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Exhibit 10.1

Execution Copy

AGREEMENT AND PLAN OF MERGER
 
BY AND AMONG
 
NUMEREX CORP,
 
NUMEREX MERGER CORPORATION,
 
OMNILINK SYSTEMS INC.,
 
AND
 
FORTIS ADVISORS LLC,
 
AS THE SELLERS’ REPRESENTATIVE
(FOR THE LIMITED PURPOSES DESCRIBED HEREIN)
 
DATED AS OF APRIL 28, 2014

 
 
 

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TABLE OF CONTENTS
 

                                                                
                     Page

ARTICLE I
 
-DEFINITIONS
    2     1.2  
“Table of Defined Term”
    11  
ARTICLE II
 
-THE MERGER
    12     2.1  
The Merger
    12     2.2  
Effective Time
    12     2.3  
Effect of the Merger
    12     2.4  
Charter; Bylaws
    13     2.5  
Directors and Officers
    13     2.6  
Conversion of Company Capital Stock
    13     2.7  
Closing Cash Consideration and Adjustment
    14     2.8  
Post-Closing Adjustment
    15     2.9  
Treatment of Stock Held by the Company
    17     2.10  
Dissenting Shares
    17     2.11  
Stock Options; Warrants
    17     2.12  
Payments Certificate
    18     2.13  
Capital Stock of Merger Sub
    18     2.14  
Escrow
    19     2.15  
Payment Mechanics
    19     2.16  
Further Ownership Rights
    22     2.17  
Lost, Stolen or Destroyed Certificates
    22     2.18  
Closing
    22                  
ARTICLE III
 
-REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    22     3.1  
Organization and Qualification; Subsidiaries
    22     3.2  
Organizational Documents
    23     3.3  
Capitalization
    23     3.4  
Authority; Enforceability
    25     3.5  
Required Vote
    26     3.6  
No Conflict; Required Filings and Consents
    26     3.7  
Material Contracts
    27     3.8  
Compliance
    31     3.9  
Financial Statements
    31     3.10  
Absence of Certain Changes or Events
    32     3.11  
No Undisclosed Liabilities; No Indebtedness
    32     3.12  
Absence of Litigation, Claims and Orders
    32     3.13  
Employee Benefit Plans
    33     3.14  
Employment and Labor Matters
    36     3.15  
Title to Properties, Rights and Assets; Leases
    38     3.16  
Taxes
    39     3.17  
Intellectual Property
    41     3.18  
Privacy and Security
    45     3.19  
Insurance
    45     3.20  
No Restrictions on the Merger; Takeover Statutes
    45     3.21  
Environmental Matters
    46     3.22  
Company Brokers
    46     3.23  
Certain Business Practices
    46     3.24  
Interested Party Transactions
    47     3.25  
Condition and Sufficiency of Assets
    47     3.26  
Bank Accounts and Powers
    47     3.27  
Books and Records
    47     3.28  
Government Contracts
    48     3.29  
Absence of Restrictions on Business Activities.
    49                  
ARTICLE IV
 
-REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
    49     4.1  
Organization; Formation of Merger Sub
    49     4.2  
Authority; Enforceability
    49     4.3  
No Conflict; Required Filings and Consents
    50     4.4  
Absence of Litigation, Claims and Orders
    50     4.5  
Compliance
    50     4.6  
Financial Capability
    51     4.7  
Brokers
    51                  
ARTICLE V
 
-CONDUCT OF BUSINESS PENDING THE MERGER
    51     5.1  
Conduct of Business by the Company Pending the Merger
    51     5.2  
Insurance
    53     5.3  
Access to Information; Confidentiality
    53     5.4  
Commercially Reasonable Efforts; Further Assurances
    54     5.5  
Notification of Certain Matters
    55     5.6  
Notification of Others
    56     5.7  
Tax Matters
    56     5.8  
Public Announcements
    59     5.9  
Stockholder Approval of Excess Parachute Payments
    59     5.10  
Information Supplied
    60                  
ARTICLE VI
 
-ADDITIONAL AGREEMENTS
    60     6.1  
Stockholder Approval; Information Statement
    60     6.2  
Notification of Certain Matters
    61     6.3  
Takeover Statutes
    61     6.4  
Employee Matters
    62     6.5  
Company Transaction Expenses
    63     6.6  
Interested Party Transactions
    63     6.7  
Delivery of Closing Date Balance Sheet
    64     6.8  
Consent Agreement
    64     6.9  
Directors and Officers Indemnification
    64     6.10  
Escrow Agreement
    65     6.11  
Corporate Records
    65                  
ARTICLE VII
 
-CONDITIONS OF MERGER
    65     7.1  
Conditions to Obligation of Each Party to Effect the Merger
    65     7.2  
Additional Conditions to Obligations of Parent and Merger Sub
    65     7.3  
Additional Conditions to Obligations of the Company
    68                  
ARTICLE VIII
 
-TERMINATION; FEES AND EXPENSES
    69     8.1  
Termination
    69     8.2  
Effect of Termination
    69     8.3  
Fees and Expenses
    70                  
ARTICLE IX
 
-SURVIVAL AND INDEMNIFICATION
    70     9.1  
Survival of Representations and Warranties
    70     9.2  
Escrow Amount
    70     9.3  
Indemnification by the Sellers
    70     9.4  
Indemnification by Parent
    71     9.5  
Calculation of Losses; Determination of Application; Limitations on
Indemnification Obligations
    72     9.6  
Distribution of Escrow Amount after the Expiration of the Claim Period
    73     9.7  
Indemnification Procedures
    73     9.8  
Objections to Claims
    73     9.9  
Resolution of Conflicts
    74     9.10  
Third-Party Claims
    74     9.11  
Non-Exclusive Remedy for Fraud, Willful or Criminal Misconduct or Intentional
Misrepresentation
    76     9.12  
Adjustment to Purchase Price
    76     9.13  
Enforcement
    76     9.14  
Tax Treatment
    76                  
ARTICLE X
 
-THE SELLERS’ REPRESENTATIVE
    76     10.1  
The Sellers’ Representative
    76                  
ARTICLE XI
 
-MISCELLANEOUS
    81     11.1  
Amendment
    81     11.2  
Waiver
    81     11.3  
Notices
    81     11.4  
Specific Performance
    83     11.5  
Interpretation
    83     11.6  
Severability
    83     11.7  
Entire Agreement
    84     11.8  
Assignment
    84     11.9  
No Third Party Beneficiaries
    84     11.10  
Failure or Indulgence Not Waiver; Remedies Cumulative
    84     11.11  
Plan of Merger
    84     11.12  
Governing Law
    85     11.13  
Jurisdiction; Waiver of Jury Trial
    85     11.14  
Counterparts
    85  

 

 
 

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EXHIBITS
 
 
Exhibit A
—
Form of Consent Agreement

 
 
Exhibit B
—
Form of Amended and Restated Certificate of Incorporation of the Surviving
Corporation

 
 
Exhibit C
—
Form of Bylaws of the Surviving Corporation

 
 
Exhibit D
—
Form of Letter of Transmittal

 
 
Exhibit E
—
Form of Escrow Agreement

 
 
Exhibit F
—
Form of FIRPTA Certificate

 
 
Exhibit G
—
Form of Confidentiality, Non-Competition, Non-Solicitation and Proprietary
Rights Agreement

 
 
Exhibit H
—
Form of Option Cash Out and Release Agreement

 

 

 
 

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AGREEMENT AND PLAN OF MERGER
 
This AGREEMENT AND PLAN OF MERGER, dated as of April 28, 2014 (this
“Agreement”), is made by and among Numerex Corp, a Pennsylvania corporation
(“Parent”), Numerex Merger Corporation, a Delaware corporation and a wholly
owned Subsidiary of Parent (“Merger Sub”), Omnilink Systems Inc., a Delaware
corporation (the “Company”), and Fortis Advisors LLC, a Delaware limited
liability company (“Sellers’ Representative”), solely in its capacity as the
Sellers’ Representative and only for the purposes provided for herein and for no
other purpose.
 
WHEREAS, the Boards of Directors of Merger Sub and the Company have each
determined that it is in the best interests of their respective stockholders for
Parent to acquire the Company upon the terms and subject to the conditions set
forth herein;
 
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company have each
approved the merger (the “Merger”) of Merger Sub with and into the Company, in
accordance with the Delaware General Corporation Law (the “DGCL”) and subject to
the conditions set forth herein, which Merger will result in, among other
things, the Company becoming a wholly-owned subsidiary of Parent;
 
WHEREAS, the Board of Directors of the Company has  (i) approved and declared
the Merger advisable upon the terms and subject to the conditions set forth in
this Agreement, (ii) directed that this Agreement and the transactions
contemplated hereby be submitted for consideration and approval of and adoption
by the Stockholders and (iii) recommended the adoption of the Merger and this
Agreement by the Stockholders; and
 
WHEREAS, promptly after the execution of this Agreement, the Company intends to
solicit and deliver to Parent Consent Agreements, in the form attached as
Exhibit A hereto (the “Consent Agreements”), executed by Stockholders holding,
in the aggregate, at least 75% of the total votes entitled to be cast by holders
of issued and outstanding shares of Company Capital Stock, voting together as a
single class on an as converted to Common Stock basis and at least 85% of the
total votes entitled to be cast by holders of issued and outstanding shares of
Series B Preferred Stock, Series B-1 Preferred Stock and Series B-2 Preferred
Stock, voting together as a single class on an as-converted to Common Stock
basis (the “Requisite Vote”).  Pursuant to the Consent Agreements, among other
things, such Stockholders will agree (a) to execute and deliver, in accordance
with the requirements of the DGCL, the Stockholder Approval and (b) to vote all
shares of Company Capital Stock owned by them in favor of the adoption of this
Agreement, the Merger and the other transactions contemplated hereby.
 
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
 
 
ARTICLE I — DEFINITIONS
 
1.1 Certain Definitions
 
.  For purposes of this Agreement, the following terms shall have the following
meanings:
 
(a) “Affiliate” means any Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by or is under common control with
such Person, including, with respect to the Company, any corporation,
partnership, limited liability company or joint venture in which the Company
has, directly or indirectly, an interest of 10% or more.
 
(b) “Aggregate Exercise Price” means the aggregate exercise price of all Stock
Options and Warrants outstanding as of immediately prior to the Effective Time.
 
(c) “Approvals” means all franchises, grants, authorizations, licenses, permits,
easements, consents, waivers, qualifications, certificates, Orders and
approvals.
 
(d) “Business Day” means any day other than a Saturday, Sunday or day on which
banks are permitted to close in the State of New York or the State of Georgia.
 
(e) “Cash” means the aggregate amount of cash, cash equivalents, marketable
securities and instruments and deposits of the Company and any of its
Subsidiaries, including checks and other payments in transit and overdrafts.
 
(f) “Claim” means any claim, suit, action, arbitration, cause of action,
complaint, allegation, criminal prosecution, investigation, demand letter or
proceeding, whether at law or at equity, before or by any Court or Governmental
Authority, any arbitrator or other tribunal.
 
(g) “Common Stock” means the common stock, $0.00002 par value per share, of the
Company.
 
(h) “Common Stock Closing Cash Consideration” means the Closing Cash
Consideration, minus the Series A Liquidation Preference Cash
Consideration, minus the Series B Liquidation Preference Cash
Consideration, minus the Series B-1 Liquidation Preference Cash Consideration
minus the Series B-2 Liquidation Preference Cash Consideration.
 
(i) “Common Stock Equivalents” means (A) Common Stock and (B) Common Stock
issuable upon the conversion of Series B Preferred Stock, Series B-1 Preferred
Stock and Series B-2 Preferred Stock.
 
(j) “Company Capital Stock” means the Common Stock and the Preferred Stock.
 
(k) “Company Charter” means the Sixth Amended and Restated Certificate of
Incorporation of the Company, as in effect on the date hereof.
 
(l) “Company Disclosure Schedule” means the Company Disclosure Schedule
delivered by the Company to Parent no later than 8:00 pm ET, April 27, 2014
(except Schedule 1.1(rrrr) which is delivered contemporaneously herewith).
 
(m) “Company Intellectual Property” means (i) any and all Company Owned
Intellectual Property and (ii) any and all other Intellectual Property Used or
held for Use by the Company or any of its Subsidiaries in the operation of its
business as currently conducted or as contemplated to be conducted pursuant to a
written product roadmap in effect as of the date hereof.
 
(n) “Company Owned Intellectual Property” means any and all Intellectual
Property owned or purported to be owned by the Company or any of its
Subsidiaries.
 
(o) “Company Loans” means, collectively, (i) the Second Amended and Restated
Loan and Security Agreement, dated April 15, 2011, as amended, between Company
and Silicon Valley Bank and (ii) the Loan and Security Agreement, dated May 16,
2013, as amended, between Company and Partners for Growth II, L.P.
 
(p) “Company Products” means any and all Software, Company Websites, Systems,
Content and other products or services owned, offered or Used by the Company and
all Documentation related to any of the foregoing, including (i) any Software,
Company Websites, Systems, and other products or service offerings sold or
marketed by the Company or under development by the Company on or prior to the
date hereof, and (ii) any Content owned by third parties that is Used by the
Company or in connection with any of the items set forth in (i) above in the
operation of the Company’s business as currently conducted.
 
(q) “Company Stock Option Plan” means the Third Amended and Restated 2004 Stock
Incentive Plan of the Company dated as of June 2010, as amended.
 
(r) “Company Transaction Expenses Amount” means (i) the aggregate amount of all
costs, fees and expenses incurred prior to the Effective Time (whether or not
invoiced) by the Company in connection with this Agreement and the transactions
contemplated hereby, including all fees and expenses of advisors, investment
bankers, lawyers and accountants arising out of, relating to or incidental to
the discussion, evaluation, financing, negotiation and documentation of the
transactions contemplated hereby plus (ii) fifty percent (50%) of the Transfer
Taxes (if any), plus (iii) the amount of the Management Bonus Pool plus (iv) the
Warrant Put Payout plus (v) the amount of all employer-side Medicare Taxes
(i.e., not withheld Medicare Taxes) payable by Parent, the Company or any of its
Subsidiaries in connection with any amount payable in respect of the Merger
Consideration.
 
(s) “Company Websites” means all content, text, graphics, images, audio, video,
data, and Software included on or used to operate and maintain the Internet
sites owned and/or operated by the Company, including all Documentation, ASP,
HTML, HTML5, DHTML, SHTML, and XML files, cgi and other scripts, all programming
code (source and object), subscriber and user data, archives, and server and
traffic logs related to any such Internet site.
 
(t) “Contract” means any contract, plan, undertaking, understanding,
arrangement, agreement, license, sublicense, options, covenants not to sue,
consent, lease, sublease, note, mortgage or other binding commitment, whether
written or oral (including electronic form), including the provisions that
survive the termination of any such contract that is no longer in force.
 
(u) “Control” (including the terms “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of stock, as trustee or executor, by Contract or credit
arrangement or otherwise.
 
(v) “Court” means any court or arbitration tribunal of the United States, any
domestic state, any foreign country and any political subdivision or agency
thereof.
 
(w) “Documentation” shall mean printed, visual or electronic materials, reports,
white papers, documentation (including technical and user documentation or
manuals), specifications, requirements, designs, flow charts, code listings,
instructions, frequently asked questions, release notes, recall notices, error
logs, diagnostic reports, marketing materials, packaging, labeling, service
manuals and other information describing the use, operation, installation,
integration, configuration, features, functionality, pricing, marketing or
correction of a product or service, whether or not provided to an end user.
 
(x) “Environmental Laws” means all applicable federal, state, local and foreign
laws, statutes and regulations (including common law) concerning the pollution,
protection or cleanup of the environment or natural resources, including those
relating to the treatment, storage, disposal, handling, transportation,
discharge, emission, Release of, or exposure to, Hazardous Substances in effect
as of the Closing Date.
 
(y) “Environmental Liability” means any liability, contingent or otherwise,
resulting from or based upon (a) a violation or any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal
(including the off-site disposal, or arrangement for disposal) of any Hazardous
Substances, (c) any exposure to Hazardous Substances or (d) the Release or
threatened Release of any Hazardous Substances.
 
(z) “Equity Securities” means Shares, Stock Options and Warrants issued and
outstanding immediately prior to Closing (excluding the Put Warrants).
 
(aa)  “Escrow Agent” means JPMorgan Chase Bank, NA.
 
(bb) “Escrow Agreement” has the meaning given to such term in Section 6.10.
 
(cc) “Escrow Amount” has the meaning given to such term in Section 2.14(a).
 
(dd) “Escrow Fund” has the meaning given to such term in Section 2.14(a).
 
(ee)  “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
 
(ff) “Expense Fund Amount” means $100,000.
 
(gg) “Fully Diluted Number” means the sum of (i) the total number of shares of
Common Stock outstanding immediately prior to the Effective Time, (ii) the total
number of shares of Common Stock issuable upon exercise of all Stock Options
(whether vested or unvested, exercisable or not exercisable) and Warrants (other
than Put Warrants) outstanding immediately prior to the Effective Time, and
(iii) the total number of shares of Common Stock that would be issuable upon
conversion pursuant to the Company Charter of all shares of Preferred Stock
outstanding immediately prior to the Effective Time.
 
(hh) “Fundamental Representations” means the representations and warranties set
forth in the following Sections:  3.1(Organization and Qualification;
Subsidiaries), 3.3 (Capitalization), 3.4 (Authority; Enforceability), 3.5
(Required Vote), 3.16 (Taxes), 3.22 (Brokers), 4.1 (Organization; Formation of
Merger Sub), 4.2 (Authority; Enforceability) and 4.8 (Brokers).
 
(ii) “Governmental Authority” means any governmental agency or authority of the
United States, any domestic state, any foreign country and any political
subdivision or agency thereof (including any agency or authority having
governmental or quasi-governmental powers), including any administrative agency
or commission.
 
(jj) “Government Bid” means each unexpired bid or proposal made to any
Governmental Authority for which an award has not been issued, which, if
accepted or awarded, would lead to a Government Contract.
 
(kk) “Government Contracts” means, with respect to or related to the business of
the Company and each of its Subsidiaries, (i) any prime contract, subcontract,
basic ordering agreement, letter contract, purchase order, delivery order, task
order, teaming agreement, cooperative agreement, grant, loan or other Contract,
or a legally binding commitment thereunder or relating thereto between the
Company or each of its Subsidiaries and any (1) Governmental Authority, (2) any
prime contractor performing under a prime Contract with a Governmental
Authority, or (3) any subcontractor performing under a prime Contract with any
Governmental Authority (provided that, in the case of each of clauses (2) and
(3), the services to be provided by the Company and each of its Subsidiaries
must be in direct furtherance of the applicable prime contract with a Government
Entity), and (ii) all bids and proposals made by the Company and its
Subsidiaries which, if accepted, would lead to any of the foregoing.
 
(ll) “Hazardous Substance” means any waste, pollutant, contaminant, hazardous,
radioactive, or toxic substance, petroleum, petroleum-based or petroleum-derived
substance or waste or asbestos-containing material, the presence of which is
regulated, or requires investigation or remediation, under any Environmental
Laws.
 
(mm) “Indebtedness” means, without duplication, (i) all indebtedness (whether or
not contingent) for borrowed money, (ii) all obligations (contingent or
otherwise) for the deferred purchase price of assets or property, (iii) all
obligations evidenced by notes, bonds, debentures or other similar instruments,
(iv) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property, (v) all obligations under
capital leases, (vi) all obligations, contingent or otherwise, as an account
party under letter of credit or similar facilities, (vii) all obligations under
any currency, interest rate or other hedge agreement or any other hedging
arrangement, (viii) all direct or indirect guarantee, support or keep-well
obligations in respect of obligations of the kind referred to in clauses (i)
through (vii) above and (ix) all obligations of the kind referred to in clauses
(i) through (viii) above secured by (or for which the holder of such obligation
has an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and Contract rights) owned by
the Company, whether or not the Company has assumed or become liable for the
payment of such obligation.
 
(nn) “Indebtedness Amount” means the amount required to satisfy all Indebtedness
of the Company, including the Company Loans, outstanding immediately prior to
the Effective Time.
 
(oo) “Indemnified Person” means a Purchaser Indemnified Person or a Stockholder
Indemnified Person, as the case may be.
 
(pp) “Indemnifying Person” means the Stockholders pursuant to Section 9.3 or
Parent pursuant to Section 9.4, as the case may be.
 
(qq) “Intellectual Property” means all rights in United States, state,
multinational and foreign intellectual property, including, without limitation,
rights in (i) registered and unregistered trademarks, service marks, trade
names, URLs, Internet domain names, slogans, logos, trade dresses and other
source indicators, together with all goodwill and common law rights related to
the foregoing, (ii) copyrights and copyrightable works (including Systems,
Software, advertising and promotional material and any other works of authorship
whether published or unpublished), including all translations, adaptations,
derivations, and combinations thereof, (iii) patents, inventions, discoveries
(whether or not patented), (iv) technology, trade secrets, other proprietary and
confidential information (such as know-how, processes, formulae, techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals,
discoveries and inventions) (v) all Company Websites, (vi) the right to sue for
unfair competition, passing off, trespass to chattels, rights of publicity and
other similar or related rights, (vii) all registrations, applications,
recordings, disclosures, renewals, continuations, continuations-in-part,
divisions, reissues, reexaminations, foreign counterparts, and other legal
protections and rights related to the Intellectual Property in clauses (i)
through (vi) and (viii) all copies and tangible embodiments thereof, in each
instance in whatever form or medium.
 
(rr) “Knowledge” (including any derivation thereof) means, with respect to the
Company and any of its Subsidiaries, knowledge of a particular fact or matter if
any of the Knowledge Persons (i) is actually aware of such fact or matter or
(ii) would reasonably be expected to discover or otherwise become aware of such
fact or matter after due inquiry of such subordinates who have responsibility
for, or would reasonably be expected to have knowledge with respect to, such
matters and inquiry thereof would reasonably be expected of such Knowledge
Person.
 
(ss) “Knowledge Persons” means Kelly Gay, Charles Pearson, Yoganand Rajala,
Steve Hudson, Daniel Graff-Radford and Paul Matteson.
 
(tt) “Law” means all laws (including any common law), statutes, ordinances,
directives, Regulations and similar mandates of any Governmental Authority,
including all Orders of Courts having the effect of law in any jurisdiction.
 
(uu) “Liability” means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated and whether due or to become
due), including, without limitation, any liability for Taxes.
 
(vv) “Lien” means any mortgage, pledge, security interest, attachment,
encumbrance, lien (statutory or otherwise), license (other than any
non-exclusive license or permission granted to end users to access and use the
Company Websites in the ordinary course of business and consistent with past
practices), claim, option, conditional sale agreement, right of first refusal,
first offer or co-sale, termination, participation or purchase or charge of any
kind (including any agreement to give any of the foregoing); provided, however,
that the term “Lien” shall not include (i) statutory liens for Taxes that are
not yet due and payable or that are being contested in good faith,
(ii) statutory or common law liens to secure landlords, lessors or renters under
leases or rental agreements confined to the premises rented, (iii) deposits or
pledges made in connection with, or to secure payment of, workers’ compensation,
unemployment insurance, old age pension or other social security programs
mandated under applicable Laws, (iv) statutory or common law liens in favor of
carriers, warehousemen, mechanics and materialmen to secure claims for labor,
materials or supplies and (v) restrictions on transfer of securities imposed by
applicable state, federal and foreign securities Laws.
 
(ww) “Management Bonus Pool” means the aggregate amount set forth on Schedule
1.1(ww) to be paid to certain employees of the Company at or promptly after
Closing as set forth on Schedule 1.1(ww) attached to the Company Disclosure
Schedule, which amount shall be paid by the Company through payroll (and subject
to applicable withholding).
 
(xx) “Material Adverse Effect” means any fact, event, change, development,
circumstance or effect that (i) is materially adverse to the business, condition
(financial or otherwise), or results of operations of the Company, taken as a
whole, or (ii) would materially impair or delay the ability of the Company to
perform its obligations hereunder, including the consummation of the Merger; in
each case other than any fact, event, change, development, circumstance or
effect resulting from (A) changes in general economic conditions, (B) general
changes or developments in the industries in which the Company operates,
(C) changes in any Laws or GAAP, (D) any force majeure event or any attack on or
by the United States, any outbreak or escalation of hostilities involving the
United States or any other national or international calamity or (E) actions
contemplated by the parties hereto in connection with this Agreement, or the
pendency or announcement of the transactions contemplated by this Agreement,
including actions of competitors, customers or suppliers or any delays or
cancellations for services or losses of members or customers (but only, in the
case of the foregoing clauses (A) through (D), to the extent that such changes
or developments occur after the date hereof and do not have a disproportionate
impact on the Company relative to the other participants in the industries in
which it operates).
 
(yy) “Merger Consideration” means (1) the Final Cash Consideration, plus (2) the
Aggregate Exercise Price, plus (3) the Escrow Amount, plus (4) the Working
Capital Escrow plus (5) the Expense Fund Amount.
 
(zz) “Optionholder” means any holder of a Stock Option.
 
(aaa) “Order” means any judgment, order, decision, writ, injunction, ruling or
decree of, or any settlement under the jurisdiction of, any Court or
Governmental Authority.
 
(bbb) “Payroll Option” means each Stock Option that was granted to an
Optionholder while such Optionholder was an employee of the Company or in
respect of such employment.
 
(ccc) “Per Share Amount” means the quotient of the Merger Consideration divided
by the Fully Diluted Number.
 
(ddd) “Paying Agent” means JPMorgan Chase Bank, NA.
 
(eee) “Permits” mean all franchises, authorizations, consents, approvals,
licenses, registrations, certificates, orders, permits or other rights and
privileges issued by any Governmental Authority.
 
(fff) “Person” means an individual, corporation, partnership, association,
trust, unincorporated organization, limited liability company or other entity or
group (as defined in Section 13(d)(3) of the Exchange Act).
 
(ggg) “Personal Information” means any information that directly identifies a
natural, living person.
 
(hhh) “Post-Closing Tax Period” means any taxable period, and that portion of
any Straddle Period, that begins after the Closing Date.
 
(iii) “Pre-Closing Tax Period” means any taxable period ending on or before the
Closing Date and that portion of any Straddle Period ending on the Closing Date.
 
(jjj) “Preferred Stock” means the Series A Preferred Stock, the Series B
Preferred Stock, the Series B-1 Preferred Stock and the Series B-2 Preferred
Stock.
 
(kkk) “Pro Rata Portion” means, with respect to any Seller, a fraction, the
numerator of which is the aggregate amount of Merger Consideration payable to
such Seller and the denominator of which is the aggregate amount Merger
Consideration payable to all Sellers (including holders of Dissenting Shares, if
any, assuming they had not asserted appraisal rights).
 
(lll) “Proceedings” means any legal, administrative, arbitral or other
proceedings, claims, suits, actions or governmental or regulatory investigations
or inquiries of any nature.
 
(mmm) “Property” (or “Properties” when the context requires) means any Real
Property and any personal or mixed property, whether tangible or intangible,
owned or leased by the Company or any of its Subsidiaries.
 
(nnn) “Put Warrants” means collectively (i) the Common Stock Warrant Purchase
Agreement for the purchase of 995,000 shares of Common Stock issued to Partners
For Growth II, L.P. on April 27, 2009, (ii) the Common Stock Warrant for the
purchase of 481,580 shares of Common Stock issued to Silicon Valley Bank on May
16, 2013, (iii) the Common Stock Warrant Purchase Agreement issued to Partners
For Growth III, L.P. for 447,250 shares of Common Stock on May 16, 2013 and (iv)
the Common Stock Warrant Purchase Agreement issued to PFG Equity Investors, LLC
for 65,670 shares of Common Stock on May 16, 2013.
 
(ooo) “Real Property” means any real property owned, leased or subleased by the
Company or any of its Subsidiaries, together with all buildings, structures and
facilities located thereon.
 
(ppp) “Regulation” means any rule, regulation, policy or interpretation of any
Governmental Authority.
 
(qqq) “Release” means any spilling, leaking, pumping, pouring, emitting,
emptying, discharge, injecting, escaping, leaching, dumping, disposing,
depositing or migration into or through the indoor or outdoor environment.
 
(rrr) “Sellers” shall mean the Stockholders, the Optionholders and the
Warrantholders.
 
(sss) “Series A Liquidation Preference Cash Consideration” means the amount of
the Closing Cash Consideration required to satisfy the Series A liquidation
preference (as outlined in Section THREE(IV)(E)(3)(d) of the Company Charter) as
of the Effective Time.
 
(ttt) “Series A Preferred Stock” means the Series A Preferred Stock, $0.00002
par value per share, of the Company.
 
(uuu) “Series B Liquidation Preference Cash Consideration” means the amount of
the Closing Cash Consideration required to satisfy the Series B liquidation
preference (as outlined in Section THREE(IV)(E)(3)(c) of the Company Charter) as
of the Effective Time.
 
(vvv) “Series B Preferred Stock” means the Series B Preferred Stock, $0.00002
par value per share, of the Company.
 
(www) “Series B-1 Liquidation Preference Cash Consideration” means the amount of
the Closing Cash Consideration required to satisfy the Series B liquidation
preference (as outlined in Section THREE(IV)(E)(3)(b) of the Company Charter) as
of the Effective Time.
 
(xxx) “Series B-1 Preferred Stock” means the Series B-1 Preferred Stock,
$0.00002 par value per share, of the Company.
 
(yyy) “Series B-2 Liquidation Preference Cash Consideration” means the amount of
the Closing Cash Consideration required to satisfy the Series B liquidation
preference (as outlined in Section THREE(IV)(E)(3)(a) of the Company Charter) as
of the Effective Time.
 
(zzz) “Series B-2 Preferred Stock” means the Series B -2 Preferred Stock, $0.
00002 par value per share, of the Company.
 
(aaaa) “Software” means any and all computer programs, software (in object and
source code), firmware, middleware, applications, API’s, web widgets, code and
related algorithms, models and methodologies, files, documentation related to
any of the foregoing and all other tangible embodiments thereof.
 
(bbbb) “Stock Option” means any option that is exercisable for shares of Common
Stock.
 
(cccc) “Stockholder” means any holder of Company Capital Stock set forth on
Annex A.
 
(dddd) “Straddle Period” means any taxable period beginning on or before and
ending after the Closing Date.
 
(eeee) “Subsidiary,” with respect to any Person, means any corporation,
partnership, joint venture, limited liability company or other legal entity of
which such Person owns, directly or indirectly, greater than 50% of the capital
stock or other equity interests that are generally entitled to vote for the
election of the board of directors or other governing body of such corporation,
partnership, joint venture, limited liability company or other legal entity or
to vote as a general partner thereof.
 
(ffff) “Systems” means servers, hardware systems, equipment, devices, websites,
databases, circuits, networks and other computer and telecommunications assets
and equipment used by the Company.
 
(gggg) “Target Working Capital” means $2,200,000.
 
(hhhh) “Tax” or “Taxes” means, with respect to any entity, (i) all income taxes
(including any tax on or based upon net income, gross income, income as
specially defined, earnings, profits or selected items of income, earnings or
profits) and all estimated, gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, unemployment, excise,
severance, stamp, occupation, premium, property or windfall profits taxes,
alternative or add-on minimum taxes and other similar taxes or assessments of
any kind whatsoever, together with all interest, penalties and additions to tax
imposed by any taxing authority (domestic or foreign) on such entity and
(ii) any Liability of such entity for the payment of any amount of the type
described in the immediately preceding clause (i) above as a result of being a
“transferee” (within the meaning of Section 6901 of the Code or any other
applicable Law) of another entity or a member of an affiliated, consolidated,
unitary or combined group.
 
(iiii) “Tax Returns” means all returns, declarations, reports, and information
statements and returns required or permitted to be filed with a Governmental
Authority relating to Taxes, including, but not limited to, original returns and
filings, amended returns, claims for refunds, and information returns (federal,
state, foreign, municipal or local), and any schedules attached to any of the
foregoing.
 
(jjjj) “Transaction Documents” means this Agreement, the Consent Agreements, the
Option Cash Out and Release Agreements, the Escrow Agreement, the Paying Agent
Agreement, the Confidentiality, Non-Competition, Non-Solicitation and
Proprietary Rights Agreements and such other instruments and agreements required
by this Agreement to be executed and delivered hereunder.
 
(kkkk) “Use” or “Used” means to use, make, have made, develop, market, sell,
offer to sell, import, transfer, practice, license (or sublicense), transmit,
broadcast, reproduce, perform, display, modify, create derivative works based
upon, distribute (electronically or otherwise) and disclose.
 
(llll)  “Warrant Consideration” means an amount of cash, without interest
thereon, equal to the excess, if any, of (x) the Per Share Amount over (y) the
exercise price per share of such Warrant, multiplied by the number of shares of
Common Stock for which such Warrant is exercisable (assuming the full
exercisability thereof) immediately prior to the Effective Time.
 
(mmmm)  “Warrant Put Payout” means an aggregate amount equal to $450,000 to be
paid at the Effective Time in exchange for the cancellation of the Put Warrants.
 
(nnnn) “Warrantholder” means a holder of a Warrant other than a Put Warrant.
 
(oooo)  “Warrants” means collectively (i) the Common Stock Purchase Warrants for
the purchase of an aggregate of 100,000 shares of Common Stock dated July 16,
2012, issued by the Company to Silicon Valley Bank and (ii) the Common Stock
Purchase Warrant, as amended, for the purchase of 85,000 shares of Series B
Preferred Stock, dated June 29, 2007, issued by the Company to Silicon Valley
Bank.
 
(pppp) “Working Capital” shall be defined and calculated in the manner set forth
on Annex B attached hereto.
 
(qqqq) “Working Capital Adjustment Amount” means (a) if the Working Capital
exceeds the Target Working Capital, a positive number equal to the amount by
which the Working Capital exceeds the Target Working Capital, and (b) if the
Target Working Capital exceeds the Working Capital, a negative number equal to
the amount by which the Target Working Capital exceeds the Working Capital.
 
(rrrr) “Working Capital Escrow” means $400,000; provided, that if the good faith
estimate of the Estimated Working Capital Adjustment Amount described in Section
2.7(b) exceeds $492,000, the Working Capital Escrow shall be increased by the
difference between such estimate and $492,000. The parties acknowledge that the
Working Capital Escrow may be adjusted as described on Schedule 1.1(rrrr)
attached to the Company Disclosure Schedule.
 
1.2 “Table of Defined Term
 
(1) .  Terms that are not defined in Section 1.1 have the meanings set forth in
the following Sections:

280G Approval 5.9
280G Disclosure Materials 5.9
Accrued Vacation Amount 3.14(a)
Advisory Group 10.1(c)
Agreement Preamble
Arbitrator 2.8(b)
Balance Sheet Date 3.9
Certificates 2.15(c)
Certificate of Merger 2.2
Claim Notice 9.7
Claim Notice Waiting Period 9.8
Claim Period 9.7
Closing 2.18
Closing Agreement 3.16(d)
Closing Cash Consideration 2.7(a)(i)
Closing Date 2.18
Closing Date Statement 2.8(b)
COBRA Coverage 3.13(d)
Code 2.15(f)
Company Preamble
Company Closing Balance Sheet 6.7
Company Closing Balance Sheet Date6.7
Company Returns 3.16(a)
Confidentiality Agreement 5.3(b)
Consent Agreements Recitals
Continuing Employees 6.4(b)
Covered Parties 6.9(a)
DGCL Recitals
Dissenting Shares 2.10(b)
Effective Time 2.2
Employees 6.4(b)
Employee Plans 3.13(a)
End Date 8.1(b)
ERISA 3.13(a)
ERISA Affiliates 3.13(a)
Escrow Agreement 6.10
Escrow Amount 2.14(a)
Escrow Fund 2.14(a)
Estimated Cash Amount 2.7(b)
Estimated Closing Amount Statement2.7(b)
Estimated Company Transaction  Expenses 2.7(b)
Estimated Indebtedness Amount 2.7(b)
Estimated Working Capital Adjustment2.7(b)
Execution Period 5.1
Expense Fund 10.1(e)
Final Cash 2.8(c)
Final Cash Consideration 2.8(a)
Final Closing Date Statement 2.8(c)
Final Company Transaction Expenses Amount 2.8(c)
Final Indebtedness Amount 2.8(c)
Final Working Capital Adjustment Amount 2.8(c)
Financial Statements 3.9
GAAP 3.9
Inbound Licenses 3.17(b)
Indemnified Third Party Claim 9.10(c)
Indemnity Claim 10.1(a)
Information Statement 6.1(b)
Infringe 3.17(h)
IRS 3.13(a)
Losses 9.3
Material Contracts 3.7(a)
Maximum Premium 6.9(b)
Merger Recitals
Merger Sub Preamble
Merger Sub Common Stock 2.13
Multiemployer Plan 3.13(c)
Multiple Employer Welfare
Arrangement 3.13(c)
Objection Notice 2.8(c)
Option Consideration 2.11(a)
Open Source Licenses 3.17(j)
Outbound Licenses 3.17(b)
Parent Preamble
Parent Representatives 5.3(a)
Payments Certificate 2.12(a)
Plan of Merger 11.1
Prohibited Transaction 5.6
Purchaser Indemnified Persons 9.3
Real Property 3.15(b)
Registered Company Intellectual
Property 3.17(a)
Requisite Vote Recitals
Retained Escrow Amount 9.6
Sellers’ Representative Preamble
Sellers’ Representative Expenses 10.1(d)
Sellers’ Representative Group 10.1(c)
Sharing Percentage 2.14©
Standard Customer Contract 3.7(a)(ii)
Stockholder Approval 3.5
Stockholder Indemnified Persons 9.4
Stockholders’ Materials 5.10
Survival Period 9.1
Surviving Corporation 2.1
Takeover Statutes 3.20
Tax Claim 5.7(c)
Third-Party Claim 9.10(a)
Threshold 9.5(b)
Transfer Taxes 5.7(e)
WARN 3.14(d)
Waived 280G Benefits 5.9

 
ARTICLE II — THE MERGER
 
2.1 The Merger
 
.  At the Effective Time, subject to and upon the terms and conditions of this
Agreement and in accordance with the DGCL, (a) Merger Sub shall be merged with
and into the Company, (b) the separate corporate existence of Merger Sub shall
cease, and (c) the Company shall, as the surviving corporation in the Merger,
continue its existence under the DGCL as a wholly owned Subsidiary of
Parent.  The Company as the surviving corporation after the Merger is sometimes
referred to herein as the “Surviving Corporation.”
 
2.2 Effective Time
 
.  At the Closing, Merger Sub and the Company shall cause the Merger to be
consummated by filing a certificate of merger with respect to the Merger (the
“Certificate of Merger”) with the Secretary of State of the State of Delaware in
such form as required by and executed in accordance with the relevant provisions
of the DGCL (the date and time of such filing, or such later date and time as
may be specified in the Certificate of Merger by mutual agreement of Parent,
Merger Sub and the Company, being the “Effective Time”).
 
2.3 Effect of the Merger
 
.  At the Effective Time, the effect of the Merger shall be as provided in the
applicable provisions of the DGCL, including Section 251 thereof.  Without
limiting the foregoing, from and after the Effective Time, the Surviving
Corporation shall have all the properties, rights, privileges, purposes and
powers, and debts, duties, and liabilities, of the Company.
 
2.4 Charter; Bylaws
 
.  Unless otherwise determined by Parent prior to the Effective Time:
 
(a) At the Effective Time, the certificate of incorporation of the Company, as
in effect immediately prior to the Effective Time, shall be amended and restated
as of the Effective Time so as to read as set forth on Exhibit B and as so
amended and restated shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended in accordance with the DGCL and such
certificate of incorporation.
 
(b) At the Effective Time, the bylaws of the Company, as in effect immediately
prior to the Effective Time, shall read as set forth on Exhibit C and shall be
the bylaws of the Surviving Corporation until thereafter amended in accordance
with the DGCL and the certificate of incorporation and bylaws of the Surviving
Corporation.
 
2.5 Directors and Officers
 
.  The directors of Merger Sub immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation, each to hold office in
accordance with the certificate of incorporation and the bylaws of the Surviving
Corporation until their respective successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation’s certificate or incorporation and
bylaws.  Unless otherwise determined by Parent prior to the Effective Time, the
officers of Merger Sub immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation.
 
2.6 Conversion of Company Capital Stock.
 
  At the Effective Time, by virtue of the Merger and without any action on the
holders thereof:
 
(a) Subject to the provisions of this ARTICLE II (including Section 2.14, with
respect to the Escrow Amount) and ARTICLE IX, each share of Company Capital
Stock issued and outstanding immediately prior to the Effective Time (other than
any shares of Company Capital Stock to be canceled or which remain outstanding
pursuant to Section 2.9 and Dissenting Shares) will be converted automatically
into the right to receive:  (i) first, with respect to each share of Series B-2
Preferred Stock, the portion of the Series B-2 Liquidation Preference Cash
Consideration to which such share of Series B-2 Preferred Stock is entitled
under Article Three, Part IV, Section E, Clause 3(a) of the Company Charter,
without interest thereon, (ii) second, with respect to each share of Series B-1
Preferred Stock, the portion of the Series B-1 Liquidation Preference Cash
Consideration to which such share of Series B-1 Preferred Stock is entitled
under Article Three, Part IV, Section E, Clause 3(b) of the Company Charter,
without interest thereon, (iii) third, with respect to each share of Series B
Preferred Stock, the portion of the Series B Liquidation Preference Cash
Consideration to which such share of Series B Preferred Stock is entitled under
Article Three, Part IV, Section E, Clause 3(c) of the Company Charter, without
interest thereon, and (iv) fourth, with respect to each share of Series A
Preferred Stock, the portion of the Series A Liquidation Preference Cash
Consideration to which such share of Series A Preferred Stock is entitled under
Article Three, Part IV, Section E, Clause 3(d) of the Company Charter; and (v)
fifth, with respect to each share of Company Capital Stock, the portion of the
Common Stock Closing Cash Consideration to which such share of Company Capital
Stock is entitled under Article Three, Part IV, Section E, Clause 3(e) of the
Company Charter.
 
(b) Upon conversion of the Company Capital Stock pursuant to Section 2.6(a),
each holder of a Certificate representing any such Company Capital Stock shall
cease to have any rights with respect thereto, except the right to receive,
subject to this ARTICLE II (including Section 2.14) and ARTICLE IX, the Merger
Consideration to be paid in consideration therefor upon surrender of such
Certificate in accordance with Section 2.15(c) hereof (or upon compliance with
Section 2.17), without interest thereon.
 
2.7 Closing Cash Consideration and Adjustment.
 
(a) The portion of the Merger Consideration to be paid by Parent at the Closing
hereunder shall consist of the following:
 
(i) An amount in cash, which amount shall be subject to adjustment after the
Closing pursuant to Section 2.8, (the “Closing Cash Consideration”) equal to:
 
(1) $37,500,000; plus
 
(2) the Estimated Cash Amount; minus,
 
(3) $392,000 (i.e., the Estimated Working Capital Adjustment Amount); minus
 
(4) the Estimated Indebtedness Amount; minus
 
(5) the Estimated Company Transaction Expenses Amount; minus
 
(6) the Working Capital Escrow; minus
 
(7) the Escrow Amount; minus
 
(8) the amount of the Expense Fund.
 
(b) Estimated Closing Amounts Certificate.  At least two (2) and no more than
five (5) Business Days before the Closing Date, the Company shall deliver to
Parent a certificate executed on behalf of the Company by the Chief Financial
Officer of the Company setting forth the Company’s good faith estimate of the
Closing Cash Consideration, including each of the following components of the
Closing Cash Consideration, which shall include a detailed calculation and other
support for each such estimate, as of the Closing of each of the following (the
“Estimated Closing Amounts Statement”): (i) the amount of Cash (the “Estimated
Cash Amount;” provided, however, that in no event shall the Estimated Cash
Amount exceed $250,000)), (ii) the Indebtedness Amount (the “Estimated
Indebtedness Amount”) and (iii) Company Transaction Expenses Amount (the
“Estimated Company Transaction Expenses Amount”).  The parties hereby agree that
the “Estimated Working Capital Adjustment Amount” shall be equal to $392,000;
provided, that notwithstanding the use of $392,000 for purposes of the
determination of Closing Cash Consideration pursuant to Section 2.7(a), the
Estimated Closing Amounts Statement shall include the Chief Financial Officer’s
good faith estimate of the Estimated Working Capital Adjustment Amount.  Such
certificate shall be accompanied by (A) a schedule showing the portion of the
Closing Cash Consideration to which each Seller is entitled to receive from the
Paying Agent (or from the Company, if a holder of Payroll Options), and
(B) appropriate documentation supporting the estimates contained in the Closing
Statement.  The estimates, calculations and supporting documentation contained
in and included with the Estimated Closing Amounts Certificate shall be
reasonably satisfactory to Parent.  Subject to the foregoing and except for
manifest error, the good faith estimate of the Closing Cash Consideration in the
Estimated Closing Amounts Certificate shall be conclusive for the purposes of
the payment to be made by Parent at the Closing, but shall be subject to
adjustment after the Closing in accordance with the provisions of Section 2.8.
 
2.8 Post-Closing Adjustment.
 
(a) Subsequent to the Closing and subject to this Section 2.8, the Closing Cash
Consideration shall be increased or decreased, as applicable, by the net result
of Sections 2.8(a)(i) through (iv) below:
 
(i) (A) decreased by the amount (if any) by which the Estimated Cash Amount
exceeds the Final Cash Amount as determined pursuant to Section 2.8(c), or
(B) increased by the amount (if any) by which the Final Cash Amount as
determined pursuant to Section 2.8(c) exceeds the Estimated Cash Amount;
 
(ii) decreased by the amount (if any) by which the Estimated Indebtedness Amount
exceeds the Final Indebtedness Amount as determined pursuant to Section 2.8(c),
or increased by the amount (if any) by which the Final Indebtedness Amount as
determined pursuant to Section 2.8(c) exceeds the Estimated Indebtedness Amount;
 
(iii) decreased by the amount (if any) by which the Estimated Transaction
Expenses Amount exceeds the Final Company Transaction Expenses Amount as
determined pursuant to Section 2.8(c), or increased by the amount (if any) by
which the Final Company Transaction Expenses Amount as determined pursuant to
Section 2.8(c) exceeds the Estimated Company Transaction Expenses; and
 
(iv) decreased by the amount (if any) by which the Estimated Working Capital
Adjustment Amount exceeds the Working Capital Adjustment Amount as finally
determined pursuant to Section 2.8(c), or increased by the amount (if any) by
which the Working Capital Adjustment Amount as finally determined pursuant to
Section 2.8(c) exceeds the Estimated Working Capital Adjustment Amount.
 
The Closing Cash Consideration, as so increased or decreased by the net amount
determined in accordance with this Section 2.8(a), shall be the “Final Cash
Consideration” hereunder.
 
(b) Within 60 days after the Closing, Parent will deliver to the Sellers’
Representative a certificate (the “Closing Date Statement”), showing Parent’s
calculation of the Cash Consideration as of the Closing Date, its calculations
of each of the Final Cash Amount as of the Closing Date, the Final Working
Capital Adjustment Amount as of the Closing Date, the Final Indebtedness Amount
as of the Closing Date and the Final Company Transaction Expenses Amount as of
the Closing Date, which certificate will be accompanied by appropriate
documentation supporting the amounts and number proposed in such
certificate.  If Parent does not deliver the Closing Date Statement within such
60-day period, then the Closing Statement shall be deemed to be conclusive,
final and binding upon the Parties.  Each Party will provide the other
reasonable access to all records in its possession that were used in the
preparation of the Closing Statement and Closing Date Statement or that may
otherwise be necessary for the preparation thereof.
 
(c) The Sellers’ Representative will review the Closing Date Statement and will
give written notice (an “Objection Notice”) to Parent of any objections the
Sellers’ Representative has to the Closing Date Statement within 30 days after
receipt.  Such notice will set forth the Sellers’ Representative’s proposal as
to each item to which the Sellers’ Representative objects together with
appropriate support for such objections.  If the Sellers’ Representative does
not deliver an Objection Notice within such 30-day period, then the Closing Date
Statement shall be deemed to be conclusive, final and binding on the
Parties.  Parent and the Sellers’ Representative will endeavor in good faith to
resolve any objections within 30 days after the receipt by Parent of the
Sellers’ Representative’s timely Objection Notice.  If such objections or
disputes have not been resolved at the end of such 30-day period, the disputed
portion only of the items contained in the Closing Date Statement will be
determined within the following 30 days by a nationally recognized accounting
firm mutually agreed upon by Parent and the Stockholders Representative (the
“Arbitrator”), which shall be the exclusive means for resolution of such
dispute, provided that, before the Parties’ referring any disputed items to the
Arbitrator, the applicable Party shall pay to the other Party any adjustment to
the Closing Date Statement or portion thereof that has been agreed to by Parent
and the Sellers’ Representative and only those adjustments to the Closing Date
Statement or portion thereof that are actually in dispute between Parent and the
Sellers’ Representative shall be referred to the Arbitrator.  The Sellers’
Representative shall deliver to Parent (upon request after the giving of any
objection to the Closing Date Statement) the work papers of the Sellers’
Representative generated in connection with its review of the Closing Date
Statement.  The determination of the Arbitrator will, with respect to each item
in dispute, be within the range for such item as proposed by Parent in the
Closing Date Statement and the Sellers’ Representative in the Objection
Notice.  Upon the mutual agreement of Parent and the Sellers’ Representative, or
the decision of the Arbitrator, the Closing Date Statement, as adjusted for
matters agreed to by the Parties or as determined by the Arbitrator (the “Final
Closing Date Statement”), shall be final, conclusive and binding on the
Parties.  The Cash, Indebtedness Amount, Company Transaction Expenses Amount and
Working Capital Amount set forth in the Final Closing Date Statement shall be
the “Final Cash Amount,” “Final Indebtedness Amount,” “Final Company Transaction
Expenses Amount,” and “Final Working Capital Adjustment Amount” for all purposes
hereunder.  Parent and the Sellers’ Representative (on behalf of the Sellers)
will bear equally the expenses of the Arbitrator incurred in connection with
such determination.
 
(d) In resolving any disputed item, the Arbitrator:  (i) shall be bound by the
provisions of this Section 2.8, (ii) shall limit its decision to such items as
are in dispute and (iii) shall make its determination based solely on
presentations by Parent and the Sellers’ Representative which are in accordance
with the guidelines and procedures set forth in this Agreement (i.e., not on the
basis of independent review).
 
(e) Within three (3) Business Days after the date on which the Final Closing
Date Statement is determined in accordance with this Section 2.8, Parent and the
Sellers’ Representative shall compute the difference, if any, between the
Closing Cash Consideration and the Final Cash Consideration (calculated pursuant
to Section 2.8(a)).  If the Closing Cash Consideration as determined above
exceeds the Final Cash Consideration, then Parent shall be entitled to receive
from the Working Capital Escrow the amount of such excess up to the entire
amount of the Working Capital Escrow; provided, that, in the event the such
excess amount is greater than the Working Capital Escrow, any such excess above
the Working Capital Escrow shall be released from the Escrow Amount.  If the
Closing Cash Consideration is less than or equal to the Final Cash
Consideration, Parent shall promptly, and in any event within five (5) Business
Days thereafter, cause the entire amount of the Working Capital Escrow to be
released to the Paying Agent for the benefit of the Stockholders and, if
applicable, Parent shall promptly deliver to the Paying Agent for the benefit of
the Stockholders an amount in cash equal to the amount of any deficiency
thereof.
 
2.9 Treatment of Stock Held by the Company
 
.  Any shares of Company Capital Stock owned by the Company immediately prior to
the Effective Time shall be canceled without any conversion thereof pursuant to
Section 2.6(a), and no payment shall be made with respect thereto.
 
2.10 Dissenting Shares.
 
(a) The Company shall comply with all requirements of Section 262 of the DGCL
and shall keep Parent promptly informed of all matters relating thereto.
 
(b) Notwithstanding anything in this Agreement to the contrary but only to the
extent required by the DGCL, any shares of Company Capital Stock outstanding
immediately prior to the Effective Time held by any holder who has not voted in
favor of the Merger and is otherwise entitled to demand, and who properly
demands, to receive payment of the fair value for such shares of Company Capital
Stock in accordance with Section 262 of the DGCL (such shares, “Dissenting
Shares”) shall not be converted pursuant to Section 2.6(a) into the right to
receive the Merger Consideration unless such holder fails to perfect or
otherwise effectively withdraws or loses such holder’s right to receive payment
of the fair value of such Dissenting Shares.  If, after the Effective Time, such
holder fails to perfect or loses its right to demand or receive such payment,
such shares of Company Capital Stock shall be treated as if they had been
converted as of the Effective Time into the right to receive Merger
Consideration, without interest thereon, pursuant to Section 2.6(a).
 
(c) The Company shall give Parent (i) prompt notice and a copy of any notice of
a Stockholder’s demand for payment or objection to the Merger, of any request to
withdraw a demand for payment and of any other instrument delivered to it
pursuant to Section 262 of the DGCL and (ii) the opportunity to direct all
negotiations and proceedings with respect to such demands, objections and
requests.  Except with the prior written consent of Parent, the Company shall
not make any payment with respect to any such demands, objections and requests
and shall not settle (or offer to settle) any such demands, objections and
requests or approve any withdrawal of the same.
 
2.11 Stock Options; Warrants; Put Warrants.
 
(a) Subject to the provisions of this ARTICLE II (including Section 2.14) and
ARTICLE IX, the Company shall take all actions necessary (including passing any
necessary resolutions of its Board of Directors) to cause all Stock Options to
either be (i) exercised or (ii) canceled and extinguished and converted into
only the right to receive an amount of cash, without interest thereon, equal to
the excess, if any, of (x) the Per Share Amount over (y) the exercise price per
share of such Stock Option, multiplied by the number of shares of Common Stock
for which such Stock Option is exercisable (assuming the full exercisability
thereof) immediately prior to the Effective Time (such amount payable in respect
of shares of Common Stock into which a Stock Option is exercisable, the “Option
Consideration”).  Notwithstanding anything to the contrary herein, no Option
Consideration shall be paid in respect of any Stock Option more than five years
after the Closing Date, unless a later payment date is permitted under Treasury
Regulation Section 1.409A-3(g).
 
(b) Prior to the Effective Time, the Company shall take all actions necessary
(including passing any necessary resolutions of its Board of Directors) (i) to
give effect to the actions contemplated by Sections 2.11(a) and 5.9 and (ii) to
terminate, effective prior to the Effective Time, the Company Stock Option Plan
and all awards thereunder so that on and after the Effective Time no Person
shall have any Stock Option, or any right to receive any equity interest in the
Company or any other right or payment other than the Option Consideration (and,
in each such case, without such actions creating any additional liability or
other obligation of the Company).
 
(c) Prior to the Effective Time, the Company shall take all actions necessary,
including entering any necessary agreements with holders of the Warrants and Put
Warrants to cause all Warrants and Put Warrants to either be exercised,
terminated or put to the Company on the terms thereof so that on and after the
Effective Time no holder of a Warrant or Put Warrant shall have any right to
purchase shares of Company Capital Stock, or any right to receive any equity
interest in the Company or any other right or payment other than, as applicable,
the Put Warrant Amount, or such Warrantholder’s Pro Rata Portion of the Merger
Consideration, in each such case only if and to the extent not then paid (and
without such actions creating any additional liability or other obligation of
the Company).
 
2.12 Payments Certificate.
 
(a) At least two (2) Business Days prior to the expected the Effective Time, the
Company shall deliver to Parent a certificate, in form and substance reasonably
satisfactory to Parent, of its Chief Executive Officer (the “Payments
Certificate”) setting forth the following information relating to each
Seller:  (i) name, address (as listed in the corporate record books of the
Company) and social security number or tax identification number (if known by
the Company); (ii) the number and type of shares of Company Capital Stock held
by such Person and the respective stock certificate numbers or the number and
type of shares of Company Capital Stock subject to the Stock Options held by
such Person (and whether such Stock Options are Payroll Options), each as of
immediately prior to the Effective Time; (iii) the percentage of the Series A
Liquidation Preference Cash Consideration, if any, payable to such Person;
(iv) the percentage of the Series B Liquidation Preference Cash Consideration,
if any, payable to such Person; (v) the percentage of the Series B-1 Liquidation
Preference Cash Consideration, if any, payable to such Person; (vi) the
percentage of the Series B-2 Liquidation Preference Cash Consideration, if any,
payable to such Person; (vii) the percentage of the Common Stock Closing Cash
Consideration payable to such Person; and (viii) in the event of any
distribution of all or any portion of the Escrow Amount, Working Capital Escrow
and Expense Fund to such Person, the percentage of any such distribution payable
to such Person.
 
(b) The Company understands that Parent and the Paying Agent shall be entitled
to rely on such certificate for the purposes of making any payments hereunder.
 
2.13 Capital Stock of Merger Sub.
 
  Each share of common stock, no par value per share, of Merger Sub (“Merger Sub
Common Stock”) issued and outstanding immediately prior to the Effective Time
shall be automatically converted into one validly issued, fully paid and
non-assessable share of common stock, no par value per share, of the Surviving
Corporation and shall thereafter constitute all of the issued and outstanding
capital stock of the Surviving Corporation.  Each stock certificate representing
any shares of Merger Sub Common Stock shall continue after the Effective Time to
represent ownership of such shares of capital stock of the Surviving
Corporation.
 
2.14 Escrow.
 
(a) Notwithstanding anything to the contrary in this ARTICLE II, at the
Effective Time and subject to and in accordance with the provisions of ARTICLE
IX and the Escrow Agreement, Parent shall pay to the Escrow Agent, for deposit
into an escrow fund (the “Escrow Fund”) on behalf of the Stockholders, an
aggregate amount equal to four million five hundred thousand dollars
($4,500,000) (as increased from time to time by the amount of any interest,
dividends, earnings and other income on such amount, the “Escrow Amount”), which
amount shall be deemed to reduce the Closing Cash Consideration payable under
this ARTICLE II and which shall be held by the Escrow Agent in accordance with
ARTICLE IX and the Escrow Agreement.
 
(b) Notwithstanding anything to the contrary in this ARTICLE II, at the
Effective Time and subject to and in accordance with the provisions of Section
2.8 and the Escrow Agreement, Parent shall pay to the Escrow Agent, for deposit
into an escrow fund, the Working Capital Escrow, which amount shall be deemed to
reduce the Closing Cash Consideration payable under this ARTICLE II and which
shall be held by the Escrow Agent in accordance with Section 2.8 and the Escrow
Agreement.
 
(c) The Escrow Fund shall be held in escrow and shall be available to compensate
the Purchaser Indemnified Persons as provided in ARTICLE IX.  To the extent not
used for such purposes, such funds shall be released as provided in ARTICLE IX
hereof.  Each Seller’s allocation of the Escrow Fund and Working Capital Escrow
shall equal (i) the Escrow Amount or Working Capital Escrow, as applicable,
multiplied by (ii) a fraction, the numerator of which is the number of Equity
Securities held by such Seller (calculated on an as-converted basis) as of the
Effective Time and the denominator of which is the Fully Diluted Number
(excluding any Equity Securities held by Dissenting Stockholders who have
exercised appraisal rights) under this ARTICLE II.  Each Seller’s allocable
interest in the Escrow Fund and Working Capital Escrow (calculated as a
percentage based on such Stockholder’s contribution amount pursuant to the
foregoing sentence relative to all contributed amounts to the Escrow Fund and
Working Capital Escrow) and shall be referred to herein as a Seller’s “Sharing
Percentage.”
 
(d) The Expense Fund shall be held in escrow by the Sellers’ Representative for
payment of expenses incurred by the Sellers’ Representative pursuant to ARTICLE
X.  Each Seller’s allocable interest in the Expense Fund shall be calculated
based on such Seller’s Sharing Percentage of the Expense Fund.
 
2.15 Payment Mechanics.
 
(a) Designation of Paying Agent.  Prior to the Effective Time, Parent shall
designate JPMorgan Chase Bank, NA to act as the Paying Agent in the Merger.
 
(b) Deposit With Paying Agent.
 
(i) Promptly following the Effective Time, but in no event later than one (1)
Business Day following the Effective Time, Parent shall remit to the Paying
Agent cash in an amount necessary to pay to all Sellers (other than holders of
Dissenting Shares) the portions of the Closing Cash Consideration to which they
are entitled hereunder in connection with the Closing (other than amounts
payable to Sellers in respect to Payroll Options).
 
(ii) Parent’s delivery of the required portion of the Closing Cash Consideration
to the Paying Agent (and, if applicable, any subsequent payment to the Paying
Agent pursuant to Section 2.14), the Escrow Amount and Working Capital Escrow to
the Escrow Agent, the Expense Fund to the Sellers’ Representative and the
payment of the Company Transaction Expenses Amount as requested by the Company
constitutes Parent’s full performance of its obligations with respect to the
payment of the Merger Consideration for the Company Capital Stock in connection
with the consummation of the Merger at Closing.  Paying Agent shall be solely
responsible for the delivery of the required portion of the Closing Cash
Consideration (and any and all subsequent disbursements of the Escrow Amount or
Working Capital Escrow, or amounts received from Parent pursuant to Section
2.14) to the Sellers, which payments shall be made by Paying Agent in accordance
with Section 2.12.  Neither the Company nor Parent shall be liable for
allocation of particular deliveries and payments among the Sellers, or for any
failure of the Paying Agent to make any such payment in accordance with this
Agreement.
 
(c) Mailing of Letters of Transmittal; Exchange.
 
(i) Promptly after the Effective Time, the Surviving Corporation shall cause to
be mailed to each holder of record of a certificate or certificates (the
“Certificates”) that represented as of the Effective Time outstanding shares of
Company Capital Stock, a letter of transmittal in the form attached hereto as
Exhibit D (which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates (if applicable) shall pass, only upon delivery of
the Certificates (if applicable) to the Paying Agent and shall be in such form
and have such other provisions as Parent may reasonably specify, including
acknowledgement of the provisions of ARTICLE IX and ARTICLE X) and instructions
for use in effecting the surrender of the Certificates in exchange for payment
of the Merger Consideration therefor.  Upon surrender of a Certificate (if
applicable) to the Paying Agent, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor
payment of the Merger Consideration that such holder has the right to receive
pursuant to Section 2.6, after giving effect to any applicable withholding
Taxes, and the Certificate (if applicable) so surrendered shall forthwith be
canceled.
 
(ii) In addition, promptly after the Effective Time, Parent shall cause to be
mailed or delivered to each Optionholder of record a cash-out and release
agreement (which shall specify that payment of the Option Consideration shall be
made only upon delivery of the completed letter of transmittal, which shall be
in such form and have such other provisions as Parent may reasonably specify,
including acknowledgement of the provisions of ARTICLE IX and ARTICLE X).  Upon
an Optionholder’s return of such cash-out and release agreement or warrant
termination agreement, duly completed and validly executed in accordance with
the instructions thereto, and such other documents as may be reasonably required
pursuant to such instructions, such Optionholder shall be entitled to receive in
exchange therefor payment of the applicable Closing Cash Consideration that such
holder has the right to receive pursuant to Section 2.11, and (i) Parent shall
cause the Paying Agent to make such payment to such Optionholder within five (5)
Business Days after such receipt with respect to all Stock Options held by such
Optionholder that are not Payroll Options, and (ii) at Closing, Parent shall
deliver an amount equal to the aggregate amount of Merger Consideration payable
in respect of all Payroll Options and Parent shall cause the Company to make
such payments to such Optionholders on the first practicable date after such
receipt with respect to all Payroll Options held by such Optionholders.
 
(iii) Prior to the Effective Time, the Company shall obtain from each
Warrantholder of record a warrant termination agreement reasonably acceptable to
Parent.  Upon a Warrantholder’s return of such warrant termination agreement,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may be reasonably required pursuant to such
instructions, such Warrantholder shall be entitled to receive in exchange
therefor payment of the applicable Closing Cash Consideration that such holder
has the right to receive pursuant to Section 2.11, and Parent shall cause the
Paying Agent to make such payment to such Warrantholder within five (5) Business
Days after such receipt with respect thereto.
 
(d) Non-Registered Holders.  If any portion of the Merger Consideration is to be
paid to a Person other than the Person in whose name the Certificate (if
applicable) for the related shares of Company Capital Stock, then it will be a
condition to such payment that (i) the Certificate (if applicable) so
surrendered will be properly endorsed and otherwise in proper form for transfer
and (ii) the Person requesting such exchange will have paid any transfer or
other Taxes required by reason of such payment in a name other than the
registered holder or will have established to the satisfaction of Parent (or any
agent designated by Parent) that such Tax has been paid or is not applicable.
 
(e) Unclaimed Amounts.  At any time following six (6) months after the Effective
Time, all cash deposited with the Paying Agent pursuant to Section 2.15(b) that
remains undistributed to the Sellers shall be delivered to Parent upon demand,
and thereafter the affected Sellers shall be entitled to look only to the
Surviving Corporation (subject to abandoned property, escheat or other similar
laws) only as general creditors thereof and subject to this ARTICLE II.  In
addition, notwithstanding anything to the contrary in this Agreement, none of
the Paying Agent, Parent, Merger Sub, the Surviving Corporation or the Sellers’
Representative shall be liable to any Seller for any amount delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar Law.
 
(f) Withholding of Tax.  Parent, the Surviving Corporation and the Paying Agent
will be entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any Seller such amounts as Parent, the
Surviving Corporation or the Paying Agent shall determine in good faith that
they are required to deduct and withhold with respect to the making of such
payment under the U.S. Internal Revenue Code of 1986, as amended from time to
time (the “Code”), and the regulations promulgated and rulings issued
thereunder, or any provision of federal, state, local or foreign Laws relating
to Taxes.  Prior to such deduction or withholding from any Seller, the payor
shall use commercially reasonable efforts to notify the applicable Seller of its
intent to withhold or deduct any amount and such Seller may timely provide any
properly completed forms or certificates which may reduce the amount of Tax that
is required to be deducted or withheld.  To the extent that amounts are so
withheld by Parent, the Surviving Corporation or the Paying Agent, such withheld
amounts shall be paid to the applicable Governmental Authority and will be
treated for all purposes of this Agreement as having been paid as Merger
Consideration to the Seller in respect of which such deduction and withholding
were made.
 
2.16 Further Ownership Rights
 
.  The Merger Consideration paid in accordance with the terms of this ARTICLE II
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the Company Capital Stock, Stock Options, Warrants and Put Warrants
(including any rights to receive accumulated but undeclared dividends on such
Company Capital Stock).  At the Effective Time, the stock transfer books of the
Company shall be closed, and thereafter there shall be no further registration
of transfers of shares of Company Capital Stock on the records of the Surviving
Corporation, and from and after the Effective Time, the Stockholders shall cease
to have any rights (including any rights to receive accumulated but undeclared
dividends on any Company Capital Stock) with respect thereto except as otherwise
provided for herein.  If, after the Effective Time, Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this ARTICLE II.
 
2.17 Lost, Stolen or Destroyed Certificates
 
.  In the event any Certificates representing Company Capital Stock shall have
been lost, stolen or destroyed, the Paying Agent shall pay the applicable Merger
Consideration in exchange for such lost, stolen or destroyed Certificates only
upon the making of an affidavit of that fact by the holder thereof and the
delivery of such other documents reasonably requested by the Paying Agent and
Parent.
 
2.18 Closing
 
.  Unless this Agreement shall have been terminated and the transactions
contemplated by this Agreement abandoned pursuant to the provisions of
Section 8.1, and subject to the satisfaction of the conditions set forth in
ARTICLE VII, the closing of the Merger (the “Closing”) will take place as soon
as practicable, but in no event later than 10:00 a.m. (Eastern Standard Time) on
the second Business Day (the “Closing Date”) following the date on which all the
conditions set forth in ARTICLE VII shall have been satisfied (or waived in
accordance with Section 11.2), unless another time and/or date is agreed to by
Parent and the Company.  The Closing shall take place at the offices of Arnold &
Porter llp, 555 Twelfth Street NW, Washington, DC 20004 or such other place as
Parent and the Company otherwise agree.
 
 
ARTICLE III  — REPRESENTATIONS AND WARRANTIESOF THE COMPANY
 
The Company hereby represents and warrants to Parent and Merger Sub as follows,
in each case subject to the disclosures made in the Company Disclosure
Schedule.  The disclosures included in any Section of the Company Disclosure
Schedule shall be numbered to correspond to the applicable sections and
subsections of this ARTICLE III and each other Section and subsection hereof
where it is reasonably clear, upon a reading of such disclosure without any
independent knowledge of the matter disclosed, that such disclosure applies to
such other Section or subsection.
 
3.1 Organization and Qualification; Subsidiaries.
 
(a) The Company is a corporation duly organized, validly existing and in good
standing under the DGCL and has all the requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
conducted and as currently proposed to be conducted.  The Company is duly
qualified or authorized to do business and is in good standing under the laws of
each jurisdiction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization.  The Company has
delivered to Parent true, complete and correct copies of its articles of
incorporation and bylaws or comparable organizational documents as in effect on
the date hereof.
 
(b) Section 3.1(b) of the Company Disclosure Schedules sets forth the names of
each Subsidiary of the Company and shows for each Subsidiary:  (i) its
jurisdiction of organization and each other jurisdiction in which it is
qualified to do business; (ii) the authorized and outstanding capital stock or
membership interests, as applicable; and (iii) the identity of and number of
shares of such capital stock or membership interests owned of record by each
holder thereof.  Except as set forth on Section 3.1(b) of the Company Disclosure
Schedule, none of the Company or any Subsidiary owns, directly or indirectly,
any capital stock or other securities of any other corporation, limited
liability company, general or limited partnership, firm, association or business
organization, entity or enterprise.
 
(c) Each Subsidiary is duly organized, validly existing and, where the concept
or a similar concept is recognized, in good standing in its jurisdiction of
organization, with all requisite corporate or limited liability company power to
own, lease and operate its Properties and to carry on its business as now being
conducted.  Each Subsidiary is duly qualified and/or licensed to do business and
is in good standing as a foreign corporation or limited liability company in
each jurisdiction in which the nature of its business or ownership or leasing of
its Properties makes such qualification or licensing necessary.
 
(d) No Shareholder nor the Company has granted to any Person any preemptive or
other similar rights with respect to any of the capital stock or limited
liability company interests of any such Subsidiary and there are no offers,
options, warrants, rights, agreements or commitments of any kind (contingent or
otherwise) entered into or granted by any Shareholder or the Company relating to
the issuance, conversion, exchange, registration, voting, sale or transfer of
any equity interests or other equity securities of such Subsidiary or obligating
such Subsidiary or any other Person to purchase or redeem any of such equity
interests or other equity securities.
 
3.2 Organizational Documents
 
.  The Company has made available to Parent, on or prior to the date hereof,
true, complete and correct copies of the Company Charter and the Company’s
bylaws, as modified, supplemented, amended or restated as of the date of this
Agreement.  The Company Charter and the Company’s bylaws are in full force and
effect, and no other organizational documents are applicable to or binding upon
the Company.  Neither the Company Charter nor the Company’s bylaws restrict or
limit the ability of the holders of Company Capital Stock to act by written
consent in lieu of a meeting.
 
3.3 Capitalization.
 
(a) The authorized capital stock of the Company consists of 271,000,000 shares,
consisting of (i) 150,000,000 shares of Common Stock, (ii) 3,000,000 shares of
Series A Preferred Stock, (iii) 15,000,000 shares of Series B Preferred Stock,
(iv) 35,000,000 shares of Series B-1 Preferred Stock and (v) 14,000,000 shares
of Series B-2 Preferred Stock.  With respect to such authorized capital stock,
(I) (1) 13,370,209 shares of Common Stock are issued and outstanding,
(2) 16,143,026 shares of Common Stock are duly reserved for future issuance
pursuant to Stock Options outstanding as of the date of this Agreement, (3)
3,221,115 shares of Common Stock are duly reserved for future issuance upon
conversion of shares of Series A Preferred Stock outstanding as of the date of
this Agreement, (4) 26,841,261 shares of Common Stock are duly reserved for
future issuance upon conversion of shares of Series B Preferred Stock
outstanding as of the date of this Agreement, (5) 33,637,207 shares of Common
Stock are duly reserved for future issuance upon conversion of shares of
Series B-1 Preferred Stock outstanding as of the date of this Agreement, (6)
13,046,486 shares of Common Stock are duly reserved for future issuance upon
conversion of shares of Series B-2 Preferred Stock outstanding as of the date of
this Agreement, and (7) 2,090,000 shares of Common Stock are duly reserved for
future issuance upon exercise of the Warrants to purchase Common Stock and
85,000 shares of Series B Preferred Stock are duly reserved for future issuance
upon exercise of the Warrants to purchase Series B Preferred Stock , (II)
2,903,207 shares of Series A Preferred Stock are issued and outstanding, (IV)
14,243,945 shares of Series B Preferred Stock are issued and outstanding, (V)
32,864,988 shares of Series B-1 Preferred Stock are issued and outstanding, (VI)
13,046,485 shares of Series B-2 Preferred Stock are issued and outstanding, and
(VII) no shares of Common Stock and no shares of Preferred Stock are owned
beneficially or of record by the Company.  Section 3.3(a) of the Company
Disclosure Schedule sets forth the following information relating to each
Seller:  (i) its name and address (as listed in the corporate record books of
the Company) and (ii) the number and class or series of shares of Company
Capital Stock held by such Person and the respective certificate numbers.
 
(b) None of the outstanding shares of Company Capital Stock are subject to, nor
were they issued in violation of, any purchase option, call option, right of
first refusal, first offer, co-sale or participation, preemptive right,
subscription right or any similar right.  Except as set forth in Section 3.3(a),
no shares of voting or non-voting capital stock, other equity interests or other
voting securities of the Company are issued, reserved for issuance or
outstanding.  Of the outstanding Stock Options, Stock Options to purchase in the
aggregate 9,075,429 shares of Common Stock have been granted under the Company
Stock Option Plan, complete and accurate copies of all of which agreements have
been made available to Parent (or, if on a standard form, such standard form and
the pages indicating the Optionholder and the number of applicable Stock Options
have been made available to Parent).  Section 3.3(a) of the Company Disclosure
Schedule sets forth a true and complete list of all outstanding Stock Options,
Warrants, Put Warrants and all other options and rights to purchase Company
Capital Stock, together with the number of shares of Company Capital Stock
subject to such security, the date of grant or issuance, the exercise price and
the expiration date of such security and the aggregate number of shares of
Company Capital Stock subject to such securities.  No Stock Option shall entitle
the Optionholder thereof to receive anything after the Merger in respect of such
Stock Option other than the Option Consideration due to such Optionholder under
Section 2.11(a) hereof.  All outstanding shares of Company Capital Stock are
validly issued, fully paid and nonassessable and were issued in compliance with
applicable securities Laws.  Except for the Company Capital Stock, there are no
bonds, debentures, notes, other Indebtedness or any other securities of the
Company with voting rights (other than the Stock Options, the Warrants and the
Put Warrants, convertible into, or exchangeable for, securities with voting
rights) on any matters on which Stockholders may vote.
 
(c) Except as described in Sections 3.3(a) and 3.3(a), there are no outstanding
securities, options, warrants, calls, rights, convertible or exchangeable
securities or Contracts or obligations of any kind (contingent or otherwise) to
which the Company is a party or by which it is bound obligating the Company,
directly or indirectly, to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of the Company or obligating the Company to issue, grant, extend or enter into
any such security, option, warrant, call, right, Contract or obligation.  Except
as set forth in the Company Charter, there are no outstanding obligations of the
Company (contingent or otherwise) to repurchase, redeem or otherwise acquire,
directly or indirectly, any shares of capital stock (or options or warrants to
acquire any such shares) of the Company.  There are no stock-appreciation
rights, stock-based performance units, “phantom” stock rights or other Contracts
or obligations of any character (contingent or otherwise) pursuant to which any
Person is or may be entitled to receive any payment or other value based on the
revenues, earnings or financial performance, stock price performance or other
attribute of the Company or its business or assets or calculated in accordance
therewith (other than payments or commissions to sales representatives of the
Company based upon revenues generated by them without augmentation as a result
of the transactions contemplated hereby, in each case in the ordinary course of
business consistent with past practice) to cause the Company to register its
securities or which otherwise relate to the registration of any securities of
the Company.  Except as set forth on Section 3.3(c) of the Company Disclosure
Schedule and Consent Agreements, there are no voting trusts, proxies or other
Contracts of any character to which the Company or, to the Knowledge of the
Company, any of the Stockholders is a party or by which any of them is bound
with respect to the issuance, holding, acquisition, voting or disposition of any
shares of capital stock or similar interests of the Company.
 
(d) Payment of the Merger Consideration pursuant to this Agreement shall satisfy
any and all rights of all holders of any Equity Interests or any rights thereto
and under applicable Law, in each case, in connection with the Merger and the
other transactions contemplated by this Agreement such that at the Effective
Time, no Person shall have any right to purchase or receive any equity or
payment interest, or right convertible into or exercisable for any equity or
payment interest of the Company or any of its Subsidiaries, upon consummation of
the Merger and the transactions expressly contemplated in connection therewith
the only outstanding shares of capital stock of the Company and its Subsidiaries
will be owned by Parent or the Company, as applicable, and there will be no
existing options, warrants, or other rights to purchase or otherwise acquire any
such shares of capital stock.
 
3.4 Authority; Enforceability
 
.  The Company has all necessary corporate or other power and authority to
execute and deliver this Agreement, each Transaction Document to which it is a
party and each instrument required to be executed and delivered by it prior to
or at the Closing and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.  The execution and
delivery by the Company of this Agreement, each other Transaction Document and
each instrument required to be executed and delivered by it prior to or at the
Closing, the performance of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly approved by the Company’s Board of Directors and have been duly and
validly authorized by all corporate or similar action, and no other corporate or
similar proceedings on the part of the Company are necessary to authorize this
Agreement, any Transaction Document to which it is a party or any instrument
required to be executed and delivered by it prior to or at the Closing or the
consummation of transactions contemplated hereby or thereby, other than the
Stockholder Approval.  Each of this Agreement, the other Transaction Documents
to which the Company is a party and each instrument required to be executed and
delivered by it prior to or at the Closing has been duly and validly executed
and delivered by the Company and the Stockholder’s Representative and, assuming
the due authorization, execution and delivery thereof by Parent and Merger Sub,
constitutes a legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
 
3.5 Required Vote
 
.  The Board of Directors of the Company, in accordance with the DGCL, Company
Charter and the Company’s bylaws, has, either by written consent or at a meeting
duly called and held prior to the execution of each Transaction Document to
which the Company is a party, (a) approved and declared advisable this Agreement
and each other Transaction Document to which the Company is a party,
(b) resolved to recommend and has recommended the approval and adoption of this
Agreement and the Merger to the Stockholders and (c) directed that this
Agreement and the Merger be submitted to the holders of Company Capital Stock
for their approval and adoption.  The affirmative vote of (1) holders of a
majority of the outstanding shares of Common Stock and Preferred Stock, voting
together as a single class on an as-converted to Common Stock basis and
(2) holders of a majority of all the outstanding shares of Series B Preferred
Stock, Series B-1 Preferred Stock and Series B-2 Preferred Stock, voting
together as a single class on an as-converted to Common Stock basis (such votes
referred to collectively as the “Stockholder Approval”) are the only votes,
approvals or other corporate actions of the holders of Company Capital Stock or
of any other security of the Company necessary to approve, authorize and adopt
this Agreement, the Merger, the other Transaction Documents and the other
transactions contemplated hereby and thereby and to consummate the Merger and
the other transactions contemplated hereby and thereby.  After receipt of the
Stockholder Approval, which is anticipated to occur promptly after the execution
and delivery of this Agreement, the Merger and this Agreement will be duly and
validly adopted and approved, and no further vote, approval or other action on
the part of any holder of Company Capital Stock or of any other security of the
Company will be required to approve or adopt this Agreement, the Merger, the
other Transaction Documents and the other transactions contemplated hereby and
thereby or to consummate the Merger and the other transactions contemplated
hereby and thereby.
 
3.6 No Conflict; Required Filings and Consents
 
.  Except as set forth on Section 3.6 of the Company Disclosure Schedule, the
execution and delivery by the Company of this Agreement, the other Transaction
Documents to which it is a party or any instrument required by this Agreement to
be executed and delivered by the Company on or prior to the Closing do not, and
the performance of this Agreement, the other Transaction Documents to which it
is a party and any instrument required by this Agreement to be executed and
delivered by it on or prior to the Closing shall not, (a) conflict with or
violate the Company Charter or the Company’s bylaws, (b) conflict with or
violate any Law or Order applicable to the Company or by which any of their
respective properties, rights or assets is bound or affected, except any such
conflict or violation that would not reasonably be expected to have a Material
Adverse Effect, (c) result in any breach or violation of, or constitute a
default (or an event that with or without notice or lapse of time or both would
become a default) under, or impair the Company’s rights or alter the rights or
obligations of any party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
on any of the properties, rights or assets of the Company pursuant to, any
Material Contract to which the Company is a party or by which such Person or its
properties, rights or assets is bound or affected, except any such breach,
violation default, impairment, alteration, right or Lien that would not
reasonably be expected to have a Material Adverse Effect or (d) require the
Company to obtain any Approval of any Person or Governmental Authority, observe
any waiting period imposed by, or make any filing with or notification to, any
Person or Governmental Authority, except for, in the case of this clause (d),
(i) the Stockholder Approval and (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware in accordance with the
DGCL.
 
3.7 Material Contracts.
 
(a) Section 3.7(a) of the Company Disclosure Schedule sets forth (in subsections
corresponding to the subsections hereof) a true and complete list, and if oral,
an accurate summary, the following Contracts to which the Company or any of its
Subsidiaries is a party or by which it or any of its properties, rights or
assets are bound that are material to the Company, any of its Subsidiaries or
the operation of the Company’s or its Subsidiaries’ business as conducted or as
planned to be conducted, regardless of whether such Contracts have been entered
into in the ordinary course of business consistent with past practice
(collectively, the “Material Contracts”):
 
(i) (A) employment Contracts or consulting Contracts with any employee,
independent contractor or consultant of the Company or any of its Subsidiaries
(except offer letters for at-will employment, other than offer letters issued
but not yet accepted, which shall be included), and all severance, change in
control, retention or similar Contracts with any current or former Stockholders,
directors, officers, employees, independent contractors, consultants or agents
of the Company or any of its Subsidiaries that would result in any obligation
(absolute or contingent) of the Company or any of its Subsidiaries to make any
payment to any current or former Stockholders, directors, officers, employees,
independent contractors, consultants or agents of the Company or any of its
Subsidiaries in excess of $50,000 following either the consummation of the
transactions contemplated hereby, termination of employment (or the relevant
relationship) or both; and (B) labor or collective bargaining Contracts (if
any);
 
(ii) Contracts involving revenues, receipts, expenditures or liabilities in
excess of $50,000 per annum or $100,000 in the aggregate that are not cancelable
by the Company or any of its Subsidiaries (without penalty, cost or other
liability) upon sixty (60) days’ notice or less (other than any such Contracts
with customers which do not differ, in form or substance, in any material
respect from the Company’s standard form of customer contracts (the “Standard
Customer Contract”), a copy of which has been made available to Parent;
provided, however, that the inclusion of an amendment, exhibit, schedule, annex
or other hand-marked, typed or other alteration to any Standard Customer
Contract which contains material terms, other than the Company’s standard
pricing exhibit or schedule, shall be deemed a material difference from the
Standard Customer Contract);
 
(iii) Contracts for the provision of goods and/or services by Company to the
Company’s top ten (10) customers as measured by total revenue for the year
ending December 31, 2013;
 
(iv) (A) promissory notes, loan agreements, indentures, evidences of
Indebtedness or other instruments and Contracts relating to the borrowing or
lending of money, whether as borrower, lender or guarantor; (B) any interest
rate swaps, caps, floors or option Contracts or any other interest rate risk
management arrangement or foreign exchange Contracts; (C) performance or payment
guarantees, letters of credit, security agreements, pledges, keep-well
arrangements and other similar credit support obligations or arrangements; and
(D) Contracts involving any obligation or liability of the Company or any of its
Subsidiaries (whether absolute, accrued, contingent or otherwise), as surety,
co-signer, endorser, co-maker, indemnitor or otherwise in respect of the
obligation of any other Person;
 
(v) (A) Contracts containing any limitation on the freedom of the Company, any
of its Subsidiaries or any of their respective Affiliates (or which, following
the Effective Time, would purport to limit the freedom of Parent or any of its
Affiliates) to engage in any line of business or compete with any Person or to
operate at any location in the world, including non-competition,
non-solicitation and standstill obligations, exclusivity rights and “most
favored nation” provisions; (B) except for the Bridge Notes, Warrants, Put
Warrants and the Stock Options, Contracts that grant to any Person any options,
rights of first refusal, first offer or co-sale or similar preferential rights
to purchase any material assets, properties or securities of the Company or any
of its Subsidiaries; or (C) Contracts requiring the Company or any of its
Subsidiaries to purchase all or substantially all of its requirements for a
particular product or service from a vendor, supplier or subcontractor or to
make periodic minimum purchases of a particular product or service from a
vendor, supplier or subcontractor;
 
(vi) joint venture or partnership agreements or joint development, distribution
or similar Contracts pursuant to which any third party is entitled or obligated
to develop or distribute any products or provide any services on behalf of the
Company or any of its Subsidiaries or pursuant to which the Company or any of
its Subsidiaries is entitled or obligated to develop or distribute any products
or provide any services on behalf of any third party;
 
(vii) Contracts for the acquisition, directly or indirectly (by merger or
otherwise) of assets (whether tangible or intangible) or capital stock of
another Person;
 
(viii) Contracts involving the issuance or repurchase of any capital stock of
the Company or any of its Subsidiaries;
 
 
(ix) Contracts providing for the purchase, sale or license of products,
material, supplies, equipment or services requiring payments to or from the
Company or any of its Subsidiaries in excess of $50,000 per annum that (A) are
not terminable by the Company upon sixty (60) days’ notice or less without cost
or other liability or (B) contain an escalation clause (other than any Contracts
with customers which do not differ, in form or substance, in any material
respect from the Standard Customer Contract; provided, however, that the
inclusion of an amendment, exhibit, schedule, annex or other hand-marked, typed
or other alteration to any Standard Customer Contract which contains material
terms, other than the Company’s standard pricing exhibit or schedule, shall be
deemed a material difference from the Standard Customer Contract);
 
(x) Contracts requiring payments to or from the Company or any of its
Subsidiaries in excess of $50,000 per annum (A) with distributors, dealers,
manufacturer’s representatives, sales agencies, advertising agencies or
franchisees for or of the Company or any of its Subsidiaries, (B) pursuant to
which the Company or any of its Subsidiaries has agreed to act as a distributor,
dealer, manufacturer’s representative, sales agent, advertising agents or
franchisee for or of another Person and (C) providing for the payment of a
commission, royalty, brokerage, finder’s or referral or similar fee calculated
as or by reference to a percentage of the revenues or profits of the Company,
any of its Subsidiaries or of their business segment or product of the Company
or any of its Subsidiaries (other than arrangements to pay commissions or fees
to employees in the ordinary course of business consistent with past practice
and any Contracts with customers which do not differ, in form or substance, in
any material respect from the Standard Customer Contract; provided, however,
that the inclusion of an amendment, exhibit, schedule, annex or other
hand-marked, typed or other alteration to any Standard Customer Contract which
contains material terms, other than the Company’s standard pricing exhibit or
schedule, shall be deemed a material difference from the Standard Customer
Contract);
 
(xi) leases, subleases or similar contracts requiring payments to or from the
Company or any of its Subsidiaries in excess of $50,000 per annum representing
an interest in or in respect of (A) any real property or (B) any material
rights, assets or property (other than Company Products or Intellectual
Property);
 
(xii) Contracts entered into by the Company or any of its Subsidiaries (or to
which it is otherwise subject to) with respect to Intellectual Property,
Software, Systems or Company Products, that include the licensing or other
acquisition of rights or waiver of rights in connection therewith and the
development and improvement thereof, including Inbound Licenses and Outbound
Licenses (other than (i) Contracts for off-the-shelf, commercially available,
shrinkwrap, or clickwrap Software or similar Contracts with annual fees of less
than $5,000 on a per-seat basis (“Off-the-Shelf Software”); (ii) Open Source
Licenses; (iii) standard terms of sale, terms of use, terms of service,
subscription agreements, clickthrough and similar agreements and other Contracts
for Company Products entered into in the ordinary course of business consistent
with past practice; and any Contracts with customers which do not differ, in
form or substance, in any material respect from the Standard Customer Contract;
provided, however, that the inclusion of an amendment, exhibit, schedule, annex
or other hand-marked, typed or other alteration to any Standard Customer
Contract which contains material terms, other than the Company’s standard
pricing exhibit or schedule, shall be deemed a material difference from the
Standard Customer Contract);
 
(xiii) Contracts, directly or indirectly, with any Governmental Authority,
including as subcontractor or otherwise, or with any Person for the provision of
goods, services or rights to or on behalf of any Governmental Authority (other
than any Contracts with customers which do not differ, in form or substance, in
any material respect from the Standard Customer Contract; provided, however,
that the inclusion of an amendment, exhibit, schedule, annex or other
hand-marked, typed or other alteration to any Standard Customer Contract which
contains material terms, other than the Company’s standard pricing exhibit or
schedule, shall be deemed a material difference from the Standard Customer
Contract);
 
(xiv) barter or multi-element Contracts, or Contracts or series of Contracts
pursuant to which the Company performs revenue generating activities and another
party thereto provides services to the Company requiring payments to or from the
Company or any of its Subsidiaries;
 
(xv) Contracts in which the Company or any of its Subsidiaries provides
advertising services to the counterparty while at the same time purchasing goods
or services from the same counterparty, whether or not documented in a single
Contract, or a series of related Contracts;
 
(xvi) Contracts with any Stockholder or Affiliate of the Company or any of its
Subsidiaries, including any agreements with directors or officers (other than
Contracts covered by Section 3.7(a)(i)) of the Company or any of its
Subsidiaries whereby the Company or any of its Subsidiaries agreed to indemnify
such director or officer;
 
(xvii) Contracts subjecting the Company or any of its Subsidiaries to any
non-competition, non-solicitation, exclusive dealing or similar restriction on
the Company’s or any Subsidiary’s business;
 
(xviii) Contracts that were not entered into in the ordinary course of business
consistent with past practice (other than Contracts already covered by
Section 3.7(a)(i) through (xvii));
 
(xix) Contracts that, if terminated, could reasonably be expected to have a
Material Adverse Effect (other than Contracts already covered by
Section 3.7(a)(i) through (xvii));
 
(xx) All other Contracts that are material to the Company, any of its
Subsidiaries or the operation of the Company’s or its Subsidiaries’ business as
conducted or as planned to be conducted (other than Contracts already covered by
Section 3.7(a)(i) through (xvii) without consideration of any dollar thresholds
set forth in such subsection or number of Contracts required to be disclosed
pursuant to such subsection); and
 
(xxi) Contracts to enter into any Material Contract described in preceding
paragraphs (i) through (xx), inclusive.
 
True and complete copies of all Material Contracts have been made available to
Parent by the Company.
 
(b) Each Material Contract is in full force and effect, is a valid and binding
obligation of the Company or any of its Subsidiaries and, to the Knowledge of
the Company, of each other party thereto and is enforceable in accordance with
its terms against the Company or any of its Subsidiaries and against each other
party, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered
in a proceeding in equity or at law), and such Material Contracts will continue
to be valid, binding and enforceable with respect to the Company or any of its
Subsidiaries and, to the Knowledge of the Company, with respect to the each
other party thereto in accordance with their respective terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law), and in full force and effect with respect to the Company
or any of its Subsidiaries and, to the Knowledge of the Company, with respect to
the each other party thereto immediately following the consummation of the
transactions contemplated hereby, with no alteration or acceleration or increase
in fees or liabilities as a result thereof.  The Company or any of its
Subsidiaries are not or, to the Knowledge of the Company, is not alleged to be,
and, to the Knowledge of the Company, no other party is or is alleged to be, in
default under, or in breach or violation of, any Material Contract, and no event
has occurred which, with the giving of notice or passage of time or both, would
constitute such a default, breach or violation which could reasonably be
expected to have a Material Adverse Effect.
 
3.8 Compliance
 
. Each of the Company and any of its Subsidiaries is, and at all times prior to
the date hereof during which any applicable statute of limitations or Contract
term has not yet terminated (or otherwise been waived, tolled, amended or
otherwise extended) has been, in compliance in all material respects with, and
is not in material default or violation of, (a) the Company Charter and or the
Company’s bylaws, (b) any Law or Order by which it or any of its properties,
rights or assets are bound or affected and (c) the terms of all bonds,
indentures, Contracts, permits, franchises and other instruments or obligations
to which it is a party or by which it or any of its properties, rights or assets
are bound or affected.  Each of the Company and any of its Subsidiaries is in
material compliance with the terms of all applicable Approvals.  Neither the
Company nor any of its Subsidiaries has received written or, to the Knowledge of
Company, oral notice of any revocation or modification of any material Approval
of any Governmental Authority or that the Company or any of its Subsidiaries is
not in compliance with any Approval or any Law or Order.  No investigation or
review is pending or, to the Knowledge of Company, threatened by any Government
Authority with respect to any alleged violation by Company of any Law or Order.
 
3.9 Financial Statements
 
.  Section 3.9 of the Company Disclosure Schedule contains a true and complete
copy of the (i) the audited consolidated balance sheets of the Company and any
of its Subsidiaries as of December 31, 2012 and December 31, 2013 (including the
notes thereto, if any), and the related audited consolidated statements of
income, shareholders’ equity and cash flows for the fiscal years then ended,
(ii) unaudited consolidated balance sheet of the Company and any of its
Subsidiaries as of March 31, 2014 and the related unaudited consolidated
statement of operations, and consolidated statement of cash flows for the three
(3) months then ended (collectively, (i) and (ii), the “Financial
Statements”).  December 31, 2013 is referred to herein as the “Balance Sheet
Date.”  The Financial Statements were prepared on the basis of the books and
records of the Company and any of its Subsidiaries kept in the ordinary course
consistent with past practice and in accordance with generally accepted
accounting principles in the United States (“GAAP”) (except as may be disclosed
in the notes thereto, provided, that, the unaudited financial statements, lack
footnotes and other presentation items and changes resulting from normal
year-end-adjustments, none of which are material, individually or in the
aggregate) applied on a consistent basis throughout the periods indicated and
fairly present in all material respects the consolidated financial position of
the Company and any of its Subsidiaries as of the respective dates thereof and
for the periods indicated.
 
3.10 Absence of Certain Changes or Events
 
.  Since the Balance Sheet Date:
 
(a) There has not been any fact, event, change, development, circumstance or
effect that has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
 
(b) The Company and any of its Subsidiaries have conducted its respective
business only in the ordinary course of business consistent with past practice.
 
(c) There has not been any change by the Company or any of its Subsidiaries in
its accounting or cash management methods, principles or practices (including
with respect to reserves, revenue recognition, timing for payments of payments
of accounts payable and collections of accounts receivable) or any revaluation
by the Company and any of its Subsidiaries of any of its assets, including
writing down the value of inventory or writing off notes or accounts receivable.
 
3.11 No Undisclosed Liabilities; No Indebtedness
 
.  Except as set forth in Section 3.11 of the Company Disclosure Schedule, the
Company and any of its Subsidiaries have no Liabilities, and there is no
existing fact, condition or circumstance that could reasonably be expected to
result in such liabilities or obligations, except Liabilities (i) disclosed in
the December 31, 2013 Financial Statements or (ii) incurred since December 31,
2013 in the ordinary course of business consistent with past practice (but
excluding any incurrence of Indebtedness) in amounts that individually and in
the aggregate are not material to the Company.
 
3.12 Absence of Litigation, Claims and Orders
 
.  There is no (a) Claim pending or, to the Knowledge of the Company, threatened
on behalf of or against the Company, any of its Subsidiaries or any of their
respective properties, rights or assets (including cease and desist letters or
requests for a license), (b) Order outstanding to which the Company, any of its
Subsidiaries or any of their respective properties, rights or assets is subject,
and (c) Claims pending or, to the Knowledge of Company, threatened on behalf of
or against the Company or any of its Subsidiaries that questions or challenges
(i) the validity of this Agreement or any other Transaction Document to which it
is a party or (ii) any action taken or to be taken by it pursuant to this
Agreement or any other Transaction Document to which it is a party or in
connection with the transactions contemplated hereby and thereby.  Neither the
Company nor any of its Subsidiaries is subject to any outstanding Claim or
Order, and neither the Company nor any of its Subsidiaries has received a Claim
or demand for payment, or has no Knowledge of any basis for the same, against it
in respect of this Agreement, any Transaction Document to which it is a party or
the transactions contemplated hereby and thereby.
 
3.13 Employee Benefit Plans.
 
(a) Section 3.13(a)(i) of the Company Disclosure Schedule lists all material
Employee Plans.  “Employee Plans” means all employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), including, without limitation, multiemployer plans within the
meaning of Section 3(37) of ERISA) and all bonus, stock option, stock purchase,
stock appreciation, incentive, deferred compensation, retirement, supplemental
retirement, severance, change in control, golden parachute, vacation, welfare,
cafeteria, dependent care, medical care, employee assistance, education or
tuition assistance, fringe and all other employee benefit plans, programs,
agreements, policies or arrangements and all employment, consulting, advisory,
executive compensation or severance Contracts, agreements or funds (other than
offer letters for at-will employment that do not provide for severance), whether
or not subject to ERISA, formal or informal, written or oral, (i) for the
benefit of, or relating to, any present or former employee, director,
independent contractor, consultant or other service provider of the Company or
any of its Subsidiaries currently entered into, contributed to, established by,
participated in and/or maintained by the Company, any of its Subsidiaries or any
of its “ERISA Affiliates” (defined as any trade or business (whether or not
incorporated) which is a member of a controlled group or which is under common
control with the Company within the meaning of Section 414 of the Code) or
(ii) under which the Company, any of its Subsidiaries or any of its ERISA
Affiliates has or may have any liability or obligation, whether or not such plan
is terminated.  With respect to each material Employee Plan, on or before the
Closing Date, the Company and any of its Subsidiaries have made available to
Parent current, correct and complete copies of (where applicable) (A) all plan
documents (including trust agreements), summary plan descriptions, summaries of
material modifications, amendments and resolutions related to such Employee
Plans, (B) the most recent determination letters or opinion letters received
from the Internal Revenue Service (the “IRS”), and all material communications
to or from the IRS or any other Governmental Authority relating to each such
Employee Plan, (C) the three most recent Form 5500 Annual Reports, (D) the most
recent audited financial statements and actuarial valuation reports and (E) all
insurance Contracts and third party administrative Contracts related to each
such Employee Plan.  Neither the Company, any of its Subsidiaries nor any ERISA
Affiliate has any formal plan or commitment, whether legally binding or not, to
create any additional plan or modify or change any existing Employee Plan that
would affect any current or former employee, director, independent contractor,
consultant or other service provider of or to the Company, any of its
Subsidiaries or any ERISA Affiliate, other than as required to comply with
applicable Law.
 
(b) (i) There has been no “prohibited transaction” (as such term is defined in
Section 406 of ERISA and Section 4975 of the Code) with respect to any Employee
Plan that would reasonably be expected to result in material liability to the
Company or any or its Subsidiaries or any ERISA Affiliate; (ii) there are no
Claims pending with respect to any Employee Plan (other than routine claims for
benefits) or, to the Knowledge of the Company, threatened or anticipated against
any Employee Plan or against the assets of any Employee Plan, or against the
Company, any of its Subsidiaries or any ERISA Affiliate, nor are there any
current or, to the Knowledge of the Company, threatened, Liens on the assets of
any Employee Plans or Liens on the assets of the Company, any of its
Subsidiaries or any ERISA Affiliate under ERISA or Subchapter D of Chapter 1 of
the Code, nor, to the Knowledge of the Company, does any condition exist that
presents a material risk of any such Lien arising (iii) to the Knowledge of the
Company, no facts or circumstances exist that could give rise to any such
Claims; (iv) no written or oral communication has been received from any
Governmental Authority concerning the funded status of any Employee Plan or any
transfer of assets or liabilities from or to any Employee Plan; (v) there is no
judgment, decree, injunction, rule or order of any Court, Governmental Authority
or arbitrator outstanding against or in favor of any Employee Plan, and there
are no pending or, to the Knowledge of the Company, threatened audits or
investigations by any Governmental Authority involving any Employee Plan;
(vi) each Employee Plan conforms to, and in its operation and administration has
been established and administered in all material respects in compliance with
the terms thereof and requirements of any and all applicable Law (including but
not limited to ERISA and the Code); (vii) the Company, any of its Subsidiaries
and its ERISA Affiliates have performed in all material respects all obligations
required to be performed by them under each Employee Plan and are not in default
under or violation of, and have no Knowledge of any default or violation by any
other Person with respect to, the Employee Plans; (viii) each Employee Plan
intended to qualify under Section 401(a) of the Code is to the Knowledge of the
Company, so qualified (and each corresponding trust is, to the Knowledge of the
Company, exempt under Section 501 of the Code), and has received or is the
subject of a favorable determination or opinion letter from the IRS, and nothing
has occurred which would reasonably be expected to adversely affect such
qualification (or exemption) or, to the Knowledge of the Company, require the
filing of a submission under the IRS’s employee plans compliance resolution
system or the taking of other corrective action pursuant to such system in order
to maintain the qualified or exempt status of such Employee Plan; (ix) all
contributions required to be made to any Employee Plan pursuant to its terms,
the requirements of ERISA or the Code or any collective bargaining agreement, or
otherwise, have been made on or before their due dates and all obligations in
respect of each Employee Plan have been properly accrued and reflected in the
Financial Statements, except as would not reasonably be expected to result in
material liability to the Company or any ERISA Affiliate; (x) no event has
occurred and, to the Knowledge of the Company, no condition exists that would
subject the Company or any of its Subsidiaries (either directly or by reason of
its affiliation with any ERISA Affiliate), any Employee Plan or any related
trust to any material Tax, fine, Lien, penalty or other material liability
imposed by ERISA or Chapter 43 of the Code; (xi) no “reportable event” (as such
term is defined in Section 4043 of ERISA) has occurred with respect to any
Employee Plan; (xii) all payments, awards, grants or bonuses made or other
property provided pursuant to any Employee Plan have been fully deductible by
the Company or any of its Subsidiaries; and (xiii) each of the Employee Plans
that is intended to satisfy the requirements of Sections 125, 423 or 501(c)(9)
of the Code satisfies such requirements in all material respects.
 
(c) No Employee Plan is an “employee pension benefit plan” (within the meaning
of Section 3(2) of ERISA) subject to Title IV of ERISA, and neither the Company
nor any of its ERISA Affiliates has ever incurred any liability under such Title
IV, and no condition exists that presents a material risk to the Company, any of
its Subsidiaries or any of its ERISA Affiliates of incurring any liability under
such Title IV.  No Employee Plan is subject to Sections 302, 303, 304 or 305 of
ERISA or Sections 412, 430, 431 or 432 of the Code.  None of the Company, any of
its Subsidiaries or any of its ERISA Affiliates has incurred any liability under
such Sections, and no condition exists that presents a material risk to the
Company or any of its ERISA Affiliates of incurring a liability under such
Sections.  No Employee Plan is a “multiemployer plan” (within the meaning of
Section 4001(a)(3) of ERISA) (a “Multiemployer Plan”), a “multiple employer
welfare arrangement” (within the meaning of Section 3(40) of ERISA) (a “Multiple
Employer Welfare Arrangement”), or single employer plan that has two or more
contributing sponsors, at least two of whom are not under common control (within
the meaning of Section 4063(a) of ERISA), and none of the Company nor any of its
ERISA Affiliates has ever contributed to or had an obligation to contribute, or
incurred any liability in respect of a contribution, to any Multiemployer Plan,
any Multiple Employer Welfare Arrangement or any single employer plan that has
two or more contributing sponsors at least two of whom are not under common
control.
 
(d) Each Employee Plan that is a “group health plan” (within the meaning of Code
Section 5000(b)(1)) has been operated in compliance in all material respects
with the group health plan continuation coverage requirements of Section 4980B
of the Code and Sections 601 through 608 of ERISA (“COBRA Coverage”) or similar
state law, Section 4980D of the Code, Part 7, Subtitle B, Title I of ERISA,
Title XXII of the U.S. Public Health Service Act and the provisions of the U.S.
Social Security Act, to the extent such requirements are applicable.  No
Employee Plan or other written or oral agreement exists which obligates the
Company to provide benefits (whether or not insured) to any current or former
employee, consultant or other service provider of or to the Company following
such current or former employee’s or consultant’s termination of employment or
consultancy with the Company, other than (i) COBRA Coverage or coverage mandated
by state Law (including coverage provided as part of a severance arrangement and
disclosed in Section 3.13(d) of the Company Disclosure Schedule), or (ii) death
benefits or retirement benefits under any “employee pension benefit plan” (as
defined in Section 3(2) of ERISA).  No Employee Plan is funded through a
“welfare benefit fund” as defined in Section 419 of the Code.
 
(e) Each compensation arrangement between the Company and a service provider to
the Company and each Employee Plan that is subject to Section 409A of the Code
complies in all material respects with the applicable requirements of
Section 409A of the Code (and has so complied for the entire period during which
Section 409A of the Code has applied to such arrangement or Employee Plan).
 
(f) Neither the execution of this Agreement nor any other Transaction Document,
nor the Stockholder Approval, nor the transactions contemplated by this
Agreement or any Transaction Document (whether alone or in connection with any
other events), could result in or, to the Knowledge of Company, is a
precondition to (i) any current or former employee, director or service provider
of or to the Company or any of its Subsidiaries becoming entitled to any
severance pay or any increase in severance pay upon any termination of
employment, (ii) the acceleration of the time of payment or vesting of, or  any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, or any increase in the amount payable under, or in any other
material obligation pursuant to, any of the Employee Plans, or (iii) the renewal
or extension of the term of any Employee Plan regarding the compensation of any
current or former employee, director or service provider of or to the Company or
any of its Subsidiaries.  Except for individual contractual arrangements that
may be amended or terminated only in accordance with their terms, each Employee
Plan may be amended or terminated without material liability to the Company or
any of its Subsidiaries, other than liability for accrued benefits through the
date of the amendment or termination and reasonable administrative costs of
amending or terminating such Employee Plan.
 
(g) There are no Employee Plans and there are no other Contracts, plans or
arrangements (written or otherwise, including this Agreement or any Transaction
Document) covering any current or former employee, director, officer,
shareholder or independent contractor of the Company or any of its Subsidiaries
that, individually or collectively, could reasonably be expected to give rise to
the payment of any amount or benefit that would not be deductible pursuant to
the terms of Section 280G of the Code in connection with the transactions
contemplated by this Agreement.
 
(h) No Employee Plan subject to Title I of ERISA holds any “employer security”
or “employer real property” (each as defined in Section 407(d) of ERISA).
 
(i) All workers’ compensation benefits paid or payable to any current or former
employee, director or other service provider of or to the Company or any of its
Subsidiaries are fully insured by a third party insurance carrier.
 
(j) No Employee Plan is maintained outside the jurisdiction of the United States
or covers any employee or consultant or independent contractor or other service
provider residing or working outside the United States, and no material
liability or obligation of the Company or any of its Subsidiaries exists with
respect to any employee benefit plan, program or arrangement maintained outside
of the jurisdiction of the United States or covering any employee or consultant
or independent contractor or other service provider residing or working outside
the United States.
 
(k) Each Person who performs or renders services to or for the Company and any
of its Subsidiaries has been, and is, properly classified by the Company as an
employee, contractor or consultant for the purpose of the Employee
Plans.  Neither the Company nor any of its Subsidiaries have or has had any
obligations to provide benefits with respect to such Persons classified as
contractors or consultants under any Employee Plan.  Neither the Company nor any
of its Subsidiaries employ, or has employed, any “leased employees” as defined
in Section 414(n) of the Code.  The Company is not a party to any Contract with
a professional employer organization.
 
(l) Other than the Company’s 401(k) plan, no Employee Plan is a pension plan,
within the meaning of Section 3(2) of ERISA.
 
3.14 Employment and Labor Matters.
 
(a) Section 3.14(a)(1) of the Company Disclosure Schedule identifies (i) all
directors and officers of the Company and any of its Subsidiaries as of the date
of this Agreement and their respective titles, (ii) all employees and
consultants employed or engaged by the Company and any of its Subsidiaries as of
the date of this Agreement, and (iii) for each individual identified in clause
(i) or (ii) with 2013 compensation in excess of $75,000, such Person’s Form W-2
or 1099 compensation for 2013, job title and date of hire or commencement of
engagement (provided that the Company and any of its Subsidiaries shall furnish
an updated schedule with respect to clauses (ii) and (iii) for new hires and
terminations after the date hereof, subject to Section 5.1, in an updated
Section 3.14(a)(1)(ii) and 3.14(a)(1)(iii) of the Company Disclosure Schedule,
as of the Closing Date.  Section 3.14(a)(2) of the Company Disclosure Schedule
sets forth a true, complete and accurate list of all accrued vacation time for
all employees of the Company and any of its Subsidiaries as of the date hereof
and the value of all such accrued vacation time based on each such employees’
compensation level in effect (the “Accrued Vacation Amount”) as of the Effective
Time.
 
(b) Except as set forth on Section 3.14(b) of the Company Disclosure Schedule,
there are no currently-effective employment, consulting, collective bargaining,
severance pay, continuation pay, termination or indemnification agreements or
other similar Contracts of any nature (whether in writing or not) between the
Company, on the one hand, and any current or former Stockholder, Affiliate,
officer, director, employee, consultant, labor organization or other
representative of any of the Company’s or any Subsidiary’s employees, on the
other hand (except for offer letters for at-will employment, other than
outstanding offer letters issued but not yet accepted, which shall be included),
nor is any such Contract presently being negotiated.
 
(c) Neither of the Company or any of its Subsidiaries is delinquent in payments
to any of its employees, consultants or independent contractors for any wages,
salaries, commissions, bonuses, benefits, contributions or other compensation
for any services or otherwise arising under any policy, practice, Contract,
plan, program or Law.  None of the Company’s or any Subsidiary’s employment
policies or practices are currently being audited or, to the Knowledge of the
Company, investigated by any Governmental Authority or Court.  There is no
pending or, to the Knowledge of the Company, threatened Claim, unfair labor
practice charge or other charge or inquiry against the Company or any of its
Subsidiaries brought by or on behalf of any current, prospective or former
employee, consultant, independent contractor, retiree, labor organization or
other representative of the Company’s or any Subsidiary’s employee or other
individual or any Governmental Authority with respect to employment practices
brought by or before any Court or Governmental Authority, nor is there or has
there been any audit or investigation related to the Company’s classification of
independent contractors and consultants.  The Company has properly classified
its employees as exempt or non-exempt in accordance with the Fair Labor
Standards Act in all material respects.
 
(d) (i) There are no Claims pending or, to the Knowledge of the Company,
threatened, between the Company, any of its Subsidiaries and any of their
respective employees, consultants or independent contractors; (ii) neither the
Company nor any of its Subsidiaries is party to any collective bargaining
agreement or other labor union Contract applicable to Persons employed by the
Company or any of its Subsidiaries nor are there any activities or proceedings
of any labor union to organize any such employees, consultants or independent
contractors of the Company or any of its Subsidiaries; (iii) there have been no
strikes, slowdowns, work stoppages, lockouts or, to the Knowledge of the
Company, threats thereof by or with respect to any employees, independent
contractors or consultants of the Company or any of its Subsidiaries, and
(iv) there are no employment-related grievances or any internal investigation of
any complaints of employment Law violations pending or, to the Knowledge of the
Company, threatened.  To the Knowledge of the Company, there are no pending
workers’ compensation claims regarding any employee of the Company.  Neither the
Company nor any of its Subsidiaries is party to, or otherwise bound by, any
consent decree with, or citation or other Order by, any Governmental Authority
relating to employees or employment practices.  The Company and its Subsidiaries
are in material compliance with all applicable Laws, Contracts and policies
relating to employment, employment practices, wages, hours and terms and
conditions of employment, including the obligations that the Company or any of
its Subsidiaries may have under the U.S. Worker Adjustment and Retraining
Notification Act of 1988, as amended (“WARN”), and any similar state or local
statute, rule or regulation, and all other notification and bargaining
obligations arising under any collective bargaining agreement, by Law or
otherwise.  Neither the Company nor any of its Subsidiaries has effectuated a
“plant closing” or “mass layoff” (as those terms are defined in WARN or similar
Laws) affecting in whole or in part any site of employment, facility, operating
unit or employee of the Company or any of its Subsidiaries without complying
with all provisions of WARN or similar Laws or implemented any early retirement,
separation or window program, nor has the Company or any of its Subsidiaries
planned or announced any such action or program for the future.
 
(e) Neither the Company, any of its Subsidiaries, nor, to the Knowledge of the
Company, any of the Company’s or any Subsidiary’s respective employees,
consultants or independent contractors is obligated under any Contract
(including licenses, covenants or commitments of any nature) or subject to any
judgment, decree or Order of any Court or Governmental Authority that would
interfere with the use of such Person’s reasonable efforts to promote the
interests of the Company or any of its Subsidiaries or that would conflict with
the Company’s or any Subsidiary’s business as conducted and as proposed to be
conducted.
 
(f) Except as set forth in Section 3.14(f) of the Company Disclosure Schedule,
no officer or employee of the Company or any of its Subsidiaries has provided
any notice to the Company or any of its Subsidiaries, as applicable, of his or
her intent, or to the Knowledge of the Company, has any present intent, to
terminate his or her employment with the Company or any of its Subsidiaries.
 
(g) All of the Company’s and any Subsidiary’s employees are “at will” employees,
subject to any termination notice provisions included in its employment
agreements or required under applicable Law, and, to the Knowledge of the
Company, there is no circumstance that could give rise to a valid claim by a
current or former employee, independent contractor or consultant of the Company
or any of its Subsidiaries for compensation on termination of employment.
 
(h) To the Knowledge of the Company, each of the Company’s and any Subsidiary’s
employees is currently devoting substantially all of his or her business time to
the conduct of the business of the Company or any of its Subsidiaries.
 
3.15 Title to Properties, Rights and Assets; Leases.
 
(a) Each of the Company and any of its Subsidiaries has good and marketable
title to all of its real or personal properties (whether owned or leased,
tangible or intangible), rights and assets, free and clear of all Liens.  This
Section 3.15(a) shall not apply to the Company’s or its Subsidiary’s
Intellectual Property for which Section 3.17 shall exclusively apply.
 
(b) Neither the Company nor any of its Subsidiaries own any real property or
other interest therein, other than interests in the Real Property as described
in Section 3.7(a)(xi) of the Company Disclosure Schedule (collectively, “Real
Property”).  With respect to such Real Property, (i) each Real Property lease,
license or interest to which the Company is a party is in full force and effect
and enforceable against the Company and the counterparty thereto in accordance
with its terms, (ii) all material rents, additional rents and or other payments
due to date from the Company on each such lease, license or other interest have
been paid, (iii) the Company has not received notice that it is in default
thereunder and (iv) there exists no material default by the Company under such
lease, license or other interest.  There are no leases, subleases, licenses,
concessions or any other Contracts to which the Company is a party granting to
any Person other than the Company any right to possession, use occupancy or
enjoyment of any of the Real Property or any portion thereof.  The Company is
not obligated under or bound by any option, right of first refusal, purchase
Contract or other Contract to sell or otherwise dispose of any Real Property or
any other interest in any Real Property.
 
3.16 Taxes.
 
(a) Each of the Company and any of its Subsidiaries (i) has filed, in a timely
and proper manner, consistent with applicable Laws, all federal, state and
material other Tax Returns required to be filed by it through the Closing Date
(the “Company Returns”) with the appropriate governmental agencies in all
jurisdictions in which Company Returns were required to be filed and has timely
paid all amounts shown thereon to be due; (ii) has timely paid all Taxes of the
Company or any of its Subsidiaries required to have been paid by the Company or
any of its Subsidiaries on or before the date hereof, and (iii) currently is not
the beneficiary of an extension of time within which to file any Tax Return,
other than extensions granted automatically under applicable Law.  All such
Company Returns as so filed were correct and complete in all material respects
at the time of filing.
 
(b) Each of the Company and any of its Subsidiaries will not accrue a Tax
Liability from December 31, 2013 up to and including the Closing Date, other
than a Tax Liability accrued in the ordinary course of business or as a result
of transactions contemplated by this Agreement.
 
(c) Neither the Company nor any of its Subsidiaries has been notified in writing
by the IRS or any state, local or foreign taxing authority that any issues have
been raised in connection with any Company Return, and no waivers of statutes of
limitations have been given with respect to the Company that are still in
effect.  Except as contested in good faith, any deficiencies asserted or
assessments (including interest and penalties) made as a result of any
examination by the IRS or by any other taxing authorities of any Company Tax
Return have been fully paid and the Company and any of its Subsidiaries has
received no notification that any proposed additional Taxes have been or may be
asserted.
 
(d) The Company nor any of its Subsidiaries has executed or entered into any
agreement conceding or agreeing to any treatment of Taxes, including, without
limitation, an IRS Form 870 or Form 870-AD, closing agreement or special closing
agreement, affecting the Company or any of its Subsidiaries pursuant to
Section 7121 of the Code or any predecessor provision thereof or any similar
provision of state, local or foreign law (each, a “Closing Agreement”).
 
(e) Neither the Company nor any of its Subsidiaries has been a United States
real property holding corporation within the meaning of Section 897(c)(2) of the
Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
 
(f) Neither the Company nor any of its Subsidiaries has ever distributed the
stock of any corporation or had its stock distributed by another Person in a
transaction satisfying, or intended to satisfy, the requirements of Section 355
of the Code (or any corresponding provision of state, local or foreign Tax law).
 
(g) Neither of the Company nor any of its Subsidiaries has engaged in any
reportable transactions for purposes of Treasury Regulations Section 1.6011-4.
 
(h) Neither of the Company nor any of its Subsidiaries shall be required to
include any item of income in taxable income for any Post-Closing Tax Period as
a result of any (i) prepaid amount received on or prior to the Closing Date,
(ii) installment sale made on or prior to the Closing Date, (iii) long-term
contract method of accounting with respect to a transaction occurring on or
prior to the Closing Date, (iv) election under Section 108(i) of the Code made
on or prior to the Closing Date, or (v) change in method of accounting for a
taxable period ending on or prior to the Closing Date.
 
(i) No audit, examination, investigation, deficiency, adjustment, refund claim,
litigation or other proceeding with respect to the Company’s Tax Returns, paid
or unpaid Taxes of the Company or any of its Subsidiaries or Tax attributes or
status of the Company or any of its Subsidiaries has been proposed, asserted or
assessed (tentatively or otherwise) or is pending.
 
(j) Neither of the Company nor any of its Subsidiaries own shares of any
controlled foreign corporations (as defined in Section 957 of the Code) or
passive foreign investment companies (as defined in Section 1297 of the Code).
 
(k) Neither of the Company nor any of its Subsidiaries own any interest in an
entity that is treated as a partnership or disregarded entity for any Tax
purposes.
 
(l) Each of the Company and any of its Subsidiaries has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, creditor, stockholder or other third party.
 
(m) Each of the Company and any of its Subsidiaries has never been a member of
any affiliated group of corporations within the meaning of Section 1504 of the
Code or of any group that has filed a combined, consolidated or unitary Tax
Return under state, local or foreign Tax law.
 
(n) Each of the Company and any of its Subsidiaries is not a party to, bound by
or obligated under any agreement relating to allocating or sharing the payment
of, or liability or indemnification for, Taxes; nor does it have any liability
for Taxes of any other Person under Treasury Regulations Section 1.1502-6 (or
any similar provision of state, local or foreign Tax law), as a transferee or
successor, by contract or otherwise.
 
(o) Notwithstanding anything contained in this Agreement to the contrary, the
Company makes no representation or warranty with respect to the amount,
availability, expiration, limitation or reduction of any net operating loss, Tax
credit carryover, built-in loss, or similar Tax item of the Company or any of
its Subsidiaries.
 
3.17 Intellectual Property.
 
(a) Section 3.17(a)(i), (ii) and (iii) of the Company Disclosure Schedule set
forth a true and complete list of (i) all United States and foreign patent,
copyright, trademark, service mark, trade dress, domain name and other
registrations and applications for the Company Owned Intellectual Property,
indicating the applicable jurisdiction, registration number (or application
number) and date issued or, if not issued, date filed (the “Registered Company
Intellectual Property”) and (ii) all Company Products currently being or
intended to be sold, provided or marketed by the Company or any of its
Subsidiaries (within the first twelve (12) months after the Closing according to
a written product roadmap in effect as of the date hereof).
 
(b) Section 3.17(b)(i) and (ii) of the Company Disclosure Schedule set forth a
true and complete listing of:  (i) all Contracts by which any options, licenses
or other rights with respect to any Company Intellectual Property are granted by
the Company or any of its Subsidiaries to any Person, including any Contracts
pursuant to which the Company or any of its Subsidiaries has agreed to any
restriction on the right of the Company to Use or enforce any Company
Intellectual Property other than Standard Contracts (“Outbound Licenses”) and
(ii) all Contracts pursuant to which the Company or any of its Subsidiaries is
granted any options, licenses or other rights with respect to any Intellectual
Property (provided, however, that Contracts for Off-the-Shelf Software and Open
Source Licenses are not required to be listed on Schedule 3.17(b)(ii)) (all
Contracts required to be listed on Schedule 3.17(b)(ii), together with all
Contracts for Off-the-Shelf Software and Open Source Licenses, are referred to
herein as the “Inbound Licenses”).  The Inbound Licenses and the Outbound
Licenses constitute all of the Contracts relating to any Company Intellectual
Property or the operation of the Company’s or Subsidiary’s business.  Each of
the Inbound Licenses and the Outbound Licenses is in full force and effect and
is valid and binding on the Company and the other parties thereto and
enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding at equity or at law).  There
exists no event of default or condition that does or will result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default by the Company, any of its Subsidiaries or, to the Company’s
Knowledge, any other party under any of the Inbound Licenses and the Outbound
Licenses.
 
(c) All of the Company’s and each of its Subsidiary’s business activities are
conducted in accordance in all material respects with the terms of the
applicable Inbound License or Outbound License.  None of the Outbound Licenses
grant any Person any exclusive rights to or under any Company Intellectual
Property or any right to sublicense Company Intellectual Property (except
end-user licenses entered into in the ordinary course of business).  Prior to
the Closing Date, the Company and each of its Subsidiaries has provided Parent
with true and complete copies of all Outbound Licenses and Inbound Licenses that
are (i) required to be disclosed pursuant to Section 3.17(b) and (ii) in force
and effect as of the Closing Date.  The rights of the Company and each of its
Subsidiaries in and to the Company Owned Intellectual Property owned by the
Company or any of its Subsidiaries and the rights granted to the Company or its
Subsidiaries pursuant to the Inbound Licenses constitute all of the Intellectual
Property Used in and/or necessary for the Company’s or any Subsidiary’s business
as currently conducted.  The foregoing rights together with other rights which
the Company or any of its Subsidiaries reasonably believes will be available
pursuant to commercially reasonable license terms constitute all of the
Intellectual Property Used in and/or necessary for the Company’s or any
Subsidiary’s business as contemplated to be conducted pursuant to a written
product roadmap in effect as of the date hereof.  Except for Intellectual
Property licensed to the Company or any Subsidiary pursuant to Contracts set
forth on Section 3.17(b)(ii) of the Company Disclosure Schedule or Contracts not
required to be disclosed pursuant to Section 3.17(b)(ii), no Intellectual
Property owned by a third party is material to the business of the Company or
any of its Subsidiaries as currently conducted or contemplated to be conducted
pursuant to a written product roadmap in effect as of the date hereof.
 
(d) All Registered Company Intellectual Property for which registrations have
been issued, is subsisting and, to the Knowledge of the Company, valid.  All
necessary registration, maintenance and renewal fees currently due in connection
with such Registered Company Intellectual Property have been made and all
necessary documents, recordations and certificates in connection with such
Registered Company Intellectual Property have been filed with the relevant
authorities over Intellectual Property matters in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining or perfecting
such Registered Company Intellectual Property.  Section 3.17(d) of the Company
Disclosure Schedule sets forth a true and complete list, and the Company and
each of its Subsidiaries has provided copies, of all Intellectual Property
applications, whether abandoned or for which prosecution has continued.  Except
as set forth in Section 3.17(d) of the Company Disclosure Schedule, no actions
are necessary (including filing of documents or payment of fees) within ninety
(90) days after the Closing Date to (i) maintain or preserve the validity, scope
or status of any Registered Company Intellectual Property owned by the Company,
or (ii) to avoid a statutory bar to patentability of any material unregistered
Company Intellectual Property owned by the Company or any of its Subsidiaries.
 
(e) The Company or any of its Subsidiaries owns and has good and exclusive
title, or has a valid and subsisting enforceable license to provide the Company
Products (sufficient for the conduct of the Company’s or its Subsidiary’s
business) and has all necessary rights to Use all of the Company Intellectual
Property and Company Products Used in the conduct of the Company’s or its
Subsidiary’s business as currently conducted and as contemplated to be conducted
pursuant to a written roadmap in effect as of the date hereof free of all
Liens.  Liens for purpose of this Section 3.17(e) exclude the Inbound Licenses
and the Outbound Licenses.  The Company and each of its Subsidiaries has the
right to bring actions for infringement of all Company Intellectual Property
owned by or exclusively licensed to the Company or any of its Subsidiaries.  No
other Person has any ownership interest in any Company Owned Intellectual
Property.  The fact of the consummation of the transactions contemplated by this
Agreement shall not grant to or allow any Person any additional ownership
interest in, or any other additional right to Use or result in the material loss
or impairment of, or payment of any material additional or accelerated amounts
with respect to, the Company’s or any Subsidiary’s right to own, Use or hold for
Use any Company Intellectual Property.  All current and former officers,
directors and employees of the Company, any of its Subsidiaries and all other
Persons who have contributed to the creation, invention, modification or
improvement of any material Company Intellectual Property or Company Products
purportedly owned by the Company and any of its Subsidiaries, in whole or in
part, have signed written agreements ensuring that all such Intellectual
Property is owned exclusively by the Company or any of its Subsidiaries, which
written agreements are, to the Company’s Knowledge, valid and enforceable.
 
(f) There are no proceedings or actions currently before any court, tribunal or
other similar authority anywhere in the world relating to the Company
Intellectual Property or Company Products, and no Company Intellectual Property
or Company Products are subject to any outstanding decree, Order, judgment,
Contract (including any settlement agreement), injunction, stipulation or decree
restricting in any manner the Use, transfer, or licensing thereof by the Company
or any of its Subsidiaries, or which may affect the validity, Use or
enforceability thereof.  Except as set forth on Section 3.17(f) of the Company
Disclosure Schedule and with respect to customary fees payable for licenses to
Off-the-Shelf Software, no royalties, honoraria or other fees are payable by the
Company or any of its Subsidiaries to any third parties with respect to any
Intellectual Property.  There is no Claim, Order or notice (including cease and
desist letters or invitations to take a license) past, pending, outstanding,
threatened or imminent, that (A) sought or seeks to limit or challenge or
concerns the Company’s or any Subsidiary’s ownership, Use, validity, scope,
registrability, or enforceability of any Company Intellectual Property or
Company Products or (B) alleged or alleges that the Company, any Subsidiary or
any of their respective employees, officers or directors have violated any
common law, statutory or other right of any Person, including any rights
relating to Intellectual Property, defamation, libel, slander, disparagement,
privacy or publicity.
 
(g) The Company and each Subsidiary has taken all reasonably necessary actions
and executed all agreements reasonably necessary to maintain, enforce, police
and protect the material Company Owned Intellectual Property, including its
ownership of such Company Owned Intellectual Property, and the validity, scope
and value thereof.  The Company and each of its Subsidiaries has taken all
security and protective measures and actions reasonably necessary to ensure the
trade secret status and confidentiality of its material trade secrets and of any
other material proprietary information, and has disclosed such trade secrets
only pursuant to enforceable written confidentiality agreements (true and
complete copies of which have been provided to Parent) sufficient to retain the
trade secret status and confidentiality of such trade secrets and, to the
Company’s Knowledge, there has not been any breach by any party to such
confidentiality agreements, or other breach that could compromise or otherwise
affect such trade secrets and other material proprietary information.  To the
Knowledge of the Company, no Person has or is attempting to acquire unauthorized
knowledge of the material trade secrets of the Company or any of its
Subsidiaries.
 
(h) The conduct of the Company’s and each Subsidiary’s business as currently
conducted and as contemplated to be conducted (and its employees’ and
consultants’ performances of their duties in connection therewith) and the
Company’s Use of the Company Intellectual Property and Company Products does not
copy without permission, infringe, misappropriate, violate or conflict with
(“Infringe”) any common law, statutory or other right of any Person, including
any rights relating to Intellectual Property, defamation, libel, slander,
disparagement, privacy or publicity.  To the Knowledge of the Company, the
Company Intellectual Property is not being Infringed by any Person.  Without
limiting the generality of the foregoing, there are no patents, published patent
applications or, to the Knowledge of the Company, other patent applications,
that impede or limit the current or currently contemplated operation of the
Company’s or any Subsidiary’s business or Use of any Company Intellectual
Property.
 
(i) To the Company’s Knowledge, all Company Products Used by the Company or its
Subsidiaries in connection with a product or service currently made available to
the public or any other Person (i) are free from any material defect, bug or
programming, design or Documentation error, inconsistency or corruptant that
materially affects the operation of the existing features and functionality of
the Company Products, (ii) are fully functional and operate and run in a
reasonable and efficient business manner and (iii) conform in all material
respects to the applicable Documentation and purposes thereof and all applicable
contractual commitments, express and implied warranties (to the extent not
subject to legally effective express exclusions thereof), to any legally binding
representations provided to customers.  The Company routinely scans the Software
and Systems for viruses and corruptants using industry standard detection
techniques and all viruses and corruptants identified have been removed from the
Software and Systems.  Neither the Company nor any of its Subsidiaries has
received any warranty claims, contractual terminations or requests for
settlement or refund due to the failure of Company Products to conform in all
material respects to its applicable Documentation or warranties or otherwise to
satisfy end user needs or for harm or damage to any third party or third party
System, Software or other assets.  The Company and each of its Subsidiaries
makes reasonable commercial efforts to document and correct all material bugs,
errors and defects in all the Company Products, and certain Documentation
related to same is retained and is available internally at the Company and each
of its Subsidiaries.
 
(j) None of the Company Products Uses, calls, incorporates, links to, interacts
with, is a derivative of or has embedded in it any source, object or other
software code that is subject to an “open source” or “copyleft,” or other
license listed as an approved license by the Open Source Initiative as of the
Closing on www.opensource.org (including any GNU General Public License, Library
General Public License, Lesser General Public License, Affero License, Mozilla
License, Berkeley Software Distribution License, Open Source Initiative License,
MIT License, Apache License, Public Domain licenses and the like) (“Open Source
License”) in a manner that would subject any Software purportedly owned by the
Company or any of its Subsidiaries to the terms of any Open Source License or
would otherwise require the public distribution of such Software or impose
limitations on the Company’s or any Subsidiary’s ability to require payments in
connection therewith.  Neither the Company nor any of its Subsidiaries has
modified any source, object or other software code that is Used by the Company
or any of its Subsidiaries and is subject to any Open Source License.
 
(k) No Company Product owned or purportedly owned by the Company or any of its
Subsidiaries is subject to any agreement with any third party pursuant to which
the Company or any of its Subsidiaries has, or could be required to deposit into
escrow such Company Product or pursuant to which access to the source code of
such Company Product is or would be granted to a third party.  To the Company’s
Knowledge, there has been no unauthorized disclosure of any of the Company’s or
any Subsidiary’s source code.
 
3.18 Privacy and Security.
 
(a)  The Company and any of its Subsidiaries has at all times complied in all
material respects with all Laws applicable to the Company relating to privacy,
data protection and the collection and use of Personal Information gathered or
accessed in the course of the operations of Company and any of its
Subsidiaries.  Each of the Company and any of its Subsidiaries has at all times
complied in all material respects with all rules, policies and procedures
established by Company or any of its Subsidiaries from time to time with respect
to the foregoing.  No Claims have been asserted or, to the Knowledge of the
Company, threatened against Company or any of its Subsidiaries by any Person
alleging a violation of such Person’s privacy, personal or confidentiality
rights under any such Law, rules, policies or procedures applicable to the
Company and, to the Knowledge of the Company, there is no basis for any such
claim.  The consummation of the transactions contemplated herein will not breach
or otherwise cause any violation of any such Law, rules, policies or
procedures.  Each of the Company and any of its Subsidiaries has taken
reasonably necessary steps to ensure that personal information and user
information gathered or accessed in the course of the operations of Company and
any of its Subsidiaries are protected against loss and against unauthorized use,
access, modification, disclosure or other misuse.  To the Knowledge of Company,
there has been no unauthorized access to or other misuse of that information.
 
(b) With respect to all Personal Information gathered or accessed in the course
of the operations of the Company and any of its Subsidiaries, each of the
Company and any of its Subsidiaries has taken measures reasonably necessary
(including, without limitation, implementing and monitoring compliance with
adequate measures with respect to technical and physical security) to protect
the Personal Information against loss and against unauthorized access, use,
modification, disclosure or other misuse.  To the Knowledge of Company, there
has been no unauthorized access to or other misuse of that information.  Each of
the Company and any of its Subsidiaries has taken commercially reasonable
measures to protect the confidentiality, integrity and security of the Software
and Systems owned or controlled by the Company and any of its Subsidiaries and
all information and transactions stored or contained therein or transmitted
thereby against any unauthorized or improper use, access, transmittal,
interruption, modification or corruption, and there have been no breaches of
same.
 
3.19 Insurance
 
.  Section 3.19 of the Company Disclosure Schedule sets forth a true and
complete list of all insurance policies covering the assets, business,
equipment, properties, operations, employees, consultants, officers and
directors of the Company and any of its Subsidiaries.  There is no claim by the
Company or any of its Subsidiaries currently pending under any of such policies
as to which coverage has been questioned, denied or disputed by the insurers of
such policies.  All premiums payable under all such policies have been paid, and
the Company and any of its Subsidiaries are otherwise in compliance in all
material respects with the terms of such policies.  To the Knowledge of the
Company, there is not any threatened termination of, or announced pending
premium increase with respect to, any of such policies.
 
3.20 No Restrictions on the Merger; Takeover Statutes
 
. Each of the Company and any of its Subsidiaries has taken all action required
to be taken by it in order to exempt this Agreement, the Consent Agreements, the
Merger and the transactions contemplated hereby and thereby (and this Agreement,
the Consent Agreements, the Merger and the transactions contemplated hereby and
thereby are exempt) from, any “fair price,” “moratorium,” “control share,”
“affiliate transaction,” “business combination” or other applicable takeover
Laws or Regulations of any state, local, foreign, municipality or other
jurisdiction, including Section 203 of the DGCL (collectively, “Takeover
Statutes”).  The provisions of Section 203 of the DGCL do not apply to the
Merger.
 
3.21 Environmental Matters
 
.  Except as set forth on Section 3.21 of the Company Disclosure Schedules:
 
(a)           The Company and any of its Subsidiaries are in material compliance
with all Environmental Laws.
 
(b)           The Company and any of its Subsidiaries are not subject to any
Environmental Liabilities and there are no conditions, facts or circumstances
that would reasonably be expected to result in such Environmental Liabilities,
including any such liabilities in connection with any formerly owned or operated
facilities or any predecessors in interest of the Company or any Subsidiary.
 
(c)           To the Company’s Knowledge, there are no underground storage
tanks, asbestos-containing materials or polychlorinated biphenyls (PCBs) located
on any Real Property and all such Real Property is free of Hazardous Substances
that require investigation or remediation under Environmental Law.
 
(d)           None of the Company or any of its Subsidiaries is in default
under, or in violation of, any Order issued pursuant to any Environmental Law.
 
(e)           None of the Company or any of its Subsidiaries has entered into
any consent decree or other written agreement with any Governmental Entity in
settlement of any Environmental Liability under which decree or agreement the
Company or any of its Subsidiaries has any unfulfilled obligations.
 
(f)           The representations and warranties contained in this Section 3.21
are the only representations and warranties being made by Stockholders with
respect to Environmental Laws, Environmental Liabilities or other environmental
matters.
 
3.22 Company Brokers
 
.  Except as set forth in Section 3.22 of the Company Disclosure Schedule, no
broker, financial advisor, finder or investment banker or other Person is
entitled to any broker’s, financial advisor’s, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company or any of its
Subsidiaries.
 
3.23 Certain Business Practices
 
.  Neither the Company, any of its Subsidiaries nor any director, officer,
employee, consultant or agent acting on behalf of the Company or any of its
Subsidiaries has (a) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity,
(b) made any unlawful payment to any foreign or domestic government official or
employee or any foreign or domestic political party, campaign or candidate for
political office or violated any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended, (c) consummated any transaction, made any payment,
entered into any Contract or arrangement or taken any other action in violation
of Section 1128B(b) of the U.S. Social Security Act, as amended, or (d) made any
other similar unlawful payment under any similar foreign Laws.  To the Knowledge
of the Company, no officer or director of the Company or any of its Subsidiaries
is a foreign or domestic government official or employee or a candidate for any
foreign or domestic political office.
 
3.24 Interested Party Transactions
 
.  Except as set forth on Section 3.24 of the Company Disclosure Schedule, there
are no existing, and there have been no, Contracts, transactions, Indebtedness,
arrangements or any related series thereof, between the Company or any of its
Subsidiaries, on the one hand, and any of the directors, officers, employees,
consultants, Stockholders or other Affiliates of the Company or any of its
Subsidiaries, or any of its Affiliates or family members, on the other hand,
except with respect to amounts due (a) as salaries and bonuses in the ordinary
course of business consistent with past practice and (b) in reimbursement of
ordinary expenses in the ordinary course of business consistent with past
practice.  At or prior to the Closing, all such Contracts, transactions,
Indebtedness and arrangements shall be terminated (except with respect to
amounts due (i) as normal salaries and bonuses and in reimbursement of ordinary
expenses in the ordinary course of business consistent with past practice and
(ii) in reimbursement of ordinary expenses in the ordinary course of business
consistent with past practice) without any liability or obligation of the
Company or any of its Subsidiaries.  There is no Indebtedness owed to the
Company or any of its Subsidiaries by any of its directors, officers, employees,
consultants, Stockholders or other Affiliates.
 
3.25 Condition and Sufficiency of Assets
 
.  Except as set forth on Section 3.25 of the Company Disclosure Schedule, the
buildings, plants, structures, furniture, fixtures, machinery, equipment,
vehicles and other items of tangible personal property that the Company and any
of its Subsidiaries own or lease are free from material defects, have been
maintained in all material respects in accordance with customary industry
practice, are in good operating condition and repair in all material respects,
and are suitable for the purposes for which they are used (subject to normal
wear and tear and continuing maintenance requirements).  The buildings, plants,
structures, furniture, fixtures, machinery, equipment, vehicles and other items
of tangible personal property currently owned or leased by the Company and any
of its Subsidiaries, together with all other properties and assets of the
Company and any of its Subsidiaries, constitute all of the rights, property and
assets reasonably necessary to conduct the business as currently conducted.
 
3.26 Bank Accounts and Powers
 
.  Section 3.26 of the Company Disclosure Schedule lists (a) all bank, payroll
and securities brokerage accounts of the Company and any of its Subsidiaries and
all authorized signers for each such account and (b) all powers of attorney
granted by the Company or any of its Subsidiaries to any third party that are
currently in effect.
 
3.27 Books and Records
 
.  The books and records of the Company and any of its Subsidiaries are true and
correct in all material respects and have been maintained in accordance with
applicable Laws and commercially reasonable business practices. The minute books
of the Company and any of its Subsidiaries accurately reflect all material
actions and proceedings taken to date by the stockholders (or equivalents
thereof) and board of directors of the Company and any of its Subsidiaries.  The
stock record books (or equivalents thereof) of the Company and any of its
Subsidiaries reflect accurately all transactions in the capital stock of the
Company and any of its Subsidiaries.
 
3.28 Government Contracts
 
(a) .
 
(a) Except as set forth on Section 3.28(a) of the Company Disclosure Schedule,
with respect to each Government Contract and Government Bid: (i) the Company and
its Subsidiaries have complied with all material terms and conditions of such
Government Contract or Government Bid, and the requirements of any applicable
Laws pertaining to such Government Contract or Government Bid; (ii) all
representations, certifications and disclosures executed, acknowledged or made
by the Company and each of its Subsidiaries with respect to any such Government
Contract or Government Bid were complete and accurate in all material respects
as of their effective date and to date the Company and each of its Subsidiaries
have complied in all material respects with all such representations,
certifications and disclosure requirements; (iii) no Governmental Authority,
prime contractor, subcontractor or other Person has notified the Company and its
Subsidiaries in writing that Company or any of its Subsidiaries has breached or
violated any applicable Law pertaining to such Government Contract or Government
Bid; and (iv) no written or threatened termination for convenience, termination
for default, cure notice or show cause notice pertaining to any such Government
Contract or Government Bid is in effect or has been issued.
 
(b) Except as set forth on Section 3.28(b) of the Company Disclosure Schedule,
since January 1, 2011:  (i) neither the Company, any of its Subsidiaries nor, to
the Company’s Knowledge, any of their principals, has been debarred, suspended,
or proposed for debarment from doing business with any Governmental Authority;
(ii) no Governmental Authority, and no prime contractor or higher-tier
subcontractor of any Governmental Authority, has withheld or set off, or
threatened or attempted to withhold or set off, an amount in excess of $5,000
which is currently due to the Company or any of its Subsidiaries under any
Government Contract; (iii) there have not been any there exist (1) no
outstanding claims against the Company or any of its Subsidiaries arising under
or relating to any Government Contract or Government Bid; (2) no criminal
allegations under the False Statements Act (18 U.S.C. § 1001) or the False
Claims Act (18 U.S.C. § 287) or comparable state laws; (3) no allegations of any
violation of the civil False Claims Act; and (4) no material disputes between
the Company, any of its Subsidiaries and any Governmental Authority under the
Contract Disputes Act, or any other federal or state law or between the Company
and any prime contractor, subcontractor or vendor arising under or relating to
any Government Contract or Government Bid; (iv) neither the Company nor any of
its Subsidiaries have been the subject of any audit or investigation by any
Governmental Authority of the Company’s cost practices and cost accounting
system that has resulted in any material disputes between the Company, any of
its Subsidiaries and the Governmental Authority regarding compliance; and
(v) neither the Company, any of its Subsidiaries nor any of their personnel has,
to the Company’s Knowledge, been under material administrative, civil or
criminal investigation, or indictment by any Governmental Authority with respect
to any alleged nondisclosure, irregularity, misstatement or omission arising
under or relating to any Government Contract or Government Bid, and the Company
has not conducted or initiated any internal investigation or made a voluntary or
mandatory disclosure to any Governmental Authority, with respect to any alleged
irregularity, misstatement or omission arising under or relating to a Government
Contract or Government Bid.
 
3.29 Absence of Restrictions on Business Activities.
 
  There is no Contract or Order binding upon the Company, any of its
Subsidiaries or any of their respective properties, rights or assets that has
had or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of Parent or its Affiliates (other
than the Surviving Corporation) or the conduct of business by Parent or its
Affiliates (other than the Surviving Corporation) as currently conducted
following the consummation of the Merger and the other transactions contemplated
thereby.
 
ARTICLE IV— REPRESENTATIONSAND WARRANTIES OF PARENT AND MERGER SUB
 
Parent and Merger Sub hereby, jointly and severally, represent and warrant to
the Company as of the date hereof and as of the Closing Date as follows:
 
4.1 Organization; Formation of Merger Sub.
 
(a) (i) Parent is a corporation duly organized, validly existing and in good
standing under Pennsylvania Law and (ii) Merger Sub is a corporation duly
organized, validly existing and in good standing under the DGCL, and each has
all the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted.  Each of
Parent and Merger Sub is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary and is in possession
of all Approvals necessary to own, lease and operate its properties and to carry
on its business as it is now being conducted, except where the failure to be so
qualified or licensed or to possess has not had and could not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
Parent.
 
(b) Merger Sub is a newly-formed entity that has been formed solely for the
purposes of the Merger and has not carried on any business or engaged in any
activities other than those reasonably related to the Merger.
 
4.2 Authority; Enforceability
 
.  Each of Parent and Merger Sub has all necessary power and authority to
execute and deliver this Agreement, each other Transaction Document to which it
is a party and each instrument required to be executed and delivered by it prior
to or at the Closing and to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby.  The execution
and delivery by each of Parent and Merger Sub of this Agreement, each other
Transaction Document to which it is a party and each instrument required hereby
to be executed and delivered by Parent and Merger Sub prior to or at the
Closing, the performance of their respective obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby have been duly and validly approved by the Boards of Directors of Parent
and Merger Sub and by Parent as the sole stockholder of Merger Sub, and no other
corporate or similar proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement, any other Transaction Document to which
they are a party or any instrument required to be executed and delivered by them
prior to or at the Closing or the consummation of the transactions contemplated
hereby or thereby.  Each of this Agreement, the other Transaction Documents to
which Parent and Merger Sub are party and each instrument required to be
executed and delivered by them prior to or at the Closing has been duly and
validly executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery thereof by the Company and the Sellers’
Representative, constitutes a legal, valid and binding obligation of each of
Parent and Merger Sub, enforceable against each of them in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
 
4.3 No Conflict; Required Filings and Consents
 
.  The execution and delivery by Parent and Merger Sub of this Agreement, the
other Transaction Documents to which they are a party or any instrument required
by this Agreement to be executed and delivered by them on or prior to the
Closing do not, and the performance of this Agreement, the other Transaction
Documents to which they are a party and any instrument required by this
Agreement to be executed and delivered by them on or prior to the Closing shall
not, (a) conflict with or violate the certificates of incorporation or bylaws of
Parent or Merger Sub, (b) conflict with or violate in any respect any Law or
Order applicable to Parent or Merger Sub or by which any of their respective
properties, rights or assets is bound or affected, (c) result in a breach or
violation of, or constitute a default (or an event that with or without notice
or lapse of time or both would become a default) under, or impair Parent’s or
Merger Sub’s rights or alter the rights or obligations of any party under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the properties,
rights or assets of Parent or Merger Sub pursuant to, any material Contract to
which Parent or Merger Sub is a party, or by which such Person or its
properties, rights or assets is or are bound or affected, except any such
breach, violation or default that could not reasonably be expected to have a
material adverse effect on the operations or affairs of Parent, or (d) require
Parent or Merger Sub to obtain any Approval of any Governmental Authority,
observe any waiting period imposed by, or make any filing with or notification
to, any Governmental Authority, except for, in the case of this clause (d), the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with Delaware Law.
 
4.4 Absence of Litigation, Claims and Orders
 
.  As of the date hereof, there is no Claim pending or, to the knowledge of
Parent, threatened on behalf of or against Parent or Merger Sub that questions
or challenges (a) the validity of this Agreement or any other Transaction
Document to which they are a party, or (b) any action taken or to be taken by
them pursuant to this Agreement or any other Transaction Document to which they
are a party or in connection with the transactions contemplated hereby and
thereby.  As of the date hereof, neither Parent nor Merger Sub is subject to any
outstanding Claim or Order in respect of this Agreement, any Transaction
Document to which they are a party or the transactions contemplated hereby and
thereby.
 
4.5 Compliance
 
.  Each of Parent and Merger Sub is and has been in compliance with, and is not
in default or violation of, (a) its certificate of incorporation and or bylaws,
(b) any Law or Order by which it or any of its properties, rights or assets are
bound or affected and (c) the terms of all bonds, indentures, contracts,
permits, franchises and other instruments or obligations to which it is a party
or by which it or any of its properties, rights or assets are bound or affected,
except any such failure to comply or default or violation that could not
reasonably be expected to have a material adverse effect on Parent or Merger
Sub.  Each of Parent and Merger Sub is in material compliance with the terms of
all applicable Approvals.  Neither the Parent nor Merger Sub has received notice
of any revocation or modification of any material Approval of any Governmental
Authority or that the Parent or Merger Sub is not in compliance with any
Approval or any Law or Order.
 
4.6 Financial Capability
 
.  Based on existing cash reserves or availability under existing credit
facilities, Parent and Merger Sub have the funds necessary (a) to pay the full
consideration payable hereunder and (b) to make all other necessary payments by
it in connection with the Merger, including all fees and expenses related
thereto.
 
4.7 Brokers
 
.  Except as set forth on Schedule 4.7, no broker, financial advisor, finder or
investment banker or other Person is entitled to any broker’s, financial
advisor’s, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Merger Sub.
 
ARTICLE V - CONDUCT OF BUSINESS PENDING THE MERGER
 
5.1 Conduct of Business by the Company Pending the Merger
 
.  During the period from the date of this Agreement and continuing through the
Closing Date or the earlier termination of this Agreement pursuant to
Section 8.1 hereof (the “Execution Period”), except as expressly contemplated or
permitted by this Agreement set forth on Schedule 5.1, or with the prior written
consent of Parent, which consent shall not be unreasonably delayed, conditioned
or withheld, the Company shall and the Company shall cause each of its
Subsidiaries (subject to applicable Law) (a) carry on its business in the
ordinary course consistent with past practice; (b) use commercially reasonable
efforts to preserve its present business organization and relationships; (c) use
commercially reasonable efforts to keep available the present services of its
employees and independent contractors; and (d) use commercially reasonable
efforts to preserve its rights, franchises, goodwill and relations with its
customers and others with whom it conducts business.  Without limiting the
generality of the foregoing, except as expressly permitted or required by this
Agreement set forth on Schedule 5.1 or consented to in writing by Parent, which
consent shall not be unreasonably delayed, conditioned or withheld, neither the
Company nor any Subsidiary shall not and directly or indirectly:
 
(a) amend or agree to amend the Company Charter or the Company’s bylaws or such
Subsidiary’s charter and bylaws, or merge with or into or consolidate with, or
agree to merge with or into or consolidate with, any other Person, subdivide or
in any way reclassify any Common Stock or any other equity security, or change
or agree to change in any manner the rights of its stockholders or other equity
holders or liquidate or dissolve;
 
(b) (i) issue, sell, redeem or acquire any Common Stock or any other ownership
interest in the Company or any Subsidiary or create any Subsidiaries;
(ii) issue, sell, grant or accelerate the timing of payment or vesting of any
option, warrant, convertible or exchangeable security, right, “phantom”
partnership (or other ownership) interest (or similar “phantom” security),
restricted partnership (or other ownership) interest, subscription, call,
unsatisfied pre-emptive right or other agreement or right of any kind to
purchase or otherwise acquire (including by exchange or conversion) any
ownership interest in the Company or any Subsidiary (except acceleration of
vesting of all outstanding unvested Options immediately prior to closing); or
(iii) enter into any contracts, agreements or arrangements to issue, redeem,
acquire or sell any Common Stock or any other ownership interests in the Company
or any Subsidiary; provided, however, the foregoing will not prohibit (A) the
acceleration or vesting of any Stock Option in accordance with its terms or the
terms of the Company Stock Option Plan, in each case, as in effect on the date
hereof, or pursuant to, or as expressly contemplated by, this Agreement, or
(B) the issuance of Common Stock or Preferred Stock, as applicable, in
connection with the exercise of any Stock Option or Warrant outstanding as of
the date hereof.
 
(c) incur any long-term Indebtedness;
 
(d) incur any Indebtedness for borrowed money or guarantee the indebtedness of
other Persons;
 
(e) (i) adopt or make any change in its accounting methods or practices for Tax
or accounting purposes, (ii) adopt or make any change in depreciation or
amortization policies or rates adopted by it for Tax or accounting purposes,
(iii) make, change or revoke any Tax election, (iv) waive any statute of
limitation relating to Taxes, (v) enter into or approve any Closing Agreement or
(vi) settle or compromise any Tax Liability;
 
(f) make any loan or advance to any of its Affiliates, officers, directors,
employees, consultants, agents or other representatives (other than reasonable
and customary loans or advances made in the ordinary course of business, none of
which shall be material, individually or in the aggregate);
 
(g) sell, transfer, lease, offer to sell, abandon or make any other disposition
of any of its properties or other assets except in the ordinary course of
business not in excess of $10,000 in the aggregate, or grant or suffer to exist,
or agree to grant or suffer to exist, any Liens on any material amount of its
assets;
 
(h) incur, assume or guarantee, or agree to incur, assume or guarantee, any
Liability or obligation (whether or not currently due and payable) relating to
its business or any of the assets except in the ordinary course of business or
in amounts not in excess of $10,000 in the aggregate;
 
(i) settle any Proceeding involving any Liability for money damages in excess of
$50,000 in the aggregate or any restrictions upon any of its operations;
 
(j) create, renew, amend, terminate or cancel, any Material Contract other than
in the ordinary course of business or as required to comply with applicable Law;
provided that neither the Company nor any Subsidiary may enter into any
contracts or agreements that include any non-competition or non-solicitation
covenant or any exclusive dealing or similar arrangement that limits the ability
of the Company or any Subsidiary to compete or operate (geographically or
otherwise) in any line of business or that has a term of greater than one year;
 
(k) declare or make any dividends or distributions of any kind;
 
(l) acquire or agree to acquire in any manner, including by way of merger,
consolidation, or purchase of an equity interest or assets, any business of any
Person or other business organization or division thereof;
 
(m) enter into, amend, modify, terminate or renew any written employment,
consulting, severance or similar agreements or arrangements with any officers or
employees or consultants of the Company or any Subsidiary, or grant any bonus,
salary or wage increase or increase or grant severance or termination pay or
increase or grant any employee benefit or hire or terminate any employee, or
adopt, modify, terminate or amend any Employee Plan, except (i) reasonable and
customary individual increases in compensation to non-officer employees in the
ordinary course of business, (ii) termination of non-officer employees with
cause, and (iii) changes that are required to comply with applicable Law;
 
(n) make or incur any capital expenditures in excess of $20,000  in the
aggregate other than those that have been approved in writing or budgeted as of
the date hereof and disclosed in writing to Parent prior to the execution of
this Agreement;
 
(o) cancel any Indebtedness or waive any Claims or rights in amounts in excess
of $10,000 in the aggregate;
 
(p) enter into, renew or amend any lease of real property or commitment to
lease, or otherwise rent or occupy real property;
 
(q) enter into, renew or amend any lease of personal property or commitment to
lease, or otherwise rent personal property, other than in the ordinary course of
business in amounts not in excess of $20,000  in the aggregate;
 
(r) fail to continually maintain any or all of the Company’s and its
Subsidiaries’ Permits;
 
(s) transfer ownership of, or grant any exclusive license to, any Company
Intellectual Property to any Person; or
 
(t) authorize, commit or agree (by contract or otherwise) to do any of the
foregoing.
 
5.2 Insurance
 
.  The Company and its Subsidiaries shall use its commercially reasonable
efforts to maintain in effect and to pay all premiums due on all insurance
policies covering the Company and its Subsidiaries (including insurance policies
relating to the Company, and its Subsidiaries and their respective properties,
other assets and employees) on the date hereof or to procure comparable
replacement policies (or such replacement coverage as is obtainable on a
commercially reasonable basis) and maintain such policies and bonds in effect
until the Closing.
 
5.3 Access to Information; Confidentiality.
 
(a) From and after the date hereof until the earlier of (x) the Closing and
(y) the termination of this Agreement in accordance with its terms, upon
reasonable notice, for purposes of integration planning and continuing due
diligence the Company and its Subsidiaries shall afford to the officers,
employees, accountants, counsel and other representatives and agents of Parent
(collectively “Parent Representatives”) reasonable access upon request during
normal business hours to all its properties, records, databases, books,
Contracts, commitments and other information (however stored) and furnish
promptly to Parent all such information as Parent may reasonably request.  The
Company and its Subsidiaries shall make available to Parent, during normal
business hours, the appropriate individuals for discussion of its business,
properties and personnel as Parent or the Parent Representatives may reasonably
request; provided, however, that no investigation pursuant to this
Section 5.3(a) shall affect any remedy available to Parent for any breach by the
Company, any of its Subsidiaries any of the Stockholders or their respective
representations, warranties and agreements contained herein or in any of the
Transaction Documents.  Without limiting the foregoing, the Company and its
Subsidiaries shall provide all financial information concerning the Company or
its Subsidiaries as may be reasonably requested by Parent.
 
(b) Parent and Merger Sub shall keep all information of the Company and its
Subsidiaries confidential in accordance with the terms of the Confidential
Non-Disclosure Agreement, dated as of December 1, 2013 (the “Confidentiality
Agreement”), by and between Parent and the Company; provided, however, that
notwithstanding anything to the contrary in the Confidentiality Agreement,
Parent and the Company may issue press release(s) or make other public
announcements in accordance with Section 5.8.
 
(c) The Company and its Subsidiaries shall keep all information of Parent and
Merger Sub confidential in accordance with the terms of the Confidentiality
Agreement; provided, however, that notwithstanding anything to the contrary in
the Confidentiality Agreement, Company and Parent may issue press release(s) or
make other public announcements in accordance with Section 5.8.
 
5.4 Commercially Reasonable Efforts; Further Assurances.
 
(a) Upon the terms and subject to the conditions set forth in this Agreement,
each party hereto shall use commercially reasonable efforts to take, or cause to
be taken, all actions, and do, or cause to be done, and to assist and cooperate
with the other party or parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated hereby and by
the other Transaction Documents.  In furtherance and not in limitation of the
foregoing, each of the Company and Parent shall use commercially reasonable
efforts to (i) as promptly as practicable, obtain all Approvals and deliver all
notices (including those referred to in Section 3.6 hereof and any referred to
in Section 3.6 of the Company Disclosure Schedule) necessary to consummate the
transactions contemplated by this Agreement and the other Transaction Documents,
(ii) make all filings under applicable Law required in connection with the
authorization, execution and delivery of this Agreement by the Company and
Parent and the consummation by them of the transactions contemplated hereby and
(iii) furnish all information required for any application or other filing to be
made pursuant to any Law or any applicable Regulations of any Governmental
Authority in connection with the transactions contemplated by this Agreement and
the other Transaction Documents.  If the Company shall fail to obtain any
Approval required of a third Person with respect to the transactions
contemplated hereby, then the Company shall use its commercially reasonable
efforts, and will take any such actions reasonably requested by Parent, to limit
the adverse effect upon the Company and Parent, Parent’s Subsidiaries, and their
respective businesses resulting, or which would result after the Effective Time,
from the failure to obtain such consent.
 
(b) In connection with any of the filings or efforts listed in clauses (i)
through (iii) of Section 5.4(a), but subject to Section 5.8, Parent and the
Company will reasonably cooperate with each other, including promptly furnishing
each other any information reasonably requested by the other, and provide copies
of all filings to the other party and its advisors.  The Company shall promptly
notify Parent of any communication that it or any of its Affiliates receives
from any Governmental Authority relating to the matters that are the subject of
this Agreement and the transactions contemplated hereby and permit Parent and
its advisors to review and comment upon in advance any proposed communication
with any Governmental Authority.  Subject to the Confidentiality Agreement, the
parties to this Agreement will provide each other with copies of all material
correspondence, filings and communications between them or any of their
representatives or advisors, on the one hand, and any Governmental Authority or
members of its staff, on the other hand, with respect to this Agreement, the
Transaction Documents or the transactions contemplated hereby or thereby.  In
addition, the parties will consult with each other and consider in good faith
the other parties’ suggestions in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments and proposals made or submitted to
any Governmental Authority with respect to this Agreement and the transactions
contemplated hereby.
 
(c) Neither party hereto will knowingly take any action that results in any of
the representations or warranties made by such party herein becoming untrue or
inaccurate in any material respect.  In addition, without limiting
Section 5.4(a), each party hereto shall use its commercially reasonable efforts
to satisfy or cause to be satisfied all of the conditions precedent set forth in
ARTICLE VII that are applicable to it and to cause the transactions contemplated
by this Agreement and the Transaction Documents to be consummated.
 
(d) Each party hereto, at the reasonable request of another party hereto, shall
promptly execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of this Agreement, the Transaction Documents and the
transactions contemplated hereby and thereby.
 
5.5 Notification of Certain Matters
 
.  Each Party shall give prompt notice to the other Parties, to the extent known
by such Party, of (a) the occurrence, or failure to occur, of any event or
existence of any condition that has caused or could reasonably be expected to
cause any of its representations or warranties contained in this Agreement to be
untrue or inaccurate in any material respect at any time after the date of this
Agreement, up to and including the Closing Date, (b) the occurrence of any
matter or event that would reasonably be expected to have a Material Adverse
Effect, (c) any failure on its part to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement, (d) any notice or other communication from any
Person alleging that the consent of such Person is or may be required in
connection with the consummation of the transactions contemplated by this
Agreement, and (e) any lawsuit, action or proceeding pending or, to the
applicable Party’s knowledge, threatened against the Party or the Parties
relating to the transactions contemplated by this Agreement.
 
5.6 Negotiation with Others.
 
  During the Execution Period, the Company shall not, and the Company shall not
authorize, cause or permit any of the Company’s Stockholders, employees,
directors, officers, advisors, consultants or agents to, (a) directly or
indirectly, solicit, initiate, encourage, entertain or engage (regardless of who
initiates such action) in discussions or negotiations with, provide any
information to, or take any other action that facilitates the efforts of, any
third party relating to any agreement (whether binding or in principle) or other
arrangement involving (i) the acquisition of the Company or any of its
Subsidiaries (whether by way of merger, purchase of capital stock, purchase of
assets or otherwise); (ii) an investment in (including by way of a sale or
transfer of the Common Stock) or financing of the Company or any Subsidiary; or
(iii) a sale, assignment, transfer, license, disposal of or encumbrance upon any
material asset, right or property of the Company or any Subsidiary (including,
without limitation, any of the Company Intellectual Property) other than
non-exclusive licenses granted by the Company in its ordinary course of
business; or that would otherwise be inconsistent with the terms of this
Agreement or that would prohibit the performance by the Company of its
obligations under this Agreement or that could reasonably be expected to
diminish the likelihood of or render impracticable the consummation of the
transactions contemplated by this Agreement (each, a “Prohibited Transaction”);
or (b) authorize or consummate a Prohibited Transaction.  Upon execution and
delivery of this Agreement, the Company shall: (x) terminate any and all
discussions, negotiations or agreements, if any, they may be having regarding a
Prohibited Transaction; and (y) immediately notify Parent in writing if it
thereafter receives any inquiries or offers, directly or indirectly, from any
Person regarding a Prohibited Transaction, which notice shall be sufficiently
detailed as to identify the nature and structure of the Prohibited Transaction
as proposed and to confirm that the inquiry regarding a Prohibited Transaction
was definitively rejected, and the Company shall refuse to discuss and
immediately reject such inquiry or offer.  Neither the Company nor any of its
Stockholders, members, partners, officers, directors, managers, employees,
representatives or agents, including any investment banker, attorney or
accountant engaged by any of them, shall amend, modify, waive or terminate, or
otherwise release any Person from, any standstill, confidentiality or similar
agreement or arrangement currently in effect in relation to a Prohibited
Transaction.  The Company shall cause its Stockholders, officers, directors,
managers, employees, agents, advisors and representatives to comply with the
provisions of this Section 5.6.
 
5.7 Tax Matters.
 
(a) From and after the Closing, the Surviving Corporation shall prepare (or
cause to be prepared) and timely file (or cause to be filed) all Tax Returns
relating to the Company for any Tax period ending on or prior to the Closing
Date (or any Straddle Period) that are required to be filed after the Closing
Date.  Such Tax Returns shall be prepared in a manner consistent with the
Company’s past practices to the extent not inconsistent with applicable
Law.  For any such Tax Returns, the Surviving Corporation will deliver to the
Sellers’ Representative a copy of each such income Tax Return at least fourteen
(14) days prior to any filing, and the Surviving Corporation shall make such
revisions to such Tax Returns as are reasonably and timely requested by Sellers’
Representative.
 
(b) Parent shall pay, or shall cause the Surviving Corporation to pay, any Taxes
that are required to be paid in conjunction with the filing after the Closing
Date of any Tax Returns for Pre-Closing Tax Periods.
 
(c) From and after the Closing, Parent or the Surviving Corporation shall notify
the Sellers’ Representative in writing within five (5) Business Days of the
commencement of any Tax audit, any administrative or judicial proceeding or any
demand or claim on the Company with respect to Taxes for a period ending on or
before the Closing Date or for any Straddle Period; provided, however, the
failure to give such notice shall not affect the indemnification provided in
Section 9.3 other than to the extent that the indemnifying Stockholders have
been actually and materially prejudiced as a result of such failure.  Parent
shall have the right to control, through counsel of its own choosing, any audit,
claim for refund or administrative or judicial proceeding involving any asserted
Tax liability with respect to Taxes and Tax Returns (a “Tax Claim”), that
relates to periods ending on or before the Closing Date, and Sellers’
Representative shall have the right, at Sellers’ expense to participate in any
such Tax Claim. Parent shall control, and the Sellers’ Representative shall have
the right to participate in, any Tax Claims that relate to a Straddle Period;
provided, however, there shall be no consent to entry of any judgment or any
entry into any settlement of any such Tax Claim without the prior written
consent of the Sellers’ Representative, which consent shall not be unreasonably
withheld, conditioned or delayed.
 
(d) The Sellers’ Representative, the Stockholders, the Company, and Parent shall
reasonably cooperate, and shall cause their respective Affiliates, directors,
officers, employees, consultants, agents, auditors and other representatives to
reasonably cooperate, in preparing and filing all Tax Returns and in resolving
all disputes and audits with respect to all taxable periods relating to Taxes
(including by maintaining and making available to each other all records
necessary in connection with Taxes and making employees available on a mutually
convenient basis to provide additional information or explanation of any
material provided hereunder or to testify at proceedings relating to such Tax
Claim).  Parent and the Surviving Corporation agree to retain all books and
records with respect to Tax matters pertinent to the Surviving Corporation
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority.
 
(e) Parent shall pay when due all transfer, documentary, sales, use,
registration and any other similar Taxes (including all applicable real estate
transfer Taxes) and related fees (including any penalties, interest and
additions to Taxes) (“Transfer Taxes”) incurred in connection with any
transaction that occurs pursuant to this Agreement, and Parent will file all
necessary Tax Returns or other forms associated with Transfer Taxes and other
documentation with respect to all such Transfer Taxes, provided that fifty
percent (50%) of the Transfer Taxes shall be included in the Company Transaction
Expenses Amount.
 
(f) The Company shall cause all Tax allocation, Tax indemnity or Tax sharing
agreements or similar contracts or arrangements with respect to the Company (if
any) to be terminated as of the Closing and shall ensure that such agreements
are of no further force or effect as to the Company from and after the Closing,
with no further liabilities or obligations imposed on the Company under any such
agreements from and after the Closing.
 
(g) For purposes of this Agreement, in the case of any Straddle Period, the
amount of Taxes allocable to the portion of the Straddle Period ending on the
Closing Date shall be deemed (i) in the case of any Tax not described in clause
(ii) below to be (A) the amount of such Tax for the entire period multiplied by
(B) a fraction, the numerator of which is the number of calendar days in the
portion of the Straddle Period ending on the Closing Date and the denominator of
which is the number of calendar days in the entire relevant Straddle Period and
(ii) in the case of any income, sales and use and withholding taxes , to be the
amount of any such Taxes that would be payable if the taxable year ended as of
the close of business on the Closing Date.
 
(h) Parent (including on or after the Closing Date, the Surviving Corporation
and Subsidiary) shall not file, or cause to be filed, any restatement or
amendment of, modification to, or claim for refund relating to, any Tax Return
of Company or Subsidiary for any taxable period that begins prior to the Closing
Date (regardless of whether such taxable period ends prior to the Closing Date)
without the prior written consent of the Sellers’ Representative, which consent
shall not be unreasonably withheld, conditioned or delayed; provided, however,
that no consent of the Sellers’ Representative shall be required with respect to
any such Tax Return related to amounts of state and/or local sales and/or use
Taxes, which, in the aggregate, are equal to or less than $250,000 (i.e., taking
into account all such Tax Returns related to amounts of state and/or local sales
and/or use Taxes for which consent previously was not required pursuant to this
proviso).  If Parent does not seek the Sellers’ Representative’s written consent
to file, or cause to be filed, any restatement or amendment of, modification to,
or claim for refund relating to, a Tax Return of the Company or its Subsidiary
for any taxable period that begins prior to the Closing Date, then no Purchaser
Indemnified Person shall be indemnified and the Sellers shall not be liable for
any Loss resulting from such settlement. If Parent or the Surviving Corporation
makes any election under Section 338 of the Code with respect to the Merger,
then, notwithstanding any contrary provision in this Agreement, any Taxes
incurred as a result of such election shall not be treated as Company
Transaction Expenses or otherwise subject to indemnification.
 
(i) The parties shall execute and file all federal, state and local income Tax
Returns in a manner consistent with this Section 5.7 and shall not take any
position before any Governmental Authority or in any judicial proceeding that is
inconsistent with this Section 5.7, except pursuant to an intervening change in
Law or a final “determination” (as defined in Section 1313(a) of the Code).  All
payments in retirement of or in respect of amounts due under the Company Loans,
and all payments of Closing Cash Consideration in respect of Stock Options made
by or at the direction of the Surviving Corporation on or after the Closing Date
shall be treated, at Parent’s election, as either (i) made by Parent or
(ii) made by the Surviving Corporation after Parent has made capital
contribution(s) to the Company to fund any such payments.  To the extent that
any payment in retirement of or in respect of amounts due under the Company
Loans, or any payment of Closing Cash Consideration in respect of Stock Options
made by or at the direction of the Surviving Corporation is either paid or
accrued on the Closing Date, such payment shall be treated as being paid or
accrued at the beginning of the day following the Closing Date in accordance
with Treasury Regulations Section 1.1502-76(b)(1)(ii)(B) and any similar
provisions of state, local or foreign tax law.  The Company shall not claim an
interest deduction or a compensation deduction for income tax purposes or any
other tax benefit or tax attribute for income tax purposes in connection with
any payment of Closing Cash Consideration in respect of Stock Options made by or
at the direction of the Surviving Corporation for any taxable period ending on
or before the Closing Date.
 
5.8 Public Announcements
 
.  The Company and Parent shall mutually agree on the form and timing of an
initial joint press release to be issued with respect to this Agreement and the
transactions contemplated hereby.  In addition, prior to the Effective Time, the
Company and Parent shall consult with and obtain the approval of the other Party
before issuing any press release or making any other public disclosure with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such press release or make any such public disclosure prior to such
consultation and approval (except as may be required by Law, in which event the
Person proposing to issue such press release or make such public disclosure
shall use its reasonable best efforts to consult in good faith with the other
Party before issuing any such press release or making any such public disclosure
and shall cooperate to limit the scope of disclosure to the minimal amount if
information required by law).  Nothing in this Agreement shall be construed to
prevent Parent from making any public disclosure required by Law, including
without limitation, disclosure requirements of the Securities and Exchange
Commission or of any securities exchange on which securities of Parent, Merger
Sub or the Surviving Corporation are publicly traded; provided, however, that
for any public disclosure relating to this Agreement or the transactions
contemplated hereby required to be made before the Effective Time, (i) if
reasonably requested by the Company, Parent shall use its commercially
reasonable efforts to obtain confidential treatment of any commercially
sensitive information of the Company proposed to be included in such disclosure
and (ii) Parent shall use reasonable efforts to allow the Company to review and
comment on any such disclosure prior to its release or filing.
 
5.9 Stockholder Approval of Excess Parachute Payments
 
.  As soon as practicable following the execution of this Agreement but in any
case prior to the Closing, the Company shall (i) secure, from each person who
has a right to any payments and/or benefits (whether or not already paid or
provided) that would be deemed to constitute “parachute payments” (within the
meaning of Section 280G of the Code and the regulations promulgated thereunder)
in connection with the transactions contemplated herein, a waiver of such
person’s rights (including the right to retain any such payment or benefit
already provided) to such payments and/or benefits applicable to such person
that exceed the individual’s parachute threshold (as determined in accordance
with Section 280G of the Code) (the “Waived 280G Benefits”) unless stockholder
approval of such Waived 280G Benefits is obtained in accordance with
Section 280G(b)(5)(B) of the Code prior to the Effective Time so that, in the
event stockholder approval of such Waived 280G Benefits is not obtained in
accordance with Section 280G(b)(5)(B) of the Code, (A) all Waived 280G Benefits
applicable to such person shall not be made or provided or retained and (B) all
remaining payments and/or benefits applicable to such person shall not be deemed
to be “parachute payments” that would not be deductible under Section 280G of
the Code; and (ii) seek the approval of its stockholders in a manner that
complies with Section 280G(b)(5)(B) of the Code and Treasury Regulations
Section 1.280G-1, which shall include adequate written disclosure to all
stockholders prior to such vote, of any such Waived 280G Benefits.  Prior to
obtaining such waivers, and prior to seeking such stockholder approval, the
Company shall provide drafts of such waivers and such stockholder approval
materials (collectively, the “280G Disclosure Materials”) to Parent for its
review and approval which shall not be unreasonably withheld, conditioned or
delayed.  Prior to the Effective Time, the Company shall deliver to Parent
evidence that a vote of the Company’s stockholders was solicited in accordance
with the foregoing provisions of this Section 5.9 and that either (1) the
requisite number of stockholder votes was obtained approving payment of the
Waived 280G Benefits (the “280G Approval”), or (2) the 280G Approval was not
obtained, (and, as a consequence, the Waived 280G Benefits shall not be made or
provided or retained), such that, in the case of either (1) or (2), no payment
or benefit paid or provided, or to be paid or provided, to any current or former
employee, director or other service provider of or to the Company (including
pursuant to this Agreement or any Transaction Document) will fail to be
deductible for federal income Tax purposes under Section 280G of the Code.
 
5.10 Information Supplied
 
.  None of the information supplied or to be supplied by the Company and any of
its Subsidiaries for inclusion or incorporation by reference in the
Stockholders’ Materials will, at the dates mailed to the Stockholders and at the
effective date of the Stockholder Approval, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading.  As used herein “Stockholders’ Materials”
shall mean the Information Statement and all other documentation and information
delivered to the Stockholders in connection with obtaining the requisite
approval of the Stockholders, in compliance with the DGCL, of the Merger, this
Agreement and the transactions contemplated hereby.  The Stockholders’ Materials
provided by the Company and any of its Subsidiaries will comply as to form in
all material respects with the provisions of all applicable laws, rules and
regulations of all Governmental Authorities.
 
 
ARTICLE VI  — ADDITIONAL AGREEMENTS
 
6.1 Stockholder Approval; Information Statement.
 
(a) The Company shall use its reasonable efforts to obtain, promptly after the
execution and delivery of this Agreement, the Consent Agreements in accordance
with the terms and conditions of this Agreement and all applicable Law
(including all applicable state and federal securities laws), the Company
Charter and the Company’s Bylaws.  The Stockholder Approval shall be irrevocable
with respect to all shares of Company Capital Stock that are owned beneficially
or of record by the applicable consenting Stockholders or as to which they have,
directly or indirectly, the right to vote or direct the voting thereof.
 
(b) Within ten (10) days after the date on which the Company obtained the
Stockholder Approval, the Company shall prepare and circulate to all
non-consenting Stockholders an information statement (the “Information
Statement”) in connection with the Company’s solicitation of the adoption and
approval by written consent of this Agreement and the Merger by such
Stockholders, and shall use reasonable efforts to solicit their consent
thereto.  The Information Statement shall include (i) the required notice under
the DGCL that the holders of Common Stock are or may be entitled to assert
dissenters’ rights under such Law in connection with the Merger and (ii) any
other information required to be provided to comply with the DGCL.  The Company
will promptly advise Parent if at any time prior to the Effective Time the
Company shall obtain knowledge of any facts that might make it necessary to
amend or supplement the Information Statement in order to make the statements
contained therein not misleading or to comply with applicable Law.  The
Information Statement shall contain the recommendation of the Board of Directors
of the Company that the holders of Common Stock approve the Merger and shall, in
accordance with the requirements of Section 228(e) of the DGCL, notify any
holder of Common Stock who did not execute the Stockholder Approval of the
corporate action taken by those Stockholders who did execute the Stockholder
Approval, and all such other information as Parent shall reasonably
request.  Any materials to be submitted to Stockholders by the Company in
accordance with this Section 6.1(b) shall be subject to Parent’s advance review
and approval; provided, that, Parent shall have two (2) Business Days to provide
comments on any draft submitted for such review and shall not otherwise
unreasonably withhold, condition or delay such approval.
 
6.2 Notification of Certain Matters.
 
(a) The Company shall give prompt notice to Parent of the occurrence or
non-occurrence of any event that results in the breach of any representation,
warranty, covenant or agreement of the Company herein such that any closing
condition contained in Sections 7.2(a) and 7.2(b) would not be satisfied
(assuming that the Closing were to occur at such time); provided, however, that
the delivery of any notice pursuant to this Section 6.2 shall not limit or
otherwise affect the remedies available to Parent or Merger Sub hereunder.
 
(b) Parent shall give prompt notice to the Company of the occurrence or
non-occurrence of any event that results in the breach of any representation,
warranty, covenant or agreement of Parent herein such that any closing condition
contained in Sections 7.3(a) and 7.3(b) would not be satisfied (assuming that
the Closing were to occur at such time); provided, however, that the delivery of
any notice pursuant to this Section 6.2(b) shall not limit or otherwise affect
the remedies available to the Company hereunder.
 
(c) Each of the Company and Parent shall give prompt notice to the other of
(i) any notice or other communication from any Person alleging that the Approval
of such Person is or may be required in connection with this Agreement, the
other Transaction Documents and the transactions contemplated hereby or thereby,
(ii) any notice or other communication from any Governmental Authority in
connection with this Agreement, the other Transaction Documents and the
transactions contemplated hereby or thereby and (iii) any Claim relating to or
involving or otherwise affecting such party that relates to this Agreement, the
other Transaction Documents and the transactions contemplated hereby or thereby.
 
(d) The Company shall give prompt notice to Parent of any fact, event, change,
development, circumstance or effect occurring after the date hereof (or of which
it became aware after the date hereof) that has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
 
6.3 Takeover Statutes
 
.  If any Takeover Statute or other anti-takeover Law, charter provision or
Contract is or shall become applicable to the Merger or the transactions
contemplated hereby or by the other Transaction Documents, the Company and the
Board of Directors of the Company shall grant such Approvals and take all other
commercially reasonable actions under such Laws, provisions and Contracts so
that the transactions contemplated hereby and thereby may be consummated as
promptly as practicable on the terms contemplated hereby and thereby without
adverse effect under, and otherwise use their commercially reasonable efforts to
eliminate or minimize the effects of, such Law, provision or Contract.
 
6.4 Employee Matters.
 
(a) The Company shall use its reasonable efforts to cooperate with Parent in its
efforts to cause each of the Persons identified in Sections 7.2(f) of the
Company Disclosure Schedule to accept, execute and deliver to Parent, the offer
of employment or engagement (as applicable) contemplated by Section 7.2(f).
 
(b) As soon as practicable following the Closing Date, Parent shall (or shall
cause one or more of its Subsidiaries to) provide employees of the Company (the
“Employees”) as of immediately prior to the Effective Time and who continue
their employment after the Effective Time (such Employees, the “Continuing
Employees”) with employee benefits (other than equity-based awards) that are
substantially similar in the aggregate to those employee benefits provided to
similarly situated employees of Parent and its Subsidiaries as of immediately
prior to the Effective Time.
 
(c) As soon as practicable following the Closing Date, Parent shall (or shall
cause one or more of its Subsidiaries to) provide any Continuing Employees with
service credit (if applicable) with respect to Parent’s vacation, health and
welfare benefit plans and Code Section 401(k) defined contribution benefit plans
in which the Continuing Employees become eligible to participate for such
Continuing Employees’ service with the Company for purposes of eligibility,
participation, vesting and, in the case of Parent’s vacation plan, benefit
accrual (except to the extent such service credit or benefit accruals would
result in a duplication of benefits).  With respect to any welfare benefit plans
maintained by Parent or its applicable Subsidiaries for the benefit of the
Continuing Employees on and after the Closing Date, Parent shall (or shall cause
its applicable Subsidiaries to) use commercially reasonable efforts to (i) give
effect, in determining any deductible and out-of-pocket limitations, to any
amounts paid by such Continuing Employees for the calendar year in which the
Closing Date occurs, with respect to similar plans maintained by the Company and
(ii) with respect to any health benefit plans maintained by Parent or its
applicable Subsidiaries (excluding, for the avoidance of doubt, any disability
plans maintained by them), ensure that no pre-existing condition limitations or
exclusion shall apply with respect to the Continuing Employees (except to the
extent any such limitation or exclusion applied prior to the Closing under the
applicable Employee Plan).
 
(d) Prior to the Closing Date, the Company shall cooperate with Parent, if and
to the extent reasonably requested by the Parent, to (i) allow Parent and its
representatives to conduct employee orientation sessions (with such sessions to
be held during scheduled work hours at times reasonably agreed to by the Company
and Parent) and to meet with employees of the Company (either individually or in
groups) during breaks, outside of scheduled work hours or as otherwise agreed to
by the Company and Parent, and (ii) provide information to employees regarding
Parent’s (or any of its Subsidiaries’) employee benefit plans and allow Parent
and its representatives to conduct an open enrollment period to enable potential
employees of the Surviving Corporation to make benefit enrollment elections
under such employee benefit plans of Parent (or any of its Subsidiaries) that
will be made available (if any) to employees of the Surviving Corporation on and
after the Closing.
 
(e) The Company shall take all actions that may be reasonably requested by
Parent in writing prior to the Closing Date with respect to (i) causing one or
more Employee Plans or arrangements with any payroll, benefits or human
resources service provider to the Company to terminate or be amended as of the
Closing Date or as of the day immediately preceding the Closing Date (in each
case as specified by Parent), (ii) causing benefit accrual or entitlement under
any Employee Plan to cease as of the Closing Date, (iii) causing the
continuation on and after the Closing Date of any insurance policy or
arrangement relating to any Employee Plan and (iv) facilitating the merger of
any Employee Plan into any employee benefit plan maintained by Parent (or any of
its Subsidiaries).  If the Company is required to terminate its 401(k) plan
prior to the Closing Date, then the Parent will cause its or an Affiliate’s
401(k) plan to accept rollovers of eligible rollover distributions from the
Company’s 401(k) plan, including rollovers of outstanding loans, to the extent
permitted by the record keeper, custodian, or trustee of Parent’s or Affiliates
401(k) plan, and the Code and ERISA.
 
(f) Nothing contained in this Section 6.4 or otherwise in this Agreement,
express or implied, shall (i) be construed to restrict in any way the ability of
Parent, the Surviving Corporation or any of their Affiliates to (A) amend,
terminate or modify the duties, responsibilities or employment of any Employee,
(B) to amend, terminate or modify any Employee Plan, compensation or benefit
arrangement or any other employee benefit plans or programs maintained by
Parent, the Surviving Corporation or their Affiliates at any time or from time
to time or (C) grant any Employee any special right for compensation, (ii) be
treated as an amendment or other modification of any compensation or benefit
arrangement of Parent, the Company, or any of its Affiliates, including any
Employee Plan, or (iii) be construed to create any third-party beneficiary
rights in any present or former employee, service provider, independent
contractor, consultant, any such Person’s alternate payees, dependents or
beneficiaries or any other Person, whether in respect of continued service or
resumed service, compensation, benefits or otherwise.  Notwithstanding anything
in this Agreement to the contrary, on and after the Closing, the employment of
employees by the Surviving Corporation shall be subject to Parent’s usual terms,
conditions and policies of employment, including, without limitation, Parent’s
policies regarding modifications of the terms and conditions of employment.
 
6.5 Company Transaction Expenses
 
.  With respect to any Company Transaction Expenses (other than Transfer Taxes)
that have not been paid prior to the Closing Date, the Company shall submit to
Parent reasonably satisfactory documentation setting forth the amounts of all
such unpaid Company Transaction Expenses including the identity of each
recipient, dollar amounts, wire instructions and any other information necessary
for Parent or the Company to effect payment thereof in accordance with
Section 2.11 and this Section 6.5.  The Company hereby agrees that Parent and
the Surviving Corporation shall not be responsible or liable for any Company
Transaction Expenses that was not expressly included in the calculation of
Closing Cash Consideration, and if Parent or the Surviving Corporation or any of
their Subsidiaries has any liability therefor, then Parent shall be entitled to
reduce the amount of the Escrow Fund by any amounts necessary to satisfy such
liability, including any related Losses, in accordance with ARTICLE IX.
 
6.6 Interested Party Transactions
 
.  Prior to the Effective Time, the Company and its Subsidiaries shall have
taken all actions necessary to terminate, and shall cause to be terminated
effective as of the Effective Time, the Contracts, transactions, Indebtedness
(subject to Parent’s and Merger Sub’s obligations pursuant to Section 2.10 and
any other arrangements set forth in Section 3.24 of the Company Disclosure
Schedule (except for indemnification agreements with the Company’s officers and
directors made available to Parent prior to the date hereof, restricted covenant
agreements and other standard proprietary information and invention agreements,
and for amounts due as normal salaries and bonuses and in reimbursement of
ordinary expenses in the ordinary course of business consistent with past
practice), in each case without any further liability or obligation of the
Company, the Surviving Corporation.
 
6.7 Delivery of Closing Date Balance Sheet
 
.  At least two (2) Business Days prior to the Closing (the date thereof being
the “Company Closing Balance Sheet Date”), the Company shall deliver to Parent
true, correct and complete copies of (a) the unaudited balance sheet of the
Company estimated as of the Closing Date (the “Company Closing Balance Sheet”),
and (b) a schedule of all outstanding accounts receivable and accounts payable
of the Company estimated as of the Closing Date.
 
6.8 Consent Agreement.
 
  The Company acknowledges and agrees to be bound by and comply with the
provisions of Section 1.5 of the Consent Agreements with respect to transfers of
record ownership of shares of the Company Capital Stock held by parties to each
of the Consent Agreements and agrees to provide such documentation and use its
commercially reasonable efforts to do such other things to effectuate the
provisions of such Consent Agreements.
 
6.9 Directors and Officers Indemnification.
 
(a) Parent and Merger Sub agree that all rights to indemnification and all
limitations on liability existing in favor of the directors, officers and
employees of the Company (the “Covered Parties”) as provided in the Company
Charter and the Company’s bylaws as in effect as of the date of this Agreement
with respect to matters occurring prior to the Effective Time shall survive the
Merger and shall continue in full force and effect, and shall be honored by
Surviving Corporation as if it was the indemnifying party thereunder, without
any amendment thereto; provided, however, that nothing contained in this
Section 6.9(a) shall be deemed to preclude the liquidation, consolidation or
merger of the Surviving Corporation, in which case all of such rights to
indemnification and limitations on liability shall be deemed to so survive and
continue notwithstanding any such liquidation, consolidation or merger.  Parent
agrees to guarantee the financial obligations of the Surviving Corporation set
forth in this Section 6.9(a).
 
(b) For a period of six (6) years after the Effective Time, Parent shall cause
to be maintained in effect the current policies of directors’ and officers’
liability insurance maintained by the Company (provided that Parent may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to the
beneficiaries thereof) with respect to claims arising from or related to facts
or events which occurred at or before the Effective Time; provided, however,
that Parent shall not be obligated to make annual premium payments for such
insurance to the extent such premiums exceed 300% of the annual premiums paid as
of the date hereof by the Company for such insurance (such 300% amount, the
“Maximum Premium”).  If such insurance coverage cannot be obtained at all, or
can only be obtained at an annual premium in excess of the Maximum Premium,
Parent shall maintain the most advantageous policies of directors’ and officers’
insurance obtainable for an annual premium equal to the Maximum Premium.
 
6.10 Escrow Agreement.
 
(a) Promptly following the date hereof, Parent and the Sellers’ Representative
will execute and deliver, and will use commercially reasonable efforts to cause
the Escrow Agent to execute and deliver, the Escrow Agreement contemplated by
ARTICLE IX (the “Escrow Agreement”) in a form attached hereto as Exhibit E.
 
6.11 Corporate Records
 
.  The Company shall deliver to Parent as soon as reasonably practicable after
the Closing copies of all available minute books of all stockholders, Board of
Directors and committee meetings, corporate seals, stock ledgers and other
similar records and items reasonably requested by Parent of the Company,
including all stock certificates or similar evidence of ownership of capital
stock or other equity interests in the Company.
 
ARTICLE VII  — CONDITIONS OF MERGER
 
7.1 Conditions to Obligation of Each Party to Effect the Merger
 
.  The respective obligations of the Company, Parent and Merger Sub to effect
the Merger shall be subject to the satisfaction at or prior to the Effective
Time of the following conditions:
 
(a) Stockholder Approval.  This Agreement, the Merger and the other transactions
contemplated hereby shall have been adopted and approved by the Company Written
Consent in accordance with the DGCL, the Company Charter and the Company’s
bylaws and the Company Written Consent shall not have been effectively
withdrawn, rescinded or revoked.
 
(b) No Injunctions or Restraints; Illegality.  (i) There shall not be in effect
any Order, injunction (whether temporary, preliminary or permanent) or other
legal restraint or prohibition issued by any Court or Governmental Authority of
competent jurisdiction that seeks to prevent the consummation of the
transactions contemplated hereby on substantially the same terms contemplated
herein or the conferring on Parent of substantially all of the rights and
benefits as contemplated herein, nor shall there be pending any proceeding
brought by any Governmental Authority seeking any of the foregoing, and
(ii) there shall not be any Law or Order enacted, entered, enforced or deemed
applicable to the transactions contemplated hereby that which makes (or seeks to
make) illegal the consummation of the transactions contemplated hereby on
substantially the same terms contemplated herein.
 
7.2 Additional Conditions to Obligations of Parent and Merger Sub
 
.  The obligations of Parent and Merger Sub to effect the Merger are also
subject to the following conditions:
 
(a) Representations and Warranties.  The representations and warranties of the
Company and the Stockholders, as applicable, contained in this Agreement and the
other Transaction Documents (i) that are qualified or limited by materiality
(including the words “material” and “Material Adverse Effect”) shall be true and
correct on and as of the Closing Date with the same effect as if made on and as
of the Closing Date (other than such representations and warranties that are
made as of a specified date, which representations and warranties shall be true
and correct as of such date) and (ii) that are not so qualified or limited shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as if made on and as of the Closing Date (other than such
representations and warranties that are made as of a specified date, which
representations and warranties shall be true and correct in all material
respects as of such date).
 
(b) Covenants and Agreements.  The Company and each of the Stockholders, as
applicable, shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement and the other Transaction
Documents to be performed or complied with by them on or prior to the Closing
Date.
 
(c) Closing Certificate.  The Company shall have delivered a certificate of an
executive officer of the Company, dated as of the Closing Date, given by him or
her on behalf of the Company and not in his or her individual capacity, to the
effect that the conditions set forth in Section 7.2(a) and Section 7.2(b)
applicable to the Company have been satisfied.
 
(d) No Governmental Restriction.  There shall not be any pending or threatened
Claim asserted by any Governmental Authority seeking (i) to obtain from Parent
or any of its Subsidiaries or the Company any damages in connection with this
Agreement or the other Transaction Documents that are material in relation to
the aggregate of the Merger Consideration payable hereunder or (ii) to impose
any condition or requirement in connection with the Merger which would, in the
reasonable opinion of the Board of Directors of Parent, so materially and
adversely affect the anticipated economic and business benefits to Parent of the
transactions contemplated by this Agreement or the other Transaction Documents
as to render consummation of such transactions inadvisable.
 
(e) Approvals and Consents.  Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that (i) all Approvals of Governmental
Authorities necessary in connection with this Agreement or the other Transaction
Documents and the transactions contemplated hereby or thereby, provided,
however, that no such Approval shall have imposed any condition or requirement
which, in the reasonable opinion of the Board of Directors of Parent, so
materially and adversely affects the anticipated economic and business benefits
to Parent of the transactions contemplated by this Agreement or the other
Transaction Documents as to render consummation of such transactions inadvisable
and (ii) all Approvals set forth in Section 7.2(e) of the Company Disclosure
Schedule have been obtained.
 
(f) Employee or Consulting Arrangements.  Each of the Persons identified on
Section 7.2(f) of the Company Disclosure Schedule shall have executed and
delivered to Parent a confidentiality, non-competition, non-solicitation and
proprietary rights agreement in the form attached hereto as Exhibit G.  Nothing
in this Agreement, whether express or implied, shall be construed to create any
third-party beneficiary rights in any present or former employee, service
provider, independent contractor or consultant of the Company or any such
person’s alternate payees, dependents or beneficiaries, whether in respect of
continued service or resumed service, compensation, benefits or otherwise.
 
(g) No Material Adverse Effect.  There shall not have occurred any Material
Adverse Effect since the date hereof.
 
(h) Resignation of Directors and Officers.  Parent shall have received the
letters of resignation, effective as of the Effective Time, from each of the
directors and officers of the Company.
 
(i) FIRPTA.  The Company shall have delivered to Parent a duly executed and
acknowledged certificate, in the form set forth on Exhibit F hereto and in
accordance with the Code and Treasury Regulations, certifying that an interest
in the Company is not a “U.S. real property interest” within the meaning of
Section 897(c)(1) of the Code.
 
(j) Dissenting Stockholders.  The Company shall have received, pursuant to the
provisions of the DGCL, notice of demands for fair value of the Company Capital
held by Stockholders of the Company representing no more than five percent (5%)
of the outstanding shares of the Company Capital Stock.
 
(k) Officer’s Certificate.  The Company shall have delivered a certificate of an
authorized officer of the Company, dated as of the Closing Date, given by him or
her on behalf of the Company and not in his or her individual capacity
certifying as to (i) the incumbency of officers of the Company executing
documents executed and delivered in connection herewith, (ii) the copies of the
Company’s Charter and bylaws, each as in effect from the date of this Agreement
until the Closing Date, and (iii) a copy of the resolutions of the Company Board
and the Company written consent authorizing and approving the applicable matters
contemplated hereunder.
 
(l) Good Standing Certificates.  The Company shall have delivered to Parent a
certificate of the Secretary of State of the State of Delaware as to the good
standing of the Company and its Subsidiaries as of a date not more than five (5)
Business Days prior to the Closing Date.
 
(m) Termination of Company Stock Plan.  The Company shall have provided written
evidence in form and substance reasonably satisfactory to Parent (with Closing
to be conclusive evidence of such determination of reasonable satisfaction) as
to the termination of all outstanding Stock Options (including any necessary
consents and approvals) such that at the Effective Time any and all equity
incentive plans sponsored or maintained by the Company and its affiliates shall
automatically terminate and, except for the payments contemplated hereunder, no
Person shall have any right to purchase or receive any equity or payment
interest in, or right convertible into or exercisable for, any equity interest
or any other payment interest in or from the Company or any of its Subsidiaries.
 
(n) Termination of Warrants and Put Warrants.  The Company shall have provided
written evidence in form and substance reasonably satisfactory to Parent (with
Closing to be conclusive evidence of such determination of reasonable
satisfaction) as to the termination of all outstanding Warrants and Put Warrants
(including any necessary consents and approvals) such that at the Effective
Time, no Person shall have any right to purchase or receive any equity or
payment interest in, or right convertible into or exercisable for, any equity
interest or any other payment interest in or from the Company or any of its
Subsidiaries.
 
(o) Termination of Certain Agreements.  The agreements set forth on Schedule
5.02(n) shall have been terminated effective immediately prior to the Effective
Time.
 
(p) Lien Releases.  The Company shall have delivered to Parent all instruments
and documents necessary to release any and all Liens, including appropriate UCC
financing statement amendments (termination statements).
 
(q) Option Cash Out and Release Agreement.  Holders of at least 90% of the
shares of Common Stock underlying outstanding Options shall have executed
cash-out and release agreements in the form attached hereto as Exhibit H.
 
7.3 Additional Conditions to Obligations of the Company
 
.  The obligation of the Company to effect the Merger is also subject to the
following conditions:
 
(a) Representations and Warranties.  The representations and warranties of
Parent and Merger Sub contained in this Agreement (i) that are qualified or
limited by materiality (including the words “material” or “Material Adverse
Effect”) shall be true and correct on and as of the Closing Date with the same
effect as if made on and as of the Closing Date (other than such representations
and warranties that are made as of a specified date, which representations and
warranties shall be true and correct as of such date) and (ii) that are not so
qualified or limited shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of the Closing
Date (other than such representations and warranties that are made as of a
specified date, which representations and warranties shall be true and correct
in all material respects as of such date).  The Company shall have received a
certificate to such effect signed by an authorized officer of Parent.
 
(b) Covenants and Agreements.  Parent and Merger Sub shall have performed and
complied in all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by them on or prior to the
Closing Date.  The Company shall have received a certificate to such effect
signed by an authorized officer of Parent.
 
(c) Transaction Documents.  Parent and Merger Sub shall have executed and
delivered all Transaction Documents to which each of them is a party and such
agreements shall be in full force and effect.
 
ARTICLE VIII — TERMINATION; FEES AND EXPENSES
 
8.1 Termination
 
.  This Agreement may be terminated and the Merger abandoned at any time prior
to the Effective Time (notwithstanding any approval thereof by the
Stockholders):
 
(a) by mutual written consent of Parent and the Company;
 
(b) by either Parent or the Company, if the Merger shall not have been
consummated on or before June 30, 2014 (the “End Date”); provided that the
termination right under this Section 8.1(b) shall not be available to any party
whose willful and material breach of this Agreement has been the cause of, or
resulted in, the failure of the Merger to have been consummated on or before the
End Date;
 
(c) by either Parent or the Company, if a Court or Governmental Authority shall
have issued an Order or taken any other action that is final and non-appealable
and that restrains, enjoins or otherwise prohibits the Merger;
 
(d) by Parent, if neither Parent nor Merger Sub is in material breach of its
obligations under this Agreement, and if (i) at any time any of the
representations and warranties of the Company in this Agreement or in any
Transaction Document become untrue or inaccurate such that the condition set
forth in Section 7.2(a) are not able to be satisfied on or prior to the End Date
(treating such time as if it were the Closing for purposes of this
Section 8.1(d)) or (ii) there has been a breach on the part of the Company of
any of its covenants or agreements contained in this Agreement or in any
Transaction Document such that the condition set forth in Section 7.2(b) would
not be satisfied (treating such time as if it were the Closing for purposes of
this Section 8.1(d)), and in each case such breach (if curable) has not been
cured within thirty (30) days after notice thereof by Parent to the Company;
 
(e) by the Company, if it is not in material breach of its obligations under
this Agreement, and if (i) at any time any of the representations and warranties
of Parent or Merger Sub in this Agreement become untrue or inaccurate such that
the condition set forth in Section 7.3(a) are not able to be satisfied on or
prior to the End Date (treating such time as if it were the Closing for purposes
of this Section 8.1(e)) or (ii) there has been a breach on the part of Parent or
Merger Sub of any of their covenants or agreements contained in this Agreement
such that the condition set forth in Section 7.3(b) would not be satisfied
(treating such time as if it were the Closing for purposes of this
Section 8.1(e)), and in each case such breach (if curable) has not been cured
within thirty (30) days after notice thereof by the Company to Parent; or
 
(f) by Parent if, within twenty-four (24) hours following execution and delivery
of this Agreement, the Company fails to deliver to Parent written evidence that
the Requisite Vote has been obtained; provided that if Parent has not terminated
this Agreement pursuant to this Section 8.1(f) and the Company delivers such
written evidence after the time period provided in this Section 8.1(f), then the
termination right in this Section 8.1(f) shall be null and void.
 
8.2 Effect of Termination
 
.  In the event that this Agreement is terminated pursuant to Section 8.1,
(a) this Agreement will forthwith become void, (b) there will be no further
liability or obligation on the part of any party hereto or any of their
respective officers or directors, and (c) all further rights and obligations of
any party hereto will cease; provided, however, that (i) this Section 8.2,
Sections 5.3(b), 5.3(c), 5.8 and 8.3 and ARTICLE XI shall survive in accordance
with their terms and (ii) no such termination will relieve any party from
liability for any breach of this Agreement by such party that occurred prior to
such termination.
 
8.3 Fees and Expenses
 
.  Except as set forth in Section 5.7(e), all fees and expenses incurred in
connection with this Agreement and the Transaction Documents and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses, whether or not the Merger is consummated.
 
ARTICLE IX  — SURVIVAL AND INDEMNIFICATION
 
9.1 Survival of Representations and Warranties
 
.  All representations and warranties made by the Company, Parent and Merger Sub
in this Agreement shall survive the Closing Date and expire on the eighteen (18)
month anniversary of the Closing Date, except for Section 3.17 (Intellectual
Property) and the Fundamental Representations, which, in the case of Section
3.17 shall survive the Closing Date and expire on the thirty six (36) month
anniversary of the Closing Date, and in the case of the Fundamental
Representations shall survive indefinitely (as applicable, the “Survival
Period”).  The expiration of the Survival Period of any representation or
warranty shall not limit the ability of an Indemnified Person to recover for any
indemnification claim relating to the breach of any such representation or
warranty arising during the survival period of such representation or warranty
that is properly asserted in accordance with this ARTICLE IX prior to the
expiration of the Survival Period applicable to such representation or
warranty.  Notwithstanding anything herein to the contrary, the rights of
Indemnified Persons under this ARTICLE IX to seek recovery of Losses arising out
of any fraud, willful or criminal misconduct or intentional misrepresentation
with respect to this Agreement committed by the Company shall survive until
expiration of all applicable statute of limitations.
 
9.2 Escrow Amount
 
.  The Escrow Amount, until disbursed in accordance with the terms of this
ARTICLE IX, shall be governed by the terms set forth herein.  The Escrow Amount
shall be available to compensate, and serve as security for, the Purchaser
Indemnified Persons with respect to any indemnification obligations of the
Sellers during the Claim Period.  The Escrow Amount shall be the sole and
exclusive remedy for satisfying obligations of the Sellers arising hereunder
pursuant to this ARTICLE IX, during the Claim Period, subject to the limitations
set forth in this Agreement.
 
9.3 Indemnification by the Sellers
 
.  Subject to the limitations set forth in this ARTICLE IX, from and after the
Closing, the Sellers shall, severally and not jointly, in accordance with their
proportionate interest on a fully-diluted basis, indemnify and hold harmless
Parent, Merger Sub, its Affiliates and their respective officers, directors,
agents, representatives, employees, successors and permitted assigns (the
“Purchaser Indemnified Persons”) from and against any and all amounts, payments,
losses, damages, claims, demands, actions or causes of action, liabilities,
settlements, judgments, costs, fees and expenses (including interest, penalties,
attorneys’, accountants, consultants and other advisors’ fees and expenses,
costs of Claims) (collectively, “Losses”) incurred by them arising out of,
resulting from or relating to any of the following matters:
 
(a) the breach of any representation or warranty of the Company contained in
this Agreement or in any Transaction Document or in any certificate delivered by
the Company pursuant hereto;
 
(b) the breach by the Company of its covenants or agreements contained in this
Agreement or any Transaction Document if such breach occurs prior to the Closing
Date;
 
(c) any Company Transaction Expenses or Indebtedness that remain unpaid
following the Closing that were not included in the calculation of Closing Cash
Consideration;
 
(d) an amount equal to (i) the excess, if any, of (A) any amounts that Parent,
Merger Sub or the Surviving Corporation are required by a Court of competent
jurisdiction to pay, or which such Persons pay in settlement, in respect of any
Dissenting Shares over (B) the amount of the Merger Consideration payable
hereunder into which such Dissenting Shares would have been converted in the
Merger had such shares not been Dissenting Shares, plus (ii) all reasonable
out-of-pocket expenses (including reasonable attorneys fees) incurred in
connection with any proceeding instituted by holders of Dissenting Shares;
 
(e) any liability of the Company for Taxes of any other Person under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign Law), as a transferee (within the meaning of Section 6901 of the Code or
any other applicable Law), a successor by operation of law, by contract or
otherwise, but only to the extent that such liability described in this clause
(e) arises out of the Company’s activities on or before the Closing Date;
 
(f) any claim or right asserted by any Person who is now, or has been at any
time prior to the date hereof, or who becomes prior to the Effective Time, a
director, or officer of the Company (the “D&O Indemnified Parties”) involving a
right or entitlement or an alleged right or entitlement to indemnification,
reimbursement of expenses or any other relief or remedy (under the Company
Charter, the Company Bylaws, the Subsidiary organizational documents, this
Agreement, any indemnification agreement or similar Contract or otherwise) with
respect to any act or omission on the part of such D&O Indemnified Party or any
event or other circumstance that arose, occurred or existed at or prior to the
Effective Time;
 
(g) any amounts recoverable by Parent under Section 2.8(e), to the extent such
amounts exceed the Working Capital Escrow; and
 
(h) the matter set forth on Schedule 9.3(h) attached to the Company Disclosure
Schedule subject to the agreements and covenants set forth therein.
 
9.4 Indemnification by Parent.
 
  Subject to the limitations set forth in this ARTICLE IX, from and after the
Closing, Parent shall indemnify and hold harmless the Stockholders, their
Affiliates and their respective officers, directors, agents, representatives,
employees, successors and permitted assigns (the “Stockholder Indemnified
Persons”) from and against any and all Losses incurred by them arising out of,
resulting from or relating to any of the following matters:
 
(a) the breach of any representation or warranty of the Parent or Merger Sub
contained in this Agreement or in any Transaction Document or in any certificate
delivered by the Parent or Merger Sub pursuant hereto; and
 
(b) the breach by Parent or Merger Sub of its covenants or agreements contained
in this Agreement or any Transaction Document if such breach occurs prior to the
Closing Date.
 
9.5 Calculation of Losses; Determination of Application; Limitations on
Indemnification Obligations.
 
(a) For the purposes of calculating the specific amount of Losses pursuant to
Section 9.3(a) (but not for purposes of determining whether a breach has
occurred), (i) the representations and warranties of a party contained in this
Agreement or in any certificate delivered by a party pursuant hereto shall be
deemed to exclude any materiality (including the words “material” or “Material
Adverse Effect”) or similar qualifiers contained therein (ii) such Losses shall
be determined without duplication of recovery by reason of the state of facts
giving rise to such Loss constituting a breach of more than one representation,
warranty, covenant or agreement; (iii) the amount of any such Losses shall be
reduced by (A) the net amount of any proceeds that any Indemnified Person
actually receives pursuant to the terms of any insurance policies, net all of
costs, expenses and other Losses incurred in connection therewith, including but
not limited to increased premiums reasonably attributed thereto, and (B) any
amount set forth as a current liability on the Closing Balance Sheet which is
used in the calculation of the Final Working Capital Adjustment Amount.
 
(b) Except as set forth in Section 9.11, and for Losses arising out of,
resulting from or relating to breaches of Fundamental Representations or
breaches of Section 3.17, the Indemnified Persons shall not be entitled to
indemnification pursuant to Section 9.3(a) for any Losses until the aggregate
amount of all Losses incurred by all Indemnified Persons exceeds $250,000 (the
“Threshold”), in which case the Indemnified Persons shall be entitled to
indemnification for the full amount of Losses, including those applied towards
the Threshold.  Except as set forth in Section 9.11 and except for Losses
arising out of, resulting from or relating to breaches of the Fundamental
Representations or Section 3.17 or any other indemnification obligation
hereunder, the Escrow Fund, to the extent not distributed to the Sellers
pursuant to Section 9.6, shall be the sole and exclusive source for satisfying
the indemnification obligations of the Sellers pursuant to Section 9.3(a);
provided, that with respect to any breaches of the Fundamental Representations
or Section 3.17, the Purchaser Indemnified Persons shall first seek recourse
against the Escrow Fund, if available.  The Purchaser Indemnified Persons’
rights to indemnification with respect to Losses arising out of, resulting from
or relating to breaches of Section 3.17 shall be limited to $8,000,000
(inclusive of all other indemnifiable Losses incurred by the Purchaser
Indemnified Persons pursuant to Section 9.3).
 
(c) Until exhausted or distributed pursuant to Section 9.6, the Escrow Fund
shall be available to pay Losses for which Purchaser Indemnified Persons are
entitled to indemnification pursuant to Section 9.3 (other than claims under
Section 9.3(f)).  Upon the Escrow Fund being exhausted or distributed pursuant
to Section 9.6, the Sellers shall be personally liable, on a several but not
joint basis based on each Seller’s Pro Rata Portion, to pay any unpaid Losses
arising out of, resulting from or relating to breaches of the Fundamental
Representations or breaches of Section 3.17 or fraud, willful or criminal
misconduct, or intentional misrepresentation, subject to the limitations set
forth in this ARTICLE IX, provided, however, that notwithstanding anything to
the contrary set forth in this Agreement, no Seller shall be liable for any
Losses in excess of the portion of the Merger Consideration received by such
Seller, unless such Seller has committed fraud, willful or criminal misconduct,
or intentional misrepresentation.
 
9.6 Distribution of Escrow Amount after the Expiration of the Claim Period.
 
 
(a) Promptly following the expiration of the Claim Period, the Escrow Agent
shall as soon as practicable distribute all amounts remaining in the Escrow
Amount to the Sellers based on such Seller’s Pro Rata Portion, after taking into
account any requirement for withholding Taxes, less, subject to Sections 9.8 and
9.9, amounts (such amounts, the “Retained Escrow Amount”) that would be
necessary to satisfy any then pending and unsatisfied or unresolved claims, for
which Escrow Agent may hold back amounts in the Escrow Amount sufficient to
satisfy any such claim (as determined in Escrow Agent’s good faith reasonable
discretion) specified in any Claim Notice delivered to the Sellers’
Representative prior to the termination of the Claim Period, subject to the
limitations in Section 9.7.
 
(b) The Retained Escrow Amount shall be retained by Escrow Agent until the
Claims related thereto have been resolved.  As soon as each such claim has been
resolved and related amounts, if any, paid out of the Escrow Amount, the Escrow
Agent shall as soon as practicable distribute any remaining Retained Escrow
Amount not required to satisfy such claim or other claims which remain pending
to the Stockholders based on their respective Sharing Percentages.
 
9.7 Indemnification Procedures
 
.  Subject to Sections 9.8 and 9.9, if Parent delivers to the Sellers’
Representative and the Escrow Agent on or before the date that is eighteen (18)
months following the Closing Date (the “Claim Period”) a notice signed by Parent
(a “Claim Notice”), stating that an indemnification claim or claims is or are
being made (describing the basis for the claim and the claimed Losses with
reasonable specificity), subject to any applicable limitations in this ARTICLE
IX, then, subject to the provisions of Sections 9.8 and 9.9, the Escrow Agent
shall forward to Parent an amount equal to the Losses claimed in the Claim
Notice.  No delay on the part of Parent in delivering a Claim Notice shall
relieve the Sellers from any of their indemnification obligations under this
ARTICLE IX unless (and then only to the extent that) the Sellers are materially
prejudiced thereby.
 
9.8 Objections to Claims.
 
 
(a)  For a period of thirty (30) calendar days after delivery of the Claim
Notice to the Sellers’ Representative and the Escrow Agent (the “Claim Notice
Waiting Period”), the Escrow Agent shall make no payment pursuant to
Section 9.7, unless the Sellers’ Representative shall have provided express
written authorization to make such payment.  After the expiration of the Claim
Notice Waiting Period, the Escrow Agent shall make a payment in accordance with
Section 9.6(a) as soon as practicable unless the Sellers’ Representative shall
have objected in a written statement delivered to Parent and the Escrow Agent
prior to the expiration of the Claim Notice Waiting Period (describing the basis
for any objection with reasonable specificity under the circumstances) to the
claim made in the Claim Notice.  The Escrow Agent shall retain the disputed
amounts, and in no event shall any amounts be released from the Escrow Amount
with respect to an item in dispute until such dispute has been finally resolved
pursuant to Section 9.9(b).
 
(b) Upon the expiration of the Claim Period, if the Escrow Agent has retained
any Retained Escrow Amount, then Parent shall notify the Sellers’ Representative
of such retention by the Escrow Agent.  The Sellers’ Representative shall have
thirty (30) calendar days from receipt of such notice from Parent to object to
Parent’s determination of such amount by delivery of a written statement
(describing the basis for any objection with reasonable specificity under the
circumstances), unless already objected to any portion of such amount pursuant
to Section 9.8.  During such period, the Escrow Agent shall retain the Retained
Escrow Amount unless the Escrow Agent shall have received written authorization
from the Sellers’ Representative to release such amounts.  If the Sellers’
Representative shall have objected to any portion of the Retained Escrow Amount
in accordance with this Section 9.8(b) or Section 9.8, then the dispute shall be
governed by the provisions of Section 9.9.  If the Sellers’ Representative shall
not have objected to any portion of the Retained Escrow Amount pursuant to this
Section 9.8(b) or Section 9.8, then the Sellers’ Representative shall have
waived any objection to such portion of the Retained Escrow Amount, and such
portion of such amount shall thereafter be paid to Parent as the Retained Escrow
Amount pursuant to Section 9.5.  Until any dispute regarding the amount of the
Retained Escrow Amount is resolved, the Escrow Agent shall retain the full
amount of the Retained Escrow Amount.
 
9.9 Resolution of Conflicts.
 
 
(a) If the Sellers’ Representative shall object in writing to any claim or
claims made in any Claim Notice or the amount of any Retained Escrow Amount,
pursuant to Section 9.8, then the Sellers’ Representative and Parent shall
attempt in good faith for thirty (30) days to agree upon the rights of the
respective parties with respect to each of such disputes.
 
(b) If the Sellers’ Representative and Parent should so agree within such thirty
(30) day period, the Escrow Agent shall be entitled to rely on any such
agreement and shall pay or retain, as applicable, the amount so agreed upon.  If
no such agreement can be reached after good faith negotiation during such thirty
(30) day period, then Parent or the Sellers’ Representative may institute
proceedings in Court accordance with Section 11.13 to resolve any such
dispute.  Each of Parent and the Sellers’ Representative shall in all instances
seek to resolve such disputes in as expeditious a manner as practicable.
 
9.10 Third-Party Claims.
 
(a) In the case of any claim for indemnification hereunder arising out of a
claim, action, suit or proceeding brought or threatened to be brought by any
third party, other than a claim for indemnification pursuant to Sections 9.3(c)
(a “Third-Party Claim”), the Indemnified Person shall, in addition and at the
same time of the delivery of a Claim Notice, give the Indemnifying Person copies
of any written claims, process or legal pleadings with respect to such
Third-Party Claim promptly after such documents are received by the Indemnified
Person.
 
(b) Subject to the provisions of Section 9.10(c), and except as otherwise
provided in this Section 9.10(b), the Indemnifying Person shall be entitled to
control the defense of any Third-Party Claim to the extent the amount in
controversy is above the Threshold (if applicable) and less than the amounts
then available for offset from the Escrow Amount pursuant to Section 9.6;
provided, however, if the Third Party Claim does not expressly state an amount
in controversy, the Indemnified Person shall make a good faith determination of
the probable amount in controversy for purposes of this Section 9.10, which
determination shall be binding on the parties to this Agreement; provided,
further, that the Indemnifying Person must acknowledge and agree in a written
notice delivered by the Indemnifying Person to the Indemnified Person within
thirty (30) days after receipt by the Indemnifying Person of the applicable
Claim Notice in respect of such Third Party Claim that each Indemnified Person
is entitled to full indemnification in respect of such Third-Party Claim, and
the Indemnifying Person and the Stockholders shall thereafter have no power or
authority to object under Section 9.8 or any other provision of this ARTICLE IX
to any claim by such Indemnified Person against the Escrow Amount for amounts
payable in respect of such Third-Party Claim; provided, further, however, that
the Indemnified Person may elect, at the Indemnified Person’s own cost and
expense, to participate in any Third-Party Claim.  If the Indemnified Person
elects to participate in the defense of a Third-Party Claim, the Indemnified
Person shall, within thirty (30) days of its receipt of the Claim Notice
provided pursuant to Section 9.10(a) (or sooner, if the nature of such
Third-Party Claim so requires), notify the Indemnifying Person of its intent to
do so.  The Indemnifying Person and each Indemnified Person shall reasonably
cooperate in the compromise of, or defense against, such Third-Party Claim.  The
Indemnifying Person shall not consent to entry of any judgment or enter into any
settlement of a Third-Party Claim without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld and
provided the Indemnified Person shall be afforded at least twenty (20) days to
consider any settlement of a Third-Party Claim, unless such judgment or
settlement provides solely for money damages or other money payments for which
each Indemnified Person is entitled to indemnification hereunder and includes as
an unconditional term thereof the giving by the claimant or plaintiff to each
such Indemnified Person of a release from all liability in respect of such
Third-Party Claim.  If the Indemnifying Person elects not to compromise or
defend against a Third-Party Claim, the Indemnified Person shall control the
defense of such Third-Party Claim.  The Indemnified Person shall not consent to
entry of any judgment or enter into any settlement of any such Third-Party Claim
without the prior written consent of the Indemnifying Person (which consent
shall not be unreasonably withheld).
 
(c) Notwithstanding the provisions of Section 9.10(b), the provisions of this
Section 9.10(c) shall apply with respect to the extent that the relief sought in
any particular Third-Party Claim (i) is monetary damages in an amount below the
Threshold (if applicable) or more than the amounts then available for offset
from the Escrow Amount pursuant to Section 9.6, (ii) involves potential criminal
liability, or (iii) is not solely monetary damages (to each such extent, an
“Indemnified Person Third-Party Claim”), and except as otherwise provided in
this Section 9.10(c), the Indemnified Person shall be entitled to control the
defense of any Indemnified Person Third-Party Claim; provided, however, that the
Indemnifying Person may elect, at the Indemnifying Person’s own cost and
expense, to participate in any Indemnified Person Third-Party Claim.  If the
Indemnifying Person elects to participate in the defense of a Indemnified Person
Third-Party Claim, the Indemnifying Person shall, within thirty (30) days after
the delivery of the Claim Notice provided pursuant to Section 9.10(a), notify
the Indemnified Person of its intent to do so.  The Indemnifying Person and the
Indemnified Person shall reasonably cooperate in the compromise of, or defense
against, such Indemnified Person Third-Party Claim.  The Indemnified Person
shall not consent to entry of any judgment or enter into any settlement of an
Indemnified Person Third-Party Claim that includes any monetary damages or
settlement amount for which any Indemnified Person would be entitled to
indemnification under this Agreement without the prior written consent of the
Indemnifying Person, which consent shall not be unreasonably withheld.  If the
Indemnified Person elects not to defend against an Indemnified Person
Third-Party Claim, the Indemnifying Person shall control the defense of such
Indemnified Person Third-Party Claim.  The Indemnifying Person shall not consent
to entry of any judgment or enter into any settlement of any such Indemnified
Person Third-Party Claim without the prior written consent of the Indemnified
Person (which consent shall not be unreasonably withheld).
 
(d) The Indemnified Persons’ costs and expenses incurred in connection with the
defense of Third-Party Claims may constitute Losses incurred or suffered by the
Indemnified Person.
 
9.11 Non-Exclusive Remedy for Fraud, Willful or Criminal Misconduct or
Intentional Misrepresentation
 
.  From and after the Closing, the rights and remedies set forth in this ARTICLE
IX and Section 11.4 are the sole and exclusive remedies against each
Indemnifying Person hereunder except for claims against an Indemnifying Person
based on fraud, willful or criminal misconduct or intentional
misrepresentation.  For the avoidance of doubt, remedies for claims against an
Indemnifying Person based on fraud, willful or criminal misconduct or
intentional misrepresentation, may be sought by any party against any such
Indemnifying Person without regard to the limitations set forth in Section 9.4
or the expiration of the Survival Period set forth in Section 9.1, subject to
applicable Law.
 
9.12 Adjustment to Purchase Price
 
.  The parties agree that any indemnification payments made pursuant to this
Agreement shall be treated for tax purposes as an adjustment to the Merger
Consideration, unless otherwise required by applicable Law.
 
9.13 Enforcement
 
.  The provisions of this ARTICLE IX are intended for the benefit of, and shall
be enforceable by, each of the Indemnified Persons and their respective
successors and permitted assigns.
 
9.14 Tax Treatment
 
.  Parent shall be treated as the owner of the Escrow Fund for tax purposes and
all income of the Escrow Fund shall be allocated to Parent until distributed to
Stockholders.  The parties intend the Escrow Amount to qualify for installment
sale reporting under Section 453 of the Code.
 
ARTICLE X   — THE SELLERS’ REPRESENTATIVE
 
10.1 The Sellers’ Representative.
 
(a) Appointment.  Effective upon the Stockholder Approval and without any
further action by the Stockholders or other Sellers, the Company and the Sellers
hereby appoint the Sellers’ Representative as exclusive agent and
attorney-in-fact for and on behalf of the Sellers.  The Sellers’ Representative
shall have full power and authority to represent all of the Sellers and their
successors with respect to all matters arising under this Agreement and the
Escrow Agreement, and all actions taken by the Sellers’ Representative hereunder
and thereunder shall be binding upon all such Sellers as if expressly confirmed
and ratified in writing by each of them, and each Seller hereby waives any right
to object, dissent, protest or otherwise negate or disaffirm the same.  The
Sellers’ Representative shall take any and all actions that it believes are
necessary or appropriate under this Agreement and the Escrow Agreement for and
on behalf of the Sellers as if the Sellers were acting on their own behalf,
including giving and receiving any notice or instruction permitted or required
hereunder or thereunder by the Sellers’ Representative or any Sellers,
interpreting all of the terms and provisions hereof or thereof, authorizing
payments to be made with respect hereto or thereto, defending all indemnity
claims against the Sellers pursuant to Section 9.3 of this Agreement (an
“Indemnity Claim”), consenting to, compromising or settling all Indemnity
Claims, conducting negotiations with Parent and its agents regarding such
claims, dealing with Parent under this Agreement with respect to all matters
arising under this Agreement, taking any and all other actions specified in or
contemplated by this Agreement and engaging counsel, accountants or other agents
(at the Sellers’ sole expense) in connection with the foregoing
matters.  Without limiting the generality of the foregoing, the Sellers’
Representative shall have full power and authority to interpret all the terms
and provisions of this Agreement and the Escrow Agreement and to consent to any
amendment hereof or thereof on behalf of all of the Sellers.
 
(b) Authorization.  By their approval and adoption of this Agreement and without
any further action, the Sellers hereby authorize the Sellers’ Representative, on
the Sellers’ behalf, to:  (i) receive all notices or documents given or to be
given to any of the Sellers by Parent pursuant hereto or in connection herewith
and to receive and accept service of legal process in connection with any suit
or proceeding arising under this Agreement; (ii) engage counsel, and such
accountants and other advisors for any of the Sellers and incur such other
expenses on behalf of any of the Sellers in connection with this Agreement and
the transactions contemplated hereby as the Sellers’ Representative may in its
sole discretion deem appropriate; and (iv) take such action on behalf of any of
the Sellers as the Sellers’ Representative may in its sole discretion deem
appropriate in respect of (A) taking such other action as the Sellers’
Representative or any of the Sellers is authorized to take under this Agreement
or the Escrow Agreement, (B) receiving all documents or certificates and making
all determinations, on behalf of any of the Sellers, required under this
Agreement, (C) all such other matters as the Sellers’ Representative may in its
sole discretion deem necessary or appropriate to consummate this Agreement and
the Escrow Agreement and the transactions contemplated hereby and thereby and
(D) all such action as may be necessary after the Closing Date to carry out any
of the transactions contemplated by this Agreement or the Escrow Agreement,
including, without limitation, the defense and/or settlement of any claims for
which indemnification is sought pursuant to ARTICLE IX and any waiver of any
obligation of Parent, Merger Sub or the Surviving Corporation.  All actions,
decisions and instructions of the Sellers’ Representative shall be conclusive
and binding upon all of the Sellers.  Except as otherwise provided in this
Agreement, the Sellers’ Representative shall have no duties to the Sellers,
shall not be deemed to be an agent of the Sellers and shall have no liability to
any Sellers, for any action taken, decision made or instruction given by the
Sellers’ Representative in connection with this Agreement, except in the case of
the Sellers’ Representative’s gross negligence or willful misconduct.  The
Sellers’ Representative may, in all questions arising under this Agreement, rely
on the advice of counsel, and for anything done, omitted or suffered in good
faith by the Sellers’ Representative in accordance with such advice, the
Sellers’ Representative shall not be liable to the Sellers.
 
(c) Limitation of Liability. Certain Stockholders have entered into a letter
agreement with the Sellers’ Representative to provide direction to the Sellers’
Representative in connection with the performance of its services under this
Agreement and the Escrow Agreement (such Stockholders, including their
individual representatives, collectively hereinafter referred to as the
“Advisory Group”).  Except as otherwise provided in this Agreement, neither the
Sellers’ Representative (together with its members, managers, directors,
officers, contractors, agents and employees) nor any member of the Advisory
Group (collectively, the “Sellers’ Representative Group”) shall have any duties
to the Sellers, shall be deemed to be an agent of the Stockholders and shall
have any liability to any Seller, for any action taken, decision made or
instruction given by the Sellers’ Representative Group in connection with this
Agreement or the Escrow Agreement, except in the case of the Sellers’
Representative Group’s gross negligence or willful misconduct.  The Sellers’
Representative Group may, in all questions arising under this Agreement or the
Escrow Agreement, rely on the advice of counsel, and for anything done, omitted
or suffered in good faith by the Sellers’ Representative Group in accordance
with such advice, the Sellers’ Representative Group shall not be liable to the
Sellers.
 
(d) Indemnification of Sellers’ Representative; Expenses.  The Sellers’
Representative Group shall be indemnified for and shall be held harmless by the
Sellers, pro rata based on each Seller’s respective share of the Merger
Consideration, against any loss, liability or expense (including fees,
disbursements and costs of counsel and other skilled professionals and in
connection with seeking recovery from insurers), judgments, fines or amounts
paid in settlement (collectively, the “Sellers’ Representative Expenses”)
incurred by the Sellers’ Representative Group relating to the Sellers’
Representative Group’s conduct in its capacity as Sellers’ Representative Group,
other than such losses, liabilities or expenses resulting from the Sellers’
Representative’s gross negligence or willful misconduct in connection with its
performance under this Agreement or the Escrow Agreement.  The indemnification
under this Section 10.1(d) and immunities under Section 10.1(c) shall survive
the Closing or termination of this Agreement or the Escrow Agreement.  Such
Sellers’ Representative Expenses (including the costs and expenses of enforcing
this right of indemnification) shall (i) be the responsibility of the
Stockholders, and Parent shall have no liability therefor and (ii) may be
recovered by the Sellers’ Representative first, from the Expense Fund, second,
from any distribution of the Escrow Amount otherwise distributable to the
Stockholders at the time of distribution, and third, directly from the Sellers,
pro rata based on each Seller’s respective share of the Merger
Consideration.  The Sellers acknowledge that the Sellers’ Representative shall
not be required to expend or risk its own funds or otherwise incur any financial
liability in the exercise or performance of any of its powers, rights, duties or
privileges or administration of its duties.
 
(e) Expense Fund.  Upon the Closing, Parent shall wire to the Sellers’
Representative the Expense Fund Amount.  The Expense Fund Amount shall be held
by the Sellers’ Representative as agent and for the benefit of the Stockholders
in a segregated client account and shall be used for the purposes of paying
directly, or reimbursing the Sellers’ Representative for, any Sellers’
Representative Expenses incurred pursuant to this Agreement, the Escrow
Agreement or any Sellers’ Representative letter agreement (the “Expense
Fund”).   The Sellers’ Representative will hold these funds separate from its
corporate funds and will not voluntarily make these funds available to its
creditors in the event of bankruptcy.  The Sellers’ Representative is not
providing any investment supervision, recommendations or advice.  The Sellers’
Representative shall have no responsibility or liability for any loss of
principal of the Expense Fund other than as a result of its gross negligence or
willful misconduct.   The Sellers’ Representative is not acting as a withholding
agent or in any similar capacity in connection with the Expense Fund, and has no
tax reporting or income distribution obligations hereunder.  As soon as
reasonably determined by Sellers’ Representative that the Expense Fund is no
longer required to be withheld, the Sellers’ Representative shall distribute the
remaining Expense Fund (if any) to the Escrow Agent or Paying Agent, as
applicable, for further distribution to the Sellers.
 
(f) Access to Information.  Subject to any attorney-client or similar legal
privileges, Parent shall provide the Sellers’ Representative reasonable access,
subject to appropriate confidentiality restrictions, to information relating to
any Indemnity Claim that is in the possession or control of Parent, and Parent
shall make available the reasonable assistance of the Surviving Corporation’s
officers and employees for purposes of performing the Sellers’ Representative’s
duties under this Agreement, including for the purpose of evaluating any
Indemnity Claim; provided that the Sellers’ Representative shall treat
confidentially and shall not disclose any nonpublic information from or
concerning any Indemnity Claim to any Person (other than, on a need-to-know
basis, to (i) the Sellers’ Representative’s attorneys, accountants or other
advisers, (ii) the Sellers and (iii) any arbitrators appointed to resolve
disputes pursuant to this Agreement).
 
(g) Reasonable Reliance.  In the performance of its duties hereunder, the
Sellers’ Representative shall be entitled to rely upon (i) the Payments
Certificate and (ii) any document or instrument reasonably believed by him to be
genuine, accurate as to content and signed by any Seller or Parent.  The
Sellers’ Representative may assume that any person purporting to give any notice
in accordance with the provisions hereof has been duly authorized to do so.
 
(h) Attorney-in-Fact.  The Sellers’ Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Seller, with full power
in his, her or its name and on his, her or its behalf to act according to the
terms of this Agreement and the Escrow Agreement in the absolute discretion of
the Sellers’ Representative and in general to do all things and to perform all
acts, including executing and delivering any agreements, certificates, receipts,
instructions, notices or instruments contemplated by or deemed advisable in
connection with this Agreement.  This power of attorney and all authority hereby
conferred and the immunities and rights to indemnification granted to the
Sellers’ Representative Group hereunder: (i) are granted and coupled with an
interest and shall be irrevocable and shall not be terminated by any act of any
Seller, by operation of law (whether by such Seller’s death, disability
protective supervision, bankruptcy or liquidation) or any other event and shall
be binding on any successor thereto, and (ii) shall survive the delivery of an
assignment by any Seller of the whole or any fraction of his, her or its
interest in the Escrow Agreement.  Without limitation to the foregoing, this
power of attorney is to ensure the performance of a special obligation, and,
accordingly, each Stockholder hereby renounces its, his or her right to renounce
this power of attorney unilaterally before the complete distribution of the
Escrow Amount.  Each Seller hereby waives any and all defenses that may be
available to contest, negate or disaffirm the action of the Sellers’
Representative taken in good faith under this Agreement.  Notwithstanding the
power of attorney granted in this Section 10.1(h), no agreement, instrument,
acknowledgement or other act or document shall be ineffective by reason only of
the Sellers having signed or given such directly instead of the Sellers’
Representative.
 
(i) Liability.  If the Sellers’ Representative is required by the terms of this
Agreement to determine the occurrence of any event or contingency, the Sellers’
Representative shall, in making such determination, be liable to the Sellers
only for its proven gross negligence or willful misconduct as determined in
light of all the circumstances, including the time and facilities available to
it in the ordinary course of business consistent with past practice.  In
determining the occurrence of any such event or contingency, the Sellers’
Representative may request from any of the Sellers such reasonable additional
evidence as the Sellers’ Representative in its sole discretion may deem
necessary to determine any fact relating to the occurrence of such event or
contingency and may at any time inquire of and consult with others, including
any of the Sellers.  The Sellers’ Representative shall not be liable to any
Sellers for any damages resulting from its delay in acting hereunder pending his
receipt and examination of additional evidence requested by the Sellers’
Representative.
 
(j) Orders.  The Sellers’ Representative is authorized, in its sole discretion,
to comply with final, nonappealable orders or decisions issued or process
entered by any court of competent jurisdiction or arbitrator with respect to the
Escrow Amount.  If any portion of the Escrow Amount is disbursed to the Sellers’
Representative and is at any time attached, garnished or levied upon under any
court order, or in case the payment, assignment, transfer, conveyance or
delivery of any such property shall be stayed or enjoined by any court order, or
in case any order, judgment or decree shall be made or entered by any court
affecting such property or any part thereof, then the Sellers’ Representative is
authorized, in its sole discretion, but in good faith, to rely upon and comply
with any such order, writ, judgment or decree of which it is advised by legal
counsel selected by it is binding upon him without the need for appeal or other
action.  If the Sellers’ Representative complies with any such order, writ,
judgment or decree, the Sellers’ Representative shall not be liable to any
Seller by reason of such compliance even though such order, writ, judgment or
decree may be subsequently reversed, modified, annulled, set aside or vacated.
 
(k) Removal of Sellers’ Representative; Authority of Successor Sellers’
Representative.  Those Sellers that in the aggregate hold at least sixty-six
percent (66%) of the Escrow Amount shall have the right at any time during the
term of this Agreement to remove the then-acting Sellers’ Representative and to
appoint a successor Sellers’ Representative; provided, however, that neither
such removal of the then acting Sellers’ Representative nor such appointment of
a successor Sellers’ Representative shall be effective until the delivery to
Parent of executed counterparts of a writing signed by each such Stockholder
with respect to such removal and appointment, together with an acknowledgment
signed by the successor Sellers’ Representative appointed in such writing that
he, she or it accepts the responsibility of successor Sellers’ Representative
and agrees to perform and be bound by all of the provisions of this Agreement
applicable to the Sellers’ Representative.  Each successor Sellers’
Representative shall have all of the power, authority, rights and privileges
conferred by this Agreement upon the original Sellers’ Representative, and the
term “ Sellers’ Representative” as used herein shall be deemed to include any
interim or successor Sellers’ Representative.  The immunities and rights to
indemnification granted hereunder shall survive the resignation or removal of
the Sellers’ Representative or any member of the Advisory Group.
 
(l) Actions of Sellers’ Representative.  Any action taken by the Sellers’
Representative pursuant to the authority granted in this Section 10.1 shall be
effective and absolutely binding on each Seller notwithstanding any contrary
action of, or direction from, any Seller.
 
(m) Reliance.  Each of Parent, the Surviving Corporation, the Paying Agent and
their Affiliates shall not be obligated to inquire into the authority of the
Sellers’ Representative, and each of them shall be fully protected in dealing
with the Sellers’ Representative hereunder.  Parent, Surviving Corporation and
their Affiliates shall be entitled to rely upon any decision, act, consent or
instruction of the Sellers’ Representative as being the decision, act, consent
or instruction of each and all of the Sellers, and Parent shall be relieved from
any liability to any Person for any acts done by it in accordance with such
decision, act, consent or instruction.
 
(n) Binding Appointment.  The provisions of this Agreement, including this
ARTICLE X, shall be binding upon each Seller and the executors, heirs, legal
representatives and successors of each Seller, and any references in this
Agreement to a Seller shall mean and include the successors to the Stockholders’
rights hereunder, whether pursuant to testamentary disposition, the laws of
descent and distribution or otherwise.
 
ARTICLE XI   — MISCELLANEOUS
 
11.1 Amendment
 
.  This Agreement may not be amended other than in an instrument in writing
signed by all of the parties hereto, except as provided in Section 251(d) of the
DGCL (in which event the Sellers’ Representative may consent to any such
amendment on behalf of the Seller).
 
11.2 Waiver
 
.  Any party hereto may extend the time for the performance of any of the
obligations or other acts required hereunder, waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and waive compliance with any of the agreements or conditions
contained herein.  Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party or parties to be bound thereby.
 
11.3 Notices
 
.  All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered personally, sent by nationally
recognized overnight courier or by registered or certified mail (postage
prepaid, return receipt requested) or by facsimile or email (if applicable) as
follows:
 
(a) If to Parent, Merger Sub or the Surviving Corporation:
 
 
Numerex Corp
3330 Cumberland Blvd SE
Suite 700
Atlanta, GA  30339
Attention:  Stratton J. Nicolaides, CEO
Facsimile:  (770) 693-5951
Email:  snicolaides@numerex.com
 
with a copy to:
 
Arnold & Porter LLP
555 Twelfth Street NW
Washington, DC  20004
Facsimile:  (202) 942-5124
Attention:  Richard Baltz
Email: Richard.Baltz@aporter.com
 
(b) If to the Company prior to the Effective Time:
 
 
Omnilink Systems, Inc.
5900 Windward Parkway
Suite 200
Alpharetta, GA  30005
Facsimile: (678) 624-5954
Attention: Chief Executive Officer
 
with a copy to:
 
DLA Piper LLP (US)
1201 West Peachtree Street
Suite 2800
Atlanta, GA  30309
Attention: Jeffrey Leavitt
Fax: (404) 682-7818
Email: jeffrey.leavitt@dlapiper.com
 
(c) If to the Sellers’ Representative:
 
Fortis Advisors LLC
Attention: Notice Department
Fax: (858) 408-1843
Email: notices@fortisrep.com
 
with a copy to:
 
DLA Piper LLP (US)
1201 West Peachtree Street
Suite 2800
Atlanta, GA  30309
Attention: Jeffrey Leavitt
Fax: (404) 682-7818
Email: jeffrey.leavitt@dlapiper.com
 
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance with this
Section 11.3.  All such notices or communications shall be deemed to be received
(i) in the case of personal delivery, nationally recognized overnight courier or
registered or certified mail, on the date of such delivery and (ii) in the case
of facsimile or email, upon confirmed receipt.
 
11.4 Specific Performance
 
.  The parties hereto agree that irreparable damage would occur in the event
that the provisions contained in this Agreement were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed
that the parties shall be entitled to seek an injunction or injunctions, without
the posting of any bond, to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which they are entitled at law or in equity.
 
11.5 Interpretation
 
.  When a reference is made in this Agreement to Sections, subsections or
exhibits, such reference shall be to a Section, subsection, or exhibit to this
Agreement unless otherwise indicated.  The words “include,” “includes” and
“including,” when used herein, shall be deemed in each case to be followed by
the words “without limitation.”  The word “herein” and similar references mean,
except where a specific Section or Article reference is expressly indicated, the
entire Agreement rather than any specific Section or Article.  Except as
otherwise specifically provided herein, the word “material,” when used in
reference to any party’s representations, warranties, covenants or agreements,
shall mean material in relation to such party.  The table of contents and the
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.  If a
document or material has been “made available” to Parent, such phrase means that
such document or material was included in the online data room maintained on
behalf of the Company to which Parent has been provided access (provided, that
the Company shall promptly notify Parent and Parent’s counsel by email promptly
upon the inclusion, addition or substitution of any documents in the Company’s
online dataroom at anytime within the 72 hours period immediately before the
execution hereof).
 
11.6 Severability
 
.  If any term or 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 remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to the parties.  Upon such determination that any
term or provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to amend or otherwise modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an mutually acceptable manner such that that transactions
contemplated hereby are fulfilled to the extent possible.
 
11.7 Entire Agreement
 
.  Except for the Confidentiality Agreement, this Agreement and the Transaction
Documents (including all exhibits and schedules hereto and thereto) and other
documents and instruments delivered in connection herewith constitute the entire
agreement and supersede all prior representations, agreements, understandings
and undertakings, whether written and oral, among the parties, or any of them,
with respect to the subject matter hereof and thereof, and no party is relying
on any other prior oral or written representations, agreements, understandings
or undertakings with respect to the subject matter hereof and thereof.
 
11.8 Assignment
 
.  This Agreement and the rights and obligations hereunder may not be assigned
without the prior written consent of each of the parties hereto; provided,
however, that Parent and Merger Sub may assign this Agreement or all or any of
their rights or obligations hereunder to one or more of their Affiliates without
the consent of any other party.  This Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and permitted assigns. Any unpermitted assignment of this Agreement shall be
null and void.
 
11.9 No Third Party Beneficiaries
 
.  Nothing in this Agreement, express or implied, is intended to or shall confer
upon any Person other than the parties hereto (except for the Indemnified
Persons to the extent set forth in ARTICLE IX) any right, benefit or remedy
under or by reason of this Agreement.
 
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative
 
.  No failure or delay on the part of any party hereto in the exercise of any
right hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor will any single or partial exercise of any such right
preclude any other (or further) exercise thereof or of any other right.  All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive to or exclusive of, any rights or remedies otherwise available to a
party hereunder.
 
11.11 Plan of Merger
 
.  The identification of the parties in the introductory paragraph and the
recital hereto, the portions of this Agreement and the Exhibits hereto that set
forth the terms and conditions of the Merger and the manner and basis of
converting the shares of the Company into cash constitute the plan of merger
required under Section 251 of the DGCL (the “Plan of Merger”).  Pursuant to
Section 251 of the DGCL, any of the terms of the Plan of Merger may be made
dependent upon facts ascertainable outside of the Plan of Merger, provided that
the manner in which such facts shall operate upon the terms of the Merger is
clearly and expressly set forth in the Plan of Merger.  Accordingly, the Plan of
Merger shall not include any disclosure schedule, other schedule or agreement
entered into in connection herewith or any portion thereof unless specifically
identified as part of the Plan of Merger approved by the board of directors for
submission to the Stockholders.  Without limitation of the foregoing, any
portion of this Agreement, any Exhibit, any Section of the Company Disclosure
Schedules or any other schedule hereto or agreement entered into in connection
herewith and otherwise part of the Plan of Merger may be redacted by the
Company, prior to submission to a stockholder vote, as necessary to prevent
public disclosure of facts ascertainable outside of the Plan of Merger that (1)
the Company considers competitively sensitive information of the Company, Parent
or Merger Sub; or (2) that identifies any current or former employee or
consultant of the Company; provided that the manner in which such redacted facts
shall operate upon the terms of the Merger is clearly and expressly set forth in
the unredacted portions of such documents.
 
11.12 Governing Law
 
.  This Agreement shall be governed by, and construed in accordance with, the
Law of the State of New York, except to the extent that the Laws of the State of
Delaware mandatorily apply to the Merger.
 
11.13 Jurisdiction; Waiver of Jury Trial.
 
(a) Each of the parties hereto (i) consents to submit itself to the exclusive
personal jurisdiction of the Federal District Court for the Northern District of
Georgia (or in the absence of jurisdiction thereof, the courts of the State of
Georgia located in Fulton County) in the event any dispute arises out of this
Agreement or any Transaction Document or any transaction contemplated hereby or
thereby, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
(iii) agrees that it will not bring any action relating to this Agreement or any
Transaction Document or any transaction contemplated hereby or thereby in any
court other than the such courts and (iv) waives (and shall not make) any claim
that jurisdiction in such court is not convenient to such party.
 
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
 
11.14 Counterparts
 
.  This Agreement may be executed in one or more counterparts, which when taken
together shall constitute one and the same agreement.
 
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly
authorized.
 
PARENT:

Numerex Corp

By:  ____________________________________
   Name:
   Title:

MERGER SUB:

Numerex Merger Corporation

By:  ____________________________________
   Name:
   Title:

THE COMPANY:

Omnilink systems Inc.

By:  ____________________________________
   Name:
   Title:

SELLERS’ REPRESENTATIVE

Fortis Advisors LLC

By:  ____________________________________
   Name:
   Title:   Managing Director

 
 
 

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