ASSET PURCHASE AGREEMENT

Exhibit 2.1

ASSET PURCHASE AGREEMENT

BY AND AMONG

HAMCO, INC. ,

NEAT SOLUTIONS, INC.

AND

EACH OF THE SHAREHOLDERS OF

NEAT SOLUTIONS, INC.

Dated as of

July 2, 2009

TABLE OF CONTENTS

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “ Agreement ”) is entered into as of the 2nd day of July, 2009, by and among HAMCO, INC. , a Louisiana corporation (the “ Purchaser ”), NEAT SOLUTIONS, INC. , a Florida corporation (the “ Seller ”), and each of the undersigned shareholders of the Seller (each a “ Shareholder ,” and collectively, the “ Shareholders ”).

WHEREAS , the Seller is engaged in the business of designing, manufacturing, marketing, importing, selling and distributing various types of products for the infant and toddler retail market (the “ Business ”);

WHEREAS , the Purchaser desires to purchase from the Seller, and the Seller desires to sell to the Purchaser, substantially all of the assets of the Seller used in the conduct of the Business, upon the terms and conditions of this Agreement; and

WHEREAS , certain capitalized terms used in this Agreement have the meanings assigned to them in Section 7.1;

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

ARTICLE I
PURCHASE AND SALE OF THE PURCHASED ASSETS

Section 1.1 Sale and Transfer of the Purchased Assets . Subject to the terms and conditions of this Agreement, as of the Closing, which shall occur simultaneously with the execution and delivery of this Agreement, the Seller shall sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser shall purchase and accept from the Seller, all of the Purchased Assets, free and clear of any and all Encumbrances (other than Permitted Encumbrances), for an aggregate consideration equal to the Final Cash Purchase Price (as finally determined and adjusted pursuant to this Agreement) plus the assumption of the Assumed Liabilities (together, the “ Purchase Price ”).

Section 1.2 Excluded Assets . Notwithstanding anything to the contrary in this Agreement, the Seller does not sell to the Purchaser, and the Purchaser does not purchase or accept from the Seller, the Excluded Assets, and the Excluded Assets shall remain the property of the Seller after the Closing.

Section 1.3 The Preliminary Cash Purchase Price .

(a) Subject to the terms and conditions of this Agreement, in consideration of the aforesaid sale, conveyance, transfer, assignment and delivery of the Purchased Assets, the Purchaser shall pay to the Seller the Preliminary Cash Purchase Price at the Closing in accordance with Section 2.3(d), which sum shall be subject to adjustment following the Closing as provided in Section 1.4 (as so adjusted, the “ Final Cash Purchase Price ”).

(b) At the Closing, the Purchaser shall deposit a sum equal to ten percent (10%) of the Preliminary Cash Purchase Price as reduced by the Besner Loan Payment (the “ Escrow Amount ”), on behalf of the Seller, with an escrow agent reasonably acceptable to the Purchaser and the Seller (the “ Escrow Agent ”), pursuant to an escrow agreement between the Purchaser, the Seller and the Escrow Agent (the “ Escrow Agreement ”), which Escrow Amount is intended to be available to satisfy the Seller’s obligations, if any, under Section 1.4(c)(ii).

Section 1.4 The Final Cash Purchase Price .

(a) As promptly as practicable, but no later than thirty (30) days after the Closing Date, the Purchaser shall cause to be prepared and delivered to the Seller a statement of Closing Net Equity and Retained Cash as of the Closing Date (the “ Closing Retained Cash ”) setting forth in reasonable detail the Purchaser’s calculations thereof (the “ Statement of Closing Calculations ”). If the Seller disagrees in any respect with the Statement of Closing Calculations, then, within the thirty (30) days after its receipt thereof, the Seller may deliver a notice to the Purchaser (the “ Notice of Disputed Items ”) setting forth in reasonable detail the items contained in the Statement of Closing Calculations that the Seller disputes and the basis for such dispute (the “ Disputed Items ”). If the Seller does not deliver a Notice of Disputed Items within such 30-day period, then the Purchaser’s Statement of Closing Calculations shall be final and be deemed a Final Resolution for purposes of this Agreement as of the expiration of such 30-day period. If the Seller delivers a Notice of Disputed Items, then the Purchaser and the Seller shall use their reasonable best efforts to negotiate in good faith an agreement as to all such Disputed Items. If such agreement is not reached within fifteen (15) days after the Purchaser’s receipt of the Notice of Disputed Items, then the Purchaser and the Seller shall (i) submit their unresolved disputes for final resolution (the “ Final Resolution ”) to an independent, nationally recognized accounting firm, having no material relationship with any party to this Agreement, to be mutually agreed upon by the Purchaser and the Seller (the “ Accounting Referee ”) and (ii) jointly direct the Escrow Agent in writing to release to the Seller the amount of the Escrow Amount, if any, in excess of the greatest amount that may become payable to the Purchaser from the Escrow Amount pursuant to Section 1.4(c)(ii) upon the resolution of the Disputed Items by the Accounting Referee. The Accounting Referee shall consider only those items or amounts contained in the Notice of Disputed Items as to which the Seller and the Purchaser were unable to resolve their disputes and shall deliver to the Purchaser and the Seller, as promptly as practicable (but in any event no later than thirty (30) days after the Accounting Referee’s engagement), a report setting forth its calculations, which report, absent manifest error, shall be final and binding upon the Purchaser and the Seller. The costs of the Accounting Referee shall be borne equally by the Purchaser and the Seller.

(b) Upon the determination of Closing Retained Cash and Closing Net Equity, whether by the agreement of the parties or by Final Resolution, the following adjustments shall be made to the Preliminary Cash Purchase Price to calculate the Final Cash Purchase Price:

(i) if such Closing Net Equity exceeds $1,027,045.45 (such excess, if any, the “ Equity Increase ”), then an amount equal to the Equity Increase shall be added to the Preliminary Cash Purchase Price;

(ii) if such Closing Net Equity is less than $527,045.45 (such shortfall, if any, the “ Equity Decrease ”), then an amount equal to the Equity Decrease shall be deducted from the Preliminary Cash Purchase Price;

(iii) if such Closing Retained Cash is less than Estimated Retained Cash (such shortfall, if any, the “ Retained Cash Shortfall ”), then an amount equal to the Retained Cash Shortfall shall be added to the Preliminary Cash Purchase Price; and

(iv) if such Closing Retained Cash exceeds Estimated Retained Cash (such excess, if any, the “ Retained Cash Excess ”), then an amount equal to the Retained Cash Excess shall be deducted from the Preliminary Cash Purchase Price.

(c) Within three (3) Business Days following the earlier of (A) the date on which the parties reach agreement with respect to Closing Retained Cash and Closing Net Equity and (B) the date of Final Resolution:

(i) if the Final Cash Purchase Price equals or exceeds the Preliminary Cash Purchase Price, then the Purchaser shall pay to the Seller the amount, if any, by which the Final Cash Purchase Price exceeds the Preliminary Cash Purchase Price, together with interest on such amount as provided in Section 1.4(d), and the Purchaser and the Seller shall jointly direct the Escrow Agent in writing to pay the remaining balance of the Escrow Amount to the Seller; or

(ii) if the Final Cash Purchase Price is less than the Preliminary Cash Purchase Price, then the Purchaser and the Seller shall jointly direct the Escrow Agent in writing to pay to the Purchaser from the Escrow Amount the amount by which the Final Cash Purchase Price is less than the Preliminary Cash Purchase Price, together with interest on such amount as provided in Section 1.4(d), and to the extent that (A) the Escrow Amount is insufficient to cover such difference, the Seller shall make payment of such shortfall by wire transfer to the Purchaser, and (B) any portion of the Escrow Amount remains after payment therefrom is made to the Purchaser pursuant to this Section 1.4(c)(ii), the Escrow Agent, pursuant to the joint written direction of the Purchaser and the Seller, shall pay any such remaining amount to the Seller.

(d) The amount of any payment to be made pursuant to Section 1.4(c) shall bear interest from and including the Closing Date to, but excluding, the date of payment at a rate per annum equal to the rate of interest published by The Wall Street Journal (Eastern Edition) on the Closing Date as the “prime rate” at large U.S. money center banks. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of three hundred sixty-five (365) days and the actual number of days elapsed. If the Escrow Amount is used to satisfy any obligation of the Seller pursuant to Section 1.4(c)(ii), any interest earned on the Escrow Amount shall be applied in satisfaction of the interest amounts required to be paid by the Seller under this Section 1.4(d).

(e) The Purchaser and the Seller shall fully cooperate with each other, and shall use reasonable efforts to cause their respective accountants and other representatives, as necessary, to cooperate, in the preparation and review of the calculations of Closing Retained Cash and Closing Net Equity, including by providing access to accountants’ work papers relevant to such calculations and other books and records relating thereto.

Section 1.5 Assumed Liabilities .

(a) On the terms and subject to the conditions set forth in this Agreement, the Purchaser agrees to assume from and after the Closing Date only the following Liabilities of the Seller (collectively, the “ Assumed Liabilities ”): (i) any current liability reflected on the Interim Balance Sheet (other than the Carolina Commerce Loan (which shall be paid in full at Closing as provided herein) and the Seller’s financing agreement with Merrill Lynch (which shall have no outstanding balance as of the Closing Date)) that remains unpaid at and is not delinquent as of the Closing Date; (ii) any current liability incurred by the Seller in the ordinary course of business in a manner consistent with past practice between the Balance Sheet Date and the Closing Date of substantially the same kind and nature as the current liabilities set forth on the Interim Balance Sheet that remains unpaid at and is not delinquent as of the Closing Date; (iii) Liabilities to be paid or performed for or with respect to periods from and after the Closing Date under or pursuant to those certain Contracts set forth in Part 1.5(a) of the Disclosure Schedule (the “ Assumed Contracts ”), but not including any Liability for any breach or default thereof occurring prior to the Closing Date; and (iv) up to $20,000 of the Seller’s royalty guarantee shortfall as of the Closing Date under the Seller’s Nickelodeon USA license and Nickelodeon Canada license, each dated January 1, 2008 (collectively, the “ Nickelodeon License ”), if included (within the royalties due over the course of the term thereof) in any replacement or renewal of the Nickelodeon License entered into between the Purchaser and MTV Networks with respect to the two (2) year period commencing January 1, 2010 (the “ Assumed Nickelodeon Shortfall ”).

(b) Notwithstanding the provisions of Section 1.5(a) or any other provision hereof or any Schedule or Exhibit hereto and regardless of any disclosure to the Purchaser, the Purchaser will not assume, or have any responsibility with respect to any of the following Liabilities of the Seller (collectively, the “ Retained Liabilities ”): (i) any Liability of the Seller not expressly included in the definition of Assumed Liabilities; (ii) any Seller Transaction Expenses; or (iii) any royalty guarantee shortfall under the Nickelodeon License in excess of, or other than, the Assumed Nickelodeon Shortfall. The Retained Liabilities shall remain the sole responsibility of, and shall be retained, paid, performed and discharged solely by, the Seller.

(c) Notwithstanding anything herein to the contrary, the transfer of the Purchased Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Purchased Assets unless the Purchaser expressly assumes such Liability pursuant to Section 1.5(a).

Section 1.6 Allocation of Purchase Price Among Purchased Assets . The Purchase Price shall be allocated for Tax purposes among each item or class of Purchased Assets as mutually agreed to by the Purchaser and the Seller and set forth on Exhibit A hereto (the “ Allocation Statement ”), which Allocation Statement shall be binding upon the Purchaser and the Seller. The Seller and the Purchaser agree that they will prepare and file all notices or other filings required pursuant to Section 1060 of the Code and Treasury regulations thereunder, and that all such notices and filings will be prepared based upon the Allocation Statement and shall be consistent with the Allocation Statement. The parties shall make consistent use of such allocation for all income Tax purposes and in all applicable filings, declarations and reports with the Internal Revenue Service and other Governmental Entities in respect thereof, including the reports required to be filed under Section 1060 of the Code. Neither the Purchaser nor the Seller will take a position on any income Tax Return, before any Governmental Entity charged with the collection of any income Tax or in any judicial proceeding that is in any manner inconsistent with the terms of the Allocation Statement or this Section 1.6 without the written consent of the other party. Each party shall notify the other party if it receives notice that the Internal Revenue Service or any other Governmental Entity proposes any allocation different from that set forth in the Allocation Statement. Any adjustment made with respect to the Purchase Price pursuant to Section 1.4 shall be allocated in accordance with the determination mutually agreed to by the Seller and the Purchaser, which shall be consistent with the Allocation Statement. No later than sixty (60) days after the Closing, each party shall deliver to the other party a copy of its Internal Revenue Service Form 8594.

ARTICLE II
THE CLOSING

Section 2.1 The Closing . The consummation of the transactions contemplated by this Agreement (the “ Closing ”) shall take place simultaneously with the execution and delivery of this Agreement and shall be effected by the execution and delivery of documents by such combination of facsimile, electronic mail and original documents as the parties may mutually determine.

Section 2.2 Deliveries by the Seller . At the Closing, the Seller shall deliver to the Purchaser:

(a) the Bill of Sale, executed by the Seller;

(b) the Assignment and Assumption Agreement, executed by the Seller;

(c) a separate Non-Competition and Non-Disclosure Agreement executed by each of the Seller, Beth C. Besner, James T. Beaty and Laurie D. Beaty, respectively;

(d) the Escrow Agreement, executed by the Seller;

(e) a copy of the resolutions of the board of directors and shareholders of the Seller authorizing the transactions contemplated hereby and the execution, delivery and performance by the Seller of this Agreement and each of the Documents to which the Seller is a party, certified by the secretary of the Corporation;

(f) all Consents set forth or described in Part 3.2(b) of the Disclosure Schedule; and

(g) all other agreements, certificates, instruments and documents reasonably requested by the Purchaser, including assignments of trademarks and patents, in order to fully consummate the transactions contemplated by this Agreement and carry out the purposes and intent of this Agreement.

The documents to be delivered hereunder by or on behalf of the Seller or the Shareholders on the Closing Date shall be in form and substance reasonably satisfactory to the Purchaser and its counsel.

Section 2.3 Deliveries by the Purchaser . At the Closing, the Purchaser shall:

(a) deliver to Beth C. Besner, on behalf of the Seller, by wire transfer of immediately available funds to a bank account designated by her, the amount necessary to satisfy in full as of the Closing Date all unpaid obligations of the Seller under the Besner Loan (the “ Besner Loan Payment ”);

(b) deliver to Carolina Commerce Bank, on behalf of the Seller, by wire transfer of immediately available funds, the amount necessary to satisfy in full as of the Closing Date all unpaid obligations of the Seller under the Carolina Commerce Loan (the “ Carolina Commerce Payment ”);

(c) deliver to the Escrow Agent, on behalf of the Seller, the Escrow Amount by wire transfer of immediately available funds to a bank account designated by the Escrow Agent;

(d) deliver to the Seller, by wire transfer of immediately available funds to a bank account designated by the Seller, the amount of the Preliminary Cash Purchase Price (prior to any adjustment thereto pursuant to Section 1.4), less the Besner Loan Payment and the Escrow Amount;

(e) deliver to the Seller the Bill of Sale, executed by the Purchaser;

(f) deliver to the Seller the Assignment and Assumption Agreement, executed by the Purchaser;

(g) deliver to the Seller a Non-Competition and Non-Disclosure Agreement, executed by the Purchaser, for each of the Seller, Beth C. Besner, James T. Beaty and Laurie D. Beaty;

(h) deliver to the Seller the Escrow Agreement, executed by the Purchaser and the Escrow Agent; and

(i) deliver to the Seller all other agreements, certificates, instruments and documents reasonably requested by the Seller in order to fully consummate the transactions contemplated by this Agreement and carry out the purposes and intent of this Agreement.

The documents to be delivered hereunder by or on behalf of the Purchaser on the Closing Date shall be in form and substance reasonably satisfactory to the Seller, the Shareholders and their counsel.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Purchaser that all of the statements contained in this Article III are true and complete and acknowledges and confirms that the Purchaser is relying upon such representations and warranties in connection with the execution, delivery and performance of this Agreement, notwithstanding any investigation made by or on behalf of the Purchaser.

Section 3.1 Organization; Standing; Corporate Power . The Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida; (ii) has all requisite corporate power and authority to carry on the Business as it is being conducted and to own or use the Purchased Assets; (iii) is duly qualified or licensed to do business as a foreign corporation in good standing in every jurisdiction in which the ownership and use of its property or the Seller’s conduct of the Business requires such qualification, except for those jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect; (iv) has all requisite corporate power and authority to execute and deliver this Agreement and the other Documents to which the Seller is a party and perform its obligations hereunder and thereunder; and (v) represents that all necessary action to authorize the execution, delivery and performance of this Agreement and the other Documents to which the Seller is a party has been taken. The Seller has heretofore delivered or made available to the Purchaser complete and correct copies of the Organizational Documents of the Seller as presently in effect. Part 3.1 of the Disclosure Schedule sets forth each jurisdiction in which the Seller is qualified to do business as a foreign corporation. The Seller does not own, directly or indirectly, any equity securities or securities convertible into or exchangeable or exercisable for equity securities of any Person or have any direct or indirect equity or ownership interest in any Person.

Section 3.2 Binding Agreement; Consents and Approvals; No Conflict, Default or Violation .

(a) This Agreement has been duly executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a Proceeding in equity or at law). Each of the other Documents to which the Seller is a party shall be duly executed and delivered by the Seller at the Closing and shall constitute the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a Proceeding in equity or at law).

(b) Part 3.2(b) of the Disclosure Schedule sets forth all Consents and waivers required to be obtained by the Seller in connection with the execution, delivery and performance by the Seller of this Agreement or any other Documents to which the Seller is or shall be a party or the consummation of the transactions contemplated hereby or thereby. All such Consents and waivers have been obtained as of the Closing Date, and neither the execution, delivery or performance of this Agreement or any other Document by the Seller nor the consummation by the Seller of any of the transactions contemplated hereby will, directly or indirectly (with or without notice of lapse of time or both):

(i) contravene, conflict with, or result in a violation of (A) any provision of the Organizational Documents of the Seller or (B) any resolution adopted by the board of directors or shareholders of the Seller;

(ii) contravene, conflict with, or result in a violation of, or give any Governmental Entity or other Person the right to exercise any remedy or obtain any relief under, any Legal Requirement to which the Seller, or any of the Purchased Assets, is subject;

(iii) contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Contract to which the Seller is a party or is otherwise bound except for violations, breaches or defaults which could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; or

(iv) result in the imposition or creation of any Encumbrance upon or with respect to any of the Purchased Assets.

Section 3.3 Capitalization . Except for the issued and outstanding shares of the capital stock of the Seller held by the Shareholders, there are no equity securities of the Seller issued or outstanding.

Section 3.4 Financial Statements; Assets and Liabilities .

(a) The Seller has delivered to the Purchaser (i) the unaudited balance sheets of the Seller as of December 31, 2008 and December 31, 2007 and the related unaudited statements of income, cash flows and stockholders’ equity for the fiscal years ended December 31, 2008 and 2007; and (ii) the unaudited balance sheet of the Seller (the “ Interim Balance Sheet ”) as of March 31, 2009 (the “ Balance Sheet Date ”) and the related unaudited statements of income, cash flows and stockholders’ equity for the interim period ended March 31, 2009 (all of the financial statements referred to in this Section 3.4(a) being hereinafter collectively referred to as the “ Financial Statements ”).

(b) The Financial Statements have been prepared from, and are in accordance with, the books and records of the Seller. Except as set forth in Part 3.4(b) of the Disclosure Schedule, the Seller’s Financial Statements present fairly the financial position and results of operations and cash flows of the Seller as of the dates and for the periods indicated therein and were prepared in accordance with GAAP applied on a consistent basis, except as otherwise noted therein (subject, in the case of unaudited statements, to normally recurring year-end audit adjustments that are not material either individually or in the aggregate and the absence of notes).

Section 3.5 No Undisclosed Liabilities . Except as set forth in Part 3.5 of the Disclosure Schedule, the Seller has no Liability of any nature, whether absolute, accrued, contingent or otherwise, other than (i) as and to the extent set forth on the Interim Balance Sheet; (ii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business, consistent with past practice and of substantially the same kind and nature as Liabilities set forth on the Interim Balance Sheet (none of which results from, arises out of, relates to, is in the nature of or was caused by any breach of contract, breach of warranty, tort, infringement or violation of law); and (iii) obligations to be performed subsequent to the Closing Date under the Assumed Contracts.

Section 3.6 Absence of Certain Changes . Except as set forth in Part 3.6 of the Disclosure Schedule, since the Balance Sheet Date the Seller has conducted the Business only in the ordinary course in a manner consistent with past practice and there has not been any:

(a) increase by the Seller of any bonuses, salaries or other compensation payable to any director, officer or other employee with an annual aggregate salary and bonus in excess of $25,000, or entry into any employment, severance or similar Contract with any director, officer or other employee with an annual aggregate salary and bonus in excess of $25,000, or loan to, or entry into any other transaction with, any shareholder, director, officer or employee on terms that would not have resulted from an arm’s-length transaction;

(b) event, occurrence or circumstance that has had, or could reasonably be expected to result in, a Material Adverse Effect;

(c) entry into, cancellation, waiver, release, termination of or receipt of notice of termination of any Contract, transaction or debt obligation involving a total remaining commitment by or to the Seller of greater than $5,000 individually or $25,000 in the aggregate;

(d) change in the accounting methods used by the Seller, or any new election or change in any existing election relating to Taxes, settlement of any claim or assessment relating to Taxes, consent to any claim or assessment relating to Taxes or waiver of the statute of limitations for any such claim or assessment;

(e) capital expenditure (or series of related capital expenditures) involving more than $10,000 or capital investment in, loan to, or acquisition of the securities or assets of, any Person (or series of related capital investments, loans or acquisitions) involving more than $10,000;

(f) Encumbrance (except for Permitted Encumbrances) imposed upon any of the Purchased Assets;

(g) Proceeding commenced nor, to the Knowledge of the Seller, threatened or anticipated relating to or affecting the Seller or the Business; or

(h) agreement or commitment, whether oral or written, by the Seller to do any of the foregoing.

Section 3.7 Tangible Personal Property; Title to and Sufficiency of Assets .

(a) Part 3.7(a) of the Disclosure Schedule sets forth all Leases relating to personal property used by the Seller or to which the Seller is a party or by which the Purchased Assets are bound. The Seller has a valid and enforceable leasehold interest under each such Lease, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(b) The Seller has good and valid title to all of the items of tangible personal property included in the Purchased Assets, all of which are set forth in Part 3.7(b) of the Disclosure Schedule, free and clear of all Encumbrances, other than as set forth in Part 3.7(b) of the Disclosure Schedule. Except as set forth in Part 3.7(b) of the Disclosure Schedule, the tangible personal property and other tangible assets owned or leased by the Seller and included in the Purchased Assets are in good operating condition and repair (ordinary wear and tear excepted) and are adequate for the uses to which they are currently being put by the Seller in the Business as of the Closing Date.

(c) The Purchased Assets include all tangible and intangible property and assets necessary for the continued conduct of the Business after the Closing in the same manner as conducted prior to the Closing.

Section 3.8 Real Property; Leases .

(a) The Seller does not currently own any Real Property. The Seller has valid and existing leasehold interests in all of the Real Property that it possesses, operates or occupies (or has similar rights to possess, operate or occupy) pursuant to its Leases for Real Property (the “ Leased Real Property ”). Part 3.8(a) of the Disclosure Schedule contains a list of all Leases for Leased Real Property. A true and complete copy of each such Lease has heretofore been delivered or made available to the Purchaser. With respect to each such Lease for Leased Real Property, there is not any default or event that, with notice or lapse of time or both, would constitute a material default on the part of the Seller (nor, to the Knowledge of the Seller, on the part of any other party thereto), and, to the Knowledge of the Seller, no event has occurred that (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute a material default under any Lease. Except as otherwise set forth in Part 3.8(a) of the Disclosure Schedule, the leasehold interest of the Seller with respect to each item of Leased Real Property is free and clear of any Encumbrances, except Permitted Encumbrances. The Seller is not a sublessor of, nor has assigned any lease covering, any item of Leased Real Property. Leasing commissions or other brokerage fees due from or payable by the Seller with respect to any Leased Real Property have been paid in full.

(b) The Leased Real Property constitutes all the interests in real property currently used in connection with the Seller’s conduct of the Business. Except as set forth in Part 3.8(b) of the Disclosure Schedule, the Seller’s use of the Leased Real Property, complies in all material respects with all Legal Requirements, including zoning requirements, and the Seller has not received any written notifications or, to the Knowledge of the Seller, other notice from any Governmental Entity, insurance company or any other party (i) requiring any actions relative to the Leased Real Property or (ii) prohibiting any actions necessary for the normal and customary operation of the Business on the Leased Real Property.

Section 3.9 Environmental Matters . The Seller is now, and has been at all times since its inception, in compliance with all applicable Environmental Laws in all material respects. The Seller has not received any written communication or, to the Knowledge of the Seller, oral communication, whether from a Governmental Entity or other Person, that alleges that the Seller is not in compliance with any Environmental Laws, and, to the Knowledge of the Seller, there are no circumstances that are reasonably likely to prevent or interfere with such compliance in the future based upon the current operation of the Business by the Seller. There are no Environmental Claims pending against the Seller or, to the Knowledge of the Seller, any Person with respect to which the Seller may have any Liability, and, to the Knowledge of the Seller, no such Environmental Claims are threatened. No Materials of Environmental Concern are located on, at or beneath any property on which the Seller conducts the Business or has a leasehold interest in connection with the Business that could reasonably be expected to give rise to Liability to the Seller under any Environmental Law, and the Seller has never disposed of any Materials of Environmental Concern in a manner that could reasonably be expected to give rise to Liability under any Environmental Law.

Section 3.10 Contracts and Commitments .

(a) Except as otherwise disclosed on Part 3.10(a) of the Disclosure Schedule, Part 3.10(a) of the Disclosure Schedule sets forth all of the Contracts to which the Seller is a party or by which it is bound in connection with either the Business or the Purchased Assets.

(b) The Seller is not in breach or default under any Assumed Contract nor, to the Knowledge of the Seller, is any other party to any Assumed Contract in breach or default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a breach or default thereunder, or permit termination, modification or acceleration, under any Assumed Contract. No party to any of the Assumed Contracts has exercised any termination rights with respect thereto. Each Assumed Contract, with respect to the Seller, is legal, valid, binding, enforceable, in full force and effect and will continue to be so on identical terms as of the Closing, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a Proceeding in equity or at law). Each Assumed Contract, with respect to the other parties to such Assumed Contract, is legal, valid, binding, enforceable, in full force and effect and will continue to be so on identical terms as of the Closing. A true and complete copy of each such Assumed Contract has heretofore been delivered or made available to the Purchaser.

Section 3.11 Receivables; Payables .

(a) All Accounts Receivable are reflected properly on the Seller’s books and records, are valid receivables subject to no setoffs or counterclaims, and are current and collectible and will be collected in accordance with their terms at their recorded amounts, subject only to any reserve for bad debts set forth on the Interim Balance Sheet as adjusted for the passage of time through the Closing Date in accordance with GAAP and the past custom and practice of the Seller. The Accounts Receivable arose from bona fide transactions in the ordinary course of business of the Seller and have been executed on terms consistent with the past practice of the Seller.

(b) The trade accounts payable and other current liabilities of the Seller as of the Closing Date arose from bona fide transactions in the ordinary course of business of the Seller and have been executed on terms consistent with the past practice of the Seller.

Section 3.12 Insurance . Part 3.12 of the Disclosure Schedule sets forth a list and description (including current premiums and deductibles) of all insurance policies, other insurance arrangements and other contracts or arrangements for the transfer or sharing of insurance risks by the Seller in force on the date hereof with respect to the Business or the Purchased Assets. The Seller has not received written notice or, to the Knowledge of the Seller, any other indication from any insurer or agent of any intent to cancel or not to renew any of such insurance policies. The Seller has delivered to the Purchaser true and complete copies of each insurance policy and each pending application of the Seller for any insurance policy. All premiums relating to such insurance policies that were required to be paid prior to the Closing Date have been timely paid. Part 3.12 of the Disclosure Schedule describes any self-insurance arrangements affecting the Seller. The Seller is in compliance with all obligations relating to insurance created (i) by any Legal Requirement to which the Seller is subject (except for such noncompliance as could not reasonably be expected to have a Material Adverse Effect) or (ii) by any Assumed Contract to which the Seller is a party.

Section 3.13 Litigation . Except as set forth in Part 3.13 of the Disclosure Schedule, there is no action, suit, inquiry, hearing, audit, arbitration, mediation, proceeding or investigation (a “ Proceeding ”) by or before any court or Governmental Entity pending or, to the Knowledge of the Seller, threatened against or involving or affecting the Seller, or which would reasonably be expected to prevent, delay, make illegal or otherwise interfere with, any of the transactions contemplated hereby. No event has occurred that would reasonably be expected to give rise to or serve as a basis for the commencement of any such Proceeding. Except as set forth in Part 3.13 of the Disclosure Schedule, there is no outstanding Order to which the Seller or any Purchased Asset is subject.

Section 3.14 Compliance with Laws . The Seller has complied with all Legal Requirements that affect the Business or the Purchased Assets, including those under the Consumer Product Safety Improvement Act of 2008 (including the issuance of any required general conformity certification) and other applicable consumer product and safety laws, and no written notice, claim or action has been received by the Seller or has been filed or commenced, or to the Knowledge of the Seller, threatened against the Seller, alleging any actual, alleged or potential violation of any Legal Requirements. All Permits required under all Legal Requirements to be held or secured by the Seller are in full force and effect and will continue to be so immediately after consummation of the transactions contemplated hereby, to the extent assignable to the Purchaser. Except as set forth in Part 3.14 of the Disclosure Schedule, no Proceeding is pending, nor has been filed or commenced, against the Seller alleging any failure to comply with any applicable Legal Requirement or Permit. No event has occurred that (with or without notice or lapse of time) would reasonably be likely to constitute or result in a material violation by the Seller of any Legal Requirement or Permit. Part 3.14 of the Disclosure Schedule contains a complete and accurate list of each Permit held by the Seller material to the Business. Each listed Permit is valid and in full force and effect and, to the Knowledge of the Seller, there is no reason why such Permit will not be renewed. The Permits listed in Part 3.14 of the Disclosure Schedule constitute all of the material Permits necessary to allow the Seller to lawfully conduct and operate the Business as currently conducted and operated and to own and use the Purchased Assets as currently owned and used.

Section 3.15 Employee Benefit Plans .

(a) Part 3.15(a) of the Disclosure Schedule lists each Plan that the Seller maintains or to which the Seller contributes. The Seller has no plan or commitment to create any additional Plan or modify or change any existing Plan that would affect any current or former employee or director of the Seller.

(b) With respect to each Plan: (i) each Plan has been administered in compliance in all material respects with its terms, including any provisions relating to contributions thereunder, and is in compliance in all material respects with the applicable provisions of ERISA, the Code and all other federal, state and other applicable laws, rules and regulations, as they relate to such Plans (including provisions relating to funding, filing, termination, reporting, disclosure and continuation coverage obligations pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended); (ii) there are no Proceedings (other than routine claims for benefits) pending or, to the Knowledge of the Seller, threatened with respect to any Plan, the assets of any trust thereunder, or the Plan sponsor or the Plan administrator with respect to the design or operation of any Plan; (iii) there is no pending or, to the Knowledge of the Seller, threatened Proceeding involving any Plan before the IRS or any other governmental authority; and (iv) each Plan which is intended to be “qualified” within the meaning of Section 401(a) of the Code is the subject of a favorable determination letter issued by the IRS.

(c) Neither the Seller nor any of its ERISA Affiliates currently maintains or sponsors or maintained or sponsored, within the six (6) years immediately preceding the Closing Date, a “pension plan” (within the meaning of Section 3(2) of ERISA) which is subject to Title IV of ERISA or Section 412 of the Code. Neither the Seller nor any of its ERISA Affiliates has a current obligation to contribute or had an obligation to contribute, within the six (6) years immediately preceding the Closing Date, to any “multiemployer plan” (within the meaning of Section 3(37) of ERISA) or any “multiple employer plan” (within the meaning of Section 413(c) of the Code).

Section 3.16 Tax Matters .

(a) All Tax Returns required to be filed by the Seller have been filed and all such returns are true, complete and correct in all material respects. All Taxes that are owed (or are to have been remitted) by the Seller (whether or not shown on any Tax Return) have been paid other than those being contested in good faith and by appropriate proceedings and for which adequate reserves have been established on the Interim Balance Sheet. There are no Encumbrances for Taxes upon any Purchased Assets, except for Permitted Encumbrances. The Seller has not received written notice of any claim made by an authority in a jurisdiction where it does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(b) The Seller has withheld or collected, and paid to the proper Tax Authority, all Taxes required to have been withheld or collected and remitted, and complied with all information reporting and back-up withholding requirements, and has maintained all required records with respect thereto, in connection with amounts paid or owing to any employee, customer, creditor, equityholder, independent contractor or other third party.

(c) The unpaid Taxes of the Seller did not, as of the Balance Sheet Date, exceed the reserve for Liability for Taxes (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Interim Balance Sheet.

(d) No Audits are presently pending with regard to any Taxes or Tax Returns of the Seller, and the Seller has not received written notification that any such Audit is threatened, contemplated or may be initiated.

(e) There are no outstanding requests or waivers to extend the statutory period of limitations applicable to the assessment of any Taxes. No power of attorney has been granted by or with respect to the Seller that currently continues in effect with respect to any matter relating to Taxes.

(f) The Seller is not a party to, is not bound by and does not have any obligation under any Tax sharing agreement, Tax indemnification agreement or similar Contract.

(g) The Seller has delivered or made available to the Purchaser complete and accurate copies of each of (i) all Tax Returns filed by the Seller with any Tax Authority for taxable periods ended on or after December 31, 2006; (ii) all Audit reports, letter rulings, technical advice memoranda and similar documents issued to the Seller by any Tax Authority relating to Taxes due from or with respect to the Seller; and (iii) all closing agreements entered into by the Seller with any Tax Authority.

Section 3.17 Intellectual Property .

(a) Part 3.17(a) of the Disclosure Schedule sets forth a list of the following Intellectual Property of the Seller: all Patents, Trademarks, Copyrights, Computer Software, unregistered trademarks and copyrights and Internet domain names, together with all Licenses related to the foregoing, pursuant to which the Seller is the licensee, licensor or otherwise bound thereunder. Except as set forth in Part 3.17(a) of the Disclosure Schedule, the Seller owns, or has the right to use pursuant to a valid license, sublicense, agreement or permission, all Intellectual Property necessary for the Seller’s operation of the Business, as presently conducted, all of which Intellectual Property is listed in Part 3.17(a) of the Disclosure Schedule. Each item of Intellectual Property owned or used by the Seller immediately prior to the Closing hereunder will be owned or available for use by the Purchaser on identical terms and conditions immediately subsequent to the Closing hereunder, including any trade secrets or confidential information held by the Seller. The Seller has taken reasonable steps to protect its rights in any of the Seller’s data or information (including trade secrets) that is valuable to the creation of the Business and not generally known to the public or competitors and in any trade secret or confidential information of third parties used in the Business.

(b) The Seller has no Knowledge, nor has the Seller received any written notice, that the Seller has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of third parties. To the Knowledge of the Seller, no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of the Seller.

(c) Part 3.17(c) of the Disclosure Schedule identifies each patent, trademark or registration or other similar filing which has been issued to the Seller with respect to any of its Intellectual Property, identifies each pending patent or trademark application or application for registration or similar filing which the Seller has made with respect to any of its Intellectual Property and identifies each License or other permission which the Seller has granted to any third party with respect to any of its Intellectual Property (together with any exceptions). The Seller has delivered to the Purchaser true, correct and complete copies of all such patents, registrations, filings, applications, Licenses and permissions (as amended to date) and have made available to the Purchaser true, correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item. Part 3.17(c) of the Disclosure Schedule also identifies each trade name or unregistered trademark used by the Seller in connection with the Business. Except as set forth in Part 3.17(c) of the Disclosure Schedule, with respect to each item of Intellectual Property required to be identified therein:

(i) the Seller possesses all right, title and interest in and to the item, free and clear of any Encumbrances;

(ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling or charge;

(iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand is pending or, to the Knowledge of the Seller, is threatened which challenges the legality, validity, enforceability, use or ownership of the item; and

(iv) the Seller has not agreed to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to the item.

(d) Part 3.17(d) of the Disclosure Schedule identifies each item of Intellectual Property that the Seller uses pursuant to any License. The Seller has delivered to the Purchaser true, correct and complete copies of all such licenses, sublicenses, agreements and permissions (as amended to date). With respect to each item of Intellectual Property required to be identified in Part 3.17(d) of the Disclosure Schedule:

(i) the License covering the item is in full force and effect and legal, valid, binding and enforceable against the Seller and, to the Knowledge of the Seller, the other parties thereto, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a Proceeding in equity or at law);

(ii) to the Knowledge of the Seller, no party to the License is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification or acceleration thereunder;

(iii) to the Knowledge of the Seller, no party to the License has repudiated any provision thereof;

(iv) to the Knowledge of the Seller, with respect to each sublicense, the representations and warranties set forth in the immediately preceding subsections (i) through (iii) are true and correct with respect to the underlying license;

(v) to the Knowledge of the Seller, the underlying item of Intellectual Property is not subject to any outstanding injunction, judgment, order, decree, ruling or charge;

(vi) no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand is pending or, to the Knowledge of the Seller, is threatened which challenges the legality, validity or enforceability of the underlying