SHAREPURCHASE AGREEMENT among GeoiLimited a privatelimited company of England and Wales; Versar,Inc. aDelaware corporation; ProfessionalProtection Systems Limited a privatelimited company of England and Wales; theSellers; and theNeil Bruce CoppRepresentative ___________________________ Dated asof January 5, 2010 ___________________________

 

1.1   Purchase and Sale of the Shares.

(a)   On the terms and subject to the conditions set forth in this Agreement, at the Closing, each Seller and the Neil Bruce Copp Shareholder shall, severally and separately and in respect of themselves only, sell, assign, transfer, convey and deliver to the Purchaser, free and clear of all Encumbrances, and in the case of each Seller  (excluding the Neil Bruce Copp Shareholder) severally and separately and in respect of themselves only, with full title guarantee, and in the case of the Neil Bruce Copp Shareholder only, with limited title guarantee (as the Neil Bruce Copp Shareholder is the legal owner but not the beneficial owner of the NBC Shares), and the Purchaser shall purchase from each Seller and the Neil Bruce Copp Shareholder, all the Shares owned by such Seller or the Neil Bruce Copp Shareholder, as the case may be, in consideration of payment of (collectively, the “Purchase Price”):

1.2   Closing.  Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares and the consummation of the other transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of EMW Picton Howell, Seebeck House, 1 Seebeck Place Knowlhill, Milton Keynes, MK5 8FR, on the date hereof (“Closing Date”).

1.3   At Closing the Purchaser shall:

1.4   Estimated Balance Sheet and Estimated Closing Indebtedness.  The Company has delivered to the Purchaser (a) an unaudited balance sheet of the Company, which unaudited balance sheet reflects balances as of November 30, 2009 (the “Estimated Balance Sheet”), (b) an itemized schedule of the amount of Closing Indebtedness (separately listing each item of Indebtedness and the related creditor), (c) an itemized schedule of the Transaction Costs paid or owed by the Company (separately listing each Transaction Cost and the related creditor), in each case as of the Closing Date (the “Schedule of Company Transaction Costs”), and (d) a certificate of the Company, executed by Nobbs (the chairman of the Company) and Whitcher (the Managing Director of the Company), certifying that each of the Estimated Balance Sheet, Closing Indebtedness and Schedule of Company Transaction Costs were prepared by the Company in good faith in accordance with this Agreement, and, in the case of the Estimated Balance Sheet, (save as for the Estimated Balance Sheet does not contain a tax provision for the financial year to date and other year end adjustments which are made in the Company Year-End Financial Statements) the Estimated Balance Sheet has been prepared in accordance with the Company’s accounting policies and generally accepted accounting practice in the United Kingdom (“GAAP”) applied in a manner consistent with the preparation of the Company Year-End Financial Statements, except as otherwise specifically contemplated by this Agreement (the “Closing Certificate”).

1.5   Delivery of Seller Notes.  At the Closing, the Purchaser shall deliver to each Seller and the Neil Bruce Copp Shareholder a loan note in substantially the form attached hereto as Exhibit C (the “Seller Notes”).  The principal amount of each Seller Note is set forth on Exhibit B hereto.  The Seller Notes shall be issued by the Purchaser and guaranteed by Versar as described with particularity in Article 5 hereof.  The principal amount of each Seller Note and any accrued interest earned thereon shall be subject to reduction to satisfy any setoff rights of the Purchaser and Versar in accordance with Article 8 of this Agreement.

1.6   Versar Common Stock.

1.7   Contingent Consideration.

1.8   Purchase Price Adjustment.

1.9   Exchange Rate Adjustment.  The amount payable at Closing in U.S. dollars, together with the Hold-Back, shall be fixed at US$5.1 million in the aggregate unless the exchange rate of U.S. dollars for Pounds Sterling exceeds 1.61 U.S. Dollars per Pound Sterling (rounded to the nearest US$ cent) or is less than 1.57 U.S. Dollars per Pound Sterling (rounded to the nearest US$ cent) as of 5:30pm Greenwich Mean Time on the last Business Day prior to the Closing (as reported by www.oanda.com).  In either such case, the amount payable at Closing shall be adjusted (the “Exchange Rate Adjustment”) by multiplying GBP£3,207,547.1 by an exchange rate equal to the average of the daily average ‘Interbank’ currency exchange rates for U.S. Dollars being converted into Pounds Sterling at the close of business on each of the forty (40) Business Days prior to the Closing Date as reported by www.oanda.com.

2.1   Organization; Standing and Power; Subsidiaries.

2.2   Company Constituent Documents; Records.  The Company has delivered to Purchaser accurate and complete copies of (a) the Certificate of Incorporation of the Company, Memorandum of Association of the Company and the Articles of Association of the Company, in each case including all amendments thereto; (b) its statutory registers and (c) the minutes and other records of the meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of its members in their capacity as such, the Board and all committees of the Board, in each case since January 8, 2003 (the items described in (a), (b) and (c) above, collectively, the “Company Constituent Documents”).  The Company has delivered to Purchaser accurate and complete copies of (a) the Certificate of Incorporation, Memorandum of Association and the Articles of Association of Personal Protection Systems, in each case including all amendments thereto; (b) its statutory registers; (c) any minutes and other records of meetings and other proceedings (including any actions taken by consent or otherwise without a meeting) of its member in their capacity as such, its board of directors and all committees of its board of directors, in each case since January 8, 2003.  There have been no formal meetings of or actions taken in lieu of a formal meeting by the Company’s or Personal Protection Systems’ members, the Board or any committee of the Board or the Board of Directors of Personal Protection Systems or any committee thereof since January 8, 2003 that are not fully reflected in the Company Constituent Documents or the constituent documents of Personal Protection Systems described above.  There has not been any violation of the Company Constituent Documents, and the Company has not taken any action that is inconsistent in any material respect with the Company Constituent Documents.  The books of account, statutory registers (including the register of members and register of directors and register of charges) and other records of the Company are accurate, up-to-date and complete in all material respects, and have been maintained materially in accordance with applicable Legal Requirements.

2.3   Capitalization, Etc.

2.4   Authority; Binding Nature of Agreement. The Company has all right, power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to take all other actions required to be taken by it pursuant to the provisions hereof.  The execution, delivery and performance of this Agreement to which it is a party and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company, and no other action on the part of the Company is necessary to authorize the execution, delivery and performance by the Company of this Agreement and any Related Agreement to which the Company is a party and to consummate the transactions contemplated hereby and thereby.  This Agreement has been duly executed and delivered by the Company.  This Agreement constitutes (assuming due and valid authorization, execution and delivery hereof by the other parties hereto) the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be limited by any insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’ rights and remedies generally and by general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity.

2.5   Non-Contravention; Consents.  Except as set forth in Part 2.5 of the Company Disclosure Schedule, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not, directly or indirectly (with or without notice or lapse of time):

2.6   Financial Statements.

2.7   Absence of Certain Changes. Except as set forth in Part 2.7 of the Company Disclosure Schedule, since the Balance Sheet Date, the Company has conducted its business only in the ordinary course of business consistent with past practice.  Except as set forth in Part 2.7 of the Company Disclosure Schedule, since the Balance Sheet Date:

2.8   Title to and Sufficiency of Assets.

(b)   The assets of the Company constitute all the assets used in or necessary to carry on its business as such business is being conducted as of immediately prior to the Closing.

2.9   Bank Accounts; Accounts Receivable; Inventory.

2.10         Equipment.  Part 2.10 of the Company Disclosure Schedule sets forth a true, correct and complete list of all equipment and other tangible assets owned by the Company having an original cost in excess of US$10,000 and regularly or customarily used by the Company in the operation of its business.  All equipment and other tangible assets that are owned, leased or used by the Company (i) are free of material defects and deficiencies and in good operating condition and repair, subject to normal wear and tear and continued repair and replacement in accordance with past practice, and (ii) comply in all material respects with, and are being operated and otherwise used in material compliance with, all applicable Legal Requirements.  During the past twelve (12) months, there has not been any significant interruption of the operations of the Company due to inadequate maintenance of such assets.

2.11      Real Property.  The Company does not own, nor has it ever owned, any real property or any interest in any real property, except for the Protection House Lease identified in Part 2.13(a)(viii) of the Company Disclosure Schedule and no other real property is leased, subleased or licensed by the Company (the “ Real Property”).  No material damage or destruction has occurred with respect to any of the Real Property for which the Company may be liable.  The premises leased pursuant to the Protection House Lease are supplied with utilities and other services necessary for the operation of the premises.  All rights as lessee to the Real Property are legally and beneficially vested in the Company and the Company is in sole and undisputed occupation.

2.12     Intellectual Property.

2.13         Contracts.

Contracts in the respective categories described in clauses (i) through (xviii) of this Article 2.13 are referred to in this Agreement as “Material Contracts”.

2.14  Customers; Accounts Receivables and Payable.

2.15      Liabilities.  Except (i) as not required in accordance with GAAP to be reflected or reserved against in the Company Financial Statements, (ii) as and to the extent reflected or reserved against in the Company Financial Statements (including the notes thereto), (iii) as set forth in Part 2.15 of the Company Disclosure Schedule or (iv) as incurred in the ordinary course of business since the Balance Sheet Date, to the Knowledge of the Company, the Company does not have any material direct or indirect debts, liabilities, claims, losses, damages, deficiencies, costs, expenses or obligations (whether absolute, accrued, contingent or otherwise) of any nature whatsoever (including, without limitation, obligations under capital leases or any unfunded obligations as required for funding on an ongoing basis under any Plan or arrangement or any uninsured liabilities resulting from failure to comply with any applicable Legal Requirement).  The Company does not have any off-balance sheet liabilities.

2.16      Data Protection.

2.17         Compliance with Legal Requirements; Governmental Authorizations.

2.18     Tax Matters.

2.19         Benefit Plans; Employees and Agents.

2.20         Environmental Matters.  Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (i) the Company is in compliance with all applicable Environmental Laws, which compliance includes the possession by the Company of all permits and other Governmental Authorizations required under applicable Environmental Laws and compliance with the terms and conditions thereof and (ii) there are no written claims pursuant to any Environmental Law pending or, to the Knowledge of the Company, threatened, against the Company.  All Governmental Authorizations currently held by the Company pursuant to Environmental Laws are identified in Part 2.20 of the Company Disclosure Schedule.  All applications required to have been filed by the Company for the renewal or transfer of the Governmental Authorizations identified or required to be identified in Part 2.20 of the Company Disclosure Schedule have been duly filed on a timely basis with the appropriate Governmental Bodies, and each other notice or filing required to have been given or made with respect to such Governmental Authorizations has been duly given or made on a timely basis with the appropriate Governmental Body.  No Materials of Environmental Concern are or have been used, manufactured, generated, sold, handled, treated, transported, stored or disposed by the Company, in breach of applicable Environmental Laws.  To the Knowledge of the Company, no underground storage tanks, above-ground storage tanks, asbestos-containing materials, landfills or disposal areas are present on any of the Company’s property.

2.21         Defective Products and Services

2.22         Insurance.

2.23         Related Party Transactions.  Save for the Protection House Lease described in Part 2.23 of the Company Disclosure Schedule, no Related Party has, and no Related Party has had at any time since January 1, 2006, any direct or indirect interest in any material asset used in or otherwise relating to the business of the Company.  No Related Party is indebted to the Company.  Since January 1, 2006, no Related Party has entered into, or has had any direct or indirect financial interest in, any Material Contract, transaction or business dealing involving the Company.  To the Knowledge of the Company, no Related Party is competing, or has competed at any time since January 1, 2007, directly or indirectly, with the Company.  No Related Party has any claim or right against the Company (other than rights to receive compensation for services performed as an Employee).

2.24         Legal Proceedings; Orders.

2.25         Insolvency.  Neither the Company nor Personal Protection Systems:

2.26     Finder’s Fee; Transaction Costs.  Other than as set forth in Part 2.26 of the Company Disclosure Schedule, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company or any of the Sellers or the Neil Bruce Copp Shareholder.

2.27     Shareholder Agreements.  There is no actual or contingent liability of the Company arising directly or indirectly out of the Shareholders Agreement dated January 8, 2003 entered into between Stephen Nobbs, Mark Whitcher, Kimbells LLP, Neil Bruce Copp and the Company or any documents entered into in connection with that transaction, including, without limitation, the Debentures, Investor Loan Agreement, Mr. Nobbs Loan Agreement or Acquisition Documentation (as defined therein).

2.28     Certain Payments.  Neither the Company, nor, to the Company’s Knowledge, any Representative or other Person associated with or acting for or on behalf of the Company, has at any time, directly or indirectly:

3.1   Authority; Binding Nature of Agreement. Such Seller or the Neil Bruce Copp Shareholder, as the case may be, has all requisite power and authority and the capacity to execute and deliver (or procure the delivery of) this Agreement and any Related Agreement to which it is a party, to consummate the transactions contemplated hereby and thereby and to take all other actions required to be taken by it pursuant to the provisions hereof and thereof.  The execution, delivery and performance of this Agreement and any Related Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or other action on the part of  such Seller  or the Neil Bruce Copp Shareholder, as the case may be, and no other action on the part of the Seller or the Neil Bruce Copp Shareholder, as the case may be, is necessary to authorize the execution, delivery and performance by  such Seller or the Neil Bruce Copp Shareholder, as the case may be, of this Agreement and any Related Agreement  or to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by  such Seller  or the Neil Bruce Copp Shareholder as the case may be.  This Agreement and any Related Agreement to which  such Seller or the Neil Bruce Copp Shareholder, as the case may be, is a party constitutes (assuming due and valid authorization, execution and delivery hereof and thereof by the other parties hereto and thereto, if any) the valid and binding obligation of  such Seller or the Neil Bruce Copp Shareholder, as the case may be, enforceable against  such Seller or the Neil Bruce Copp Shareholder, as the case may be, in accordance with their respective terms, except as such enforcement may be limited by any bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’ rights and remedies generally and by general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity.

3.2   Ownership and Transfer of the Shares.  Such Seller  or the Neil Bruce Copp Shareholder, as the case may be, is, in respect of the Shares as set forth opposite their name on Part 2.3(a) of the Company Disclosure Schedule, (a) the legal and beneficial owner of those Shares with full authority to transfer the legal and beneficial interest in the Shares or (b) the beneficial owner of those Shares and has the power to procure the transfer of those Shares by the legal owner or (c) in the case of the Neil Bruce Copp Shareholder is the legal owner of those Shares with full authority to transfer legal title to those Shares of, in each case, free and clear of any and all Encumbrances.   Such Seller  or the Neil Bruce Copp Shareholder, as the case may be, has the power, authority and capacity to sell, transfer, assign and deliver (or to procure such sale, transfer, assignment and delivery of) such Shares as provided in this Agreement, and such delivery will convey to Purchaser title to such Shares, free and clear of any and all Encumbrances.  The assignments, endorsements, powers and other instruments of transfer delivered by each of Seller and the Neil Bruce Copp Shareholder (or their respective authorized agents) at the Closing will be sufficient to transfer to the Purchaser such Seller’s or the Neil Bruce Copp Shareholder’s entire right, title and interest, legal and beneficial, in such Shares. No Seller or the Neil Bruce Copp Shareholder is a resident or citizen of the United States.

3.3   Non-Contravention; Consents.  The execution, delivery and performance of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby do not, directly or indirectly (with or without notice or lapse of time):

3.4   No Other Agreements.  Such Seller or the Neil Bruce Copp Shareholder, as the case may be, does not have any legal obligation, absolute or contingent, to any other Person to sell or otherwise transfer Shares (other than pursuant to this Agreement) and is not subject to any voting agreement with respect to a change of control of the Company or a right of first refusal related to the Shares.

3.5   Litigation. Each of the Sellers and the Neil Bruce Copp Shareholder have not received any written notification of any action, claim, suit, proceeding or investigation pending and, to such Seller’s or the Neil Bruce Copp Shareholder’s, as the case may be, Knowledge, there is no such matter threatened against or affecting such Seller or the Neil Bruce Copp Shareholder, as the case may be, or the Shares, in each case before any court or Governmental Body, that would reasonably be expected to affect the ability of such Seller or the Neil Bruce Copp Shareholder, as the case may be, to sell and transfer the Shares set forth opposite their name on Part 2.3(a) of the Company Disclosure Schedule or otherwise to consummate the transactions contemplated by this Agreement at the Closing.

3.6   Finder’s Fees.  No arrangement has been made by or on behalf of such Seller or the Neil Bruce Copp Shareholder (as the case may be) entitling any broker, finder, or investment banker to any brokerage, finder’s or other fee or commission in connection with the Transactions except as set forth in the Schedule of Company Transaction Costs.

3.7   Securities Representations.  Whitcher hereby warrants that he is acquiring shares of Versar common stock as a portion of the Purchase Price for his own account for investment and not with a view to resell or in connection with, any distribution thereof, nor with any present intention of distributing or selling the same.  He has carefully reviewed the publicly available information regarding Versar made available to him, has made detailed inquiry concerning Versar and its business, and has received any and all written information which he has requested and has received answers to his satisfaction of all inquiries made by him.  He has sufficient knowledge and experience in finance and business that he is capable of evaluating the risks and merits of his investments in Versar and is able to financially bear the risks thereof.  He acknowledges and agrees that the shares of Versar common stock issuable as a portion of the Purchase Price are “restricted securities” as defined in Rule 144 promulgated under the Securities Act as in effect from time to time and must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  He has been advised or is aware of the provisions of Rule 144 which permit limited resales of shares purchased in a private placement subject to satisfaction of certain conditions, including, among other things, the availability of certain current public information about the Company, the resales occurring following the required holding period under Rule 144 and the number of shares being sold during any three-month period not exceeding specified limitations.

4.1   Corporate Existence and Power.  Purchaser is a private limited company duly organized and validly existing under the laws of England and Wales.  Versar is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Each of Purchaser and Versar has all necessary power and authority to carry on its business in the manner in which its business is currently being conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified would not have a material adverse effect on Purchaser’s or Versar’s ability to complete the Transactions.

4.2   Authority; Binding Nature of Agreement.  Each of Purchaser and Versar has all right, power and authority to execute and deliver this Agreement and any Related Agreements to which it is a party, to consummate the transactions contemplated hereby and thereby and to take all other actions required to be taken by it pursuant to the provisions hereof and thereof.  The execution, delivery and performance by each of Purchaser and Versar of this Agreement and each Related Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of Purchaser and Versar, as applicable, and no other action on the part of Purchaser or Versar is necessary to authorize the execution, delivery and performance by Purchaser or Versar of this Agreement or any Related Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by each of Purchaser and Versar.  This Agreement constitutes and, upon execution and delivery thereof by Purchaser and Versar, each Related Agreement to which either or both or them is a party will constitute (assuming due and valid authorization, execution and delivery hereof and thereof by the other parties hereto and thereto, if any) the legal, valid and binding obligation of Purchaser and/or Versar, as applicable, enforceable against Purchaser and/or Versar, as applicable, in accordance with its terms, except as such enforcement may be limited by any bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors’ rights and remedies generally and by general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity.

4.3   Non-Contravention; Consents.  The execution, delivery and performance by Purchaser and Versar of this Agreement and of each Related Agreement to which either is a party or both of them are parties and the consummation of the transactions contemplated hereby and thereby by Purchaser and Versar do not, directly or indirectly (without notice or lapse of time):

4.4   Compliance with Legal Requirements.  Purchaser and Versar each has complied with all applicable Legal Requirements and Orders in connection with the execution, delivery and performance of this Agreement and any Related Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby.  No filing with, notice to or consent from any Person (other than the parties hereto) is required in connection with the execution, delivery or performance of this Agreement or any of the Related Agreements by Purchaser and Versar or either of them or the consummation of the transactions contemplated hereby and thereby by Purchaser and Versar or either of them.

5.1   Guarantee of Purchaser Obligations.  Purchaser is a direct subsidiary of Versar, and Versar acknowledges that it will derive substantial benefit from the Transactions. As consideration for the Sellers and the Neil Bruce Copp Shareholder entering into this Agreement and the Related Agreements and for the Sellers and the Neil Bruce Copp Shareholder consummation of the Transactions, Versar irrevocably and  unconditionally guarantees the due and punctual payment as, when and if due, of all sums payable at Closing and under (a) the Seller Notes, on the terms and subject to the conditions set forth in Article 1.4 hereof, (b) the Contingent Consideration, on the terms and subject to the conditions set forth in Article 1.6 hereof, (c) the purchase price adjustment provisions in Article 1.8 and (d) the performance of Purchaser’s obligations pursuant to this Agreement (collectively, the “Guaranteed Obligations”); provided, that the holders of the Seller Notes and recipients of the Contingent Consideration to whose benefit the guarantee pursuant to this Article 5.1 inures (each, a “Guaranteed Party”) shall only if the Guaranteed Obligations are not satisfied by the Purchaser within ten (10) Business Days demand payment of or assert a claim against Versar under this Article 5.1. The guarantee set forth in this Article 5.1 may only be enforced on the terms set forth herein and nothing set forth in this Article 5.1 shall confer or give or shall be construed to confer or give to any Person other than the Guaranteed Parties any rights or remedies against any Person other than the rights of the Guaranteed Parties against Versar as expressly set forth herein. Subject to the terms of Article 8.5, to the extent any Guaranteed Obligations, as to which no dispute as to entitlement or amount exists pursuant to the terms of this Agreement, are not paid within three (3) Business Days of demand by the Guaranteed Party pursuant to this Article 5.1, such Guaranteed Obligations shall bear penalty interest at a rate of 5.0% above LIBOR.

6.1   Confidentiality; Non-competition

6.2   Confidentiality.  The parties acknowledge that the Company and the Purchaser have previously executed a confidentiality agreement, dated July 21, 2009 (the “Confidentiality Agreement”), which Confidentiality Agreement is hereby incorporated herein by reference and shall continue in full force and effect in accordance with its terms.

6.3   Public Disclosure.  Save as for the Neil Bruce Copp Shareholder disclosing the facts and terms of the Transaction to the beneficiaries of the Neil Bruce Copp’s estate and unless otherwise permitted by this Agreement, the Company, the Sellers and the Neil Bruce Copp Shareholder shall consult with the Purchaser before issuing any press release or otherwise making any public statement or making any other public (or non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the Transactions, and neither the Company, Sellers nor the Neil Bruce Copp Shareholder shall issue any such press release or make any such statement or disclosure without the prior approval of the Purchaser (which approval shall not be unreasonably withheld or delayed), except as may be required by law or by any regulatory or governmental body to which a party is subject, including but not limited to the London Stock Exchange, the Takeover Panel or the UK Listing Authority.

6.4   Tax Covenant.  The provisions of Schedule 6.4 (Tax Covenant) apply to and are incorporated by reference into this Agreement.

6.5   Covenant Regarding Costs.  To the extent that Whitcher has Knowledge that the incurrence of any cost by the Company during the Earn-Out Period would cause the aggregate administrative and selling and distribution costs of the Company to exceed the Maximum Costs, Whitcher shall promptly notify Purchaser and shall seek Purchaser’s prior written consent to incur such cost.

7.1   Conditions to Obligations of Purchaser.  The obligations of Purchaser to effect the Transactions are subject to the following conditions:

7.2   Satisfaction of Conditions.  The Purchaser hereby agrees that by executing this Agreement they have accepted that the Sellers and the Neil Bruce Copp have fully satisfied all the closing conditions set out in Article 7.1.

7.3   Post Closing Obligations Whitcher and Nobbs shall procure that following Closing Wolanski & Co Trustees Ltd enter into the Lease Deed of Variation in the form agreed immediately prior to Closing.

8.1   Survival.  All of the warranties (including those warranties set forth in Article 2, Article 3 and Article 4) and covenants contained herein or in any instrument or document delivered or to be delivered pursuant to this Agreement, and the rights of the Sellers, the Neil Bruce Copp Shareholder, the Company and the Purchaser to recover for damages incurred by them, as set forth in this Article 8, shall survive the execution of this Agreement and the Closing Date notwithstanding any investigation heretofore or hereafter made by or on behalf of any party hereto or any Knowledge of facts determined or determinable by any party hereto and shall continue until, and all claims with respect thereto shall be made on or prior to September 4, 2011, except for (a) the warranties set forth in (i) Article 2.3 (Capitalization), Article 3.1 (Authority and Binding Nature of Agreement) and Article 3.2 (Ownership and Transfer of Shares), Article 4 (Warranties of Purchaser and Versar) and Article 5 (Versar Guarantee of Purchaser Obligations) which shall survive indefinitely, (ii) the Tax Warranties and the Tax Covenant, which shall survive until the seventh anniversary of the Closing Date; (b) warranties, covenants and other matters for which notice of a claim for recovery has been given in accordance with this Agreement as of the end of the applicable period referred to above, in which event such warranties, covenants and other matters that serve as the basis for such claim shall survive until the final disposition of such claim; (c) covenants to be performed after the Closing Date, which shall survive until performed in accordance with their respective terms and (d) claims relating to fraud, which shall survive indefinitely.

8.2   Recovery by Purchaser Parties.

8.3   Recovery by Seller and the Neil Bruce Copp Shareholder.  In the event a Seller or the Neil Bruce Copp Shareholder suffers or incurs or otherwise become subject to any Damages which arise from or as a result of:

8.4   Basket; Limitation on Liability.

8.5   Offset Against Seller Notes and Contingent Consideration.

8.6   Procedure for Recovery of Damages.

8.7   Third Party Claims.  Except as otherwise provided in this Agreement, the following procedures shall be applicable with respect to recovery for claims made by third parties (“Third Party Claims”).  After receipt by a Claiming Party of notice of the commencement of any action or the assertion of any Legal Proceeding, liability or obligation by a third party (whether by legal process or otherwise), against which Legal Proceeding, liability or obligation the Claiming Party is entitled to recover from one or more parties under this Agreement, the Claiming Party will promptly (and no later than 2 Business Days following the Claiming Party having Knowledge of such claim) notify the Purchaser, the Sellers or the Neil Bruce Copp Shareholder against whom recovery is sought (the “Indemnifying Party”) in writing of the commencement or assertion thereof and provide a copy of such Third Party Claim, process and all legal pleadings; provided, however, that any failure by the Claiming Party to so notify the Indemnifying Party shall not limit any of the Claiming Party’s rights to recover Damages under this Article 8 (except to the extent such failure actually prejudices the defence of such Third Party Claim).  The Indemnifying Party shall have the right, exercisable upon written notice within 10 Business Days after receipt of such notice, to assume the defence of such action with counsel of reputable standing unless in such action injunctive or equitable remedies have been sought therein in respect of the Claiming Party, the Purchaser or the Company.  The Indemnifying Party and the Claiming Party shall reasonably cooperate in the defence of such claims.  If the Indemnifying Party shall assume or participate in the defence of such Third Party Claim as provided herein, the Claiming Party shall make available to the Indemnifying Party all relevant records and take such other action and sign such documents as are necessary to defend such Third Party Claim in a timely manner. If the Claiming Party shall be required by judgment or a settlement agreement to pay any amount in respect of any obligation or liability against which the Claiming Party is entitled to recover under this Agreement, such amount, net of any insurance proceeds actually recovered (less any amounts reasonably incurred by the claiming parties in order to secure such recoveries, including any applicable insurance deductibles), shall be paid by the Indemnifying Party, including by offset against the outstanding balance under the Indemnifying Parties’ Seller Notes or any Indemnifying Parties’ Contingent Consideration payable, if applicable.  No Indemnifying Party, in the defence of any such Third Party Claim, shall, except with the written consent of the Claiming Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Claiming Party of a release from all liability with respect to such claim or litigation. In the event that the Indemnifying Party does not assume the defence of any matter for which it is entitled to assume such defence as provided above, the Claiming Party shall have the full right to defend against any such claim or demand, and shall be entitled to in good faith settle or agree to pay in full such claim or demand, in its sole discretion; provided, that the Claiming Party may, at its or their option, seek the consent of the Indemnifying Party to such settlement or payment (which consent shall not be unreasonably withheld or delayed), and, if such consent is given, such settlement shall be finally determined to have been made by the Claiming Party in good faith.

If the Indemnifying Party shall have assumed the defence of an action pursuant to this Article 8.7, a Claiming Party shall have the right to participate in the defence of such action with its own counsel, but the fees and expenses of such counsel shall be at the expense of the Claiming Party unless (a) the employment of such counsel shall have been authorized in writing by the Indemnifying Party in connection with the defence of such action or claim, (b) the Indemnifying Party shall not have employed counsel in the defence of such action or claim, or (c) such Claiming Party shall have reasonably concluded on the advice of its counsel that there may be defences available to it which are contrary to, or inconsistent with, those available to the Indemnifying Party, thus preventing the Indemnifying Party’s counsel from adequately representing the Indemnifying Party and the Claiming Party, in any of which events such fees and expenses of not more than one additional counsel for the Claiming Party shall be borne by the Indemnifying Party.

8.8   Characterization of Recovery.  The parties agree to treat any recovery of Damages received by the Purchaser Parties under this Agreement as an adjustment to the purchase price for Tax purposes, unless otherwise required by applicable law.

8.9   No Contribution.  No Indemnifying Party shall have and shall not exercise or assert (or attempt to exercise or assert), any right of contribution, right of recovery or other right or remedy against the Company or any of its officers or directors in connection with any reimbursement obligation or any other liability to which such Indemnifying Party may become subject under or in connection with this Agreement.

8.10          Obligations Regarding Mitigation.  The Purchaser Parties shall attempt to mitigate the amount of Damages to which they shall be entitled pursuant to this Article 8 by seeking recourse for a reasonable period of time against any third party from which the Company is entitled to payment with respect to such Damages, in whole or in part, and by seeking insurance coverage for any such Damages to the extent that Versar or Purchaser has maintained insurance relating to such matter and if any sum is so recovered then either the amount then payable by the Sellers and the Neil Bruce Copp Shareholder (as applicable) in respect of those Damages shall be reduced by an amount equal to the sum so recovered or (if any amount shall already have been paid by any of the Sellers and the Neil Bruce Copp Shareholder (as applicable) in respect of those Damages) there shall be repaid to the Sellers and the Neil Bruce Copp Shareholder (as applicable) an amount equal to the amount so recovered or (if less) the amount of such payment (to the extent not previously repaid by the Purchaser.

8.11          If the Purchaser Parties make a Claim Saving, then either the amount then payable by the Sellers and the Neil Bruce Copp Shareholder (as applicable) in respect of any Damages pursuant to this Agreement shall be reduced by an amount equal to the Claim Saving Amount or (if any amount shall already have been paid by any of the Sellers and the Neil Bruce Copp Shareholder (as applicable) in respect of any Damages claimed under this Agreement) there shall be repaid to the Sellers and the Neil Bruce Copp Shareholder (as applicable) an amount equal to the Claim Saving Amount or (if less) the amount of such payment (to the extent not previously repaid by the Purchaser Parties).

8.12          Limitations.  Notwithstanding anything in this Article 8 to the contrary, the Sellers and Neil Bruce Copp Shareholder shall have no liability (or such liability shall be reduced) in respect of any Damages under this Agreement:

8.13         For the avoidance of doubt the Purchaser Party shall not be entitled to recover Damages to the extent it has already made recovery in respect of the same loss or damage under this Agreement.

9.1    Further Assurances.  Each party hereto shall execute and cause to be delivered to each other party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (on or after the Closing Date) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement, any of the Related Agreements or any of the other documents, certificates, etc. executed or delivered in connection therewith.

9.2    Fees and Expenses.  Each party to this Agreement shall bear and pay all fees, costs and expenses (including legal fees and accounting fees) that have been incurred or that are incurred by such party in connection with the transactions contemplated by this Agreement, including all fees, costs and expenses incurred by such party in connection with or by virtue of (a) the investigation and review conducted by Purchaser and its Representatives with respect to the Company’s business (and the furnishing of information to Purchaser and its Representatives in connection with such investigation and review), (b) the negotiation, preparation and review of this Agreement (including the Company Disclosure Schedule), the Related Agreements and all agreements, certificates, opinions and other instruments and documents delivered or to be delivered in connection with the transactions contemplated by this Agreement or the Related Agreements, (c) the preparation and submission of any filing or notice required to be made or given in connection with any of the transactions contemplated by this Agreement or the Related Agreements, and the obtaining of any Consent required to be obtained in connection with any of such transactions, and (d) the consummation of the Transactions.

9.3    Amendment.  This Agreement may be amended only by an instrument in writing signed by the Company, Purchaser and the Sellers and the Neil Bruce Copp Shareholder at any time.

9.4    Waiver; Remedies Cumulative.  The rights and remedies of the parties to this Agreement are cumulative and not alternative.  Neither any failure nor any delay by any party in exercising any right, power or privilege under this Agreement, any of the Related Agreements or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable Legal Requirements, (i) no claim or right arising out of this Agreement, any of the Related Agreements or any of the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (ii) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (iii) no notice to or demand on one party will be deemed to be a waiver of any obligation of that party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

9.5    Entire Agreement.  This Agreement and the Related Agreements constitute the entire agreement among the parties to this Agreement and supersedes all other prior agreements and understandings, both written and oral, among or between any of the parties with respect to the subject matter hereof and thereof. This Article 9.5 shall not exclude any representations made fraudulently.

9.6    Execution of Agreement; Counterparts; Electronic Signatures.

9.7    Governing Law and Submission to Jurisdiction; Appointment of Process Agent:

9.8    Assignment and Successors.  No party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other parties, except that Purchaser may assign any of its rights and delegate any of its obligations under this Agreement to any Purchaser Party (it being agreed and acknowledged that Versar will continue to guarantee the performance of such Purchaser Party pursuant to the terms of Article 5, provided that if such assignee ceases to be a member of the Purchaser’s Group, this Agreement and the benefits arising under it shall be deemed automatically by that fact to have been transferred to the Purchaser immediately before the assignee ceases to be a member of the Purchaser’s Group).  Subject to the preceding, this Agreement will apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of the parties.

9.9    Parties in Interest.  Except as set forth in Article 8, none of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the parties hereto and their respective successors and assigns (if any).

9.10   Notices.  All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given (a) upon actual receipt, when delivered by hand, (b) upon receipt of transmission confirmation, when sent by facsimile, (c) three Business Days after mailing by prepaid registered or certified mail within the United States, (d) one Business Day after sending by overnight courier (with postage prepaid and confirmation requested) within the United States or (e) two Business Days after sending by international courier (with postage prepaid and confirmation requested):

9.11        Construction; Usage.

9.12         Enforcement of Agreement. The parties acknowledge and agree that each of them would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately compensated in all cases by monetary damages alone.  Accordingly, in addition to any other right or remedy to which any party may be entitled, at law or in equity, it shall be entitled to enforce any provision of this Agreement by a decree of specific performance and temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement, without posting any bond or other undertaking.

9.13         Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

	By:	/s/ Mark Whitcher
		Name:  Mark Whitcher