ACCEPTANCE OF COLLATERAL IN FULL SATISFACTION OF OBLIGATIONS AT LESS THAN FACE VALUE AND PURCHASE AGREEMENT

THIS ACCEPTANCE OF COLLATERAL IN FULL SATISFACTION OF OBLIGATIONS AT LESS THAN FACE VALUE AND PURCHASE AGREEMENT , dated as of July 9, 2009 (the “ Agreement ”), is entered into by and among ProElite, Inc., a New Jersey corporation (“ Pledgor ”), Terry N. Trebilcock (“ Trebilcock ”) and Juliemae Trebilcock (together with Trebilcock, the “ Secured Parties ”) and KOTC Acquisition, LLC, a Minnesota limited liability company wholly owned by Secured Parties (“ Acquiror ”).

WHEREAS , on September 11, 2007, the Pledgor and the Secured Parties entered into that certain Stock Purchase Agreement (the “ KOTC Purchase Agreement ”) pursuant to which Secured Parties sold Pledgor all of the capital stock of King of the Cage, Inc., a California corporation (the “ Company ”), and the Pledgor was obligated to make certain contingent payments to the Secured Parties, which obligations were secured by a pledge of the Company’s stock in favor of the Secured Parties pursuant to a Pledge Agreement between them dated September 11, 2007 (the “ Pledge Agreement ”);

WHEREAS, Secured Parties have assigned their rights, powers and interests in and to, and arising under, the KOTC Purchase Agreement and the Pledge Agreement to Acquiror, pursuant to that certain Assignment and Consent Agreement, dated July 9, 2009 by and among Secured Parties, Acquiror and Pledgor;

WHEREAS , the parties hereto acknowledge that, as of the date hereof (based upon recent financial projections and the loss of significant sponsors), without the continued involvement of Trebilcock the Company has essentially no value and, even with the continuing involvement of Trebilcock, presently has little if any value (net of debts owed, including advances recently made by Trebilcock to the Company which were necessary in order to enable the Company to continue its business operations );

WHEREAS , the parties hereto believe it is in their respective best interests to avoid the cost and uncertainty associated with a public or private sale of the Collateral (as defined in the Pledge Agreement) and have agreed, in connection with an overall settlement and release of all claims between them being entered into contemporaneously herewith, that Acquiror shall accept the Collateral in a “strict foreclosure” pursuant to Section 9620 of the California Commercial Code, in full satisfaction of all Obligations (as defined in the Pledge Agreement), but at less than full value, and as a related transaction Pledgor shall transfer certain other assets owned by Pledgor, but related to the business of the Company, to the Secured Parties for additional consideration;

WHEREAS , the Company, among other things, is currently engaged principally in the business of promoting mixed martial arts live events under the King of the Cage brand, which includes the broadcast of such events on pay-per-view (the “ Business ”); and

WHEREAS , in order to effectuate the acceptance in full satisfaction of the Obligation at less than face value contemplated by this Agreement, Acquiror desires to acquire from Pledgor, and Pledgor desires to convey to Acquiror, all of the capital stock of the Company owned by Pledgor (the “ Shares ”), subject to the terms and conditions set forth in this Agreement.

In consideration of the foregoing Recitals (which are hereby incorporated herein), the mutual promises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

“ Acquired Assets ” has the meaning assigned in Section 2.3.

“ Acquiror ” has the meaning assigned in the caption of this Agreement.

“ Acquiror Closing Deliverable ” has the meaning assigned in Section 5.3.

“ Acquiror Disclosure Schedule ” has the meaning assigned in Section 3.1.

“ Affiliate ” means, with respect to any specified Person, any other Person, directly or indirectly controlling, controlled by or under common control with such specified Person.  For purposes of this definition, “ control ” when used in connection with any specified Person means the power to direct the management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; and the terms “controlling” and “controlled” have correlative meanings to the foregoing.  For the avoidance of doubt, it is acknowledged  that the Secured Parties and the Pledgor are not Affiliates of each other.

“ Agreement ” means this Agreement, as amended or modified from time to time in accordance with Section 7.5.

“ Assignments ” mean the assignments contemplated by Sections 5.2(b), (c) and (f).

“ Assumed Liabilities ” has the meaning assigned in Section 2.4(a).

“ Assumption Agreement ” has the meaning assigned in Section 2.4(a).

“ Bully Beatdown Contracts ” has the meaning assigned in Section 2.3(b).

“ Business ” has the meaning assigned in the recitals to this Agreement.

“ Closing ” has the meaning assigned in Section 5.1.

“ Closing Date ” has the meaning assigned in Section 5.1.

“ Closing Payment ” has the meaning assigned in Section 2.5(b).

“ Code ” means the Internal Revenue Code of 1986, as amended and the rules and regulations promulgated thereunder.

“ Company ” has the meaning assigned in the Recitals.

“ Contract ” means, with respect to any Person, any agreement, indenture, undertaking, debt instrument, contract, contractual obligation, lease or other commitment to which such Person is a party or by which such Person is bound, or to which any of such Person’s properties is subject.

“ Damages ” has the meaning set forth in Section 6.2.

“ Dollar ” and “ $ ” shall mean United States Dollars.

“ Distributions ” has the meaning assigned in Section 2.5(c)(3).

“ Earn-Out ” has the meaning assigned in Section 2.5(c).

“ Escrow Agreement ” has the meaning assigned in Section 6.5.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“ Excluded Matters ” has the meaning assigned in Section 3.2(f).

“ Final Allocation ” has the meaning assigned in Section 2.6.

“ Financial Statements ” has the meaning assigned in Section 3.2(f).

“ Governmental Authority ” means any court, administrative agency or commission, self-regulatory organization or other foreign, federal, state or local governmental authority or instrumentality.

“ Indemnified Party ” has the meaning assigned in Section 6.6.

“ Indemnification Termination Date ” has the meaning assigned in Section 6.1.

“ Indemnifying Party ” has the meaning assigned in Section 6.6.

“ Insolvency Proceeding ” has the meaning assigned in Section 3.2(p).

“ Intellectual Property ” means any or all of the following and all rights in, arising out of, or associated therewith (i) all United States, international and foreign patents and applications therefor and all reissues, divisions, divisionals, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and all patents, applications, documents and filings claiming priority to or serving as a basis for priority thereof, (ii) all inventions (whether or not patentable), invention disclosures, improvements, trade secrets, proprietary information, know how, computer software programs (in both source code and object code form), technology, business methods, technical data and customer lists, tangible or intangible proprietary information, and all documentation relating to any of the foregoing, (iii) all copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world, (iv) all industrial designs and any registrations and applications therefor throughout the world, (v) all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world, (vi) all databases and data collections and all rights therein throughout the world, (vii) all moral and economic rights of authors and inventors, however denominated, throughout the world, (viii) all Web addresses, sites and domain names and numbers, (ix) any similar or equivalent rights to any of the foregoing anywhere in the world; and (x) the information of a Person that has commercial value to such Person and which is not known publicly, including know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans, drawings and blue prints.

“ Interim Date ” means August 31, 2008.

“ IRS ” means the Internal Revenue Service.

“ KOTC Purchase Agreement ” has the meaning assigned in the recitals to this Agreement.

“ Liens ” means any charge, mortgage, pledge, security interest, restriction, claim, lien, or encumbrance, other than restrictions on transfer and disposition arising under securities laws.

“ Litigation ” has the meaning assigned in Section 3.2(n).

“ Material Adverse Effect ” means with respect to the Company, an effect that, individually or in the aggregate, is both material and adverse; provided however , that “Material Adverse Effect” shall not be deemed to include the effects of: (i) general changes in conditions in the securities industry, or in the global or United States economy or capital markets; (ii) changes in applicable generally accepted accounting principles or in laws, regulations or regulatory policies of general applicability; (iii) any change caused by the announcement of this Agreement or the Stock Acquisition; (iv) acts of war, major hostilities or terrorist attacks; or (v) actions or omissions of Pledgor or Company taken in accordance with this Agreement or with the prior written consent of Acquiror.

“ Net Cash Flow ” has the meaning assigned in Section 2.5(c)(2).

“ Net Sale Proceeds ” has the meaning assigned in Section 2.5(c)(4).

“ Obligations ” has the meaning assigned in the recitals to this Agreement.

“ Objection Notice ” has the meaning assigned in Section 2.6.

“ Ordinary Course of Business ” means an action taken by a Person that is taken in the ordinary course of the normal day-to-day operations of such Person, reasonably consistent with the past practices of such Person.

“ PE Fighter Contracts ” has the meaning assigned in Section 2.3(a).

“ Person ” shall mean and include an individual, bank, partnership, joint venture, limited liability company, corporation, trust, unincorporated organization and government or any department or agency thereof.

“ Pledge Agreement ” has the meaning assigned in the recitals to this Agreement.

“ Pledgor ” has the meaning assigned in the caption of this Agreement.

“ Pledgor Closing Deliverables ” has the meaning assigned in Section 5.2.

“ Pledgor Disclosure Schedule ” has the meaning assigned in Section 3.1.

“ Pre-Closing Income Tax Costs ” has the meaning assigned in Section 4.8(d).

“ Proposed Allocation ” has the meaning assigned in Section 2.6.

“ Purchase Price ” has the meaning assigned in Section 2.5.

“ Rights ” means, with respect to any Person, securities or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for, redeem or acquire, or any options, calls or commitments relating to, or any stock appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price or value of, shares of capital stock of such Person.

“ Secured Parties ” has the meaning assigned in the caption of this Agreement.

“ Shares ” has the meaning assigned in the Recitals.

“ Stock Acquisition ” has the meaning assigned in Section 2.2.

“ Stub Income Tax Returns ” has the meaning assigned in Section 4.8(a).

“ Subsidiary” and Subsidiaries ” means, with respect to any Person, any corporation or other entity of which at least a majority of the outstanding shares of stock or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors (or Persons performing similar functions) of such corporation or entity (regardless of whether or not at the time, in the case of a corporation, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.

“ Taxes ” means all federal, state, local and foreign taxes, levies or other assessments imposed by any taxing authority, however denominated, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem , goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, and custom duties, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority.

“ Tax Returns ” means, collectively, all returns, declarations, reports, estimates, information returns and statements required to be filed under federal, state, local or any foreign tax laws.

“ Trebilcock ” has the meaning assigned in the caption of this Agreement.

“ Trebilcock Percentage ” has the meaning assigned in Section 2.5(c)(1) of this Agreement.

“ Unassumed Liabilities ” has the meaning assigned in Section 2.4(b) of this Agreement.

SECTION 1.2.          Interpretation .  When a reference is made in this Agreement to Recitals, Sections, Exhibits or Schedules, such reference shall be to a Recital or Section of, or Exhibits or Schedule to, this Agreement unless otherwise indicated.  The headings contained in this Agreement are for reference purposes only and are not part of this Agreement.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.” No rule against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement.

SECTION 2.1.          Compliance with California Commercial Code .  The parties intend that the transactions contemplated hereby comply with the California Commercial Code and Section 9620 thereof (“ Section 9620 ”) in particular (and any similar applicable law).  In furtherance thereof:

(a)           Pledgor hereby agrees to the terms of the acceptance of Collateral provided in this Agreement, intending by such agreement to comply with Section 9620(c)(2).

(b)           Acquiror represents to Pledgor that it: (i) has obtained certified UCC searches in the State of New Jersey with respect to the Pledgor dated April 28, 2009, June 22, 2009 and July 6, 2009 which identified that the Secured Parties are the only secured parties of record with respect to the Pledgor in such jurisdiction; (ii) has obtained a certified tax lien, judgment, civil and bankruptcy searches with respect to the Pledgor in the County of Los Angeles, State of California dated June 22, 2009 and July 6, 2009 which identified that there were no lien holders (other than Bowne of Los Angeles, Inc.) of record with respect to the Pledgor in such jurisdiction; (iii) has not received a notification of a claim of an interest in the Shares by any party other than the Pledgor; and (iv) have not received from any party a notification of objection to the transactions contemplated in this Agreement.

(c)           Pledgor hereby waives any requirement of subdivision (e) of Section 9620 to dispose of the Collateral pursuant to a waiver under Section 9624(b) of the California Commercial Code.

(d)           The Secured Parties and Acquiror hereby consent to the acceptance of the Collateral in full satisfaction of the Obligations and acknowledge that the satisfaction is at less than face value.

(e)           The additional terms of the acceptance of the Collateral shall be as set forth in the balance of this Agreement, however to the extent that any conflict between this Section 2.1 and the balance of this Agreement would render the acceptance contemplated by this Section ineffective, then this Section 2.1 shall control.

SECTION 2.2.         Stock Acquisition .  In furtherance of the acceptance of Collateral contemplated hereby, and subject to the terms and conditions of this Agreement, at the Closing, Pledgor shall convey the Shares to Acquiror, and Acquiror shall acquire the Shares from Pledgor (the “ Stock Acquisition ”).

SECTION 2.3.          Purchase of Certain Other Assets of Pledgor .  At the Closing, Pledgor shall sell, convey, transfer, assign and deliver to Acquiror, and Acquiror shall purchase from Pledgor, the following assets and property of Pledgor (collectively, the “ Acquired Assets ”):

(a)           all of Pledgor’s and its Affiliates’ interests in and to the fighter contracts attached hereto as Annex A for Abel Cullumn, Conor Huen, Tony Bonello, Thomas Denny, Jon Murphy, Ray Lazama, Victor Valenzuela and Nate Carey (the “ PE Fighter Contracts ”), most of whom were historically associated with the business of the Company; and

(b)           all of Pledgor’s and its Affiliates’ ownership interests in and to the bully contracts attached hereto as Annex B for Vincent Carosso, Dennis Ilyaich, Ryan Kessman, Garrett Lee, James Monko, Jonathan Rentie, Eric Shaw and Christian Smith who have appeared as bullies in the Bully Beatdown series (the “ Bully Beatdown Contracts”) .

SECTION 2.4.          Liabilities Related to Acquired Assets .

(a)            Limited Assumption of Liabilities .  At the Closing, Acquiror shall assume and agree to pay, perform, and discharge all future payment and performance obligations of Pledgor in connection with the Acquired Assets arising after the Closing, but specifically excluding any liabilities or obligations relating to pre-closing breach or nonperformance (the “ Assumed Liabilities ”).  Such assumption shall be evidenced by an Assumption Agreement in substantially the form of Exhibit A hereto (the “ Assumption Agreement ”).

(b)            Unassumed Liabilities .  Except for the Assumed Liabilities, Acquiror shall not assume any liability or obligation of the Pledgor (the “ Unassumed Liabilities ”).  Without limiting the generality of the foregoing, it is expressly agreed and understood that Acquiror shall not assume, and that Pledgor retains full responsibility to pay, perform and discharge, all payment and performance obligations related to the Acquired Assets arising or relating to periods prior to the Closing.  By virtue of acquiring the Shares, all liabilities and obligations of the Company shall remain the responsibility of the Company (subject to the representations, warranties and covenants herein).

SECTION 2.5.         Purchase Price .  In addition to the acceptance of the Collateral in full satisfaction of the Obligations at less than face value, Acquiror shall make the following additional payments (the “ Purchase Price ”):

(a)            [Intentionally Omitted]

(b)            Closing Payment .  Acquiror shall pay to Pledgor [***] in cash or immediately available funds at Closing (the “ Closing Payment ”).

(c)            Earn-Out .  Subject to the terms and conditions of this Section 2.5(c), Acquiror shall pay and/or deliver to Pledgor in cash and/or property (as required by this Section 2.5(c)) the sum of :  (I) the product of (1) [***] multiplied by (2) the Net Cash Flow of the Acquiror (whether or not any dividends or distributions are actually distributed or declared) multiplied by (3) the Trebilcock Percentage; plus (II) the product of (1) [***] multiplied by (2) of all Net Liquidity Proceeds of the Acquiror actually distributed to its members, multiplied by (3) the Trebilcock Percentage; plus (III) [***] of the net proceeds actually received by the Secured Parties and their immediate family members in connection with a sale or disposition by them of equity securities of the Company or the Acquiror; provided, however , such sum shall not exceed the maximum aggregate payments in this Section 2.5(c) below (such amount being herein referred to as the “ Earn-Out ”).  All Earn-Out amounts under clause (I) shall be in cash and all Earn-Out amounts under clauses (II) or (III) shall be in the same form, and in the same proportion, and with all related rights (such as registration rights) as received by the Secured Parties or their assignees; provided, that any non-cash consideration shall be valued for purposes of calculating the amount of the Earn-Out in Section 2.5(c)(5) at the fair market value of such non-cash consideration at the time of receipt by Pledgor.  Any contingent or deferred payments under clauses (II) or (III) shall be payable when received by the Secured Parties.  At Acquiror’s option, in place of some or all of any non-cash consideration, it may instead make a cash payment equal to the fair market value of such non-cash consideration.

(1)           For purposes of this Section 2.5(c), the term “ Trebilcock Percentage ” shall be equal to the aggregate percentage of the outstanding equity interests of Acquiror (or its successor) held, directly or indirectly, by the Secured Parties and their immediate family members as determined by a monthly average of such percentage ownership over each twelve (12) month period in which Net Cash Flow or Net Liquidity Proceeds are measured.

(2)           For purposes of this Section 2.5(c), the term “ Net Cash Flow ” shall mean for any twelve (12) month period ending on the annual anniversary of the Closing Date, the sum of cash actually received by the Company during such period less : (i) cash paid by the Company during such period for costs of goods sold; (ii) cash paid by Company during such period for costs associated with the Company as operated by Acquiror in its good faith business judgment (including without limitation, insurance, rent, furniture, fixtures and equipment, salaries, employee benefits, commissions, royalties, brokerage fees, refunds, charge–offs, costs of collection, capital expenses related thereto and other reasonable business expenses); (iii) cash paid by the Company for the development of one or more reality television series related to the Business or the promotion of such reality television series; (iv) any taxes paid on the resulting income or business operations of the Company; (v) Net Liquidity Proceeds; (vi) cash from sales and issuances by Acquiror of its equity securities (or securities convertible, exchangeable or exercisable for such equity securities) the proceeds of which are not distributed to the members of Acquiror; and (vii) an amount necessary to maintain commercially reasonable cash reserves, not to exceed $[***] in the aggregate (but only to the extent not already provided for or included in the amounts in clauses (i) through (vi) of this sentence).  Notwithstanding the foregoing, in the calculation of Net Cash Flow, Acquiror cannot deduct an amount in excess of [***] annually for compensation, royalties or dividends paid or distributed to the Secured Parties or their immediate family members (except market compensation may be paid to Juliemae Trebilcock for actual services rendered, not to exceed [***] annually).  For purposes of this Section 2.5(c)(2), the parties intend that only cash receipts and cash expenditures that are reasonably connected to the Business will be used to calculate Net Cash Flow and cash receipts and cash expenditures that are not reasonably connected to the Business shall be excluded from such calculation.

(3)           For purposes of this Section 2.5(c), the term “ Net Liquidity Proceeds ” shall mean for any twelve (12) month period ending on the annual anniversary of the Closing Date, the sum of cash or cash equivalents actually received during such period (including upon disposition of any non-cash consideration received) arising from: (i) any sale of the Acquiror or the Company, whether by merger, sale of all or substantially all its assets, sale of majority of its equity securities or other transaction that has substantially the effect of any of the foregoing, in each case after the date hereof; plus (ii) the sale of any material assets of Acquiror or the Company; plus   (iii) cash from sales and issuances by Acquiror or the Company of its debt or equity securities (or securities convertible, exchangeable or exercisable for such equity securities), but only to the extent proceeds therefrom are distributed to the members of Acquiror.

(4)           The Earn-Out payments shall be calculated on the annual anniversaries of the Closing Date based on the Company’s previous twelve (12) months’ operations, and payments shall be made within ninety (90) days after such calculations.  All calculations shall be subject to audit rights and the objection procedures described in Section 2.5(e) below.

(5)           The maximum aggregate Earn-Out  payments shall be as follows:

(A)           The Earn-Out shall be capped at [***] if Pledgor has been paid pursuant to the Earn-Out [***] within one (1) year and ninety (90) days following the Closing Date;

(B)           The Earn-Out shall be capped at [***] if Pledgor has been paid pursuant to the Earn-Out [***] within two (2) years and ninety (90) days following the Closing Date;

(C)           The Earn-Out shall be capped at [***] if Pledgor has been paid pursuant to the Earn-Out [***] within three (3) years and ninety (90) days following the Closing Date;

(D)           The Earn-Out shall be capped at [***] if Pledgor has been paid pursuant to the Earn-Out [***] within four (4) years and ninety (90) days following the Closing Date; and

(E)           The Earn-Out shall be capped at [***], and under no circumstances shall Acquiror be required to pay Pledgor more than [***] in Earn-Out payments regardless as to when it is paid, except that any Earn-Out payment or portion thereof that is not timely paid shall bear interest at the rate of 6% per annum accruing from its due date.

(F)           As an example, if the Secured Parties own 50% of Acquiror, and Acquiror has Net Cash Flow of $0 in the first 12 months after the Closing, and Net Cash Flow of $[***] in the second 12 months after the Closing, then Acquiror would owe $[***] to Pledgor; however, if Acquiror sold $[***] of equity securities in the second 12 months and made a special distribution to the Secured Parties of $[***] in connection with such sale, then, $[***] of such amount would be Net Liquidity Proceeds, and would be added to the Earn-Out, which if paid in such period would result in a total payment of $[***].

(d)            Prepayment .  Acquiror may prepay any amount due as Earn-Out payments hereunder to satisfy the as Earn-Out payments caps set forth in Section 2.5(c).

(e)            Audit Rights and Objection Procedures .

(1)           Acquiror shall, until all Earn-Out payments have been made and there are no pending objections related thereto, from time to time as reasonably requested, grant Pledgor and its advisors access to and the right to inspect (subject to reasonable confidentiality provisions) the books and records of the Company and Acquiror reasonably requested by Pledgor in order to verify the calculations of Acquiror’s independent accountants referred to in Section 2.5(c) above, and shall cause its employees and accountants to reasonably cooperate in such effort.  Such request shall be made in writing and Acquiror shall, in a reasonable amount of time thereafter, provide such access during reasonable business hours.  Each party shall bear its own expenses in connection with any such audit.

(2)           Pledgor may, each year in which it has a potential to an Earn-Out payment, object to the proposed calculation of Net Cash Flow by using the same procedures referred to below in Section 2.6 with respect to tax allocations, treating the delivery by the Acquiror of its calculation of Net Cash Flow for a given period like the “Proposed Allocation” below, and calculating all time periods and objections accordingly, with the final result of such procedure determining the actual Earn-Out payment for that year.

SECTION 2.6.          Allocation of Purchase Price .  Acquiror shall deliver to Pledgor, no later than thirty (30) days after the Closing Date, a proposed allocation, for U.S. federal income Tax purposes and pursuant to Section 1060 of the Code and the regulations thereunder, of the Purchase Price among the Acquired Assets and the Shares (the “ Proposed Allocation ”).  Promptly following receipt of the Proposed Allocation, Pledgor shall review the same and, within twenty (20) days after Pledgor’s receipt of such Proposed Allocation, may deliver to Acquiror a certificate executed by Pledgor setting forth objections to the proposed allocation (an “ Objection Notice ”), together with a summary of the reasons therefor and calculations which, in the Pledgors’ view, are necessary to eliminate such objections.  If Pledgor does not deliver an Objection Notice within such 20-day period, the Proposed Allocation shall be the final allocation of the Purchase price (the “ Final Allocation ”).  If Pledgor delivers an Objection Notice within such 20-day period, Acquiror and the Pledgors shall use their reasonable attempts to resolve by written agreement any differences identified in the Objection Notice within the succeeding five (5) days and, if they are able to resolve all such differences, the allocation agreed to shall be the Final Allocation.  If any objections raised by Pledgor in the Objection Notice are not resolved within the 5-day period next following such 5-day period, then Acquiror and Pledgor shall submit the objections that are then unresolved (together with any agreed adjustments) to an independent certified public accountant mutually and reasonably agreed to by Acquiror and Pledgor (and whose expenses shall be split equally between them), who shall be directed by Acquiror and Pledgor to resolve the unresolved objections within the next ten (10) days and to deliver written notice to each of Acquiror and Pledgor setting forth its resolution of the disputed matters.  The allocation resulting from the decision of the independent certified public accountant shall be the Final Allocation.  Any allocation that becomes the Final Allocation pursuant to the preceding provisions of this Section 2.6 shall be attached to this Agreement after Closing.  No party to this Agreement will take a position on any federal or state Tax return, before any Governmental Authority charged with the collection of any income Tax, or in any judicial Proceeding that is in any way inconsistent with the Final Allocation.

SECTION 2.7.          Non-Assignable Contracts .  If any of the Acquired Assets is not transferable or assignable under the provisions thereof or under applicable law to Acquiror on the Closing Date without the consent of any Person (a “ Required Consent ”), and such Required Consent shall not have been duly obtained prior to the Closing and the Closing occurs, then notwithstanding any provision of this Agreement to the contrary: (a) the underlying Contract shall be deemed not to have been assigned in violation of its term or applicable law, (b) Pledgor shall have been deemed to not made any representation or warranty that such Acquired Assets could be assigned without the consent of such Person or without any breach or default under the underlying Contract or applicable law and (c) Pledgor shall, for a period of sixty (60) days after Closing use its commercially reasonable efforts to obtain the Required Consent (and Acquiror shall reasonably assist), and during such period, shall, to the extent consistent with the underlying Contract and applicable law, provide the benefits of such Contract to Acquiror provided Acquiror at the same time pays and assumes all related post-Closing burdens and liabilities, in each case as if the Required Consent had been obtained and the underlying Contract had been assigned as of Closing.  If the Required Consent is obtained during such 60-day period, then the underlying Contract shall be deemed to have been assigned as of the Closing pursuant to this Agreement. If the Required Consent cannot be obtained during such 60-day period, then the underlying Contract shall be deemed to have been retained by Pledgor; provided, however , Pledgor hereby agrees that it shall not