Exhibit 10.1
 
STOCK PURCHASE AGREEMENT
by and among
LOCAL.COM CORPORATION,
KRILLION, INC.,
THE STOCKHOLDERS OF KRILLION, INC.,
and
HUMMER WINBLAD VENTURE PARTNERS V, L.P., AS STOCKHOLDERS’ AGENT
Dated as of April 29, 2011
 

 

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TABLE OF CONTENTS

              PAGE  
ARTICLE I            SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS
       
1.1. Sale and Purchase of Shares
    1  
1.2. Closing
    1  
1.3. Purchase Price
    1  
1.4. Working Capital Adjustment
    2  
1.5. Surrender of Certificates
    3  
1.6. Taking of Necessary Action; Further Action
    4  
1.7. Tax Withholding
    4  
1.8. Transfer Taxes
    4  
 
       
ARTICLE II            REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
MAJOR
       
STOCKHOLDERS
       
2.1. Organization and Qualification
    4  
2.2. Certificate of Incorporation and Bylaws
    5  
2.3. Subsidiaries
    5  
2.4. Capitalization
    5  
2.5. Authority and Enforceability
    6  
2.6. No Conflicts
    6  
2.7. Financial Statements
    7  
2.8. Absence of Certain Changes
    7  
2.9. Intellectual Property
    9  
2.10. Contracts
    12  
2.11. Title to Property
    14  
2.12. Leased Real Property
    14  
2.13. Bank Accounts
    14  
2.14. Receivables; Major Customers
    14  
2.15. Litigation
    15  
2.16. Permits
    15  
2.17. Taxes
    15  
2.18. Employee Benefit Matters
    16  
2.19. Certain Interests
    19  
2.20. Insurance
    19  
2.21. Brokers; Termination Fees
    20  
2.22. Compliance with Law
    20  
2.23. No Acquisition Proposals
    20  
2.24. No Misstatements
    20  
 
       
ARTICLE III            REPRESENTATIONS AND WARRANTIES OF THE COMPANY
STOCKHOLDERS
       
3.1. Organization and Qualification
    21  
3.2. Authority and Enforceability
    21  
3.3. Ownership of the Shares
    21  
3.4. No Conflicts; Consents
    21  

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TABLE OF CONTENTS
(continued)

              PAGE  
3.5. Litigation
    21  
3.6. Tax Advisors
    22  
3.7. Brokers
    22  
3.8. No Misstatements
    22  
 
       
ARTICLE IV            REPRESENTATIONS AND WARRANTIES OF PURCHASER
       
4.1. Organization and Qualification
    22  
4.2. No Conflict
    22  
4.3. Authority and Enforceability
    23  
4.4. Brokers
    23  
 
       
ARTICLE V            ADDITIONAL AGREEMENTS
       
5.1. Confidentiality
    23  
5.2. Public Disclosure
    23  
5.3. Treatment of Company Options
    24  
5.4. Termination of Benefit Plans
    24  
5.5. Tax Matters
    24  
5.6. Expenses
    26  
 
       
ARTICLE VI            CLOSING DELIVERABLES
       
6.1. Closing Deliveries by Purchaser
    26  
6.2. Closing Deliveries by the Company
    26  
 
       
ARTICLE VII            ESCROW AND INDEMNIFICATION
       
7.1. Escrow Fund
    28  
7.2. Survival Period
    28  
7.3. Indemnification
    29  
7.4. Limitations
    30  
7.5. Indemnification Procedures
    31  
7.6. Stockholders’ Agent
    32  
7.7. Actions of the Stockholders’ Agent
    33  
 
       
ARTICLE VIII GENERAL PROVISIONS
       
8.1. Notices
    33  
8.2. Severability
    34  
8.3. Assignment, Binding Effect, Benefit
    34  
8.4. Incorporation of Exhibits
    35  
8.5. Specific Performance
    35  
8.6. Governing Law; Forum
    35  
8.7. Time of the Essence
    35  
8.8. Waiver of Jury Trial
    35  
8.9. Construction
    35  
8.10. Further Assurances
    35  
8.11. Amendments and Waivers
    36  

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TABLE OF CONTENTS
(continued)

              PAGE  
8.12. Headings
    36  
8.13. Counterparts
    36  
8.14. Entire Agreement
    36  

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          EXHIBITS        
Exhibit A
  —   Definitions
 
       
Exhibit B-1
  —   Form of Employment Agreement
 
       
Exhibit B-2
  —   Form of Transitional Payment Agreement
 
       
Exhibit C
  —   Form of FIRPTA Certificate
 
       
Exhibit D
  —   Form of Escrow Agreement
 
       
Exhibit E
  —   Form of Proprietary Information and Inventions Assignment Agreement
 
       
Exhibit F
  —   Form of Company Legal Opinion
 
       

          SCHEDULES        
Schedule 1-A
  —   Company Stockholders
 
       
Schedule 1-B
  —   Key Employees
 
       
Schedule 1.4(a)
  —   Estimated Closing Balance Sheet
 
       
Schedule 1.5(b)
  —   Final Conversion Schedule
 
       
Schedule 5.6
  —   Company Fees and Expenses

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STOCK PURCHASE AGREEMENT
     This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of April 29,
2011, is entered into by and among Local.com Corporation, a Delaware corporation
(“Purchaser”), Krillion, Inc., a Delaware corporation (the “Company”), all of
the stockholders of the Company, each of whom are listed on Schedule 1-A hereto
(the “Company Stockholders”), and Hummer Winblad Venture Partners V, L.P., as
stockholders’ agent (the “Stockholders’ Agent”). Capitalized terms used in this
Agreement are defined on Exhibit A.
RECITALS
     WHEREAS, the Company Stockholders collectively own all of the issued and
outstanding shares of the Company’s Common Stock and Preferred Stock (the
“Shares”); and
     WHEREAS, the Company Stockholders desire to sell, and Purchaser desires to
purchase (the “Share Purchase”), all of the Shares, all in accordance with the
terms and conditions set forth in this Agreement.
     NOW, THEREFORE, in consideration of the foregoing and the respective
covenants, agreements, representations and warranties set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS
     1.1. Sale and Purchase of Shares. At the Closing, the Company Stockholders
shall sell, assign, transfer and deliver the Shares to the Purchaser, and the
Purchaser shall purchase the Shares from the Company Stockholders, on the terms
and subject to the conditions set forth in this Agreement.
     1.2. Closing. The closing of the Share Purchase (the “Closing”) shall take
place at the offices of Purchaser at 10:00 a.m. California time on the date
hereof or on such other date, or at such other time or place, as shall be agreed
to in writing by the parties hereto. All deliveries to be made or other actions
to be taken at the Closing shall be deemed to occur simultaneously, and no such
delivery or action shall be deemed complete until all such deliveries and
actions have been completed or the relevant parties have agreed to waive such
delivery or action. If the Closing does not occur, any delivery made or other
action taken at the Closing shall be deemed not to have occurred and be without
force or effect.
     1.3. Purchase Price. As consideration for the Shares, Purchaser agrees to
pay to the Company Stockholders the purchase price, payable as follows:
          (a) As consideration for each share of the Company’s Common Stock,
$0.0001 par value per share, issued and outstanding immediately prior to the
Closing (the “Company Common Stock”), Purchaser agrees to pay to each holder
thereof at the Closing and upon delivery by such holder of his, her or its
Company Certificate(s) representing such shares of the Company Common Stock, a
per share amount in cash equal to $0.0001 (the “Initial Common Amount Per
Share”). The aggregate purchase price payable for all shares of Company Common
Stock outstanding immediately prior to the Closing pursuant to this
Section 1.3(a) is referred to herein as the “Common Stock Consideration”.

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          (b) As consideration for each share of the Company’s Preferred Stock,
$0.0001 par value per share, issued and outstanding immediately prior to the
Closing (the “Company Preferred Stock”), Purchaser agrees to pay each holder
thereof:
          (i) at the Closing and upon delivery by such holder of his, her or its
Company Certificate(s) representing such shares of the Company Preferred Stock,
a per share amount in cash equal to the quotient resulting from dividing (i) an
amount equal to (A) $3,500,000 minus (B) the Common Stock Consideration minus
(C) the Secured Notes Payment Amount minus (D) the Escrow Amount minus (E) the
Company Fees and Expenses minus (F) all amounts due and owing under the
Purchaser Promissory Note minus (G) the Negative Estimated Working Capital
Adjustment, if any, and plus, (H) the Positive Estimated Working Capital
Adjustment, if any, by (ii) the number of shares of Company Preferred Stock
outstanding as of immediately prior to the Closing;
          (ii) such holder’s Proportionate Escrow Share of the Working Capital
Adjustment Consideration (if any) at such time and subject to such terms and
conditions as set forth in Section 1.4(e); and
          (iii) such holder’s Proportionate Escrow Share of the final amount, if
any, released from the Escrow Fund pursuant to Article VII.
The aggregate purchase price payable for all shares of Company Preferred Stock
outstanding immediately prior to the Closing pursuant to this Section 1.3(b) is
referred to herein as the “Preferred Stock Consideration”.
          (c) At the Closing, Purchaser shall pay the full Secured Notes Payment
Amount to the holders thereof subject to Section 6.2(g).
     1.4. Working Capital Adjustment.
          (a) Attached as Schedule 1.4(a) is the Company’s estimated balance
sheet as of the close of business on the Closing Date prepared in accordance
with United States generally accepted accounting principles (“GAAP”)
consistently applied (the “Estimated Closing Balance Sheet”). The Company’s
estimate of its Working Capital (the “Estimated Working Capital Value”) shall be
calculated based on the difference between the current assets and the current
liabilities (excluding accrued vacation and PTO of employees and Company Fees
and Expenses) of the Company as reflected on the Estimated Closing Balance
Sheet. To the extent the Estimated Working Capital Value is less than $0, such
difference shall be deemed to be the Negative Estimated Working Capital
Adjustment. To the extent the Estimated Working Capital Value is greater than
$0, such excess shall be deemed to be the Positive Estimated Working Capital
Adjustment.
          (b) As soon as practicable (but in no case more than thirty (30) days)
after the Closing Date, Purchaser shall prepare and provide to the Stockholders’
Agent an unaudited balance sheet of the Company as of the close of business on
the Closing Date (the “Proposed Closing Balance Sheet”) that has been prepared
in a manner consistent with the preparation of the Estimated Closing Balance
Sheet, including preparation in accordance with GAAP consistently applied. The
Stockholders’ Agent shall provide such assistance in the preparation of the
Proposed Closing Balance Sheet as shall be reasonably requested by Purchaser. In
connection with the delivery of the Proposed Closing Balance Sheet, Purchaser
shall also deliver to the Stockholders’ Agent a worksheet which sets forth
Purchaser’s revised calculation of the Working Capital as of the Closing Date
(the “Proposed Working Capital Value”).

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          (c) Following the Stockholders’ Agent receipt of the items set forth
in Section 1.4(b) above, the Stockholders’ Agent shall notify Purchaser in
writing within thirty (30) days if the Stockholders’ Agent disagrees with the
adjustments resulting in the Proposed Working Capital Value, in which case the
Stockholders’ Agent and Purchaser shall seek in good faith to resolve any
differences that they may have with respect to the calculation of the Proposed
Working Capital Value. If Purchaser has not received any such written notice
from the Stockholders’ Agent within thirty (30) days after delivering the items
set forth in Section 1.4(b), then the Stockholders’ Agent shall be deemed to
have accepted the calculation of the Proposed Working Capital Value and such
value shall be deemed the “Final Working Capital Value” for purposes of this
Agreement.
          (d) If the parties are unable to reach an agreement on the Proposed
Working Capital Value within thirty (30) days after delivery of notice of
disagreement by Stockholders’ Agent, then Purchaser and the Stockholders’ Agent
shall jointly engage a Designated Accounting Firm promptly to determine the
amount of the Final Working Capital Value, which determination shall be final
and binding on the parties. The fees, costs and expenses of the Designated
Accounting Firm shall be paid by the non-prevailing party or in such other
equitable allocation as may be determined in either case by the Designated
Accounting Firm (and any fees incurred by the Stockholders’ Agent shall be
deemed Agent Expenses hereunder).
          (e) Within ten (10) days after the determination of the Final Working
Capital Value, (i) to the extent the Final Working Capital Value is greater than
the Estimated Working Capital Value, Purchaser shall pay in cash to each
Preferred Stockholder such Preferred Stockholder’s Proportionate Escrow Share of
the amount by which the Final Working Capital Value exceeds the Estimated
Working Capital Value (the “Working Capital Adjustment Consideration”), or (ii)
to the extent the Final Working Capital Value is less than the Estimated Working
Capital Value, the Escrow Agent shall pay to Purchaser from the Escrow Fund the
amount by which the Estimated Working Capital Value exceeds the Final Working
Capital Value, as the case may be.
     1.5. Surrender of Certificates.
          (a) Procedure. Concurrently herewith, the Company Stockholders are
delivering to Purchaser share certificates representing the Shares, duly
endorsed for transfer or accompanied by duly signed powers of attorney for
transfers (each such certificate, a “Company Certificate”). Upon surrender of
all Company Certificates held by a Company Stockholder to Purchaser or to such
other agent or agents as may be appointed by Purchaser, the Company Certificates
so surrendered shall forthwith be cancelled following the issuance to the
Purchaser of new shares of Company Common Stock.
          (b) Conversion Schedule. Attached as Schedule 1.5(b) is a schedule
(the “Final Conversion Schedule”) showing for each Company Stockholder as of the
Closing: (i) the number and class of Shares held, (ii) a calculation of the
amount payable to such Company Stockholder at the Closing pursuant to
Section 1.3 and (iv) such Company Stockholder’s Proportionate Escrow Share of
the Escrow Amount (assuming no claims for Losses pursuant to Article VII). An
officer of the Company shall certify that the Final Conversion Schedule
correctly reflects the calculations required to be made pursuant to this
Agreement, and the Company shall deliver the Final Conversion Schedule together
with such certification to Purchaser at Closing.
     1.6. Taking of Necessary Action; Further Action. If, at any time after the
Closing, any further action is necessary or desirable to carry out the purposes
of this Agreement and to vest Purchaser with full right, title and possession to
all of the outstanding shares of Company Capital Stock, the officers and
directors of Purchaser and the Company are fully authorized in the name of their
respective entities or

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otherwise to take, and will take, all such lawful and necessary action, so long
as such action is not inconsistent with this Agreement.
     1.7. Tax Withholding. Purchaser shall be entitled to deduct and withhold
from the purchase price payable hereunder, or other payment otherwise payable
pursuant to this Agreement or the Escrow Agreement, the amounts required to be
deducted and withheld under the Code, or any provision of any U.S. federal,
state, local or foreign Tax Law. Any amounts so withheld shall be paid over to
the appropriate Governmental Authority. To the extent that amounts are so
deducted and withheld, such deducted and withheld amounts shall be treated for
all purposes of this Agreement as having been paid to such holder in respect of
whom such deduction and withholding was made.
     1.8. Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) imposed on any Company Stockholder or other Person entitled to receive
the purchase price pursuant to the terms of this Agreement shall be borne and
paid by such Company Stockholder or Person.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
     The Company represents and warrants to Purchaser that the statements
contained in this Article II are true and correct, except as set forth in the
disclosure schedule delivered by the Company to Purchaser concurrently with the
execution of this Agreement (the “Company Disclosure Schedule”). The Company
Disclosure Schedule shall be arranged according to specific sections in this
Article II and shall provide exceptions to, or otherwise qualify in reasonable
detail, the corresponding section in this Article II (unless and to the extent
the relevance of such disclosure to other representations and warranties is
readily apparent from the actual text of the disclosed exception, in which case
such disclosure shall also be deemed to qualify such other representation(s) and
warranty(ies)):
     2.1. Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to
(i) conduct its business in the manner in which its business is currently being
conducted, (ii) own and use its assets in the manner in which its assets are
currently owned and used and (iii) to perform its obligations under all Company
Contracts. The Company is duly qualified to do business and is in good standing
in Delaware, California and in each other jurisdiction in which the assets owned
or leased by the Company, or the operation of the Company’s business, makes such
qualification necessary, except where the failure to be so organized, existing,
qualified and in good standing would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
     2.2. Certificate of Incorporation and Bylaws. The Company has delivered to
Purchaser a true and correct copy of (i) the certificate of incorporation and
bylaws or other charter documents, as applicable, of the Company, and all
amendments thereto (the “Charter Documents”); (ii) the minute books containing
all consents, actions and meetings of the Company Board (and any committees
thereof) and Company Stockholders; and (iii) the stock transfer books of the
Company setting forth all issuances or transfers of any of the Company’s capital
stock. The Charter Documents are in full force and effect and the Company is not
in violation of any provisions therein. The corporate minute books, stock
registers and other corporate records of the Company that have been provided to
Purchaser are complete and accurate, and the signatures appearing on all
documents contained therein are the true signatures of the Persons purported to
have signed the same.

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     2.3. Subsidiaries. The Company has no subsidiaries and does not own, of
record or beneficially, or control (nor has it ever owned or controlled) any
direct or indirect interest, or any right to acquire any such right (contingent
or otherwise) in any corporation, partnership, joint venture, association or
other entity.
     2.4. Capitalization.
          (a) The Company’s authorized capital stock consists of 25,777,800
shares of Common Stock, $0.0001 par value per share, 15,515,900 shares of
Series A Preferred Stock, $0.0001 par value per share, and 15,515,900 shares of
Series A-1 Preferred Stock, $0.0001 par value per share. As of immediately prior
to the Closing, 7,462,700 shares of Common Stock, 15,431,313 shares of Series A
Preferred Stock and no shares of Series A-1 Preferred Stock were issued and
outstanding. The Shares constitute all of the outstanding shares of Company
Capital Stock as of immediately prior to the Closing, and all of the Shares
(i) have been duly authorized and validly issued, (ii) are fully paid and
non-assessable, and (iii) have been issued in full compliance with all
applicable securities laws and other applicable Laws and any right of first
refusal or similar right or limitation, including those in the Charter
Documents. None of the Shares are subject to preemptive rights created by
statute, the Charter Documents, or any agreement to which the Company is a party
or by which it is bound. None of the Shares are unvested or are subject to a
repurchase option, substantial risk of forfeiture or other similar condition
under any applicable restricted stock purchase agreement or other similar
agreement with the Company.
          (b) The Company has reserved 4,569,181 shares of Common Stock for
issuance under the Company’s 2006 Stock Plan (the “Company Stock Plan”), of
which options to purchase 2,200,391 shares of Common Stock are outstanding as of
immediately prior to the Closing. Except for the Company Stock Plan, the Company
has never adopted, sponsored or maintained any stock option plan or any other
plan, arrangement or agreement providing for equity compensation to any Person.
          (c) As of immediately prior to the Closing, the Company had
outstanding Secured Notes in the aggregate principal amount of $698,904.11. The
Secured Notes have not been repaid prior to the Closing, and as of immediately
prior to the Closing remain issued and outstanding. The Share Purchase will be
deemed a “Corporation Transaction” under the terms of the Secured Notes and the
full amount due and payable under the Secured Notes upon the Closing will be
$698,904.11 in the aggregate (the “Secured Notes Payment Amount”).
          (d) Except as set forth in Section 2.4(d) of the Company Disclosure
Schedule, and except as included in Sections 2.4(a), 2.4(b) and 2.4(c) above,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character, whether or not contingent, relating to the issued
or unissued capital stock of the Company or obligating the Company to issue or
sell any share of capital stock of, or other equity interest in, the Company.
The Company does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the Company Stockholders on any matter. Except for the Stockholder Agreements
which are to be terminated immediately prior to Closing in accordance with
Section 6.2(j) and the Secured Notes, there are no Contracts under which the
Company is or may become obligated to sell or otherwise issue any shares of
Company Capital Stock or any other securities. As a result of the Share
Purchase, Buyer will be the sole record and beneficial holder of all issued and
outstanding Company Capital Stock and all rights to acquire or receive any
Company Capital Stock, whether or not such Company Capital Stock is outstanding.
          (e) Except as set forth in Section 2.4(e) of the Company Disclosure
Schedule, the Company is not a party or subject to any stockholder agreement,
voting agreement, voting trust, or any

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other similar arrangement relating to the registration, transfer or voting of
any of the securities of the Company.
          (f) The Company has never repurchased, redeemed or otherwise
reacquired any Shares or other securities. No Company Stockholder has exercised
any right of redemption, if any, provided in the Charter Documents with respect
to any shares of the Company Capital Stock, and the Company has not received
notice that any Company Stockholder intends to exercise such rights. There are
no declared or accrued but unpaid dividends with respect to any of the Shares.
          (g) There are no outstanding contractual obligations of the Company to
provide funds to make an investment (in the form of a loan, capital contribution
or otherwise) in any Person.
          (h) The Capital Stock and Company Options (including the shares
subject to issuance pursuant to such outstanding Company Options) issued and
outstanding as of immediately prior to the Closing are set forth on the Final
Conversion Schedule.
     2.5. Authority and Enforceability. The Company has all necessary corporate
power and authority to execute and deliver this Agreement and the agreements and
documents set forth in the exhibits hereto (the “Ancillary Agreements”) to which
the Company is a party, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the Share Purchase and other transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action on the part of the Company and no other corporate
proceedings are necessary to authorize and approve this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. This Agreement and the Ancillary Agreements have been duly and validly
executed and delivered by the Company, constitute the legal, valid and binding
obligations of the Company, and are enforceable against the Company in
accordance with their terms, subject to (i) the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting
creditors’ rights generally and (ii) rules of law and equity governing specific
performance, injunctive relief and other equitable remedies.
     2.6. No Conflicts. Section 2.6 of the Company Disclosure Schedule sets
forth all notices, approvals, consents, waivers or other authorizations
(“Consents”) required of the Company by any third party or Governmental
Authority in connection with the execution and delivery of this Agreement and
the Ancillary Agreements and the consummation of the Share Purchase. Assuming
all such Consents have been obtained and all filings and other obligations
described therein have been completed, the execution and delivery of this
Agreement and the Ancillary Agreements and the consummation of the Share
Purchase by the Company will not, directly or indirectly:
          (a) breach or violate the Company’s Charter Documents;
          (b) breach or give any Governmental Authority the right to challenge
the Share Purchase or other transactions contemplated by this Agreement or to
exercise any remedy or obtain any relief under any Law or any Order to which the
Company, its business or any of its assets are subject;
          (c) contravene, conflict with or result in a violation or breach of
any of the terms or requirements of, or give any Governmental Authority the
right to revoke, withdraw, suspend, cancel, terminate or modify any Permit that
is held by the Company or that otherwise relates to the Company’s business or
assets;

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          (d) breach any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or modify, any of the
Company’s Material Contracts; or
          (e) result in the imposition or creation of any Encumbrance upon or
with respect to any of the assets owned or used by the Company.
     2.7. Financial Statements.
          (a) Attached to Section 2.7 of the Company Disclosure Schedule are
true and complete copies of:
          (i) the unaudited financial statements (balance sheet, income
statement and statement of cash flows) of the Company as of and for the fiscal
years ended as of December 31, 2009 and December 31, 2010 (collectively, the
“Annual Financial Statements”); and
          (ii) the unaudited balance sheet of the Company as of March 31, 2011
(the “Interim Balance Sheet”), and income statement for the two months ended
February 28, 2011 (together with the Interim Balance Sheet, the “Interim
Financial Statements”).
          (b) The Annual Financial Statements and the Interim Financial
Statements (i) were prepared in accordance with the books of account and other
financial records of the Company; (ii) present fairly the financial condition
and the results of operations of the Company’s business as of the dates, and for
the periods, covered thereby; (iii) represent actual, bona fide transactions and
have been maintained in accordance with sound business practices, and (iv) have
been prepared in accordance with GAAP consistently applied.
          (c) The Company has no debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or not matured, determined or
determinable other than those (i) recorded or fully reserved against on the face
of the Interim Balance Sheet; or (ii) incurred in the ordinary course of the
Company’s business since December 31, 2010 and which are not, individually or in
the aggregate, material in amount.
          (d) The books of account and other financial records of the Company
are in all material respects complete and correct, and do not contain or reflect
any material inaccuracies or discrepancies.
     2.8. Absence of Certain Changes. Since December 31, 2010:
          (a) there has not been any Material Adverse Effect;
          (b) there has not been any loss, damage or destruction to, or any
interruption in the use of, any of the Company’s assets (whether or not covered
by insurance);
          (c) the Company has not (i) declared, accrued, set aside or paid any
dividend or made any other distribution (whether in cash, stock or property) in
respect of any shares of the Company Capital Stock, or (ii) repurchased,
redeemed or otherwise reacquired any shares of the Company Capital Stock or
other securities;
          (d) the Company has not sold or otherwise issued any shares of the
Company Capital Stock or any other securities;

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          (e) the Company has not amended its Charter Documents and has not
effected or been a party to any merger, acquisition, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
          (f) the Company has not purchased or otherwise acquired any asset from
any other Person in excess of $10,000, except for supplies acquired by the
Company in the ordinary course of business;
          (g) the Company has not leased or licensed any asset from any other
Person requiring an expenditure from the Company in excess of $10,000;
          (h) the Company has not made any capital expenditures in excess of
$10,000;
          (i) the Company has not sold or otherwise transferred, and has not
leased or licensed, any asset to any other Person with a value in excess of
$10,000;
          (j) the Company has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
Indebtedness;
          (k) the Company has not pledged or hypothecated any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance;
          (l) the Company has not made any loan or advance to any other Person
other than the extension of credit in the ordinary course of business;
          (m) the Company has not (i) established or adopted any Company
Employee Plan, (ii) paid any bonus or made any profit-sharing or similar payment
to, or increased the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its directors, officers
or employees, or (iii) entered into any severance, termination or employment
agreement;
          (n) the Company has not entered into, and neither the Company nor any
of the assets owned or used by the Company has become bound by, any Material
Contract;
          (o) no Contract by which the Company or any of the assets owned or
used by the Company is or was bound, or under which the Company has or had any
rights or interest, has been amended or terminated;
          (p) the Company has not incurred, assumed or otherwise become subject
to any Liability, other than accounts payable or accrued expenses (of the type
required to be reflected as current liabilities in the “liabilities” column of a
balance sheet prepared in accordance with GAAP) incurred by the Company in the
ordinary course of business;
          (q) the Company has not changed any of its methods of accounting or
accounting practices in any respect;
          (r) the Company has not entered into any transaction or taken any
other action outside the ordinary course of business; and
          (s) the Company has not agreed, committed or offered (in writing or
otherwise), and has not attempted, to take any of the actions referred to in
clauses (c) through (r) above.

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     2.9. Intellectual Property.
          (a) Section 2.9(a) of the Company Disclosure Schedule identifies and
provides a brief description of all Business IP and Other IP and identifies each
license agreement or other agreement under which any Intellectual Property
Rights are being provided or licensed to or used by the Company, except that the
Company need not list (a) Commodity Software or (b) immaterial trade secrets and
Confidential Information. The Company has good and valid title to all of the
Business IP, free of any Encumbrances, and has a valid right to use and
otherwise exploit all the Business IP and Other IP licensed by it. The Company
is the sole owner and sole creator of the Business IP and of all rights, title
and interest in and to the Business IP. The Business IP was created for the
Company’s account (solely by the Company’s employees or contractors) and not
with (or in the course of work for) or as a work-made-for-hire for any third
party. Except as set forth in Section 2.9(a) of the Company Disclosure Schedule,
the Company is not obligated to make any payment to any Person for the use or
other exploitation of any Intellectual Property Rights (other than Commodity
Software). Except as set forth in Section 2.9(a) of the Company Disclosure
Schedule, the Company is free to use, modify, copy, distribute, sell, license or
otherwise exploit each item of Business IP on an exclusive basis, other than
Intellectual Property Rights previously licensed by the Company on a
non-exclusive basis to third parties, with respect to which the Company’s rights
are not exclusive by reason of the existing non-exclusive license(s) thereto
that are listed in Section 2.9(a) of the Company Disclosure Schedule.
          (b) The Company has taken all reasonable measures and precautions
necessary to protect and maintain the confidentiality and secrecy of the
Business IP and Other IP (except for any Business IP and Other IP whose value
would be unimpaired by public disclosure) and otherwise to maintain and protect
the value of such Intellectual Property Rights.
          (c) Except as set forth in Section 2.9(a) of the Company Disclosure
Schedule, there are no patents or patent applications (including provisional
applications), trademark applications or registrations, domain names, or
registered copyrights owned by the Company that are used in or applicable to the
Company’s business. All Business IP and Other IP are valid, subsisting, and
enforceable. Section 2.9(a) of the Company Disclosure Schedule sets forth all
application fees, issue fees, maintenance fees, responses to office actions,
filings, and all other actions and payments that must be, or reasonably should
be, taken or made within 90 Business Days of the Closing Date to maintain any
Business IP or Other IP or the Company’s rights or position with respect
thereto.
          (d) Except as set forth in Section 2.9(d) of the Company Disclosure
Schedule, there are and have been no Proceedings relating to any of the Business
IP or Other IP, or to the registrability, validity, enforceability, misuse,
infringement, misappropriation, or other violation thereof, including without
limitation any oppositions, cancellations, or reexamination proceedings. Except
as set forth in Section 2.9(d) of the Company Disclosure Schedule, there are and
have been no Proceedings relating to any Intellectual Property Rights of any
Person, or to the registrability, validity, enforceability, misuse,
infringement, misappropriation, or other violation thereof, in which the Company
is a party, indemnitor, witness, or other participant.
          (e) None of the Business IP has been created or obtained in violation
of any technical measure designed to restrict or govern access to any data, code
or service (including, without limitation, robots.txt as implemented on any
Internet site). To the Company’s Knowledge, the Company and its business do not
infringe, misappropriate or otherwise violate or make any unlawful use of (and
to the Company’s Knowledge, the Company and its business have not infringed,
misappropriated or otherwise violated or made any unlawful use of, or received
any notice or other communications of any actual, alleged, possible, or
potential infringement, misappropriation, violation, or unlawful use of, any
Intellectual Property Rights or other right or contract (including any
invitation to license any Intellectual

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Property Rights) of any Person), and the Company has no reason to believe that
any of the foregoing will be forthcoming or applicable to the Company’s
business. To the Knowledge of the Company, no other Person is or has been
infringing, misappropriating, violating, or making any unlawful use of any
Business IP or Other IP, and to the Knowledge of the Company, no Intellectual
Property Rights owned or used by any other Person infringe or conflict with, any
Business IP or Other IP.
          (f) The Company has not licensed or provided any of the Business IP or
Other IP to any Person on any sort of exclusive basis. The Company has not
entered into any covenant not to compete or other contract, lease, license,
purchase or sales order, or other agreement or binding commitment, whether or
not in written form, limiting their ability to exploit fully any of the Business
IP or Other IP or to transact business in any market or geographical area or
with any Person, including but not limited to granting most favored nation
pricing, exclusive sales, exclusive distribution, exclusive marketing or other
exclusive rights, rights of first refusal, rights of first negotiation or
similar rights.
          (g) The Company has not entered into and is not bound by any Contract,
whether or not in written form, under which any Person has the right to
distribute or a license or other right with respect to any Business IP or Other
IP, other than non-exclusive end-user object code licenses granted to the
Company’s customers in the ordinary course of business on the Company’s standard
form of end-user object code license provided to Purchaser. The Company has not
disclosed or delivered to any Person (other than its authorized software
development employees and contractors), or permitted the disclosure or delivery
to any Person (other than such employees and contractors), of the source code,
or any portion or aspect of the source code, or any proprietary information or
algorithm contained in any source code, of any Software included in or embodying
any Business IP. No event has occurred, and no circumstance or condition exists,
that (with or without notice or lapse of time) could reasonably be expected to
result in the disclosure or delivery to any Person of the source code, or any
portion or aspect of the source code, or any proprietary information or
algorithm contained in any source code, of any Software included in or embodying
any Business IP.
          (h) Section 2.9(h) of the Company Disclosure Schedule contains a true
and complete list of all Software or other material used by the Company in its
business that is licensed to the Company as “free software,” “open source
software” or under a similar licensing or distribution model (including but not
limited to the GNU General Public License (GPL), GNU Lesser General Public
License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic
License, the Netscape Public License, the Sun Community Source License
(SCSL) the Sun Industry Standards License (SISL) and the Apache License) (“Open
Source Materials”) and describes the manner in which such Open Source Materials
were used (such description shall include whether (and, if so, how) the Open
Source Materials were modified and/or distributed). Except as set forth in
Section 2.9(h) of the Company Disclosure Schedule, the Company has not
(i) incorporated Open Source Materials into, or combined Open Source Materials
with, the Business IP or Software; (ii) distributed Open Source Materials in
conjunction with any Business IP, Software or Company Products; or (iii) used
Open Source Materials in a manner that creates, or purports to create,
obligations for the Company with respect to any Business IP or Software or
grants, or purports to grant, to any third party, any rights or immunities under
any Business IP or Software (including, but not limited to, using any Open
Source Materials that require, as a condition of use, modification and/or
distribution of such Open Source Materials that other software incorporated into
or with, derived from or distributed with such Open Source Materials be
(A) disclosed or distributed or made available or provided in source code form,
(B) be licensed for the purpose of making derivative works, or (C) be
redistributable at no charge).
          (i) To the Company’s Knowledge, all Software (including all parts
thereof) is free of any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop
dead device,” “virus” or other software routines or hardware components that
permit unauthorized access or the unauthorized disablement or

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erasure of such Software (or all parts thereof) or data or other software of
users (“Contaminants”). To the Company’s Knowledge, the Company’s information
technology systems are also free from Contaminants and the Software and the
Company’s information technology systems are secure. The Company has adequate
backup, disaster recovery and security plans and procedures and to the Company’s
Knowledge, there have been no unauthorized intrusions or breaches of the
security of information technology systems of the Company.
          (j) All Software and all Company Products perform in all material
respects in accordance with their specifications and the Company has not
received any complaints from its customers or partners with respect thereto. The
Company has disclosed in writing to Purchaser in the Company Disclosure Schedule
all information of which the Company is aware relating to any problem or issue
with respect to the performance or operation of any Software or the Company
Products which does, or may reasonably be expected to, have a Material Adverse
Effect on the value, functionality or fitness for the intended purpose thereof.
          (k) Neither the execution and delivery or effectiveness of this
Agreement and the Ancillary Agreements nor the performance of the Company’s
obligations under this Agreement and the Ancillary Agreements will cause the
forfeiture or termination of, or give rise to a right of forfeiture or
termination of, any Business IP or Other IP or Software or impair the right of
Purchaser to use, possess, sell or license any Business IP, Other IP, Software
or portion of any of the foregoing. After the Closing, all Business IP and Other
IP will be fully transferable, alienable, and licensable by Purchaser without
restriction and without payment of any kind to any third party.
          (l) The Company has disclosed to Purchaser the circumstances under
which and manner in which it has collected any names, addresses, email
addresses, telephone numbers, credit card numbers, health information and other
personally identifiable or other information of any Person and the type of
information so collected. The Company has materially complied with all
applicable Laws and the applicable privacy policies of the Company and other
Persons relating to (i) the privacy of users of the Company Products, including
all Internet websites and mobile applications owned, maintained, or operated by
the Company (the “Websites”) and (ii) the collection, storage, use, processing,
transfer, and disclosure of any information collected by the Company or by third
parties having authorized access to the records of the Company. The execution,
delivery and performance of this Agreement and the Ancillary Agreements comply
in all material respects with all applicable Laws relating to privacy and with
all applicable privacy policies of the Company and all other Persons. Copies of
all current and prior privacy policies of the Company, including the privacy
policies inapplicable to the Websites, are attached to Section 2.9(l) of the
Company Disclosure Schedule. Each of the Websites and other materials
distributed or marketed by the Company has at all times made all disclosures to
users or customers required by applicable Laws, and none of such disclosures
made or contained in any Website or in any such materials have been materially
inaccurate, misleading or deceptive or in violation of any applicable Law.
          (m) Section 2.9(m) of the Company Disclosure Schedule contains a true
and complete list of all Software development tools used by the Company in
connection with the business of the Company (each, a “Development Tool”).
Section 2.9(m) of the Company Disclosure Schedule also sets forth, for each
Development Tool: (a) for any Development Tool not entirely developed
independently by the Company, the identity of the independent contractors and
consultants involved in such development and a list of the agreements with such
independent contractors and consultants; (b) a list of any third parties
possessing any rights to receive royalties or other payments with respect to
such Development Tool, and a schedule of all such royalties payable; (c) a list
of any restrictions on the Company’s unrestricted right to use and distribute
such Development Tools; and (d) a list of all agreements with third parties for
the use

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by such third party of such Development Tool. The Company has sufficient right,
title and interest in and to the Development Tools for the conduct of the
business of the Company as presently conducted.
          (n) Each current and former employee, officer and consultant of the
Company has executed a proprietary information and inventions assignment
agreement substantially in the form attached as Exhibit E.1
     2.10. Contracts.
          (a) Section 2.10(a) of the Company Disclosure Schedule contains a true
and complete list of the following Contracts to which the Company is a party or
is subject, or by which any of its assets are bound:
          (i) all Contracts for the purchase or lease of materials, supplies,
goods, services, equipment or other assets or for the furnishing of services to
the Company with payments greater than $5,000 per year;
          (ii) all Contracts for the sale of materials, supplies, goods,
services, equipment or other assets by the Company (whether or not the Company
has recognized any revenue with respect to such contracts and agreements) in
excess of $10,000;
          (iii) all broker, distributor, dealer, manufacturer’s representative,
franchise, agency, sales promotion, market research, marketing, consulting and
advertising Contracts to which the Company is a party under which the Company
made any payments in excess of $10,000 in the aggregate within the preceding
twelve (12) month period;
          (iv) all leases and subleases of real property;
          (v) all Contracts relating to Indebtedness other than trade
Indebtedness of the Company, including any Contracts in which the Company is a
guarantor of Indebtedness;
          (vi) all Contracts with any Governmental Authority to which the
Company is a party;
          (vii) all Contracts that limit or purport to limit the ability of the
Company to compete in any line of business or with any Person or in any
geographic area or during any period of time;
          (viii) all Contracts between or among the Company and any Company
Stockholder, or officer or director of the Company or any Affiliate of such
Person;
          (ix) all employment, termination or separation Contracts currently in
effect with any former employee of the Company;
          (x) all partnership, joint venture or similar Contracts involving a
sharing of profits, losses, costs or liabilities by the Company with any other
Person;
 

1   Exhibit E will contain the Company’s current form of confidentiality and
inventions assignment agreement.

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          (xi) all Contracts to manufacture for, supply to or distribute to any
third party any products or components;
          (xii) all Contracts providing for indemnification of any officer,
director, employee or agent of the Company;
          (xiii) all Contracts that are terminable upon or prohibits a change of
ownership or control of the Company;
          (xiv) all Contracts for any capital expenditure or leasehold
improvement individually or in the aggregate in excess of $10,000;
          (xv) all Contracts that relate to the acquisition or disposition of
any material business (whether by merger, sale of stock, sale of assets or
otherwise);
          (xvi) all material Contracts which would require any consent or
approval of a counterparty as a result of or to permit the consummation of the
transactions contemplated by this Agreement; and
          (xvii) all other Contracts, whether or not made in the ordinary course
of business, that are material to the Company’s business.
          (b) True and complete copies of each Contract required to be listed in
Section 2.10(a) of the Company Disclosure Schedule (the “Material Contracts”)
have been delivered to Purchaser. Each Material Contract (i) is, to the
Company’s Knowledge, legal, valid and binding on the respective parties thereto
and is in full force and effect and (ii) upon consummation of the Share
Purchase, except to the extent that any Consents set forth in Section 2.6 of the
Company Disclosure Schedule are not obtained, shall continue in full force and
effect without penalty or other adverse consequence. The Company is not in
breach of, or default under, any Material Contract, and the Company has not been
given or received notice to or from any Person relating to any such alleged or
potential default that has not been cured. To the Company’s Knowledge, no event
has occurred which with or without the giving of notice or lapse of time, or
both, may conflict in any material respect with or result in a violation or
breach in any material respect of, or give any Person the right to exercise any
remedy under or accelerate the maturity or performance or cancel, terminate or
modify, any Material Contract.
          (c) To the Knowledge of the Company, no other party to any Material
Contract is in breach thereof or default thereunder.

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     2.11. Title to Property. The Company has good and valid title to all of its
tangible properties, interests in properties, and assets that it purports to
own, including all the tangible properties and assets reflected on the Interim
Balance Sheet or acquired after March 31, 2011, free and clear of all
Encumbrances. The property and equipment of the Company that are used in the
operations of the business of the Company are in good operating condition and
repair, subject to normal wear and tear, all material property and equipment are
reasonably adequate for the uses to which they are being put and have been
maintained and serviced in accordance with all applicable Law. All properties
used in the operations of the Company are reflected in the Interim Balance Sheet
to the extent GAAP requires the same to be reflected, except for such properties
as were acquired after the date thereof (each of which, if material to the
Company or its business as currently conducted is set forth on Section 2.11 of
the Company Disclosure Schedule).
     2.12. Leased Real Property. The Company does not own and has never owned
any real property. Section 2.12 of the Company Disclosure Schedule sets forth a
true and complete list of all real property currently leased or subleased by or
from the Company or otherwise used or occupied by the Company (the “Leased Real
Property”), including the name of the lessor, licensor, sublessor, master lessor
and/or lessee. The Company has made available to Purchaser true, correct and
complete copies of all leases, lease guaranties, subleases, agreements for the
leasing, use or occupancy of, or otherwise granting a right in or relating to
the Leased Real Property, including all amendments, terminations and
modifications thereof (“Lease Agreements”). All such Lease Agreements are valid
and effective in accordance with their respective terms, and there is not, under
any of such Lease Agreements, any existing default, or event of default (or
event which with notice or lapse of time, or both, would constitute a default).
The Company has not received any notice of a default, alleged failure to
perform, or any offset or counterclaim with respect to any such Lease Agreement,
which has not been fully remedied and withdrawn.
     2.13. Bank Accounts. Section 2.13 of the Company Disclosure Schedule
accurately sets forth, with respect to each account maintained by or for the
benefit of the Company at any bank or other financial institution:
          (a) the name and location of the institution at which such account is
maintained;
          (b) the name in which such account is maintained and the account
number of such account;
          (c) a description of such account and the purpose for which such
account is used;
          (d) the current balance in such account;
          (e) the rate of interest being earned on the funds in such account;
and
          (f) the names of all individuals authorized to draw on or make
withdrawals from such account.
There are no safe deposit boxes or similar arrangements maintained by or for the
benefit of the Company.
     2.14. Receivables; Major Customers.
          (a) Section 2.14(a) of the Company Disclosure Schedule provides a true
and complete breakdown and aging of all accounts receivable, notes receivable
and other receivables of the Company as of March 31, 2011.

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          (b) Except as set forth in 2.14(a) of the Company Disclosure Schedule,
all existing accounts receivable of the Company (including those accounts
receivable reflected on the Interim Balance Sheet that have not yet been
collected and those accounts receivable that have arisen since March 31, 2011
and have not yet been collected):
          (i) represent valid obligations of customers of the Company arising
from bona fide transactions entered into in the ordinary course of business; and
          (ii) are current and are collectible in full, except to the extent of
any reserve for uncollectible accounts receivable set forth on the Interim
Balance Sheet.
          (c) Section 2.14(c) of the Company Disclosure Schedule accurately
identifies, and provides an accurate and complete breakdown of the revenues
received from, each customer or other Person that accounted for (i) more than
$25,000 of the consolidated gross revenues of the Company in 2009, (ii) more
than $25,000 of the Company’s gross revenues in 2010, or (iii) more than $25,000
of the Company’s gross revenues in the first three months of 2011. The Company
has not received any notice or other communication (in writing or otherwise),
and has not received any other information, indicating that any customer or
other Person identified in 2.14(c) of the Company Disclosure Schedule may cease
dealing with the Company or may otherwise reduce the volume of business
transacted by such Person with the Company below historical levels.
     2.15. Litigation. There is no Proceeding pending or, to the Knowledge of
the Company, threatened (including allegations that could form the basis for
future action) against the Company or any of its properties or employees,
officers or directors (in their capacities as such). To the Knowledge of the
Company, no event has occurred, and, no claim, dispute or other condition or
circumstance exists, that might directly or indirectly give rise to or serve as
a basis for the commencement of any such Proceeding. There is no Order against
the Company, or, to the Knowledge of the Company, any of its employees,
directors or officers (in their capacities as such), that would prevent, enjoin,
or materially alter or delay any of the transactions contemplated by this
Agreement, or that would reasonably be expected to result in a Material Adverse
Effect. The Company does not have any plans to initiate any litigation,
arbitration or other proceeding against any third party.
     2.16. Permits. Section 2.16 of the Company Disclosure Schedule contains a
true and complete list of all the necessary permits, licenses, consents,
registrations, or authorizations of any Governmental Authority necessary for the
Company to own, lease and otherwise hold and use its assets and to carry on its
business as it is now being conducted (the “Permits”). The Permits are in full
force and effect and will remain so after the Closing Date and no suspension or
cancellation of any Permit is pending or, to the Knowledge of the Company,
threatened. The Company has not received any notice or other communication from
any Governmental Authority regarding (i) any actual or possible violation of or
failure to comply with any term or requirement of any Permit; or (ii) any actual
or possible revocation, withdrawal, suspension, cancellation, termination or
modification of any Permit.
     2.17. Taxes.
          (a) All Tax Returns filed by the Company are true, correct, and
complete. Each Tax required to have been paid, or claimed by any Governmental
Authority to be payable, by the Company (whether pursuant to any Tax Return or
otherwise) has been duly paid in full or on a timely basis. Any Tax required to
have been withheld or collected by the Company has been duly withheld and
collected; and (to the extent required) each such Tax has been paid to the
appropriate Governmental Authority.

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          (b) Section 2.17(b) of the Company Disclosure Schedule accurately
identifies all Tax Returns required to be filed by or on behalf of the Company
with any Governmental Authority with respect to any taxable period ending on or
before the Closing Date (the “Company Returns”). The Company is not currently
the beneficiary of any extension of time within which to file a Company Return.
All Company Returns (i) have been or will be filed when due, and (ii) have been,
or will be when filed, accurately and completely prepared in full compliance
with all applicable Laws. All amounts shown on the Company Returns to be due on
or before the Closing Date, and all amounts otherwise payable in connection with
the Company Returns on or before the Closing Date, have been or will be paid on
or before the Closing Date. The Company has delivered to the Purchaser accurate
and complete copies of all the Company Returns filed since the Company’s
incorporation.
          (c) The Financial Statements fully accrue all actual and contingent
liabilities for Taxes with respect to all periods through the dates thereof in
accordance with GAAP.
          (d) Each Company Return relating to income Taxes that has been filed
with respect to any period ended on or prior to the date on or prior to which
would be subject to the statute of limitation under the Code, has either
(i) been examined and audited by all relevant Governmental Authority, or (ii) by
virtue of the expiration of the limitation period under applicable Law, is no
longer subject to examination or audit by any Governmental Body. Section 2.17(d)
of the Company Disclosure Schedule accurately identifies each examination or
audit of any Company Return that has been conducted since December 31, 2005. The
Company has delivered to the Purchaser accurate and complete copies of all audit
reports and similar documents (to which the Company has access) relating to the
Company Returns. Except as set forth in Section 2.17(d) of the Company
Disclosure Schedule, no extension or waiver of the limitation period applicable
to any of the Company Returns has been granted (by the Company or any other
Person), and no such extension or waiver has been requested from the Company.
          (e) Except as set forth in Section 2.17(d) of the Company Disclosure
Schedule, no claim or other Proceeding is pending or has been threatened against
or with respect to the Company in respect of any Tax. There are no unsatisfied
losses, costs, damages, liabilities and expenses for Taxes (including
liabilities for interest, additions to tax and penalties thereon and related
expenses) with respect to any notice of deficiency or similar document received
by the Company. The Company has not entered into or has become bound by any
agreement or consent pursuant to Section 341(f) of the Code. The Company has not
been, and the Company will not be, required to include any adjustment in taxable
income for any tax period (or portion thereof) pursuant to Section 481 or 263A
of the Code or any comparable provision under state or foreign Tax laws as a
result of transactions or events occurring, or accounting methods employed,
prior to the Closing.
          (f) There is no agreement, plan, arrangement or other Contract
covering any employee of the Company that, individually or collectively, could
give rise directly or indirectly to the payment of any amount that would not be
deductible pursuant to Section 280G or Section 162 of the Code other than
expense reimbursements for meals and lodging not fully deductible under
Section 162 of the Code. The Company is not, and the Company has never been, a
party to or bound by any Contract which obligates the Company to compensate any
Person for any excise tax pursuant to Section 4999 of the Code or any tax
indemnity agreement, tax sharing agreement, tax allocation agreement or similar
Contract.
     2.18. Employee Benefit Matters.
          (a) Neither the Company nor any Person that is a member of the same
controlled group as the Company or under common control with the Company within
the meaning of Section 414 of the Code (each, an “ERISA Affiliate”) currently
maintains, contributes to or sponsors, nor have they ever maintained,
contributed to or sponsored or had any obligation to contribute to, any
“employee benefit

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plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”)). Section 2.18(a) of the Company Disclosure
Schedule contains a true and complete list of all compensation, bonus, equity
compensation, deferred compensation, retiree medical, disability or life
insurance, dependent care, disability, loan, fringe benefit, severance,
supplemental retirement, change in control or other employee benefit plans,
programs or arrangements to which the Company is a party or pursuant to which
the Company has any obligation (each a “Company Employee Plan,” and
collectively, the “Company Employee Plans”). The Company does not have any
express or implied commitment to create, incur Liability with respect to or
cause to exist any such Company Employee Plan.
          (b) The Company has furnished Purchaser with a true and complete copy
of each Company Employee Plan (or a written summary of any Company Employee Plan
that is not in writing) and a true and complete copy of each material document
prepared in connection with each Company Employee Plan, including, without
limitation, (i) each prototype or mass submitter Company Employee Plan’s
adoption agreement; (ii) each funded Company Employee Plan’s trust agreement or
other funding arrangement; (iii) each funded Company Employee Plan’s investment
policy; (iv) for each Company Employee Plan subject to ERISA, each summary plan
description and summary of material modifications; (v) the three most recent
annual reports (Form 5500 series and all schedules and financial statements
attached thereto), if any, required under ERISA or the Code in connection with
each Company Employee Plan; (vi) for each Company Employee Plan intended to
qualify under Section 401(a) of the Code, the most recently received IRS opinion
or determination letter; (vii) for each Company Employee Plan intended to
qualify under Section 401(k) of the Code, the most recent test reports
demonstrating compliance with the contribution limitations of Section 415 of the
Code, the actual deferral percentage requirements of Section 401(k) of the Code,
the actual contribution percentage requirements of Section 401(m) of the Code
and the top-heavy plan requirements of Section 416 of the Code; and (viii) the
most recently prepared actuarial report and financial statement in connection
with each Company Employee Plan, if applicable and if not included in such
Company Employee Plan’s annual report.
          (c) To the Company’s Knowledge, the Company is not party to any
contract nor has granted any compensation, equity or award that is compensation
subject to tax under Section 409A of the Code, and to the Company’s Knowledge,
neither the Company nor any of its ERISA Affiliates has any Liability or
obligation to make any payments or to issue any equity award or bonus that is
subject to tax under Section 409A of the Code.
          (d) No Company Employee Plan provides, or reflects or represents any
Liability to provide, retiree health, disability or life insurance coverage to
any Person for any reason, except as may be required by the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”), or other applicable
statute, and the Company has never represented, promised or contracted (whether
in oral or written form) to any employee (either individually or to employees as
a group) or any other Person that such employee or other Person would be
provided with health, disability or life insurance coverage after retirement or
other termination of service, except to the extent required by statute.
          (e) Each Company Employee Plan is now and always has been operated in
all material respects in accordance with its terms and the requirements of all
applicable Laws including, without limitation, ERISA and the Code. The Company
and each ERISA Affiliate has performed all material obligations required to be
performed by it under, is not in any material respect in default under or in
violation of, and has no Knowledge of any default or violation by any party to,
any Company Employee Plan. No action, claim or proceeding is pending or, to the
Knowledge of the Company, threatened with respect to any Company Employee Plan
(other than claims for benefits in the ordinary course) and the Company has no
reasonable basis to believe that any fact or event exists that could give rise
to any such action, claim or proceeding. Neither the Company nor any ERISA
Affiliate is subject to any penalty or Tax with respect to any Company Employee
Plan under Section 502(i) of ERISA or Sections 4975

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through 4980 of the Code. Each Company Employee Plan described in
Section 2.18(a) can be amended, terminated or otherwise discontinued at any time
without material Liability to Purchaser, the Company or any of their ERISA
Affiliates (other than ordinary administration expenses).
          (f) Each Company Employee Plan intended to qualify under Section
401(a) of the Code (i) has received a favorable determination, opinion,
notification or advisory letter from the IRS with respect to each such Company
Employee Plan as to its qualified status under the Code, and no fact or event
has occurred since the date of such letter from the IRS to adversely affect the
qualified status of any such Company Employee Plan or the exempt status of any
such trust, or (ii) has remaining a period of time under applicable Treasury
regulations or IRS pronouncements in which to apply for such a letter and make
any amendments necessary to obtain a favorable determination as to the qualified
status of each such Company Employee Plan.
          (g) Neither the Company nor any ERISA Affiliate maintains or ever has
maintained any employee benefit plan subject to Title IV of ERISA.
          (h) All contributions, premiums or payments required to be made or
accrued with respect to any Company Employee Plan have been made on or before
their due dates. All such contributions have been fully deducted for income tax
purposes and no such deduction has been challenged or disallowed by any
Governmental Authority and no fact or event exists which could reasonably be
expected to give rise to any such challenge or disallowance.
          (i) The Company has complied in all material respects with all
applicable state and federal laws related to employment, including those related
to wages, hours, worker classification (including the proper classification of
independent contractors and consultants), collective bargaining, workers’
compensation and the withholding and payment of taxes and is not liable for any
arrears of wages, taxes, penalties or other sums for failure to comply with any
of the foregoing. The Company is not bound by or subject to (and none of its
assets or properties is bound by or subject to) any written or oral, express or
implied, contract, commitment or arrangement with any labor union, and no labor
union has requested or, to the Knowledge of the Company, has sought to represent
any of the employees, representatives or agents of the Company. There is no
strike or other labor dispute involving the Company pending, or to the Knowledge
of the Company, threatened, nor is the Company aware of any labor organization
activity involving its employees. There is no claim with respect to payment of
wages, salary, overtime pay, workers compensation benefits or disability
benefits that has been asserted or, to the Knowledge of the Company, threatened
against the Company with respect to any Person currently or formerly employed by
the Company. The Company has not incurred any Liability or obligations under the
WARN Act or any similar state or local law in the past. No terminations prior to
the Closing would trigger any notice or other obligations under the WARN Act or
similar state or local Law. The employment of each employee of the Company is
terminable “at will,” and each employee of the Company who is located in the
United States and is not a United States citizen has all approvals,
authorizations and papers necessary to work in the United States in accordance
with applicable law.
          (j) To the Knowledge of the Company, no employee of or consultant to
the Company has been injured in the workplace or in the course of his or her
employment or consultancy, except for injuries which are covered by insurance or
for which a claim has been made under worker’s compensation or similar Laws.
          (k) The Company has furnished Purchaser with a true and complete list
of (i) all individuals who serve as employees of or consultants to the Company
as of the Closing Date; (ii) in the case of such employees, the position, office
location, base compensation, bonus or commission opportunity (if any) and
severance pay entitlement (if any) applicable to each such individual; and
(iii) in

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the case of each such consultant, the consulting rate payable to such
individual. The Company has neither promised nor implied any future compensation
or benefits to any current or former employee.
          (l) The consummation of the Share Purchase will not (either alone or
in conjunction with any other event) (i) entitle any current or former director,
employee, contractor or consultant of the Company to severance pay, unemployment
compensation or other payment, (ii) accelerate the time of payment or vesting,
or increase the amount of compensation due to any such director, employee,
contractor or consultant, or result in the payment of any other benefits to any
Person or the forgiveness of any Indebtedness of any Person or (iii) result in
any prohibited transaction described in Section 406 of ERISA or Section 4975 of
the Code for which an exemption is not available.
     2.19. Certain Interests.
          (a) No holder of greater than 1% of the voting power of the Company or
any officer of the Company and, to the Knowledge of the Company, no director or
immediate relative or spouse (or immediate relative of such spouse) who resides
with, or is a dependent of, any such officer or director:
          (i) has any direct or indirect financial interest in any creditor
(other than the holders of the Secured Notes), competitor, supplier
manufacturer, agent, representative, distributor or customer of the Company;
provided, however, that the ownership of securities representing no more than 5%
of the outstanding voting power of any creditor competitor, supplier
manufacturer, agent, representative, distributor or customer, and which are
listed on any national securities exchange or traded actively in the national
over-the-counter market, shall not be deemed to be a “financial interest” as
long as the Person owning such securities has no other connection or
relationship with such competitor, supplier, agent, distributor or customer;
          (ii) owns, directly or indirectly, in whole or in part, or has any
other interest, in any tangible or intangible property which the Company uses in
the conduct of its business (except for any such ownership or interest resulting
from the ownership of securities in a public company);
          (iii) has any claim or cause of action against the Company; or
          (iv) has outstanding any Indebtedness to the Company.
          (b) Except as set forth in Section 2.19 of the Company Disclosure
Schedule, and except for the payment of employee compensation in the ordinary
course of business, consistent with past practice, the Company has no Liability
or other obligation of any nature whatsoever to any Company Stockholder or any
Affiliate thereof or to any officer or director of the Company or, to the
Knowledge of the Company, to any immediate relative or spouse (or immediate
relative of such spouse) of any such officer or director.
     2.20. Insurance. Section 2.20 of the Company Disclosure Schedule contains a
true and complete list of all policies or binders of fire, liability, title,
worker’s compensation, product liability and other forms of insurance maintained
by the Company on its business, assets or employees. All insurance coverage as
set forth in Section 2.20 of the Company Disclosure Schedule is in full force
and effect and all such policies have been issued by insurers of recognized
responsibility. There is no default under any such coverage nor has there been
any failure by the Company to give notice or present any material claim under
any such coverage in a due and timely fashion. There are no outstanding unpaid
premiums as of the Closing Date, except for such unpaid premiums having been
incurred in the ordinary course of business, and the Company has not received
any notice of (i) cancellation or non-renewal of any such coverage, or (ii) any
material amendment of any such coverage, including the material increase of any

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such annual or other premiums payable under any such policies and, to the
Knowledge of the Company, no such cancellation, amendment or increase in
premiums is threatened.
     2.21. Brokers; Termination Fees. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or commission in connection
with the origination, negotiation or execution of this Agreement, the Share
Purchase or the other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. There are no breakup,
termination, cancellation or similar fees or penalties due and owing or that may
become due and owing by the Company to any third party in connection with any
agreement or understanding by the Company or the Company Stockholders pursuant
to which a merger, consolidation, or business combination involving the Company,
or any sale, exchange, disposition of all or substantially all of the Company’s
assets was to occur.
     2.22. Compliance with Law.
          (a) The Company since its inception has complied in all material
respects with each, and is not in violation in any material respect of, any
applicable Law to which the Company or its business operations, assets or
properties is or has been subject, including without limitation the Foreign
Corrupt Practices Act and the antiboycott prohibitions contained in 50 U.S.C.
Section 2401 et seq. or taken any action that can be penalized under Section 999
of the Code.
          (b) No event has occurred and no circumstances exist that (with or
without the passage of time or the giving of notice) may result in a violation
of, conflict with or failure on the part of the Company to comply with, any Law,
except for such violations, conflicts or failures to comply that would not in
the aggregate have a Material Adverse Effect. The Company has not received
written notice regarding any violation of, conflict with, or failure to comply
with, any Law.
          (c) The Company has not received any written notice of violation
issued pursuant to any Environmental Law with respect to the Company or the
Leased Real Property or any use or condition thereof or operations thereon. All
Governmental Authorizations required by or issued pursuant to any Environmental
Law for the Company or the operation of its business on the Leased Real Property
have been obtained and are maintained in full force and effect, and the Company
is in material compliance with all terms and conditions of such Governmental
Authorizations.
          (d) The Company has not caused or taken any action that has resulted
or may result in, or has been or is subject to, any losses, costs, damages,
liabilities, expenses or obligation relating to (i) Environmental Conditions on,
under, or about the Leased Real Property or any other properties or assets
owned, leased or used by the Company or held for use in connection with,
necessary for the conduct of, or otherwise material to, the Company’s business
or (ii) the past or present use, management, handling, transport, treatment,
generation, storage or release of any Hazardous Substance, except for any such
losses, costs, damages, liabilities, expenses and obligations that have not had
or resulted in, and shall not have or result in, a Material Adverse Effect.
     2.23. No Acquisition Proposals. Since April 2, 2011 the Company has not
(and to the Company’s Knowledge, no officer, director, employee, Affiliate or
other agent of the Company has) (i) solicited, initiated, encouraged, discussed
or accepted any inquiries, offers or proposals from any Person (other than
Purchaser) which constituted, or would reasonably have been expected to lead to
an Acquisition Proposal or (ii) negotiated with any Person or entered into any
agreement, letter of intent or other document relating to or contemplating, or
any agreement in principle with respect to, any Acquisition Proposal.

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     2.24. No Misstatements. No representation or warranty made by the Company
in this Agreement, the Company Disclosure Schedule or any certificate delivered
or deliverable pursuant to the terms hereof contains or will contain any untrue
statement of a material fact, or omits, or will omit, when taken as a whole, to
state a material fact, necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading. Company does
not have Knowledge of any fact that has specific application to Company that
could reasonably be expected to result in a Material Adverse Effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY STOCKHOLDERS
     Each Company Stockholder severally and not jointly (and only with respect
to himself, herself or itself) hereby represents and warrants to Purchaser that
the statements contained in this Article III are true and correct:
     3.1. Organization and Qualification. If the Company Stockholder is an
entity, such Company Stockholder is a corporation, limited partnership or
limited liability company duly organized, validly existing and in good standing
under the laws of the state of its organization or incorporation.
     3.2. Authority and Enforceability. If the Company Stockholder is an entity,
such Company Stockholder has all requisite power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which such Company
Stockholder is a party, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Ancillary
Agreements to which such Company Stockholder is a party and the consummation of
the Share Purchase and the other transactions contemplated by this Agreement
have been duly and validly authorized by all requisite action on the part of the
Company Stockholder. This Agreement and the Ancillary Agreements have been duly
and validly executed and delivered by such Company Stockholder and constitute
the legal, valid and binding obligations of such Company Stockholder, and are
enforceable against such Company Stockholder in accordance with their terms,
subject to (i) the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar Laws affecting creditors’ rights generally and
(ii) rules of law and equity governing specific performance, injunctive relief
and other equitable remedies.
     3.3. Ownership of the Shares. Such Company Stockholder owns, beneficially
and of record, the number of Shares set forth opposite such Company
Stockholder’s name on Schedule 1-A. Such Company Stockholder has, and Purchaser
will acquire at the Closing, good and valid title to such Shares, free and clear
of any Encumbrances.
     3.4. No Conflicts; Consents. To the Knowledge of such Company Stockholder,
no filing or registration with, and no permit, authorization, consent or
approval of, any party, including any Governmental Authority, is necessary for
the consummation of the transactions contemplated by this Agreement by such
Company Stockholder. Neither the execution and delivery of this Agreement by
such Company Stockholder, the consummation of the transactions contemplated
hereby, nor the compliance by such Company Stockholder with any of the
provisions hereof do, as of the Closing, (i) violate or conflict with any
provision of the charter, bylaws or other organizational documents of the
Company Stockholder, if such Company Stockholder is an entity, (ii) create any
Encumbrance on any of the Shares owned by such Company Stockholder, (iii) to the
Knowledge of such Company Stockholder, violate any Law applicable to such
Company Stockholder, or (iv) violate, conflict with, or result in any breach of,
constitute a default (or an event which with the giving of notice or lapse of
time, or both would become a

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default) under, require any consent under, or create any rights of termination,
amendment, acceleration, suspension, revocation or cancellation under any
Contract to which such Company Stockholder is a party or by which any of his,
her or its assets are bound.
     3.5. Litigation. There is no pending Proceeding, and to the Knowledge of
such Company Stockholder, no Person has threatened to commence any Proceeding
that (i) involves any of the Shares owned by such Company Stockholder or that
otherwise relates to or might materially affect any of the Shares owned by such
Company Stockholder (whether or not such Company Stockholder is named as a party
thereto) or (ii) seeks or is likely to inhibit or delay the ability of such
Company Stockholder to enter into this Agreement or any of the Ancillary
Agreements to which such Company Stockholder is a party or to consummate the
transactions contemplated by this Agreement. To the Knowledge of such Company
Stockholder, no event has occurred, and, no claim, dispute or other condition or
circumstance exists, that might directly or indirectly give rise to or serve as
a basis for the commencement of any such Proceeding.
     3.6. Tax Advisors. Such Company Stockholder has reviewed with his, her or
its own tax advisors the tax consequences of the transactions contemplated under
this Agreement. With respect to such matters, such Company Stockholder relies
solely on such advisors and not on any statements or representations of the
Company or Purchaser or any of their respective agents, written or oral. Such
Company Stockholder understands that he, she or it shall be responsible for his,
her or its own tax Liability that may arise as a result of the Share Purchase
and any other transactions contemplated by this Agreement.
     3.7. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
origination, negotiation or execution of this Agreement, the Share Purchase or
the other transactions contemplated by this Agreement based upon arrangements
made by or on behalf of such Company Stockholder.
     3.8. No Misstatements. With respect to Major Stockholder, no representation
or warranty made by such Major Stockholder in this Agreement or any certificate
delivered or deliverable pursuant to the terms hereof contains or will contain
any untrue statement of a material fact, or omits, or will omit, when taken as a
whole, to state a material fact, necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading. No
Major Stockholder Company has Knowledge of any fact that has specific
application to Company that could reasonably be expected to result in a Material
Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Purchaser hereby represents and warrants to the Company that the statements
contained in this Article IV are true and correct:
     4.1. Organization and Qualification. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware. Purchaser has all requisite corporate power and authority to own,
lease and otherwise hold its properties and other assets necessary to carry on
its business as it is now being conducted. Purchaser is duly qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by Purchaser or the operation of its business, makes such
qualification necessary, except where the failure to be so organized, existing,
qualified and in good standing would not have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated by this
Agreement.

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     4.2. No Conflict. Except as may result from any facts or circumstances
relating solely to the Company, the execution, delivery and performance of this
Agreement and the Ancillary Agreements by Purchaser do not and will not:
          (a) violate, conflict with or result in the breach of any provision of
the certificate of incorporation or bylaws (or other organizational documents)
of Purchaser;
          (b) conflict with or violate any Order of any Governmental Authority
or any Law applicable to Purchaser; or
          (c) conflict with, or result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would
become a default) under, require any consent under, or give to others any rights
of termination, amendment, acceleration, suspension, revocation or cancellation
of, or result in the creation of any Encumbrance on any of the assets or
properties of Purchaser pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which Purchaser is a party or by which any of such
assets or properties is bound or affected, which would have a material adverse
effect on the ability of Purchaser to consummate the transactions contemplated
by this Agreement or by the Ancillary Agreements.
     4.3. Authority and Enforceability. Purchaser has all necessary corporate
power and authority to execute and deliver this Agreement and the Ancillary
Agreements, and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Ancillary Agreements and
the consummation of the Share Purchase have been duly and validly authorized by
all necessary corporate action on the part of Purchaser and no other corporate
proceedings are necessary to authorize and approve this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. This Agreement and the Ancillary Agreements have been duly and validly
executed and delivered by Purchaser, constitute the legal, valid and binding
obligations of Purchaser, and are enforceable against Purchaser in accordance
with their terms, subject to (i) the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar Laws affecting creditors’
rights generally and (ii) rules of law and equity governing specific
performance, injunctive relief and other equitable remedies.
     4.4. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
origination, negotiation or execution of this Agreement, the Share Purchase or
the other transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
     5.1. Confidentiality.
          (a) As used in this Agreement, the term “Confidential Information”
includes any and all of the following information of Company and Purchaser that
has been or may hereafter be disclosed in any form, whether in writing, orally,
electronically or otherwise, or otherwise made available by observation,
inspection or otherwise by either Party (Purchaser, collectively, on the one
hand or Company, on the other hand) or its Affiliates, legal representatives and
agents (collectively, a “Disclosing Party”) to the other Party or its Affiliates
and agents (collectively, a “Receiving Party”): (i) all information that is a
trade secret under applicable trade secret or other

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law; (ii) all information concerning product specifications, data, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing or distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer hardware, Software and computer
software and database technologies, systems, structures and architectures;
(iii) all information concerning the business and affairs of the Disclosing
Party (which includes historical and current financial statements, financial
projections and budgets, tax returns and accountants’ materials, historical,
current and projected sales, capital spending budgets and plans, business plans,
strategic plans, marketing and advertising plans, publications, client and
customer lists and files, contracts, the names and backgrounds of key personnel
and personnel training techniques and materials, however documented), and all
information obtained from review of the Disclosing Party’s documents or property
or discussions with the Disclosing Party regardless of the form of the
communication; (iv) all notes, analyses, compilations, studies, summaries and
other material prepared by the Receiving Party to the extent containing or
based, in whole or in part, upon any information included in the foregoing; and
(v) the existence of this Agreement or any of the terms of this Agreement or the
transactions contemplated by this Agreement (“Contemplated Transactions”).
          (b) Each Receiving Party acknowledges the confidential and proprietary
nature of the Confidential Information of the Disclosing Party and agrees that
such Confidential Information (i) shall be kept confidential by the Receiving
Party; (ii) shall not be used for any reason or purpose other than to consummate
the Contemplated Transactions; and (iii) without limiting the foregoing, shall
not be disclosed by the Receiving Party to any Person, except in each case as
otherwise expressly permitted by the terms of this Agreement or with the prior
written consent of the Disclosing Party. From and after the Closing, the
provisions of this Section 5.1 shall not apply to or restrict in any manner
Purchaser’s use of any Confidential Information of the Company. Notwithstanding
the foregoing, the Receiving Party may disclose Confidential Information to the
Receiving Party’s attorneys, accountants and ownership partners.
          (c) Notwithstanding Section 5.1(a) above, Confidential Information
shall not include any information which (i) was publicly known and made
generally available in the public domain prior to the time of disclosure by the
Company; (ii) becomes publicly known and made generally available after
disclosure by the Company to the Receiving Party through no action or inaction
of the Receiving Party; (iii) is already in the possession of the Receiving
Party at the time of disclosure by the Company as shown by the Receiving Party’s
files and records immediately prior to the time of disclosure; (iv) is obtained
by the Receiving Party from a third Party without a breach of such third party’s
obligations of confidentiality.
     5.2. Public Disclosure. Upon execution of this Agreement, Purchaser may
elect to issue a press release announcing such execution. Purchaser shall
consult with the Company with respect to, and give the Company a reasonable
opportunity to comment on, Purchaser’s initial press release (and related
external communication plan) with respect to this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby. The Company
shall not issue any press release or make any statement or disclosure regarding
the terms of this Agreement, the Ancillary Agreements or the transactions
contemplated hereby and thereby, except as may be required by applicable Law.
Notwithstanding anything to the contrary set forth in this Section 5.2,
Purchaser may make such disclosures and filing regarding the terms of this
Agreement, the Ancillary Agreements or the transactions

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contemplated hereby and thereby, as is necessary to comply with applicable Law,
including without limitation, applicable securities Laws, without seeking the
consultation or input from Company.
     5.3. Treatment of Company Options. Company Options shall not be assumed or
substituted by Purchaser. Prior to the Closing, the Company Board has provided
for the cancellation of all outstanding Company Options effective as of and
contingent upon the Closing. The Company has taken all steps necessary to cause
the Company Options to be treated as set forth in this Section 5.3, including
but not limited to providing any necessary notices to, and obtaining any
necessary consents or waivers from, holders of Company Options that remain
outstanding immediately prior to the Closing. Copies of the relevant agreements
governing all Company Options have been made available to Purchaser.
     5.4. Termination of Benefit Plans. The Company has terminated all Company
Employee Plans set forth on Section 2.18(a) of the Company Disclosure Schedule
effective as of no later than the Closing. The Company has provided to Purchaser
executed resolutions by the Company Board terminating such Company Employee
Plans in form and substance satisfactory to Purchaser.
     5.5. Tax Matters.
     The following provisions shall govern the allocation of responsibility as
among Purchaser and the Stockholders’ Agent for certain Tax matters:
          (a) Pre-Closing Tax Period and Straddle Period Tax Returns. Purchaser
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company for any taxable year or period that ends on or before
the Closing Date that are due (including extensions) after the Closing Date and
for any Straddle Period. Purchaser shall (i) submit such Tax Returns to the
Stockholders’ Agent for review and comment at least 20 days prior to their
filing and (ii) make any timely comments requested by the Stockholders’ Agent in
good faith, provided such comments are (A) consistent with past practice and
applicable Law, and (B) could not reasonably be expected to materially adversely
impact the Company or Purchaser (or any Affiliate) in any taxable year or period
beginning after the Closing Date. Purchaser shall receive a disbursement from
the Escrow Fund, at least five days before the due date of the applicable Tax
Return, in an amount equal to the Taxes shown as due and payable on such Tax
Return to the extent such Taxes are due with respect to the Tax Liability of the
Company for taxable years ending on or before the Closing Date and the portion
of any Straddle Period ending on (and including) the Closing Date, and to the
extent such amounts were not reflected on the Estimated Closing Balance Sheet.
In the event that Purchaser and the Stockholders’ Agent are unable to agree on
any position(s) taken on any Tax Return described in this Section 5.5 prior to
the due date for filing such Tax Return, Purchaser and the Stockholders’ Agent
shall promptly submit such Tax Return to the Tax Arbitrator for resolution in
accordance with the procedures described in this Section 5.5; provided, however,
that if the Tax Arbitrator is unable to resolve such dispute prior to the filing
of such Tax Return, Purchaser shall be entitled to receive a disbursement from
the Escrow Fund in accordance with this Section 5.5 for the amount of Taxes for
taxable periods ending on or before the Closing Date and the portion of any
Straddle Period ending on (and including) the Closing Date shown as due and
payable on the Tax Return originally submitted to the Stockholders’ Agent by
Purchaser, and to the extent such amounts were not reflected on the Estimated
Closing Balance Sheet; provided further, that if the Tax Arbitrator resolves
such dispute in favor of the Stockholders’ Agent, Purchaser shall within five
days of such resolution by the Tax Arbitrator pay the Escrow Fund the difference
between the amount of the disbursement Purchaser received from the Escrow Fund
and the amount the Tax Arbitrator determines Purchaser should have been entitled
to receive from the Escrow Fund. Where it is necessary for purposes of this
Section 5.5 to apportion the Taxes of the Company or with respect to the assets
of the Company for a Straddle Period, such Liability shall be apportioned
between the period deemed to end at the close of the Closing Date, and the
period deemed to begin at the beginning of the day following the Closing Date on
the basis of an interim closing of the

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books, except that Taxes (such as real or personal property Taxes) imposed on a
periodic basis shall be allocated on a daily basis.
          (b) Tax Contests. After the Closing Date, Purchaser shall notify the
Stockholders’ Agent within 20 days of the commencement of any notice of Tax
deficiency, proposed Tax adjustment, Tax assessment, Tax audit, Tax examination
or other administrative or court proceeding, suit, dispute or other claim with
respect to Taxes (a “Tax Claim”) affecting the Taxes of or with respect to the
Company that, if determined adversely to the taxpayer or after the lapse of time
would be grounds for a claim for indemnity pursuant to Section 7.3(b) hereof;
provided, however, that a failure by Purchaser to provide notice of a Tax Claim
within such 20 day period shall not entitle the Indemnifying Parties to reduce
the amount of the Liability required to be paid pursuant to Section 7.3(b)
unless such failure results in a material detriment to the Indemnifying Parties,
in which case the amount the Indemnifying Parties are required to pay with
respect to such Liability shall only be reduced by the amount of such detriment.
Thereafter, Purchaser shall deliver to the Stockholders’ Agent, as promptly as
possible but in no event later than 20 days after Purchaser’s receipt thereof,
copies of all relevant notices and documents (including court papers) received
by Purchaser. In the case of any Tax Claim relating to any Tax period ending on
or before the Closing Date that, if determined adversely to the Company would be
grounds for a claim for indemnity pursuant to Section 7.3(b) hereof, the
Stockholders’ Agent (at its sole cost and expense) shall have the right to
control the conduct of such Tax Claim and shall have the right to settle such
Tax Claim; provided, however, (i) that Purchaser may fully participate in the
dispute of such Tax Claim, (ii) the Stockholders’ Agent shall not settle,
compromise or dispose of any Tax Claim in a manner that could reasonably be
expected to materially affect the Company after the Closing Date, (iii) the
Stockholders’ Agent shall keep the Purchaser timely informed with respect to the
commencement, status and nature of any such Tax Claim and (iv) the Stockholders’
Agent shall not settle, compromise or dispose of any Tax Claim without the
consent of the Purchaser, which consent shall not be unreasonably withheld. In
the case of any Tax Claim relating to the Taxes of any Straddle Period,
Purchaser and the Stockholders’ Agent may each participate, at their own
expense, in the audit or proceeding, and the audit or proceeding shall be
controlled by Purchaser or the Stockholders’ Agent, whichever would bear the
burden of the greatest portion of the adjustment; provided, however, that the
party controlling the Straddle Period Tax Claim (i) shall not settle such audit
or proceeding without the consent of the other party, which consent shall not be
unreasonably withheld and (ii) shall keep the other party timely informed with
respect to the commencement, status and nature of any such Tax Claim.
          (c) Cooperation. Purchaser and the Stockholders’ Agent shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns and any audit, examination, litigation
or other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Each of Purchaser and the Stockholders’ Agent agrees, upon request,
to use its reasonable best efforts to obtain any certificate or other document
from any Tax Authority as may be necessary to mitigate, reduce or eliminate any
Tax that could be imposed (including, but not limited to, with respect to the
transactions contemplated hereunder).
          (d) Dispute Resolution. Any dispute, controversy, or claim between
Purchaser, on the one hand, and the Stockholders’ Agent, on the other hand,
arising out of or relating to the provisions of this Agreement that relates to
Taxes that cannot be resolved by negotiations between Purchaser and the
Stockholders’ Agent shall be submitted to a senior tax partner in a mutually
agreeable nationally recognized accounting firm for resolution (“Tax
Arbitrator”). The resolution reached by the Tax Arbitrator shall be binding on
the Company, the Stockholders’ Agent, Purchaser and their respective Affiliates,
and may be entered and enforced in any court having jurisdiction. The expenses
of the Tax

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Arbitrator shall be borne by Purchaser and the Stockholders’ Agent in such
proportions as the Tax Arbitrator considers to be fair and reasonable in all
circumstances to resolve the dispute (and any such fees incurred by the
Stockholders’ Agent shall be deemed Agent Expenses hereunder).
     5.6. Expenses. Whether or not the Share Purchase is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, the fees and expenses of its
advisers, accountants and legal counsel) shall be paid by the party incurring
such expense, except that in the event the Share Purchase is consummated, to the
extent not paid by the Company prior to Closing, the aggregate amount payable by
Purchaser to the Preferred Stockholders pursuant to Section 1.3(b)(i) shall be
reduced by the aggregate of any legal, accounting, broker’s, investment banker
and any other fees and expenses incurred by the Company in connection with the
execution of this Agreement and the Ancillary Agreements and the consummation of
the Share Purchase and other transactions contemplated hereby and thereby (such
amount referred to as “Company Fees and Expenses”). Schedule 5.6 is the
Company’s good faith itemized estimate of the Company Fees and Expenses incurred
up to and including the Closing Date.
ARTICLE VI
CLOSING DELIVERABLES
     6.1. Closing Deliveries by Purchaser. At the Closing, Purchaser shall
deliver or cause to be delivered to the Company:
          (a) Certificate of Purchaser. A certificate validly executed by an
officer of the Purchaser, certifying for and on the Company’s behalf, that the
representations and warranties of Purchaser contained in this Agreement are true
and correct in all material respects as of the Closing Date (except for those
representations and warranties qualified by material, materiality or similar
expressions which shall be true and correct in all respects).
          (b) Escrow Agreement. An executed counterpart of the Escrow Agreement
substantially in the form attached hereto as Exhibit D from Purchaser.
     6.2. Closing Deliveries by the Company. At the Closing, the Company shall
deliver or cause to be delivered to Purchaser:
          (a) Certificates of the Company.
          (i) A certificate, validly executed by the Company’s Chief Executive
Officer, certifying for and on the Company’s behalf, that the representations
and warranties of the Company contained in this Agreement are true and correct
in all material respects as of the Closing Date hereof (except for those
representations and warranties qualified by material, materiality or similar
expressions which shall be true and correct in all respects); provided, however,
the representations and warranties contained in Sections 2.1, 2.2, 2.4, 2.5,
2.6, 2.8(a), 2.11, 2.15, 3.1, 3.2, 3.3 and 3.5 are true and correct in all
respects, and as to the Company’s compliance with and performance of its
covenants and obligations to be performed and complied with at or before the
Closing.
          (ii) A certificate, validly executed by the Secretary or an Assistant
Secretary of the Company, certifying for and on the Company’s behalf, as to
(i) the terms and effectiveness of its Charter Documents, each attached as an
exhibit to such certificate, (ii) the valid adoption of resolutions of the
Company Board whereby this Agreement, the Share Purchase and the

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transactions contemplated hereunder were adopted and approved by the Company
Board, a copy of which shall be attached as an exhibit to such certificate,
(iii) the incumbency and signatures of the officers of Company executing this
Agreement and any of the Ancillary Agreements, and (iv) attaching a certificate
as of a date not earlier than the tenth business day prior to the Closing as to
the good standing of Company in the States of Delaware and California and each
jurisdiction in which Company is licensed or qualified to do business as a
foreign corporation.
          (iii) A properly executed Foreign Investment and Real Property Tax Act
of 1980 notification letter (the “FIRPTA Certificate”), substantially in the
form of Exhibit C attached hereto, which states that shares of capital stock of
the Company do not constitute “United States real property interests” under
Section 897(c) of the Code, for purposes of satisfying Purchaser’s obligations
under Treasury Regulation Section 1.1445-2(c)(3).
          (b) Resignation of Directors and Officers. Letters of resignation in
form and substance satisfactory to Purchaser from the directors and officers of
the Company in office immediately prior to the Closing, whereby each such Person
resigns as a director and/or an officer of the Company, as the case may be,
effective as of the Closing.
          (c) Submission of Expenses. A detailed estimate of Company Fees and
Expenses as of the Closing Date pursuant to Section 5.6, the accuracy of which
shall be certified by an executive officer of the Company, together with
reasonable backup documentation in connection therewith.
          (d) Final Conversion Schedule. The Final Conversion Schedule and
related certificate pursuant to Section 1.5(b).
          (e) Employee Agreements. An executed counterpart of (i) an employment
agreement, in substantially the form attached hereto as Exhibit B-1, from each
Key Employee of the Company, which Employment Agreement will include mutually
agreeable provisions related to retention bonus payments to be paid by Purchaser
to such Key Employee (collectively, the “Employment Agreements”) and (ii) a
transitional payment agreement, in substantially the form attached hereto as
Exhibit B-2, from each Person who is an employee of the Company immediately
prior the Closing who is not a Key Employee (collectively, the “Transitional
Payment Agreements”).
          (f) Legal Opinions. A legal opinion from GCA Law Partners LLP, legal
counsel to the Company, in substantially the form of Exhibit F attached to this
Agreement.
          (g) Secured Notes. The original Secured Notes, which shall be
cancelled following payment therefor at the Closing, and an executed counterpart
of an agreement in form and substance satisfactory to Purchaser from the holders
of the Secured Notes acknowledging and agreeing that (i) on payment of the
aggregate Secured Notes Payment Amount, the Secured Notes will be paid in full
and that effective as of the Closing, the Secured Notes and the Security
Agreement are deemed cancelled and terminated and (ii) such holder will execute
and file, or authorizes Purchaser to file on its behalf, as of the Closing Date
any financing statements, including without limitation any UCC financing
statement amendments, necessary or desirable to terminate any security interest
granted to such holders under the Security Agreement.
          (h) Consents and Waivers. Executed copies of all consents and waivers
set forth on Section 2.6 of the Company Disclosure Schedule (in written form
reasonably satisfactory to Purchaser).
          (i) Termination of Benefit Plans. Evidence reasonably satisfactory to
Purchaser that all Company Employee Plans set forth on Section 2.18(a) of the
Company Disclosure Schedule and

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arrangements have been terminated pursuant to resolution of the Company Board
(the form and substance of which shall have been subject to review and approval
of Purchaser), effective as of no later than the Closing.
          (j) Termination of Stockholder Agreements. Evidence reasonably
satisfactory to Purchaser that all stockholder agreements by and among the
Company Stockholders (including but not limited to any investors’ rights
agreement, right of first refusal and co-sale agreement, voting agreement and
similar agreements) have been terminated, effective as of no later than the
Closing.
          (k) Escrow Agreement. An executed counterpart of the Escrow Agreement
substantially in the form attached hereto as Exhibit D from the Stockholders’
Agent.
          (l) Secured Note Waiver. A waiver signed by each holder of a Secured
Note waiving any and all rights to any and all interest, fees and/or penalties
due or that may become due in accordance with the terms of such Secured Note and
waiving any and all preferences set forth in the Secured Note, except for
payment of the principal amount of such Secured Note at Closing.
ARTICLE VII
ESCROW AND INDEMNIFICATION
     7.1. Escrow Fund. On the Closing Date, Purchaser shall deposit or cause to
be deposited the Escrow Amount with [ • ] (or its successor in interest or other
institution selected by Purchaser with the reasonable consent of the Company),
as escrow agent (the “Escrow Agent”), such deposit (together with interest and
other income thereon) to constitute the escrow fund (the “Escrow Fund”) which
shall be available to compensate Purchaser Indemnified Parties pursuant to the
indemnification obligations of the Company for Losses and be governed by the
terms set forth herein and in the Escrow Agreement attached hereto as Exhibit D.
The escrow period (the “Escrow Period”) shall terminate at 11:59 p.m. California
Time on the first Business Day that is on or after the day the Company has paid
out all of the Escrow Funds, in accordance with the following Escrow Release
Schedule (the “Escrow Release Date”); provided, however, that a portion of the
Escrow Fund which is necessary to satisfy any unsatisfied or unresolved claims
for Losses specified in any Officer’s Certificate delivered to the Escrow Agent
prior to the Escrow Release Date shall remain in the Escrow Fund until such
claims have been resolved. Subject at all times to the foregoing, any amounts in
the Escrow Fund not otherwise released to satisfy a claim for Losses and/or not
subject to an unsatisfied or unresolved claim for Losses shall be released in
accordance with the following schedule until all amounts remaining in the Escrow
Fund are released (the “Escrow Release Schedule”):

  (i)   On July 31, 2012, an amount equal to thirty five percent (35%) of EBITDA
generated from the business of the Company from the Closing through June 30,
2012 shall be released from the Escrow Fund;     (ii)   Every three (3) months
after July 31, 2012 through April 30, 2013, an amount equal to thirty five
percent (35%) of EBITDA generated from the business of the Company for the
immediately preceding calendar quarter shall be released from the Escrow Fund;

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  (iii)   Every three (3) months after April 30, 2013, an amount equal to fifty
percent (50%) of EBITDA generated from the business of the Company for the
immediately preceding calendar quarter;

     7.2. Survival Period. The representations and warranties of the Company and
the Company Stockholders contained in Sections 2.1, 2.4, 2.5, 2.6, 2.11, 2.15,
2.21, 2.22, 3.1, 3.2 and 3.3 (the “Specified Representations”) shall survive the
Closing Date until the expiration of all applicable statutes of limitation and
all other representations and warranties of the Company and the Company
Stockholders contained in this Agreement shall survive the Closing Date for a
period of 12 months (the “Survival Period”). The representations and warranties
of Purchaser contained in this Agreement shall survive the Closing Date for a
period of 12 months. All covenants and agreements of the parties will survive in
accordance with their respective terms. If written notice of a claim has been
given prior to the expiration of the Survival Period by Purchaser to
Stockholders’ Agent, then the relevant representations and warranties shall
survive as to such claim until such claim has been finally resolved,
     7.3. Indemnification.
          (a) Subject to the limitations set forth in this Article VII, after
the Closing Date, the Company Stockholders shall severally and not jointly
indemnify and hold harmless Purchaser and its Affiliates, officers, directors,
employees, agents, successors and assigns (collectively, the “Purchaser
Indemnified Parties”) for any and all liabilities, losses, damages of any kind,
claims, costs, expenses, fines, fees, deficiencies, interest, awards, judgments,
amounts paid in settlement and penalties (including, without limitation,
reasonable attorneys’, consultants’ and experts’ fees and expenses and other
costs of defending, investigating or settling claims) suffered, incurred,
accrued (in accordance with GAAP) or paid by them (including, without
limitation, in connection with any action brought or otherwise initiated by any
of them) (collectively, “Losses”), arising out of or resulting from:
          (i) any inaccuracy or breach of any representation or warranty made by
such Company Stockholder in Article III of this Agreement;
          (ii) the breach of any covenant or agreement made by such Company
Stockholder in this Agreement or any of the Ancillary Agreements; or
          (iii) any act of gross negligence, fraud or intentional
misrepresentation of such Company Stockholder or any officer, director,
Affiliate or employee of such Company Stockholder related to this Agreement.
          (b) Subject to the limitations set forth in this Article VII, after
the Closing Date, the Company Stockholders shall severally and not jointly
(based on their respective Proportionate Escrow Share) indemnify and hold
harmless the Purchaser Indemnified Parties for any and all Losses arising out of
or resulting from:
          (i) any inaccuracy or breach of any representation or warranty made by
the Company in Article II of this Agreement;
          (ii) the breach of any covenant or agreement made by the Company in
this Agreement or any of the Ancillary Agreements;
          (iii) any monies owed as a repayment of pre-paid services as a result
of the termination of the Pre-Paid Contracts;

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          (iv) any inaccuracy contained in the Final Conversion Schedule or the
statement of Company Fees and Expenses provided pursuant to Sections 1.4 and
5.6; or
          (v) any act of gross negligence, fraud or intentional
misrepresentation of the Company or any officer, director, Affiliate or employee
of the Company related to this Agreement.
          (c) Indemnification by Purchaser. Subject to the limitations set forth
in this Article VII, after the Closing Date, the Company Stockholders and their
respective Affiliates, officers, directors, employees, agents, successors and
assigns (collectively, the “Seller Indemnified Parties”) shall be indemnified
and held harmless by Purchaser for any and all Losses arising out of or
resulting from:
          (i) any inaccuracy or breach of any representation or warranty made by
Purchaser in Article IV of this Agreement; or
          (ii) any act of gross negligence, fraud or misrepresentation of
Purchaser or any officer, director, Affiliate or employee of Purchaser related
to this Agreement.
          (d) Materiality. As used herein, Losses are not limited to matters
asserted by third parties, but include Losses incurred or sustained by the
Purchaser Indemnified Parties or Seller Indemnified Parties in the absence of
claims by third parties. The Company Stockholders shall not have any right of
contribution, right of indemnity or other right or remedy against Purchaser or
any other Purchaser Indemnified Parties in connection with any indemnification
obligation or any other Liability to which such Company Stockholder may become
subject under or in connection with this Agreement. Purchaser shall not have any
right of contribution, right of indemnity or other right or remedy against the
Company Stockholders or any other Seller Indemnified Parties in connection with
any indemnification obligation or any other Liability to which Purchaser may
become subject under or in connection with this Agreement.
     7.4. Limitations.
          (a) Limitation on Company Stockholder Liability. The maximum aggregate
Liability of the Company Stockholders for indemnification under this Article VII
for any of the matters set forth in Section 7.3(b)(i), (ii) or (iii) shall not
exceed the Escrow Amount; provided, however, that the foregoing shall not apply
(i) with respect to any breach of the Specified Representations, for which the
maximum aggregate Liability of the Company Stockholders for indemnification
under this Article VII for any of the matters set forth in Section 7.3(b)(i),
(ii) or (iii) shall in no event exceed the aggregate amount of consideration
actually received by the Company Stockholders plus (A) the Escrow Amount less
any of such amount paid to Company Stockholders plus (B) Secured Notes Payment
Amount plus (C) the Company Fees and Expenses plus (D) all amounts that were due
and owing at Closing under the Purchaser Promissory Note plus (E) the Negative
Estimated Working Capital Adjustment, if any, and with respect to each
individual Company Stockholder, shall in no event exceed the actual amount of
consideration received by such Company Stockholder plus, in the case of the
Preferred Stockholders (A) the Proportionate Escrow Share plus (B) each
Preferred Stockholder’s proportionate share of the Secured Notes Payment Amount
plus (C) each Preferred Stockholder’s proportionate share of the Company Fees
and Expenses plus (D) each Preferred Stockholder’s proportionate share of all
amounts that were due and owing at Closing under the Purchaser Promissory Note
Company plus (E) each Preferred Stockholder’s proportionate share of the
Negative Estimated Working Capital Adjustment, or (ii) with respect to gross
negligence, fraud or intentional misrepresentation by the Company, for which
there shall be no maximum Liability. In no event shall the maximum aggregate
Liability of any Company Stockholder for any matters under this Article VII
exceed such Company Stockholder’s proportionate share of any and all such
Liabilities (for purposes of clarity, including with respect to fraud or
intentional misrepresentation by the Company). All claims for indemnification
pursuant to this Article 7 shall be made first from the

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Escrow Fund, and only after exhaustion of the Escrow Fund, directly against the
Company Stockholders subject to the limitations of this Section 7.4(a).
          (b) Notwithstanding anything to the contrary contained in this
Agreement, no indemnification shall be available in respect of any claim made
under Section 7.3(a) or (b): (i) until the aggregate amount (without
duplication) of Losses of the Purchaser Indemnified Parties with respect to all
such claims exceeds $75,000 (the “Basket Amount”), in which case the Purchaser
Indemnified Parties shall be entitled to be indemnified for all such Losses,
including both those below and in excess of the Basket Amount, and (ii) unless
the Loss relating to such claim, or series of related claims that are based
primarily on a similar set of operative facts, is greater than $10,000.
          (c) Limitation on Purchaser Liability. The maximum aggregate Liability
of Purchaser for indemnification under this Article VII for any of the matters
set forth in Section 7.3(a) shall not exceed $350,000; provided, however, that
the foregoing shall not apply with respect to gross negligence, fraud or
intentional misrepresentation by Purchaser.
     7.5. Indemnification Procedures.
          (a) For purposes of this Section 7.5, a party against which
indemnification may be sought is referred to as the “Indemnifying Party” and the
party which may be entitled to indemnification is referred to as the
“Indemnified Party.”
          (b) The obligations and liabilities of Indemnifying Parties under this
Article VII with respect to Losses arising from actual or threatened claims or
demands by any third party which are subject to the indemnification provided for
in this Article VII (“Third Party Claims”) shall be governed by and contingent
upon the following additional terms and conditions. If an Indemnified Party
shall receive notice of any Third Party Claim, the Indemnified Party shall give
the Indemnifying Party notice of such Third Party Claim within 90 days of the
receipt by the Indemnified Party of such notice; provided, however, that the
failure to provide such notice shall not release an Indemnifying Party from any
of its obligations under this Article VII except to the extent that such
Indemnifying Party is materially prejudiced by such failure. The notice of claim
shall describe in reasonable detail the facts known to the Indemnified Party
giving rise to such indemnification claim, and the amount or good faith estimate
of the amount arising therefrom.
          (c) If the Indemnifying Party acknowledges in writing that the
Indemnified Party is entitled to indemnification hereunder against any Losses
that may result from such Third Party Claim, then the Indemnifying Party shall
be entitled to assume and control the defense of such Third Party Claim through
counsel of its choice (such counsel to be reasonably acceptable to the
Indemnified Party) if it gives notice of its intention to do so to the
Indemnified Party within thirty (30) days of the receipt of such notice from the
Indemnified Party; provided, however, that the Indemnifying Party shall not have
the right to assume the defense of the Third Party Claim if (i) any such claim
seeks, in addition to or in lieu of monetary losses, any injunctive or other
equitable relief; or (ii) there is reasonably likely to exist a conflict of
interest that would make it inappropriate (in the judgment of the Indemnified
Party in its reasonable discretion) for the same counsel to represent both the
Indemnified Party and the Indemnifying Party; or (iii) settlement of, or an
adverse judgment with respect to, the Third Party Claim would establish (in the
good faith judgment of the Indemnified Party) a precedential custom or practice
that would be materially adverse to the business interests of the Indemnified
Party; provided, however, in each such instance the Indemnifying Party shall
have the right (at its expense), but not the obligation, to participate in (but
not control), the defense of any such Third Party Claim. If the Indemnifying
Party assumes the defense of a Third Party Claim, it will conduct the defense
actively, diligently and at its own expense, and it will hold all Indemnified
Parties harmless from and against all Losses caused by or arising out of any
settlement

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thereof. The Indemnified Party shall cooperate with the Indemnifying Party in
such defense and make available to the Indemnifying Party, at the Indemnifying
Party’s expense, all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably requested by the Indemnifying Party. Except
with the written consent of the Indemnified Party (not to be unreasonably
withheld, conditioned or delayed), the Indemnifying Party will not, in the
defense of a Third Party Claim, consent to the entry of any judgment or enter
into any settlement (i) which does not include as an unconditional term thereof
the giving to the Indemnified Party by the third party of a release from all
Liability with respect to such suit, claim, action, or proceeding; or
(ii) unless there is no finding or admission of (A) any violation of Law by the
Indemnified Party (or any Affiliate thereof), (B) any Liability on the part of
the Indemnified Party (or any Affiliate thereof) or (C) any violation of the
rights of any person and no effect on any other claims of a similar nature that
may be made by the same third party against the Indemnified Party (or any
Affiliate thereof).
          (d) In the event that the Indemnifying Party fails or elects not to
assume the defense of an Indemnified Party against such Third Party Claim which
the Indemnifying Party had the right to assume pursuant to Section 7.5(c), the
Indemnified Party shall have the right, at the expense of the Indemnifying
Party, to defend or prosecute such claim in any manner as it may reasonably deem
appropriate, and the Indemnified Party may seek prompt reimbursement for any
Losses incurred in connection with any settlement thereof; provided, however,
that the Indemnified Party will not, in the defense of a Third Party Claim,
consent to the entry of any judgment or enter into any settlement without the
written consent of the Indemnifying Party (not to be unreasonably withheld,
conditioned or delayed). If no settlement of such Third Party Claim is made, the
Indemnified Party may seek prompt reimbursement for any Losses arising out of
any judgment rendered with respect to such claim. Any Losses for which an
Indemnified Party is entitled to indemnification hereunder shall be promptly
paid as suffered, incurred or accrued (in accordance with GAAP). If the
Indemnifying Party does not elect to assume the defense of a Third Party Claim
which it has the right to assume hereunder, the Indemnified Party shall have no
obligation to do so.
          (e) In the event that the Indemnifying Party is not entitled to assume
the defense of the Indemnified Party against such Third Party Claim pursuant to
Section 7.5(c), the Indemnified Party shall have the right, at the expense of
the Indemnifying Party, to defend or prosecute such claim and consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim in any manner it may reasonably deem appropriate, and the
Indemnified Party may seek prompt reimbursement for any Losses incurred in
connection with such judgment or settlement; provided, however, that the
Indemnified Party will not, in the defense of a Third Party Claim, consent to
the entry of any judgment or enter into any settlement without the written
consent of the Indemnifying Party (not to be unreasonably withheld, conditioned
or delayed). In such case, the Indemnified Party shall conduct the defense of
the Third Party Claim actively and diligently, and the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to the
Indemnified Party, at the Indemnifying Party’s expense, all such witnesses,
records, materials and information in the Indemnifying Party’s possession or
under the Indemnifying Party’s control relating thereto as is reasonably
requested by the Indemnified Party. If no settlement of such Third Party Claim
is made, the Indemnified Party may seek prompt reimbursement for any Losses
arising out of any judgment rendered with respect to such claim. Any Losses for
which an Indemnified Party is entitled to indemnification hereunder shall be
promptly paid as suffered, incurred or accrued (in accordance with GAAP).
     7.6. Stockholders’ Agent.
          (a) The Company Stockholders, by approving this Agreement and the
transactions contemplated hereby, irrevocably appoint and constitute Hummer
Winblad Ventures Partners V, LP, as the Stockholders’ Agent for and on behalf of
the Company Stockholders to execute and deliver this Agreement and the Escrow
Agreement and for all other purposes hereunder and thereunder, to give and

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receive notices and communications, to authorize delivery to Purchaser of the
applicable portion of the Escrow Fund in satisfaction of claims by Purchaser (or
to object to such deliveries), to assume the defense of any Third Party Claim
pursuant to Section 7.5 on behalf of any Common Stockholder, to agree to,
negotiate, enter into settlements and compromises of, and demand arbitration and
comply with orders of courts and awards of arbitrators with respect to such
claims by Purchaser and such Third-Party Claims, to agree to, negotiate, enter
into and provide amendments and supplements to and waivers in respect of this
Agreement, in accordance with Section 8.11 of this Agreement, and the Escrow
Agreement, and to take all actions necessary or appropriate in the judgment of
the Stockholders’ Agent for the accomplishment of any or all of the foregoing.
Such agency may be changed by the holders of a majority in interest of the
Escrow Fund from time to time upon not less than 10 days’ prior written notice
to all of the Company Stockholders and to Purchaser. No bond shall be required
of the Stockholders’ Agent, and the Stockholders’ Agent shall receive no
compensation for its services. Notices or communications to or from the
Stockholders’ Agent shall constitute notice to or from each of the Company
Stockholders (including any notices required to be given to any Company
Stockholder under Section 7.5).
          (b) The Stockholders’ Agent shall not be liable for any act done or
omitted hereunder as Stockholders’ Agent while acting in good faith and any act
done or omitted pursuant to the advice of counsel shall be conclusive evidence
of such good faith. The Company Stockholders shall severally and pro rata, in
accordance with their respective Proportionate Escrow Shares, indemnify the
Stockholders’ Agent and hold it harmless against any loss, liability or expense
incurred without gross negligence or bad faith on the part of the Stockholders’
Agent and arising out of or in connection with the acceptance or administration
of his duties hereunder, (the “Agent Expenses”). Following the termination of
the Escrow Period and after the full satisfaction of any claims made by
Purchaser, the Stockholders’ Agent shall have the right to recover Agent
Expenses from the Escrow Fund from any amount that would otherwise be
distributed to the Company Stockholders and, prior to any such distribution,
shall deliver to the Escrow Agent a certificate setting forth the Agent Expenses
actually incurred. Notwithstanding the foregoing, the Stockholders’ Agent shall
have the right to recover Agent Expenses from the Escrow Fund from any amount
that would otherwise be distributed to the Company Stockholders and, prior to
any such distribution, following delivery to the Escrow Agent of (i) a
certificate setting forth the Agent Expenses actually incurred and (ii) a signed
consent from the Purchaser authorizing such Agent Expenses.
          (c) The Stockholders’ Agent shall have reasonable access to
information about the Company and Purchaser and the reasonable assistance of the
Company’s and Purchaser’s officers and employees for purposes of performing its
duties and exercising its rights under this Article VII, provided that the
Stockholders’ Agent shall treat confidentially and not disclose any nonpublic
information from or about the Company or Purchaser to anyone (except on a need
to know basis to its attorneys, accountants and financial advisors and such
other necessary individuals who agree in writing to treat such information
confidentially) consistent with the confidentiality provisions of Section 5.1.
     7.7. Actions of the Stockholders’ Agent. A decision, act, consent or
instruction of the Stockholders’ Agent shall constitute a decision of all of the
Company Stockholders and shall be final, binding and conclusive upon each and
every Company Stockholder, and the Escrow Agent, Purchaser and the Company may
rely upon any decision, act, consent or instruction of the Stockholders’ Agent
as being the decision, act, consent or instruction of each and every Company
Stockholder. The Escrow Agent and Purchaser are hereby relieved from any
Liability to any Person for any acts done by them in accordance with such
decision, act, consent or instruction of the Stockholders’ Agent.

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ARTICLE VIII
GENERAL PROVISIONS
     8.1. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made (i) upon receipt) by delivery in
Person, (ii) the next business day after deposit with an overnight courier
service, (iii) the next business day after dispatch by cable, by facsimile, by
telegram, by telex or (iv) three business days after deposit in United States by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this
Section 8.1):
          (a) if to the Company:
Krillion, Inc.
607A West Dana Street
Mountain View, CA 94041
Facsimile: (650) 965-0236
Attention: Sherry Thomas-Zon
with a copy (which shall not constitute notice) to:
GCA Law Partners LLP
1891 Landings Drive
Mountain View, CA 94043
Facsimile: (650) 428-3901
Attention: Jon Gonzales, Esq.
          (b) if to the Stockholders’ Agent:
Hummer Winblad Venture Partners V, L.P.,
as Stockholders’ Agent
One Lombard Street
San Francisco, CA 94111
Facsimile: (650) 979-9601
Attention: Todd Forrest
with a copy (which shall not constitute notice) to:
GCA Law Partners LLP
1891 Landings Drive
Mountain View, CA 94043
Facsimile: (650) 428-3901
Attention: Jon Gonzales, Esq.

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          (c) if to Purchaser:
Local.com Corporation
7555 Irvine Center Drive
Irvine, CA 92618
Facsimile: (949) 784-0880
Attention: Heath Clarke, CEO
with a copy (which shall not constitute notice) to:
Local.com Corporation
7555 Irvine Center Drive
Irvine, CA 92618
Facsimile: (949) 419-1194
Attention: Scott Reinke, General Counsel
     8.2. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in any manner
materially adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this Agreement be
consummated as originally contemplated to the greatest extent possible.
     8.3. Assignment, Binding Effect, Benefit. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by the Company
or the Company Stockholders (whether by operation of Law or otherwise) without
the prior written consent of Purchaser. Purchaser may assign any of its rights
hereunder to any Affiliate of Purchaser without obtaining the consent of the
Company or the Company Stockholders; provided that Purchaser shall remain
primarily liable for its obligations hereunder, and provided that the assignment
shall not be effective until Purchaser shall have provided the Company and the
Company Stockholders with notice of such assignment which notice must include
the full name of the assignee, the nature of the assignee’s relationship with
Purchaser and address of the assignee. Subject to the terms of this Section 8.3,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
     8.4. Incorporation of Exhibits. The Company Disclosure Schedule, the
Schedules and all Exhibits attached hereto and referred to herein are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
     8.5. Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof in addition to any other remedy at law
or in equity.
     8.6. Governing Law; Forum. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California applicable to
contracts executed in and to be

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performed in that state and without regard to any applicable conflicts of law.
Any controversy or claim arising out of or relating to this Agreement or a
breach hereof shall be finally settled by arbitration in Irvine, California,
under the commercial rules then in effect of the American Arbitration
Association, and shall be determined in accordance with the laws of the State of
California applicable to contracts to be wholly performed therein.
     8.7. Time of the Essence. For purposes of this Agreement and the
transactions contemplated by this Agreement, time is of the essence.
     8.8. Waiver of Jury Trial. Each of the parties hereto hereby irrevocably
waives any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby.
     8.9. Construction.
          (a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include the
masculine and feminine genders.
          (b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
          (c) As used in this Agreement, the words “include” and “including,”
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words “without limitation.”
          (d) Except as otherwise indicated, all references in this Agreement to
“Articles,” “Sections,” “Schedules” and “Exhibits” are intended to refer to an
Article or Section of, or Schedule or Exhibit to, this Agreement.
          (e) Except as otherwise indicated, all references (i) to any agreement
(including this Agreement), contract or Law are to the agreement, contract or
Law as amended, modified, supplemented or replaced from time to time; and
(ii) to any Government Authority include any successor to that Government
Authority.
          (f) Except as otherwise indicated, reference to any Person includes
such Person’s successors and assigns but, if applicable, only if such successors
and assigns are not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or individually.
          (g) As used in this Agreement, “hereunder,” “hereof,” “hereto,” and
words of similar import shall be deemed references to this Agreement as a whole
and not to any particular Article, Section or other provision hereof
          (h) As used in this Agreement, with respect to the determination of
any period of time, use of the word “from” means “from and including” and “to”
means “to but excluding”.
     8.10. 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

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party may reasonably request (prior to, at or after the Closing) for the purpose
of carrying out or evidencing any of the transactions contemplated by this
Agreement.
     8.11. Amendments and Waivers. This Agreement may not be amended or
modified, nor may compliance with any condition or covenant set forth herein be
waived, except by a writing duly and validly executed by Purchaser, the Company
and the Stockholders’ Agent, or in the case of a waiver, the party waiving
compliance.
     8.12. Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
     8.13. Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in two or more counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
     8.14. Entire Agreement. This Agreement (including the Exhibits, the
Schedules and the Company Disclosure Schedule) constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings among the parties with respect thereto.
[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, Purchaser, the Company, the Company Stockholders and
the Stockholders’ Agent have caused this Agreement to be executed as of the date
first written above by their respective officers thereunto duly authorized.

            LOCAL.COM CORPORATION
      By:   /s/ Heath B. Clarke         Name:   Heath B. Clarke        Title:  
Chief Executive Officer        KRILLION, INC.
      By:   /s/ Sherry Thomas-Zon         Name:   Sherry Thomas-Zon       
Title:   CEO        COMPANY STOCKHOLDERS
      By:   /s/ Signature on file         Name:           Title:          
STOCKHOLDERS’ AGENT:

HUMMER WINBLAD VENTURE PARTNERS V, L.P.
      By:   Hummer Winblad Equity Partners V, L.L.C.,         its General
Partner            By:   /s/ Todd Forrest         Todd Forrest, Managing
Director and CFO             

Signature Page to Stock Purchase Agreement

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Exhibit A
Definitions
     “Acquisition Proposal” with respect to the Company, means any offer or
proposal relating to any transaction or series of related transactions
involving: (a) any purchase from such party or acquisition by any Person or
“group” (as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of 10% or more interest in the total outstanding voting
securities of the Company or any tender offer or exchange offer that if
consummated would result in any Person or group beneficially owning 10% or more
of the total outstanding voting securities of the Company, (b) any merger,
consolidation, business combination or similar transaction involving the
Company, (c) any sale, lease (other than in the ordinary course of business
consistent with past practice), exchange, transfer, license (other than in the
ordinary course of business consistent with past practice), acquisition or
disposition of 10% or more of the assets of the Company or (d) any liquidation
or dissolution of the Company (provided, however, that the transactions between
Purchaser and the Company contemplated by this Agreement shall not be deemed an
Acquisition Proposal).
     “Affiliate” of a specified Person means a Person who directly or indirectly
through one or more intermediaries controls, is controlled by, or is under
common control with such specified Person.
     “Agent Expenses” has the meaning set forth in Section 7.6(b).
     “Agreement” has the meaning set forth in the Preamble.
     “Ancillary Agreements” has the meaning set forth in Section 2.5.
     “Annual Financial Statements” has the meaning set forth in
Section 2.7(a)(i).
     “Audit” means any audit, investigation, assessment of Taxes, other
examination by any Tax Authority, or any administrative or judicial proceeding
or appeal of such proceeding relating to Taxes.
     “Basket Amount” has the meaning set forth in Section 7.4(b).
     “Business Day” means any day on which banks are not required or authorized
to close in Irvine, California.
     “Business IP” means all Intellectual Property Rights at any time
purportedly owned by or exclusively licensed to or created by or for the
Company. All other Intellectual Property Rights that may be or have been used or
exploited (or held for use or exploitation), whether exclusively or
non-exclusively, in connection with the Company’s business are referred to in
this Agreement as “Other IP.”
     “Charter Documents” has the meaning set forth in Section 2.2.
     “Closing” has the meaning set forth in Section 1.2.
     “COBRA” has the meaning set forth in Section 2.18(d).
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Commodity Software” means commonly available, off-the-shelf software
(excluding Open Source Materials) with aggregate value of less than $10,000 that
is licensed non-exclusively to the Company in

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object code form only on generally available terms and is not part of or
directly used to enable any product or service of the Company.
     “Common Stock Consideration” has the meaning set forth in Section 1.3(a).
     “Company” has the meaning set forth in the Preamble.
     “Company Board” means the Board of Directors of the Company.
     “Company Capital Stock” means all shares of Company Common Stock and
Company Preferred Stock.
     “Company Certificate” has the meaning set forth in Section 1.5(a).
     “Company Common Stock” has the meaning set forth in Section 1.3(a).
     “Company Disclosure Schedule” has the meaning set forth in Article II.
     “Company Employee Plan” or “Company Employee Plans” has the meaning set
forth in Section 2.18(a).
     “Company Fees and Expenses” has the meaning set forth in Section 5.6.
     “Company Option” means each option to acquire shares of Company Common
Stock granted under the Company Stock Plan.
     “Company Preferred Stock” has the meaning set forth in Section 1.3(b).
     “Company Products” means all products, technologies and services developed
(including products, technologies and services under development), made,
provided, distributed, imported, sold or out-licensed by or on behalf of the
Company.
     “Company Returns” has the meaning set forth in Section 2.17(b).
     “Company Stockholders” has the meaning set forth in the Preamble.
     “Company Stock Plan” has the meaning set forth in Section 2.4(b).
     “Confidentiality Agreement” has the meaning set forth in Section 5.1.
     “Consents” has the meaning set forth in Section 2.6.
     “Contaminants” has the meaning set forth in Section 2.9(i).
     “Contract” means any written or legally binding oral agreement, contract,
subcontract, settlement agreement, lease, binding understanding, instrument,
note, option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan or legally binding, commitment or arrangement, or undertaking of
any nature, as in effect as of the date hereof or as may hereinafter be in
effect.
     “Secured Notes” means the First Amended and Restated Secured Promissory
Note issued by the Company on February 14, 2011 to each of Hummer Winblad
Venture Partners V, L.P. and Leapfrog

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Ventures II, L.P. in the aggregate principal amount of $465,602.39 and
$233,301.72, respectively, true and complete copies of which have been provided
to Purchaser.
     “Secured Notes Payment Amount” has the meaning set forth in Section 2.4(c).
     “Designated Accounting Firm” shall mean an independent accounting firm of
recognized standing reasonably satisfactory to Purchaser and Stockholders’
Agent.
     “Development Tools” has the meaning set forth in Section 2.9(m).
     “EBITDA” means Earnings before interest, taxes, depreciation and
amortization.
     “Employment Agreements” has the meaning set forth in Section 6.2(e).
     “Environment” means soil, surface waters, ground waters, land, stream
sediments, surface or subsurface strata, ambient air and any other environmental
medium.
     “Environmental Conditions” means any condition with respect to the
Environment which results in any damage, loss, cost, expense, claim, demand,
Order or Liability to or against the Company or Purchaser.
     “Environmental Laws” means all Laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata, and natural
resources), including, without limitation, Laws relating to (i) emissions,
discharges, releases or threatened releases of, or exposure to, Hazardous
Substances, (ii) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances,
(iii) recordkeeping, notification, disclosure and reporting requirements
regarding Hazardous Substances, and (iv) endangered or threatened species of
fish, wildlife and plant and the management or use of natural resources.
     “Encumbrance” means any mortgage, deed of trust, lien, pledge, charge,
security interest, title retention device, conditional sale or other security
arrangement, collateral assignment, claim, charge, adverse claim of title,
ownership or right to use, restriction or other encumbrance of any kind
(including any restriction on (i) the transfer or receipt of any income derived
from any asset of the Company, (ii) the use of any asset, and (iii) the
possession, exercise or transfer of any other attribute of ownership of any
asset of the Company).
     “ERISA” has the meaning set forth in Section 2.18(a).
     “ERISA Affiliate” has the meaning set forth in Section 2.18(a).
     “Escrow Agent” has the meaning set forth in Section 7.1.
     “Escrow Amount” means an amount equal to $1,000,000 in cash, which shall be
deposited with the Escrow Agent pursuant to Section 7.1 of the Agreement.
     “Escrow Fund” has the meaning set forth in Section 7.1.
     “Escrow Period” has the meaning set forth in Section 7.1.
     “Escrow Release Date” has the meaning set forth in Section 7.1.

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     “Escrow Release Schedule” has the meaning set forth in Section 7.1.
     “Estimated Closing Balance Sheet” has the meaning set forth in
Section 1.4(a).
     “Estimated Working Capital Value” has the meaning set forth in
Section 1.4(a).
     “Final Conversion Schedule” has the meaning set forth in Section 1.5(b).
     “Final Working Capital Value” has the meaning set forth in Section 1.4(c).
     “FIRPTA Certificate” has the meaning set forth in Section 6.2(a)(iii).
     “GAAP” has the meaning set forth in Section 2.7(b).
     “Governmental Authority” means any domestic or foreign governmental,
regulatory or administrative authority, agency or commission, any court,
tribunal or arbitral body, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental authority.
     “Governmental Authorization” means any consent, approval, license,
registration, security clearance, authorization, certificate or permit issued,
granted, given or otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Law.
     “Hazardous Substance” means any substance which is (i) defined as a
hazardous substance, hazardous material, hazardous waste, pollutant or toxic
substance under any applicable Environmental Laws, (ii) a petroleum hydrocarbon,
(iii) asbestos, (iv) lead paint, or (v) regulated pursuant to any Environmental
Laws.
     “Indebtedness” means (i) all indebtedness for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (ii) any other indebtedness that is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases, (iv) all obligations in respect of bankers’
acceptances issued or created, (v) all liabilities secured by any Encumbrance on
any property and (vi) all guarantees of the payment obligations of a third
party.
     “Indemnified Party” has the meaning set forth in Section 7.5(a).
     “Indemnifying Party” has the meaning set forth in Section 7.5(a).
     “Initial Common Amount Per Share” has the meaning set forth in
Section 1.3(a).
     “Initial Preferred Amount Per Share” has the meaning set forth in
Section 1.3(b)(i).
     “Intellectual Property Rights” means any or all of the following worldwide
legal rights, whether or not filed, perfected, registered or recorded, that may
now or hereafter exist under the laws of any jurisdiction: (i) patents, patent
applications, and patent rights, including any and all continuations,
continuations-in-part, divisionals, reissues, reexaminations or extensions
thereof; all invention certificates; and all inventions and improvements
thereto, whether or not patentable; (ii) rights associated with works of
authorship (including but not limited to audiovisual works), including
copyrights, copyright applications, and copyright registrations, moral rights,
economic rights, mask work rights, mask work applications, and mask work
registrations; (iii) rights relating to the protection of trade secrets and

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Confidential Information; (iv) industrial design rights and industrial property
rights; (v) trademarks, service marks, logos, trade dress, trade names,
applications and registrations for any of the foregoing, and all goodwill
associated with the same; (vi) domain names, including but not limited to
Internet domain names, Internet and World Wide Web URLs, and domain name
registrations and pending applications therefor; (vii) all rights of publicity;
(viii) all rights in data, databases, and data collections; (ix) any rights
existing under any terms of use, terms of service, proprietary license, open
source license, free software license or other license or terms of any kind
which seek to govern access to, use of, or distribution of any product, data,
Software, or service (including, without limitation the terms of use or service
of any Internet site); (x) any rights similar or analogous to those set forth in
the preceding clauses and any other proprietary rights (including rights with
respect to negative covenants) of any kind; (xi) all rights held under any
licenses or sublicenses or similar grants of rights to any proprietary assets
owned by another Person; and (xii) all rights to sue for any past, present or
future infringement, misappropriation, or violation of any of the foregoing and
the right to all income, royalties, damages and payments now or hereafter due or
payable with respect to any of the foregoing rights, including without
limitation damages for past, present or future infringement, misappropriation,
or violation.
     “Interim Balance Sheet” has the meaning set forth in Section 2.7(a)(ii).
     “Interim Financial Statements” has the meaning set forth in
Section 2.7(a)(ii).
     “IRS” means the Internal Revenue Service.
     “Key Employees” are employees of the Company that are listed on
Schedule 1-B.
     “Knowledge” means (i) with respect to any Company Stockholder, the actual
knowledge of such Person after “due inquiry”, which shall be deemed a reasonably
comprehensive investigation that a prudent individual could be expected to
conduct to discover or otherwise become aware of a fact or matter and (ii) with
respect to the Company, the actual knowledge of the Company’s employees,
officers, directors and each Major Stockholder after “due inquiry”.
     “Law” means any foreign, federal, state or local law (including common
law), statute, code, ordinance, rule, regulation or other requirement.
     “Lease Agreements” has the meaning set forth in Section 2.12.
     “Leased Real Property” has the meaning set forth in Section 2.12.
     “Liability” with respect to any Person, any liability or obligation of such
Person of any kind, character or description, whether known or unknown, absolute
or contingent, accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executor, determined, determinable or otherwise, and whether
or not the same is required to be accrued on the financial statements of such
Person.
     “Losses” has the meaning set forth in Section 7.3(a).
     “Major Stockholder” means any Company Stockholder who holds (together with
any of his, her or its Affiliates) more than 5% of the Company Capital Stock (on
an as-converted basis) immediately prior to the Closing.
     “Material Adverse Effect” means any event, change, violation, inaccuracy,
circumstance or effect (regardless of whether such event, change, violation,
inaccuracy, circumstance or effect is inconsistent

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with any representations or warranties made in this Agreement) that is or is
reasonably likely to be, individually or in the aggregate, materially adverse to
the financial condition, assets (including intangible assets), business,
operations or results of operations of the Company, or business prospects, or a
material adverse effect on the ability to consummate the transactions
contemplated hereby; provided, however, that any adverse change, event,
circumstance or effect arising from or related to conditions generally affecting
the global securities markets or the world economy (provided that such
conditions do not affect the Company disproportionately as compared to the
Company’s competitors), shall not be taken into account in determining whether a
“Material Adverse Effect” has occurred or could reasonably be expected to occur.
     “Material Contracts” has the meaning set forth in Section 2.10(b).
     “Negative Estimated Working Capital Adjustment” has the meaning set forth
in Section 1.4(a).
     “Open Source Materials” has the meaning set forth in Section 2.9(h).
     “Order” means any award, injunction, judgment, decree, order, ruling,
subpoena or verdict or other decision issued, promulgated or entered by or with
any Governmental Authority.
     “Permits” has the meaning set forth in Section 2.16.
     “Person” means an individual, a partnership, a corporation, an association,
a limited liability company, a joint stock company, a trust, a joint venture, an
unincorporated organization, a group, a Governmental Authority or any other type
of entity.
     “Positive Estimated Working Capital Adjustment” has the meaning set forth
in Section 1.4(a).
     “Preferred Stock Consideration” has the meaning set forth in
Section 1.3(b).
     “Preferred Stockholder” means any Company Stockholder who holds shares of
the Company Preferred Stock immediately prior to the Closing.
     “Pre-Paid Contracts” means those certain Contracts with Toshiba America
Information Systems, Inc., dated August 3, 2010 and Electrolux Home Products,
Inc., dated November 16, 2009.
     “Proceeding” means any action, suit, litigation, arbitration, lawsuit,
claim, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding and any informal proceeding), prosecution, contests,
hearing, inquiry, inquest, audit, examination, investigation, challenge,
controversy or dispute commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Authority or any arbitrator.
     “Proportionate Escrow Share” means, with respect to each Preferred
Stockholder, a fraction, the numerator of which is the aggregate dollar amount
payable in cash at the Closing to such Preferred Stockholder in exchange for all
shares of Company Preferred Stock owned by such Preferred Stockholder pursuant
to Section 1.3(b)(i) immediately prior to the Closing and as set forth on the
Final Conversion Schedule and the denominator of which is the aggregate dollar
amount to be payable in cash at the Closing in respect of all shares of Company
Preferred Stock owned by all Preferred Stockholders pursuant to
Section 1.3(b)(i).
     “Proposed Closing Balance Sheet” has the meaning set forth in
Section 1.4(b).

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     “Proposed Working Capital Value” has the meaning set forth in
Section 1.4(b).
     “Purchaser” has the meaning set forth in the Preamble.
     “Purchaser Indemnified Parties” has the meaning set forth in
Section 7.3(a).
     “Purchase Promissory Note” means that certain promissory noted, dated
April 1, 2011, by and between the Company and Purchaser in the principal amount
of $100,000.00.
     “Security Agreement” means that certain First Amended and Restated Security
Agreement, dated as of February 14, 2011, executed by the Company in favor of
the Collateral Agent (as defined therein) on behalf of Hummer Winblad Venture
Partners V, L.P. and Leapfrog Ventures II, L.P., a true and correct copy of
which has been provided to Purchaser.
     “Seller Indemnified Parties” has the meaning set forth in Section 7.3(c).
     “Share Purchase” has the meaning set forth in the Recitals.
     “Shares” has the meaning set forth in the Recitals.
     “Software” means all software (other than Commodity Software),
documentation and content developed, licensed, or used by or for the Company, in
any form (including, but not limited to, all software programs, objects, APIs,
widgets, modules, routines, algorithms and code, in source code, object code,
and other form), and includes, without limitation, (i) all past and current
versions and releases, all work-in-process, and developed but unreleased code,
and all versions or releases under development as of the Closing Date including
any improvements, updates, patches and enhancements; (ii) any other software
owned or licensed by the Company that is, has been, or is intended to be used by
the Company in connection with its business and/or the development, utilization,
or support of the software described in this paragraph; and (iii) all derivative
works of any of the software described in this paragraph.
     “Specified Representations” has the meaning set forth in Section 7.2.
     “Stockholders’ Agent” has the meaning set forth in the Preamble.
     “Straddle Period” means a taxable year or period beginning on or before,
and ending after, the Closing Date.
     “Survival Period” has the meaning set forth in Section 7.2.
     “Tax” or “Taxes” means all federal, state, local and foreign taxes, and
other assessments of a similar nature including, without limitation: (i) taxes
or other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, profits, sales, use, capital stock, payroll,
employment, social security, workers’ compensation, unemployment compensation or
net worth; (ii) taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added or gains taxes; (iii) license,
registration and documentation fees; (iv) customs duties, tariffs and similar
charges and (v) obligations pursuant to laws of escheat or unclaimed or
abandoned property, in the case of each of the foregoing clause (i) through (v),
whether imposed directly or through withholding and including any interest,
additions to tax, or penalties applicable thereto.
     “Tax Arbitrator” has the meaning set forth in Section 5.5(d).

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     “Tax Authority” means the IRS and any other national, regional, state,
municipal, foreign or other governmental or regulatory authority or
administrative body responsible for the administration of any Taxes.
     “Tax Claim” has the meaning set forth in Section 5.5(b).
     “Tax Return” means all federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms and information returns or
other documents and any amendments thereto required to be filed with a Tax
Authority.
     “Transitional Payment Agreements” has the meaning set forth in
Section 6.2(e).
     “Third Party Claims” has the meaning set forth in Section 7.5(b).
     “Websites” has the meaning set forth in Section 2.9(l).
     “Working Capital” means the difference between the Company’s assets and
liabilities as set forth on the Estimated Closing Balance Sheet or the Proposed
Closing Balance Sheet, as the case may be.
     Working Capital Adjustment Consideration has the meaning set forth in
Section 1.4(e).

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Exhibit B-1
Form of Employment Agreement
Exhibit B-2
Form of Transitional Payment Agreement
Exhibit C
Form of FIRPTA Certificate
Exhibit D
Form of Escrow Agreement
Exhibit E
Form of Proprietary Information and Inventions Assignment Agreement
Exhibit F
Form of Company Legal Opinion
Schedule 1-A
List of Company Stockholders
Schedule 1-B
List of Key Employees
Schedule 1.4(a)
Estimated Closing Balance Sheet
Schedule 1.5(b)
Final Conversion Schedule
Schedule 5.6
Company Fees and Expenses