ASSET PURCHASE AGREEMENT dated as of December 13, 2004 by and between PITNEY BOWES INC.

EXECUTION COPY

 

 

 

 

 

 

 

 

ASSET PURCHASE AGREEMENT

dated as of

December 13, 2004

by and between

PITNEY BOWES INC.

and

THE STANDARD REGISTER COMPANY

 

 

 

 

 

 

 

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “ Agreement ”) is entered into as of December 13, 2004 by and between Pitney Bowes Inc., a Delaware corporation (“ Buyer ”), and The Standard Register Company, an Ohio corporation (“ Seller ”).

RECITALS

WHEREAS, Seller is currently conducting the Business; and

WHEREAS, Seller wishes to sell and Buyer wishes to purchase the Purchased Assets subject to the assumption of certain of the Liabilities of Seller upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual representations, covenants and agreements hereinafter set forth, the adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

SALE AND PURCHASE OF ASSETS; CLOSING

1.1   

Certain Terms.  

Certain capitalized terms used in this Agreement are defined in Article X.

1.2   

Sale and Purchase of Purchased Assets; Assumption of Certain Liabilities.

(a)  

Purchased Assets .  Subject to the terms and conditions of this Agreement, at the Closing Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase, free and clear of all Encumbrances other than Permitted Encumbrances, all of Seller’s right, title and interest in and to the following Assets of Seller related to or used in the Business as they exist on the Closing Date, other than the Excluded Assets (all of such purchased assets being collectively referred to as “ Purchased Assets ”):

(i)

all Inventories;

(ii)

all Tangible Personal Property listed in Section 1.2(a)(ii) of the Disclosure Schedule ;

(iii)

subject to Section 5.16, all Contracts related to the Business that are not excluded under Section 1.2(b)(v) (the “ Assumed Contracts ”) and Seller’s rights under the Excluded Contracts, but only to the extent set forth in Section 1.2(b)(v) of the Disclosure Schedule ;

(iv)

all of Seller’s books and records relating to the Purchased Assets and the Liabilities of Seller other than the Excluded Assets and the Excluded Liabilities (and, to the extent such books and records do not relate exclusively to such Assets and Liabilities, copies thereof) including, but not limited to, machinery and equipment maintenance files, customer lists, customer purchasing histories, price lists, supplier lists, quality control records and procedures, customer complaint and inquiry files, research and development files, records, data (including, but not limited to, all correspondence with any Governmental Body), sales material and records (including, but not limited to, pricing history, total sales, terms and conditions of sale, sales and pricing policies and practices), strategic plans, internal financial statements, marketing and promotional surveys, material and research, Seller Intellectual Property files, and, subject to Legal Requirements, copies of all personnel records relating to employees of the Business;

(v)

the Intellectual Property of Seller described or set forth in Section 1.2(a)(v) of the Disclosure Schedule (the “ Seller Intellectual Property ”);

(vi)

all claims and proceeds under insurance policies arising from or relating to the Purchased Assets or the Assumed Liabilities prior to the Closing Date;

(vii)

all claims of Seller against third parties relating to the Purchased Assets or Assumed Liabilities, whether known or unknown, fixed or contingent; and

(viii)

all rights of Seller relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof with respect to the Business included in the Closing Date Statement of Accounts, but not including prepayments relating to deferred revenue included in the Closing Date Statement of Accounts.

(ix)

intentionally omitted

Notwithstanding the foregoing, the transfer of the Purchased Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Purchased Assets unless Buyer expressly assumes that Liability pursuant to Section 1.2(c).

(b)  

Excluded Assets .  The following Assets of Seller existing on the Closing Date (collectively, the “ Excluded Assets ”) are not part of the sale and purchase contemplated hereunder, are excluded from the Purchased Assets and shall remain the property of Seller after the Closing:

(i)

all cash and cash equivalents and all Accounts Receivable;

(ii)

all minute books, corporate seals, stock record books and stock transfer records of Seller and Tax Returns and Tax records of Seller and records pertaining to the Excluded Assets and the Excluded Liabilities;

(iii)

all Real Property;

(iv)

all insurance policies and rights thereunder except to the extent specified in Section 1.2(a)(vii);

(v)

all Contracts listed in Section 1.2(b)(v) of the Disclosure Schedule (the “ Excluded Contracts ”);

(vi)

all personnel records and other records that Seller is required by law to retain in its possession;

(vii)

all claims for refunds of Taxes and other governmental charges of whatever nature for periods prior to the Closing Date to the extent such Taxes were paid by Seller;

(viii)

all rights and interests under any of the Plans;

(ix)

all rights of Seller in this Agreement and the other Transaction Documents;

(x)

all claims due from Affiliates of Seller or other parties related to Seller;

(xi)

any Intellectual Property of Seller not listed in Section 1.2(a)(v) of the Disclosure Schedule (“ Excluded Intellectual Property ”);

(xii)

all prepayments relating to deferred revenue included in the Closing Date Statement of Accounts;

(xiii)

all Permits; and

(xiv)

the Assets expressly designated in Section 1.2(b)(xiv) of the Disclosure Schedule .

(c)  

Assumed Liabilities .  At the Closing, Buyer shall assume only the following Liabilities and shall in no event assume any of the Excluded Liabilities (the Liabilities to be assumed being referred to herein collectively as the “ Assumed Liabilities ”):

(i)

any trade account payable (other than a trade account payable to an Affiliate of Seller) incurred in the ordinary course of business and consistent with past practice to the extent reflected on the Closing Date Statement of Accounts and taken into account in the Net Working Capital Adjustment;

(ii)

any Liability to Seller’s customers incurred by Seller in the ordinary course of business consistent with past practice for orders outstanding on the Closing Date reflected on the Closing Date Statement of Accounts, including, but not limited to, fulfillment of performance obligations relating to deferred service contract liability;

(iii)

any Liability arising after the Closing Date under the Assumed Contracts, except for Liabilities caused by a breach by Seller of its obligations under such Contracts; and

(iv)

any Liability of Seller, including accrued miscellaneous Liabilities described in Section 1.2(c)(iv) of the Disclosure Schedule to the extent reflected on the Closing Date Statement of Accounts and taken into account in the Net Working Capital Adjustment.

Except as expressly provided in this Agreement and the other Transaction Documents, Buyer shall not assume or be liable, nor be deemed to have assumed or be liable for, any Liability of Seller of any nature whatsoever.

(d)  

Excluded Liabilities .  The Excluded Liabilities shall remain the sole responsibility of and shall be retained, paid, performed and discharged solely by Seller.  “ Excluded Liabilities ” means all liabilities not expressly listed as Assumed Liabilities and includes, without limitation, the following Liabilities:

(i)

any Liability arising out of or relating to services of Seller to the extent sold prior to the Closing Date other than to the extent assumed pursuant to Section 1.2(c);

(ii)

any Liability under any Assumed Contract that arises after the Closing Date and arises out of or relates to any breach by Seller of its obligations under such Contract that occurred prior to the Closing Date;

(iii)

any Liability for Taxes, including, without limitation,  (A) any Taxes arising as a result of Seller’s operation of the Business or the ownership of the Purchased Assets on or prior to the Closing Date, (B) any Taxes that will arise as a result of the sale of the Purchased Assets pursuant to this Agreement and the transactions contemplated hereby, (C) any deferred Taxes of any nature and (D) any income or franchise Taxes of Seller for any period;

(iv)

any Liability that arises under any Contract not assumed by Buyer, including any Liability arising out of or relating to Seller’s credit facilities or any security interest related thereto;

(v)

any Environmental Liabilities arising out of or relating to facts, events, conditions or circumstances occurring or existing prior to the Closing Date;

(vi)

any Liability or obligation of Seller or any ERISA Affiliate with respect to any Employee Benefit Plan established, maintained, sponsored or contributed to by Seller or any ERISA Affiliate including, but not limited to (i) Liabilities for complete and partial withdrawals under any multiemployer plan (as defined in Section 3(37) of ERISA) pursuant to Section 4203 or 4205 of ERISA, respectively; (ii) Liabilities to the PBGC (including, without limitation, liabilities for premiums and terminations); (iii) Liabilities under Section 4980B of the Code or Part 6 of Subtitle B of Title I of ERISA; (iv) Liabilities arising under Section 412 of the Code or Section 302(a)(2) of ERISA; (v) Liabilities for any retiree medical benefits; and (vi) any Liability or obligation of Seller or any ERISA Affiliate to make contributions to any Employee Benefit Plan for periods ending on or prior to Closing; or any Liability or obligation of Seller or any ERISA Affiliate with respect to any current or former employee, director, shareholder, agent, independent contractor of Seller or any ERISA Affiliate;

(vii)

any Liability under any employment, severance, retention or termination agreement between Seller or any of its Affiliates and employees of Seller or any of its Affiliates;

(viii)

any Liability arising out of any employee grievance, claim or complaint, whether made prior to or after the Closing, arising out of or relating to any fact, event, circumstance or condition existing or occurring on or prior to the Closing Date, whether or not the employee is hired by Buyer;

(ix)

any Liability to any Affiliate of Seller;

(x)

any Liability to indemnify, reimburse or advance amounts to or arising from any Guarantee of Seller for the benefit of any Person, except to the extent provided in Section 1.2(c)(iii);

(xi)

any Liability arising out of any Proceeding pending as of the Closing Date or any Proceeding commenced after the Closing Date and arising out of or relating to any occurrence or event happening on or prior to the Closing Date;

(xii)

any Liability arising out of or resulting from Seller’s compliance or noncompliance with any Legal Requirement or Order of any Governmental Body;

(xiii)

any Liability of Seller (other than for Taxes, which are covered by Section 1.2(d)(iii) above) under or arising out of or in connection with the negotiation, execution or consummation of this Agreement or any other documents executed in connection with the transactions contemplated hereunder including, without limitation, any broker’s, finder’s, financial advisor’s, legal advisor’s or other similar fees and commissions payable in connection with the transactions contemplated by this Agreement;

(xiv)

any Liability for any refund arising out of or relating to the termination by any customer of any service for which a prepayment that constitutes an Excluded Asset under Section 1.2(b)(xii) was made prior to the Closing Date;

(xv)

any Liability for accrued commissions relating to any period prior to the Closing Date; and

(xvi)

any Liability of Seller based upon Seller’s or any of its Affiliates’ acts or omissions occurring on or after the Closing Date.

1.3   

Payment of Purchase Price.

(a)  

The Final Purchase Price shall be determined under and payable in the manner provided in this Agreement.

(b)  

Subject to the terms and conditions of this Agreement, at the Closing, Buyer shall pay to Seller $19,800,000, less the amount of Accounts Receivable set forth on the Reference Balance Sheet (the “ Initial Purchase Price ”), less the Escrow Deposit to be placed in escrow pursuant to Section 2.3, by delivery of cash payable by wire transfer of immediately available funds to Seller’s account set forth on Schedule I (“ Seller’s Account ”).  Following the Closing, the Initial Purchase Price shall be adjusted as provided in Article II.

1.4   

The Closing.  

The purchase and sale provided for in this Agreement shall take place at a closing (the “ Closing ”) (a) at the offices of Proskauer Rose LLP at 1585 Broadway, New York, New York, at 10:00 a.m. (local time) on December 31, 2004, and shall be effective as of 11:59 PM on such date, or (b) at such other time and place as the parties may agree.

1.5   

Closing Deliveries.

(a)  

At or prior to the Closing, Seller shall deliver to Buyer:

(i)

the Purchased Assets;

(ii)

a bill of sale in the form of Exhibit A dated the Closing Date and duly executed by Seller (the “ Bill of Sale ”);

(iii)

an assignment and assumption agreement in the form of Exhibit B dated the Closing Date and duly executed by Seller (the “ Assignment and Assumption Agreement ”);

(iv)

an assignment of the Seller Intellectual Property in the form of Exhibit C dated the Closing Date and duly executed by Seller (the “ Assignment of Intellectual Property ”);

(v)

such other bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be requested by Buyer, each in form and substance reasonably satisfactory to Buyer dated the Closing Date and duly executed by Seller;

(vi)

a certificate dated the Closing Date executed by the President or Chief Financial Officer of Seller in the form of Exhibit D;

(vii)

a copy of Seller's Articles of Incorporation (and all amendments thereto) certified by the Secretary of State (or other appropriate state official) of its state of incorporation and a copy of Seller's Code of Regulations certified by the corporate secretary;

(viii)

a long-form good standing certificate for Seller from the Secretary of State of the State of Ohio dated within ten (10) days prior to the Closing Date;

(ix)

an opinion of Dinsmore & Shohl LLP, counsel to Seller, dated the Closing Date, substantially in the form of Exhibit E;

(x)

releases of all Encumbrances on the Purchased Assets, other than Permitted Encumbrances;

(xi)

a sales representative and subcontract/reseller agreement in the form of Exhibit F (the “ Sales Representative and Subcontract/Reseller Agreement ”) dated the Closing Date and duly executed by Seller;

(xii)

a transitional services agreement in the form of Exhibit G (the “ Transitional Services Agreement ”) dated the Closing Date and duly executed by Seller;

(xiii)

intentionally omitted

(xiv)

keys to the applicable offices located in the real property that is subject to the Real Property License (as defined below) and any security access cards or badges required for employees of the Business to enter such real property or gain access to any area subject to such Real Property License;

(xv)

the Escrow Agreement dated the Closing Date and duly executed by Seller;

(xvi)

a license of certain Seller Real Property, between Buyer or an Affiliate of Buyer and Seller, as landlord, in the form of Exhibit H dated the Closing Date (the “ Real Property License ”); and

(xvii)

such other documents as Buyer may reasonably request.

(b)  

At the Closing, Buyer shall deliver the Escrow Deposit to the Escrow Agent.

(c)  

At or prior to the Closing, Buyer shall deliver to Seller:

(i)

an amount equal to the Initial Purchase Price less the Escrow Deposit;

(ii)

a certificate executed by an authorized officer of Buyer in the form of Exhibit I dated the Closing Date;

(iii)

an opinion of Proskauer Rose LLP, counsel to Buyer, dated the Closing Date, substantially in the form of Exhibit J;

(iv)

the Assignment and Assumption Agreement dated the Closing Date and duly executed by Buyer;

(v)

the Sales Representative and Subcontract/Reseller Agreement dated the Closing Date and duly executed by Buyer;

(vi)

the Transitional Services Agreement dated the Closing Date and duly executed by Buyer;

(vii)

the Escrow Agreement dated the Closing Date and duly executed by Buyer;

(viii)

the Real Property License dated the Closing Date and duly executed by Buyer; and

(ix)

such other documents as Seller may reasonably request.

ARTICLE II

PURCHASE PRICE ADJUSTMENT, ESCROW AND RELATED MATTERS

2.1   

Net Working Capital and Accounts Receivable Adjustments.

(a)  

The Initial Purchase Price shall be increased dollar-for-dollar (but not by more than $200,000) or decreased dollar-for-dollar (with no limitation) by the amount (the “ Net Working Capital Adjustment ”) that the Closing Net Working Capital on the Closing Date, as finally determined as provided in this Article II, is more than or less than the Reference Date Net Working Capital.  In addition, the Initial Purchase Price shall be increased or decreased dollar-for-dollar by the amount (the “ Accounts Receivable Adjustment ”) that the Accounts Receivable on the Closing Date (the “ Closing Accounts Receivable ”), as finally determined as provided in this Article II, is less than or more than the Accounts Receivable set forth on the Reference Balance Sheet (the “ Reference Date Accounts Receivable ”).  The Initial Purchase Price, as so increased or decreased, is referred to herein as the “ Final Purchase Price ”.

(b)  

Closing Date Statement of Accounts and Closing Date Statement of Receivable .  In order to conclusively determine the Closing Net Working Capital, the Net Working Capital Adjustment, the Closing Accounts Receivable and the Accounts Receivable Adjustment as of the Closing Date, as soon as reasonably practicable after the Closing Date (but not later than sixty (60) days thereafter), Seller will (at its expense) prepare a statement of the Purchased Assets and the Assumed Liabilities as of the Closing Date (the “ Closing Date Statement of Accounts ”) and a statement of the Closing Accounts Receivable (the “ Closing Date Statement of Receivables ”).  Buyer agrees that, during such 60-day period, Seller and its representatives shall have, for the purposes of preparing the Closing Date Statement of Accounts and the Closing Date Statement of Receivables, reasonable on-site access during normal business hours to properties and appropriate books and records relating thereto.  The Adjustment Documents shall be prepared in accordance with GAAP on a basis consistent with the financial statements of Seller as of and for the ten-month period ended October 24, 2004.  In connection with the preparation of the Closing Date Statement of Accounts, on or as promptly as practicable after the Closing Date (and in any event within five (5) business days thereafter), Seller shall conduct a physical count, in accordance with Section 2.1(b) of the Disclosure Schedule , of the quantity of Inventories as of the close of business on the day immediately preceding the Closing Date.  Seller’s responsibility in the prior sentence shall be limited to (i) causing The Reynolds and Reynolds Company (“ Reynolds ”) to conduct a count of the Inventory stored by Reynolds, (ii) reimbursing any out-of-pocket expenses incurred by Reynolds and (iii) providing a reconciliation of such count to the Reference Balance Sheet and a timeline therefor as described in Section 1.2(b) of the Disclosure Schedule .  At Buyer’s expense, Buyer and PricewaterhouseCoopers LLP (“ PwC ”) shall have the right to observe and test such physical count.  Buyer shall cause its field engineers to count all Inventory to which they have access and Buyer shall pay any other expenses relating to such Inventory count.

(c)  

Disputes .   Seller shall deliver to Buyer on or prior to the date on which the Closing Date Statement of Accounts and the Closing Date Statement of Receivables are due (i) the Closing Date Statement of Accounts, (ii) a statement of the calculation of the Reference Date Net Working Capital, (iii) a statement of the calculation of the Closing Net Working Capital as of the Closing Date, (iv) a statement of the calculation of the resulting Net Working Capital Adjustment, (v) the Closing Date Statement of Receivables, (vi) a statement of the calculation of the Reference Date Accounts Receivable, (vii) a statement of the calculation of the Closing Accounts Receivable as of the Closing Date and (viii) a statement of the calculation of the resulting Accounts Receivable Adjustment (collectively, the “ Adjustment Documents ”).  The Adjustment Documents shall be final and binding on the parties, and deemed accepted by Buyer unless, within seventy-five (75) days after Buyer’s receipt thereof (during which period Buyer will cause PwC to audit the Closing Date Statement of Accounts and Closing Date Statement of Receivables), Buyer provides Seller with a written notice of objection with respect to the Adjustment Documents (an “ Objection Notice ”).  The Objection Notice shall specify in reasonable detail each item on the Adjustment Documents that Buyer disputes, the nature of any objection so asserted, and any portions of the Adjustment Documents, if any, that Buyer does not dispute.  Seller shall deliver to Buyer and PwC any customary management representation letters as required under United States generally accepted auditing standards for audits of similar scope and nature, and pertaining to the Closing Date Statement of Accounts and Closing Date Statement of Receivables, and other documents and information required in connection with the audit of these documents.  Seller shall cooperate in good faith and on a timely basis with Buyer and PwC in connection with their review of the Adjustment Documents and the audit of the Closing Date Statement of Accounts and Closing Date Statement of Receivables, and Seller shall provide Buyer and PwC with reasonable access to any of its personnel, books, records, schedules, analyses, working papers and other information relating to the Business.

(d)  

Resolution of Disputes .  During the 30-day period following the date on which the Objection Notice is received by Seller, Seller and Buyer shall meet in an effort to resolve any objections contained therein.  If Seller and Buyer are unable to resolve the dispute within such 30-day period, then any disputed matter set forth in the Objection Notice which remains unresolved shall be submitted for final determination to Ernst & Young LLP (the “ Independent Accounting Firm ”).  The Independent Accounting Firm shall, based solely on the presentations made by Seller and Buyer and within sixty (60) days after the date of the Objection Notice, render a written report as to the resolution of each disputed matter set forth in the Objection Notice which remains outstanding, and as to the calculation of the Reference Date Net Working Capital, Closing Net Working Capital, Net Working Capital Adjustment, Reference Date Accounts Receivable, Closing Accounts Receivable and Accounts Receivable Adjustment and statement of the calculation of the Final Purchase Price.  The Independent Accounting Firm shall have exclusive jurisdiction over, and resort to the Independent Accounting Firm shall be the sole recourse and remedy of the parties against one another or any other Person with respect to, any disputes arising out of or relating to the Reference Date Net Working Capital, the Closing Date Statement of Accounts, the Net Working Capital Adjustment, the Reference Date Accounts Receivable, the Closing Date Statement of Receivables and the Accounts Receivable Adjustment.  The Independent Accounting Firm’s determination shall be conclusive and binding on all parties and shall be enforceable in a court of law.

(e)  

Fees .  The Independent Accounting Firm’s fees and expenses shall be borne by Seller and Buyer in inverse proportion (as a percentage of the absolute dollar amount disputed) as Seller and Buyer prevail on the matters resolved by the Independent Accounting Firm.  The allocation of such fees and expenses shall be determined by the Independent Accounting Firm at the time of the Independent Accounting Firm’s resolution of the disputed matters set forth in the Objection Notice.

(f)  

Final Adjustments .  The Net Working Capital Adjustment and the Accounts Receivable Adjustment shall each become final and binding upon the parties upon the earlier of (i) the failure by Buyer to object thereto within the period permitted under, and otherwise in accordance with, the requirements of Section 2.1(c), (ii) the written agreement between Buyer and Seller with respect thereto or (iii) the decision by the Independent Accounting Firm with respect to disputes under Section 2.1(d).

(g)  

Payment .  Any reduction or increase in the Initial Purchase Price as determined pursuant to this Section 2.1 shall be paid by Seller (in accordance with the next sentence) or Buyer (as appropriate) to the other by wire transfer in immediately available funds within five (5) business days after the Final Purchase Price has become binding hereunder together with a rate of interest thereon equal to 2.5 percent per annum (compounded at the end of each calendar month) from and including the Closing Date until but excluding the date of actual payment (the “ Interest Amount ”).  In the event of a reduction in the Initial Purchase Price, Buyer and Seller will execute and deliver joint written instructions to the Escrow Agent directing the release of funds to Buyer in an amount equal to the total reduction in the Initial Purchase Price, plus the Interest Amount, up to the maximum amount provided in the Escrow Agreement (with any remaining amount being paid directly by Seller in the manner provided above).

2.2   

Purchase Price Allocation.

Buyer shall engage Deloitte & Touche LLP (“ D&T ”) and Seller shall, in its discretion, prepare and deliver to D & T a proposed list of assumptions for consideration for allocation of the Initial Purchase Price, plus the Assumed Liabilities, within sixty (60) days after the Closing Date.  D&T shall prepare an allocation of the Initial Purchase Price, plus the Assumed Liabilities, taking into account any adjustments made thereto pursuant to this Agreement, among the Purchased Assets in accordance with Code Section 1060 and the Treasury Regulations thereunder (and any similar provision of state, local or foreign law, as appropriate) (the “ Allocation ”).  D&T shall prepare the Allocation in its sole discretion.  D&T shall deliver the Allocation, in a written report to Buyer no later than thirty (30) days after the acceptance of the Adjustment Documents.  All services and work products (the “ Deliverables ”) rendered pursuant to Buyer’s engagement with D&T shall be solely for Buyer’s informational purposes and internal use, and are not intended to be and shall not be used by any person or entity other than Buyer.  The advice, opinions, reports and Deliverables issued by D&T shall not be distributed to Seller without the prior written consent of D&T.  Buyer agrees to provide a written request to D&T to release to Seller the advice, opinions, reports and Deliverables issued by D&T to Buyer, and Seller agrees to execute with D&T an acknowledgment of non-reliance and a release acceptable to D&T, or to engage D&T separately for such work products.  In the event that Seller wishes to rely on information within the Deliverables or derivatives of such information, Seller must seek to engage D&T separately for such work products as may be agreed upon by Seller and D&T for their relevant purposes and subject to D&T and Seller’s acceptance of D&T’s standard general business terms and conditions.  Seller and Buyer shall use their commercially reasonable efforts to agree to an allocation of the Purchase Price together with the Assumed Liabilities among the Purchased Assets.  In the event an adjustment to the Initial Purchase Price is made pursuant to Section 2.1 or any adjustment thereto is made, such allocation shall be revised accordingly by D&T and delivered to Buyer as soon as reasonably practicable, and Buyer and Seller shall use their commercially reasonable efforts to agree on such allocation as revised.  Buyer and Seller and each of their Affiliates shall take all actions and file all Tax Returns (including, but not limited to, IRS Form 8594 “Asset Acquisition Statement”) consistent with any agreed allocation unless required to do so by law and, in such event, Seller shall provide advance written notice to Buyer detailing (i) the reasons surrounding such inconsistent position and (ii) the position to be taken by Seller.  Each party shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the other may reasonably request to prepare such proposed allocations.

2.3   

Escrow.  

There shall be deposited in escrow with Citibank, N.A. (the “ Escrow Agent ”) an amount equal to $990,000 (the “ Escrow Deposit ”) of the Initial Purchase Price as part of the consideration for the Purchased Assets.  The Escrow Deposit shall be delivered by Buyer to the Escrow Agent at the Closing and shall be held and delivered by the Escrow Agent in accordance with the terms and provisions of the Escrow Agreement.  Any fees and expenses payable to the Escrow Agent pursuant to the Escrow Agreement shall be shared equally by Buyer and Seller.  Such fees payable by Seller shall be deducted from the amount payable by Buyer pursuant to Section 1.5(c)(i).  Between the date hereof and the Closing, the parties shall negotiate in good faith as to the terms of an escrow agreement (the “ Escrow Agreement ”) reflecting the terms of this Section 2.3 and otherwise as contemplated by this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Subject to the exceptions to the following representations and warranties contained in the Disclosure Schedule attached hereto, Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date as follows:

3.1   

Organization, Good Standing and Qualification.

(a)  

Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio and has all requisite corporate power and authority to carry on the Business as now conducted.  Seller is duly qualified to transact the Business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.  Seller is so qualified in each of the fifty States.

(b)  

Seller has delivered to Buyer correct and complete copies of the current Articles of Incorporation and Code of Regulations of Seller as currently in effect.

3.2   

Right to Purchase Price.  

No Person other than Seller is entitled to any portion of the Final Purchase Price.

3.3   

Subsidiaries.  

None of the Subsidiaries of Seller or any other Person in which Seller owns, directly or indirectly, any capital stock or other equity or ownership interest has any right, title or interest in or to any of the Purchased Assets.

3.4   

Authorization; Enforceability.  

Seller has full corporate power and authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder.  All corporate and other action on the part of Seller, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement and the other Transaction Documents and the performance of all obligations of Seller hereunder and thereunder has been taken.  Each of this Agreement and the other Transaction Documents constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Seller, enforceable in accordance with its terms.

3.5   

No Conflict.  

Seller is not in violation of or default under any provision of its Articles of Incorporation or Code of Regulations or, with respect to the Business, in any material respect, of any Order or Contract to which it is a party or by which it is bound or any Legal Requirement applicable to it.  Except as set forth in Section 3.5 of the Disclosure Schedule , the execution, delivery and performance of this Agreement and the other Transaction Documents by Seller and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any such provision in any material respect, or an event which results in the creation of any Encumbrance upon any Purchased Assets.

3.6   

Governmental Authorities; Consents.

Except as set forth in Section 3.6 of the Disclosure Schedule , no approval, Order, authorization, registration, qualification, designation, declaration or filing of or with, or notice to, or other Consent of, any Governmental Body on the part of Seller is required in connection with the execution and delivery of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby.

3.7   

Legal Compliance.

Seller and its predecessors and Affiliates have complied in all material respects with all Legal Requirements applicable to the Business, and no Proceeding or notice has been filed, given or commenced against any of them during the past three (3) years alleging any failure so to comply.

3.8   

Licenses, Permits, Orders and Authorizations.  

Except for qualifications or licenses to transact the Business in any jurisdiction based upon nexus, including, but not limited to those described in Section 3.1, there are no licenses, approvals, Consents, franchises, authorizations, security clearances and other permits of, to, from or with any Governmental Body, which are held by or applicable to Seller exclusively with respect to the Business (“ Permits ”) and no permits other than those described above are necessary to permit Seller to own, operate, use and maintain the Purchased Assets in the manner in which they are now operated and maintained and to conduct the Business as currently conducted.  Seller is not a party or subject to the provisions of any Order of any Governmental Body with respect to the Business.  

3.9   

Litigation.

Section 3.9 of the Disclosure Schedule contains a complete and correct description of all Proceedings involving Seller or any of its employees, officers or directors existing at any time during the past three (3) years related to the Business.  Except as set forth in Section 3.9 of the Disclosure Schedule , there is no Proceeding pending or, to Seller’s Knowledge, currently threatened against Seller that questions the validity of this Agreement or the right of Seller to enter into or consummate, or seeks to enjoin or obtain damages with respect to, the transactions contemplated hereby or by any of the other Transaction Documents, or that, if adversely resolved, could reasonably be expected to result, either individually or in the aggregate, in any Material Adverse Effect, nor is Seller aware that there is any basis for the foregoing.  The foregoing includes, without limitation, Proceedings pending or, to Seller’s Knowledge, threatened involving the prior employment of any of the employees of the Business, their use in connection with the Business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with former employers.  There is no Proceeding by Seller currently pending or which Seller intends to initiate related to the Business.

3.10   

Financial Statements; Books and Records.

(a)  

Attached as Exhibit K are Seller’s (i) income statement for the year ended December 28, 2003, (ii) income statement for the ten-month period ended October 24, 2004 and (iii) balance sheet as of October 24, 2004, in each case as prepared by Seller and certified by the Chief Financial Officer of Seller (collectively, the “ Financial Statements ”).  Except as set forth in Section 3.10(a) of the Disclosure Schedule , the Financial Statements (including the notes thereto) have been prepared in accordance with GAAP, applied on a consistent basis throughout the periods indicated and with each other, present fairly the financial condition and results of operations of the Business for each such period, are correct and complete, are consistent with the books and records of Seller, which books and records are correct and complete in all material respects, and reflect adjustments for non-recurring items; provided , however , that the partial-year financial statements are subject to normal year-end adjustments, the effect of which will not be material individually or in the aggregate, and are presented without footnotes.

(b)  

Seller maintains a system of internal accounting controls sufficient to provide assurance that transactions relating to the Business are executed with its management’s authorization, and all such transactions are recorded as are required to permit preparation of the Financial Statements in accordance with GAAP on a consistent basis (except as set forth in Section 3.10(a) of the Disclosure Schedule ) and to maintain accountability for all material Assets and all Liabilities relating to the Business.

(c)  

The books and records of the Business (i) accurately reflect all material items of income and expense and all material Assets and Liabilities of the Business, (ii) are in all material respects complete and correct and do not contain any material inaccuracies or discrepancies, (iii) have been maintained in accordance with good business and accounting practices, and (iv) have been made available to Buyer for its inspection.

(d)  

Seller has not engaged in any monetary transaction, maintained any bank account or used any corporate funds with respect to the Business except for monetary transactions, bank accounts or funds which have been and are reflected in the books and records of Seller.

3.11   

Title to Assets.

Seller owns the Purchased Assets free and clear of all Encumbrances, except Encumbrances listed in Section 3.11 of the Disclosure Schedule .

3.12   

Absence of Certain Changes or Events.

Except as set forth in Section 3.12 of the Disclosure Schedule , since December 28, 2003, Seller has conducted the Business only in the ordinary course of business consistent with past practice and, with respect to the Business, there has not been any:

(a)   

Material Adverse Change, and no event has occurred or state of facts exists that is reasonably likely to result in a Material Adverse Change;

(b)   

material damage, destruction or loss, whether or not covered by insurance;

(c)   

sale, exchange or other disposition of any of the Purchased Assets, other than the sale of its Inventory in the ordinary course of business consistent with past practice;

(d)   

indebtedness incurred by Seller for borrowed money or any commitment to borrow money entered into by Seller or any loans or guarantees made or agreed to be made by Seller;

(e)   

waiver by Seller of a right or of debt owed to it;

(f)   

satisfaction or discharge of any Encumbrance or payment of any obligation by Seller not in the ordinary course of business consistent with past practice;

(g)   

other than in the ordinary course of business, transaction or Contract entered into by Seller or its Affiliates relating to the Business or any Purchased Asset (including the acquisition or disposition of any Purchased Assets);

(h)   

labor dispute, other than routine individual grievances, or any activity or proceeding to organize any employees of the Business, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees;

(i)   

other than in the ordinary course of business, change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or payment of or agreement (written or oral) to pay, conditionally or otherwise, any bonus, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any, director, officer, employee, consultant or agent, or new employment, compensation or deferred compensation agreement (or any amendment of any such existing agreement);

(j)   

amendment of any Plan (other than as required to comply with applicable Legal Requirements), or waiver of any material rights under, or permittance or provision for the acceleration of vesting or payment under, any provision of any Plan;

(k)   

any equipment or any research and development expenses related to the Business, except in the ordinary course of business;

(l)   

initiation, receipt or settlement of any Proceeding affecting the Business, the Purchased Assets or otherwise material to the Business;

(m)   

change or amendment to any material Contract by which Seller or any of the Purchased Assets is bound or to which Seller or any of such Purchased Assets is subject, except in the ordinary course of business;

(n)   

except as otherwise set forth in Section 3.12 of the Disclosure Schedule , any other event or condition of any character affecting Seller which would reasonably be likely to result in a Material Adverse Change; or

(o)   

any agreement, whether oral or written, fixed or contingent, by Seller to do any of the foregoing.

3.13   

Undisclosed Liabilities.

Seller has no Liability (and, to Seller’s Knowledge, there is no basis for any present or future Proceeding against Seller giving rise to any Liability) related to the Business, other than (i) Liabilities set forth on the face of the Reference Balance Sheet (rather than the notes thereto), (ii) Liabilities incurred in the ordinary course of business consistent with past practice subsequent to October 24, 2004, (iii) obligations under Contracts incurred in the ordinary course of business consistent with past practice subsequent to October 24, 2004 and (iv) Liabilities set forth in Section 3.13 of the Disclosure Schedule , all of which Liabilities and obligations referred to in the foregoing clauses (i), (ii), (iii) and (iv), individually or in the aggregate, are not material to the Business or Purchased Assets.

3.14   

Intellectual Property.

(a)   

The Seller Intellectual Property contains only those items and rights which are:  (i) owned by Seller; (ii) in the public domain; or (iii) rightfully used by Seller pursuant to a valid and enforceable license or other similar Contract (the “ Seller Licensed Intellectual Property ”).

(b)   

Section 1.2(a)(v) of the Disclosure Schedule contains a true and complete list of the Seller Intellectual Property.  All such Seller Intellectual Property is in good standing, all registrations of and applications for any such Seller Intellectual Property that is owned by Seller are in full force and effect and all of the fees and filings due as of the Closing Date with respect thereto have been or will be duly made.  The due dates, if any, specified in Section 3.14(b) of the Disclosure Schedule are accurate and complete.

(c)   

Seller has all rights in the Seller Intellectual Property necessary to carry out the current activities of the Business, including, to the extent required to carry out such activities, rights to make, use, reproduce, modify, adopt, create derivative works based on, translate, distribute (directly and indirectly), transmit, display and perform publicly, license, rent and lease and, other than with respect to the Seller Licensed Intellectual Property, assign and sell the Seller Intellectual Property.  The Seller Intellectual Property constitutes all Intellectual Property which is necessary in order to conduct the Business as currently conducted, other than trademarks and similar intellectual property containing the name of Seller and software except as described in Section 3.14(c) of the Disclosure Schedule .

(d)   

The Business as currently conducted and the reproduction, manufacturing, distribution, licensing, sublicensing, sale or any other exercise of rights in any Seller Intellectual Property as engaged in by Seller does not, to Seller’s Knowledge, infringe on any Intellectual Property of any Person in the United States.  Except as set forth in Section 3.14(d) of the Disclosure Schedule , Seller has received no written notice that any claims (i) challenging the validity, effectiveness or, other than with respect to the Seller Licensed Intellectual Property, ownership by Seller of any Seller Intellectual Property or (ii) to the effect that the use, distribution, licensing, sublicensing, sale or any other exercise of rights in the Seller Intellectual Property by Seller or its respective agents or use by its respective customers infringes or will infringe any Intellectual Property of any Person, have been asserted or are threatened by any Person.  To Seller’s Knowledge, there is no unauthorized use, infringement or misappropriation of any Seller Intellectual Property by any third party, employee, former employee or contract worker.

(e)   

Except as set forth in Section 3.14(e) of the Disclosure Schedule , Seller is not, nor as a result of the execution or delivery of this Agreement or the performance of Seller's obligations hereunder will be, in violation in any material respect of any license, sublicense, Contract or instrument involving any Seller Intellectual Property, nor will the execution or delivery of this Agreement, or the performance of Seller’s obligations hereunder, cause the material diminution, termination or forfeiture of Seller’s rights in any Seller Intellectual Property.

(f)   

Except as set forth in Section 3.14(f) of the Disclosure Schedule , Seller owes no royalties or other payments to third parties in respect of the Seller Intellectual Property.

(g)   

Seller has implemented commercially reasonable steps for the physical and electronic protection of the information assets of the Business from unauthorized disclosure, use or modification.   Section 3.14(g) of the Disclosure Schedule sets forth (i) each Known breach of security involving such information assets (ii) its Known consequences and (iii) the steps Seller has taken to remedy such breach.

(h)   

All personally identifiable information used by or in the possession of Seller with respect to the Business has been collected, stored, maintained and used in all material respects in accordance with all applicable Legal Requirements including Seller’s applicable privacy policies.

(i)   

Seller is not making and has not made any unauthorized and improper use of any confidential information of any other Person in connection with the Business.

(j)   

Seller has provided to Buyer documentation with respect to any invention, process, computer software and program or other know-how included in the Seller Intellectual Property, which documentation is accurate in all material respects and reasonably sufficient in detail and content to identify and explain such invention, process, computer software and program or other know-how to facilitate its full and proper use without reliance on the special knowledge or memory of any Person.

3.15   

Intentionally Omitted.

3.16   

Tangible Assets.

Seller owns or leases all buildings, machinery, equipment, and other tangible Purchased Assets necessary for the conduct of the Business as now conducted.  Each such Purchased Asset has been maintained in accordance with normal industry practice, is in reasonably good operating condition and repair (subject to normal wear and tear and the useful life of such Purchased Asset), and is suitable for the purposes for which it is now used and proposed to be used.

3.17   

Sufficiency of Assets.

The Purchased Assets together with the Excluded Assets and the rights of Buyer under the Ancillary Agreements constitute all of the assets which are used in the Business.  Except as set forth in Section 3.17 of the Disclosure Schedule , the Purchased Assets constitute all of the Assets used by Seller to conduct the Business as currently conducted.  Since December 28, 2003, Seller has not sold, transferred, licensed, assigned or delivered to any Affiliate any asset or property related to the Business.

3.18   

Guarantees.

Neither Seller, in connection with the Business, nor any Purchased Asset is directly or indirectly a guarantor of, subject to or otherwise liable for any Liability or obligation (including indebtedness) of any other Person (collectively “ Guarantees ”), except for indemnity provisions in contracts entered into in the ordinary course of business.

3.19   

Customers.

Section 3.19 of the Disclosure Schedule sets forth a complete and correct list of the names of all of the customers of the Business as of October 24, 2004, including the bill to address, equipment location, annual gross revenues per customer, expiration date of the underlying contract and services provided.  Except as set forth in Section 3.19 of the Disclosure Schedule , Seller is not or has not been engaged in any material dispute with any customer of the Business that since January 1, 2004, has accounted for gross revenues on an annualized basis of $25,000 or more.  Seller has not received any actual notice or Knows that any customer of the Business that, since January 1, 2004, has accounted for gross revenues on an annualized basis of $25,000 or more has ceased, or after the Closing will cease, to use the services, products, equipment or goods of the Business or has substantially reduced, or after the Closing will substantially reduce, the use of such services, products, equipment or goods at any time.

3.20   

Suppliers.

Section 3.20 of the Disclosure Schedule sets forth a complete and correct list of the names and addresses of the suppliers of the Business that accounted for the top forty vendors as calculated by total invoiced amounts to Seller from December 28, 2003 to October 24, 2004 and the amount during such period for which Seller was invoiced by each such supplier.  Except as set forth in Section 3.20 of the Disclosure Schedule , Seller is not or has not been engaged in any material dispute with any such suppliers of the Business since December 29, 2003.  Seller has not received any actual notice or Knows that any suppliers of the Business will not sell services, raw materials, supplies, merchandise and other goods to Seller at any time after the Closing Date on terms and conditions substantially similar to those currently in effect, subject only to general and customary price increases.  Seller has adequate sources of supply for the Business as now conducted.  Except as set forth in Section 3.20 of the Disclosure Schedule , Seller is not dependent on a supplier that is the sole supplier of any goods and services it requires to operate the Business.

3.21   

Intentionally Omitted

3.22   

Affiliated Transactions.

Except as set forth in Section 3.22 of the Disclosure Schedule and except for payments under compensation arrangements with Seller disclosed in Section 3.29 of the Disclosure Schedule , none of the Affiliates, officers, directors or employees of Seller or any Affiliate of any of them, is a party to any Contract with Seller or is directly or, to Seller’s Knowledge, indirectly interested in any Contract with Seller, in each case related to the Business.  Seller has not given any Guarantees or assumed any obligations of, and has no indebtedness to, any of its Affiliates, officers, directors, or employees, or any Affiliate of any of them and no such Person has any indebtedness to Seller, in each case related to the Business.  Except as set forth in Section 3.22 of the Disclosure Schedule , neither Seller nor any of its officers or, to Seller’s Knowledge, directors, employees or any Affiliate of any of them (i) has any material direct or indirect financial interest in any competitor, supplier or customer of the Business or (ii) owns, directly or indirectly, in whole or in part, or has any other interest in, any tangible or intangible Purchased Assets which Seller currently uses in the conduct of the Business.

3.23   

Product Liability.  

Seller has no material Liability (and has received no notice of any threatened Proceeding against it giving rise to any material Liability) arising out of any injury to individuals or property caused by the ownership, possession, or use of any service or product sold or delivered by Seller in the conduct of the Business not fully covered by insurance (subject to applicable deductibles).

3.24   

Contracts.

(a)  

Section 3.24(a) of the Disclosure Schedule sets forth a complete and correct list of the following Contracts to which Seller is a party or by which it is bound that relate to the Business:

(i)

Contracts with the top 320 customers of the Business as calculated by invoiced amounts due to Seller for the period from December 28, 2003 to October 24, 2004, Contracts with suppliers set forth in Section 3.20 of the Disclosure Schedule , and any other Contract (or group of related Contracts) involving the performance of services or the delivery of goods or materials by or to Seller, the performance of which will involve aggregate consideration in excess of $25,000;

(ii)

any agreement concerning a partnership or joint venture;

(iii)

any Contract (or group of related Contracts) under which it has created, incurred, assumed, or given any Guarantees of any indebtedness for borrowed money, or any capitalized lease obligation, in excess of $25,000 or under which it has imposed an Encumbrance on any of the Purchased Assets;

(iv)

any material Contract concerning confidentiality;

(v)

any Contract with any Affiliates of Seller;

(vi)

any Contract with any labor union or association;

(vii)

any Contract for the employment of any individual on a full-time, part-time, consulting, or other basis;

(viii)

any Contract under which it has advanced or loaned any amount to any of its directors, officers or employees;

(ix)

any Contract under which the consequences of a default or termination could have a Material Adverse Effect;

(x)

any Contract for the sale of any of the Purchased Assets other than in the ordinary course of business or for the grant to any Person of any option, right of first refusal or similar right to purchase any such Purchased Assets;

(xi)

any Contract which contains covenants of Seller not to compete with any Person or covenants of any other Person not to compete with Seller;

(xii)

any Contract relating to the acquisition by Seller of any operating business or the capital stock of any other Person;

(xiii)

any Contract requiring the payment to any Person of a brokerage or sale commission or a finder's or referral fee (other than arrangements to pay commissions or fees to employees, agents, alliance partners or other intermediaries in the ordinary course of business);

(xiv)

any lease, sublease or other Contract under which Seller is lessor or lessee of any equipment or other tangible property, other than Contracts that may be terminated on thirty (30) days or less notice (without penalty or premium);

(xv)

any Contract involving the assignment, transfer, license (whether as licensee or licensor), pledge or Encumbrance of any Seller Intellectual Property transferred hereunder;

(xvi)

any distribution or sales representative agreement or Contract appointing any representative, other than Contracts that may be terminated on thirty (30) days or less notice (without penalty or premium);

(xvii)

any Contract of a type not referenced above that is material to the Business that requires any Consent, waiver or other action by any Person in connection with the transactions contemplated hereby;

(xviii)

any other Contract (or group of related Contracts) of a type not referenced above the performance of which involves aggregate consideration in excess of $25,000; and

(xix)

each amendment, supplement and modification (whether written or oral (in the case of oral amendments, supplements and modifications, of which Seller has Knowledge)) in respect of any of the foregoing.

(b)  

Seller has delivered to Buyer or made available to Buyer for copying a correct and complete copy of each written Contract listed in Section 3.24(a) of the Disclosure Schedule as amended to date and a written summary setting forth the terms and conditions of each oral Contract referred to in Section 3.24(a) of the Disclosure Schedule .  With respect to each such Contract: (i) the Contract is legal, valid, binding and enforceable against Seller and, to Seller’s Knowledge, each other party thereto, and is in full force and effect; (ii) except as set forth in Section 3.24(b) of the Disclosure Schedule , the Contract is assignable to Buyer without any Consent of any Person; (iii) Seller is not and, to Seller’s Knowledge, no other party is in breach or default, and no event has occurred which with the passage of time or giving of notice would constitute a breach or default by Seller or, to Seller’s Knowledge, any other party thereto or, to Seller’s Knowledge, permit termination, modification, or acceleration by Seller or any other party under the Contract; and (iv) Seller has not, and no other party in writing has, repudiated any provision of the Contract.  

3.25   

Employee Benefits Plans; ERISA.

(a)   

Section 3.25(a) of the Disclosure Schedule contains a list of all “employee benefit plans” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and any other employee benefit plans, policies, trust funds or arrangements (whether written or unwritten, insured or self-insured) (each an “ Employee Benefit Plan ”) (1) established, maintained, sponsored or contributed to (or with respect to which any obligation to contribute has been undertaken) by Seller or any entity that would be deemed a “single employer” with Seller under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (each, an “ ERISA Affiliate ”) on behalf of any employee, officer or consultant of the Business (whether current, former or retired) or their beneficiaries or (2) with respect to which Seller or any ERISA Affiliate has or has had since January 1, 1996 any obligation on behalf of any such employee, officer, consultant or beneficiary (each, a “ Plan ” and, collectively, the “ Plans ”).  Seller has delivered true, correct and complete copies of each of the Plans and related documents and governmental filings.

(b)   

Since January 1, 1996, to Seller’s Knowledge, none of Seller or any ERISA Affiliate or any of their respective predecessors has ever contributed to, contributes to, has ever been required to contribute to, or otherwise participated in or participates in or in any way, directly or indirectly, has any Liability with respect to any plan subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA, including, without limitation, any “multiemployer plan” (within the meaning of Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code) or any single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) which is subject to Sections 4063, 4064 and 4069 of ERISA.  To Seller’s Knowledge, no Purchased Asset is, or has been since January 1, 1996, subject to any lien under ERISA or the Code.

(c)   

With respect to each of the Plans:  (1) each Plan that is intended to be qualified under Section 401(a) of the Code (i) has been timely amended to reflect the changes required by the Economic Growth and Tax Relief Reconciliation Act of 2001 (“ EGTRRA ”), the Department of Labor’s final regulations for claims procedures and the Internal Revenue Service’s (“ IRS ”) final regulations for minimum distributions, and the correct mortality table as prescribed in Revenue Ruling 2001-62 and (ii) has received a determination letter, opinion letter, advisory letter or notification letter, as applicable, from the IRS regarding its qualified status under the Code for all amendments required prior to EGTRRA, has time remaining to apply under applicable Treasury regulations or IRS pronouncements for a letter and to make any amendments necessary to obtain a favorable letter or, if reliance is permitted under IRS Announcement 2001-77, relies on the favorable opinion letter or advisory letter of the master and prototype or volume submitter plan sponsor of such plan, and, to Seller’s Knowledge, nothing has occurred, whether by action or by failure to act, that caused or could cause the loss of such qualification or the imposition of any penalty or Tax Liability; (2) all payments required by the Plan, any collective bargaining agreement or other agreement, or by applicable law (including, without limitation, all contributions, insurance premiums or intercompany charges) with respect to all periods through the date of the Closing Date shall have been made prior to the Closing Date (on a pro rata basis where such payments are otherwise discretionary at year end) or provided for by Seller as applicable, by full accruals as if all targets required by such Plan had been or will be met at maximum levels on its financial statements; (3) to Seller’s Knowledge, no action has been asserted, instituted or, to Seller’s Knowledge, is threatened or anticipated against any of the Plans (other than non-material routine claims for benefits and appeals of such claims), any trustee or fiduciaries thereof, Seller or any ERISA Affiliate, any officer or employee thereof, or any of the assets of any trust of any of the Plans; (4) the Plan complies and has been maintained and operated in accordance with its terms and applicable law, including, without limitation, ERISA and the Code; and (5) no Plan is or is reasonably expected to be under audit or investigation by the IRS, Department of Labor or any other Governmental Body and no such completed audit, if any, has resulted in the imposition of any Tax or penalty.

(d)   

Except as set forth in Section 3.25(d) of the Disclosure Schedule , the consummation of the transactions contemplated by this Agreement will not give rise to any Liability for severance pay, unemployment compensation, termination pay or withdrawal liability, or accelerate the time of payment or vesting or increase the amount of compensation or benefits due to any employee of the Business (whether current, former or retired) or their beneficiaries solely by reason of such transactions or by reason of a termination following such transactions.

3.26   

Environmental Matters.

(a)  

For purposes of this Agreement, the term “ Environment ” shall mean any surface or subsurface physical medium or natural resource, including, air, land, soil, surface waters, ground waters, stream and river sediments, and biota; the term “ Environmental Laws ” shall mean any federal, state, local or common law, rule, regulation, ordinance, code, order or judgment (including the common law and any judicial or administrative interpretations, guidances, directives, policy statements or opinions) relating to the injury to, or the pollution or protection of human health and safety or the Environment; the term “ Environmental Liabilities ” shall mean any claims, judgments, damages (including punitive damages), losses, penalties, fines, liabilities, encumbrances, liens, violations, costs and expenses (including attorneys’ and consultants’ fees) of investigation, remediation or defense of any matter relating to human health, safety or the Environment of whatever kind or nature by any party, entity or authority, (A) which are incurred as a result of (i) the existence of Hazardous Substances in, on, under, at or emanating from any real property presently or formerly owned, operated or managed by Seller with respect to the Business, (ii) the use, offsite transportation, treatment, storage or disposal of Hazardous Substances generated by Seller with respect to the Business, including but not limited to any Liability arising out of the performance of services at a customer’s or third party’s location or facility, or (iii) the violation of any Environmental Laws with respect to the Business or (B) which arise under the Environmental Laws with respect to the Business; the term “Hazardous Substances ” shall mean petroleum, petroleum products, petroleum-derived substances, radioactive materials, hazardous wastes, polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos or any materials containing asbestos, and any materials or substances regulated or defined as or included in the definition of “hazardous substances,” “hazardous materials,” “hazardous constituents,” “toxic substances,” “pollutants,” “contaminants” or any similar denomination intended to classify or regulate substances by reason of toxicity, carcinogenicity, ignitability, corrosivity or reactivity under any Environmental Law.  All references in this Section 3.26 to Seller shall include each entity comprising Seller and any of its past Subsidiaries and all predecessors thereto, and any person or entity the liabilities of which, pursuant to the Environmental Laws, contractually, by common law, by operation of law or otherwise, Seller may have succeeded to.

(b)  

All of the current and past operations of the Business and the Purchased Assets, including any operations at or from any real property presently or formerly owned, used, leased, occupied, managed or operated by Seller with respect to the Business (the “ Real Property ”), comply in all material respects and have at all times complied in all material respects with all applicable Environmental Laws.  Neither Seller nor, to Seller’s Knowledge, any other Person has engaged in, authorized, allowed or suffered any operations or activities upon any of the Real Property for the purpose of or in any way involving the handling, manufacture, treatment, processing, storage, use, generation, release, discharge, emission, dumping or disposal of any Hazardous Substances at, on or under the Real Property, except in compliance in all material respects with all applicable Environmental Laws.

(c)  

Neither the Purchased Assets nor the Real Property contains any Hazardous Substances in, on, over, under or at it in concentrations which would presently violate Environmental Laws or impose liability or obligations on the present or former owner, manager, or operator of such Real Property under the Environmental Laws for any investigation, corrective action, remediation or monitoring of Hazardous Substances in, on, over, under or at such Real Property.  None of such Real Property is listed or proposed for listing on the National Priorities List pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., or any similar inventory of sites requiring investigation or remediation maintained by any state.  Seller has not received any notice, whether oral or written, from any Governmental Body or other Person of any actual or threatened Environmental Liabilities with respect to the Real Property, the Purchased Assets or the conduct of the Business.

(d)  

To Seller’s Knowledge, there are no underground storage tanks, asbestos or asbestos containing materials, polychlorinated biphenyls, urea formaldehyde, or other Hazardous Substances (other than small quantities of Hazardous Substances stored and maintained in accordance and compliance with all applicable Environmental Laws for use in the ordinary course of the Business) in, on, over, under or at any such presently owned, managed or operated Real Property.

(e)  

To Seller’s Knowledge, there are no conditions existing at any such Real Property or with respect to such Purchased Assets, that require, or which with the giving of notice or the passage of time or both may require remedial or corrective action, removal or closure pursuant to the Environmental Laws.

(f)  

Seller has all the Permits necessary for the conduct of the Business and for the operations on, in or at such Purchased Assets and Real Property which are required under applicable Environmental Laws and is in compliance in all material respects with the terms and conditions of all such Permits.

(g)  

Seller has provided to Buyer all environmental reports, assessments, audits, studies, investigations, data and other written environmental information in its custody, possession or control concerning the Purchased Assets or Real Property.

(h)  

Seller has not contractually, by operation of law, by the Environmental Laws, by common law or otherwise assumed or succeeded to any Environmental Liabilities of any predecessors or any other Person with respect to the Business.

3.27   

Tax Returns and Payments.

(a)  

Seller has timely filed (taking into account any extensions) all Tax Returns required to be filed by it with respect to the Purchased Assets or otherwise relating to the Business, and each such Tax Return was, as of the date of filing, true, complete and correct in all material respects.  All Taxes owed by Seller (whether or not shown on any Tax Return) have been timely paid, except those that are being disputed in good faith with adequate reserves therefor on the Reference Balance Sheet and as described in Section 3.27(a) of the Disclosure Schedule .  

(b)  

Section 3.27(b) of the Disclosure Schedule sets forth in general the jurisdictions in which Seller is required to file Tax Returns with respect to the Business or the Purchased Assets as if the Business were a stand-alone entity.  There are no ongoing Tax audits or investigations specifically relating to the Business or Purchased Assets pending with respect to Seller, and Seller has not received any written or oral notice of the commencement of any such audit or investigation.  During the last five (5) years, no written claim has been made by a taxing authority in a jurisdiction where Seller does not file Tax Returns asserting that Seller is or may be subject to taxation by that jurisdiction with respect to the Business.  During the last five (5) years, no Tax claim has become (or, with the passage of time, would reasonably be expected to become) a lien on any Purchased Assets of Seller.

3.28   

Insurance.

Section 3.28 of the Disclosure Schedule sets forth the following information with respect to each insurance policy (including policies providing property, casualty, liability, and worker’s compensation coverage and bond and surety arrangements) to which Seller has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past five (5) years with respect to the Business:

(i)

the name, address and telephone number of the broker;

(ii)

the name of the insurer, the name of the policyholder, and the name of each covered insured;

(iii)

the policy number and the period of coverage;

(iv)

the scope (including an indication of whether the coverage was on a claims made, occurrence, or other basis) and amount (including a description of how deductibles and ceilings are calculated and operate) of coverage; and

(v)

a description of any retroactive premium adjustments or other loss-sharing arrangements.

With respect to each such insurance policy:  (A) the policy is legal, valid, binding and enforceable against Seller and, to Seller’s Knowledge, each other party thereto, and is in full force and effect; (B) to Seller’s Knowledge, the policy will continue to be legal, valid, binding and enforceable against each other party thereto, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby; (C) Seller is not and, to Seller’s Knowledge, no other party to the policy is in breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default by Seller or, to Seller’s Knowledge, any other party thereto, or, to Seller’s Knowledge, permit termination, modification, or acceleration by Seller or any other party under the policy; and (D) no party to the policy has repudiated any provision thereof.  Seller has been covered during the past five (5) years by insurance in scope and amount customary and reasonable for the Business.   Section 3.28 of the Disclosure Schedule describes any self-insurance arrangements affecting the Business.

3.29   

Employees; Labor Agreements and Actions.

(a)  

Section 3.29(a) of the Disclosure Schedule sets forth a complete and correct list of the names, compensation levels and job titles of all of the employees or consultants of the Business.   Section 3.29(a) of the Disclosure Schedule sets forth a complete and correct list of all employment, consulting or severance agreements (not including Seller’s severance policy disclosed in Section 3.25) between Seller and any current or former employee or consultant of the Business whose compensation or severance benefits exceeded $50,000 on an annualized basis at any time since December 28, 2003 and which may not be terminated at will, or by giving notice of thirty (30) days or less, without cost or penalty.  Seller has delivered to Buyer true, correct and complete copies of each such agreement, as amended to date.

(b)  

Except as set forth in Section 3.29(b) of the Disclosure Schedule , each employee of the Business has executed an agreement with Seller regarding confidentiality and proprietary information and, to Seller’s Knowledge, no such employee is in violation thereof.  Seller has provided Buyer complete and correct copies of all such agreements.  To Seller’s Knowledge, no employee of the Business is subject to a Contract that would prohibit such employee from performing services for Buyer (including, without limitation, selling and supporting any of Buyer’s products and services).

(c)  

Seller is not bound by or subject to (and none of the Purchased Assets is bound by or subject to) any written or oral, express or implied, Contract, commitment or arrangement with any labor union with respect to the Business, and no labor union has requested or, to Seller’s Knowledge, has sought to represent any of the employees, representatives or agents of the Business.  There is no strike or other labor dispute involving the Business pending or, to Seller’s Knowledge, threatened, nor is Seller aware of any labor organization activity involving any employees of the Business.  Seller is not aware that any key employee of the Business, or that any group of key employees of the Business, intends to terminate his, her or their employment with Seller, or that Seller has a present intention to terminate the employment of any of the foregoing.  Except as set forth in Section 3.29 of the Disclosure Schedule , the employment of each employee of the Business is terminable at the will of Seller, subject to applicable law.

3.30   

Certain Payments.

During the past three (3) years, neither Seller nor any of its Affiliates, nor any other Person associated with or acting for or on behalf of any of them, has directly or indirectly, in connection with the Business, (a) made any contribution, gift, bribe, payoff, influence payment, kickback, or other similar payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Business, or (iv) in violation of any Legal Requirement, or (b) established or maintained any fund or Asset that has not been recorded in the books and records of Seller.

3.31   

Brokers’ Fees .

Except as set forth in Section 3.31 of the Disclosure Schedule , no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based on arrangements made by Seller or any of its Affiliates.

3.32   

Full Disclosure.

No representation or warranty of Seller and no statement made herein or in the Schedules hereto or in any certificate delivered pursuant to the requirements of this Agreement by or on behalf of Seller contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements herein or therein, in light of the circumstances under which they were made, not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as of the date hereof and as of the Closing Date as follows:

4.1   

Organization and Good Standing.

Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.

4.2   

Authorization; Enforceability.

Buyer has full corporate power and authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder and thereunder.  All corporate action on the part of Buyer, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement and the other Transaction Documents and the performance of all obligations of Buyer hereunder and thereunder has been taken or will be taken prior to the Closing.  This Agreement and the other Transaction Documents each constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Buyer, enforceable in accordance with its terms.

4.3   

No Conflict.

(a)  

The execution, delivery and performance of this Agreement and the other Transaction Documents by Buyer and the consummation of the transactions contemplated hereby and thereby will not result in any violation of or be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any provision of Buyer’s Certificate of Incorporation or By-Laws or any Order or Contract to which it is a party or by which it is bound or any provisions of any Legal Requirement applicable to it.  

(b)  

Buyer is not and will not be required to give any notice to or make any filing with or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby.

4.4   

Governmental Authorities; Consents.

No Consent, Order or authorization of, or registration, qualification, designation, declaration or filing with, or notice to, any Governmental Body or other Person on the part of Buyer is required in connection with the execution and delivery of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby.

4.5   

Certain Proceedings.

There is no Proceeding pending or, to Buyer’s knowledge, currently threatened against Buyer that questions the validity of this Agreement or the right of Buyer to enter into or to consummate the transactions contemplated hereby or by any of the Transaction Documents, nor is Buyer aware that there is any basis for the foregoing.

4.6   

Brokers’ Fees.

No broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based on arrangements made by Buyer or any of its Affiliates.

ARTICLE V

COVENANTS

5.1   

Access and Investigation.

Between the date of this Agreement and the Closing Date, Seller shall, and shall cause its representatives to, (a) afford Buyer and its representatives (collectively, “ Buyer’s Advisors ”) reasonable access during normal business hours to Seller’s AST system, personnel, properties, Contracts, books and records, financial, operating and other information and any other documents and data related to the Business, and (b) furnish Buyer and Buyer’s Advisors with copies of all such Contracts, books and records, financial, operating and other information and any other documents and data as Buyer may reasonably request.

5.2   

Operation of the Business by Seller.

Seller agrees that from the date hereof until the Closing Date (unless Buyer shall otherwise consent in writing and unless otherwise expressly permitted hereunder) Seller shall (and shall cause its Affiliates to) (i) conduct the Business in the ordinary course consistent with past practice; (ii) use its commercially reasonable efforts to preserve intact the Business and relationships with third parties; (iii) taking into account the effects of this Agreement and the transactions contemplated hereby, keep available the services of the employees of the Business; (iv) confer with Buyer concerning operational matters of a material nature with respect to the Business; and (v) otherwise report periodically to Buyer concerning the status of the operations and finances of the Business and promptly convey the occurrence of any material event with respect to the Business.  Without limiting the generality of the foregoing, from the date hereof until the Closing Date, with respect to the Business, Seller will not (and will cause its Affiliates not to), without the consent of Buyer, which consent shall not be unreasonably withheld or delayed:

(a)  

sell, lease, license or otherwise dispose of any of the Purchased Assets other than sales of Inventory in the ordinary course of business;

(b)  

enter into any contract, agreement or other commitment giving any Person an option, rights of first offer or other similar rights with respect to the Purchased Assets or any of them;

(c)  

other than in the ordinary course of business, consistent with past practice, increase or decrease the compensation, including, without limitation, the bonus, benefits or rate of pay, for any employee of the Business (except as required by contractual obligations existing on the date hereof and scheduled annual salary raises, as previously disclosed by Seller to Buyer), or terminate any employee of the Business;

(d)  

bid upon or enter into any Contract, including, without limitation, any Contract with any customer or supplier, or engage in any transaction, in each case other than in the ordinary course of the Business consistent with its past practices;

(e)  

incur or commit to incur any Liability other than in the ordinary course of the Business;

(f)  

enter into any leases of capital equipment not consistent with past practice;

(g)  

create any indebtedness or obligation that would be or could become an Encumbrance on the Purchased Assets;

(h)  

do or fail to do any acts or permit any acts or omissions to act that would constitute a breach of a Contract required to be listed in Section 3.24(a) of the Disclosure Schedule , or other material obligation related to the Business;

(i)  

fail to keep in effect and undiminished any present contract of insurance;

(j)  

settle or agree to settle any Proceeding or otherwise waive any right thereto;

(k)  

fail to maintain the tangible Purchased Assets in substantially the same condition as existing on the date hereof, ordinary wear and tear excepted;

(l)  

other than in the ordinary course of business, consistent with past practice, amend, extend or terminate any Contract required to be listed in Section 3.24(a) of the Disclosure Schedule or grant any severance or termination pay or rights to, or enter into any employment or severance agreement with, any employee, officer, director or manager of Seller or any ERISA Affiliate, increase any benefits payable under existing severance or termination pay policies or employment or similar agreements or establish, adopt, enter into or, except as required by Legal Requirements, terminate or amend, any Plan, in each case other than on a basis applicable to Seller’s employees;

(m)  

other than in the ordinary course of business, consistent with past practice, hire any new employee, except as a replacement for a current employee of the Business and on substantially the same terms and conditions;

(n)  

take or agree or commit to take any action that would make any representation or warranty of Seller hereunder inaccurate in any material respect at, or as of any time on or prior to, the Closing Date;

(o)  

other than in the ordinary course of business, consistent with past practice, make any change to the prices, terms of sale, policies, methods, practices or procedures relating to the sales of services of the Business to customers or Affiliates or change in any manner any way it accounts for any sales;

(p)  

enter into any agreement, whether oral or written, fixed or contingent, to do any of the foregoing; or

(q)  

take any action that would reasonably be expected to result in a Material Adverse Change.

5.3   

Tax Matters.

(a)  

Before and after the Closing, Seller and Buyer shall reasonably cooperate, and shall cause their respective Affiliates, officers, employees and agents to reasonably cooperate, in preparing and filing all Tax Returns, in resolving any audits or disputes relating to Taxes and in connection with any other matters relating to Taxe s.  

(b)  

Seller shall deliver to Buyer at the Closing a certificate complying with the Code and applicable Treasury Regulations, in form and substance satisfactory to Buyer, certifying that the transactions contemplated by this Agreement are exempt from withholding under Code Section 1445.

(c)  

All transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest), incurred in connection with the transactions contemplated by this Agreement shall be paid when due by Seller.

5.4   

Efforts to Consummate.

(a)  

Seller shall, and shall cause each of its Affiliates to, at Seller’s expense, use their commercially reasonable efforts to take all action and do all things necessary to consummate, as soon as reasonably practicable, the transactions contemplated hereby, including, without limitation, (i) obtaining all Consents referred to in Section 3.6, at the sole cost and expense of Seller, (ii) filing all forms, registrations and notices required to be filed to consummate the transactions described herein and taking all actions necessary to obtain any requisite approvals, consents, Orders, exemptions, waivers or other Consents by or from any Person, and (iii)  satisfying the conditions to Buyer’s obligation to close the transactions contemplated hereby and avoiding taking any action that could reasonably be expected to materially delay the obtaining of, or result in not obtaining, any Consent from any Person, including without limitation any Governmental Body necessary to be obtained prior to the Closing.

(b)  

After the date hereof, Seller shall consult with Buyer prior to making any filings with, or having any communications with, any Governmental Body with respect to the Business or this Agreement.  Prior to the Closing, each party shall promptly consult with the other party hereto with respect to, provide any necessary information with respect to, and provide the other party (or its respective counsel) with copies of, all filings made by such party with any Governmental Body or any other information supplied by such party to a Governmental Body in connection with this Agreement and the transactions described herein.  Each party hereto shall promptly inform the other of any communication from any Governmental Body regarding any of the transactions contemplated herein.

5.5   

Notification.

Seller shall promptly notify Buyer in writing if Seller becomes aware of any event, fact or condition that would cause any of Seller’s representations and warranties in this Agreement to be untrue or incomplete or which makes the satisfaction of the conditions to Buyer’s obligation to close the transactions contemplated hereby impossible or unlikely; provided , however , that no disclosure by Seller pursuant to this Section 5.5 shall be deemed to amend or supplement any representation or Disclosure Schedule or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant or other breach of this Agreement.  As promptly as practicable following receipt of such notification, Buyer will notify Seller in writing of its election to either (i) waive all of its rights and remedies with respect to the matters contained in Seller’s notification or (ii) reserve all of its rights and remedies with respect to such matters, in which case the parties shall use best efforts to negotiate a mutually acceptable resolution of such matters.  If the parties have not resolved any such matters by the Termination Date, the parties may mutually agree to extend the Termination Date to allow for such resolution.

5.6   

Employment Matters.

(a)   

No later than fifteen (15) days prior to the Closing Date, to the extent permitted by Legal Requirements, Seller shall provide Buyer and its Affiliates with all information requested by any of them about the employees who work in the Business.  No later than the later of ten (10) days after receiving such information or five (5) days prior to the Closing Date, Buyer or its Affiliate shall offer employment effective as of the date immediately following the Closing Date to all employees of the Business, to remain at their current employment location, pending the satisfaction by such employees of Buyer’s prerequisites for employment including, but not limited to, drug testing, background check, provision of satisfactory Form I-9, agreement to follow certain policies of Buyer including, as applicable, Buyer’s Conflict of Interest policy, Business Practices Guidelines and policy on non-binding mediation for employee disputes, and execution of non-competition and non-solicitation agreement and, where appropriate, execution of a confidentiality and intellectual property agreement.  Seller agrees to use its commercially reasonable efforts to assist Buyer in its efforts to hire such employees effective as of the date immediately following the Closing Date.  All offers of employment by Buyer shall be on terms and conditions that, in the aggregate, are substantially comparable to the terms and conditions of employment of similarly situated employees of Buyer or its Affiliate.  Buyer shall have no liability or responsibility for, and Seller and its Affiliates shall have sole liability and responsibility for, any and all severance pay and other employment termination obligations for Seller employees who decline Buyer’s offer of employment or who are unable to meet Buyer’s prerequisite hiring requirements as set forth above.  Notwithstanding the foregoing, nothing herein shall be construed to prevent Buyer from terminating the employment of any employee at any time after the Closing Date for any reason (or no reason).

(b)   

Seller shall be solely responsible for compliance with the Worker Adjustment and Retraining Notification Act and any Liability arising thereunder as a result of the transactions contemplated by this Agreement.

(c)   

Seller agrees that it shall be Seller’s sole responsibility to provide the required notices under Part 6 of Title I of ERISA (“ COBRA ”) to all M&A Qualified Beneficiaries (as defined in Treas. Reg. Section 54.4980B-9, Q&A 4), and that it shall provide coverage under COBRA to such individuals and shall be responsible for all obligations and liabilities relating to or arising under the COBRA continuation coverage requirements.

(d)   

If any employee of the Business has incurred any deductibles in connection with any medical or dental plans for the calendar year in which the Closing occurs, Buyer will apply any such amount towards meeting any required deductibles under Buyer’s medical or dental plans for the same calendar year.  Seller will provide any information reasonably requested by Buyer in Buyer’s efforts to transfer to Buyer’s medical and dental plans the deductible history of the employees of the Business with respect to such medical and dental plans for such calendar year.

(e)   

For purposes of determining eligibility to participate and the vesting of benefits under plans maintained or contributed to by Buyer (or an Affiliate) for the benefit of employees of the Business who are employed by Buyer (or an Affiliate) immediately after the Closing Date in connection with the transactions contemplated by this Agreement, and for purposes of calculating benefits under Buyer’s severance plan, short-term disability plan, 401(k) plan and vacation policy, Buyer shall give credit for years of service with Seller solely to the extent recognized by Seller under the applicable similar Plan maintained by Seller, and solely to the extent such time period is recognized under the terms of Buyer's or an Affiliate's plans, as if they were years of service with Buyer (or an Affiliate).

5.7   

Bulk Sales Laws.

The parties agree to waive compliance with any applicable bulk sales laws or other similar laws.

5.8   

No Negotiation.

(a)  

Unless and until this Agreement is terminated pursuant to Article VIII, Seller shall not, and shall cause its representatives not to, directly or indirectly, solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person (other than Buyer) relating to any transaction involving the sale of the Business or any of the Purchased Assets (other than sales of Inventory in the ordinary course of business consistent with past practice)(any such transaction is referred to herein as an “ Acquisition Transaction ”).

(b)  

If Seller receives an offer or proposal relating to a possible Acquisition Transaction, Seller shall immediately notify Buyer and provide all information available to Seller to Buyer as to the identity of the party making any such offer or proposal and the terms thereof, and, if in writing, provide a copy of such offer or proposal to Buyer.

(c)  

The parties recognize and acknowledge that a breach or attempted breach by Seller of this Section 5.8 will cause irreparable and material loss and damage for Buyer, the amount of which cannot be readily determined and as to which it will not have any adequate remedy at law or in damages.  Accordingly, in addition to any other remedy Buyer may have with respect to such breach or attempted breach, Buyer shall be entitled to preliminary and permanent injunctive relief without proof of actual damages or posting of any bond or other security.

5.9   

Payment of Brokers’ Fees.

Seller agrees to pay all fees, commissions or other compensation to the Persons set forth on Schedule III with respect to the transactions contemplated by this Agreement, and neither Buyer nor any of its Affiliates will be liable for any such fees, commissions or other compensation.  Buyer agrees to pay all fees, commissions or other compensation to the Persons set forth on Schedule IV with respect to the transactions contemplated by this Agreement, and neither Seller nor any of its Affiliates will be liable for any such fees, commissions or other compensation.

5.10   

Non-Competition; Non-Solicitation.

(a)  

During the period commencing on the Closing Date and expiring on the later of the fifth anniversary of the Closing Date and the second anniversary of the expiration or termination of the Sales Representative and Subcontract/Reseller Agreement (the “ Non-Compete Period ”), except as provided in the Sales Representative and