or share capitalization of the Seller and duplicate copies of those records included in the Assets that are necessary to enable the Seller to file its tax returns and reports as well as any of the records or materials relating to the Seller generally and not involving or relating to the Assets;

(c) The Employee Benefit Plans of the Seller;

(d) All Tax refunds, Tax credits and Tax reductions of the Seller or to which the Seller has any claims;

(e) Those assets of the Seller that are set forth in Schedule 1.8(e) ; and

(f) Insurance Claims and Rights other than those included in the Assets pursuant to Section 1.3(j).

1.9 Excluded Liabilities . Expressly excluded from the definition of "Assumed Liabilities" are the following (the "Excluded Liabilities" ):

(a) Any of the Seller’s indebtedness for borrowed money;

(b) Any of the Seller’s or the Shareholder’s Liabilities for expenses or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement or the consummation (or preparation for the consummation) of the transactions contemplated hereby, including attorneys’, accountants’ and financial advisory fees;

(c) Any Liability of the Seller with respect to any Taxes, (it being understood that the Buyer shall not be deemed to be the Seller’s transferee with respect to any tax liability);

(d) Any of the Seller’s Liabilities pursuant to any Laws, to the extent that such Liabilities arise in connection with conditions or circumstances existing or arising prior to the Closing;

(e) All Liabilities arising prior to, on or after the Closing under any Environmental Law or relating to Hazardous Substances (i) in connection with any real property or facility owned, leased or operated by Seller prior to the Closing Date, including any formerly operated facilities of the Seller solely to the extent incurred as a result of any act or omission prior to the Closing or (ii) arising from the disposal, or arranging for the disposal or treatment, of Hazardous Substances to any third-party or Superfund waste disposal, reclamation or recycling site by Seller to the extent treated, disposed of, or arranged for, prior to the Closing Date;

(f) Any of the Seller’s Employee Benefit Plans and the Liabilities arising under or related thereto;

(g) Liabilities, if any, arising as a result of transactions entered into in violation of this Agreement;

(h) Any Liabilities for product liability arising from the manufacture or sale of products by the Seller prior to the Closing;

(i) Any Liability of the Seller or the Shareholder to make any payment, whether in cash or stock, to any employee of the Seller that is contingent upon such employee remaining an employee of the Seller through any change in control or sale of assets of the Seller or that is otherwise related to or triggered by such a change in control or sale;

(j) Any Liability arising prior to, on or after the Closing resulting from Seller’s or the Shareholder’s violation of the Communications Act, the rules and policies of the FCC, or any other Law, including but not limited to any Liability arising from: (i) Seller’s or the Shareholder’s failure to obtain FCC Equipment Authorizations for any of Seller’s products (in existence prior to the Closing) which require FCC Equipment Authorizations under the Communications Act and the rules and policies of the FCC; (ii) Seller’s or the Shareholder’s failure to obtain any other FCC license, permit, authorization or approval required under the Communications Act and the rules and policies of the FCC; (iii) Seller’s or the Shareholder’s use or operation of any equipment or facilities authorized under any FCC license, permit, authorization or approval in a manner which is not in accordance with Law, including the Communications Act and the rules and policies of the FCC (including but not limited to any violation of the Communications Act or the FCC’s rules or policies related to Seller’s operation of the facilities authorized under Local Television Transmission Service Station KA86394); or (iv) to the extent not covered by (i)-(iii), any violations by Seller or the Shareholder of the Communications Act or the rules and policies of the FCC.

(k) Except as expressly assumed by Buyer under Section 1.7, any Liability relating to the operation of the Business prior to the Closing; or

(l) Any other Liability of the Seller not expressly assumed by the Buyer under Section 1.7.

1.10 Adjustment of Purchase Price .

(a) Not later than sixty (60) days following the Closing Date, the Seller shall, at the expense of the Seller and, to the extent requested, with the assistance of the Buyer, prepare and submit to Buyer a statement setting forth, in reasonable detail, the Working Capital of the Seller (as defined in this Section 1.10(a)) as of the close of business on the day immediately preceding the Closing Date (the "Proposed Final Working Capital Amount" ). For purposes of this Section 1.10, the "Working Capital of the Seller" shall have the meaning set forth in Schedule 1.10(a) . In the event that the Buyer disputes the correctness of the Proposed Final Working Capital Amount, the Buyer shall notify the Seller in writing of its objections within thirty (30) days after receipt of the statement setting forth the calculation of the Proposed Final Working Capital Amount and shall set forth, in writing and in reasonable detail, each of the reasons for the Buyer’s objections. If the Buyer fails to deliver such notice of objections within such time, the Buyer shall be deemed to have accepted the statement setting forth the calculation of the Proposed Final Working Capital Amount. The Buyer and the Seller shall endeavor in good faith to resolve any disputed matters within twenty (20) days after the Seller’s receipt of the Buyer’s notice of objections. If the Buyer and the Seller are unable to so resolve the disputed matters, the Buyer and the Seller shall select a nationally known independent accounting firm (which firm shall not then be providing any services to the Buyer, the Shareholder or the Seller) (the "Working Capital Independent Accountant" ) to resolve the matters in dispute (in a manner consistent with Section 1.10(b)), including the appropriate amount of interest, if any, due on the disputed amount (determined in accordance with Section 1.10(c) or Section 1.10(d), as the case may be), and the determination of the Working Capital Independent Accountant in respect of the correctness of each matter remaining in dispute shall be conclusive and binding on the Buyer and the Seller. The Working Capital of the Seller as of the close of business on the day immediately preceding the Closing Date, as finally determined pursuant to this Section 1.10(a) (whether by failure of the Buyer to deliver notice of objection, by agreement of the Buyer and the Seller or by determination of the Working Capital Independent Accountant), is referred to herein as the "Final Working Capital Amount."

(b) The Proposed Final Working Capital Amount and the Final Working Capital Amount shall be calculated in accordance with Schedule 1.10(a) and using the significant accounting policies and accounting practices set forth on Schedule 1.10(b) . Without limiting the generality of the foregoing, the reserves of the Seller used in connection with the determination of the Proposed Final Working Capital Amount and the Final Working Capital Amount shall be the same as the reserves set forth on the balance sheet of the Seller dated December 31, 2007, absent a significant change in circumstances between December 31, 2007, and the Closing Date.

(c) If the Final Working Capital Amount is greater than Four Million Three Hundred Eighty Two Thousand Dollars ($4,382,000), the excess shall be paid by the Buyer to the Seller by wire transfer of immediately available funds to an account or accounts designated in writing by the Seller within five (5) Business Days of the date on which the Final Working Capital Amount is finally determined, together with simple interest thereon during the period commencing on the Closing Date and ending on the date of payment (the "Interest Period" ) at a rate equal to the 30-day London Interbank Offered Rate ( "LIBOR" ) in effect from time to time during the Interest Period.

(d) If the Final Working Capital Amount is less than Four Million Three Hundred Eighty Two Thousand Dollars ($4,382,000), the deficiency shall be paid by the Seller to the Buyer by wire transfer of immediately available funds to an account designated in writing by the Buyer within five (5) business days of the date on which the Final Working Capital Amount is finally determined, together with simple interest thereon during the Interest Period at a rate equal to LIBOR in effect from time to time during the Interest Period.

(e) Subject to any applicable privileges (including the attorney-client privilege and the work product privilege), the Seller shall make available to the Buyer and, upon request, to the Working Capital Independent Accountant, the books, records, documents and work papers underlying the preparation of the statement setting forth the Proposed Final Working Capital Amount. Subject to any applicable privileges (including the attorney-client privilege and the work product privilege), the Buyer shall make available to the Seller and, upon request, to the Working Capital Independent Accountant, the books, records, documents and work papers created or prepared by or for the Buyer in connection with its review of the Proposed Final Working Capital Amount.

(f) If, as finally determined by the Working Capital Independent Accountant, all of the matters in dispute shall be resolved in favor of the Buyer, then the Seller shall pay all fees and expenses of the Working Capital Independent Accountant. If, as finally determined by the Working Capital Independent Accountant, all of the matters in dispute shall be resolved in favor of the Seller, then the Buyer shall pay all fees and expenses of the Working Capital Independent Accountant. If, as finally determined by the Working Capital Independent Accountant, the matters in dispute shall be resolved partially in favor of the Buyer and partially in favor of the Seller, then the Buyer and the Seller shall each pay one-half (1/2) of the fees and expenses of the Working Capital Independent Accountant.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Seller and the Shareholder . The Seller and the Shareholder hereby jointly and severally represent and warrant to the Parent and the Buyer that:

(a)  Corporate Standing and Authority; Binding Agreement . The Seller is a corporation duly organized, validly existing and in good standing under the laws of California and the Shareholder is a corporation duly organized, validly existing and in good standing under the laws of Delaware. The Seller and the Shareholder each have full corporate power to own all of their properties and assets and to conduct their businesses as they are now being conducted, and neither their ownership or leasing of property nor the conduct of their businesses requires any of them to be qualified as a foreign entity in any jurisdiction in which any of them are not qualified, except where the failure to qualify would not have a Material Adverse Effect. Set forth in Schedule 2.1(a) is a listing of the jurisdictions, if any, where the Seller or any of the Subsidiaries is qualified as a foreign entity. The execution of this Agreement and the consummation of the transactions contemplated hereby will not violate any provision of the Articles of Incorporation or Bylaws of the Seller or the Shareholder, and the Seller and the Shareholder have each obtained all necessary authorization and approval from their Boards of Directors, shareholders, partners, members and/or managers, as the case may be, for the execution of this Agreement and the consummation of the transactions contemplated hereby. This Agreement is a legal, valid and binding agreement of the Seller and the Shareholder, enforceable against each of them in accordance with its terms, except that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws or equitable principles generally affecting creditors’ rights. True, complete and correct copies of the Articles of Incorporation and Bylaws of the Seller have been made available to the Parent and the Buyer. The Seller has no subsidiaries or equity interests in any entity.

(b)  Absence of Conflicting Agreements or Required Consents . Except as set forth in Schedule 2.1(b) , the execution, delivery and performance of this Agreement by the Seller and the Shareholder do not and will not: (i) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to any of the Seller or the Shareholder or by which either of them is bound or affected, (ii) result in any breach of or constitute a default under any note, bond, mortgage, indenture, lease, license, franchise or other instrument or obligation to which the Seller or the Shareholder is a party or (iii) require any novation, consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, or any Person not a party to this Agreement.

(c)  Financial Statements . The Seller has furnished the Buyer with the following information with respect to the Seller: (i) the income tax returns for the years ended December 31, 2005, 2006 and 2007; and (ii) unaudited financial statements as at December 31, 2005, 2006 and 2007 and for the fiscal years then ended and the unaudited balance sheet as at June 30, 2008 (the statements referred to in the foregoing clause (ii) being collectively referred to hereinafter as the "Financial Statements" ). The Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ( "U.S. GAAP" ) consistently applied throughout the periods indicated, subject to normal recurring year-end adjustments and the absence of footnotes required by GAAP. The Financial Statements are true, correct and complete in all material respects and fairly present the financial condition and results of the operations of the Seller as of the dates and for the periods indicated, and the Seller and the Shareholders acknowledge that the Buyer has placed considerable reliance on the Financial Statements in the calculation and negotiation of the Purchase Price.

(d)  Corporate Controls . The Seller makes and keep accurate books and records reflecting its assets and maintains internal accounting controls that provide reasonable assurance that: (i) transactions are executed with management’s authorization; (ii) transactions are recorded as necessary to permit preparation of the financial statements of the Seller and to maintain accountability for its assets; (iii) access to its assets is permitted only in accordance with management’s authorization; and (iv) the books and records of its assets are compared with its actual assets at reasonable intervals.

(e)  Undisclosed Liabilities . There are no Liabilities of the Seller of any kind, whether accrued, absolute, contingent or otherwise except: (i) as set forth in Schedule 2.1(e) ; (ii) as indicated in the balance sheet as of December 31, 2007 or April 30, 2008; or (iii) Liabilities or obligations arising since December 31, 2007 or April 30, 2008 which: (A) were incurred in the ordinary and usual course of the business of the Seller consistent with past practices and in the aggregate do not exceed $50,000, and with respect to any individual item or group of related items do not exceed $25,000; (B) are of types and in amounts consistent with the past practices of the Seller; and (C) do not benefit the Shareholder.

(f)  Taxes .

(i) The Seller has filed all Tax returns and reports which are required by law to be filed prior to the Closing and has paid all Taxes due and owing by the Seller (whether or not shown or required to be shown on any Tax return) and has paid all Taxes which have or may become due pursuant to those returns and reports, and all assessments made and all other accrued Taxes, whether or not the returns, reports or payments are yet due. Schedule 2.1(f) sets forth those income, sales and use, employment and other Tax returns that have been examined by any taxing authority since December 31, 2003. All filed Tax returns and reports of the Seller are true, correct and complete in all respects and there is no outstanding claimed deficiency with respect to any Tax period, no formal or informal notice of a proposed deficiency, no notification of any pending audit of any Tax returns or reports and no waiver or extension granted by the Seller with respect to any statute of limitations affecting the assessment of any Tax. The liabilities and reserves for Taxes in the Financial Statements are sufficient in the aggregate for the payment of all unpaid federal, state and local Taxes (including any interest or penalties thereon), whether or not disputed, for which the Seller may be liable in its own right or as transferee of the assets of, or successor to, any corporation, person, association, partnership, joint venture or other entity.

(ii) Except as disclosed in Schedule 2.1(f) : (a) proper and accurate amounts have been withheld by the Seller from its employees and others for all prior periods in compliance in all material respects with the Tax withholding provisions of applicable federal, state and local laws and regulations, and proper due diligence steps have been taken in connection with back-up withholding; (b) returns which are true, correct and complete in all material respects have been filed by the Seller for all periods for which returns were due with respect to income tax withholding, value added or goods and services taxes and unemployment taxes; and (c) the amounts shown on such returns to be due and payable have been paid in full or adequate provision therefor has been included by the Seller in the most recent Financial Statements.

(iii) No audit of any return of the Seller is currently in progress, and the Seller has not been notified that such an audit is contemplated by any taxing authority. The Seller does not contemplate the filing of any amendment to any return. The Seller does not have any actual or potential material liability for any Tax obligation of any taxpayer (including any affiliated group of corporations or other entities which included the Seller during a prior period). There are no Tax claims pending or, to Seller’s Knowledge, threatened against the Seller and there are no material Tax claims threatened to be asserted against the Seller. There are no material issues which have been raised in prior periods or audits which by application of similar principles are expected to result in a material Tax claim for any other period.

(iv) Neither the Buyer nor the Parent will be required to deduct and withhold any amount pursuant to section 1445(a) of the Code upon the transfer of the Assets to the Buyer.

(v) There are no liens for Taxes upon the Assets.

(g)  Inventories . The inventory of the Seller: (i) complies with all applicable federal laws and regulations and with all applicable laws and regulations of each of the states of the United States in which the Seller does business or into which any product would be shipped directly by the Seller; (ii) does not contain any Hazardous Substances; and (iii) consists of items of a quantity and quality historically useable and/or saleable in the ordinary course of business, except for obsolete and slow-moving items and items below standard quality, substantially all of which have been or will have been written off or written down on the Financial Statements in accordance with U.S. GAAP consistently applied prior to or at the Closing. The inventory reflected in the Financial Statements has been acquired in the ordinary course of business of the Seller in accordance with its normal inventory practices and is stated in accordance with U.S. GAAP consistently applied.

(h)  Non-Infringement of Patents, Trademarks and Other Intellectual Property . Except as set forth in Schedule 2.1(h) , the Seller is the sole owner of the Intellectual Property free and clear of all liens, encumbrances and rights of others. The Intellectual Property does not infringe or violate the rights of any Person. There is no pending or, to Seller’s Knowledge, threatened claim of infringement or violation of the rights of others with respect to the Intellectual Property, and, to Seller’s Knowledge, there is no use or exploitation by another Person which would conflict with the Seller’s claim to ownership of any right to use any of the Intellectual Property or which is similar to the Intellectual Property so as to create a reasonable possibility of confusion as to the source of the ownership of any of the Intellectual Property by any member of the public. Except as set forth on Schedule 2.1(h) , neither the Seller nor the Shareholder has licensed or permitted any other Person to use or exploit any of the Intellectual Property currently or at any time in the future, and neither the Seller nor the Shareholder has suffered any such exploitation to exist. The Seller has never been involved in any controversy with another Person involving the use or exploitation of any of the Intellectual Property, and there are not any past or present disputes with respect to the Intellectual Property. Schedule 2.1 (h) sets forth a listing of all registrations in any governmental office or registry with respect to any of the Intellectual Property. All patents and patent applications of the Seller have been validly and properly assigned to the Seller by the inventor.

The right of the Seller to use or exploit the Intellectual Property is not dependent upon any license, permit, grant or agreement, except as set forth in Schedule 2.1(h) , and the Seller owns or licenses all of the Intellectual Property necessary to the conduct of its business as conducted on the date hereof. Except as set forth on Schedule 2.1(h) , neither the Seller nor the Shareholder is obligated to make any royalty or other payments with respect to any of the Intellectual Property. The Seller is not in default under any license or sublicense agreement involving any of the Intellectual Property with a third party. To Seller’s Knowledge, there is no material defect in any of the Intellectual Property (e.g., including the abandonment of a trademark or a defect which could give rise to cancellation of a trademark registration or invalidation of a patent). The actual design of the products of the Seller and the manufacturing processes used therefor are proprietary to the Seller.

To Seller’s Knowledge, there is no patent, patent application, copyright, copyright application, trademark, trademark application or other intellectual property right which would reasonably be expected to be the basis for an infringement claim with respect to the Business.

(i)  Operations and Use of Properties . Except as set forth on Schedule 2.1(i) , the operations, business and properties, including leased properties, of the Seller comply in all material respects with all applicable laws or orders or other governmental or administrative laws, ordinances, regulations or orders, including zoning, land use and building codes and those relating to motor vehicle registration, permitting, inspection and operation. The assets of the Seller are sufficient for the conduct of its business as it is currently conducted and as it is proposed to be conducted in accordance with Seller’s current commitments.

(j)  Licenses, Permits and Authorizations . The Seller in its name has all Licenses, all of which are listed in Schedule 2.1(j) . Each License is valid and in full force and effect. Except as set forth in Schedule 2.1(j) , the continuation, validity and effectiveness of each License will in no way be affected by the consummation of the transactions contemplated by this Agreement.

(k)  Insurance . The Seller is covered by valid and currently effective insurance policies issued in favor of the Seller for such risks and in such amounts which are, in the best judgment of the Seller after advice from one or more qualified insurance broker(s), customary in the locales of operation of the Seller for companies operating similar businesses and operations. Since it commenced operations, the Seller has been continuously insured for product liability risks with respect to products sold by it and the insurance coverage will continue beyond the Closing Date for the applicable period of liability with respect to products sold by the Seller prior to the Closing. The policies of insurance of the Seller in effect since December 31, 2005, are listed and described in Schedule 2.1(k) . All such policies, including any insurance policies previously maintained by the Seller, provide "per occurrence" coverage. The Seller has never been denied insurance coverage nor has such coverage been conditioned upon special terms or rates of premium. Schedule 2.1(k) lists and briefly describes all claims made by the Seller under insurance policies since December 31, 2005.

(l)  Environmental Matters .

(i) The Seller (including its operations, businesses and properties, whether owned or leased, now or in the past) has been and is in compliance with all applicable Laws implemented and/or enforced by any ministry, department or administrative or regulatory agency relating to the protection of the environment, occupational health and safety or the manufacture, processing, distribution, use, generation, treatment, storage, disposal, discharge, transport or handling of any pollutants, contaminants, petroleum, chemicals or industrial, toxic or hazardous wastes or substances (such Laws being hereinafter referred to as "Environmental Laws" and such wastes of substances being hereinafter referred to as "Hazardous Substances" ), except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect.

(ii) The Seller has obtained all licenses, permits, approvals, consents, certificates, registrations and other authorizations under Environmental Laws required for the operation of the business of the Seller (collectively the "Environmental Permits" and individually an "Environmental Permit" ), all of which are described in Schedule 2.1(l) . Each Environmental Permit is valid, subsisting and in good standing and the Seller is not and has not been in violation, default or breach of any Environmental Permit and no proceeding is pending or, to Seller’s Knowledge, threatened to revoke or limit any Environmental Permit.

(iii) The Seller has not used or permitted to be used, except in compliance with Environmental Laws, any of its properties (including the Seller’s Facilities or facilities, or any property or facility that it previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle Hazardous Substances).

(iv) The Seller has never received any notice of or been prosecuted for an offense alleging non-compliance with any Environmental Laws, and the Seller has not settled any allegation of non-compliance short of prosecution. There are no orders or directions relating to environmental matters requiring any work, repairs, construction, investigation, clean up of contamination or capital expenditures ( "Work" ) with respect to the Business or any property of the Seller (including the Seller’s Facilities), and the Seller has not received notice of any of the same and is not required by Environmental Laws to undertake any Work.

(v) The Seller has not caused or permitted and, to Seller’s Knowledge, there has not been, any release, in any manner whatsoever, of any Hazardous Substances on or from any of its properties (including the Seller’s Facilities) or assets or any property or facility that any of them previously owned or leased, or any such release on or from a facility owned or operated by third parties but with respect to which the Seller is or would reasonably be expected to have any liability. All Hazardous Substances and all other wastes and other materials and substances used in whole or in part by the Seller or resulting from the Business have been used, generated, disposed of, treated and stored in compliance with all Environmental Laws, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. Schedule 2.1(l) identifies all of the locations where Hazardous Substances used in whole or in part by the Seller have been or are being stored or disposed of.

(vi) The Seller has not received any notice that it is potentially responsible for a federal, state, municipal or local clean-up site or corrective action under any Environmental Laws. The Seller has not received any request for information in connection with any federal, state, municipal or local inquiries as to any sites at which contamination is or is suspected to exist.

(vii) The Seller has delivered to Buyer true and complete copies of all environmental audits, evaluations, assessments, studies or tests relating to the Seller which have been conducted on behalf of the Seller or the Shareholder.

(m)  Receivables . All accounts receivable, notes receivable and other receivables reflected in the Financial Statements (the "Accounts Receivable" ) have been properly recorded on the books of the Seller and arose from bona fide transactions in the ordinary course of business and reflect credit terms consistent with past practices of the Seller. None of the Accounts Receivable outstanding on the date of this Agreement are, or on the date of the Closing will be, in dispute or subject to any reduction, offset or counterclaim, subject to the reserve for doubtful accounts set forth on the Financial Statements.

(n)  Employees and Labor Laws .

(i)  Labor Disputes . The Seller has not experienced any strikes, lockouts, grievances or other material labor disputes or demands for recognition of a union as collective bargaining agent for all or any part of the Seller’s employees, and the Seller is not a party to any collective bargaining or other labor agreement.

(ii)  Employment Agreements . Except as disclosed in Schedules 2.1(n) and 2.1(q)(i) the Seller has no written agreements of employment or oral agreements or understandings with any employee as to any specific period of employment or any severance agreements with any employee. There are no oral agreements or understandings with employees, except as to current salary, including performance incentive programs, or wage rates, and there are no other oral agreements or understandings involving the employment practices or operations of the Seller. Schedule 2.1(n) sets forth a list of all arrangements for deferred compensation, supplemental retirement benefits and change in control/ownership payments to officers, directors, employees, shareholders or consultants of the Seller.

(iii)  Proceedings . No employee of the Seller is presently the subject of a disciplinary proceeding or is otherwise being considered for termination.

(iv)  Collective Bargaining Agreements . No employee of the Seller is covered by a collective bargaining agreement and the Seller has not made any contracts with any labor union or employee association or any commitments to conduct, or conducted, negotiations with any labor union or employee association with respect to any future collective bargaining agreements and there are, to Seller’s Knowledge, no current attempts to organize or establish any labor union or employee association with respect to any employees of the Seller or any certification of any such union or association with regard to a bargaining unit.

(v)  Salary . The transactions contemplated by this Agreement will not cause an increase in the salary or rate of pay of any employee of the Seller, and, except as set forth in Schedule 2.1(n) : (A) no employee of the Seller has been given an increase in salary or rate of pay in excess of five percent (5%) of such employee’s salary or rate of pay since December 31, 2007; and (B) there are no outstanding commitments for increases in any employee’s salary or rate of pay.

(vi)  Layoffs and Relocations . The Seller has not laid off or relocated any of its employees within the thirty days prior to the date of this Agreement.

(o)  Product Labeling, Product Liability and Product Warranty . The Seller is in compliance with all Laws relating to product labeling, product safety and public health and safety, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect. The Seller has not received any notice of any claim that any product now or heretofore offered for sale or sold by the Seller or distributed by the Seller is injurious to the health and safety of any person or is not in conformity with its specifications or not suitable for any purpose or application for which it is offered for sale, sold or distributed. Schedule 2.1(o) describes the warranties given by the Seller with respect to its products and sets forth a description of all Product Liability Claims ever asserted against the Seller with respect to its products. Except as set forth in Schedule 2.1(o) , there are no outstanding returns of any products from customers of the Seller which have not been recorded in the books of the Seller or issues relating to products delivered by the Seller that would reasonably be expected to give rise to any product returns.

(p)  Seller’s Contracts . Schedule2.1(p) identifies all of the Contracts in excess of $25,000, true and complete copies of which, with respect to written contracts, have been delivered to Buyer and Seller has provided Buyer with a true and complete summary of each oral Contract in excess of $25,000 (each a "Material Contract" and collectively the "Material Contracts" ). Except as set forth on the attached Schedule 2.1(p) , all of the Material Contracts were entered into in the ordinary course of business. Each of the Material Contracts is a valid and binding obligation of the parties thereto in accordance with its terms, subject in each case to bankruptcy, insolvency, reorganization, moratorium and similar laws of general application relating to or affecting creditors rights and to general principles of equity. Except as set forth on the attached Schedule 2.1(p) , Seller has performed and complied in all material respects with the provisions of each Material Contract and is not in default under any Material Contract; and, to Seller’s Knowledge, no other party to any Material Contract is in default thereunder. Subject to Section 3.5(a), the execution of this Agreement and the consummation of the transactions contemplated hereby will not violate any provision of any of the Material Contracts and will not result in or create a right of termination, cancellation or adverse modification of any of the Material Contracts. The Seller is not a party to any Material Contract which provides for retrospective price concessions or adjustments or entities the other party thereto to participate in any retrospective discount or rebate programs, and the Seller has no liability whatsoever to provide refunds of selling prices to any customer with respect to any products sold or delivered prior to the Closing. The Seller has not incurred any material obligation to indemnify another party to a Material Contract under the terms of any Material Contract. The Seller has no Material Contract with any customer involving sales to that customer that would be expected to result in a loss to the Seller as determined under U.S. GAAP. Except as set forth in Schedule 2.1(p) , there are no Material Contracts or outstanding quotations for the sale of products which are priced below the Seller’s published prices for the products that are the subject of such Material Contract or related quotation or not in accordance with the Seller’s or a Subsidiary’s normal and ordinary practice. Schedule 2.1(p) contains a complete list of (i) all deliveries of products that the Seller has made since December 31, 2007, which was delivered seven (7) days or more prior to the due date; and (ii) all prepayments made to the Seller by any of its customers.

(q)  Employee Benefit Plans .

(i)  Schedule 2.1(q)(i) lists all employee pension benefit plans (as defined in section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ( "ERISA" )(each a "Pension Plan" ), all employee welfare benefit plans (as defined in section 3(1) of ERISA) (each a "Welfare Plan" ), all specified fringe benefit plans (as defined in section 6039D(d) of the Code and all executive compensation, retirement, supplemental retirement, deferred compensation, incentive, bonus, severance, compensation associated with change in control, perquisite, health care, death benefit, medical insurance, disability insurance, life insurance, vacation pay, sick pay, stock option, stock appreciation, stock purchase, phantom stock or other equity-based performance or other employee or retiree benefit or compensation plan, program, arrangement, agreement, policy or understanding, whether written or unwritten to which the Seller is or has since December 31, 2003, been a party, or with respect to which the Seller has or may in the future have an obligation, or that are or have been since December 31, 2003, maintained, contributed to or sponsored by the Seller for the benefit of any current or former employee, officer or director (such plans, programs, and arrangements being hereinafter referred to individually as an "Employee Benefit Plan" and collectively as the "Employee Benefit Plans" ). The Financial Statements accurately reflect all commitments of the Seller with respect to the Employee Benefit Plans to the extent required by U.S. GAAP.

(ii) The Shareholder has furnished or will furnish Buyer with a complete and accurate copy of each Employee Benefit Plan document (including, in each case, all amendments) and a complete and accurate copy of all material documents relating to each such plan, including, if applicable: (A) each trust agreement, insurance or annuity contract, investment management agreement, custodial agreement and other agreement relating to the funding of such plan, and all amendments thereto; (B) the most recent summary plan description and any subsequent summary of material modifications; and (C) with respect to the ADG Companies 401(k) Plan, the most recently filed annual return reports (Form 5500 series), including all applicable schedules, and the most recent financial statements.

(iii) With respect to the ADG Companies 401(k) Plan: (A) the Plan is qualified under section 401(a) of the Code and any trust through which such Plan is funded is exempt from federal income tax under section 501(a) of the Code; (B) the Internal Revenue Service has issued a favorable determination as to the qualified status of such Pension Plan and trust under the Code; and (C) nothing has occurred that would reasonably be expected to materially and adversely affect the qualified status of such Plan or any trust through which such Plan is funded.

(iv) No asset of the Seller or any Subsidiary is the subject of a Lien arising under section 302(f) of ERISA or section 412(n) of the Code.

(v) All contributions, insurance premiums or payments required to be made or paid with respect to the Employee Benefit Plans have been made by their respective due dates.

(vi) Except as disclosed in Schedule 2.1(q)(vi) , no Employee Benefit Plan, and no other commitment or agreement, provides for the payment of separation, severance or similar benefits to any person solely as a result of any transaction contemplated by this Agreement or as a result of a "change in control", and the consummation of the transaction contemplated by this Agreement will not accelerate the time of payment or vesting of, or increase the amount of, any compensation due to any employee.

(vii) Except as disclosed in Schedule 2.1(q)(vii) , the Seller has no liability with respect to any employee or former employee for post-employment benefits other than as required by section 4980B of the Code and Part 6 of Title I of ERISA.

(viii) There has been no representation made to or communication with any employee by the Seller that is not in accordance with the existing terms and limitations of the Employee Benefit Plans. The Seller has not made any commitment to modify any, or create any other, Employee Benefit Plan.

(r)  Title IV Plans . Neither the Seller nor any entity that is or has ever been a member of either (i) a controlled group (within the meaning of section 414(b) or (c) of the Code) or (ii) an affiliated service group (within the meaning of section 414(m) or (o) of the Code) that, in either case, includes or included the Seller or any Subsidiary or an entity of which the Seller is a successor (each an "ERISA Affiliate" ) has ever maintained a plan subject to Title IV of ERISA. Neither the Seller nor any ERISA Affiliate has ever had any obligation to contribute to any "multiemployer plan" (within the meaning of section 4001(a)(3) of ERISA) or a "multiple employer plan" (within the meaning of section 4063 or 4064 of ERISA) with respect to any of its employees.

(s)  Litigation . Except as set forth in Schedule 2.1(s) , there are no: (i) claims, suits, actions, citations, administrative or arbitration or other proceedings or governmental investigations pending or, to Seller’s Knowledge, threatened against the Seller or to which the Seller is a party or relating to any of the properties (owned or leased), businesses or business practices of the Seller or the transactions contemplated by this Agreement; or (ii) judgments, orders, writs, injunctions or decrees of any court or administrative agency involving the Seller or affecting their assets or businesses.

(t)  Customers . Except as set forth in Schedule 2.1(t) , no single customer or customers group of affiliated customers has accounted for more than ten percent (10%) of the gross sales of the Seller since December 31, 2005. Except as set forth on Schedule 2.1(t) , since December 31, 2005, no customer of the Seller has terminated or communicated to the Seller the intention or threat to terminate its relationship with the Seller, or the intention to substantially reduce the quantity of products or services it purchases from the Seller.

(u)  No Side Agreements . Except for this Agreement and the items listed in the schedules and exhibits hereto, (i) the Seller is not a party to any agreement calling for any action outside the ordinary course of business; (ii) no agreement or understanding exists calling for any payment or consideration from a customer or supplier to an officer, director, manager or shareholder respecting any transaction between the Seller and such supplier or customer; and (iii) except as set forth in Schedule 2.1(u) , no affiliate of the Seller, directly or through any business concern affiliated with such affiliate, transacts any business with the Seller.

(v)  Suppliers and Tooling . Except as set forth on Schedule 2.1(v) , there are no sole or majority source suppliers or subcontractors for any purchased parts or sub-assemblies in respect of current sales or projected sales by the Seller. Schedule 2.1(v) sets forth details regarding which, if any, subcontractors hold materials provided to such subcontractor by the Seller without charge and a list of tooling, jigs, manufacturing instructions, test specifications and bills of material used in the manufacture of the parts or sub-assemblies that the Seller procures from suppliers, as well as where it is possible that the Seller would reasonably be expected to encounter any difficulty in removing or relocating such tooling, jigs, manufacturing instructions, test specifications and bills of material or where there is any question regarding the title to such tooling, jigs, manufacturing instructions, test specifications and bills of material.

(w)  Title to Assets . Except for Permitted Liens, there are no liens, claims, security interests, mortgages, easements, restrictions, charges or encumbrances affecting any of the assets of the Seller and the Seller has good and marketable title to its assets.

(x)  Machinery and Equipment . The machinery and equipment of the Seller is in good operating condition and repair, ordinary wear and tear and aging excepted, to allow for the day-to-day operation of the Busines