STOCK PURCHASE AGREEMENT DATED 2/16/04

Stock Purchase Agreement

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SCS TRANSPORTATION INC

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Title: STOCK PURCHASE AGREEMENT DATED 2/16/04
Governing Law: Nebraska Date: 2/25/2004
Industry: Trucking Sector: Transportation

STOCK PURCHASE AGREEMENT DATED 2/16/04, Parties: scs transportation inc

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EXHIBIT 10.12

STOCK PURCHASE AGREEMENT

AMONG

SAIA MOTOR FREIGHT LINE, INC.

AND

JAMES D. CLARK

JANICE A. CLARK

AMY L. HUNT

G. J. DEYONGE

AND

STUART W. KUTLER TRUST UNDER TRUST AGREEMENT DATED JANUARY 28, 1998

February 16, 2004

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TABLE OF CONTENTS

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1. Definitions....................................................................................... 1

2. Purchase and Sale of Company Shares............................................................... 8

(a) Purchase Price.............................................................................. 8

(b) Payment..................................................................................... 8

(d) Deliveries at the Closing................................................................... 8

3. Representations and Warranties Concerning the Transaction......................................... 8

(a) Representations and Warranties of the Sellers............................................... 8

(b) Representations and Warranties of the Buyer................................................. 9

4. Representations and Warranties Concerning the Company............................................. 10

(a) Organization, Qualification, and Corporate Power............................................ 11

(b) Capitalization.............................................................................. 11

(d) Brokers' Fees............................................................................... 12

(e) Title to Assets............................................................................. 12

(f) Subsidiaries................................................................................ 12

(g) Financial Statements........................................................................ 12

(h) Books and Records........................................................................... 12

(i) Events Subsequent to October 1, 2003........................................................ 13

(j) Undisclosed Liabilities..................................................................... 14

(k) Business Practices.......................................................................... 15

(l) Legal Compliance............................................................................ 15

(m) Tax Matters................................................................................. 15

(n) Real Property............................................................................... 17

(o) Intellectual Property....................................................................... 20

(p) Tangible Assets............................................................................. 22

(q) Inventory................................................................................... 22

(r) Contracts................................................................................... 22

(s) Notes and Accounts Receivable............................................................... 24

(t) Powers of Attorney.......................................................................... 24

(u) Insurance................................................................................... 24

(v) Litigation.................................................................................. 24

(w) Labor Matters............................................................................... 25

(x) Employee Benefits........................................................................... 25

(y) Guaranties.................................................................................. 28

(z) Environmental Matters....................................................................... 28

(aa) Certain Business Relationships With the Company............................................. 30

(bb) Contractors................................................................................. 30

(cc) Customer Relations.......................................................................... 30

(dd) Bank Accounts............................................................................... 31

(ee) No Additional Representations and Warranties................................................ 31

5. Post Closing Covenants............................................................................ 31

(a) General..................................................................................... 31

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(b) Litigation Support.......................................................................... 32

(d) Confidentiality............................................................................. 32

(e) Miscellaneous............................................................................... 32

(f) Payment of Indebtedness..................................................................... 34

6. Deliveries at Closing............................................................................. 34

(a) Sellers' Deliveries at Closing.............................................................. 34

(b) Buyer's Deliveries at Closing............................................................... 36

7. Remedies for Breaches of this Agreement........................................................... 36

(a) Survival of Representations and Warranties.................................................. 37

(b) Time Limitations............................................................................ 37

(d) Indemnification Provisions for Benefit of the Sellers....................................... 39

(e) Calculation of Adverse Consequences; Limitations on Indemnity Obligations................... 40

(f) Right to Set off; Escrow.................................................................... 42

(g) Matters Involving Third Parties............................................................. 42

(h) Other Indemnification Provisions............................................................ 44

8. Tax Matters....................................................................................... 44

(a) Tax Filings................................................................................. 44

(b) Section 338(h)(10) Election................................................................. 45

(d) S Corporation Status........................................................................ 46

(e) Cooperation on Tax Matters.................................................................. 46

(f) Tax Sharing Agreements...................................................................... 47

(g) Certain Taxes and Fees...................................................................... 47

9. Miscellaneous..................................................................................... 47

(a) Nature of Certain Obligations............................................................... 47

(b) Press Releases and Public Announcements..................................................... 47

(d) Entire Agreement............................................................................ 48

(e) Succession and Assignment................................................................... 48

(f) Counterparts................................................................................ 48

(g) Headings.................................................................................... 48

(h) Notices..................................................................................... 48

(i) Governing Law............................................................................... 49

(j) Amendments and Waivers...................................................................... 49

(k) Equitable Modification...................................................................... 49

(l) Expenses.................................................................................... 49

(m) Construction................................................................................ 50

(n) Incorporation of Exhibits, Annexes, and Schedules........................................... 50

(o) Specific Performance........................................................................ 50

(p) Submission to Jurisdiction.................................................................. 50

(q) Arbitration................................................................................. 51

(r) Appointment of Sellers' Representative...................................................... 52

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EXECUTION COPY

STOCK PURCHASE AGREEMENT

This Agreement (the "Agreement") entered into on February 16,

2004, by and among Saia Motor Freight Line, Inc., a Louisiana corporation (the

"Buyer") and James D. Clark, Janice A. Clark, Amy L. Hunt, G. J. DeYonge and the

Stuart W. Kutler Trust Under Trust Agreement dated January 28, 1998

(collectively the "Sellers"). The Buyer and the Sellers are referred to

collectively herein as the "Parties".

The Sellers in the aggregate own all of the outstanding

capital stock of Clark Bros. Transfer, Inc., a Nebraska corporation (the

"Company").

This Agreement contemplates a transaction in which the Buyer

will purchase from the Sellers, and the Sellers will sell to the Buyer, all of

the outstanding capital stock of the Company in return for cash and a promissory

note.

NOW, THEREFORE, in consideration of the premises and the

mutual promises herein made, and in consideration of the representations,

warranties, and covenants herein contained, the Parties agree as follows.

1. Definitions.

"AAA" has the meaning set forth in Section 9(q) below.

"Accredited Investor" has the meaning set forth in Regulation

D promulgated under the Securities Act.

"Adverse Consequences" means all actions, suits, proceedings,

hearings, investigations, charges, complaints, claims, demands, injunctions,

judgments, orders, decrees, rulings, damages (excluding, except as otherwise

provided in this Agreement, incidental, consequential, special, enhanced and

punitive damages) dues, diminution in value, penalties, fines, costs (including

costs of investigation and defense, court costs and attorneys' fees, Costs and

Fees and Arbitration Expenses), amounts paid in settlement, liabilities,

obligations, Taxes, liens, losses, expenses and fees.

"Affiliate" has the meaning set forth in Rule 12b-2 of the

regulations promulgated under the Securities Exchange Act.

"Affiliated Group" means any affiliated group within the

meaning of Code Section 1504(a) or any similar group defined under a similar

provision of state, local, or foreign law.

"Agreement" has the meaning set forth in the preface above.

"Arbitrable Dispute" has the meaning set forth in Section 9(q)

below.

"Arbitration Expenses" has the meaning set forth in Section

9(q) below.

"Arbitrators" has the meaning set forth in Section 9(q) below.

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"Basket" has the meaning set forth in Section 7(e) below.

"Buyer" has the meaning set forth in the preface above.

"Capitalized Lease" means a lease under which the obligations

of the lessee should, in accordance with GAAP consistently applied, be included

in determining total liabilities as shown on the liability side of a balance

sheet of the lessee.

"Capitalized Lease Obligations" means the amount of the

liability reflecting the aggregate discounted amount of future payments under

all Capitalized Leases calculated in accordance with GAAP consistently applied

and Statement of Financial Accounting Standards No. 13.

"Closing" has the meaning set forth in Section 2(c) below.

"Closing Date" has the meaning set forth in Section 2(c)

below.

"COBRA" means the requirements of Part 6 of Subtitle B of

Title I of ERISA and Code Section 4980B and of any similar state law.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company" has the meaning set forth in the preface above.

"Company Retained Property" has the meaning set forth in

Section 5(g) below.

"Company Share" means any issued and outstanding share of the

capital stock of the Company.

"Confidential Information" means any information concerning

the businesses and affairs of the Company that is not generally available to the

public (other than through a breach of a confidentiality obligation or similar

obligation owed to the Company).

"Controlled Groups" has the meaning set forth in Code Section

1563.

"Conveyed Property" has the meaning set forth in Section 5(g)

below.

"Costs and Fees" has the meaning set forth in Section 9(q)

below.

"Covered Breach" has the meaning set forth in Section 7(e)

below.

"Disclosure Schedule" has the meaning set forth in Section 4

below.

"EBITDA Claim Basket" has the meaning set forth in Section

7(e) below.

"EBITDA Reduction Claim" has the meaning set forth in Section

7(e) below.

"Employee Benefit Plan" means any "employee benefit plan" (as

such term is defined in ERISA Section 3(3)) and any other employee benefit plan,

program or arrangement of any

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kind.

"Employee Pension Benefit Plan" has the meaning set forth in

ERISA Section 3(2).

"Employee Welfare Benefit Plan" has the meaning set forth in

ERISA Section 3(1).

"Employment Agreement" has the meaning set forth in Section

6(a) below.

"Environmental Law" means any applicable laws (including

rules, regulations, codes, plans, injunctions, judgments, orders, decrees,

rulings and charges thereunder) as enacted and in effect on or prior to the

Closing Date relating to the protection of health or the environment, including

without limitation: the Clean Air Act, the Federal Water Pollution Control Act,

the Resource Conservation and Recovery Act, the Comprehensive Environmental

Response, Compensation and Liability Act, the Toxic Substance Control Act, any

comparable state or foreign law, and the common law, including the law of

nuisance and strict liability.

"Environmental Permits" means all permits, registrations,

approvals, licenses, filings and submissions to any governmental body or other

authority required by or made by or on behalf the Company under or pursuant to

any Environmental Law.

"Environmental Property" means any assets or property

currently or previously owned, leased, operated or used by the Company.

"EPA" means the United States Environmental Protection Agency.

"ERISA" means the Employee Retirement Income Security Act of

1974, as amended.

"ERISA Affiliate" means each entity which is treated as a

single employer with the Company for purposes of Code Section 414.

"Escrow Agent" means Wells Fargo Bank, N.A.

"Escrow Agreement" means that certain Escrow Agreement dated

as of the Closing Date among Buyer, certain of the Sellers and the Escrow Agent.

"Excepted Real Property" has the meaning set forth in Section

4(z) below.

"Fiduciary" has the meaning set forth in ERISA Section 3(21).

"Financial Statements" has the meaning set forth in Section

4(g) below.

"GAAP" means United States generally accepted accounting

principles as in effect from time to time.

"Hazardous Materials" shall mean pollutants, contaminants,

hazardous substances, hazardous chemicals, toxic substances, hazardous wastes,

infectious wastes, radioactive materials, petroleum including crude oil or any

fraction thereof, asbestos fibers, or

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solid wastes or other hazardous materials, including without limitation those

defined in any Environmental Law.

"HIPAA" means the Health Insurance Portability and

Accountability Act of 1996, as amended.

"Improvements" has the meaning set forth in Section 4(n)

below.

"Income Tax" means any federal, state, local, or foreign

income tax, including any interest, penalty, or addition thereto, whether

disputed or not.

"Income Tax Return" means any return, declaration, report,

claim for refund, or information return or statement relating to Income Taxes,

including any schedule or attachment thereto, and including any amendment

thereof.

"Indebtedness" means at a particular time, without

duplication: (a) any indebtedness for borrowed money or issued in substitution

for or exchange of indebtedness for borrowed money, (b) any indebtedness

evidenced by any note, bond, debenture or other debt instrument; (c) any

indebtedness for the deferred purchase price of property or services with

respect to which a Person is liable, contingently or otherwise, as obligor or

otherwise, (d) any commitment by which a Person assures a creditor against loss

(including, without limitation, contingent reimbursement obligations with

respect to letters of credit), (e) any obligations for which a Person is

obligated pursuant to a guarantee, (f) any obligations under Capitalized Lease

Obligations with respect to which a Person is liable, contingently or otherwise,

as obligor, guarantor or otherwise, or with respect to which obligations a

Person assures a creditor against loss; (g) any indebtedness secured by a

Security Interest on a Person's assets, (h) any unsatisfied obligation for

Withdrawal Liability to a Multiemployer Plan, (i) all indebtedness of a Person

for which such Person may become liable as a fiduciary or otherwise and (j) all

costs (including prepayment penalties) that would be due as a result of the

payment of any such indebtedness at Closing; provided, however, that all current

liabilities of a Person other than current liabilities attributable to the

current portion of such Person's long term debt shall not be included in the

definition of Indebtedness.

"Indemnified Persons" has the meaning set forth in Section

7(c) below.

"Independent Third Party" means a nationally recognized law

firm or any of the following accounting firms or their successors: Ernst & Young

LLP, KPMG LLP, Deloitte & Touche LLP and PricewaterhouseCoopers LLP.

"Intellectual Property" means all of the following in any

jurisdiction throughout the world: (a) all inventions (whether patentable or

unpatentable and whether or not reduced to practice), all improvements thereto,

and all patents, patent applications, and patent disclosures, together with all

reissuances, continuations, continuations in part, revisions, extensions, and

reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,

slogans, trade names, corporate names, Internet domain names, and rights in

telephone numbers, together with all translations, adaptations, derivations, and

combinations thereof and including all goodwill associated therewith, and all

applications, registrations, and renewals in connection therewith, (c)

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all copyrightable works, all copyrights, and all applications, registrations,

and renewals in connection therewith, (d) all mask works and all applications,

registrations, and renewals in connection therewith, (e) all trade secrets and

confidential business information (including ideas, research and development,

know how, formulas, compositions, manufacturing and production processes and

techniques, technical data, designs, drawings, specifications, customer and

supplier lists, pricing and cost information, and business and marketing plans

and proposals), (f) all computer software (including source code, executable

code, data, databases and related documentation), (g) all material advertising

and promotional materials, (h) all other proprietary rights, and (i) all copies

and tangible embodiments thereof (in whatever form or medium).

"IRS" means the Internal Revenue Service.

"Knowledge" means actual knowledge after reasonable

investigation. For purposes of determining whether any Seller has conducted a

reasonable investigation, if such Seller has made inquiry of the officers and

directors of the Company, the investigation shall be deemed to be reasonable

without need for further verification.

"Lease Consents" has the meaning set forth in Section 6(a)

below.

"Leased Real Property" means all leasehold or subleasehold

estates and other rights to use or occupy any land, buildings, structures,

improvements, fixtures or other interest in real property held by the Company.

"Leases" means all leases, subleases, licenses, concessions

and other agreements (written or oral), including all amendments, extensions,

renewals, guaranties and other agreements with respect thereto, pursuant to

which the Company holds any Leased Real Property.

"Most Recent Balance Sheet" means the balance sheet contained

within the Most Recent Financial Statements.

"Most Recent Financial Statements" has the meaning set forth

in Section 4(g) below.

"Most Recent Fiscal Period End" has the meaning set forth in

Section 4(g) below.

"Multiemployer Plan" has the meaning set forth in ERISA

Section 3(37).

"Non-Compete Agreements" has the meaning set forth in Section

6(a) below.

"Ordinary Course of Business" means, with respect to the

business of the Company, only the ordinary course of commercial operations

customarily engaged in by the Company consistent with industry norms and the

Company's prior practices, and specifically does not include (a) any activity

(i) involving the purchase or sale of the Company or of any product line or

business unit of the Company, (ii) involving modification or adoption of any

Employee Benefit Plan or (iii) which requires approval by the board of directors

or shareholders of the Company, or (b) the incurrence of any liability for any

tort or any breach or violation of or default under any contract or applicable

law.

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"Owned Real Property" means all land, together with all

buildings, structures, improvements and fixtures located thereon, and all

easements and other rights and interests appurtenant thereto, owned by any of

the Company.

"Party" has the meaning set forth in the preface above.

"PBGC" means the Pension Benefit Guaranty Corporation.

"Permitted Encumbrances" means with respect to each parcel of

Real Property: (a) real estate taxes, assessments and other governmental levies,

fees or charges imposed with respect to such Real Property which are not due and

payable as of the Closing Date, or which are being contested in good faith and

for which appropriate reserves have been established in accordance with GAAP;

(b) mechanics liens and similar liens for labor, materials or supplies provided

with respect to such Real Property incurred in the ordinary course of business

for amounts which are not due and payable and which would not, individually or

in the aggregate, have a material adverse effect on the business of the Company

as currently conducted thereon; (c) zoning, building codes and other land use

laws regulating the use or occupancy of such Real Property or the activities

conducted thereon which are imposed by any governmental authority having

jurisdiction over such Real Property which are not violated by the current use

or occupancy of such Real Property or the operation of the business of the

Company as currently conducted thereon; (d) easements, covenants, conditions,

restrictions and other similar matters of record affecting title to such Real

Property which do not or would not materially impair the use or occupancy of

such Real Property in the operation of the business of the Company as currently

conducted thereon; and (e) any Security Interests in existence on the Closing

Date securing the Indebtedness of the Company disclosed on the Most Recent

Balance Sheet; and (f) minor imperfections which do not materially detract from

the value, or interfere with the present use, of the property subject thereto or

affected thereby.

"Person" means an individual, a partnership, a corporation, a

limited liability company, an association, a joint stock company, a trust, a

joint venture, an unincorporated organization, or a governmental entity (or any

department, agency, or political subdivision thereof).

"Prohibited Transaction" has the meaning set forth in ERISA

Section 406 and Code Section 4975.

"Purchase Price" has the meaning set forth in Section 2(a)

below.

"Real Property" has the meaning set forth in Section 4(n)

below.

"Real Property Laws" has the meaning set forth in Section 4(n)

below.

"Reportable Event" has the meaning set forth in ERISA Section

4043.

"S Corporation Sale" has the meaning set forth in Section 8(b)

below.

"Section 338(h)(10) Election" has the meaning set forth in

Section 8(b) below.

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"Section 338(h)(10) Gross-Up" has the meaning set forth in

Section 8(b) below.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of

1934, as amended.

"Security Interest" means any mortgage, pledge, lien,

encumbrance, charge, or other security interest, other than (a) mechanic's,

materialmen's, and similar liens, (b) liens for taxes not yet due and payable,

Leases, and (d) other liens arising in the Ordinary Course of Business and not

incurred in connection with the borrowing of money.

"Sellers" has the meaning set forth in the preface above.

"Subject Documents" has the meaning set forth in Section 9(r)

below.

"Subsidiary" means, with respect to any Person, any

corporation, limited liability company, partnership, association or other

business entity of which: (a) if a corporation, a majority of the total voting

power of shares of stock entitled (without regard to the occurrence of any

contingency) to vote in the election of directors, managers or trustees thereof

is at the time owned or controlled, directly or indirectly, by that Person or

one or more of the other Subsidiaries of that Person or a combination thereof,

or (b) if a limited liability company, partnership, association or other

business entity, a majority of the partnership or other similar ownership

interest thereof is at the time owned or controlled, directly or indirectly, by

any Person or one or more Subsidiaries of that Person or a combination thereof.

For purposes hereof, a Person or Persons shall be deemed to have a majority

ownership interest in a limited liability company, partnership, association or

other business entity if such Person or Persons shall be allocated a majority of

limited liability company, partnership, association or other business entity

gains or losses or shall be or control (or have the power to be or control) a

managing director, manager or general partner of such limited liability company,

partnership, association or other business entity.

"Tax" means any federal, state, local, or foreign income,

gross receipts, license, payroll, employment, excise, severance, stamp,

occupation, premium, windfall profits, environmental (including taxes under Code

Section 59A), customs duties, capital stock, franchise, profits, withholding,

social security (or similar), unemployment, disability, real property, personal

property, sales, use, transfer, registration, value added, alternative or add on

minimum, estimated, or other tax of any kind whatsoever, including any interest,

penalty, or addition thereto, whether disputed or not.

"Tax Return" means any return, declaration, report, claim for

refund, or information return or statement relating to Taxes, including any

schedule or attachment thereto, and including any amendment thereof.

"WARN Act" has the meaning set forth in Section 4(w) below.

"Withdrawal Liability" means, at any time, the aggregate

amount of the liabilities,

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if any, pursuant to Section 4201 of ERISA, and any increase in contributions

pursuant to Section 4243 of ERISA with respect to all Multiemployer Plans to

which the Company makes, is making, or is obligated to make contributions on

behalf of participants who are or were employed by any of them or to which such

Person has any current or potential liability.

2. Purchase and Sale of Company Shares.(a) On and

subject to the terms and conditions of this Agreement, the Buyer agrees

to purchase from each of the Sellers, and each of the Sellers agrees to

sell to the Buyer, all of his or her Company Shares for the

consideration specified below in this Section 2.

(a) Purchase Price. The purchase price for the

Company Shares shall be an amount equal to $21,684,241 (the "Purchase

Price").

(b) Payment. Subject to the terms and conditions

of this Agreement, the Purchase Price shall be paid by Buyer as

follows:

(i) $2,500,000 payable by wire transfer

of immediately available funds on the day after the Closing

Date to the Escrow Agent to be held pursuant to the terms of

the Escrow Agreement;

(ii) $6,200,000 by the issuance by the

Buyer on the Closing Date of its promissory note which shall

be guaranteed by SCS Transportation, Inc., a Delaware

corporation, substantially in the form attached hereto as

Exhibit A; and

(iii) the balance on the day after the

Closing Date by wire transfer of immediately available funds

to an account designated by the Sellers.

contemplated by this Agreement (the "Closing") shall take place at the

offices of Koley Jessen P.C. in Omaha, Nebraska, commencing at 1:00

p.m. local time on February 16, 2004 or such other date as the Buyer

and the Sellers may mutually determine (the "Closing Date").

(d) Deliveries at the Closing. At the Closing,

(i) the Sellers will deliver to the Buyer the various certificates,

instruments, and documents referred to in Section 6(a) below, (ii) the

Buyer will deliver to the Sellers the various certificates,

instruments, and documents referred to in Section 6(b) below, (iii)

each of the Sellers will deliver to the Buyer stock certificates

representing all of such Sellers' Company Shares, endorsed in blank or

accompanied by duly executed assignment documents, and (iv) the Buyer

will deliver to the Sellers and the Escrow Agent the consideration

specified in Section 2(b) above.

3. Representations and Warranties Concerning the

Transaction.

(a) Representations and Warranties of the

Sellers. Each of the Sellers represents and warrants to the Buyer that

the statements contained in this Section 3(a) are correct and complete

as of the Closing Date with respect to such Seller, except as set forth

in Annex I attached hereto. Nothing in Annex I shall be deemed adequate

to disclose an exception to a representation or warranty made herein,

however, unless Annex I identifies the exception with reasonable

particularity and describes the relevant

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facts in detail. Annex I will be arranged in paragraphs corresponding

to the lettered and numbered paragraphs contained in this Section 3(a).

(i) Authorization of Transaction. The

Seller has full power and authority to execute and deliver

this Agreement and to perform such Seller's obligations

hereunder. This Agreement constitutes the valid and legally

binding obligation of the Seller, enforceable in accordance

with its terms and conditions, subject to applicable

bankruptcy, insolvency, reorganization, moratorium or similar

laws affecting creditors' rights generally and to general

principles of equity, regardless of whether enforcement is

sought in a proceeding at law or in equity. The Seller need

not give any notice to, make any filing with, or obtain any

authorization, consent, or approval of any government or

governmental agency in order to consummate the transactions

contemplated by this Agreement.

(ii) Noncontravention. Neither the

execution and the delivery of this Agreement, nor the

consummation of the transactions contemplated hereby, will (A)

violate any constitution, statute, regulation, rule,

injunction, judgment, order, decree, ruling, charge, or other

restriction of any government, governmental agency, or court

to which the Seller is subject or (B) conflict with, result in

a breach of, constitute a default under, result in the

acceleration of, create in any party the right to accelerate,

terminate, modify, or cancel, or require any notice under any

agreement, contract, lease, license, instrument, or other

arrangement to which the Seller is a party or by which such

Seller is bound or to which any of his or her assets is

subject (or result in the imposition of any Security Interest

upon any of such Seller's assets, including, without

limitation, any Company Shares).

(iii) Brokers' Fees. The Seller has no

liability or obligation to pay any fees or commissions to any

broker, finder, or agent with respect to the transactions

contemplated by this Agreement for which the Buyer or the

Company could become liable or obligated.

(iv) Company Shares. The Seller holds of

record and owns beneficially the number of Company Shares set

forth next to such Seller's name in Section 4(b) of the

Disclosure Schedule, free and clear of any restrictions on

transfer (other than any restrictions under the Securities Act

and state securities laws), Taxes, Security Interests,

options, warrants, purchase rights, contracts, commitments,

equities, claims, and demands. The Seller is not a party to

any option, warrant, purchase right, or other contract or

commitment that could require the Seller to sell, transfer, or

otherwise dispose of any Company Shares (other than this

Agreement). The Seller is not a party to any voting trust,

proxy, or other agreement or understanding with respect to the

voting of any Company Shares.

(b) Representations and Warranties of the Buyer.

The Buyer represents and warrants to the Sellers that the statements

contained in this Section 3(b) are correct and

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complete as of the Closing Date.

(i) Organization of the Buyer. The

Buyer is a corporation duly organized, validly existing, and

in good standing under the laws of the jurisdiction of its

incorporation.

(ii) Authorization of Transaction. The

Buyer has full power and authority (including full corporate

power and authority) to execute and deliver this Agreement and

to perform its obligations hereunder. This Agreement

constitutes the valid and legally binding obligation of the

Buyer, enforceable in accordance with its terms and

conditions, subject to applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting

creditors' rights generally and to general principles of

equity, regardless of whether enforcement is sought in a

proceeding at law or in equity. The Buyer need not give any

notice to, make any filing with, or obtain any authorization,

consent, or approval of any government or governmental agency

in order to consummate the transactions contemplated by this

Agreement.

(iii) Noncontravention. Neither the

execution and the delivery of this Agreement, nor the

consummation of the transactions contemplated hereby, will (A)

violate any constitution, statute, regulation, rule,

injunction, judgment, order, decree, ruling, charge, or other

restriction of any government, governmental agency, or court

to which the Buyer is subject or any provision of its charter

or bylaws or (B) conflict with, result in a breach of,

constitute a default under, result in the acceleration of,

create in any party the right to accelerate, terminate,

modify, or cancel, or require any notice under any agreement,

contract, lease, license, instrument, or other arrangement to

which the Buyer is a party or by which it is bound or to which

any of its assets is subject.

(iv) Brokers' Fees. The Buyer has no

liability or obligation to pay any fees or commissions to any

broker, finder, or agent with respect to the transactions

contemplated by this Agreement for which any Seller could

become liable or obligated.

(v) Investment. The Buyer is not

acquiring the Company Shares with a view to or for sale in

connection with any distribution thereof within the meaning of

the Securities Act.

(vi) No Additional Representations and

Warranties. Notwithstanding anything in this Section 3(b) or

any other provision of this Agreement, it is the explicit

intent of each party to this Agreement that the Buyer is not

making any representation or warranty whatsoever, express or

implied, beyond those made in this Agreement or any other

documents or instruments executed in connection with this

Agreement or the transactions contemplated herein.

4. Representations and Warranties Concerning the

Company. The Sellers represent and warrant to the Buyer that the statements

contained in this Section 4 are correct and

<PAGE>

complete as of the Closing Date, except as set forth in the disclosure schedule

delivered by the Sellers to the Buyer on the date hereof (the "Disclosure

Schedule"). Nothing in the Disclosure Schedule shall be deemed adequate to

disclose an exception to a representation or warranty made herein, however,

unless the Disclosure Schedule identifies the exception with reasonable

particularity and describes the relevant facts in detail. The Disclosure

Schedule will be arranged in paragraphs corresponding to the lettered and

numbered paragraphs contained in this Section 4.

(a) Organization, Qualification, and Corporate

Power. The Company is a corporation duly organized, validly existing,

and in good standing under the laws of the jurisdiction of its

incorporation. The Company is duly authorized to conduct business and

is in good standing under the laws of each jurisdiction where such

qualification is required, except where the failure to qualify has not

had, or will not reasonably be expected to have, a material adverse

effect on the business of the Company as currently conducted. The

Company has full corporate power and authority to carry on the business

in which it is engaged and to own and use the properties owned and used

by it. Section 4(a) of the Disclosure Schedule lists the directors and

officers of the Company.

(b) Capitalization. The equity capitalization of

the Company is set forth in Section 4(b) of the Disclosure Schedule

which lists the authorized and issued and outstanding capital stock of

the Company and identifies the record owner of all shares of such

capital stock. All of the Company Shares have been duly authorized, are

validly issued, fully paid, and nonassessable, and are held of record

by the respective Sellers as set forth in Section 4(b) of the

Disclosure Schedule. There are no outstanding or authorized options,

warrants, purchase rights, subscription rights, conversion rights,

exchange rights, or other contracts or commitments that could require

the Company to issue, sell, or otherwise cause to become outstanding

any of its capital stock. There are no outstanding or authorized stock

appreciation, phantom stock, profit participation, or similar rights

with respect to the Company. There are no voting trusts, proxies, or

other agreements or understandings with respect to the voting of the

capital stock of the Company. All of the shares of the Company's

capital stock subject to the pledge agreements listed on Section 4(b)

of the Disclosure Schedule will be cancelled and shall no longer be

issued and outstanding upon payment of all principal and accrued and

unpaid interest under the promissory notes listed on Section 4(b) of

the Disclosure Schedule. Upon the consummation of the transactions

contemplated in this Agreement, Buyer will own all of the issued and

outstanding capital stock of the Company, free and clear of any

restrictions on transfer (other than any restrictions under the

Securities Act and state securities laws), Taxes, Security Interests,

options, warrants, purchase rights, contracts, commitments, equities,

claims, and demands other than any security interests placed thereon by

Buyer or otherwise applicable to Buyer or its assets.

the delivery of this Agreement, nor the consummation of the

transactions contemplated hereby, will (i) violate any constitution,

statute, regulation, rule, injunction, judgment, order, decree, ruling,

charge, or other restriction of any government, governmental agency, or

court to which the Company is subject or any provision of the articles

of incorporation or bylaws of the Company or (ii) except as set forth

in Section 4(c) of the Disclosure Schedule, conflict with, result in a

breach of, constitute a default under, result in the acceleration of,

create

<PAGE>

in any party the right to accelerate, terminate, modify, or cancel, or

require any notice under any agreement, contract, lease, license,

instrument, or other arrangement to which the Company is a party or by

which it is bound or to which any of its assets is subject (or result

in the imposition of any Security Interest upon any of its assets). The

Company is not required to give any notice to, make any filing with, or

obtain any authorization, consent, or approval of any government or

governmental agency in order for the Parties to consummate the

transactions contemplated by this Agreement.

(d) Brokers' Fees. The Company does not have any

liability or obligation to pay any fees or commissions to any broker,

finder, or agent with respect to the transactions contemplated by this

Agreement.

(e) Title to Assets. The Company has good and

marketable title to, or a valid leasehold interest in, the properties

and assets used by it, located on its premises, or shown on the Most

Recent Balance Sheet or acquired after the date thereof, free and clear

of all Security Interests, except for Permitted Encumbrances and

properties and assets disposed of in the Ordinary Course of Business

since the date of the Most Recent Balance Sheet.

(f) Subsidiaries. The Company has no

Subsidiaries.

(g) Financial Statements. Attached hereto as

Exhibit B are the following financial statements (collectively the

"Financial Statements"): (i) audited consolidated balance sheets and

statements of income, changes in stockholders' equity, and cash flows

as of and for the fiscal years ended December 31, 2000, December 31,

2001 and December 31, 2002 for the Company; and (ii) the unaudited

consolidated balance sheet and statements of income, changes in

stockholders' equity, cash flows and footnotes (the "Most Recent

Financial Statements") as of and for the 12 months ended December 31,

2003 (the "Most Recent Fiscal Period End") for the Company. The

Financial Statements (including the notes thereto) have been prepared

in accordance with GAAP applied on a consistent basis throughout the

periods covered thereby except as otherwise disclosed in the notes to

the Financial Statements and present fairly in all respects the

financial condition of the Company as of such dates and the results of

operations of the Company for such periods.

(h) Books and Records. To the Knowledge of the

Sellers, the books of account, and other records of the Company, all of

which have been made available to the Buyer, are complete and correct

and have been maintained in accordance with sound business practices.

The stock record books of the Company, all of which have been made

available to the Buyer, are complete and correct and have been

maintained in accordance with sound business practices. To the

Knowledge of the Sellers, the minute book of the Company contains

records of all meetings held of, and corporate action taken by, the

stockholders, the board of directors, and committees of the board of

directors of the Company, and no meeting of any such stockholders,

board of directors, or committee has been held for which minutes have

not been prepared and are not contained in such minute books. At the

Closing, all of those books and records will be in the possession of

the Company.

<PAGE>

(i) Events Subsequent to October 1, 2003. Since

October 1, 2003, there has not been any adverse change in the business,

financial condition, operations, results of operations, or future

prospects of the Company and since such date the Company has not

operated outside of the Ordinary Course of Business. Without limiting

the generality of the foregoing, since that date, except as set forth

in Section 4(i) of the Disclosure Schedule:

(i) the Company has not sold, leased,

transferred, or assigned any assets, tangible or intangible,

outside the Ordinary Course of Business;

(ii) the Company has not entered into

any agreement, contract, lease, or license outside the

Ordinary Course of Business;

(iii) the Company has operated its

business in the Ordinary Course of Business regarding the

payment of Indebtedness, payables and other liabilities, as

well as the recording of revenue, expenses, assets,

liabilities and cash flows in its books and records consistent

with its historical accounting policies;

(iv) the Company has applied cash

receipts to notes and accounts receivable in the Ordinary

Course of Business and the Company has not altered the method

or timing of collecting accounts or notes receivable other

than in the Ordinary Course of Business;

(v) no party (including the Company)

has accelerated, terminated, made modifications to, or

canceled any agreement, contract, lease, or license to which

the Company is a party or by which it is bound;

(vi) the Company has not imposed any

Security Interest (other than Permitted Encumbrances) upon any

of its assets, tangible or intangible;

(vii) the Company has invested in assets,

property and equipment consistent with its historical

practices, but has not made any capital expenditures outside

the Ordinary Course of Business;

(viii) the Company has not made any

capital investment in, or any loan to, any other Person

outside the Ordinary Course of Business;

(ix) the Company has not created,

incurred, assumed or guaranteed more than $25,000 in aggregate

Indebtedness other than routine increases in its revolving

credit arrangement in the Ordinary Course of Business;

(x) the Company has not granted any

license or sublicense of any rights under or with respect to

any Intellectual Property;

(xi) there has been no change made or

authorized in the articles of incorporation or bylaws of the

Company;

<PAGE>

(xii) the Company has not issued, sold,

or otherwise disposed of any of its equity securities, or

granted any options, warrants, or other rights to purchase or

obtain (including upon conversion, exchange, or exercise) any

of its equity securities;

(xiii) the Company has not declared, set

aside or paid any dividend or made any distribution with

respect to its equity securities (whether in cash or in kind)

or redeemed, purchased, or otherwise acquired any of its

equity securities;

(xiv) the Company has not experienced any

damage, destruction, or loss (whether or not covered by

insurance) to its property;

(xv) the Company has not made any loan

to, or entered into any other transaction with, any of its

directors, officers, contractors, shareholders or employees or

any of their respective Affiliates;

(xvi) the Company has not entered into

any employment contract or collective bargaining agreement,

written or oral, or modified the terms of any such existing

contract or agreement other than oral employment contracts

entered into in the Ordinary Course of Business;

(xvii) the Company has not granted any

increase in the base compensation of any of its directors,

officers, contractors or employees other than increases to

base compensation to its employees consistent with its

historical practices;

(xviii) the Company has not adopted,

amended, modified, or terminated any bonus, profit sharing,

incentive, severance, or other plan, contract, or commitment

for the benefit of any of its directors, officers, contractors

or employees (or taken any such action with respect to any

other Employee Benefit Plan) and Section 4(i) of the

Disclosure Schedule lists all payments and distributions, if

any, made under any such bonus, profit sharing, incentive,

severance, or other plan, contract, or commitment for the

benefit of any of its directors or officers, the Sellers or

any of their respective Affiliates since October 1, 2003;

(xix) the Company has not made any other

change in employment terms for any of its directors, officers,

contractors or employees other than normal increases in

compensation to its employees (other than officers) consistent

with their historical practices; and

(xx) the Company has not committed to

any of the foregoing.

(j) Undisclosed Liabilities. The Company does

not have any liability (whether known or unknown, whether asserted or

unasserted, whether absolute or contingent, whether accrued or

unaccrued, whether liquidated or unliquidated, and

<PAGE>

whether due or to become due, including any liability for Taxes),

except for (i) liabilities set forth or reserved against on the Most

Recent Balance Sheet or disclosed in any notes thereto, (ii)

liabilities which have arisen after the Most Recent Fiscal Period End

in the Ordinary Course of Business (none of which are material in

amount) or (iii) liabilities set forth in Section 4(j) of the

Disclosure Schedule.

(k) Business Practices. Since January 1, 2000,

neither the Company nor any director, officer, agent, contractor or

employee of the Company, or any other Person associated with or acting

for or on behalf of the Company, has directly or indirectly (i) made

any contribution, gift, bribe, rebate, payoff, influence payment,

kickback, or other payment to any Person, private or public, regardless

of form, whether in money, property, or services (A) to obtain

favorable treatment in securing business, (B) to pay for favorable

treatment for business secured, (C) to obtain special concessions or

for special concessions already obtained, for or in respect of the

Company or any Affiliate of the Company or (D) in violation of any

applicable laws (including rules, regulations, codes, plans,

injunctions, judgments, orders, decrees, rulings, and charges

thereunder) of any federal, state, local, or foreign governments (and

all agencies thereof) or (ii) established or maintained any fund or

asset that has not been recorded in the books and records of the

Company.

(l) Legal Compliance. The Company has complied

with all applicable laws (including rules, regulations, codes, plans,

injunctions, judgments, orders, decrees, rulings, and charges

thereunder) of all federal, state, local, and foreign governments (and

all agencies thereof) and no action, suit, proceeding, hearing,

investigation, charge, complaint, claim, demand, or notice has been

filed or, to the Knowledge of the Sellers, commenced against it

alleging any failure so to comply.

(m) Tax Matters.

(i) The Company has filed all Tax

Returns that it was required to file. All such Tax Returns

were correct and complete in all respects. All Taxes owed by

the Company (whether or not shown on any Tax Return) have been

paid. The Company is not currently the beneficiary of any

extension of time within which to file any Tax Return.

(ii) There is no dispute or claim

concerning any Tax liability of the Company (A) claimed or

raised by any authority in writing or (B) as to which any of

the Sellers has Knowledge.

(iii) Section 4(m) of the Disclosure

Schedule lists all federal, state, local, and foreign Income

Tax Returns filed with respect to the Company for taxable

periods ended on or after December 31, 2000, indicates all Tax

Returns for taxable periods ended on or after December 31,

2000 that have been audited, and indicates all Tax Returns for

taxable periods ended on or after December 31, 2000 that

currently are the subject of audit. The Sellers have delivered

to the Buyer correct and complete copies of all federal Income

Tax Returns, examination reports, and statements of

deficiencies assessed against, or

<PAGE>

agreed to by the Company since December 31, 2000. The Company

has not waived any statute of limitations in respect of Taxes

or agreed to any extension of time with respect to a Tax

assessment or deficiency.

(iv) The Company has not filed a consent

under Code Section 341(f) concerning collapsible corporations.

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 to make any

payments that will not be deductible under Code Section 280G.

The Company has not been a United States real property holding

corporation within the meaning of Code Section 897(c)(2)

during the applicable period specified in Code Section

897(c)(1)(A)(ii). The Company is not a party to any tax

allocation or sharing agreement. The Company (A) has not been

a member of an Affiliated Group filing a consolidated federal

Income Tax Return (other than a group the common parent of

which was the Company) or (B) has no liability for the Taxes

of any Person under Reg.Section 1.1502 6 (or any similar

provision of state, local, or foreign law), as a transferee or

successor, by contract, or otherwise.

(v) The unpaid Taxes of the Company (A)

did not, as of the Most Recent Fiscal Period End, exceed the

reserve for Tax liability (rather than any reserve for

deferred taxes established to reflect timing differences

between book and tax income) set forth on the Most Recent

Balance Sheet and (B) will not exceed that reserve as adjusted

for operations and transactions through the Closing Date in

accordance with the past custom and practice of the Company in

filing its Tax Returns.

(vi) 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 (A) change in method of accounting for a taxable period

ending on or prior to the Closing Date under Code Section

481(c) (or any corresponding or similar provision of state,

local or foreign income Tax law); (B) "closing agreement" as

described in Code Section 7121 (or any corresponding or

similar provision of state, local or foreign income Tax law)

executed on or prior to the Closing Date; (C) deferred

intercompany gain or any excess loss account described in

Treasury Regulations under Code Section 1502 (or any

corresponding or similar provision of state, local or foreign

income Tax law); (D) installment sale or open transaction

disposition made on or prior to the Closing Date; or (E)

prepaid amount received on or prior to the Closing Date.

(vii) The Company (and any predecessor of

the Company) has been a validly electing S corporation within

the meaning of Code Sections 1361 and 1362 at all times since

1999 and, except as to any revocation of such status caused by

the consummation of the transactions contemplated by this

Agreement or any affirmative acts of the Buyer after the

Closing, the Company will be an S corporation up to and

including the Closing Date.

<PAGE>

(viii) The Company has not, in the past 10

years, (A) acquired assets from another corporation in a

transaction in which the Company's Tax basis for the acquired

assets was determined, in whole or in part, by reference to

the Tax basis of the acquired assets (or any other property)

in the hands of the transferor or (B) acquired the stock of

any corporation which is a qualified subchapter S subsidiary.

(n) Real Property.

(i) Section 4(n)(i) of the Disclosure

Schedule sets forth the address and legal description of each

parcel of Owned Real Property. With respect to each parcel of

Owned Real Property:

(A) The Company has good and marketable

fee simple title, free and clear of all liens and

encumbrances, except Permitted Encumbrances;

(B) except as set forth in Section

4(n)(i)(B) of the Disclosure Schedule, the Company

has not leased or otherwise granted to any Person the

right to use or occupy such Owned Real Property or

any portion thereof; and

rights of first offer or rights of first refusal to

purchase such Owned Real Property or any portion

thereof or interest therein.

(ii) Section 4(n)(ii) of the Disclosure

Schedule sets forth the address of each parcel of Leased Real

Property, and a true and complete list of all Leases for each

such Leased Real Property (including the date and name of the

parties to such Lease document). The Sellers have delivered to

the Buyer a true and complete copy of each such Lease

document, and in the case of any oral Lease, a written summary

of the terms of such Lease. Except as set forth in Section

4(n)(ii) of the Disclosure Schedule, with respect to each of

the Leases, including the Leases executed and delivered

pursuant to Section 6(a)(v) below:

(A) such Lease is legal, valid,

binding, enforceable and in full force and effect,

subject to applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting

creditors' rights generally and to general principles

of equity, regardless of whether enforcement is

sought in a proceeding at law or in equity;

(B) the transactions contemplated by

this Agreement do not require the consent of any

other party to such Lease (except for those Leases

for which Lease Consents (as hereinafter defined) are

obtained), will not result in a breach of or default

under such Lease, and will not otherwise cause such

Lease to cease to be legal, valid, binding,

enforceable and in full force and effect on identical

terms following the

<PAGE>

Closing;

enjoyment of the Leased Real Property under such

Lease has not been disturbed and, to the Knowledge of

the Sellers, there are no disputes with respect to

such Lease;

(D) Neither the Company nor, to the

Knowledge of the Sellers, any other party to the

Lease is in breach or default under such Lease, and,

to the Knowledge of the Sellers, no event has

occurred or circumstance exists which, with the

delivery of notice, the passage of time or both,

would constitute such a breach or default, or permit

the termination, modification or acceleration of rent

under such Lease;

(E) no security deposit or portion

thereof deposited with respect to such Lease has been

applied in respect of a breach or default under such

Lease which has not been redeposited in full;

(F) the Company does not owe, and will

not owe in the future, any brokerage commissions or

finder's fees with respect to such Lease;

(G) the other party to such Lease is

not an Affiliate of, and otherwise does not have any

economic interest in, the Company;

(H) the Company has not subleased,

licensed or otherwise granted any Person the right to

use or occupy such Leased Real Property or any

portion thereof; and

(I) the Company has not collaterally

assigned or granted any other Security Interest,

except for Permitted Encumbrances, in such Lease or

any interest therein.

(iii) The Owned Real Property identified

in Section 4(n)(i) of the Disclosure Schedule, and the Leased

Real Property identified in Section 4(n)(ii)(collectively, the

"Real Property") comprise all of the real property used or

intended to be used in the business of the Company; and,

except for purchase options granted under the leases described

in Section 6(a)(v) below, the Company is not a party to any

agreement or option to purchase any real property or interest

therein.

(iv) All buildings, structures,

fixtures, building systems, parking lots and equipment, and

all components thereof, included in the Real Property (the

"Improvements") are in condition and repair sufficient for the

operation of the business of the Company consistent with past

practices. To the Knowledge of the Sellers, there are no facts

or conditions affecting any of the Improvements which would,

individually or in the aggregate, interfere in any respect

with the use or occupancy of the Improvements or any portion

thereof in

<PAGE>

the operation of the business of the Company as currently

conducted thereon.

(v) The Company has not received

written notice of any condemnation, expropriation or other

proceeding in eminent domain, affecting any parcel of Real

Property or any portion thereof or interest therein. There is

no injunction, decree, order, writ or judgment outstanding,

nor any claims, litigation, administrative actions or similar

proceedings, pending or, to the Knowledge of the Sellers,

threatened, relating to the ownership, lease, use or occupancy

of the Real Property or any portion thereof, or the operation

of the business of the Company as currently conducted thereon

or proposed to be conducted.

(vi) The Real Property is in compliance

with all applicable building, zoning, subdivision, health and

safety and other land use Laws, including The Americans with

Disabilities Act of 1990, as amended, and all insurance

requirements affecting the Real Property (collectively, the

"Real Property Laws"). The Company has not received any notice

of violation of any Real Property Law and there is no basis

for the issuance of any such notice or the taking of any

action for such violation.

(vii) To the Knowledge of the Sellers,

each parcel of Real Property has direct access to a public

street adjoining the Real Property or has access to a public

street via insurable easements benefiting such parcel of Real

Property, and such access is not dependent on any land or

other real property interest which is not included in the Real

Property. To the Knowledge of the Sellers, none of the

Improvements or any portion thereof is dependent for its

access, use or operation on any land, building, improvement or

other real property interest which is not included in the Real

Property.

(viii) Except as set forth on Section

4(n)(viii) of the Disclosure Schedule, to the Knowledge of the

Sellers, all water, oil, gas, electrical, steam, compressed

air, telecommunications, sewer, storm and waste water systems

and other utility services or systems for the Real Property

have been installed and are operational and sufficient for the

operation of the business of the Company as currently

conducted thereon.

(ix) To the Knowledge of the Sellers,

the Company's use or occupancy of the Real Property or any

portion thereof and the operation of the business of the

Company as currently conducted thereon is not dependent on a

"permitted non-conforming use" or "permitted non-conforming

structure" or similar variance, exemption or approval from any

governmental authority.

(x) To the Knowledge of the Sellers,

the current use and occupancy of the Real Property and the

operation of the business of the Company as currently

conducted thereon does not violate in any respect any

easement, covenant, condition, restriction or similar

provision in any instrument of record or other unrecorded

agreement affecting such Real Property.

<PAGE>

(xi) To the Knowledge of the Sellers,

none of the Real Property or any portion thereof is located in

a flood hazard area (as defined by the Federal Emergency

Management Agency).

(xii) The terminations of the Leases set

forth in Section 6(a)(iv) are effective to terminate those

Leases and release the Company from all obligations and

liabilities thereunder. The Leases executed and delivered

pursuant to Section 6(a)(v) below are duly executed by the

landlords, and valid and legally binding obligations of the

landlords, enforceable in accordance with their respective

terms and conditions, subject to applicable bankruptcy,

insolvency, reorganization, moratorium or similar laws

affecting creditors' rights generally and to general

principles of equity, regardless of whether enforcement is

sought in a proceeding at law or in equity. Neither the

execution and delivery of any such Lease by the landlords, nor

the consummation of the performance of each landlord's

obligations thereunder will (i) violate any constitution,

statute, regulation, rule, injunction, judgment, order,

decree, ruling, charge, or other restriction of any

government, governmental agency, or court to which any

landlord is subject or any provision of the charter or

operating agreement of any landlord or (ii) conflict with,

result in a breach of, constitute a default under, result in

the acceleration of, create in any party the right to

accelerate, terminate, modify, or cancel, or require any

notice under any agreement, contract, lease, license,

instrument, or other arrangement to which any landlord is a

party or by which it is bound or to which any of its assets is

subject (or result in the imposition of any Security Interest

upon any of its assets). No landlord under any of the Leases

executed and delivered pursuant to Section 6(a)(v) below is

required to give any notice to, make any filing with, or

obtain any authorization, consent, or approval of any

government or governmental agency in order for such landlord

to execute, deliver and perform its obligations under each

such Lease.

(o) Intellectual Property.

(i) To the Knowledge of the Sellers,

the Company has not interfered with, infringed upon,

misappropriated, or violated any Intellectual Property rights

of third parties in any respect, and none of the Sellers or

the directors and officers of the Company has ever received

any charge, complaint, claim, demand, or notice alleging any

such interference, infringement, misappropriation, or

violation (including any claim that the Company must license

or refrain from using any Intellectual Property rights of any

third party). To the Knowledge of the Sellers, no third party

has interfered with, infringed upon, misappropriated, or

violated any Intellectual Property rights of the Company in

any respect.

(ii) Section 4(o)(ii) of the Disclosure

Schedule identifies each patent or registration which has been

issued to the Company with respect to any of its Intellectual

Property, identifies each pending patent application or

application for registration which the Company has made with

respect to any of its Intellectual Property, and identifies

each license, sublicense, agreement, or

<PAGE>

other permission which the Company has granted to any third

party with respect to any of its Intellectual Property

(together with any exceptions). Section 4(o)(ii) of the

Disclosure Schedule also identifies each trade name or

unregistered trademark, service mark, corporate name, Internet

domain name, copyright and computer software item currently

owned and used by the Company in connection with its business.

With respect to each item of Intellectual Property required to

be identified in Section 4(o)(ii) of the Disclosure Schedule:

(A) the Company possesses all right,

title, and interest in and to the item, free and

clear of any Security Interest (other than Permitted

Encumbrances), license, or other restriction;

(B) the item is not subject to any

outstanding injunction, judgment, order, decree,

ruling, or charge;

hearing, investigation, charge, complaint, claim, or

demand is pending or, to the Knowledge of the

Sellers, is threatened which challenges the legality,

validity, enforceability, use, or ownership of the

item; and

(D) the Company has no

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