STOCK PURCHASE AGREEMENT

EXHIBIT 10.1

STOCK PURCHASE AGREEMENT

BY AND AMONG

HAT WORLD, INC.,

HAT SHACK, INC.,

AND

THE SHAREHOLDERS OF

HAT SHACK, INC.

TABLE OF CONTENTS

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “ Agreement ”), dated as of December 9, 2006, by and among HAT WORLD, INC., a Minnesota corporation (“ Buyer ”), HAT SHACK, INC., a Georgia corporation (the “ Company ”), and all the shareholders of the Company as set forth on the signature page hereto (individually, a “Seller” and collectively, the “ Sellers ”). Buyer, the Company, and Sellers are sometimes referred to individually as a “ Party ” and collectively as the “ Parties ”, and the Shareholders’ Committee shall be deemed a Party to the extent it acts on behalf of the Sellers as provided in this Agreement.

     WHEREAS, as of the date of this Agreement, Sellers collectively own 111,437 shares of Common Stock of the Company, 16,238 shares of Series A Convertible Preferred Stock of the Company and 30,000 shares of Series B Convertible Preferred Stock of the Company (collectively, the “ Shares ”; it being acknowledged that the term “ Shares ” shall also refer to the shares of the Company’s Common Stock into which the Company’s outstanding Series A Convertible Preferred Stock and Series B Convertible Preferred Stock will be converted into, and the shares of the Company’s Common Stock that will be issued pursuant to the exercise of stock options and warrants, immediately prior to Closing), which Shares constitute all of the issued and outstanding shares of capital stock of the Company;

     WHEREAS, Sellers desire to sell, and Buyer desires to purchase, all of the Shares, for the consideration and on the terms set forth in this Agreement; and

     WHEREAS, the Company, in consideration of the anticipated benefits to be received by the Company in connection with the closing of the transactions contemplated hereby, and in order to induce Buyer to enter into this Agreement, has agreed to be a Party to this Agreement for certain purposes as set forth herein.

     NOW, THEREFORE, in consideration of the mutual benefits to be derived from this Agreement, the representations, warranties, conditions, and promises hereinafter contained, and other consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties hereby agrees as follows:

ARTICLE I
SALE AND TRANSFER OF SHARES; CLOSING

     Section 1.1. Sale and Transfer of Shares . Subject to the terms and conditions of this Agreement, at the Closing, Sellers shall sell and transfer the Shares to Buyer, and Buyer shall purchase the Shares from Sellers.

     Section 1.2. Purchase Price . The purchase price (the “ Purchase Price ”) for the Shares shall be $18,000,000, adjusted initially by the Estimated Closing Adjustment Amount and finally by the Closing Adjustment Amount. In accordance with Section 1.4(b), at the Closing, the Purchase Price, prior to adjustment by the Closing Adjustment Amount, shall be delivered as follows:

          (a) $14,500,000, adjusted by the Estimated Closing Adjustment Amount, if applicable, and less an amount equal to the Potential Lost Lease Cost, payable in cash by Buyer to Sellers by wire transfer of immediately available funds (the “ Cash Consideration ”);

          (b) an amount set forth on Schedule 1.2 (the “ Escrow Fund ”), payable in cash by Buyer to the Escrow Agent by wire transfer of immediately available funds to be held pursuant to the Escrow Agreement (the “ Escrow );

The Closing Adjustment Amount shall be paid by Buyer or Sellers, as the case may be, following the Closing in accordance with Section 1.6. All interest earned on the Escrow shall be for the benefit of the Sellers pro rata in accordance with their ownership interests of the Shares.

     Section 1.3. Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) will take place at the offices of Bass, Berry & Sims PLC, 315 Deaderick Street, Suite 2700, Nashville, Tennessee 37238-3001 at 10:00 a.m. (local time) on the third Business Day after the satisfaction or waiver of all the closing conditions set forth in Article V of this Agreement or at such other time and place as Buyer and Sellers may agree in writing (the date of the Closing, the “ Closing Date ”). Subject to the provisions of Article VI, failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 1.3 will not result in the termination of this Agreement and will not relieve any Party of any obligations under this Agreement. In such event, the Closing will occur as soon as practicable, subject to Article VI.

     Section 1.4. Closing Obligations . In addition to any other documents to be delivered under other provisions of this Agreement, at the Closing:

          (a) Sellers shall deliver, or cause to be delivered, to Buyer:

          (i) certificates representing the Shares, duly endorsed (or accompanied by duly executed stock powers), for transfer to Buyer;

          (ii) releases in substantially the forms attached hereto as Exhibit A-1 , Exhibit A-2 , and Exhibit A-3 executed by each of the Sellers and any employees of the Company receiving Change in Control Payments as set forth on Schedule 1.9 (the “ Releases ”);

          (iii) noncompetition, nondisclosure, and nonsolicitation agreements in substantially the form attached hereto as Exhibit B-1 , executed by each of the Sellers (other than Mark Deal, Katherine Ryback and Jim Hardison) and noncompetition, nondisclosure and nonsolicitation agreements in substantially the form attached hereto as Exhibit B-2 executed by each by Mark Deal, Katherine Ryback and Jim Hardison (collectively, the “ Noncompetition Agreements ”);

          (iv) an escrow agreement relating to the Escrow, in substantially the form attached hereto as Exhibit C , executed by Sellers and the Escrow Agent (the “ Escrow Agreement ”); and

          (v) Legal Opinion of Arnall Golden Gregory LLP, counsel to the Seller Parties, in substantially the form attached hereto as Exhibit D .

          (b) Buyer shall deliver, or cause to be delivered, to Sellers or the Escrow Agent, as applicable:

          (i) the Cash Consideration to Sellers by wire transfer of immediately available funds to an account of Arnall Golden Gregory LLP, counsel to the Company, designated on Schedule 1.4(b)(i) which funds will in turn be allocated to the Sellers. Buyer shall have no liability to the Sellers or any other Person with respect to the allocation of the Purchase Price;

          (ii) the Escrow Agreement, executed by Buyer and the Escrow Agent, together with the delivery to the Escrow Agent of the Escrow Fund by wire transfer to an account specified by the Escrow Agent; and

          (iii) the Noncompetition Agreements, executed by Buyer.

     Section 1.5. Estimated Closing Adjustment Amount .

          (a) The “ Estimated Closing Adjustment Amount ” (which may be a positive or negative number) will be an amount equal to (i) the Working Capital of the Company as reflected on the Estimated Closing Balance Sheet (as prepared and delivered pursuant to Section 1.5(b) below), minus (ii) $3,250,000. If the Estimated Closing Adjustment Amount is negative, such amount will be subtracted from the Cash Consideration payable by Buyer to Sellers pursuant to Section 1.4(b)(i). If the Estimated Closing Adjustment Amount is positive, such amount will be added to the Cash Consideration payable by Buyer to Sellers pursuant to Section 1.4(b)(i).

          (b) No earlier than five (5) Business Days and no later than one (1) Business Day prior to the Closing Date, the Shareholders’ Committee shall cause an estimated balance sheet of the Company as of the Closing Date (the “ Estimated Closing Balance Sheet ”) to be prepared and delivered to Buyer, which will be accompanied by a calculation of the estimated Working Capital of the Company as of the Closing Date. The inventory valuation, to be used as a basis for calculating the estimated Working Capital of the Company as of the Closing Date, shall be determined as follows:

          (i) Buyer shall analyze the inventory of the Company as more particularly described on Schedule 1.5(b) in order to determine the market value of the inventory (but excluding any inventory reserves) (the “ HW Inventory Valuation ”), which will then be used in the calculation of the estimated and actual Working Capital of the Company as of the Closing Date;

          (ii) No later than ten (10) days prior to the date by which the Shareholders’ Committee is to deliver the calculation of the estimated Working Capital of the Company pursuant to Section 1.5(b), Buyer shall present the HW Inventory Valuation to the Shareholders’ Committee (the “ Presentation Date ”);

          (iii) If within five (5) days following the Presentation Date, the Shareholders’ Committee has not given written notice of its objection to the HW Inventory Valuation (which notice must contain (i) a statement of the Shareholders’ Committee’s calculation of the market value of the Company’s inventory to be used as a basis for calculating the Working Capital of the Company as of the Closing Date and (ii) the basis of the Shareholders’ Committee’s objection), then the HW Inventory Valuation will be binding and conclusive on the Parties and will be used as the basis for calculating the estimated Working Capital of the Company as of the Closing Date; and

          (iv) If the Shareholders’ Committee duly gives Buyer such notice of objection within five (5) days following the Presentation Date, the Shareholders’ Committee, at its discretion, may submit only the items in dispute from the HW Inventory Valuation to an independent third party audit or appraisal firm to be mutually agreed upon by Buyer and the Shareholders’ Committee (the “ Independent Appraiser ”) for resolution. If issues are submitted to the Independent Appraiser for resolution, (i) the Shareholders’ Committee and Buyer shall furnish or cause to be furnished to the Independent Appraiser such work papers and other documents and information relating to the disputed issues with respect to the HW Inventory

Valuation as the Independent Appraiser may request and are available to that Party or its agents and shall be afforded the opportunity to present to the Independent Appraiser any material relating to the disputed issues and to discuss the issues with the Independent Appraiser; (ii) for purposes of its determination, the Independent Appraiser shall use the inventory valuation methodology set forth on Schedule 1.5(b) ; and (iii) the determination by the Independent Appraiser, as set forth in a notice to be delivered to the Shareholders’ Committee and Buyer within thirty (30) days of the submission to the Independent Appraiser of the issues in dispute, will be final, binding, and conclusive on Sellers (through the actions of the Shareholders’ Committee) and Buyer. The Shareholders’ Committee shall pay the fees and costs of the Independent Appraiser in connection with such determination; provided, however, that if the Independent Appraiser determines that the items in dispute from the HW Inventory Valuation were under-reported by Buyer by more than fifteen percent (15%), then Buyer shall pay the fees and costs of the Independent Appraiser in connection with such determination.

     Section 1.6. Closing Adjustment Amount .

          (a) The “ Closing Adjustment Amount ” will be an amount (which shall be a positive number) equal to the difference between (i) the Working Capital of the Company as reflected on the Closing Balance Sheet and (ii) the Working Capital of the Company as reflected on the Estimated Closing Balance Sheet. If the Working Capital of the Company as reflected on the Closing Balance Sheet is greater than the Working Capital of the Company as reflected on the Estimated Closing Balance Sheet, then the Closing Adjustment Amount will be paid by wire transfer of immediately available funds by Buyer to Escrow Agent for distribution to the Sellers pursuant to written instructions provided to the Escrow Agent by the Shareholders’ Committee. If the Working Capital of the Company as reflected on the Estimated Closing Balance Sheet is greater than the Working Capital of the Company as reflected on the Closing Balance Sheet, then the Closing Adjustment Amount will be paid to Buyer to an account specified by Buyer from and to the extent of the Working Capital Escrow held by the Escrow Agent under the Escrow Agreement, and any remaining amount payable to Buyer by wire transfer of immediately available funds by Sellers to Buyer to an account specified by Buyer. Within three (3) Business Days after the calculation of the Closing Adjustment Amount becomes binding and conclusive on the Parties pursuant to Sections 1.6(c) and 1.6(d), Sellers or Buyer, as the case may be, will make the payment provided for in this Section 1.6(a) and/or Buyer and the Shareholders’ Committee will deliver joint written instructions to the Escrow Agent under the Escrow Agreement directing that the appropriate amount be paid to Buyer from the Working Capital Escrow with any remaining amount of the Working Capital Escrow, if any, being distributed to Sellers. If the payment provided for in this Section 1.6(a) is not made within ten (10) Business Days after such Closing Adjustment Amount becomes binding and conclusive on a Party, interest at the rate of five percent (5%) per annum shall accrue and be payable on the Closing Adjustment Amount.

          (b) Buyer shall prepare a balance sheet of the Company as of the Closing Date (the “ Closing Balance Sheet ”), which will include a calculation of the Working Capital of the Company as of the Closing Date. Buyer shall deliver the Closing Balance Sheet to the Shareholders’ Committee within forty-five (45) days following the Closing Date (the date of such delivery, the “ Delivery Date ”).

          (c) If within fifteen (15) days following the Delivery Date, the Shareholders’ Committee has not given Buyer written notice of its objection to the Closing Balance Sheet calculation (which notice must contain (i) a statement of the Shareholders’ Committee’s calculation of the Company’s Working Capital as of the Closing Date and (ii) the basis of the Shareholders’ Committee’s objection), then the Working Capital amount reflected in the Closing Balance Sheet will be binding and conclusive on the Parties and will be used in computing the Closing Adjustment Amount.

          (d) If the Shareholders’ Committee duly gives Buyer such notice of objection within fifteen (15) days following the Delivery Date, and if the Shareholders’ Committee and Buyer fail to resolve the issues outstanding with respect to the Closing Balance Sheet and the calculation of the Working Capital reflected in the Closing Balance Sheet within fifteen (15) days of Buyer’s receipt of the objection notice from the Shareholders’ Committee, the Shareholders’ Committee and Buyer shall submit the issues remaining in dispute to an independent accounting firm to be mutually agreed upon by Buyer and the Shareholders Committee (the “ Independent Accountants ”) for resolution. If issues are submitted to the Independent Accountants for resolution, (i) the Shareholders’ Committee and Buyer shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that Party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (ii) if any item in dispute relates to the valuation of inventory, the Independent Accountants must use the inventory valuation methodology set forth on Schedule 1.5(b) ; (iii) the determination by the Independent Accountants, as set forth in a notice to be delivered to the Shareholders’ Committee and Buyer within thirty (30) days of the submission to the Independent Accountants of the issues remaining in dispute, will be final, binding, and conclusive on Sellers and Buyer; and (iv) Sellers and Buyer shall pay equal percentages of the fees and costs of the Independent Accountants in connection with such determination, unless one Party’s calculation of the disputed items in the Working Capital calculation as of the Closing Date differs from the calculation of the disputed items in the Working Capital as of the Closing Date by the Independent Accountants by more than 33.33%, in which case such Party shall then pay one hundred percent (100%) of the Independent Accountants’ fees and costs in connection with such determination. In the event that both Parties’ calculation of the disputed items in the Closing Adjustment Amount differs from the determination of the Independent Accountants by more than 33.33%, then the Party whose calculation differs from the determination of the Independent Accountants by the greatest amount shall pay one hundred percent (100%) of the Independent Accountants’ fees and costs.

     Section 1.7. Lease Consents .

          (a) As used herein:

          (i) “ Lease Consent Cost ” means any amount Buyer or the Company pays or agrees to pay in order to obtain a Lease Consent from a landlord under a Lease, either prior to the Closing or at any time after the Closing prior to the end of the 210 ^th day following the Closing Date (whether such amount is paid or payable by Buyer or the Company prior to or after Closing). If such amount is a one time payment, the Lease Consent Cost shall be the amount of such payment. If such amount is more than one payment (such as increased rent), the Lease Consent Cost shall be the net present value (calculated using a 5% discount rate) of the sum of such payments becoming payable during the remaining term of the Lease;

          (ii) “ Other Lease Increase Cost ” means any amount Buyer or the Company is required to pay or otherwise agrees to pay under any Lease as a result of the occurrence of the transactions contemplated by this Agreement that (i) would not have been owed had the transactions contemplated by this Agreement not occurred and (ii) is not a Lease Consent Cost. If such amount is a one time payment, the Other Lease Increase Cost shall be the amount of such payment. If such amount is more than one payment (such as increased rent), the Other Lease Increase Cost shall be the net present value (calculated using a 5% discount rate) of the sum of such payments becoming payable during the remaining term of the Lease. In the event that such amount is a percentage of the revenues from a store owned by Buyer or any of its affiliates as of the Closing Date which violates a radius or other similar restriction in a Lease, for purposes of this Agreement, the Other Lease Increase Cost shall equal the last trailing twelve months of such width

store’s revenues as of the Closing Date multiplied by the applicable percentage payable to the landlord pursuant to the Lease, for the remaining term of the Lease.

          (iii) “ Lost Lease Cost ” means the net present value (calculated using a 5% discount rate) of the lesser of (i) 4.5 times the Store EBITDA reflected on Schedule 1.7 hereto and (ii) the Store EBITDA for the store covered by such Lease multiplied by the remaining term of the applicable Lease, with respect to any Leases that (y) are terminable by the landlord thereunder as a result of the transactions contemplated by this Agreement and (z) are in fact so terminated by such landlord not later than 210 days after the Closing Date. The Lost Lease Cost for Leases which may be but are not terminated prior to the Closing Date is the “ Potential Lost Lease Cost ”.

          (b) In the event that the Company fails to obtain the consent of a landlord for any Lease listed on section (a) of Schedule 1.7 prior to the Closing, Buyer shall reduce the cash consideration payable at Closing by the Potential Lost Lease Cost for each such Lease and shall deposit such amount with the Escrow Agent, to be held in escrow pursuant to the terms of the Escrow Agreement.

          (c) If any Lease Consent Cost or Other Lease Increase Cost is not paid or accrued by the Company at or prior to the Closing or if there is any Lost Lease Cost, Buyer shall be entitled to reimbursement from the funds held by the Escrow Agent under the Lease Escrow in an amount equal to such Lease Consent Costs, Other Lease Increase Costs and Lost Lease Costs. The procedures set forth in Section 8.7(a) shall apply to a claim for reimbursement under this Section as if it were a claim for indemnification to which Section 8.7(a) is applicable. The Deductible limitation in Section 8.4 is not applicable to any such claim for reimbursement under this Section.

     Section 1.8. Obtaining Lease Consents .

          (a) With respect to Leases, the provisions of this Section shall be applicable in connection with the efforts of the Parties to obtain Lease Consents.

          (b) Prior to the Closing, the Company may obtain Lease Consents on such economic terms as the Buyer shall approve in advance in writing which approval will not be unreasonably withheld, conditioned or delayed. If Buyer has not disapproved in writing the form and/or terms of any proposed Lease Consent within three (3) Business Days following written notice thereof, Buyer shall be deemed to have consented in writing to the form and terms thereof. In addition, anything to the contrary herein notwithstanding, in no event shall the Company agree to any non-economic terms or conditions in connection with any Lease Consents without the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed by Buyer.

          (c) After the Closing and prior to the end of the 210 ^th day following the Closing Date, Buyer or the Company may incur or agree to incur Lease Consent Costs and Other Lease Increase Costs in connection with obtaining Lease Consents only with the advance written approval of the Shareholders’ Committee (which approval shall not be unreasonably withheld, conditioned or delayed by the Shareholders’ Committee) and the costs so incurred shall be subject to the provisions of Section 1.7(c). If the Shareholders’ Committee has not disapproved in writing such costs within ten (10) days following written notice thereof, the Shareholders’ Committee shall be deemed to have consented in writing to such costs.

          (d) Each of the Shareholders’ Committee and Buyer shall, during the period of time that they are obtaining Lease Consents subject to the provisions of this Section and Section 1.7, furnish a weekly report to the other party as to the Lease Consents obtained since the prior weekly report and the

terms agreed to in connection therewith, and shall otherwise furnish the other party from time to time with all other information reasonably requested concerning the efforts made to obtain Lease Consents. Buyer shall use commercially reasonable efforts to assist the Company and the Shareholders’ Committee in obtaining the Lease Consents.

     Section 1.9. Change in Control Payments . The Company will make the Change in Control Payments at Closing to the Persons and in the amounts set forth under the heading “Hat Shack Retention” on Schedule 1.9 attached hereto. Buyer shall make the retention payments to the Persons and in the amounts set forth under the heading “Hat World Retention” by the 20 ^th day of the month following the date(s) set forth under the heading “Guaranteed Salary Thru” in Schedule 1.9 and the severance payments to the Persons and in the amounts set forth under the heading “Hat World Severance” upon termination of such Person’s employment by the Company without cause, provided that such Person (i) has been an employee of the Company in good standing at all times since the Closing Date, (ii) executes and delivers to the Company and Buyer a Release, and (iii) with respect to Messrs. Deal and Hardison and Ms. Ryback, has signed a Noncompetition Agreement in the form of Exhibit A-2 .

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PRINCIPAL SELLERS AND THE COMPANY

     In order to induce Buyer to enter into this transaction, Mark S. Monroe, The Monroe Revocable Trust, Michael W. McNelis, Donald W. Weber, Jennifer A. Major, Steven D. Weber and Christopher J. Weber (individually, a “ Principal Seller ” and collectively, the “ Principal Sellers ”) and the Company, jointly and severally, represent and warrant to Buyer that, except as set forth in the disclosure schedules of the Company (collectively, the “ Disclosure Schedule ”), the statements made in this Article II are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date). The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered and lettered sections contained in this Article II.

     Section 2.1. Organization and Good Standing .

          (a) The Disclosure Schedule contains a complete and accurate list of the Company’s jurisdiction of incorporation and any other jurisdictions in which it is qualified to do business as a foreign corporation. The Company is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use its properties and assets, and to perform all of its obligations under the Applicable Contracts. The Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification.

          (b) True and complete copies of the Articles of Incorporation and Bylaws of the Company, as currently in effect, have been delivered to Buyer.

          (c) The Company does not, directly or indirectly, own, and has not agreed to purchase or otherwise acquire, the capital stock or other equity interests of, or any interest convertible into or exchangeable or exercisable for capital stock or other equity interests of, any Person.

     Section 2.2. Authority; No Conflict .

          (a) This Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. Upon the execution and delivery by the Company of each document or instrument to be executed or delivered by it at Closing pursuant to Section 1.4(a) or any other provision of this Agreement (collectively, the “ Company Closing Documents ”), each of the Company Closing Documents will constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. The Company has all requisite corporate power and authority to execute and deliver this Agreement and the Company Closing Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly and validly authorized and approved by the Company, and no other corporate action on the part of the Company is necessary to authorize the execution and delivery of this Agreement by the Company or the consummation of the transactions contemplated hereby.

          (b) Except as set forth in Section 2.2(b) of the Disclosure Schedule, neither the execution and delivery of this Agreement by Seller Parties nor the consummation of the transactions contemplated hereby will, directly or indirectly (with or without notice or lapse of time):

          (i) conflict with or violate the Articles of Incorporation or Bylaws of the Company;

          (ii) conflict with or violate, or give any Governmental Authority or other Person the right to challenge any of the transactions contemplated hereby or exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any Seller Party, or any of the assets owned or used by the Company, may be subject;

          (iii) cause Buyer or the Company to become subject to, or to become liable for, the payment of any Tax;

          (iv) breach any provision of any Applicable Contract, or give any Person the right to declare a default under, exercise any remedy under, accelerate the maturity or performance of or payment under, or cancel, terminate, or modify, any Applicable Contract; or

          (v) result in the imposition or creation of any Lien upon or with respect to any of the assets owned or used by the Company.

          (c) Except as set forth in the Disclosure Schedule, the Seller Parties are not and will not be required to give any notice to or obtain any consent or approval from (i) any Governmental Authority, (ii) any party to any Applicable Contract, or (iii) any other Person, in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

     Section 2.3. Capitalization . The authorized equity securities of the Company consist of 900,000 shares of Class A voting common stock, no par value, of which 110,143 shares are issued and outstanding, 100,000 shares of Class B nonvoting common stock, no par value, of which 1,294 shares are issued and outstanding, 500,000 shares of Series A Convertible Preferred Stock, no par value, of which 16,238 shares are issued and outstanding, and 500,000 shares of Series B Convertible Preferred Stock, no par value, of which 30,000 shares are issued and outstanding. All of the Shares have been duly authorized and validly issued and are fully paid and non-assessable. The Shares have not been issued in violation of, and, the capital stock of the Company is not subject to, any preemptive or subscription rights or rights of first refusal. None of the Shares were issued in violation of the Securities Act or any other

Legal Requirement, nor does the payment or agreement to pay a portion of the Purchase Price to Mark Monroe, Mark Deal, Katherine Ryback, Jim Hardison and/or any other Person not a Seller violate the Securities Act or any other Legal Requirement. Except as set forth on the Disclosure Schedule, there are no options, warrants, calls, subscriptions, convertible securities, or other rights, agreements, or commitments that obligate the Company to issue, transfer, or sell any shares of capital stock of the Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to the Company. There is no obligation, contingent, or otherwise, of the Company to repurchase, redeem, or otherwise acquire any Shares. There are no voting trusts, proxies, or other agreements to which any Seller is a party with respect to the voting or transfer of any Shares.

     Section 2.4. Financial Statements . Attached on the Disclosure Schedule are copies of (i) the audited balance sheets of the Company for the fiscal years ended as of February 1, 2004, January 30, 2005 and January 29, 2006, and the related audited income statements for the year then ended (the “ Audited Financial Statements ”), and (ii) the unaudited balance sheets of the Company as of October 29, 2006 (the “ Most Recent Balance Sheet ”), and the related unaudited income statements for the nine-month period then ended (the “ Unaudited Financial Statements ”) (the financial statements referred to in clauses (i) and (ii) above, including the notes thereto, if any, the “ Financial Statements ”). The Financial Statements fairly present in all material respects (and the financial statements to be delivered pursuant to Section 4.7 will fairly present in all material respects) the financial condition and results of operations of the Company as at the respective dates of and for the periods referred to in such Financial Statements; provided, however, that the Unaudited Financial Statements are subject to normal year-end adjustments and lack footnotes and other presentation items (which, if presented, would not differ materially from those included in the Audited Financial Statements). The Financial Statements have been prepared from the books and records of the Company (which books and records are accurate and complete in all material respects) in accordance with GAAP and reflect the consistent application of accounting principles throughout the periods involved, except as disclosed in the notes to the Financial Statements.

     Section 2.5. Real Property .

          (a) The Company does not own and has never owned any real property.

          (b) The Disclosure Schedule lists (i) all real property with respect to which the Company holds a leasehold interest or subleasehold interest, or otherwise has a license or other right to use (the “ Leased Real Property ”), and (ii) each agreement, contract, or other arrangement under which the Company leases or otherwise has the right to use any such Leased Real Property (listing, with respect to each such agreement, the names of the parties to the agreement, the address of the Leased Real Property, the rentable square footage and annual rent thereunder and the expiration date). The Seller Parties have delivered to Buyer true, correct and complete copies of each agreement, contract or arrangement under which the Company leases or otherwise has the right to use any such Leased Real Property, including any amendments thereto, assignments thereof and any renewal terms. The Company enjoys peaceful and undisturbed possession of the Leased Real Property. The Company has not entered into any subleases, arrangements, licenses, or other agreements relating to the use or occupancy of all or any portion of the Leased Real Property by any Person other than the Company.

          (c) To the Knowledge of the Company, the Leased Real Property, and the use of the Leased Real Property by the Company for the purposes for which it is currently being used, conforms to all applicable fire, safety, zoning, and building laws and ordinances, laws relating to the disabled, and other applicable Legal Requirements.

     Section 2.6. Personal Property .

          (a) The Company has good and valid title to, or a valid and enforceable right to use under a contract listed in Section 2.15 of the Disclosure Schedule, all property and assets (whether tangible or intangible) used or held for use by the Company in connection with its business, including all such assets reflected in the Most Recent Balance Sheet or acquired since October 29, 2006 (the “ Most Recent Balance Sheet Date ”), free and clear of all Liens other than (i) any Lien for Taxes not yet due and payable, (ii) any landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, or similar Liens arising or incurred in the ordinary course of business with respect to obligations that are not yet due or delinquent, and (iii) any Liens identified on the Disclosure Schedule (the “ Permitted Liens ”).

          (b) Each item of machinery, equipment, furniture, and other tangible personal property used or held for use by the Company in connection with its business is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for the purposes for which it is presently used, and is free from any latent and patent defects. All such tangible personal property is in the possession of the Company.

     Section 2.7. Taxes .

          (a) The Company has timely filed all Tax Returns required to be filed by it in accordance with applicable Legal Requirements, other than any Tax Returns in respect of which the Company has been the beneficiary of any extension of time within which to file any such Tax Returns as disclosed on the Disclosure Schedule. All such Tax Returns are true and complete in all material respects. Except as set forth in the Disclosure Schedule, no such Tax Return has been audited or examined by any taxing authority, court, or other Governmental Authority, and, to the Knowledge of the Company, no such audit or examination is threatened. The Company has not received from any foreign, federal, state, or local taxing authority any (i) notice indicating an intent to open an audit or other review, (ii) request for information related to Tax matters, or (iii) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any taxing authority against the Company. True and complete copies of such Tax Returns for the past three years and any examination reports and statements of deficiencies relating thereto assessed against or agreed to by the Company have been made available to Buyer.

          (b) All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been paid or reserved. All Taxes that the Company is or was required by applicable Legal Requirements to withhold or collect have been withheld or collected, and, to the extent required, have been properly paid on a timely basis to the appropriate Governmental Authority or other Person. The (i) unpaid Taxes of the Company (computed consistent with the Company’s historical accounting principles and practices provided that such principles and practices are consistent with applicable Tax law) do not exceed the reserve for Taxes (rather than any reserve for deferred Taxes established to reflect timing differences between book and tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto), and (ii) the reserve set forth on the Most Recent Balance Sheet represents an accurate estimate of the Taxes due with respect to the periods ended October 29, 2006.

          (c) There is no dispute or claim concerning (i) any Liability of the Company for additional Taxes, or (ii) any obligation of the Company to file Tax Returns or pay Taxes in any jurisdiction in which it does not file Tax Returns or pay Taxes, either (x) claimed or raised by any Governmental Authority in any notice or other communication provided to the Company, or (y) as to which any Seller Party has Knowledge. No assessment or other Proceeding by any taxing authority, court, or other Governmental Authority is pending, or to the Knowledge of the Company, threatened, with

respect to the Taxes or Tax Returns of the Company. There are no Liens for Taxes upon any assets of the Company.

          (d) There are no outstanding agreements, waivers, or arrangements extending the statutory period of limitations applicable to any claim for or the period for the collection or assessment of Taxes due by the Company for any taxable period.

          (e) The Company does not have any liability for Taxes of any Person other than the Company (i) under Treasury Regulations Section 1.1502-6 (or any similar provision of applicable law); or (ii) as a transferee or successor by contract or otherwise. The Company has not been a member of an “affiliated group” within the meaning of Section 1504(a) of the Code. The Company is not a party to any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement, or similar agreement.

          (f) None of the assets of the Company is “tax-exempt use property” within the meaning of Section 168(h) of the Code.

          (g) The Company has not made any payments, is not obligated to make any payments, and is not a party to any agreement that under certain circumstances could obligate it or any successor to make payments, that will not be deductible under Section 280G of the Code (including any payments required to be made in connection with the consummation of the transactions contemplated hereby).

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

          (i) No closing agreement pursuant to Section 7121 of the Code or any similar provision of applicable law has been entered into with respect to the Company or any of its assets.

          (j) There are no joint ventures, partnerships, or other arrangements or contracts to which the Company is a party that could be treated as a partnership for federal income tax purposes.

          (k) The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:

          (i) change in method of accounting for a taxable period ending on or prior to the Closing Date;

          (ii) installment sale or open transaction disposition made on or prior to the Closing Date; or

          (iii) prepaid amount received on or prior to the Closing Date.

          (l) The Company has not distributed stock of another Person, nor had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code; and

          (m) The Company has not participated in any “listed transaction” or “reportable transactions” or “tax shelters” within the meaning of the Code requiring it to file, register, prepare,

produce or maintain any disclosure report, list or any other statement or document under Section 6111 or 6112 of the Code.

     Section 2.8. Employees .

          (a) The Disclosure Schedule sets forth a complete and accurate list of (i) each salaried employee of the Company, including each employee on leave of absence or layoff status, and (ii) each director of the Company, giving, with respect to each such individual, name, job title, current annual salary with the Company, any bonuses paid by the Company in addition to such annual salary since January 1, 2006 and services credited for purposes of vesting and eligibility to participate under any Employee Benefit Plan (in each case, to the extent applicable). Pursuant to written Company policy, all employees of the Company are required to use their vacation and sick days on or before the last day of the fiscal year, and if they do not use such days by such date, the employees will lose all rights with respect thereto and have no right to any payment therefor.

          (b) There is no collective bargaining agreement in effect between the Company and any labor unions or organizations in respect of its employees. The Company has not experienced any organized slowdown, work interruption strike, or work stoppage by its employees, and, to the Knowledge of the Company, there is no strike, labor dispute, or union organization activities pending or threatened affecting the Company.

          (c) The Company is, and at all times has been, in compliance with all Legal Requirements regarding employment and employment practices, terms and conditions of employment, wages and hours, benefits, equal employment opportunity, anti-discrimination, immigration, occupational health and safety, unfair labor practices, and collective bargaining (the “ Employment Matters ”), except where such noncompliance would not have a Material Adverse Effect. Except as set forth in the Disclosure Schedule, since January 1, 2002 (the “ Compliance Date ”), there have been no Proceedings or claims regarding the Employment Matters, whether oral or in writing, by or against the Company or that otherwise relate to or may affect the business of, or any of the assets owned or used by, the Company.

          (d) Except as set forth in the Disclosure Schedule, the Company is not a party to any employment, non-competition, severance, or other contract or agreement with any employee or director of the Company. To the Knowledge of the Company, no employee or director of the Company is bound by any contract or agreement that purports to limit the ability of such director or employee to engage in or continue or perform any conduct, activity, duties, or practice relating to the business of the Company, or that requires the employee to transfer, assign, or disclose information concerning his or her work to anyone other than the Company.

     Section 2.9. Employee Benefits .

          (a) The Disclosure Schedule lists all employment, consulting, executive compensation, bonus, deferred compensation, incentive compensation, stock purchase, stock option or other equity-based, retention, change in control, severance or termination pay, hospitalization or other medical, life, disability, dental, vision or other insurance, supplemental unemployment benefits, profit-sharing, pension or retirement plans, programs, agreements or arrangements, and each other fringe or other employee benefit plan, program, agreement or arrangement (including any “employee benefit plan,” within the meaning of Section 3(3) of ERISA), sponsored, maintained, or contributed to or required to be contributed to by the Company or by any ERISA Affiliate for the benefit of any employee or former employee of the Company, or any beneficiaries thereof, or with respect to which the Company or any ERISA Affiliate may have any Liability (the “ Employee Benefit Plans ”).

          (b) Each Employee Benefit Plan is and has been maintained and administered in compliance with its terms and with the applicable requirements of ERISA, the Code, and any other applicable Legal Requirements. The Company has timely segregated or transferred all employee contributions and paid all other contributions, premiums, and expenses payable to or in respect of each Employee Benefit Plan under the terms thereof and in accordance with the Code, ERISA, and other applicable Legal Requirements. Neither the Company, nor, to the Knowledge of the Company, any other Person, has engaged in any transaction with respect to any Employee Benefit Plan that would be reasonably likely to subject the Company or Buyer to any Tax or penalty (civil or otherwise) imposed by ERISA, the Code, or other applicable Legal Requirements.

          (c) With respect to each Employee Benefit Plan, the Company has delivered to Buyer complete copies of each of the following documents: (i) a copy of each Employee Benefit Plan (including any amendments thereto); (ii) a copy of the three most recent Form 5500 and annual report, if any, required under ERISA or the Code; (iii) a copy of the three most recent nondiscrimination reports, if any, required under the Code; (iv) a copy of the most recent Summary Plan Description and any related summary of material modification, if any, required under ERISA; (v) if the Employee Benefit Plan is funded through a trust or any third party funding vehicle, a copy of the trust or other funding agreement (including any amendments thereto); and (vi) if the Employee Benefit Plan is intended to be qualified under Section 401(a) of the Code, the most recent determination letter received from the Internal Revenue Service.

          (d) No Employee Benefit Plan is a “multiemployer plan,” as such term is defined in Section 3(37) of ERISA or a plan that is subject to Title IV of ERISA, and neither the Company nor any ERISA Affiliate has at any time contributed to, maintained, or incurred any liability with respect to such a plan.

          (e) None of the Employee Benefit Plans that are “welfare benefit plans,” within the meaning of Section 3(1) of ERISA, provide for continuing benefits or coverage after termination or retirement from employment, except for COBRA rights under a “group health plan” as defined in Section 4980B(g) of the Code and Section 607 of ERISA.

          (f) Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a determination from the Internal Revenue Service that it is so qualified and there are no facts or circumstances that would be reasonably likely to adversely affect the qualified status of any such Employee Benefit Plan.

          (g) Except as set forth in the Disclosure Schedule, the consummation of the transactions contemplated hereby will not (i) result in an increase in or accelerate the vesting of any of the benefits available under any Employee Benefit Plan, or (ii) otherwise entitle any current or former director or employee of the Company to any severance pay, bonus payments, or other payment from the Company.

          (h) There are no pending or, to the Knowledge of the Company, threatened Proceedings that have been asserted relating to any Employee Benefit Plan by any employee or beneficiary covered under any Employee Benefit Plan or otherwise involving any Employee Benefit Plan (other than routine claims for benefits), and neither the Company, any ERISA Affiliate, nor any other Person has engaged in a nonexempt prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code. No examination or audit of any Employee Benefit Plan by any Governmental Authority is currently in progress or, to the Knowledge of the Company, threatened. The Company is not a party to any agreement or understanding with the Pension Benefit Guaranty Corporation, the Internal Revenue Service, or the Department of Labor.

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     Section 2.10. Compliance with Legal Requirements . Except as set forth on the Disclosure Schedule, the Company is, and at all times has been, in compliance with all Legal Requirements, including any Legal Requirements related to escheat laws, that are or were applicable to the operation of its business or the ownership or use of any of its assets, except where such non-compliance could not have a Material Adverse Effect. The Company has not received, at any time since the Compliance Date, any notice or other communication from any Governmental Authority or other Person regarding any actual, alleged, or potential violation of or failure to comply with any Legal Requirement.

     Section 2.11. Governmental Authorizations . Each Governmental Authorization of the Company is valid and in full force and effect except where the failure to be in full force and effect could not be expected to have a Material Adverse Effect. Except as set forth on the Disclosure Schedule, the Company is, and at all times since the Compliance Date, has been, in compliance with each such Governmental Authorization except where the failure to be in compliance could not be expected to have a Material Adverse Effect. Except as set forth on the Disclosure Schedule, the Company has not received, at any time since the Compliance Date, any notice or other communication from any Governmental Authority or other Person regarding (a) any actual, alleged, or potential violation of or failure to comply with any term or requirement of any such Governmental Authorization, or (b) any actual, proposed, or potential revocation, suspension, cancellation or termination of, or modification to, any such Governmental Authorization. The Company has all of the Governmental Authorizations necessary to permit the Company to lawfully conduct and operate its business in the manner it is currently conducted except where the failure to have such authorizations could not reasonably be expected to have a Material Adverse Effect.

     Section 2.12. Legal Proceedings; Orders .

          (a) Except as set forth in the Disclosure Schedule, there are no pending Proceedings or claims, whether oral or in writing, (i) by or against the Company or that otherwise relate to or may affect the business of, or any of the assets owned or used by, the Company, or (ii) that challenge, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated hereby. To the Knowledge of the Company, no such Proceeding or claim, whether oral or in writing, has been threatened, and no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding or claim. Except as set forth in the Disclosure Schedule, there have not been any orders, judgments, or decrees rendered against, or any settlements effected by, the Company in connection with any Proceedings or claims, whether oral or in writing, brought by or against the Company, or that otherwise relate to or may affect the business of, or any of the assets owned or used by, the Company.

          (b) There are no Orders outstanding (i) against the Company; or (ii) to the Company’s Knowledge, that challenge, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated hereby. To the Knowledge of the Company, no such Order has been threatened, and no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Order.

     Section 2.13. Environmental Matters .

          (a) To the Knowledge of the Company, the Company is and has been in compliance with all Environmental Laws, and does not have any Liability under any Environmental Laws with respect to the Leased Real Property or any other properties and assets (whether real, personal, or mixed) in which the Company (or any predecessor) has or at any time has had an interest, except in each case as could not have a Material Adverse Effect.

          (b) To the Knowledge of the Company, there are no Hazardous Materials present on or in the environment at the Leased Real Property or any properties in which the Company has had at any time an interest except as could not have a Material Adverse Effect. To the Knowledge of the Company, there has been no emission, disposal, discharge, or other release or, to the Knowledge of the Company, threat of release, of any Hazardous Materials at or from the Leased Real Property or any properties in which the Company has had at any time an interest or, during the period of the Company’s ownership or lease thereof, at, on, under, or from any property formerly owned or leased by the Company.

          (c) The Company has not received any citation, notice, or other communication from any Governmental Authority regarding any alleged, actual, or potential violation of any Environmental Law relating to the Leased Real Property or any properties in which the Company has had at any time an interest, or any alleged, actual, or potential obligation to undertake or bear the cost of any Liabilities under any Environmental Law relating to the Leased Real Property or any properties in which the Company has had at any time an interest.

     Section 2.14. Insurance . The Disclosure Schedule contains a true and complete list and summary (including coverage amounts) of (a) all policies of property, fire, and casualty, products liability, workers’ compensation, and other forms of insurance under which any of the assets or properties of the Company are covered or otherwise relating to the business of the Company, and (b) all life insurance policies covering the life of any employee of the Company for which the Company or any employee of the Company has paid any premiums. Such policies are in full force and effect, and the Company or such employee has paid all premiums due, and has otherwise performed all of its obligations under, all such policies of insurance. Neither the Company nor any employee of the Company has received any notice of (a) cancellation or intent to cancel, or (b) an increase or intent to increase premiums with respect to such insurance policies, and is not aware of any basis for any such action. None of the policies identified on the Disclosure Schedule provides for retrospective premium adjustment. The Disclosure Schedule identifies all risks that the Company has designated as being self-insured and the amount of reserves set aside by the Company to cover such risks. True and complete copies of such insurance policies have been delivered to Buyer.

     Section 2.15. Contracts .

          (a) Section 2.15(a) of the Disclosure Schedule lists each contract, agreement, or other commitment to which the Company is a party or by which the Company is otherwise bound, involving payments to or from the Company in the aggregate amount exceeding $10,000, excluding the agreements disclosed in Sections 2.5(b), 2.8(d), and 2.16(c) of the Disclosure Schedule (such contracts, agreements, and obligations, together with the agreements disclosed in the aforesaid sections of this Agreement (the “ Applicable Contracts ”):

          (b) Except as set forth in the Disclosure Schedule:

          (i) Each Applicable Contract is valid and binding and in full force and effect.

          (ii) The Company and, to the Knowledge of the Company, each other party to any Applicable Contract is, and at all times has been, in compliance with all applicable terms and requirements of each Applicable Contract.

          (iii) The Company has not given to, or received from, any other party to any Applicable Contract, any notice or other communication regarding any actual or alleged breach of

or default under any Applicable Contract by the Company or any other party to such Applicable Contract.

          (c) True and complete copies of each of the Applicable Contracts have been delivered to Buyer.

     Section 2.16. Intellectual Property .

          (a) The term “ Intellectual Property Assets ” means all intellectual property owned, licensed (as licensor or licensee), or used by the Company, including:

          (i) the Company’s name, all fictional business names, trade names, trade dress, registered and unregistered trademarks, registered and unregistered service marks, and applications for any of the foregoing (collectively, “ Marks ”);

          (ii) all patents, patent applications, and inventions and discoveries that may be patentable or unpatentable worldwide (collectively, “ Patents ”);

          (iii) all registered and unregistered copyrights in both published works and unpublished works, and copyright applications (collectively, “ Copyrights ”);

          (iv) all rights in Internet web sites and Internet domain names (collectively, “ Internet Rights ”);

          (v) all computer software (excluding off-the-shelf software components licensed to the Company pursuant to non-negotiable standard form, mass-market, or “shrink wrap” licenses involving payments of less than $3,000 on an annual basis) (the “ Software ”);

          (vi) all confidential or proprietary know-how, information, customer lists, technical information, data, process technology, plans, drawings, and blue prints pertaining to the business of the Company and maintained by the Company as trade secrets (collectively, “ Trade Secrets ”); and

          (vii) all general know-how, business information, customer and supplier lists, technical information, data processing technology, plans, drawings, and blue prints pertaining to the business of the Company but which are not Trade Secrets (collectively, “ Business Knowledge ”).

          (b) The Disclosure Schedule contains a true and complete list of the Intellectual Property Assets (other than Trade Secrets and Business Knowledge) in each case listing, as applicable, (i) the title of the application or registration, (ii) the name of the applicant/registrant and current owner, (iii) the jurisdiction where the application/registration is located, (iv) the application or registration number, (v) filing date, and (vi) whether each such Intellectual Property Asset is owned or licensed. Prior to the date of this Agreement, the Company has provided Buyer with specimens showing the use of each Mark in commerce.

          (c) The Disclosure Schedule contains a true and complete list of agreements and contracts under which the Company licenses any Intellectual Property Assets (as a licensor or licensee). To the Knowledge of the Company, the Intellectual Property Assets constitute all of the intellectual property necessary to the conduct of the Company’s business as currently conducted. The Company has good and valid title to, or a valid and enforceable right to use under an agreement listed in the Disclosure

Schedule, each of the Intellectual Property Assets, free and clear of all Liens. The Company has the right to use without payment to a third party each of the Intellectual Property Assets, other than any payment required under any agreement listed in the Disclosure Schedule. Neither this Agreement nor the transactions contemplated by this Agreement, including the assignment to Buyer by operation of law or otherwise of any contracts or agreements to which the Company is a party, will result in (i) Buyer granting to any Person any right to or with respect to any Intellectual Property Assets; or (ii) Buyer being bound by, or subject to, any non-compete or other restriction on the operation or scope of its business.

          (d) To the Knowledge of the Company, none of the Intellectual Property Assets is infringed by any patent, proprietary right, trade name, trademark, trade dress, service mark, copyright, domain name, or other intellectual property or proprietary right of any other Person or, to the Knowledge of the Company, has been challenged or threatened in any way. None of the Intellectual Property Assets infringes or interferes with or is alleged to infringe or interfere with any patent, trade name, trademark, trade dress, service mark, copyright, domain name or other intellectual property right of any other Person, or misappropriates any trade secret or proprietary rights of any other Person.

          (e) There are no pending or, to the Knowledge of the Company, threatened Proceedings asserting that any of the Intellectual Property Assets is infringed by the intellectual property rights of any other Person or that any of the Intellectual Property Assets infringes or interferes with any intellectual property or proprietary rights of any other Person, or otherwise relating to the Intellectual Property Assets.

          (f) All Patents, Marks, and Copyrights that have been registered, and all Internet Rights, are in compliance in all material respects with all formal Legal Requirements (including the payment of any required maintenance fees), and are valid and enforceable.

          (g) The Company has taken all commercially reasonable precautions to protect the secrecy, confidentiality, and value of all Trade Secrets. The Trade Secrets are not part of the public knowledge or literature, and the Trade Secrets have not been used, divulged, or appropriated either for the benefit of any Person (other than the Company) or to the detriment of the Company. The Business Knowledge has not been appropriated either for the benefit of any Person (other than the Company) or to the detriment of the Company.