ASSET PURCHASE AGREEMENT

1.

CERTAIN DEFINITIONS . For purposes of this Agreement, the following capitalized terms shall have the following meanings:

1.1.

Agreement has the meaning set forth in the preamble to this Agreement.

1.2.

Accounts Receivable has the meaning set forth in Section 4.9 .

1.2(A)

Accounts Receivable Reserve has the meaning set forth in Section 6.10 .

1.3.

Actual Cash Purchase Price has the meaning set forth in Section 3.1 .

1.4.

ADP has the meaning set forth in Section 4.14 .

1.5.

ADP Plan(s) has the meaning set forth in Section 4.16(b) .

1.5(A)

“ Affiliate(s) ” of a Person other than a natural Person mean any entity controlled by, controlling, or under common control with such Person.

1.6.

Assets means all of Seller’s right, title and interest in and to the assets and properties owned by Seller and used in connection with the Business, whether known or unknown, tangible or intangible, real or personal, wherever situated, other than the Excluded Assets. The Assets include, without limitation, all of Seller’s right, title and interest in and to the following:

(a)

all furniture, fixtures, other fixed assets, equipment, machinery, dies, tooling and office and other equipment and vehicles used in connection with or related to the Business, including, without limitation, the assets listed on the attached Schedule 1.6(a) ;

(b)

the goodwill of and all other intangible assets associated with the Business;

(c)

all patents, patent applications, common law trademarks, registered trademarks, trademark applications and registrations, trade names, trade name applications and registrations, service marks, service mark applications and registrations, service names, copyrights, copyright applications and registrations, commercial and technical trade secrets, drawings, specifications, technology, phone numbers, fax numbers, websites, web domains, computer and electronic data processing programs and software, inventions, processes, know-how, confidential information and other proprietary property rights and interests used in connection with the Business, including, without limitation, the items set forth on the attached Schedule 1.6(c) (collectively, the “ Intellectual Property ”);

(d)

all sales and business records, personnel records of Seller’s employees, credit records of Seller’s customers, customer lists, advertising and promotional materials and all other books and records of every kind and nature used in connection with or related to the Business;

(e)

all written personal property leases entered into by Seller which cover personal property used in connection with the Business (the “ Personal Property Leases ”), which are set forth on the attached Schedule 1.6(e) ;

(f)

those certain written contracts and agreements, other than the Personal Property Leases, entered into by Seller in connection with the Business, that are set forth on the attached Schedule 1.6(f) (the “ General Contracts ”);

(g)

all licenses and permits held by Seller in connection with the Business, the Assets or the Leased Personal Property, including, without limitation, those set forth on the attached Schedule 1.6(g) ;

(h)

all inventories of the Business, regardless of nature or kind, or whether such inventories are included in Seller’s Most Recent Balance Sheet;

(i)

all third party warranties and claims for warranties relating to the Business, the Assets, and the Leased Property;

(j)

all Accounts Receivable, including, without limitation, those set forth on the attached Schedule 1.6(j ) which shall include the monies owed by DSPI to Seller;

(k)

all prepaid expenses set forth on Schedule 1.6(k) ;

(l)

those assets of DSPI used in connection with the Business;

(m)

all claims and rights concerning any litigation or potential litigation in connection with or with respect to the Business, in which Seller is a claimant, including but not limited to enforcing noncompetition covenants against Former Employees and excluding any claims for refunds of premiums on insurance policies of Seller;

(n)

all rights (but no obligations) of, Seller pursuant to the DCA Agreement and the Ruch Release; and

(o)

the Real Property Lease.

1.7.

Assumed Liabilities means

(a)

Seller’s obligations, liabilities and commitments first arising from and after the Closing Date under the General Contracts, the Personal Property Leases, and pursuant to the Real Property Lease Assignment;

(b)

those trade account payables set forth on the attached Schedule 1.7(b) , which shall not include any items that are adjustments to the calculation of Operating Profit in accordance with Schedule 1.87 ;

(c)

accruals for employee vacation time, sick time, and bonus payments for Transferred employees, as set forth on Schedule 1.7(c) ;

(d)

all obligations, liabilities, and commitments (including under Environmental Laws) arising out of or relating to the operation and conduct of the Business or the use or ownership of the Assets from and after the Closing, including obligations, liabilities and commitments in respect of any and all products sold by the Business from and after the Closing (including in respect of product liability claims for items that are sold by Purchaser from and after the Closing) and except for obligations and liabilities arising from or related to the Business, the Assets or the Leased Real Property prior to the Closing; and

(e)

other accrued operating expenses or trade payables: (i) described on the attached Schedule 1.7(e); or (ii) incurred in the ordinary course of business consistent with past practice, in each case which shall not include any items that are adjustments to the calculation of Operating Profit in accordance with Schedule 1.87 .

1.8.

Attendant Documents has the meaning set forth in Section 4.1 .

1.9.

[Intentionally omitted]

1.10.

Bill of Sale has the meaning set forth in Section 8.2(a) .

1.11.

Business has the meaning set forth in the Recitals to this Agreement.

1.12.

Business Day means any day other than a Saturday, Sunday, legal holiday, or other day upon which banks in Delaware are not permitted or required to be closed.

1.13.

Cap has the meaning set forth in Section 9.6 .

1.14.

[intentionally omitted]

1.15.

CERCLA has the meaning set forth in Section 4.20(a)(i) .

1.16.

Claim has the meaning set forth in Section 9.3(a) .

1.17.

[intentionally omitted]

1.18.

Closing has the meaning set forth in Section 8.1 .

1.19.

Closing Date has the meaning set forth in Section 8.1 .

1.20.

Closing Date Cash Payment has the meaning set forth in Section 3.2(a) .

1.21.

Closing Net Assets has the meaning set forth in Section 3.3(b) .

1.22.

COBRA has the meaning set forth in Section 4.16(a)(i) .

1.23.

Code has the meaning set forth in Section 4.16(a)(ii) .

1.24.

Commercial Arbitrator has the meaning set forth in Section 10.2(a) .

1.24A

Consequential Damages has the meaning set forth in Section 9.6 .

1.25.

Contracts means all of the General Contracts and the Personal Property Leases.

1.26.

Controlled Group has the meaning set forth in Section 4.16(a)(iii) .

1.27.

Controlled Group Member has the meaning set forth in Section 4.16(a)(iv) .

1.28.

Current Employee(s) has the meaning set forth in Section 4.14 .

1.29.

DCA means Denville.ca, Inc., formerly known as Bioresource, Inc., a Canadian corporation.

1.30.

DCA Agreement has the meaning set forth in Section 8.2(g) .

1.31.

Denville has the meaning set forth in Section 6.1 .

1.32.

Denville Scientific has the meaning set forth in Section 6.1 .

1.33.

Downward Net Asset Adjustment Amount has the meaning set forth in Section 3.3(c) .

1.34.

DSPI means Denville Scientific Products, Inc., formerly known as TKR Biotech Products, Inc., a Pennsylvania Corporation.

1.35.

Early 2009 Stub Operating Profit has the meaning set forth in Exhibit 3.2(b) .

1.36.

Employees has the meaning set forth in Section 4.14 .

1.37.

ERISA has the meaning set forth in Section 4.16(a)(v) .

1.38.

Employee Benefit Plan(s) has the meaning set forth in Section 4.16(a)(vi) .

1.39.

Employment Agreement has the meaning set forth in Section 8.2(d) .

1.40.

Environmental Laws has the meaning set forth in Section 4.20(a)(i) .

1.41.

Environmental Reports has the meaning set forth in Section 4.20(a)(iii) .

1.42.

Escrow Agent has the meaning set forth in Section 3.2(a)(i) .

1.43.

Escrow Agreement has the meaning set forth in Section 3.2(a)(i) .

1.44.

Escrow Payment has the meaning set forth in Section 3.2(a)(i) .

1.45.

Estimated Closing Net Asset Value has the meaning set forth in Section 3.3(a) .

1.46.

Excluded Assets . Any provision of this Agreement to the contrary notwithstanding, the following shall not be included in the Assets and shall be Excluded Assets under this Agreement:

(a)

any written or oral contracts or agreements other than the General Contracts, the Personal Property Leases and the Real Property Lease;

(b)

cash and cash equivalents of Seller and any marketable securities held by Seller;

(c)

the minute books, stock books, corporate seals and other corporate records of Seller relating to its organization and existence; provided, however, from time to time after the Closing, Seller shall, on request and upon reasonable notice, make such minute books, stock books and other corporate records available to Purchaser for inspection and copying, at Purchaser’s sole cost and expense, during normal business hours.

(d)

all tax returns of Seller and all prepaid taxes;

(e)

any employee loans outstanding;

(f)

all of Seller’s insurance policies and return of premiums associated with the cancellation of any of Seller’s insurance policies;

(g)

all equity interests in any Person, including, but not limited to, DSPI and DCA;

(h)

that certain note receivable in the amount of $250,000 from DSPI (the “ DSPI Note ”);

(i)

any life insurance policies on the life of a Shareholder;

(j)

all prepaid expenses not included in the Assets;

(k)

all rights under this Agreement; and

(l)

any other items listed on the attached Schedule 1.46 .

1.47.

Excluded Liabilities means any and all debts, liabilities or obligations of Seller, regardless of their type or nature, other than the Assumed Liabilities (collectively, the “ Excluded Liabilities ”). Such Excluded Liabilities shall include, without limitation:

(a)

any remediation, or other liability or obligation for any violation of the Environmental Laws arising from the operation of the Business or the Leased Real Property prior to the Closing Date, including, without limitation, those arising prior to Seller’s occupancy of the Leased Real Property;

(b)

any liability or obligation relating, in any way, to any action, suit, investigation or proceeding against Seller, the Business, the Assets, or the Leased Property, or at law or in equity arising prior to the Closing Date, before any federal, state, municipal or other governmental department, commission, board, agency, court or instrumentality, whether or not disclosed to Purchaser;

(c)

any liability of Seller for Taxes, including, but not limited to, Taxes that arise in connection with the consummation of the transactions contemplated hereby and any liability for the unpaid Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee of, or successor to Seller, by contract or otherwise;

(d)

except as assumed by Purchaser pursuant to Section 1.7(c) , any obligation whatsoever related to employees or independent contractors, including but not limited to under the Employee Benefit Plans, arising in connection with the Business on or before the Closing Date, including but not limited

to any liability resulting from Seller’s termination of employees on or prior to the Closing Date, any workers’ compensation claims which relate to events on or before the Closing Date, and any COBRA coverage for existing qualified beneficiaries, qualified beneficiaries who have not elected COBRA coverage but have COBRA rights and any individuals who become qualified beneficiaries in connection with the transactions contemplated by this Agreement and any and all liabilities and obligations relating to severance payments, change of control costs, Seller’s Plans, including but not limited to Seller’s 401(k) Plan;

(e)

all written or oral contracts or agreements other than the General Contracts, the Personal Property Leases and the Real Property Lease, as assumed pursuant to Section 1.7 above;

(f)

all debts, liabilities and obligations of Seller, including but not limited to those set forth on the face of or described in the notes, if any, to the Most Recent Balance Sheet of Seller, other than the Assumed Liabilities;

(g)

all liabilities whatsoever of DSPI or DCA, including but not limited to any liabilities associated with or related to any equity interest held by Seller in DSPI or DCA and all obligations of Seller pursuant to the DCA Agreement and the Ruch Release;

(h)

any liability or expense of Seller or Shareholders arising out of the transactions contemplated by this Agreement, including the negotiation or execution of this Agreement and the Attendant Documents and the consummation of such transactions;

(i)

all fees, commissions and expenses payable to Sun Mergers & Acquisitions LLC;

(j)

any claim by Fisher Scientific International, Inc., or its subsidiary, Molecular BioProducts, Inc., for trademark infringement arising out of or in connection with Seller’s operation of the Business prior to the Closing Date; and

(k)

except to the extent expressly included in the list of Assumed Liabilities, any obligation or liability of Seller arising out of or in connection with Seller’s operation of the Business prior to the Closing Date, including but not limited to the failure to qualify to do business, or otherwise register with, any state in which such qualification or registration is required.

1.48.

Filing Date has the meaning set forth in Section 10.2(b) .

1.49.

Financial Statements and “ Annual Financial Statements ” have the respective meanings set forth in Section 4.17 .

1.50.

Final 2008 Stub Operating Profit has the meaning set forth in Exhibit 3.2(b) .

1.51.

Final 2009 Stub Operating Profit has the meaning set forth on Exhibit 3.2(b) .

1.52.

Final Closing Net Asset Value has the meaning set forth in Section 3.3(b) .

1.53.

Final Early 2009 Stub Operating Profit has the meaning set forth in Exhibit 3.2(b) .

1.54.

Final Latter 2009 Operating Profit has the meaning set forth in Exhibit 3.2(c) .

1.55.

Final Latter 2009 Operating Profit Determination Date has the meaning set forth on Exhibit 3.2(c) .

1.56.

Final Purchase Price Payment has the meaning set forth in Exhibit 3.2(c) .

1.57.

Final Purchase Price Payment Date has the meaning set forth in Section 6.7(a) .

1.58.

Final Trailing 12-Month Operating Profit has the meaning set forth in Exhibit 3.2(b) .

1.59.

Former Employee(s) has the meaning set forth in Section 4.15 .

1.60.

General Contracts has the meaning set forth in Section 1.6(f) .

1.61.

Hazardous Materials has the meaning set forth in Section 4.20(a)(ii) .

1.62.

Indemnification Notice has the meaning set forth in Section 9.3(a) .

1.63.

Indemnified Party has the meaning set forth in Section 9.3(a) .

1.64.

Indemnifying Party has the meaning set forth in Section 9.3(a) .

1.65.

Independent Accounting Firm has the meaning set forth in Section 3.3(b) .

1.66.

Intellectual Property has the meaning set forth in Section 1.6(c) .

1.67.

Interim Purchase Price Clawback Amount has the meaning set forth in Exhibit 3.2(b) .

1.68.

Interim Purchase Price Payment has the meaning set forth in Exhibit 3.2(b) .

1.69.

ISRA means the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq.

1.70.

Latter 2009 Operating Profit has the meaning set forth in Exhibit 3.2(c) .

1.71.

Latter 2009 Stub Period has the meaning set forth in Exhibit 3.2(c) .

1.72.

Leased Personal Property has the meaning set forth in Section 4.5 .

1.73.

Leased Property has the meaning set forth in Section 4.5 .

1.74.

Leased Real Property has the meaning set forth in Section 4.8 .

1.75.

Licenses has the meaning set forth in Section 4.6 .

1.76.

Liens has the meaning set forth in Section 2.1 .

1.77.

Losses has the meaning set forth in Section 9.1 .

1.78.

Material Adverse Effect shall mean (i) a material adverse effect on the financial condition or results of operations of the Business, taken as a whole, or (ii) on the ability of Seller to consummate the transactions contemplated in this Agreement.

1.79.

Maximum Cash Purchase Price has the meaning set forth in Section 3.1 .

1.80.

Monthly Report(s) has the meaning set forth in Section 6.7(a) .

1.81.

Most Recent Balance Sheet has the meaning set forth in Section 4.17 .

1.82.

Multiemployer Plan has the meaning set forth in Section 4.16(a)(vii) .

1.83.

Name Change Amendments has the meaning set forth in Section 6.1 .

1.84.

Net Assets shall mean the Accounts Receivable (net of the Accounts Receivable Reserves), inventory, fixed assets, all cash delivered to Purchaser at Closing, and prepaid expenses included among the Assets minus the accounts payable and accrued expenses of the Business included among the Assumed Liabilities.

1.85.

Non-Assignable Asset has the meaning set forth in Section 6.3(a) .

1.86.

Noncompetition Agreements has the meaning set forth in Section 8.2(e) .

1.87.

Notice (whether or not capitalized) has the meaning set forth in Section 10.3 .

1.88.

Objection Notice has the meaning set forth in Section 6.7(b) .

1.88A

Obligations has the meaning set forth in Section 10.16 .

1.89.

Operating Profit has the meaning set forth in Exhibit 1.87 .

1.90.

Operating Profit Determination Deliverables has the meaning set forth in Exhibit 3.2(b) .

1.91.

Parent has the meaning set forth in the preamble to this Agreement.

1.92.

Parent Guarantee has the meaning set forth in Section 8.3(f) .

1.93.

Party and Parties have the meanings set forth in the preamble to this Agreement.

1.94.

Pension Plan has the meaning set forth in Section 4.16(a)(viii) .

1.95.

Permitted Liens has the meaning set forth in Section 4.10 .

1.96.

Personal Property Leases has the meaning set forth in Section 1.6(e) .

1.97.

Person means any individual, corporation, partnership (limited or general), limited liability partnership, limited liability company, trust, association or other organization or entity, as the context requires.

1.98.

Plan(s) has the meaning set forth in Section 4.16(b) .

1.99.

Pre-Closing Tax Period(s) has the meaning set forth in Section 6.4 .

1.100.

Protected Names has the meaning set forth in Section 6.1 .

1.101.

Purchase Price has the meaning set forth in Section 3.1 .

1.102.

Purchase Price Bank Account has the meaning set forth in Section 3.2(a)(ii) .

1.103.

Purchaser has the meaning set forth in the preamble to this Agreement.

1.104.

Purchaser Parties has the meaning set forth in Section 9.1 .

1.105.

RCRA has the meaning set forth in Section 4.20(a)(i) .

1.106.

Real Property Lease means that certain lease dated as of June 16, 2004, as amended, for the Leased Real Property located at 3005 Hadley Road, Units #1-3 and 4A, South Plainfield, New Jersey.

1.106(A)

Real Property Lease Assignment has the meaning set forth in Section 8.3(b) .

1.107.

Retirement Plan has the meaning set forth in Section 4.16(c) .

1.108.

Ruch Release has the meaning set forth in Section 8.2(j) .

1.109.

Sale Payment has the meaning set forth in Section 6.9 .

1.110.

Sale Transaction has the meaning set forth in Section 6.9 .

1.111.

Seller has the meaning set forth in the preamble of this Agreement.

1.112.

Seller Parties has the meaning set forth in Section 9.2 .

1.113.

Seller’s actual knowledge shall mean the actual knowledge of Walter Demsia or Ryan Sharp without any inquiry.

1.114.

Seller’s knowledge shall mean the actual knowledge of Walter Demsia or Ryan J. Sharp after due inquiry.

1.115.

Shareholder(s) has the meaning set forth in the preamble to this Agreement.

1.116.

Shareholders’ Representative has the meaning set forth in Section 8.4(a) .

1.117.

Statement of Closing Net Assets has the meaning set forth in Section 3.3(b) .

1.118.

Target Closing Net Asset Value has the meaning set forth in Section 3.3(c) .

1.119.

Tax or Taxes means any and all federal, state, local or foreign taxes, fees, levies, duties, tariffs, imposts, and governmental impositions or charges of any kind in the nature of (or similar to) taxes, including (without limitation) (a) income, franchise, profits, gross receipts, margins, ad valorem, net worth, value added, sales, use, service, real or personal property, special assessments, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits, transfer and gains taxes, (b) interest, penalties, additional taxes and additions to tax imposed with respect thereto, and (c) any obligation to indemnify or otherwise assume or succeed to the Tax Liability of any other Person.

1.120.

Tax Return means any return, declaration, report, claim for refund, or information return or statement related to Taxes, including any schedule or attachment thereto, any amendment thereof, and including, without limitation, consolidated, combined, and unitary tax returns.

1.121.

Third Party Claim has the meaning set forth in Section 9.3(a) .

1.122.

Threshold Amount has the meaning set forth in Section 9.6

1.123.

Trailing 12-Month Operating Profit has the meaning set forth in Exhibit 3.2(b) .

1.124.

Trailing 12-Month Operating Profit Product has the meaning set forth in Exhibit 3.2(b) .

1.125.

Transfer Taxes has the meaning set forth in Section 10.8 .

1.126.

Transferred Employees has the meaning set forth in Section 7.1 .

1.127.

Transition Agreement has the meaning set forth in Section 8.2(f) .

1.128.

WARN Act has the meaning set forth in Section 7.2 .

1.129.

Welfare Plan has the meaning set forth in Section 4.16(a)(ix) .

1.130.

Year-End Balance Sheet has the meaning set forth in Section 4.17 .

1.131.

2008 Stub Operating Profit has the meaning set forth in Exhibit 3.2(b) .

1.132.

2008 Operating Profit has the meaning set forth in Exhibit 3.2(a) .

1.133.

2009 Stub Operating Profit Determination Date has the meaning set forth in Exhibit 3.2(b) .

2.

PURCHASE AND SALE OF ASSETS

2.1.

Purchase and Sale of the Assets . On the Closing Date, Seller shall sell, transfer, and assign to Purchaser, and Purchaser shall purchase, accept and acquire from Seller, on the terms and subject to the conditions set forth in this Agreement, all of the Assets, other than the Excluded Assets, free and clear of all judgments, security interests, liens, title defects, mortgages or encumbrances of any nature whatsoever (collectively, the “ Liens ”), other than the Permitted Liens set forth on Schedule 4.10 .

2.2.

Liabilities Assumed . On the Closing Date, Seller shall assign to Purchaser, and Purchaser shall assume from Seller, the Assumed Liabilities, provided Purchaser shall not assume and shall not be liable for any of the Excluded Liabilities.

3.

CONSIDERATION

3.1.

Purchase Price and Payment . The purchase price for the Assets (the “ Purchase Price ”) shall be Twelve Million Eight Hundred Eleven Thousand Eight Hundred Seventy Two Dollars ($12,811,872.00), as adjusted in accordance with Section 3.2 and Section 3.3 (collectively, the “ Actual Cash Purchase Price ”), which Actual Cash Purchase Price shall be paid as hereinafter set forth in Section 3.2 , as adjusted pursuant to Section 3.3 , and which Actual Cash Purchase Price shall in no event be greater than Twenty Five Million Five Hundred Thousand ($25,500,000.00) (the “ Maximum Cash Purchase Price ”); and (b) the assumption by Purchaser of the Assumed Liabilities.

3.2.

Payment of Purchase Price . Purchaser shall pay the Actual Cash Purchase Price as follows:

(a)

At the Closing, Purchaser shall pay Seller the sum of Twelve Million Eight Hundred Eleven Thousand Eight Hundred Seventy Two Dollars ($12,811,872.00) (the “ Closing Date Cash Payment ”), which Closing Date Cash Payment shall be determined in accordance with Exhibit 3.2(a) , payable as follows:

(b)

At the time specified in Exhibit 3.2(b) , Purchaser shall pay the Interim Purchase Price Payment, if any, to Seller by wire transfer of immediately available funds to the Purchase Price Bank Account which Interim Price Payment shall be determined in accordance with Exhibit 3.2(b) . Alternatively, at the time specified in Exhibit 3.2(b), Seller shall pay the Interim Purchase Price Clawback Amount to Purchaser by wire transfer of immediately available funds to a bank account specified by Purchaser in writing.

(c)

As specified in Exhibit 3.2(c) , the Parties shall determine the Final Purchase Price Payment and any payment thereof shall be paid at the time specified in Exhibit 3.2(c) . In the event there is a Final Purchase Price Payment, Purchaser shall pay the Final Purchase Price Payment to Seller by wire transfer of immediately available funds to the Purchase Price Bank Account. In no event shall the Actual Cash Purchase Price, as adjusted pursuant to Section 3.2 and Section 3.3 , exceed the Maximum Cash Purchase Price.

3.3.

Post Closing Adjustment to Purchase Price .

(a)

Attached hereto as Exhibit 3.3(a) is a statement of the estimated value of the Net Assets of the Business as of August 31, 2009 (the “ Estimated Closing Net Asset Value ”), as derived from the unaudited estimated balance sheet of the Seller as of August 31, 2009 and prepared in accordance with GAAP consistent with past practice.

(b)

Unless specifically waived in writing by Purchaser, Seller shall, at its cost and expense, prepare and deliver to Purchaser, within ninety (90) days after the Closing Date, a statement (the “ Statement of Closing Net Assets ”) setting forth a balance sheet of the Net Assets as of the Closing Date (the “ Closing Net Assets ”), which Statement of Closing Net Assets shall be prepared in accordance with GAAP consistent with past practice. Purchaser shall have fifteen (15) calendar days from the date of its receipt of the Statement of Closing Net Assets to deliver to Seller a written objection to the Statement of Closing Net Assets, which objection shall include a reasonably detailed statement of the basis for Purchaser’s objection. During such fifteen (15) day period, Purchaser and Parent shall grant Seller, Shareholders’ Representative and Seller’s accountants, legal counsel and advisors, reasonable access, during normal business hours, to Purchaser’s books and records to review (at Seller’s sole expense) Seller’s calculation of the Closing Net Assets and preparation of the Statement of Closing Net Assets. If Purchaser fails to timely object, then the Statement of Closing Net Assets shall be deemed accepted as originally delivered to Purchaser. If Purchaser timely objects to the Statement of Closing Net Assets and Seller and Purchaser are unable to resolve such dispute within ten (10) calendar days of Seller’s receipt of Purchaser’s objections, then the issues in dispute shall be submitted to an independent, nationally recognized accounting firm reasonably acceptable to the Parties (the “ Independent Accounting Firm ”) for resolution. The Independent Accounting Firm shall be instructed to submit a report to Purchaser and Seller within thirty (30) calendar days with a determination regarding any disputed items (such disputed amounts to be resolved by the Independent Accounting Firm in accordance with the accounting principles used in preparing the Estimated Closing Net Asset Value), and such report shall be final, binding and conclusive on the Parties hereto. The value of the Closing Net Assets as finally determined by this Section 3.3(b) shall be deemed the “ Final Closing Net Asset Value ” for purposes of this Agreement. The fees, costs and expenses of the Independent Accounting Firm shall be divided equally and paid by Purchaser and Seller.

(c)

If it is determined, pursuant to 3.3(b), that the Final Net Asset Value is less than Four Million One Hundred Fifty Thousand Dollars ($4,150,000.00) (the “ Target Closing Net Asset Value ”), then the Purchase Price shall be decreased by one dollar ($1.00) for every dollar that the Final Closing Net Asset Value is less than the Target Closing Net Asset Value (the “ Downward Net Asset Adjustment Amount ”).

(d)

In the event of a Downward Net Asset Adjustment Amount, Seller shall pay such Downward Net Asset Adjustment Amount to Purchaser within three (3) Business Days of the determination of the Downward Net Asset Adjustment Amount, by wire transfer of immediately available funds to one or more accounts designated by Purchaser in writing.

3.4.

Allocation of Consideration . The aggregate consideration paid by Purchaser to Seller pursuant to this Agreement (including the Assumed

Liabilities) shall be allocated among the Assets, including any intangible assets. Certain of such allocations are as set forth in Schedule 3.4 which Seller and Purchaser have agreed upon. Each Party agrees to report the transactions contemplated by this Agreement for federal income tax and all other tax purposes (including, without limitation, for purposes of Section 1060 of the Code) in a manner consistent with the agreed upon allocations set forth in Schedule 3.4 and in accordance with all applicable rules and regulations, and to take no position inconsistent with such allocations in any administrative or judicial examination or other proceeding. Purchaser and Seller shall timely file the appropriate forms in accordance with the requirements of Section 1060 of the Code.

4.

REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS . Seller and Shareholders, jointly and severally, hereby represent, warrant and covenant the following to Purchaser and Parent:

4.1.

Good Standing and Authority . Seller is a corporation organized, validly existing and in good standing under the laws of the State of Delaware. Except as set forth on Schedule 4.1 , Seller is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which it is required to be so qualified except where the failure to be qualified would not reasonably be expected to have a Material Adverse Effect. Seller has the corporate power and authority to enter into this Agreement, to enter into any and all documents contemplated in this Agreement (the “ Attendant Documents ”) to which it is or will be a party and to consummate the transactions contemplated in this Agreement and the Attendant Documents. This Agreement and all of the Attendant Documents to which Seller will be a party as of the Closing, and the consummation of the transactions contemplated in this Agreement and the Attendant Documents, will be, on or prior to the Closing Date, duly authorized and approved by all necessary corporate action on the part of Seller. This Agreement, and all of the Attendant Documents to which Seller will be a party as of the Closing, when executed and delivered, constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles. This Agreement, and all of the Attendant Documents to which each Shareholder will be a party as of the Closing, when executed and delivered, constitute legal, valid and binding obligations of each such Shareholder, enforceable against each such Shareholder in accordance with their respective terms subject, as to enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors’ rights generally and to general equitable principles. Notwithstanding anything to the contrary contained herein, the representation contained in the immediately preceding sentence is made severally by each Shareholder and not jointly and severally. Seller owns no equity interests other than its interests in DSPI.

4.2.

Assets . The Assets (including the assets of DSPI acquired by Purchaser), together with all Leased Personal Property, the Leased Real Property and the Excluded Assets, constitute all of the assets which are used in connection with and are necessary to the operation of the Business as of the Closing. Except as set forth on Schedule 4.2 , all of the Assets and all of the Leased Personal Property are located at the Leased Real Property.

(a)

The attached Schedule 1.6(a) contains a true and complete list of all material furniture, fixtures, fixed assets, material equipment, machinery, tools, dies, jigs, patterns, molds, engineering and office equipment and vehicles used in connection with the operation of or related to the Business, other than the Leased Personal Property.

(b)

The attached Schedule 1.6(i) contains a true and complete list of all material third party warranties and claims for warranties relating to the Business, the Assets or the Leased Personal Property.

4.3.

Intellectual Property . Seller owns no patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, applications for registered service marks, registered copyrights and applications for registered copyrights. The attached Schedule 4.3 contains a true and complete list of any common law trademarks and logos used in connection with the operation of the Business, none of which are owned by any Shareholder, and any and all corporate and assumed names under which Seller in the five (5) years prior to the Closing Date, has conducted or, is currently conducting the Business. To Seller’s actual knowledge, Seller has the right to assign its entire right, title and interest in and to all of the Intellectual Property. Seller is not a party to any license agreements granting any right to use or practice any rights under any Intellectual Property, whether Seller is the licensee or licensor thereunder. The items comprising the Intellectual Property are the only proprietary property used by Seller in connection with the Business as conducted immediately prior to the Closing. There has been no written claim received by Seller for infringement, misappropriation or misuse of any of the Intellectual Property or any other proprietary information related to the Business in the ten (10) years prior to the Closing Date. Seller has received no written claim in the ten (10) years prior to the Closing Date that Seller has infringed or is infringing on any trademark, trade name, copyright or other proprietary or intellectual property right of any third party or that Seller is illegally using the trade secrets or property rights of any third party.

4.4.

Contracts . The attached Schedule 4.4 identifies all material contracts and agreements related to the Business to which Seller is a party (including all Contracts), true and complete copies of all (or, if verbal, true and complete summaries) of which have been delivered to Purchaser. For purposes of

this Section 4.4 a Contract or agreement shall be deemed to be material if it involves obligations (contingent or otherwise) of, or payments to Seller involving aggregate annual consideration payable to or by Seller in excess of twenty-five thousand dollars ($25,000), or if it restricts Seller’s ability to compete in the Business. Each Contract was entered into in the ordinary course of business, is legal, valid and binding against Seller, enforceable against Seller and in full force and effect. To Seller’s knowledge, there are no disputes, oral agreements or forbearance programs in effect as to any Contract. Seller has not assigned, transferred, mortgaged or otherwise conveyed its interest in any Contract. Seller has complied in all material respects with the provisions of each Contract to which it is a party, and is not in default under any such Contract and, to Seller’s knowledge, no party to any such Contract has failed to comply in any material respect with, or is in material default under, the provisions of such Contract. Except as disclosed on Schedule 4.21 , this Agreement and the transactions contemplated by this Agreement will not violate or cause a default under any Contract or, require notice to, or the consent of, any party to any Contract.

4.5.

Leased Assets . The attached Schedule 1.6(e), contains a true and complete list of the leased personal property used by the Business (collectively, the “ Leased Personal Property ,” and together with the Leased Real Property, the “ Leased Property ”). Seller is the exclusive user of all of the Leased Personal Property listed on the attached Schedule 1.6(e) and all of the Leased Personal Property is located at the Leased Real Property. Except for the Leased Personal Property, there is no personal property which is leased and which is used in connection with the operation of, or related to, the Business. ›

4.6.

Permits and Licenses . The attached Schedule 1.6(g) lists all governmental franchises, permits, licenses or other authorizations from a governmental entity held by Seller in connection with the Business, the Assets, the Real Property, or the Leased Property (the “ Licenses ”), true and complete copies of all of which have been delivered to Purchaser. Except as set forth on the attached Schedule 4.6 , all of the Licenses are in full force and effect and are assignable or transferable to Purchaser in connection with the consummation of the transactions contemplated in this Agreement. To Seller’s knowledge, Seller has obtained all Licenses necessary for its operation of the Business, the ownership of the Assets or the lease of the Leased Property the absence of which would not reasonably be expected to have a Material Adverse Effect, and Seller has not, to Seller’s knowledge, engaged in any activity which would cause revocation or suspension of any such Licenses. No action or proceeding looking to or contemplating the revocation or suspension of any Licenses is pending or, to Seller’s knowledge, threatened.

4.7.

Real Property Owned . Seller does not own and has never owned any real property.

4.8.

Real Property Leased . The attached Schedule 4.8 lists and briefly describes all real properties leased or subleased to or by Seller for use in the operation of the Business (the “ Leased Real Property ”). Seller has delivered to Purchaser true, correct and complete copies of the leases and subleases for all land, buildings and improvements used in the Business listed on the attached Schedule 4.8 . Except as set forth on the attached Schedule 4.8 , with respect to each Real Property Lease:

(a)

the Real Property Lease is legal, valid, binding, enforceable and in full force and effect;

(b)

to Seller’s actual knowledge, the Leased Real Property has been operated and maintained in accordance with applicable laws, rules and regulations;

(c)

Seller is not, and to Seller’s actual knowledge no other party to the Real Property Lease is, in breach or default, and no event has occurred which, with notice or lapse of time, would constitute such a breach or default or permit termination, modification or acceleration under the Real Property Lease;

(d)

To Seller’s actual knowledge, no party to the Real Property Lease has repudiated any of its provisions;

(e)

Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered all or any portion of its interest in the Real Property Lease;

(f)

the Leased Real Property is supplied with utilities and other services necessary for the operation of the Business at the Leased Real Property, as conducted immediately prior to the Closing; and

(g)

the facilities leased under the Real Property Lease are in good operating condition, subject to ordinary wear and tear, and would require no structural changes by the landlord pursuant to the Real Property Lease if such lease were to terminate as of the Closing Date.

4.9.

Accounts Receivable and Payables . The attached Schedule 1.6(j) contains a true and complete list of all accounts receivable of the Business (the “ Accounts Receivable ”), as of two (2) Business Days prior to the Closing Date. Except as set forth on the attached Schedule 4.9 , all Accounts Receivable are reflected properly on the books and records of Seller, are valid receivables subject to no setoffs or counterclaims, are current and collectible and will be collected in substantial accordance with their terms and at their recorded amounts, subject only to the reserve for bad debts set forth on the Most Recent Balance Sheet, as adjusted for the passage of time through the Closing Date in accordance with generally acceptable accounting principles consistently applied, and are free and clear of all

Liens and factoring agreements. No trade accounts payable forming part of the Assumed Liabilities or other Assumed Liabilities are past due. The Assumed Liabilities have been incurred in the ordinary course of business and Seller has not delayed or postponed the payment of any such Assumed Liabilities or other accounts payable or other liabilities. Seller has no Notes Receivable other than the DSPI Note.

4.10.

Title; Liens . Except (i) as set forth on the attached Schedule 4.10 , and (ii) for the Liens set forth on the attached Schedule 4.10 (the “ Permitted Liens ”), Seller has good, marketable and unencumbered title to, or an unencumbered interest in, each item comprising the Assets, free and clear of any and all Liens.

4.11.

Good Condition . Except as set forth on the attached Schedule 4.11 , to Seller’s knowledge, all of the Assets and all of the Leased Personal Property are currently in good operating condition, subject to normal wear and tear, operating for their respective intended uses and need no major repairs.

4.12.

Litigation . There are no actions, suits, investigations or proceedings pending or, to Seller’s actual knowledge, threatened against Seller, the Business, the Assets or the Leased Property, at law or in equity, before any federal, state, municipal or other governmental department, commission, board, agency, court or instrumentality which could affect, in any way, the Business, the Assets or the Leased Property. There has been no written notice received by Seller that Seller is in default under any order, writ, injunction or decree of any court or other governmental department, commission, board, agency or instrumentality which such default could materially affect, the Business, the Assets or the Leased Property in any way.

4.13.

Compliance with Applicable Laws and Regulations . Except as set forth on the attached Schedule 4.13 , Seller has complied in all material respects with all laws, regulations, rules, orders, judgments, decrees and other requirements imposed by any governmental authority applicable to Seller, the Business, the Assets or the Leased Property.

4.14.

Employees . The attached Schedule 4.14 contains a complete and accurate list of employees leased to the Business by ADP TotalSource (“ ADP ”) as of the Closing Date (each a “ Current Employee ” and collectively the “ Current Employees ”) and, with respect to each Current Employee, his or her salary or hourly rate currently in effect and accrued vacation and sick time as of a date no more than five (5) Business Days prior to the Closing Date. Except as set forth on the attached Schedule 4.14 , no Current Employee is currently on leave of absence, layoff, military leave, suspension, sick leave, workers’ compensation, salary continuance or short or long term disability or otherwise not actively performing his or her work during all normally scheduled business hours. The Current Employees and the Former Employees (as defined below) are sometimes referred to, collectively, as the “ Employees .”

4.15.

Employee Relations . Except as set forth on the attached Schedule 4.15 , there are no written or oral collective bargaining or other employment agreements or understandings with or affecting any Current Employee. There has been no written notice received by Seller with respect to any Current Employee or any person formerly employed by Seller (each a “ Former Employee ” and collectively the “ Former Employees ”) in connection with a violation of the Fair Labor Standards Act or other applicable federal, state or local labor laws. All payments due and payable by Seller to ADP, including but not limited to with respect to health, welfare or unemployment insurance and pursuant to any agreement, as of the Closing Date will have been paid as of the Closing Date or properly accrued for. Except as set forth on Schedule 4.15 , there are no severance payments which could become payable by Purchaser under the terms of any oral or written agreement or commitment. Except as set forth on the attached Schedule 4.15 , (i) there is no unfair labor practice charge or complaint concerning the Business or any Current or Former Employee pending before any governmental agency in any jurisdiction in which Seller conducts business; (ii) there is no labor strike or material slowdown, work stoppage, lockout or other collective labor action actually pending or to Seller’s knowledge threatened against or affecting the Business, and Seller has not in the five (5) years prior to the Closing Date experienced any strike or material slowdown, work stoppage, lockout or other collective labor action in connection with the Business by or with respect to any Current Employees; (iii) there are no charges against the Business pending before the Equal Employment Opportunity Commission or any agency in any jurisdiction in which Seller conducts business responsible for the prevention of unlawful employment practices; (iv) Seller has not received written notice from any governmental agency responsible for the enforcement of labor or employment laws of an intention to conduct an investigation of the Business and, to Seller’s knowledge, no such investigation is currently in progress; (v) no Current Employee or Former Employee has any claim pending against Seller on account of or for overtime pay; and (vi) except as set forth on Schedule 4.15 , Seller has no temporary employees. To the actual knowledge Seller: (i) no Current Employee or Former Employee has breached such employee’s obligations regarding confidentiality, non-competition or non-solicitation, to the extent such Current Employee or Former Employee is so obligated, and (ii) no Current Employee or group of Current Employees plans to leave the Company or to refuse employment by Purchaser.

4.16.

Employee Benefits .

(a)

Definitions: For purposes of this Agreement, the following words and phrases shall have the meanings set forth below:

(i)

“ COBRA ” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended;

(ii)

“ Code ” shall mean the Internal Revenue Code of 1986, as amended;

(iii)

“ Controlled Group ” shall mean a group of two or more trades or businesses, whether or not incorporated, that are considered a single employer under Sections 414(b), (c), (m), (n), or (o) of the Code;

(iv)

“ Controlled Group Member ” shall mean a corporation, trade or business that is a member of a Controlled Group to which Seller belongs;

(v)

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended;

(vi)

“ Employee Benefit Plan(s) ” shall mean and include any Pension Plan, Welfare Plan, Multiemployer Plan and any bonus, severance, deferred compensation, annuity, retirement, stock option, stock purchase, executive compensation, incentive compensation, educational assistance, insurance or other plan or arrangement providing benefits to employees of Seller or any Controlled Group Member, including any similar plan allowed by any foreign law;

(vii)

“ Multiemployer Plan ” has the meaning set forth in Section 3(37) of ERISA;

(viii)

“ Pension Plan ” means any employee pension benefit plan as defined in Section 3(2) of ERISA;

(ix)

“ Welfare Plan ” means any employee welfare benefit plan as defined in Section 3(1) of ERISA.

(b)

Seller’s Employee Benefit Plans and Documents : The attached Schedule 4.16 lists (i) all Employee Benefit Plans that Seller maintains, sponsors, participates in or contributes to or with respect to which Seller has or is reasonably expected to have any liability or potential liability, whether or not such plan is terminated, frozen or transferred to another party (each plan so listed or required to be so listed is referred to hereinafter individually as a “ Plan ” and collectively as the “ Plans ”); and (ii) all Employee Benefit Plans that ADP, on behalf of Seller, maintains, sponsors, participates in or contributes to (each an “ ADP Plan ” and collectively the “ ADP Plans ”). With respect to each Plan, Seller has provided Purchaser with true and correct copies, to the extent applicable, of the following: (i) all material documents pursuant to which the Plan is maintained, administered and funded; (ii) the past three (3) years of Form 5500 (Annual Report) with schedules and attachments; (iii) collective

bargaining agreements or contracts and all amendments thereto; (iv) with regard to each Plan that is a self-funded Welfare Plan, experience and enrollment data for the prior three (3) plan years as well as documentation and calculations demonstrating the present value of accrued obligations under such plans as of the Closing Date; (v) agreements with respect to leased or temporary employees; (vi) all governmental rulings and pending requests for rulings; (vii) the most recent Internal Revenue Service determination letters; and (viii) a list of all COBRA qualified beneficiaries (including COBRA qualified beneficiaries who are either receiving or are entitled to elect to receive COBRA benefits), the date of each qualified beneficiary’s qualifying event, the nature of the qualifying event, the date as of which the maximum COBRA period will end and the cost of such qualified beneficiary’s COBRA coverage.

(c)

Pension Plan; No Title IV, Multiemployer, Multiple-Employer, Retiree Welfare or Special COBRA Liabilities . The only Pension Plans maintained by Seller and with respect to which Seller has any liability or potential liability are those Plans listed on the attached Schedule 4.