ASSET PURCHASE AGREEMENT

Exhibit 10.2

EXECUTION VERSION

ASSET PURCHASE AGREEMENT

DATED AS OF OCTOBER 2, 2009

among

ACOUSTIC MARKETING RESEARCH, INC.
(a Colorado corporation),

MISONIX, INC.
(a New York corporation),

and

MEDICAL IMAGING HOLDINGS, INC.
(a Delaware corporation)

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ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated as of October 2, 2009 (the “ Agreement ”), among Acoustic Marketing Research, Inc. (doing business as Sonora Medical Systems), a Colorado corporation (“ Seller ”), MISONIX, INC., a New York corporation and majority stockholder of Seller (“ Parent ”), and Medical Imaging Holdings, Inc., a Delaware corporation (“ Buyer ”).

WHEREAS, Seller is engaged in the business of (i) selling, repairing and servicing new and used diagnostic ultrasound systems and consumable accessories used in conjunction therewith, (ii) selling, repairing, servicing and testing diagnostic ultrasound transducers, (iii) developing and selling equipment for testing ultrasound transducers, (iv) selling equipment used for cleaning and disinfecting ultrasound transducers including, but not limited to, transesophogeal echocardiography probes, (v) selling equipment used for testing endoscopic probes, (vi) repairing and servicing MRI systems and parts and subsystems used therein, and (vii) performing training for the service and maintenance of diagnostic ultrasound and MRI systems, in each instance throughout the world (the “ Business ”);

WHEREAS, the parties desire that Seller sells, assigns, transfers, conveys and delivers to Buyer, and that Buyer purchases and acquires from Seller, all of Seller’s right, title and interest in and to the Purchased Assets (as hereinafter defined), and that Buyer assumes the Assumed Liabilities (as hereinafter defined), upon the terms and subject to the conditions of this Agreement.

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

ARTICLE I

DEFINITIONS

1.1 Definitions . When used in this Agreement, the following terms shall have the meanings assigned to them in this Article I or in the applicable Section of this Agreement to which reference is made in this Article I.

“ Accounts Receivable ” means (a) any trade accounts receivable and other rights to payment from customers or any factor of the Business, and (b) any other account or note receivable related to the Business, together with, in each case, the full benefit of any security interest of Seller therein, in each case excluding accounts receivable owing from Affiliates.

“ Action ” is defined in Section 3.15(a).

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

“ Agreement ” is defined in the Preamble.

“ Ancillary Documents ” means the Assignment and Assumption Agreement, the Escrow Agreement, the Domain Name Assignment, the Patent Assignment, the Trademark Assignment, the Transition Services Agreement and the other agreements, instruments and documents delivered at the Closing.

“ Asset Allocation ” is defined in Section 2.8.

“ Assigned Contracts ” is defined in Section 2.1(c).

“ Assignment and Assumption Agreement ” means the Bill of Sale, Assignment and Assumption Agreement in the form and substance acceptable to Buyer.

“ Assumed Liabilities ” is defined in Section 2.3.

“ Audited Financial Statements ” is defined in Section 3.4(a).

“ Authorization ” means any authorization, approval, consent, certificate, license, permit or franchise of or from any Governmental Entity or pursuant to any Law.

“ Balance Sheet ” is defined in Section 3.4(b).

“ Balance Sheet Date ” is defined in Section 3.4(b).

“ Books and Records ” means books of account, general, financial, warranty and shipping records, invoices, supplier lists, product specifications, product formulations, drawings, correspondence, engineering, maintenance, operating and production records, advertising and promotional materials, credit records of customers and other documents, records and files, in each case related to the Business, including books and records relating to Seller’s Intellectual Property and the employee and personnel records of the Transferred Employees.

“ Business ” is defined in the Recitals.

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

“ Buyer ” is defined in the Preamble.

“ Buyer Indemnitees ” is defined in Section 9.2(a).

“ CERCLA ” is defined in Section 3.18(a)(ix).

“ Charter Documents ” means, with respect to any entity, the certificate of incorporation, the articles of incorporation, by-laws, articles of organization, limited liability company agreement, partnership agreement, formation agreement, joint venture agreement or other similar organizational documents of such entity (in each case, as amended).

“ Closing ” is defined in Section 2.6.

“ Closing Date ” is defined in Section 2.6.

“ Closing Net Working Capital ” is defined in Section 2.7(b).

“ Closing Net Working Capital Statement ” is defined in Section 2.7(b).

“ Code ” means the Internal Revenue Code of 1986.

“ Confidentiality Agreement ” is defined in Section 5.2(a).

“ Consents ” is defined in Section 3.3(a).

“ Contract ” means any agreement, contract, license, lease, commitment, arrangement or understanding, written or oral, including any sales order or purchase order.

“ Copyrights ” is defined in Section 3.11(a).

“ Disclosure Schedule ” is defined in the Preamble to Article III.

“ Domain Name Assignment ” means the domain name assignment in the form and substance acceptable to Buyer.

“ Employee ” means any individual employed by Seller.

“ Environmental Claims ” is defined in Section 3.18(b).

“ Environmental Laws ” is defined in Section 3.18(b).

“ Environmental Permit ” is defined in Section 3.18(b).

“ Equipment ” means laboratory equipment, machinery, fixtures, furniture, supplies, accessories, materials, equipment, parts, automobiles, trucks, vehicles, tooling, tools, molds, office equipment, computers, telephones and all other items of tangible personal property owned or leased by Seller, in each case related to the Business.

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

“ ERISA Affiliate ” means any Person that together with the Seller, is or was at any time treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

“ Escrow Agent ” means the escrow agent appointed pursuant to the terms of the Escrow Agreement.

“ Escrow Agreement ” means the Escrow Agreement to be entered into as of the Closing among Buyer, Seller and the Escrow Agent.

“ Escrow Amount ” is defined in Section 2.5(a).

“ Estimated Closing Net Working Capital” is defined in Section 2.7(a).

“ Excluded Assets ” is defined in Section 2.2.

“ Excluded Liabilities ” is defined in Section 2.4.

“ Federal Prime Government Contract” is defined in the definition of “Government Contract” in this Section 1.1.

“ Federal Prime Government Contractor” is defined in the definition of “Government Contract” in this Section 1.1.

“ Financial Statements ” is defined in Section 3.4(a).

“ GAAP ” means United States generally accepted accounting principles.

“ Government Contract ” means any contract, basic ordering agreement, letter contract, purchase order, delivery order, change order, or other commitment of any kind, between (i) Seller and the United States Government (a “ Federal Prime Government Contract ”), (ii) Seller and any state, county, township or municipal government (a “ State/Local Prime Government Contract ”), (iii) Seller and any prime contractor to the United States Government (a “ Federal Prime Government Contractor ”) with respect to a Federal Prime Government Contract of such Federal Prime Government Contractor, (iv) Seller and any prime contractor to any state, county, township or municipal government (“ State/Local Prime Government Contractor ”) with respect to a State/Local Prime Government Contract, (v) Seller and any direct subcontractor to a Federal Prime Government Contractor with respect to a Federal Prime Government Contract, or (vi) Seller and any direct subcontractor to a State/Local Prime Government Contractor with respect to a State/Local Prime Government Contract. “Government Contract” shall also include any “Contractor team arrangement” as defined in Federal Acquisition Regulation 9.601.

“ Governmental Entity ” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to United States federal, state, local, or municipal government, foreign, international, multinational or other government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory, administrative or judicial authority thereof, and any non-governmental regulatory body to the extent that the rules and regulations or orders of such body have the force of Law.

“ Hazardous Materials ” is defined in Section 3.18(b).

“ In-Bound Licenses ” is defined in Section 3.11(c).

“ Indebtedness ” means any of the following: (a) any indebtedness for borrowed money, (b) any obligations evidenced by bonds, debentures, notes or other similar instruments, (c) any obligations to pay the deferred purchase price of property or services, except trade accounts payable and other current Liabilities arising in the ordinary course of the Business, (d) any indebtedness created or arising under any conditional sale or other title retention agreement with respect to acquired property, (e) any obligations, contingent or otherwise, under acceptance credit, letters of credit or similar facilities, and (f) any guaranty of any of the foregoing.

“ Independent Expert ” is defined in Section 2.7(d).

“ Indemnitee ” means any Person that is seeking indemnification from an Indemnitor pursuant to the provisions of this Agreement.

“ Indemnitor ” means any party hereto from which any Indemnitee is seeking indemnification pursuant to the provisions of this Agreement.

“ Intellectual Property ” is defined in Section 3.11(a).

“ Intellectual Property Rights ” is defined in Section 3.11(a).

“ Inventory ” means all raw materials, work-in-process, finished goods, supplies, spare parts and other inventories related to the Business, including all such items (a) in transit from suppliers of the Business, (b) held for delivery by suppliers of the Business, or (c) held on consignment by third parties.

“ Knowledge ” of Seller or any similar phrase means, with respect to any fact or matter, the actual knowledge of the directors and executive officers of Seller, together with such knowledge that such directors or executive officers could be expected to discover after due investigation concerning the existence of the fact or matter in question.

“ Landlord ” is defined in Section 6.7.

“ Law ” means any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, rule, regulation and any other binding requirement or determination of any Governmental Entity.

“ Lease Assignment Agreement ” means the lease assignment agreement substantially in the form of Exhibit A hereto.

“ Liabilities ” is defined in Section 3.5.

“ Lien ” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance in respect of such property or asset.

“ Longmont Lease ” means that Building Lease, dated as of July 30, 2004, by and between Seller and Diagonal Tech Center, LTD.

“ Losses ” is defined in Section 9.2(a).

“ Marks ” is defined in Section 3.11(a).

“ Material Contract ” is defined in Section 3.13(b).

“ Moore” means G. Wayne Moore, an individual.

“ Names ” is defined in Section 6.2.

“ Net Working Capital ” means, without duplication, current assets (including Accounts Receivable, Inventory and ordinary course prepaid expenses but excluding any current or deferred Tax assets and cash and cash equivalents) of Seller, minus current liabilities of Seller incurred in the ordinary course of Seller’s Business (including accounts payable and ordinary course accrued expenses but excluding any Indebtedness, current or deferred Tax liabilities and any obligations with respect to any Seller Benefit Plans or compensation owed to Employees); in each case determined in accordance with GAAP and as calculated in accordance with and in a manner consistent with the illustration set forth on Schedule 2.7.

“ Noncompetition Period ” is defined in Section 5.3(a).

“ Notice of Claim ” is defined in Section 9.4(a).

“ Notice of Objection ” is defined in Section 2.7(c).

“ Order ” means any award, injunction, judgment, decree, order, ruling, subpoena or verdict or other decision issued, promulgated or entered by or with any Governmental Entity of competent jurisdiction.

“ Out-Bound Licenses ” is defined in Section 3.11(d).

“ Parent ” is defined in the Preamble.

“ Patent Assignment ” means the patent assignment in the form and substance acceptable to Buyer.

“ Patents ” is defined in Section 3.11(a).

“ Person ” means an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, a Governmental Entity or any other entity or body.

“ Policy ” is defined in Section 3.20(a).

“ Premises ” is defined in Section 6.7.

“ Products ” is defined in Section 3.21(a).

“ Proprietary Information ” is defined in Section 3.11(a).

“ Purchase Price ” is defined in Section 2.5(a).

“ Purchased Assets ” is defined in Section 2.1.

“ Release ” is defined in Section 3.18(b).

“ Restricted Business ” is defined in Section 5.3(a).

“ Restricted Contract ” is defined in Section 2.9(a).

“ Review Period ” is defined in Section 2.7(c).

“ Seller ” is defined in the Preamble.

“ Seller Benefit Plans ” means (a) any “employee benefit plan” as defined in ERISA Section 3(3), including any (i) employee pension benefit plan (as defined in ERISA Section 3(2)), and (ii) employee welfare benefit plan (as defined in ERISA Section 3(1)), and (b) any stock purchase, stock option, phantom equity, severance pay, employment, change-in-control, vacation pay, company awards, salary continuation, fringe benefit plan or program, nonqualified deferred compensation plan, sick leave, medical plan, dental plan, excess benefit, bonus or other incentive compensation, life insurance, or other employee benefit plan, contract, program, policy or other arrangement, whether or not subject to ERISA that (x) is contributed to, maintained, or sponsored by the Seller or an ERISA Affiliate or to which the Seller or an ERISA Affiliate has or may have any Liability, contingent or otherwise, either directly or as a result of an ERISA Affiliate and (y) provides benefits of economic value to any present or former employee, consultant or director of Seller, or present or former beneficiary of any such Person.

“ Seller Group ” means any affiliated, combined, consolidated, unitary or similar group of which Seller is or was a member.

“ Seller Indemnitees ” is defined in Section 9.3(a).

“ Seller Intellectual Property ” is defined in Section 3.11(e).

“ Seller Interim Financial Statements ” is defined in Section 3.4(a).

“ Seller Owned Intellectual Property ” is defined in Section 3.11(b).

“ Seller Registered Items ” is defined in Section 3.11(f).

“ Software ” is defined in Section 3.11(a).

“ State/Local Prime Government Contract ” is defined in the definition of “Government Contract” in this Section 1.1.

“ State/Local Prime Government Contractor ” is defined in the definition of “Government Contract” in this Section 1.1.

“ Target Net Working Capital ” means $2,688,309.

“ Tax ” or “ Taxes ” means any and all federal, state, local, or foreign net or gross income, gross receipts, net proceeds, sales, use, escheat, unclaimed property, ad valorem, value added, franchise, bank shares, withholding, payroll, employment, excise, property, deed, stamp, alternative or add-on minimum, environmental, profits, windfall profits, transaction, license, lease, service, service use, occupation, severance, energy, unemployment, social security, workers’ compensation, capital, premium, abandoned or unclaimed property and other taxes, assessments, customs, duties, fees, levies, or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties, additions to tax, or additional amounts with respect thereto, and including any liability for the payment of the foregoing obligations of another Person as a result of (a) being or having been a member of an affiliated, consolidated, combined, unitary or aggregate group of corporations; (b) being or having been a party to any tax sharing agreement or any express or implied obligation to indemnify any Person; and (c) being or having been a transferee, successor, or otherwise assuming the obligations of another Person to pay the foregoing amounts.

“ Tax Returns ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Taxing Authority ” means any Governmental Entity having jurisdiction with respect to any Tax.

“ Third Party Claim ” is defined in Section 9.4(a).

“ Third Party Defense ” is defined in Section 9.4(b).

“ TINA ” is defined in Section 3.13(d)(vi).

“ Trademark Assignment ” means the trademark assignment in the form and substance acceptable to Buyer.

“ Transition Services Agreement ” means the transition services agreement in the form and substance acceptable to Buyer.

“ Transferred Employees ” is defined in Section 6.3.

“ Unaudited Financial Statements ” is defined in Section 3.4(a).

ARTICLE II

PURCHASE AND SALE

2.1 Purchase and Sale of the Purchased Assets . Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver, and Parent shall cause Seller to sell, assign, transfer, convey and deliver, to Buyer, and Buyer shall purchase, acquire and accept from Seller, free and clear of Liens, the entire right, title and interest of Seller in, to and under all of the assets, properties and rights of every kind and description, real, personal and mixed, tangible and intangible, wherever situated, that are related to the Business, other than the Excluded Assets (collectively, the “ Purchased Assets ”), including without limitation the following assets, properties and rights:

(a) all Inventory;

(b) all Equipment;

(c) all Contracts related to the Business including, without limitation, those set forth on Schedule 2.1(c) (other than those Contracts which are Excluded Assets) (the “ Assigned Contracts ”);

(d) all Accounts Receivable;

(e) all Books and Records (copies of which may be retained by Seller, subject to the confidentiality obligations set forth herein);

(f) all claims, causes of action, choses in action, rights of recovery and rights under all warranties, representations and guarantees made by suppliers of products, materials or equipment, or components thereof, arising from or relating to the other Purchased Assets or the Assumed Liabilities;

(g) all insurance benefits, including rights and proceeds, arising from or relating to the other Purchased Assets or the Assumed Liabilities prior to the Closing, unless expended in accordance with this Agreement;

(h) all rights under any permits or certifications from any Governmental Entity that have been issued or applied for;

(i) all prepaid expenses of the Business;

(j) all rights of Seller to its corporate name and derivatives and variants thereof;

(k) all Intellectual Property owned by Seller;

(l) all security deposits, earnest deposits and all other forms of deposit or security placed with or by Seller for the performance of an Assigned Contract; and

(m) all goodwill of the Business.

2.2 Excluded Assets . The Purchased Assets do not include, and Seller is not selling, assigning, transferring, conveying or delivering, and Buyer is not purchasing, acquiring or accepting from Seller any of the assets, properties or rights set forth in this Section 2.2 (collectively, the “ Excluded Assets ”):

(a) all cash, cash equivalents and bank accounts of Seller;

(b) the corporate seals, Charter Documents, minute books, stock books, Tax Returns, books of account or other records having to do with the corporate organization of Seller;

(c) the rights which accrue or will accrue to Seller under this Agreement and the Ancillary Documents;

(d) each Seller Benefit Plan;

(e) all accounts receivable owing from Affiliates;

(f) that certain Employment Agreement, dated as of November 1, 1999, by and between Seller and Moore;

(g) that certain Agreement for Ultrasound Technical Services, entered into on May 10, 2007, by and between Seller and Axess Ultrasound, LLC (as successor in interest to TriMedx, LLC);

(h) the Longmont Lease; and

(i) all rights to Tax refunds.

2.3 Assumed Liabilities . Upon the terms and subject to the conditions of this Agreement, Buyer shall assume effective as of the Closing, and from and after the Closing Buyer shall pay, discharge or perform when due, as appropriate, only the following Liabilities and obligations of Seller (excluding the Liabilities and obligations retained by Seller in accordance with Section 2.4, the “ Assumed Liabilities ”):

(a) the Liabilities and obligations of the Business that are included in the finally determined Closing Net Working Capital;

(b) all Liabilities and obligations of Seller in respect of the Assigned Contracts which Liabilities or obligations (i) relate solely to the period after the Closing or (ii) remain to be performed by Seller as of the Closing so long as such obligations (y) arise in the ordinary course of the Business and (z) do not arise with respect to a prepayment of services by any third parties (in each case with respect to (i) and (ii), other than obligations or Liabilities thereunder arising as a result of the breach thereof at or prior to the Closing or those Contracts which are included as an Excluded Asset); and

(c) Liabilities arising under Seller’s standard product warranties relating solely to the repair of any products sold by Seller in the ordinary course of its business prior to the Closing Date.

2.4 Excluded Liabilities . Neither Buyer nor any of its Affiliates shall assume any Liabilities of Seller (such unassumed Liabilities, the “ Excluded Liabilities ”) other than those specifically set forth in Section 2.3. Notwithstanding the foregoing, in no event shall Buyer or any of its Affiliates assume or incur any Liability in respect of, and Seller shall remain bound by and liable for, and shall pay, discharge or perform when due, the following Liabilities of Seller:

(a) all Liabilities arising from or related to the Business or Purchased Assets prior to or on the Closing Date except to the extent any such Liability is specifically included as an Assumed Liability;

(b) all Liabilities for Taxes of Seller or any Affiliate of Seller;

(c) all Liabilities in respect of Excluded Assets;

(d) all Indebtedness of the Business;

(e) all Liabilities and obligations of Seller with respect to accrued employee wages, salaries, payroll and withholding taxes;

(f) all intercompany accounts payables due to Parent from Seller; and

(g) all Liabilities arising out of or incurred in connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated hereby, including Taxes and fees and expenses of counsel, accountants and other experts.

2.5 Purchase Price .

(a) The aggregate amount to be paid by Buyer on the Closing Date with respect to the Purchased Assets shall be Eight Million Dollars ($8,000,000) (the “ Purchase Price ”). The Purchase Price is subject to adjustment pursuant to Section 2.7. Buyer shall pay the Purchase Price as follows: (i) an aggregate amount of Four Hundred Thousand Dollars ($400,000) in cash (the “ Escrow Amount ”) shall be deposited on the Closing Date by wire transfer of immediately available funds with the Escrow Agent in accordance with the terms of the Escrow Agreement, and (ii) the balance shall be paid in cash to Seller on the Closing Date.

(b) All amounts payable under this Section 2.5 shall be paid by wire transfer of immediately available funds to an account designated in writing by Seller or the Escrow Agent, as applicable, no later than three Business Days prior to the applicable payment date.

2.6 Closing Date . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Morgan, Lewis & Bockius LLP, Philadelphia, PA, at 10:00 a.m. on a date to be specified by the parties. The date on which the Closing occurs is referred to in this Agreement as the “ Closing Date .”

2.7 Net Working Capital Adjustment .

(a) At least five (5) business days prior to the Closing Date, Seller shall prepare and deliver to Buyer a good faith estimate calculation of Seller’s Net Working Capital as of the close of business on the Closing Date determined in accordance with GAAP and in a manner consistent with the illustration set forth in Schedule 2.7(a) hereto (the “ Estimated Closing Net Working Capital ”). At the Closing:

(i) if the Estimated Closing Net Working Capital is less than the Target Net Working Capital, the Purchase Price shall be reduced by an amount equal to such deficiency; and

(ii) if the Estimated Closing Net Working Capital exceeds the Target Net Working Capital, the Purchase Price shall be increased by an amount equal to such excess.

(b) Within 90 days after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement (the “ Closing Net Working Capital Statement ”), which shall set forth Buyer’s calculation of Net Working Capital as of the Closing Date (“ Closing Net Working Capital ”) determined in accordance with GAAP and in a manner consistent with the illustration set forth in Schedule 2.7(a) hereto.

(c) Upon receipt from Buyer, Seller shall have 15 days to review the Closing Net Working Capital Statement (the “ Review Period ”). If Seller disagrees with Buyer’s computation of Closing Net Working Capital, Seller may, on or prior to the last day of the Review Period, deliver a notice to Buyer (the “ Notice of Objection ”), which sets forth its objections to Buyer’s calculation of Closing Net Working Capital; provided that the Notice of Objection shall include only objections based on (i) non-compliance with the standards set forth in Schedule 2.7(a) for the preparation of the Closing Net Working Capital Statement and (ii) mathematical errors in the computation of Closing Net Working Capital. Any Notice of Objection shall specify those items or amounts with which Seller disagrees, together with a detailed written explanation of the reasons for disagreement with each such item or amount, and shall set forth Seller’s calculation of Closing Net Working Capital based on such objections. Further, if independent auditors are engaged by Seller in connection with the preparation of the Notice of Objection, such Notice of Objection should also be accompanied by a certificate of the independent auditors of Seller setting forth that they concur with each of the positions taken by Seller in the Notice of Objection. To the extent not set forth in the Notice of Objection, Seller shall be deemed to have agreed with Buyer’s calculation of all other items and amounts contained in the Closing Net Working Capital Statement.

(d) Unless Seller delivers the Notice of Objection to Buyer within the Review Period, Seller shall be deemed to have accepted Buyer’s calculation of Closing Net Working Capital and the Closing Net Working Capital Statement shall be final, conclusive and binding. If Seller delivers a Notice of Objection to Buyer complying with the requirements set forth in Section 2.7(c) within the Review Period, Buyer and Seller shall, during the 30 days following such delivery or any mutually agreed extension thereof, use their commercially reasonable efforts to reach agreement on the disputed items and amounts in order to determine the amount of Closing Net Working Capital. If, at the end of such period or any mutually agreed extension thereof, Buyer and Seller are unable to resolve their disagreements, they shall jointly retain and refer their disagreements to an independent valuation firm or independent accounting firm mutually reasonably acceptable to Buyer and Seller (the “ Independent Expert ”). The parties shall instruct the Independent Expert promptly to review this Section 2.7 and to determine solely with respect to the disputed items and amounts so submitted whether and to what extent, if any, the Closing Net Working Capital set forth in the Closing Net Working Capital Statement requires adjustment. The Independent Expert shall base its determination solely on written submissions by Buyer and Seller and not on an independent review. Buyer and Seller shall make available to the Independent Expert all relevant books and records and other items reasonably requested by the Independent Expert. The parties shall request that the Independent Expert deliver to Buyer and Seller, as promptly as practicable but in no event later than 45 days after its retention, a report which sets forth its resolution of the disputed items and amounts and its calculation of Closing Net Working Capital. The decision of the Independent Expert shall be final, conclusive and binding on the parties. The costs and expenses of the Independent Expert shall be shared equally by Buyer and Seller.

(e) Within five (5) business days after the Closing Net Working Capital is finally determined pursuant to this Section 2.7:

(i) if the finally determined Closing Net Working Capital is less than the Estimated Closing Net Working Capital, Seller shall pay to Buyer an amount equal to such deficiency; and

(ii) if the finally determined Closing Net Working Capital is greater than the Estimated Closing Net Working Capital, Buyer shall pay to Seller an amount equal to such excess.

(f) Any such payment made by Buyer or Seller pursuant to Section 2.7(e) shall be made by wire transfer of immediately available funds to an account designated in writing by Buyer or Seller, as the case may be, at least one Business Day prior to such transfer.

(g) Any rights accruing to a party under this Section 2.7 shall be in addition to and independent of the rights to indemnification under Article IX. Any payments made to any party under this Section 2.7 shall not be subject to the terms of Article IX.

2.8 Allocation . The Purchase Price (as increased by the amounts treated as Assumed Liabilities for federal income tax purposes and other amounts treated as taxable sales consideration for federal income tax purposes) shall be allocated among the covenants set forth in Section 5.3 and the Purchased Assets for all purposes (including Tax and financial accounting purposes) in accordance with their respective fair market values pursuant to an allocation schedule prepared by Buyer after the Closing in accordance with Section 1060 of the Code and the regulations adopted thereunder (the “ Asset Allocation ”). As soon as practicable after the Closing Date and in any event no later than 90 days prior to the latest date for filing of the U.S. federal Tax Return by Seller for the period ending on the Closing Date, Buyer shall deliver a copy of its initial determination of the Asset Allocation to Seller. Seller shall, within 30 days of receipt of Buyer’s initial determination of the initial Asset Allocation, notify Buyer if Seller disagrees with Buyer’s initial determination, and if Seller does not so notify Buyer within such 30 days, the initial Asset Allocation shall be final and binding on the parties. If Seller disagrees with such initial Asset Allocation, Buyer and Seller shall make a good faith effort to resolve the dispute. If Buyer and Seller are unable to resolve their differences within 30 days after Buyer has been notified of Seller’s disagreement with the initial Asset Allocation, then any remaining disputed issues shall be submitted to the Independent Expert, which shall resolve the disagreement in a final binding manner after hearing the views of the parties. The fees and expenses of the Independent Expert shall be shared equally between Buyer and Seller. Except as may be required by Law, Buyer and Seller will (a) file or cause to be filed all Tax Returns (including Internal Revenue Service Form 8594) in a manner consistent with the Asset Allocation (as determined pursuant to this Section 2.8) and (b) not take any action inconsistent therewith. Any subsequent adjustments to the Purchase Price shall be reflected in the Asset Allocation hereunder in a manner consistent with Regulation Section 1.1060-1.

2.9 Consents .

(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to sell, assign, transfer, convey or deliver any Purchased Asset or any benefit arising under or resulting from such Purchased Asset if the sale, assignment, transfer, conveyance or delivery thereof, without the Consent of a third party, (i) would constitute a breach or other contravention of the rights of such third party, (ii) would be ineffective with respect to any party to a Contract concerning such Purchased Asset, or (iii) would, upon transfer, materially adversely affect the rights of Buyer under such Purchased Asset. If the sale, assignment, transfer, conveyance or delivery by Seller to, or any assumption by Buyer of, any interest in, or Liability under, any Purchased Asset requires the consent of a third party, then such sale, assignment, transfer, conveyance, delivery or assumption shall be subject to such Consent being obtained. Without limiting Section 2.9(b), to the extent any Assigned Contract may not be assigned to Buyer by reason of the absence of any such Consent (“ Restricted Contract ”), Buyer shall not be required to assume any Assumed Liabilities arising under such Restricted Contract.

(b) To the extent that any Consent in respect of a Restricted Contract or any other Purchased Asset shall not have been obtained on or before the Closing Date, Buyer may elect to proceed with the Closing, in which case, Seller shall continue to use its reasonable best efforts to obtain any such Consent after the Closing Date until such time as it shall have been obtained. Seller shall, and Parent shall cause Seller to, cooperate with Buyer in any economically reasonable arrangement proposed by Buyer to provide that Buyer shall receive the interest of Seller in the benefits under such Restricted Contract or other Purchased Asset. Seller shall pay and discharge, and shall indemnify and hold harmless, Buyer and its Affiliates from and against any and all reasonable out-of-pocket costs of seeking to obtain or obtaining any such Consent whether before or after the Closing Date. As soon as a Consent for the sale, assignment, transfer, conveyance, delivery or assumption of a Restricted Contract or other Purchased Asset is obtained, Seller shall promptly assign, transfer, convey and deliver such Restricted Contract or Purchased Asset to Buyer, and Buyer shall assume the Assumed Liabilities under any such Restricted Contract from and after the date of assignment to Buyer pursuant to a special-purpose assignment and assumption agreement substantially similar in terms to those of the Assignment and Assumption Agreement.

(c) Nothing contained in this Section 2.9 or elsewhere in this Agreement shall be deemed a waiver by Buyer of its rights to have received on the Closing Date an effective assignment of all of the Purchased Assets or of the covenant of Seller to obtain all Consents, nor shall this Section 2.9 or any other provision of this Agreement be deemed to constitute an agreement to exclude from the Purchased Assets any Assigned Contracts or other Purchased Asset as to which a Consent may be necessary.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT

Seller and Parent jointly and severally represent and warrant to Buyer as of the date hereof and as of the Closing Date that the statements contained in this Article III are true and correct, except as set forth in the disclosure schedule dated and delivered as of the date hereof by Seller and Parent to Buyer (the “ Disclosure Schedule ”), which is attached to this Agreement and is designated therein as being the Disclosure Schedule. The Disclosure Schedule shall be arranged in paragraphs corresponding to each representation and warranty set forth in this Article III. Each exception to a representation and warranty set forth in the Disclosure Schedule shall qualify the specific representation and warranty which is referenced in the applicable paragraph of the Disclosure Schedule, and no other representation or warranty.

3.1 Organization and Good Standing .

(a) Seller is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Colorado, has all requisite power to own, lease and operate its properties and to carry on the Business as now being conducted and as proposed to be conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which it owns or leases property or conducts any business so as to require such qualification except for those jurisdictions where the failure to be so qualified and in good standing could not individually or in the aggregate have a material adverse effect on the Purchased Assets or the condition (financial or otherwise), operations, prospects or results of operations of the Business or Seller. Seller is not in default under its Charter Documents. The Charter Documents of Seller in the forms provided to Buyer are the Charter Documents of Seller as in effect on the date of this Agreement.

(b) Parent is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of New York. The Charter Documents of Parent in the forms provided to Buyer are the Charter Documents of Parent as in effect on the date of this Agreement.

(c) Parent owns 95% of Seller’s issued and outstanding equity.

(d) Seller has no subsidiaries or investments in any other Person.

3.2 Authority and Enforceability .

(a) Each of Seller and Parent has the requisite power and authority to enter into this Agreement, to consummate the transactions contemplated hereby and to perform their obligations hereunder. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the performance of the obligations hereunder have been duly authorized by all necessary action on the part of Seller and Parent and no other consent, action or proceedings on the part of Seller and Parent or any holder of Parent’s equity is required to authorize this Agreement or to consummate the transactions contemplated hereby. Seller and Parent have duly executed and delivered this Agreement. This Agreement constitutes the valid and binding obligation of Seller and Parent, enforceable against them in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to creditors’ rights generally, and (ii) the availability of injunctive relief and other equitable remedies.

(b) Each of Seller and Parent, as applicable, has the requisite power and authority to enter into each Ancillary Document to which it is, or specified to be, a party, to consummate the transactions contemplated thereby and to perform their respective obligations thereunder. The execution and delivery by each of Seller and Parent of each Ancillary Document to which it is, or specified to be, a party, the consummation of the transactions contemplated thereby and the performance of their respective obligations thereunder have been duly authorized by all necessary action on the part of Seller and the Parent and no other proceedings on the part of Seller and Parent or any holder of Parent’s equity is required to authorize each Ancillary Document or to consummate the transactions contemplated thereby. The Ancillary Documents, upon execution and delivery by Seller and Parent, as applicable, and, assuming due authorization, execution and delivery by Buyer, constitute the valid and binding obligation of each of Seller and Parent, as applicable, enforceable against it in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or relating to creditors’ rights generally, and (ii) the availability of injunctive relief and other equitable remedies. The Ancillary Documents effectively vest in Buyer good, valid and marketable title to all the Purchased Assets free and clear of all Liens, other than with respect to Purchased Assets that are leased by Seller.

3.3 No Conflicts; Consents .

(a) Except as set forth on Section 3.3(a) of the Disclosure Schedule, the execution and delivery of this Agreement by Seller and Parent does not, and the performance by Seller and Parent of their obligations hereunder and the consummation by Seller and Parent of the transactions contemplated hereby (in each case, with or without the giving of notice or lapse of time, or both) will not, directly or indirectly, (i) violate the provisions of any of the Charter Documents of Seller or Parent, (ii) violate or constitute a default, an event of default or an event creating rights of acceleration, termination, cancellation, imposition of additional obligations or loss of rights, or require a consent to assignment, under any Contract (A) to which Seller or Parent is a party, (B) of which Seller or Parent is a beneficiary or (C) by which Seller, Parent or any of their assets are bound, (iii) violate or conflict with any Law, Authorization or Order applicable to Seller or Parent, or give any Governmental Entity or other Person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy, obtain any relief under or revoke or otherwise modify any rights held under, any such Law, Authorization or Order, or (iv) result in the creation of any Liens upon any of the assets owned or used by Seller. Section 3.3(a) of the Disclosure Schedule sets forth all consents, waivers, assignments and other approvals and actions that are required in connection with the transactions contemplated by this Agreement under any Contract to which Seller is a party (collectively, “ Consents ”) in order to preserve all rights of, and benefits to, Seller thereunder.

(b) No Authorization or Order of, registration, declaration or filing with, or notice to, any Governmental Entity or other Person is required by or with respect to Seller or Parent in connection with the execution and delivery of this Agreement and the transactions contemplated hereby.

3.4 Financial Statements .

(a)  Section 3.4(a) of the Disclosure Schedule contains true and complete copies of (collectively, the “ Financial Statements ”) (i) the audited financial statements of Parent as of June 30, 2007, June 30, 2008 and June 30, 2009 and the related statements of income and cash flows for the years then ended (the “ Audited Financial Statements ”); (ii) the unaudited balance sheet of Seller as of June 30, 2007, June 30, 2008 and June 30, 2009 and the related statements of income for the years then ended (the “ Unaudited Financial Statements ”); and (iii) the unaudited balance sheet and the related statement of income of Seller as of and for the two-month period ended August 31, 2009 (the “ Seller Interim Financial Statements ”).

(b) The Financial Statements are true, complete and correct in all material respects and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, subject, in the case of the Seller Interim Financial Statements, to normal year-end adjustments (the effect of which will not be materially adverse) and the absence of notes. The Financial Statements are based on the books and records of Parent and Seller, as applicable, and fairly present in all material respects the financial condition of the business of Parent and the Business, as applicable, as of the respective dates they were prepared and the results of the operations of the business of Parent and the Business, as applicable, for the periods indicated. The balance sheet of Seller as of June 30, 2009 is referred to herein as the “ Balance Sheet ” and the date thereof as the “ Balance Sheet Date. ”

3.5 No Undisclosed Liabilities . Seller has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (collectively, “ Liabilities ”), except those which (a) are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date, and (b) have been incurred in the ordinary course of the Business and consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.

3.6 Taxes .

(a) All Tax Returns required to have been filed by or with respect to Seller have been duly and timely filed (or, if due between the date hereof and the Closing Date, will be duly and timely filed), and, to the Knowledge of Seller, each such Tax Return correctly and completely reflects Liability for Taxes and all other information required to be reported thereon. All Taxes owed by Seller and each member of the Seller Group (whether or not shown on any Tax Return) have been timely paid (or, if due between the date hereof and the Closing Date, will be duly and timely paid). Seller has adequately provided for, in their books of account and related records, Liability for all unpaid Taxes, being current Taxes not yet due and payable.

(b) No Tax Return of any member of the Seller Group has been audited and there is no action or audit now pending nor, to the Knowledge of Seller, proposed or threatened against, or with respect to, any member of the Seller Group in respect of any Taxes. Except as set forth on Section 3.6(b) of the Disclosure Schedule, no member of the Seller Group is the beneficiary of any extension of time within which to file any Tax Return, nor has Seller made (or had made on their behalf) any requests for such extensions. No claim has ever been made by an authority in a jurisdiction where Seller does not file Tax Returns that Seller is or may be subject to taxation by that jurisdiction or that any of them must file Tax Returns. There are no Liens on any of the stock or assets of Seller with respect to Taxes.

(c) Seller has withheld and timely paid all Taxes required to have been withheld and paid and has complied with all information reporting and backup withholding requirements, including maintenance of required records with respect thereto.

(d) There is no dispute or claim concerning any Liability for Taxes with respect to any member of the Seller Group for which notice has been provided, or which is asserted nor, to the Knowledge of Seller, threatened, or which is otherwise known to Seller. No issues have been raised in any Tax examination with respect to Seller which, by application of similar principles, could reasonably be expected to result in Liability for Taxes for any member of the Seller Group, the Business or the period not so examined. Seller has delivered to Buyer correct and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by any member of the Seller Group with respect to Seller since 2003. No member of the Seller Group has waived (nor is subject to a waiver of) any statute of limitations in respect of Taxes nor has agreed to (or is subject to) any extension of time with respect to a Tax assessment or deficiency.

(e) Seller is not a “foreign person” within the meaning of Section 1445 of the Code.

(f) The Seller Group has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

(g) Seller is not a party to any Tax allocation or sharing agreement. Seller has no Liability for the Taxes of any Person, other than under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local, or foreign Law) with respect to any member of the Seller Group of which Seller currently is a member, (i) as a transferee or successor, (ii) by contract, (iii) under Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local or foreign Law), or (iv) otherwise.

(h) No Member of the Seller Group has entered into any transaction that is a “reportable transaction” (as defined in Treasury Regulation Section 1.6011-4, as modified by periodically issued IRS guidance).

3.7 Compliance with Law . Since November 16, 1999: (i) Seller has conducted, and is conducting, the Business in compliance with all applicable Laws, (ii) to the Knowledge of Seller, no event has occurred and no circumstances exist that (with or without the passage of time or the giving of notice) may result in a violation of, conflict with or failure on the part of Seller to conduct the Business in compliance with, any applicable Law, and (iii) Seller has not received notice regarding any violation of, conflict with, or failure to conduct the Business in compliance with, any applicable Law.

3.8 Business Authorizations .

(a) Seller owns, holds or lawfully uses in the operation of the Business all Authorizations which are necessary for it to conduct the Business as currently conducted or for the ownership and use of the assets owned or used by Seller in the conduct of the Business free and clear of all Liens, which authorizations are valid and in full force and effect and listed in Section 3.8(a) of the Disclosure Schedule.

(b) No event has occurred and no circumstances exist that (with or without the passage of time or the giving of notice) may result in a violation of, conflict with, failure on the part of Seller to comply with the terms of, or the revocation, withdrawal, termination, cancellation, suspension or modification of any Authorization. Seller has not received any notice regarding any violation of, conflict with, failure to comply with the terms of, or any revocation, withdrawal, termination, cancellation, suspension or modification of, any Authorization. Seller is not in default, nor has Seller received notice of any claim of default, with respect to any Authorization.

(c) No Person other than Seller owns or has any proprietary, financial or other interest (direct or indirect) in any Authorization which Seller owns or uses in the operation of the Business as conducted over the past 24 months or as currently conducted.

3.9 Title to Properties . With respect to property and assets that Seller purports to own which are included in the Purchased Assets, Seller has good and transferable title to all such personal property, free and clear of all Liens. All leases under which personal property and assets are leased are in full force and effect and constitute valid and binding obligations of the other party(ies) thereto, and Seller is not nor, to the Knowledge of Seller, is any other party thereto, in breach of any of the terms of any such lease. Except for the Excluded Assets, there are no assets or properties used in the operation of the Business that are owned by any Person other than Seller that will not be licensed or leased to Buyer under valid, current license arrangements or leases. Seller owns no real property.

3.10 Condition of Tangible Assets . To the Knowledge of Seller, (i) all Purchased Assets that are tangible property are structurally sound, are in good operating condition and repair (subject to normal wear and tear given the use and age of such assets), are usable in the ordinary course of the Business and (ii) conform to all Laws and Authorizations relating to their construction, use and operation. To the Knowledge of Seller, there are no facts or conditions affecting such Purchased Assets that could interfere in any material respect with the use or operation thereof as used or operated for the 12 months preceding the date of this Agreement.

3.11 Intellectual Property .

(a) As used in this Agreement, “ Intellectual Property ” means all (i) inventions (whether or not patentable), trade secrets, technical data, databases, customer lists, designs, technology, ideas, know-how and other proprietary information (“ Proprietary Information ”); (ii) trade names, trademarks and service marks, logos, and trade dress, whether registered or recognized under the common law, domain names, URLs, addresses and other designations and the goodwill associated therewith (“ Marks ”); (iii) copyrights and copyrightable works, moral rights or other literary property or author’s rights, documentation, websites, mask works and other works of authorship (“ Copyrights ”); (iv) computer software (in source code and/or object code form), including any and all software implementations, models and methodologies, user manuals and training materials relating thereto (“ Software ”); (v) patent, patent applications, provisional patents, design patents, PCT filings, invention disclosures and other rights to inventions or designs (“ Patents ”); (vi) forms of legal rights and protections that may be obtained for, or may pertain to, the Intellectual Property set forth in clauses (i) through (v) in any country of the world (“ Intellectual Property Rights ”), including all applications, registrations, issuances, divisions, continuations, renewals, reissuances and extensions of the foregoing; (vii) copies and tangible embodiments of all of the foregoing, as well as related documentation, in whatever form or medium; and (viii) all rights to sue or recover and retain damages and costs and attorney’s fees for present and past infringement of any of the foregoing.

(b)  Section 3.11(b) of the Disclosure Schedule lists (by name, owner and, where applicable, registration number and jurisdiction of registration, application, certification or filing) all Intellectual Property that is owned by Seller (whether exclusively, jointly with another Person or otherwise) (“ Seller Owned Intellectual Property ”). Except as described in Section 3.11(b) of the Disclosure Schedule, Seller owns the entire right, title and interest to all Seller Owned Intellectual Property free and clear of all Liens and all such Seller Owned Intellectual Property is valid and enforceable.

(c) Section 3.11(c) of the Disclosure Schedule lists, other than commercially available Software and other licenses, sublicenses and agreements for which Seller has paid or is obligated to pay a one-time payment of less than $5,000 or continuing annualized payments of less than $1,000, all current licenses, sublicenses and other agreements and all prior agreements with surviving obligations (“ In-Bound Licenses ”) pursuant to which a third party (including Parent) authorizes Seller to use, practice any rights under, or grant sublicenses with respect to, any Intellectual Property related to the Business owned by such third party, including the incorporation of any such Intellectual Property into products of Seller and, with respect to each such In-Bound License, whether such In-Bound License is exclusive or non-exclusive. The Software that is used or relied upon by Seller in the conduct of its business, including any embedded or integrated third party software, does not contain any open source or freeware and the sale or licensing of the Software in the ordinary course of business is not governed, in whole or in part, by the terms of the GNU General Public License or any other license requiring (as a license condition or otherwise) the Seller to disclose source code to any of the Software and any other software for which a reasonably prudent person would hold in confidence. The computer software, computer firmware, computer hardware (whether general purpose or special purpose), and other similar or related items of automated, computerized and/or software system(s) that are used or relied upon by the Seller in the conduct of its business is sufficient in all material respects for the current needs of such business.

(d)  Section 3.11(d) of the Disclosure Schedule lists, other than licenses, sublicenses and agreements for which Seller has received or is entitled to receive a one-time payment of less than $5,000 or continuing annualized payments of less than $1,000, all current licenses, sublicenses and other agreements and all prior agreements with surviving obligations (“ Out-Bound Licenses ”), pursuant to which Seller authorizes a third party (including Parent) to use, practice any rights under, or grant sublicenses with respect to, any Seller Owned Intellectual Property or pursuant to which Seller grants rights to use or practice any rights under any Intellectual Property owned by a third party and, with respect to each such Out-Bound License, whether such Out-Bound License is exclusive or non-exclusive.

(e) Seller (i) exclusively owns the entire right, interest and title to all Intellectual Property that is used in or necessary for the Business as is currently conducted or proposed to be conducted (including the design, refurbishment, license and sale of all products currently under development or in production) free and clear of Liens, except as described in Section 3.11(b) of the Disclosure Schedule, or (ii) otherwise rightfully uses or otherwise enjoys such Intellectual Property pursuant to a valid and enforceable In-Bound License that is listed in Section 3.11(c) of the Disclosure Schedule. The Seller Owned Intellectual Property, together with Seller’s rights under the In-Bound Licenses listed in Section 3.11(c) of the Disclosure Schedule (collectively, the “ Seller Intellectual Property ”), constitutes all the Intellectual Property used in or necessary for the operation of the Business as is currently conducted and as proposed to be conducted (including the design, refurbishment, license and sale of all products currently under development or in production).

(f) No registration, maintenance and renewal fees related to Intellectual Property or other certifications, filings or registrations that are owned by Seller and related to the Business (“ Seller Registered Items ”) are currently overdue and all requisite documents and certificates related to such Seller Registered Items have been filed with the relevant Governmental Entity or other relevant authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Seller Registered Items. All Seller Registered Items are in good standing and held in compliance with all applicable legal requirements. Seller also owns valid record title for all Seller Registered Items, as recorded with the relevant Governmental Entity or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of asserting ownership and/or the assignment thereof.

(g) Except as set forth on Section 3.11(g) of the Disclosure Schedule, there are no challenges (or, to the Knowledge of Seller, any basis therefor) with respect to the validity or enfo