STOCK PURCHASE AGREEMENT

EXHIBIT 10.11

STOCK PURCHASE AGREEMENT

by and between

The Stockholders and Optionholders of

Spring BioScience Corporation, as Sellers

and

Ventana Medical Systems, Inc., as Purchaser

Dated September 4, 2007

TABLE OF CONTENTS

-i-

TABLE OF CONTENTS

(continued)

-ii-

TABLE OF CONTENTS

(continued)

-iii-

TABLE OF CONTENTS

(continued)

-iv-

TABLE OF CONTENTS

INDEX TO SCHEDULES

-v-

STOCK PURCHASE AGREEMENT

THIS AGREEMENT (this “ Agreement ”) is made and entered into as of the 4th day of September, 2007, among the stockholders and optionholders listed on Schedule A (each a “ Seller ” and collectively the “ Sellers ”), and VENTANA MEDICAL SYSTEMS, INC. , a Delaware corporation (“ Purchaser ”).

WHEREAS , SPRING BIOSCIENCE CORPORATION , a California S-corporation (the “ Corporation ”) conducts the business of developing, supplying and selling reagents for the immunohistochemistry (IHC) market and for the life science research market, including, but not limited to, bulk antibody reagents (the “ Business ”).

WHEREAS , Sellers are the record and beneficial owners of all the issued and outstanding shares of the common stock of the Corporation (the “ Shares ”), which constitute all the issued and outstanding capital stock of the Corporation and certain options to purchase Shares which will all be exercised in connection with the transactions contemplated by this Agreement.

WHEREAS , Sellers desire to sell to Purchaser, and Purchaser desires to purchase from Sellers, the Shares, upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the respective representations, warranties, covenants, agreements and conditions contained in this Agreement, and in order to set forth the terms and conditions of the sale and purchase of the Shares, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS; PURCHASE AND SALE OF SHARES

SECTION 1.01 Definitions . The following terms when used in this Agreement have the meanings set forth below:

“ Affiliate ” means (i) any corporation, limited liability company, partnership, trust or other entity in control of, controlled by or under common control with a Person, and (ii) any officer, director, manager, general partner, equity holder or trustee of any corporation, limited liability company, partnership, trust or other entity in control of, controlled by or under common control with a Person.

“ Affiliated Group ” means any affiliated group within the meaning of Code Section 1504(a) or any similar group defined under a similar provision of state, local or foreign law of which the Corporation has been a member.

“ Agreement ” has the meaning set forth in the Preamble.

“ Business ” has the meaning set forth in the recitals.

“ Closing ” means the closing of the purchase and sale of the Shares.

“ Closing Date ” has the meaning set forth in Section 1.07 .

“ Code ” means the Internal Revenue Code of 1986, as amended, or any corresponding provision of any succeeding law.

“ Contract ” and “ Contracts ” has the meaning set forth in Section 2.14 .

“ Control ” (including the terms “ controlling ,” “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

“ Corporation ” has the meaning set forth in the recitals.

“ Corporation Intellectual Property ” means the Intellectual Property that is owned or used by the Corporation.

“ Corporation Premises ” means all real property leased or subleased by the Corporation or used or occupied by the Corporation, together with, all building and other structures, facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property of the Corporation attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing.

“ Damages ” means actual losses, liabilities, damages, Taxes, or expenses, including, without limitation, reasonable fees and expenses of experts and counsel, exemplary, incidental, special or consequential damages, but shall not, as between the parties hereto, include punitive damages, absent fraud.

“ Drop Dead Date ” means September 30, 2007.

“ Employee Benefit Plans ” means collectively the plans, programs, funds, or arrangements identified on Schedule 2.09(b) to this Agreement.

“ Employee Plan ” means any employee benefit plan (within the meaning of Section 3(3) of ERISA) and each other employment, fringe benefit, or other retirement, bonus, deferred or incentive compensation plan, program, arrangement or agreement sponsored, maintained or contributed to or required to be contributed to by either Corporation or any ERISA Affiliate for the benefit of any current or former Employee or director of either Corporation or any ERISA Affiliate.

“ Encumbrance ” means any charge, claim, community property interest, condition, equitable interest, lien, mortgage, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

“ Environment ” means soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

“ Environmental, Health, and Safety Liabilities ” means any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to (a) any environmental, health, or safety matters or conditions (including on-site or off- site contamination, occupational safety and health, and regulation of chemical substances or products); (b) fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law or Occupational Safety and Health Law; (c) financial responsibility under Environmental Law or Occupational Safety and Health Law for cleanup costs or

-ii-

corrective action, including any investigation, cleanup, removal, containment, or other remediation or response actions (“ Cleanup ”) required by applicable Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Authority or any other Person) and for any natural resource damages; or (d) any other compliance, corrective, investigative, or remedial measures required under Environmental Law or Occupational Safety and Health Law. The terms “removal,” “remedial,” and “response action,” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended (“ CERCLA ”).

“ Environmental Law ” means any Legal Requirement that requires or relates to (a) advising appropriate authorities, employees, and the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant impact on the Environment; (b) preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment; (c) reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated; (d) assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of; (e) protecting resources, species, or ecological amenities; (f) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances; (g) cleaning up pollutants that have been released, preventing the threat of release, or paying the costs of such clean up or prevention; or (h) making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

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

“ ERISA Affiliate ” means any Person, trade or business, whether or not incorporated, that together with the Corporation is or ever was deemed a “single employer” within the meaning of Section 4001(b)(1) of ERISA or Section 414 of the Code.

“ Escrow Agent ” means Thomas Title & Escrow, LLC.

“ Escrow Agreement ” has the meaning set forth in Section 1.05 .

“ Escrow Amount ” means $11,700,000.

“ Exclusivity Period ” has the meaning set forth in Section 4.13 .

“ Facilities ” means any real property, leaseholds, or other interests currently or formerly owned or operated by the Corporation and any buildings, plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently or formerly owned or operated by the Corporation.

“ Financial Statements ” means, collectively, the unaudited balance sheets of the Corporation as of December 31, 2006, December 31, 2005 and December 31, 2004, the related unaudited statements of operations and retained earnings and cash flows for the fiscal years then ended and accompanying notes and the unaudited financial statement for the six months ended June 30, 2007 prepared by the Corporation and delivered by Purchaser.

“ Founding Shareholders ” has the meaning set forth in Schedule 1.01 .

-iii-

“ GAAP ” means generally accepted accounting principles as in effect in the United States.

“ Governmental Authority ” means any federal, national, supranational, state, provincial, local, or similar government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body, including without limitation the Internal Revenue Service or any taxing authority (whether domestic or foreign), including any state, local or foreign government or any subdivision or taxing agency thereof (including a United States possession).

“ Gross-Up Amount ” means that portion of the Purchase Price in excess of $39,000,000, representing the agreed upon incremental Tax liability of Sellers’ resulting from the making of a §338(h)(10) Election in connection with the transactions contemplated by this Agreement. If the IRS or a court of competent jurisdiction, in an audit or administrative or judicial proceeding, (i) reallocate the purchase price allocation as set forth in the Allocation Schedule or IRS Form 8883, and (ii) as a result of such reallocation the incremental income Tax liability of Sellers’ resulting from the making of a §338(h)(10) Election in connection with the transactions contemplated by this Agreement is greater than $1,600,000, then the Purchase Price shall be adjusted accordingly.

“ Hazardous Activity ” means the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Substances in, on, under, about, or from the Facilities or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off the Facilities, or that may affect the value of the Facilities or the Corporation.

“ Hazardous Substance ” means any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substance as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substance, oil or Hazardous Substance or other chemical or substance regulated by any Environmental Laws.

“ Indebtedness ” means the aggregate amount of the principal of, and accrued and unpaid interest and penalties on, whether or not contingent, all obligations for borrowed money, or any portion thereof, and all costs, expenses and other charges included therein that is due and payable on or after the Closing Date.

“ Intellectual Property ” means any or all of the following and all rights in, arising out of, or associated therewith, including any licenses or grants: (i) all patents, patent applications, and all inventions and discoveries that may be patentable, or other invention disclosures; (ii) all computer software (whether in source code or object code forms) and related documentation; (iii) all copyrights, copyright registrations and copyright applications; (iv) all trade names, logos, trademarks and service marks, source indentifiers, common law marks and registrations and applications for trademarks and service marks, and goodwill related thereto; (v) all web sites and domain names; (vi) all know-how, trade secrets, proprietary information, customers lists, data, databases and technical information, and related documentation; and (vii) all licenses to any of the foregoing, and all claims against a third party relating to unauthorized or infringing use of any of the foregoing .

“ Interim Financial Statements ” means the unaudited financial statement for the six months ended June 30, 2007.

“ IRS ” means the Internal Revenue Service.

-iv-

“ Inventories ” means all inventory, merchandise, finished goods, and raw materials, packaging, labels, supplies and other personal property maintained, held or stored by or for the Corporation at the Closing Date, and any prepaid deposits for any of the same.

“ Knowledge ” in the case of Sellers means the actual knowledge of the Founding Shareholders, after reasonable inquiry, and in the case of Purchaser, means the actual knowledge of Purchaser’s Chief Executive Office and Chief Financial Officer, after reasonable inquiry.

“ Legal Requirement ” means any federal, state, local, municipal, foreign, international, multinational or other statute, law, order, constitution, rule, regulation, ordinance, principle of common law, treaty or other requirement of any Governmental Authority.

“ License ” means any authorization, approval, license, or certification applicable to or affecting the Corporation issued by any Governmental Authority in the jurisdiction in which any such Business is located.

“ Material Adverse Effect ” means any circumstance, change, effect, event, occurrence, state of facts or development that, individually or in the aggregate with all other circumstances is reasonably likely to be materially adverse, (i) as to the Corporation, to the Business, assets, financial condition or results of operations, customer or supplier relationships of the Corporation, including the termination or resignation of employment by the Corporation of Haiying Xia or Adam Huang or, (ii) as to a party to this Agreement, on the ability of a party to this Agreement to consummate timely the transactions provided for in this Agreement; provided , however , that none of the following shall be deemed, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or shall be, a Material Adverse Effect: any adverse change, effect, event, occurrence, state of facts or development attributable to or resulting from any (A) announcement of the transactions contemplated by this Agreement; (B) conditions affecting the industry in which the Corporation participates, the United States economy as a whole or the capital markets in general or the markets in which the Corporation operates; or (C) act of terrorism, or war or hostilities (armed or otherwise) involving the United States.

“ Net Working Capital Target ” means Working Capital of $550,000 as of the Closing Date.

“ Occupational Safety and Health Law ” means any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

“ Option ” has the meaning set forth in Section 1.09(a) .

“ Permitted Liens ” means (i) statutory liens for Taxes and other governmental charges and assessments which are not yet due and payable or are being contested in good faith, (ii) mechanics, materialmen’s and similar liens that can be satisfied by a payment of cash to the lienholders and that are attributable to accounts payable in the Financial Statements, (iii) as to real property interests, including leasehold interests, any easements, rights-of-way, servitudes, permits, restrictions and minor imperfections or irregularities in title which do not, individually or in the aggregate, interfere with the ability to own, use or operate such real property, (iv) purchase money liens and liens securing rental payments under any capital lease arrangements disclosed or reflected in the Financial Statements, and (v) notice filings with respect to equipment leases or other leases of personal property.

-v-

“ Person ” means any individual, any entity or any unincorporated organization, including, without limitation, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust or a joint venture.

“Post-Closing Tax Period” means a taxable period that commences after the Closing Date.

“ Pre-Closing Tax Period ” means a taxable period that ends on or before the Closing Date.

“ Purchase Price ” means the aggregate purchase price for the Shares as set forth in Section 1.03 .

“ Purchaser ” has the meaning set forth in the Preamble.

“ Purchaser Plans ” means the employee benefit plans of Purchaser and its Affiliates that provide employee benefits to employees of the Corporation after the Closing.

“ Receivables ” means any and all accounts receivable, notes and other amounts receivable from third parties, including customers and employees, arising from the conduct of the Business before the Closing, whether or not in the ordinary course, together with any unpaid financing charges accrued thereon.

“ Required Consent Contract ” means any Contract that requires the consent of another party upon the consummation of the transactions contemplated by this Agreement.

“ Release ” means any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

“§338(h)(10) Election” is defined in Section 5.02(a) .

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Shares ” has the meaning set forth in the recitals.

“ Sellers ” has the meaning set forth in the Preamble.

“ Sellers’ Accounts ” has the meaning set forth in Schedule 1.04 .

“ Seller Representatives ” has the meaning set forth in Section 8.01 .

“ Stock Option Plan ” means the Corporation’s 2004 Stock Plan.

“ Straddle Tax Period ” means a taxable period that includes but does not end on the Closing Date.

“ Tax ” or “ Taxes ” means any (a) federal, state, local or foreign income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or withholding, or other tax, charge, levy, assessment, or fee of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalties, additions to tax, or additional amounts in respect of the foregoing; (b) liability for the payment of any amounts of the type described in clause (a) arising as a result of being (or ceasing to be) a member of any Affiliated Group (or being included (or required to be included) in any

-vi-

Tax Return relating thereto); and (c) liability for the payment of any amounts of the type described in clause (a) as a result of any express or implied obligation, by contract or pursuant to Law, to indemnify or otherwise assume or succeed to the liability of any other person.

“ Tax Return ” means any returns, protective filings, declarations, reports, bills, claims for refund, information returns (including where permitted or required, any consolidated, combined or unitary returns) or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or in connection with the administration of any statutes, laws, rules, regulations, orders or awards of any Governmental Authority relating to any Taxes.

“ Taxing Authority ” means the Internal Revenue Service or any other Governmental Authority responsible for the collection or administration of any Tax.

“ Threat of Release ” means a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

“ Threatened ” means a claim, Proceeding, dispute, action, or other matter will be deemed to have been “threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.

“ Treasury Regulations ” or “ Regulation ” means the temporary and final regulations promulgated under the Code.

“ Working Capital ” means, as of any date, in accordance with GAAP and the principles set forth on Schedule 1.08 , (i) the amount of the current assets of the Corporation as of such date (excluding any deferred Tax assets), minus (ii) the amount of the current liabilities of the Corporation as of such date.

SECTION 1.02 Sale of Shares . Subject to the terms and conditions of this Agreement, at the Closing, each Seller shall sell, assign, transfer and convey to Purchaser the number of Shares set forth on Schedule 1.02 for such Seller, and Purchaser shall purchase and acquire from each Seller such Shares, free and clear of all Encumbrances, except restrictions under federal and state securities laws. At Closing, in consideration for the sale of the Shares by each Seller to Purchaser, each Seller shall receive their pro rata share of the aggregate Purchase Price (minus any amounts to be held back pursuant to the Escrow Agreement).

SECTION 1.03 Purchase Price . The “ Purchase Price ” shall be an amount up to $40,600,000, to be paid by Purchaser in accordance with Section 1.04 below, subject to adjustment pursuant to Section 1.08 or the Escrow Agreement.

SECTION 1.04 Payment of the Purchase Price . On the Closing Date, Purchaser shall pay to the Sellers $28,900,000 (less applicable withholding taxes), which amount is equal to the Purchase Price, less the Escrow Amount, by delivery of cash payable by wire transfer of immediately available funds to the designated account of a designated Seller Representative set forth on Schedule 1.04 , which shall be for the benefit of all the Sellers’ and will be promptly distributed by such Seller Representative to the account of each Seller as set forth on Schedule 1.04 (“ Sellers’ Accounts ”) in the amounts set out by the name of each Seller set forth on Schedule 1.04 . Seller Representatives shall deliver to Purchaser a

-vii-

receipt for the Purchase Price less the Escrow Amount and each Seller shall deliver to Purchaser their certificate(s) representing the Shares in accordance with the terms of Section 1.06 hereof. At the Closing, Purchaser will wire to the Corporation at the account designated on Schedule 1.04 the withholding amounts attributable to the exercise of Options in the amounts set forth next to the name of each Optionholder in Schedule 1.04 . In connection herewith, each Seller hereby authorizes Purchaser to transmit to the Corporation any and all amounts that are required to be withheld by the Corporation pursuant to the regulations of any applicable Taxing Authority in connection with the payment of the Purchase Price (minus any amounts held back in connection with the Escrow Amount), which is to be deemed for all purposes to have been made to the Sellers. Purchaser shall cause the Corporation to remit such Tax withholdings to the applicable Taxing Authorities promptly after receipt thereof from Purchaser.

SECTION 1.05 Escrow . Prior to the Closing, the Sellers and the Purchaser shall enter into the escrow agreement with the Escrow Agent substantially in the form of Exhibit A (the “ Escrow Agreement ”). In accordance with the terms of the Escrow Agreement the Purchaser shall deposit the Escrow Amount in accordance with the terms and conditions of the Escrow Agreement, to be managed and paid out by the Escrow Agent in accordance with the terms and conditions thereof. As more fully described in the Escrow Agreement, the Escrow Fund shall be available to satisfy, to the extent still available, the payouts to the Sellers pursuant to the milestones set forth on Schedule 1.05 (the “ Milestone Payments ”), or any amounts owed to Purchaser pursuant to Section 4.07 .

SECTION 1.06 Delivery of the Shares . At the Closing, each Seller shall deliver to Purchaser the certificate(s) representing the Shares, each duly endorsed in the name of Purchaser or accompanied by a duly executed stock power, all in good form for transfer of valid title to the Shares to Purchaser, free and clear of all Encumbrances, except restrictions on transfer under federal and state securities laws.

SECTION 1.07 Closing . The Closing shall take place at the offices of Snell & Wilmer L.L.P., One Arizona Center, 400 East Van Buren, Phoenix, Arizona 85004, at 10:00 a.m. on the date on which the conditions of closing set forth in Article VI shall be satisfied or waived by the party entitled to the benefit thereof, or at such other location and on such other date to which the parties may mutually agree (the “ Closing Date ”).

SECTION 1.08 Purchase Price Adjustments .

(a) As promptly as possible, but in any event within 30 days after the Closing Date, Purchaser will deliver to the Seller Representatives (i) a balance sheet of the Corporation as of the Closing Date calculated in accordance with Schedule 1.08 (the “ Closing Balance Sheet ”) and (ii) its calculation of the Working Capital as of the Closing Date (the “ Preliminary Working Capital Statement ”) based on the Closing Balance Sheet and calculated in accordance with Schedule 1.08 . If the Seller Representatives have any objections to the Preliminary Working Capital Statement, the Seller Representatives shall deliver to Purchaser a statement setting forth in reasonable detail their objections thereto (an “ Objections Statement ”). If an Objections Statement is not delivered to Purchaser within 30 days after delivery of the Preliminary Working Capital Statement, the Preliminary Working Capital Statement shall be final, binding and non-appealable on the parties hereto. The Seller Representatives and Purchaser shall negotiate in good faith to resolve any such objections, but if they do not reach a final resolution within 30 days after the delivery of the Objections Statement, the Seller Representatives and Purchaser shall submit such dispute to a reputable firm of certified public accountants selected jointly by Seller Representatives and Purchaser, and not employed by either of them during the two years prior to the Closing Date (the “ Neutral Accountant ”). The Seller Representatives and Purchaser shall use their commercially reasonable efforts to

-viii-

cause the Neutral Accountant to resolve all disagreements as soon as practicable. The resolution of the dispute by the Neutral Accountant shall be final, binding and non-appealable on the parties hereto. The fees and expenses of the Neutral Accountant shall be apportioned between Sellers, on the one hand, and Purchaser, on the other hand, by the Neutral Accountant based on the degree to which each party’s claims were unsuccessful and shall be paid by the parties in accordance with such determination. The Preliminary Working Capital Statement, as revised, if at all, and as finally determined pursuant to this Section 1.08(a) , shall be referred to as the “ Final Working Capital Statement ” and the Working Capital as set forth in the Final Working Capital Statement shall be referred to as the “ Final Working Capital .”

(b) If the Final Working Capital is greater than Net Working Capital Target, Purchaser shall pay such excess (plus simple interest on such amount at the Prime Rate, determined as of the date of final resolution, from the Closing Date through the date of payment) to the Seller Representatives (on behalf of the Sellers) by wire transfer of immediately available funds to an account or accounts designated by the Seller Representatives.

(c) If the Final Working Capital is less than Net Working Capital Target, the Escrow Agent, after a request by the Purchaser or the Seller Representatives, shall pay out of the Escrow Amount such shortfall (plus simple interest on such amount at the Prime Rate, determined as of the date of final resolution, from the Closing Date through the date of payment) to the Purchaser by wire transfer of immediately available funds to an account or accounts designated by the Purchaser.

(d) In addition, to the extent the Purchaser is, 90 days after the Closing Date, unable to collect, after a good faith effort (which shall not require Purchaser to engage attorneys or collection agents), any amount of the Receivables listed on Schedule 2.07(c) (except to the extent, if any, such Receivable is reserved for on the Interim Financial Statements), the Purchaser shall assign at its option such account(s) to the Seller Representatives (for the benefit of the Sellers) and after written notice from the Purchaser or Seller Representatives, the Escrow Agent shall pay the amount of such account(s) from the Escrow Amount to the Purchaser.

(e) In addition, within a reasonable period of time following the Closing Date, the Corporation, as directed by Purchaser, will hire an outside consultant to conduct a valuation of the fair market value of the Corporation shares acquired by Purchaser and an assessment of any and all amounts that were estimated to be required to be withheld by the Corporation, pursuant to Section 8.01(d) , in connection with the regulations of any applicable Taxing Authority with respect to the exercise of an Option pursuant to Section 1.09(a) , including, without limitation, FICA and Medicare and the Option holders withholding obligations. If the Purchaser determines, based on such consultant’s recommendations and findings, that any amount so withheld was inadequate to satisfy any obligations to the applicable Taxing Authority under any applicable Taxing Authority rule or regulation then, the Escrow Agent shall pay the amount of such account(s) from the Escrow Amount to the Purchaser.

SECTION 1.09 Exercise of Options . As of the Closing Date, but deemed to occur on the day prior to the Closing by virtue of the consummation of the transactions contemplated by this Agreement and the receipt of a check from each Optionholder for such Optionholder’s aggregate exercise price for their Shares:

(a) Each option or right to acquire Shares issued by the Corporation held by Sellers (each an “ Option ”) which is outstanding, unexpired and unexercised as of the Closing Date shall be exercised into Shares, equal to the number of Shares for which such Option is then exercisable at an exercise price per share equal to the per share Option exercise price then applicable to the Option and

-ix-

otherwise subject to the same terms and conditions of the Option as in effect immediately prior to the Closing Date. Seller Representatives shall collect the exercise price from each exercising Option holder and deliver all the monies related to the exercise price at Closing to the Corporation. Any such Share received pursuant to the exercise of an Option hereof shall be accounted for in Schedule 1.04 , for purposes of payment of the Purchase Price, as if such Share existed as of the date of the signing of this Agreement.

(b) All Options exercised pursuant to Section 1.09(a) shall from and after the Closing Date no longer be outstanding and shall cease to exist and each holder of an Option which immediately prior to the Closing Date represented a right to acquire Share shall cease to have any rights as an optionholder or shareholder of the Corporation or any surviving entity thereto.

SECTION 1.10 Further Assurances . If, at any time after the Closing Date, Purchaser shall reasonably determine that any deeds, assignments or assurances or any other acts or things are necessary (a) to vest, perfect or confirm, of record or otherwise, title to the Shares in Purchaser, or (b) otherwise to consummate the transactions provided for in this Agreement, Sellers shall, at Sellers’ expense, execute and deliver, in the name and on behalf of Sellers, all such deeds, bills of sale, assignments and assurances and shall do, in the name and on behalf of Sellers, all such other acts and things that are necessary to vest, perfect or confirm title to the Shares in Purchaser and otherwise to consummate the transactions provided for in this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF FOUNDING SELLERS

Except for the representations in Sections 2.01, 2.03 and 2.30, which each Seller is only making as to his, her, or itself, each Founding Shareholder hereby represents and warrants to Purchaser, knowing and intending that Purchaser is relying hereon in entering into the transactions provided for herein, as follows, except as otherwise set forth in the written disclosure schedules delivered to Purchaser (the “ Disclosure Schedules ”). The Disclosure Schedules are numbered to correspond to the various sections and subsections of this Article II setting forth certain exceptions to the representations and warranties contained in this Article II and certain other information called for by this Agreement. No disclosure made in any particular Disclosure Schedule shall be deemed made in any other Disclosure Schedule unless expressly made therein (by cross-reference or otherwise):

SECTION 2.01 Authority Relative to Agreement . Sellers have the requisite power and authority to enter into and to perform their obligations under this Agreement and the Escrow Agreement. The execution and delivery of this Agreement and the Escrow Agreement by Sellers and the consummation by Sellers of the transactions provided for in this Agreement have been duly authorized by all necessary corporate action on the part of Sellers. Each Seller is the record and beneficial owner of the number of Shares, as applicable, as set forth on Schedule 2.02 , in each case, free and clear of any and all Encumbrances, other than applicable federal and state securities law restrictions or as set forth on Schedule 2.02 . On the Closing Date, each Seller shall transfer to Purchaser good title to such Shares, free and clear of all Encumbrances, except applicable federal and state securities law restrictions.

SECTION 2.02 Capital Stock; Title . The authorized capital stock of the Corporation consists of 40,000,000 shares of common stock, of which 7,501,250 shares are issued and outstanding immediately prior to the Closing. The Shares represent, collectively, all of the issued and outstanding shares of capital stock or other equity interests in the Corporation. The Shares are fully paid and

-x-

nonassessable. The Corporation does not have any outstanding subscriptions, warrants, convertible securities, obligations, options or rights entitling others to acquire shares of capital stock of the Corporation, or any outstanding securities, options, warrants, rights or other instruments convertible into or exchangeable or exercisable for shares of capital stock of the Corporation. Other than set forth on Schedule 2.02 , no other Person has ever held any beneficial or record ownership of any shares of the Corporation’s common stock or options to purchase the Corporation’s common stock. Except as disclosed in Schedule 2.02 , neither the Corporation nor Sellers is a party to any shareholders agreement, buy-sell or similar agreement, redemption or similar agreement, proxy, voting trust or arrangement affecting the Shares. All the Shares have been duly authorized and validly issued. All shares of the Corporation’s common stock issued upon exercise of the options issued pursuant to the Stock Option Plan in accordance therewith were duly authorized and validly issued and fully paid and nonassessable. None of the Shares was issued in violation of the Securities Act or any other legal requirement of any Governmental Authority.

SECTION 2.03 Execution and Performance of Agreement; Validity and Binding Nature . This Agreement has been duly executed and delivered by Sellers, and this Agreement is, and each of the documents and agreements executed and delivered by Sellers pursuant to the terms hereof, when duly executed and delivered by all parties whose execution and delivery thereof is required, shall be, the legal, valid and binding obligations of Sellers, enforceable against Sellers in accordance with their respective terms, except to the extent that enforceability may be limited by bankruptcy, receivership, moratorium, conservatorship, reorganization or other laws of general application affecting the rights of creditors generally or by general principles of equity.

SECTION 2.04 Non-Contravention . Neither the execution and delivery of this Agreement or the Escrow Agreement nor the consummation of the transactions provided for in this Agreement shall (a) violate, breach or be in conflict with any provisions of the Articles of Incorporation or Bylaws of either the Corporation or Sellers, as applicable, (b) result in the creation or imposition of any Encumbrance upon any material property or assets of the Corporation, (c) conflict with or violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental or regulatory authority to which the Corporation or Sellers are subject, or (d) conflict with, result in any breach of, constitute a default (or event which with the giving of notice of lapse of time, or both, would become a default) under, require any consent under, or give to others any right of termination, amendment, acceleration, suspension, revocation , or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Corporation is a party or by which any of the Shares or any of the Corporation’s assets or properties is bound or affected.

SECTION 2.05 Organization, Standing and Qualification . The Corporation is a corporation, duly organized, validly existing and in good standing under the laws of the State of California and has the corporate power and lawful authority to own and hold its properties and conduct the Business as now owned, held and conducted in its state of incorporation and the states (or other jurisdictions) in which it has qualified to do business. The Corporation is qualified and in good standing in all states (or other jurisdictions) in which such qualification is required by reason of the nature or extent of the Business conducted by the Corporation therein, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect on the Corporation. Such states (and other jurisdictions) are disclosed in Schedule 2.05 .

SECTION 2.06 Articles of Incorporation and By-Laws; No Subsidiaries .

-xi-

(a) True and complete copies of the Corporation’s Articles of Incorporation and By-Laws (together with all amendments thereto) have been made available to Purchaser.

(b) The Corporation does not own any capital stock or other equity securities of or equity interest in any corporation, partnership, joint venture, or other entity or business organization. The Corporation is not under any obligation to acquire any securities from any Person.

(c) The Corporation does not currently have, nor has it ever had, any subsidiaries.

SECTION 2.07 Financial Statements .

(a) Sellers have delivered the Financial Statements to Purchaser. The Financial Statements have been prepared from the books and records of the Corporation as prepared in the ordinary course of the Business. The Financial Statements (i) have been prepared in manner consistent with past practice of the Corporation, (ii) were prepared in accordance with the books of account and other financial records of the Corporation, (iii) present fairly the financial position of the Corporation as of their respective dates and the results of the Corporation’s operations and cash flows for the periods covered thereby, (iv) have been prepared by management on a basis consistent with the past practices of the Corporation, and (v) include all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the financial condition of the Corporation and the results of operations of the Corporation as of the dates thereof or for the periods covered thereby. The books of account and other financial records of the Corporation (i) reflect all items of income and expense and all assets and liabilities required to be reflected therein i on a basis consistent with the past practice of the Corporation, (ii) are in all material respects complete and correct, and do not contain or reflect any material inaccuracies or discrepancies and (iii) have been maintained in accordance with good business and accounting practices.

(b) There are no obligations or liabilities relating to or affecting the Corporation or the Business (whether accrued, absolute, contingent, liquidated, unliquidated, or otherwise, whether due or to become due and regardless of when asserted), except: (i) liabilities reflected or reserved against in the Financial Statements or disclosed in the notes thereto, (ii) those liabilities that have been incurred in the ordinary course of business and consistent with past practice since the Interim Financial Statements, (iii) those liabilities arising from the transaction contemplated in this Agreement, and (iv) liabilities specifically disclosed in Schedule 2.07(b) .

(c) Schedule 2.07(c) is an aged list of the Receivables, as of a date at least 10 business days prior to the Closing Date, showing separately those Receivables that as of such date had been outstanding for (a) 29 days or less, (b) 30 to 59 days, (c) 60 to 89 days, (d) 90 to 119 days and (e) more than 119 days. Except to the extent, if any, reserved for on the Interim Financial Statements, all Receivables reflected on the Interim Financial Statements arose from, and the Receivables existing as of the Closing will have arisen from, the sale of Inventory or services to Persons not affiliated with the Corporation and in the ordinary course of business consistent with past practice and, except as reserved against on the Interim Financial Statements, constitute or will constitute, as the case may be, only valid, undisputed claims of the Corporation not subject to valid claims of setoff or other defenses or counterclaims other than normal cash discounts accrued in the ordinary course of business consistent with past practice.

(d) Subject to amounts reserved therefor on the Interim Financial Statements, the values at which all Inventories are carried on the Interim Financial Statements reflect the historical

-xii-

inventory valuation policy of the Corporation of stating such Inventories at the lower of cost (determined on the last in, first out method) or market value. The Corporation has good and marketable title to the Inventories free and clear of all Encumbrances. The Inventories do not consist of, in any material amount, items that are obsolete, damaged or slow-moving. The Inventories do not consist of any items held on consignment. The Corporation is not under any obligation or liability with respect to accepting returns of items of Inventory or merchandise in the possession of their customers other than in the ordinary course of business consistent with past practice. No clearance or extraordinary sale of the Inventories has been conducted since the date of the Interim Financial Statement. The Corporation has not acquired or committed to acquire or manufacture Inventory for sale which is not of a quality and quantity usable in the ordinary course of business within a reasonable period of time and consistent with past practice, nor has the Corporation changed the price of any Inventory except for (a) price reductions to reflect any reduction in the cost thereof to the Corporation, (b) reductions and increases responsive to normal competitive conditions and consistent with the Corporation’s past sales practices, (c) increases to reflect any increase in the cost thereof to the Corporation and (d) increases and reductions made with the written consent of the Purchaser. Schedule 2.07(d) contains a complete list of the addresses of all warehouses and other facilities in which the Inventories are located. The Inventories are in good and merchantable condition in all material respects, are suitable and usable for the purposes for which they are intended and are in a condition such that they can be sold in the ordinary course of the Business consistent with past practice.

SECTION 2.08 Corporation Intellectual Property .

(a) Schedule 2.08(a) sets forth a true and complete list of all domestic and foreign registered patents and patent applications, registered marks (including trademarks, service marks, and other registrable source identifiers) and mark registration applications, material unregistered marks, registered trade names, registered domain names, registered copyrights, copyright applications, software programs (other than off-the-shelf software), all written Contracts relating to the development, ownership or use of the Corporation Intellectual Property, and all registered designs, that are owned or used by Corporation or any Affiliate in connection with the Business (collectively, the “ Registered Intellectual Property ”). With regard to the Registered Intellectual Property, all material application, maintenance, renewal or other similar fees have been properly paid and are current, and all registrations, applications and filings are valid and remain in full force and effect.

(b) To the Knowledge of Founding Shareholders, the Corporation has sufficient ownership or rights, free and clear of any Encumbrances, to the Corporation Intellectual Property necessary for its Business as now conducted, and, giving effect to any consents required under any Required Consent Contracts, the execution, delivery and performance of this Agreement shall not adversely affect the Corporation’s right to use the Corporation Intellectual Property in the conduct of the Business as presently conducted. To the Knowledge of Founding Shareholders, none of the Corporation Intellectual Property infringes upon the Intellectual Property rights of any Person, and Sellers or Corporation have not received any oral or written communication alleging such violation.

(c) Corporation has not licensed Corporation Intellectual Property to any Person, and does not have any shared ownership interest with any Person in any Corporation Intellectual Property, nor has it licensed or purchased any Corporation Intellectual Property from any Person under any arrangement requiring continuing royalty, license or other payments. Corporation has taken commercially reasonable actions necessary to protect its Intellectual Property.

-xiii-

(d) No contractor, former employee, or other Person other than Corporation possesses any current or contingent rights to any Corporation Intellectual Property, and the transactions contemplated by this Agreement will not result in any third party gaining a right to access the Corporation Intellectual Property (as the result of an escrow release or otherwise). To the Knowledge of Founding Shareholders, no contractor, former employee, or other Person has misappropriated or infringed, or is infringing, any of the Corporation Intellectual Property, or has asserted any claim or challenged the validity, enforceability, continuity or ownership of the Corporation Intellectual Property.

(e) To the Knowledge of Founding Shareholders, Corporation’s employees are not obligated under any contract (including licenses, covenants or commitments of any nature), or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to Corporation or that would conflict with the Business as now conducted. Each employee and consultant of Corporation who has made material contributions to the creation or development of the Corporation Intellectual Property (or otherwise has made contributions to the creation or development of the Corporation Intellectual Property such that without such contributions any aspect of the Intellectual Property would not function or operate, or could not be used as intended) has executed a customary confidentiality, non-compete, and assignment of inventions agreement, all of which have been provided to Purchaser’s legal counsel or has otherwise assigned to Corporation all rights, title and interest in any Intellectual Property developed by such employee or consultant during and within the scope of his employment or consultancy with Corporation. To the Knowledge of Founding Shareholders, no employees or consultants are in violation thereof.

(f) To the Knowledge of Founding Shareholders, none of the Corporation’s employees or consultants is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee’s or consultant’s ability to promote the interest of the Corporation or that would conflict with the Corporation’s business. Neither the execution or delivery of this Agreement or the Escrow Agreement, nor the carrying on of the Corporation’s business by the employees and consultants of the Corporation, nor the conduct of the Corporation’s business as now conducted and as presently proposed to be conducted, will, to the Knowledge of Founding Shareholders, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee or consultant is now obligated.

SECTION 2.09 Employee Plans .

(a) Schedule 2.09 sets forth a list of each Employee Plan. With respect to each Employee Plan, Sellers have provided to Purchaser: a copy of each Employee Plan (including all amendments thereto); a copy of the annual report and actuarial report, if required under ERISA or the Code, with respect to each Employee Plan for the last two (2) plan years ending prior to the date hereof; if the Employee Plan is funded through a trust or any third party funding vehicle, a copy of the trust or other funding contract (including all amendments thereto) and the latest financial statements with respect to the last reporting period ended immediately prior to the date thereof; a copy of the most recent “summary plan description”, together with each “summary of material modifications”, if required under ERISA, with respect to each Employee Plan; and the most recent determination letter received from the IRS with respect to each Employee Plan that is intended to be qualified under Code Section 401(a).

-xiv-

(b) The Corporation or an ERISA Affiliate have never maintained, had an obligation to contribute to, or actually made contributions to an Employee Plan that is subject to the provisions of Title IV of ERISA.

(c) To the Knowledge of the Founding Shareholders, each Employee Plan has been operated and administered in all material respects in accordance with its terms and Applicable Law, including ERISA and the Code. There are no pending or, to the Knowledge of the Founding Shareholders, threatened audits, investigations or claims involving any Employee Plan by any Governmental Authority or other Person, other than routine claims for benefits. Each Employee Plan that is intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS regarding its qualified status, and no fact exists, including any amendment or failure to amend any Employee Plan, that would cause the IRS to revoke such favorable determination letter.

(d) Except (i) as may be provided in any employment Contract currently in effect between Corporation and an Employee or former Employee, or (ii) as otherwise set forth on Schedule 2.09(d) , the consummation of the transaction contemplated herein shall not (A) result in any payment becoming due, or increase the amount of compensation due, to any Employee or former Employee or current or former director of the Corporation, (B) increase any benefits payable under any Employee Plan, or (C) accelerate the time of payment or vesting, or increase the amount of, or otherwise enhance, any benefit due to any Employee or former Employee or current or former director of the Corporation. No such payment will result in the loss by reason of Section 280G of the Code, of any federal income Tax deduction by Purchaser or by the Corporation.

(e) No Employee Plan provides benefits, including death or medical benefits (whether or not insured), with respect to current or former Employees of Corporation or current or former directors of Corporation after retirement or other termination of service other than (i) coverage mandated by Sections 601-608 of ERISA and Section 4980B(f) of the Code, (ii) death benefits or retirement benefits under any employee pension benefit plan (within the meaning of Section 3(2) of ERISA), (iii) benefits the full cost of which is borne by the current or former Employee or current or former director (or his or her beneficiary), or (iv) severance or deferred compensation benefits properly accrued as Liabilities on the books of either Corporation or an ERISA Affiliate.

(f) The Corporation has not made any representation or communication, oral or written, with respect to the participation, eligibility for benefits, vesting, benefit accrual or coverage under any Employee Plan to any Employee or any former Employee or current or former director of Corporation which is not in accordance with the terms and conditions of the Employee Plans.

(g) No “leased employee” (within the meaning of Section 414(n) of the Code) performs (or during the preceding three years has performed) services for Corporation. The Corporation has at all times been in material compliance with Applicable Law regarding the classification of Employees and independent contractors. No Person engaged by either Corporation as an independent contractor, laborer, temporary Employee, or “leased employee” has ever been improperly excluded from participation in a Employee Plan, nor has Corporation used the services of any such individual to an extent that would reasonably be expected to result in the disqualification of any of the Employee Plans or the imposition of material penalties or excise Taxes with respect to the Employee Plans by the IRS, the Department of Labor, the Pension Benefit Guaranty Corporation or any other Governmental Authority.

-xv-

(h) The Corporation and each ERISA Affiliate has complied in all material respects with the notice and continuation coverage requirements of Section 4980B of the Code and the regulations thereunder with respect to each Employee Plan that is, or was during any taxable year of either Corporation or any ERISA Affiliate for which the statute of limitations on the assessment of federal income Taxes remains open, by consent or otherwise, a group health plan within the meaning of Section 5000(b)(1) of the Code.

(i) None of the Employee Plans, any trusts created thereunder, either Corporation or any ERISA Affiliate, or any Employee of the foregoing, nor, to the Knowledge of the Founding Shareholders, any trustee, administrator or other fiduciary thereof, has engaged in a “prohibited transaction” (as such term is defined in Section 4975 of the Code or Section 406 of ERISA). To the Founding Shareholders’ Knowledge, no sponsor, trustee or administrator of any Employee Benefit Plan has engaged in a transaction or has taken or failed to take any action with respect to an Employee Benefit Plan that would be reasonably expected to subject the Corporation or an ERISA Affiliate to a civil penalty assessed pursuant to Section 502(i) of ERISA or a Tax imposed pursuant to Section 4975 or 4980B of the Code.

(j) The Corporation and each ERISA Affiliate, and each Employee Benefit Plan has complied in all material respects with the Health Insurance Portability and Accountability Act of 1996, and the regulations issued thereunder.

(k) Each Employee Plan that is a “nonqualified deferred compensation plan” as such term is defined in Section 409A of the Code has been operated in good faith compliance with Code Section 409A for periods beginning after December 31, 2004.

(l) Set forth on Schedule 2.09 is a list of each individual who, as of a date not more than five (5) days preceding the date of this Agreement, was a “M&A qualified beneficiary” (as such term is defined in Treasury Regulations Section 54.4980B-9 Q&A-4) and to whom the Corporation was providing continued group health plan coverage under Section 4980B of the Code.

SECTION 2.10 Real Property .

(a) The Corporation owns no real property and has no fee simple ownership interest in any real property. Schedule 2.10(a) contains a true and correct list of all of the Corporation Premises and all leases, subleases or use or occupancy agreements with respect to the Corporation Premises to which the Corporation is a party and all monthly rental fees (and other recurring fees) related to such leases.

(b) The Corporation has undisturbed possession of the Corporation Premises and all leases, subleases or use or occupancy agreements with respect to the Corporation Premises are in full force and effect, and the Corporation is not in default thereunder (with or without notice or lapse of time), and to the Knowledge of the Founding Shareholders, the other party is not in default thereunder (with or without notice or lapse of time). The Corporation Premises (including improvements thereon) are in good operating condition and repair (ordinary wear and tear excepted) and are adequate in all material respects for their present uses by the Corporation and are, as to the Corporation’s interest, free and clear of all Encumbrances except Permitted Liens.

SECTION 2.11 Personal Property and Sufficiency of Assets .

-xvi-

(a) (i) the Corporation has valid title to or the right to use all tangible personal property material to the conduct of the Business as presently conducted, and (ii) the tangible personal property owned by the Corporation is owned free and clear of Encumbrances other than Permitted Liens.

(b) The equipment and other tangible assets material to the conduct of the Business as presently conducted are in operating condition, ordinary wear and tear excepted, and are suitable for their present use by the Corporation.

(c) The (i) building, structures, improvements, automobiles, equipment and other tangible assets of the Corporation, and (ii) the Intellectual Property of the Corporation and other intangible assets of the Corporation are, in the reasonable judgment of the Founding Shareholders, sufficient for the continued conduct of the business of the Corporation after the Closing in substantially the same manner as conducted prior to the Closing. No Seller, nor any other Person, owns or has the right to use any assets (whether tangible or intangible) that are used in the conduct of the Business.

SECTION 2.12 Taxes . Sellers represent and warrant to Purchaser, as of the date of this Agreement and as of the Closing:

(a) Copies of Tax Returns, Audit Reports, Other Relevant Tax Documents . The Corporation has delivered or caused to be delivered to Purchaser complete and correct copies of: (i) all federal and state Tax Returns filed by or in respect of the Corporation relating to periods ending on or after December 31, 2001; (ii) any and all other Tax Returns filed by or in respect of the Corporation requested by Purchaser; (iii) any and all audit reports relating to Taxes and issued by or with respect to the Corporation on or after December 31, 2001; and (iv) any and all revenue agent examination reports, information document requests, notices of proposed deficiencies, notices of deficiency, protests, petitions, settlement agreements, closing agreements, private letter ruling requests and technical advice memoranda received by, submitted by, or agreed to by, or on behalf of, the Corporation in respect of taxable periods ending on or after December 31, 2001, or to which the Corporation is subject;

(b) Filing of Tax Returns; Payment of Taxes; Related Matters .

(i) All Tax Returns required to be filed by or with respect to the Corporation have been timely filed and all such Tax Returns are true, correct, and complete in all material respects;

(ii) All Taxes due and payable by or attributable to the Corporation for any period preceding the Closing Date, including, but not limited to any Tax due arising out of the transactions contemplated by this Agreement, (whether or not a Tax Return is due by the Closing Date), have been paid, properly accrued or otherwise adequately reserved on the Financial Statements, or will be accrued on the books and records of the Corporation from time to time, in accordance with past custom and practice, through the Closing Date with statements thereof made available to Purchaser on the Closing Date;

(iii) The Corporation has disclosed on each Tax Return filed by or in respect of the Corporation all positions taken thereon that could give rise to a substantial understatement penalty of federal income Taxes within the meaning of Code Section 6662 or any similar provisions of any other Tax law;

(iv) The Corporation has timely paid all required current estimated payments of Taxes in amounts sufficient to avoid interest charges and underpayment penalties;

-xvii-

(v) There are no Tax liens upon any assets of the Corporation, other than liens for sales and payroll Taxes not yet due and payable and liens for non-delinquent current real property taxes;

(vi) The Corporation is not currently the beneficiary of any extension of time to file any Tax Return, and there are no outstanding waivers or agreements extending the statute of limitations for any period with respect to any Tax to which the Corporation may be subject or will cause Purchaser to be subject to;

(vii) The Corporation has complied with all requirements relating to the withholding of Taxes (including withholding and reporting requirements under Code Sections 1441 through 1464, 3401 through 3406, 6041, and 6049) and has within the times and in the manner prescribed by law paid over such amounts to the proper taxing authorities in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party, and all Forms W-2 and 1099 (and state law counterparts thereof) required with respect thereto have been properly completed and timely filed; and

(viii) The Corporation has not done business in or engaged in a trade or business in any jurisdiction in which it has not filed all required Tax Returns, and no written notice or inquiry has been received from any jurisdiction in which Tax Returns have not been filed by the Corporation to the effect that the filing of Tax Returns may be required;

(c) Audit Related Matters .

(i) There are no pending or threatened actions or suits, whether in the form of an audit or an administrative, judicial or other proceeding, for the assessment or collection of Taxes against the Corporation or (insofar as either relates to the activities or income of the Corporation or could result in liability of the Corporation on the basis of joint and/or several liability) any Person that was included in the filing of a Tax Return with the Corporation on a consolidated, combined or unitary basis;

(ii) No adjustment relating to the Tax Returns filed or to be filed by or with respect to the Corporation (including, to the extent applicable, any consolidated federal income Tax Return of the Corporation and any state, local or other Tax Return that includes the Corporation on a consolidated, combined or unitary basis) have been proposed in writing or, informally by any Governmental Authority (insofar as either relates to the activities or income of the Corporation or could result in liability of the Corporation on the basis of joint and/or several liability) and no basis exists for any such adjustment;

(iii) The Corporation has not received from any taxing authority any (A) notice indicating an intent to open an audit or other review, (B) request for information relating to Taxes, or (C) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed against the Corporation;

(iv) There are no outstanding agreements extending or waiving the statutory period of limitation applicable to any claim for the collection or assessment or reassessment of Taxes due from the Corporation for any taxable period;

(v) There is no power of attorney currently in force with respect to any matter relating to Taxes of the Corporation; and

-xviii-

(vi) With respect to any past audit, review or examination by any relevant Governmental Authority of issues relating to Taxes of the Corporation, no issue raised or addressed therein is re