Exhibit 10.1
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
by and among
NAVISITE, INC.,
as Parent,
NAVI ACQUISITION CORP.,
as Buyer,
and
ALABANZA, LLC and HOSTING VENTURES, LLC,
as the Sellers
August 10, 2007

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TABLE OF CONTENTS

              Page
ARTICLE I — PURCHASE AND SALE OF ASSETS; CLOSING
    1  
Section 1.1. Purchase and Sale of Assets
    1  
Section 1.2. Consideration
    3  
Section 1.3. Assumption of Liabilities
    4  
Section 1.4. Time and Place of Closing
    6  
Section 1.5. Working Capital Adjustment
    6  
Section 1.6. Allocation
    8  
 
       
ARTICLE II — REPRESENTATIONS AND WARRANTIES OF THE SELLERS
    8  
Section 2.1. Existence; Good Standing; Authority; Subsidiaries
    8  
Section 2.2. No Conflict, Consents
    10  
Section 2.3. Financial Statements
    10  
Section 2.4. Absence of Certain Changes
    11  
Section 2.5. Consents and Approvals
    12  
Section 2.6. Litigation
    12  
Section 2.7. Taxes
    12  
Section 2.8. Employee Benefit Plans
    15  
Section 2.9. Real and Personal Property
    17  
Section 2.10 Labor and Employment Matters
    18  
Section 2.11. Customers; Vendors
    19  
Section 2.12. Contracts and Commitments
    19  
Section 2.13. Intellectual Property
    21  
Section 2.14. Environmental Matters
    24  
Section 2.15. Insurance
    25  
Section 2.16. Brokers
    25  
Section 2.17. Compliance with Laws
    25  
Section 2.18. Transactions with Affiliates
    26  
Section 2.19. Product Warranties and Liabilities
    26  
Section 2.20. Knowledge
    26  
 
       
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF NAVISITE
    27  
Section 3.1. Existence; Good Standing; Authority
    27  
Section 3.2. No Conflict
    28  
Section 3.3. Consents and Approvals
    28  
Section 3.4. Brokers
    28  
Section 3.5. Financial Capabilities
    28  
Section 3.6. Knowledge
    28  
 
       
ARTICLE IV — CERTAIN COVENANTS OF THE PARTIES
    29  
Section 4.1. Confidentiality
    29  
Section 4.2. Further Action
    29  
Section 4.3. Press Releases
    29  
Section 4.4. Conveyance Taxes; Costs
    29  

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              Page
Section 4.5. Books and Records
    30  
Section 4.6. Approval of Transactions
    30  
Section 4.7. FIRPTA Certification
    30  
Section 4.8. Use of Name; Use of Network
    30  
Section 4.9. Endorsement of Checks, Etc
    30  
Section 4.10 Consents
    31  
Section 4.11. Certain Tax Matters
    31  
 
       
ARTICLE V — EMPLOYEE MATTERS
    32  
Section 5.1. Employees; Benefits
    32  
 
       
ARTICLE VI — CONDITIONS TO CLOSING
    33  
Section 6.1. Conditions to Obligations of the Sellers
    33  
Section 6.2. Conditions to Obligations of NaviSite
    34  
Section 6.3. Deliveries at Closing
    35  
 
       
ARTICLE VII — SURVIVAL; INDEMNIFICATION
    37  
Section 7.1. Survival
    37  
Section 7.2. Indemnification of NaviSite
    37  
Section 7.3. Indemnification of Sellers
    38  
Section 7.4. Procedure for Indemnification of NaviSite-Two Party Claims
    38  
Section 7.5. Procedure for Indemnification of Sellers — Two Party Claims
    39  
Section 7.6. Method of Asserting Third-Party Claims
    40  
Section 7.7. Remedies Exclusive
    41  
 
       
ARTICLE VIII — GENERAL PROVISIONS
    42  
Section 8.1. Notices
    42  
Section 8.2. Fees and Expenses
    43  
Section 8.3. Certain Definitions
    43  
Section 8.4. Interpretation
    43  
Section 8.5. Counterparts and Facsimile Signatures
    44  
Section 8.6. Amendments and Waivers
    44  
Section 8.7. Entire Agreement; Severability
    44  
Section 8.8. Third Party Beneficiaries
    44  
Section 8.9. Governing Law
    45  
Section 8.10. Assignment
    45  
Section 8.11. Consent to Jurisdiction
    45  
Section 8.12. Mutual Drafting
    45  
Section 8.13. Remedies
    45  
Section 8.14. Bulk Sales Law
    45  

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EXHIBITS

     
Exhibit A
  Form of Escrow Agreement
Exhibit B
  Form of Non-Competition Agreement
Exhibit C
  Form of Sublease
Exhibit D
  Form of Assignment and Assumption Agreement
Exhibit E
  Form of Bill of Sale
Exhibit F
  Form of Transition Services Agreement

SCHEDULES

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EXECUTION VERSION
ASSET PURCHASE AGREEMENT
     This ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of August 10,
2007 by and among (i) NaviSite, Inc., a Delaware corporation (“Parent”); (ii)
Navi Acquisition Corp., a Delaware corporation (“Buyer”, and together with
Parent, “NaviSite”); and (iii) Alabanza, LLC, a Maryland limited liability
company (“Alabanza”), and Hosting Ventures, LLC, a Maryland limited liability
company (“Hosting”, and together with Alabanza, the “Sellers” and each a
“Seller”).
     WHEREAS, Sellers own and operate dedicated and shared web hosting
businesses, including without limitation that certain proprietary platform
consisting of the major modules of Domain System Manager, Control Panel Software
and Security and System Administration Tools (the “Businesses”); and
     WHEREAS, Sellers desires to sell, and NaviSite desires to buy,
substantially all of the assets of Sellers related to the Businesses, on the
terms and subject to the conditions set forth herein; and
     WHEREAS, as a condition and inducement to NaviSite to enter into this
Agreement and Buyer to assume the liabilities set forth herein, at the Closing
(as defined in Section 1.4), NaviSite, Sellers and the escrow agent named
therein (the “Escrow Agent”) shall enter into an escrow agreement substantially
in the form attached hereto as Exhibit A (with such changes as the Escrow Agent
may reasonably request, the “Escrow Agreement”), pursuant to which Parent shall
place the Escrowed Funds (as defined in Section 1.2(a)(i)) in an escrow account
(the “Escrow Account”) to secure certain indemnification obligations to
NaviSite.
     NOW THEREFORE, in consideration of the mutual agreements and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I — PURCHASE AND SALE OF ASSETS; CLOSING
     Section 1.1. Purchase and Sale of Assets.
          (a) Except as otherwise provided below and subject to the terms and
conditions of this Agreement, Sellers shall sell, convey, transfer, assign and
deliver to Buyer at the Closing, free and clear of all Liens (as hereinafter
defined), except for the Permitted Liens (as hereinafter defined), all of the
assets and properties of every kind, nature and description of Sellers related
to the Businesses (all of such assets and properties being referred to herein as
the “Purchased Assets”). The Purchased Assets shall include, but shall not be
limited to, the following assets of the Sellers:
                    (i) all of the tangible personal property, machinery,
equipment, tools, machine and electric parts, supplies, computers, appliances,
office furniture and fixtures and vehicles, wherever located, owned or used by
Sellers primarily in connection with the Businesses;

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                    (ii) all of the rights, tangible and intangible, of Sellers
existing under the contracts, agreements, leases, licenses, instruments or
commitments of Sellers relating to the Businesses, including without limitation
those listed in Schedule 1.1(a)(ii) attached hereto, including without
limitation any contracts or agreements with Cybage Software Pvt. Ltd., all
customer contracts, and all signature authorizations given to any Seller
permitting such Seller to charge the credit cards of end-user customers to the
extent such signature authorizations are legally and contractually assignable
(collectively, the “Assumed Contracts”), it being understood by the parties that
all of the Assumed Contracts listed on such Schedule 1.1(a)(ii) that are in the
name of Alabanza Corporation as of the date hereof shall be included in the
Purchased Assets and the Assumed Contracts, and Sellers shall cause Alabanza
Corporation to execute an Assignment, to transfer such assets to Buyer at the
Closing;
                    (iii) all rights in and to any governmental and private
permits, licenses, franchises and authorizations, to the extent assignable, used
in connection with the Businesses;
                    (iv) all raw materials, work-in progress and finished-goods
inventories, and all repair and replacement parts and materials, and all other
parts and materials, used in or relating to the Businesses, including, without
limitation, all inventories of computer program code (in all media) and
materials and program documentation (collectively, the “Inventory”);
                    (v) all rights in and to any requirements, processes,
formulations, methods, technology, know-how, formulae, trade secrets, trade
dress, designs, inventions and other proprietary rights and all documentation
embodying, representing or otherwise describing any of the foregoing, owned or
held by Sellers in connection with the Businesses, including without limitation
all rights in the Businesses’ proprietary platform consisting of the major
modules of Domain System Manager, Control Panel Software and Security and System
Administration Tools (the assets described in Sections 1.1(v) through 1.1(viii),
which shall all be delivered by Sellers to Buyer in electronic form to a
computer(s) or server(s) designated by NaviSite, by remote telecommunication,
are referred to as the “Intangible Property Rights”);
                    (vi) all registered and pending patents, copyrights, domain
names (including without limitation “alabanza.com”), trade names, trademarks and
service marks of Sellers used in the Businesses, including without limitation
those listed on Schedule 1.1(a)(vi), all unregistered trade names, trademarks,
brand names (including but not limited to “One on One Internet” and “Linux Web
Host”) and service marks of Sellers used in the Businesses, and all
documentation embodying, representing or otherwise describing any of the
foregoing, and all internet protocol address space associated with the
Businesses to the extent owned by the Sellers;
                    (vii) all rights in and to the customer lists, parts lists,
vendor lists, promotion lists, marketing data and other compilations of names
and data of Sellers developed in connection with the Businesses, and which shall
be delivered by or on behalf of Sellers to Buyer at or prior to the Closing;
                    (viii) all of Sellers’ rights in and to the computer
software programs (including software licensed to Sellers) used in connection
with the Businesses or developed or under development by, or on behalf of,
Sellers in connection with the Businesses, including without limitation those
identified on Schedule 1.1(a)(viii), including the source code and object

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code for such software, and all technical and descriptive materials (other than
Inventory) relating to the acquisition, design, development, use or maintenance
of computer code and program documentation and materials in any and all
languages (“Technical Documentation”), in each case to the extent that Sellers
possess and have a right to possess and transfer the same;
                    (ix) all accounts and notes receivable, negotiable
instruments of or made payable to Sellers, advanced payments, claims for refunds
and deposits and other prepaid items of Sellers, including all customer security
deposits and all security deposits made by Sellers pursuant to any vendor
contracts;
                    (x) all accounts receivable schedules, lists, files, books,
publications, and other records and data of Sellers used in connection with the
Businesses;
                    (xi) all causes of action, claims, suits, proceedings,
judgments or demands, of whatsoever nature, of or held by Sellers against any
third parties with respect to the Businesses; and
                    (xii) all goodwill of Sellers associated with the Businesses
and the Purchased Assets, including the Intangible Property Rights.
          (b) Notwithstanding the foregoing, Sellers shall not transfer to
Buyer, and the Purchased Assets shall not include, (i) the articles of
organization, operating agreements, minute books, record books, tax
identification numbers, and other organizational documents of Sellers; (ii)
Sellers’ rights under this Agreement and any other agreement, document or
instrument entered into pursuant to this Agreement; and (iii) any of the assets
listed on Schedule 1.1(b) (collectively, “Excluded Assets”).
          (c) As used herein, “Liens” mean liens, rights or options of any third
party to acquire assets, security interests, mortgages, encumbrances and
restrictions of any kind. As used herein, “Permitted Liens” means (i) such
imperfections of title, easements or Liens which do not materially impair the
current use of the Purchased Assets, (ii) materialmen’s, mechanics’, carriers’,
workmen’s, warehousemen’s, repairmen’s and other like Liens arising in the
ordinary course of business, or deposits to obtain the release of such Liens,
(iii) Liens for taxes not yet due and payable, or being contested in good faith,
(iv) purchase money Liens incurred in the ordinary course of business, and
(v) the Liens listed on Schedule 1.1(c).
     Section 1.2. Consideration.
          (a) As consideration for the sale to Buyer of the Purchased Assets,
Parent shall pay to Sellers an aggregate amount equal to Six Million Eight
Hundred Fifty Thousand Dollars ($6,850,000) (the “Purchase Price”) (subject to
adjustment as set forth in Section 1.5), payable as follows:
                    (i) Parent shall deliver to, and cause to be directly
deposited with, Mellon Bank, N.A. (the “Escrow Agent”), for the account and
future potential benefit of Sellers, cash in the amount of Six Hundred and
Eighty Five Thousand ($685,000), which amount, together with all interest and
other amounts earned thereon, shall be referred to as the “Escrowed Funds”; and

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                    (ii) Parent shall pay the balance of the Purchase Price to
the Sellers at Closing by wire transfer of immediately available funds (the
“Closing Payment”).
          (b) The Escrowed Funds shall be held by the Escrow Agent pursuant to
the terms and conditions of the Escrow Agreement for the purpose of satisfying
working capital adjustments pursuant to Section 1.5 hereof and indemnification
claims pursuant to Article VII hereof. Unless disbursed in accordance with
Section 1.5 or Article VII, the Escrowed Funds shall be held by the Escrow Agent
until 5:00 p.m., Boston time, on that date which is the six-month anniversary of
the Closing Date (as defined in Section 1.4) and shall be maintained and used
strictly in accordance with the terms of this Agreement and the Escrow
Agreement. At the six-month anniversary of the Closing Date, the Escrowed Funds,
with such adjustments as set forth in Section 1.5 and Article VII, shall be
disbursed to Sellers in accordance with the Escrow Agreement. Notwithstanding
the foregoing, in the event that a working capital adjustment to the Purchase
Price is in dispute pursuant to Section 1.5 as of the time of such anniversary,
or NaviSite has delivered written notice to Sellers of an indemnification claim
as set forth in Article VII and such claim has not been resolved in accordance
with Article VII prior to such anniversary, the amount necessary to satisfy such
dispute or claim shall not be disbursed and shall continue to be held by the
Escrow Agent pursuant to the Escrow Agreement until such dispute or claim is
resolved as provided in Section 1.5 or Article VII, as the case may be, and all
other Escrowed Funds shall be disbursed to Sellers at that time.
     Section 1.3. Assumption of Liabilities.
          (a) Buyer shall assume only: (i) those Liabilities specifically set
forth in Schedule 1.3(a) (collectively, the “Assumed Liabilities”); and
(ii) those Liabilities arising after the Closing Date under the Assumed
Contracts (which, together with the Assumed Liabilities, shall sometimes be
referred to herein collectively as the “Assumed Obligations”). The Assumed
Obligations shall not include, and Sellers covenant that Buyer shall not be
liable or responsible for, any obligations or liabilities arising out of any act
or omission of Sellers occurring prior to Closing under any Assumed Contract,
regardless of when such liability or obligation is asserted. “Liabilities”
include all debts, liabilities, commitments or obligations of any kind,
character or nature whatsoever, whether known or unknown, secured or unsecured,
fixed, absolute, contingent or otherwise, and whether due or to become due.
          (b) Except for the Assumed Obligations, Buyer shall not assume or
perform, and Sellers shall remain responsible for any and all Liabilities of
Sellers, whether known or unknown, and regardless of when such Liabilities arise
or are asserted, including, without limitation, any obligations or liabilities
of Sellers with respect to the following (all Liabilities other than Assumed
Obligations shall be referred to herein as the “Excluded Liabilities”):
                    (i) any compensation or benefits payable to employees of
Sellers, including, but not limited to, any Liabilities arising under any
employee pension or profit sharing plan or other employee benefit plan, any
severance pay or other termination costs due to employees of any Seller or any
of Sellers’ obligations to their employees for salaries and holiday and sick
pay, accrued and unpaid as of the Closing Date, other than as set forth in
Section 5.1;

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                    (ii) all federal, state, local, non-U.S. or other taxes,
including without limitation any income, sales, use, personal property and other
taxes which may become payable as a result of the transactions contemplated by
this Agreement;
                    (iii) injuries to or the death of any person, or any
employee of any Seller, that (A) has occurred or may occur, prior to Closing, in
connection with the Businesses, or (B) has occurred prior hereto or may occur
hereafter in connection with any business other than the Businesses conducted,
or any operations other than the operations of the Businesses, engaged in by
Sellers, even if not discovered until after the Closing Date;
                    (iv) all liens, claims and encumbrances on any of the
Purchased Assets (other than the Permitted Liens assumed by the Buyer) and all
obligations and liabilities secured thereby;
                    (v) all obligations of Sellers for borrowed money, or
incurred in connection with the purchase, lease or acquisition of any assets,
and any obligations of a similar nature incurred by Sellers;
                    (vi) any accounts or notes payable or similar indebtedness
incurred by Sellers;
                    (vii) any claims, demands, actions, suits, legal
proceedings, obligations or liabilities arising from Sellers’ operation of the
Businesses, including, but not limited to, those set forth in Schedule 2.6, or
arising from any other business or operations of Sellers other than the
Businesses, whether conducted prior to or after the Closing, whether such
claims, demands, actions, suits, legal proceedings, obligations or liabilities
are presently pending or threatened or are threatened or asserted at any time
after the date hereof and whether before or after the Closing;
                    (viii) fees payable to Sellers’ agents, brokers or
representatives for strategic partnerings, or other transactions, including
without limitation any fees due to RBC Daniels L.P.;
                    (ix) any legal, accounting or other fees or expenses of
Sellers or their members relating to or arising from the transactions
contemplated hereby; and
                    (x) any Liabilities set forth on Schedule 1.3(b).

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     Section 1.4. Time and Place of Closing. The closing (the “Closing”) of the
purchase and sale of the Purchased Assets and the other transactions
contemplated by this Agreement shall be held at the offices of Saul Ewing LLP,
222 Delaware Avenue, Wilmington, Delaware 19899, effective as of the date hereof
at 5:00pm, or at such other time as NaviSite and the Sellers may mutually
determine. The date on which the Closing actually occurs is sometimes referred
to herein as the “Closing Date.”
     Section 1.5. Working Capital Adjustment.
          (a) For purposes of this Agreement, “Net Working Capital” shall mean
as of any particular date (i) the value of all current assets, net of provision
for bad debt, plus restricted cash (to the extent not duplicative) of the
Sellers as of that date, less (ii) the amount of all current liabilities,
including accrued current liabilities not yet due, of the Sellers as of that
date determined in each case in accordance with U.S. generally accepted
accounting principles, consistently applied (“GAAP”), and excluding (iii) cash
accounts, inter-company accounts, operating lease payments due after the Closing
Date, obligations under capital leases, deferred revenue, any accounts
receivable related to Excluded Assets, accrued payroll and payroll taxes due by
the Sellers at the Closing Date and any vacation liabilities due by the Sellers
for employees not hired by the Buyer. A calculation of Net Working Capital as of
June 30, 2007 based on the June Balance Sheet (as defined in Section 2.3) is
attached hereto as Schedule 1.5(a). Notwithstanding the foregoing, the Net
Working Capital as of the Closing shall exclude current liabilities pursuant to
Sections 4.4 and 8.2 of this Agreement, and any bonuses paid or to be paid to
any employees of Sellers in connection with or in contemplation of the
transactions contemplated by this Agreement.
          (b) Within forty-five (45) days following the Closing Date, NaviSite
shall deliver to Sellers a written statement showing NaviSite’s calculation of
the Net Working Capital as of the Closing Date in accordance with GAAP and
applying the same accounting principles, policies and practices that were used
in the creation of the June Balance Sheet and Schedule 1.6 (the “Closing
Statement”). NaviSite shall provide Sellers and their representatives with
reasonable access to such books and records relating to the Businesses through
the Closing Date and NaviSite personnel as Sellers reasonably request in order
to permit Sellers to analyze the Closing Statement.
          (c) If, within ten (10) days following delivery of the Closing
Statement to Sellers, Sellers have not given NaviSite written notice of their
objection as to the calculation of Net Working Capital as of the Closing Date as
reflected on the Closing Statement (which notice shall state the basis of
Sellers’ objection), then the Net Working Capital as of the Closing Date as so
reflected on the Closing Statement shall be binding and conclusive on the
parties and shall be the “Closing Net Working Capital.”
          (d) If Sellers give NaviSite written notice in accordance with
Section 1.5(c) of objection to the calculation of the Net Working Capital as of
the Closing Date as reflected on the Closing Statement, NaviSite and Sellers
shall attempt in good faith to agree upon the Net Working Capital as of the
Closing Date, and if such agreement is reached the Net Working Capital so agreed
upon shall be the Closing Net Working Capital. If Sellers and NaviSite fail to
resolve the issues raised by such objection within ten (10) days of NaviSite’s
receipt of such

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objection, Sellers and NaviSite shall submit the issues remaining in dispute to
binding resolution by either (i) an independent accounting firm selected within
five (5) days thereafter by agreement of Sellers and Buyer or (ii) in the event
Sellers and NaviSite have been unable to select a firm by agreement within the
prescribed time period, a “Big Four” accounting firm selected by lot, after
eliminating any “Big Four” accounting firm that has, in the prior three years,
been engaged to provide accounting or tax advisory services to Sellers or
NaviSite or any of their respective subsidiaries or affiliates. The accounting
firm selected in accordance with this Section 1.5(d) is referred to herein as
the “Review Accountants”. If issues are submitted to the Review Accountants for
resolution, (A) Sellers and NaviSite shall furnish or cause to be furnished to
the Review Accountants and to the other party such work papers and other
documents and information relating to the disputed issues as the Review
Accountants may request and are available to that party or its agents and shall
be afforded the opportunity to present to the Review Accountants any material
relating to the disputed issues and to discuss the issues with the Review
Accountants; (B) the determination by the Review Accountants of the Net Working
Capital as of the Closing Date, as set forth in a notice to be delivered to both
Sellers and NaviSite within sixty (60) days of the submission to the Review
Accountants of the issues remaining in dispute, shall be final, binding and
conclusive on the parties and shall be the Closing Net Working Capital; and
(iii) NaviSite and Sellers shall each pay one-half of the fees and expenses of
any Review Accountants selected to resolve any such dispute.
          (e) If, after the final determination according to this Section 1.5,
the Closing Net Working Capital is greater than Seventy-Five Thousand Dollars
($75,000) (the “Target Amount”), then the Purchase Price shall be increased by
an amount equal to the amount by which the Closing Net Working Capital exceeds
the Target Amount (the “Increase Amount”), and Parent shall promptly pay the
Increase Amount to Sellers by wire transfer of immediately available funds.
Alternatively, if the Closing Net Working Capital is less than the Target
Amount, then the Purchase Price shall be reduced by an amount equal to the
amount by which the Target Amount exceeds the Closing Net Working Capital (the
“Reduction Amount”), and NaviSite and Sellers shall jointly direct the Escrow
Agent to offset the Reduction Amount, if any, against the Escrowed Funds and to
promptly disburse the Reduction Amount to Parent, all in accordance with the
Escrow Agreement. Notwithstanding the foregoing, the Reduction Amount shall in
no event exceed the then remaining amount of the Escrowed Funds and the sole
source of recovery therefore shall be the Escrowed Funds under the Escrow
Agreement.

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     Section 1.6. Allocation. NaviSite and Sellers shall mutually allocate the
purchase price (and all other capitalized costs) among the Purchased Assets (and
the Sellers shall allocate the purchase price between each other) in accordance
with Schedule 1.6, or as the parties otherwise agree in writing no later than
seventy-five (75) days after Closing. Such allocation shall be made in
accordance with the provisions of Section 1060 of the Internal Revenue Code of
1986, as amended (the “Code”), and shall be binding upon NaviSite and Sellers
for all purposes (except to the extent that GAAP requires that NaviSite assign a
different value to any asset for financial reporting purposes). The fair market
value of each of the Assets shall be equal to its book value and any purchase
price in excess of the book value shall be allocated to goodwill. In the event
that the Purchase Price is increased or decreased in accordance with
Section 1.5(e), Schedule 1.6 shall be amended, consistent with the intent of
this Section 1.6, to reflect such increase or decrease.
ARTICLE II — REPRESENTATIONS AND WARRANTIES OF THE SELLERS
     The Sellers Disclosure Schedule shall be arranged in sections and
subsections corresponding to the numbered and lettered sections and subsections
contained in this Article II. The disclosures in any section or subsection of
the Sellers Disclosure Schedule shall qualify other sections and subsections in
this Article II to the extent it is reasonably apparent from a reading of the
disclosure that such disclosure is applicable to such other sections and
subsections. Disclosure of any matter in the Sellers Disclosure Schedule shall
not constitute an expression of a view that such matter is material or is
required to be disclosed pursuant to this Agreement. To the extent that any
representation or warranty set forth in this Agreement is qualified by the
materiality of the matter(s) to which the representation or warranty relates,
the inclusion of any matter in the Disclosure Schedule does not constitute a
determination by any Seller that any such matter is material. The disclosure of
any information concerning a matter in the Disclosure Schedule does not imply
that any other undisclosed matter that has a greater significance or value is
material. Except as set forth in the Sellers Disclosure Schedule attached hereto
and delivered by Sellers, each of the Sellers hereby jointly and severally
represents and warrants to NaviSite as of the date hereof (or, if made as of a
specified date, as of such date) and as of the Closing Date, as follows:
     Section 2.1. Existence; Good Standing; Authority; Subsidiaries.
          (a) Each of the Sellers is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Maryland.
Each of the Sellers has all requisite power and authority and all necessary
governmental licenses, authorizations, consents and approvals to own, operate,
lease and encumber its properties and carry on its business as currently
operated and conducted. Each of the Sellers is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of each
other jurisdiction in which the character or ownership of its properties or in
which the transaction or character of its business makes such qualification
necessary, except where the failure to be so licensed or qualified or in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect. Schedule 2.1 hereto sets forth a true, correct and complete list of all
foreign jurisdictions in which each Seller is so qualified or licensed and in
good standing. The copies of the articles of organization and operating
agreements (collectively, the “Organizational Documents”) of each Seller, each
as amended to date and in full force and effect, have been

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provided or made available to NaviSite’s counsel, and are complete and correct,
and no amendments thereto are pending. Neither Seller is in violation of any
provision of its Organizational Documents. The books and records, minute books,
membership unit record books and other similar records of Sellers, all of which
have been made available to NaviSite’s counsel and NaviSite, are true, correct
and complete.
          (b) Each of the Sellers has all power and authority to execute and
deliver this Agreement and each agreement, document and instrument to be
executed and delivered by or on behalf of Sellers pursuant to this Agreement and
the Ancillary Agreements and to carry out the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement by each of the
Sellers, the performance by each of the Sellers of its obligations hereunder and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of each of the Sellers. This
Agreement has been duly executed and delivered by each of the Sellers and,
assuming the due authorization, execution and delivery of this Agreement by
NaviSite, this Agreement constitutes a legal, valid and binding obligation of
each of the Sellers, enforceable against each of the Sellers in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors’ rights and general principles of equity. No
other action on the part of any Seller is necessary to authorize the execution
and delivery of this Agreement by the Sellers or the consummation by the Sellers
of the transactions contemplated hereby.
          (c) Neither of the Sellers has any subsidiaries or any ownership
interest in any other securities or in any other corporation, limited liability
company, partnership, association or other business entity.

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     Section 2.2. No Conflict, Consents. Neither the execution and delivery by
Sellers of this Agreement and the other agreements, documents and instruments
contemplated hereby, nor the consummation by Sellers of the transactions in
accordance with the terms hereof and thereof, conflicts with or results in a
breach of any provisions of the Organizational Documents of Sellers. Except as
set forth on Schedule 2.2 and assuming the consents, approvals and
authorizations contemplated by Section 3.3 are obtained and are in full and
effect and notices have been duly given, none of the execution, delivery or the
performance by Sellers of this Agreement and the other agreements, documents and
instruments contemplated hereby, nor the consummation by the Sellers of the
transactions contemplated hereby: (a) results in the creation or imposition of
any Lien on any of the property held by any of the Sellers; (b) requires consent
to assignment or otherwise, as a result of the transactions contemplated hereby
(including without limitation to maintain in full force and effect any of the
Material Contracts (as defined in Section 2.12) as a result of the transactions
contemplated hereby), violates, or conflicts with, or results (or will violate,
conflict with or result) in a breach of any provision of, or constitutes a
default (or an event which, with or without notice or lapse of time or both,
would constitute a default) or gives rise to any right of termination,
cancellation or acceleration, change of control rights, modification,
notification, enhancement of rights of third parties, revocation of grant of
rights or assets, placement into or release from escrow of any assets of any
Seller or acceleration of any right or obligation of any Seller or a loss of any
benefit to which any Seller is entitled under any of the terms, conditions or
provisions of any Material Contract; or (c) violates any order, writ,
injunction, decree, statute, law, rule or regulation applicable to any Seller.
Section 2.3. Financial Statements.
          (a) Sellers have delivered to NaviSite the following financial
statements of each Seller (collectively, the “Financial Statements”):
                    (i) Unaudited consolidated balance sheets as of December 31,
2005 and December 31, 2006, and consolidated statements of income and retained
earnings and consolidated statements of cash flows for each of the fiscal years
then ended; and
                    (ii) Unaudited consolidated balance sheet as of June 30,
2007 (the “June Balance Sheet”), and the related unaudited consolidated
statements of income and retained earnings and cash flows for the month and year
to date period then ended.
          (b) Subject to the absence of footnotes and normal year-end audit
adjustments with respect to any unaudited Financial Statements which are
consistent in nature and amount with adjustments made in prior years, the
Financial Statements have been (and those statements to be delivered for periods
ending subsequent to the date hereof will be) prepared from, and in accordance
with, the information contained in the books and records of Sellers, which have
been regularly kept and maintained in accordance with Sellers’ normal and
customary practices and applicable legal and accounting practices and fairly
present, in all material respects, the financial condition of each of the
Sellers and the Businesses as of the dates thereof and results of operations and
cash flows for the periods referred to therein, and have been prepared in
accordance with GAAP consistently applied throughout all periods indicated, and
present fairly (or when delivered will present fairly) in all material respects
the consolidated financial condition, cash flows and operating results of each
of the Sellers and the Businesses as of the

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dates and for the periods indicated therein, and are consistent with the books
and records of Sellers.
          (c) As of the date hereof, all liabilities of Sellers of a type that
would be required to be shown on the Financial Statements (including the notes
thereto, where applicable) in accordance with GAAP (whether direct, indirect,
accrued, absolute, contingent, asserted, unasserted or otherwise) have been
(i) stated or adequately reserved or accrued against on the June Balance Sheet
or the notes thereto, (ii) reflected on Schedule 2.3, or (iii) incurred after
the date of the June Balance Sheet in the ordinary course of business consistent
with past practices.
     Section 2.4. Absence of Certain Changes. Except as set forth on
Schedule 2.4, from the date of the June Balance Sheet to the date of this
Agreement, the Sellers have operated only in the ordinary course of business
consistent with past practices and there has not been any:
          (a) to the knowledge of the Sellers, event, occurrence or development
which would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, other than developments generally in the industry in
which the Sellers operate;
          (b) to the knowledge of the Sellers, event or development that would,
individually or in the aggregate, reasonably be expected to prevent or
materially delay the performance of this Agreement or any of the Ancillary
Agreements by Sellers;
          (c) exchange in, reclassification, split or subdivision of any of the
Sellers’ authorized or issued membership interests; grant of any option, right
to purchase or similar right regarding the membership interests of any Seller;
or purchase, redemption, retirement, or other acquisition by any Seller of any
such membership interests; or
          (d) declaration or payment of any dividend or other distribution or
payment in respect of the membership interests of the Sellers.

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     Section 2.5. Consents and Approvals. Except as set forth on Schedule 2.5,
the execution, delivery and performance of this Agreement by Seller will not
require any consent, approval, permit, authorization, waiver or other action by,
or filing with or notification to, any federal, state, local, or any non-U.S.
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body (a “Governmental
Authority”), except the notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”), if applicable.
     Section 2.6. Litigation. Except as set forth on Schedule 2.6, as of the
date of this Agreement there is no litigation, action, suit, proceeding,
inquiry, claim, arbitration or investigation pending or, to the knowledge of any
Seller, threatened in writing against any Seller or any of its assets or
property or any of its directors or officers in their capacities as such or for
which any Seller is obligated to indemnify a third party. Neither Seller is a
party to or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or Governmental Authority or any arbitration ruling or
any settlement or similar agreement or written arrangement with ongoing
obligations relating to a dispute (or the resolution of a dispute) with any
third party.
Section 2.7. Taxes.
          (a) Except as set forth on Schedule 2.7:
                    (i) Each of the Sellers has timely filed, or will timely
file, all material Tax Returns required to be filed by such Seller with respect
to the Businesses with respect to Taxes for any period ending on or before the
date of this Agreement, taking into account any extension of time to file
granted to or obtained on behalf of any Seller;
                    (ii) Each of the Sellers has paid or caused to be paid all
Taxes and other assessments reflected in such Tax Returns that have become due
and payable. Each of the Sellers has made provision, in accordance with GAAP,
for all Taxes owed or accrued through the date of this Agreement;
                    (iii) Each of the Sellers has withheld and paid all Taxes
required to be withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party
under all applicable Tax Laws, and all Forms W-2 and 1099 required with respect
thereto have been properly completed and timely filed and have, within the time
and manner prescribed by Law, registered for the purpose of each withholding Tax
in the relevant territory or jurisdiction;
                    (iv) There are no Liens for Taxes upon the assets or
properties of the Sellers or the Businesses except for statutory Liens for
current Taxes not yet due;
                    (v) No Seller has requested any extension of time within
which to file any Tax Return in respect of any taxable year which has not since
been filed, and no outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns has been given by or on behalf of any Seller;
                    (vi) No Seller (A) is required to include in income in any
taxable period ending after the Closing any adjustment pursuant to Section
481(a) of the Code, by reason

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of any voluntary or involuntary change in accounting method (nor has any
Governmental Authority proposed any such adjustment or change of accounting
method); (B) has made an election, or is required, to treat any of its assets as
tax-exempt bond financed property or tax-exempt use property under Section 168
of the Code or any comparable provision of non-U.S., state or local law; or
(C) has filed a consent pursuant to former Section 341(f) of the Code for (or
any corresponding provision of state or local law) or agreed to have former
Section 341(f) of the Code (or any corresponding provision of state or local
law) applied to the disposition of any asset;
                    (vii) No power of attorney has been granted by or with
respect to any Seller with respect to any matter relating to Taxes;
                    (viii) No Seller is a party to any agreement, contract or
arrangement that will result in the payment of any “excess parachute payments”
within the meaning of Section 280G of the Code and no action by any Seller,
whether pursuant to this Agreement or otherwise, shall result in the making of
any such payment;
                    (ix) No Seller has requested or received a ruling or
determination from any Governmental Authority or signed a closing or other
agreement with any Governmental Authority, in either case with respect to Taxes;
                    (x) No Seller is a party to, is bound by, or has any
obligation under, any Tax sharing agreement, Tax indemnification agreement or
similar contract or arrangement (collectively, “Tax Indemnification
Agreements”); and as of the date of this Agreement, no Seller has knowledge of
any potential Liability to any Person as a result of, or pursuant to, any such
Tax Indemnification Agreement;
                    (xi) The Sellers have previously delivered or made available
to NaviSite true, correct and complete copies of (A) all audit reports, letter
rulings, technical advice memoranda and similar documents issued by a
Governmental Authority relating to the United States federal, state, local or
non-U.S. Taxes due from or with respect to any Seller or the Businesses, (B) all
United States federal Tax Returns, and those state, local and non-U.S. Tax
Returns filed by any Seller for tax periods ending on or after December 31, 2001
and (C) all closing agreements entered into by any Seller with any Governmental
Authority with respect to Taxes; and the Sellers will deliver to NaviSite all
materials with respect to the foregoing for all matters arising after the date
hereof.
                    (xii) No Seller has any Liability for Taxes of another
Person under Section 1.1502-6 of the Treasury regulations promulgated under the
Code (the “Treasury Regulations”) or any similar provision under state, local or
non-U.S. Law, by contract or otherwise;
                    (xiii) No Seller has any deferred intercompany gain or loss
arising as a result of a deferred intercompany transaction within the meaning of
Section 1.1502-13 of the Treasury Regulations (or similar provision under state,
local or non-U.S. Law) or any excess loss account under Section 1.1502-19 of the
Treasury Regulations (or similar provision of state, local or non-U.S. Law);

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                    (xiv) Since December 31, 2006, no Seller has incurred any
Liability for Taxes other than in the ordinary course of business;
                    (xv) No claim has been made, nor does any Seller reasonably
expect that a claim will be made by a Governmental Authority in a jurisdiction
where such Seller does not file Tax Returns that such Seller is or may be
subject to taxation by that jurisdiction;
                    (xvi) No Seller has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period described in Section 897(c)(1)(A)(ii) of the Code;
                    (xvii) Neither the Internal Revenue Service (the “IRS”) nor
any other Governmental Authority is asserting as of the date of this Agreement
by written notice to any Seller or, to any Seller’s knowledge, threatening in
writing as of the date of this Agreement to assert against any Seller, any
deficiency or claim for any amount of additional Taxes; and
                    (xviii) No federal, state, local or non-U.S. audits or other
administrative proceedings or court proceedings are pending as of the date of
this Agreement with regard to any Taxes or Tax Returns of any Seller, and no
Seller has received a written notice prior to the date of this Agreement of any
actual or threatened in writing audits or proceedings or is otherwise aware of
any such audits or proceedings.
                    (xix) Each of the Sellers qualifies as a “disregarded
entity” for Federal income tax purposes.
          (b) For the purposes of this Agreement:
                    (i) “Taxes” shall mean any United States federal, state or
local or non-U.S. income, gross receipts, occupation, premium, environmental
(including taxes under Code Section 59A), customs, profits, registration,
alternative or add-on minimum, estimated, withholding, payroll, employment,
unemployment, social security (or similar), excise, sales, use, value-added,
occupancy, franchise, real property, personal property, business and occupation,
windfall profits, capital stock, stamp or transfer tax or duty or any other tax,
charge, fee or imposition in the nature of Taxes, computed on a separate basis,
including any interest, penalties, additions or assessments with respect
thereto, whether disputed or not;
                    (ii) “Tax Law” shall mean the Law (including any applicable
regulations or any administrative pronouncement) of any Governmental Authority
relating to any Tax;
                    (iii) “Tax Returns” shall mean any U.S. federal, state,
local or non-U.S. return, declaration, report, claim for refund, amended return
or information return, and any schedule, exhibit, attachment or other materials
submitted with any of the foregoing, and any amendment thereto; and
                    (iv) “Law” means any non-U.S. or United States federal,
state or local law, statute, rule, regulation, ordinance, standard, requirement,
administrative ruling, order or process (including any zoning or land use law or
ordinance, building code, Environmental Law,

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securities, stock exchange, blue sky, civil rights, employment, labor or
occupational health and safety law or regulation or any law, order, rule or
regulation applicable to federal contractors) or administrative interpretation..
Section 2.8. Employee Benefit Plans.
          (a) Schedule 2.8 contains a true, correct and complete list of each
deferred compensation and each bonus or other incentive compensation, stock
purchase, stock option and other equity or equity based compensation plan,
program, agreement or arrangement; each severance or termination pay, medical,
surgical, hospitalization, life insurance and other “welfare plan,” fund or
program (within the meaning of Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)); each profit sharing, stock bonus or
other “pension plan,” fund or program (within the meaning of Section 3(2) of
ERISA); each employment, “change in control,” termination or severance
agreement; and each other employee benefit plan, fund, program, agreement or
arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by any Seller or by any trade or business, whether
or not incorporated (an “ERISA Affiliate”), that together with any Seller would
be deemed a “single employer” within the meaning of Section 414(b), (c), (m) or
(o) of the Code, or to which any Seller or an ERISA Affiliate is party, whether
written or oral, for the benefit of any employee or former employee of any
Seller (the “Employee Plans”); provided that with respect to Employee Plans
established or maintained primarily for employees or former employees working
outside the United States only material Employee Plans are listed. “Former
Employee Plan” shall mean any Employee Plans of any Seller sponsored,
maintained, or contributed to within the last three years, notwithstanding that
such plans are not listed on Schedule 2.8. No Seller or ERISA Affiliate of any
Seller has any commitment or formal plan, whether legally binding or not, to
create any additional material employee benefit plans or modify or change, in
any material way, any existing Employee Plans and no condition exists which
would prevent any Seller from terminating any Employee Plans (other than
Employee Plans required to be maintained under applicable Law) without material
Liability to such Seller (other than for benefits accrued at the time of such
termination), except to the extent limited by Law.
          (b) Each Employee Plan and Former Employee Plan intended to be
“qualified” within the meaning of Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service and the trusts
maintained thereunder are exempt from taxation under Section 501(a) of the Code
and, to the knowledge of the Sellers, no event has occurred or circumstance
exists that would reasonably be expected to affect such qualified status. Each
Employee Plan and Former Employee Plan intended to satisfy the requirements of
Section 501(c)(9) of the Code has satisfied such requirements.
          (c) None of the Employee Plans or Former Employee Plans is a
“multiemployer plan,” as such term is defined in Section 3(37) of ERISA (a
“Multiemployer Plan”), nor is or was any Employee Plan or Former Employee Plan
subject to Section 302 or Title IV of ERISA or Section 412 of the Code. No
Liability under Title IV or Section 302 of ERISA has been incurred by any Seller
or ERISA Affiliate that has not been satisfied in full, and no condition exists
that presents a material risk to any Seller or ERISA Affiliate of incurring any
such Liability. No Seller or ERISA Affiliate sponsors, maintains, contributes to
or has an

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obligation to contribute to, or has at any time sponsored, maintained,
contributed to or had an obligation to contribute to, any Multiemployer Plan or
any pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of
ERISA.
          (d) Except as set forth on Schedule 2.8, no Seller or, to the
knowledge of any Seller, any Employee Plan, any Former Employee Plan, any trust
created thereunder, or any trustee or administrator thereof, has engaged in a
transaction in connection with which any Seller, any Employee Plan, any Former
Employee Plan, any such trust, or any trustee or administrator thereof, or any
party dealing with any Employee Plan or any Former Employee Plan or any such
trust could be subject to either a material civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a material tax imposed pursuant to
Section 4975 or 4976 of the Code. To the knowledge of the Sellers, there has
been no prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code and other than a transaction that is exempt under a
statutory or administrative exemption) with respect to any Employee Plan or any
Former Employee Plan that could result in any material liability to any Seller
or ERISA Affiliate.
          (e) Except as set forth on Schedule 2.8, each Employee Plan and Former
Employee Plan has been operated and administered in all material respects in
accordance with its terms and applicable Law, including but not limited to ERISA
and the Code, and all contributions required to be made under the terms of any
of the Employee Plans or any Former Employee Plan as of the date of this
Agreement have been timely made or, if not yet due, have been properly reflected
on the Financial Statements except for any failure to do so which would not
reasonably be expected to result in any material liability to any Seller or
ERISA Affiliate.
          (f) Except as set forth on Schedule 2.8, no Employee Plan or Former
Employee Plan provides medical, surgical, hospitalization, death or similar
benefits (whether or not insured) for employees or former employees of any
Seller for periods extending beyond their retirement or other termination of
service, other than (i) coverage mandated by applicable Law, (ii) death benefits
under any “pension plan,” or (iii) benefits the full cost of which is borne by
the current or former employee (or his beneficiary). The Sellers and each ERISA
Affiliate are in material compliance with (A) the requirements of the applicable
health care continuation and notice provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and the regulations (including
proposed regulations) thereunder and any similar state law and (B) the
applicable requirements of the Health Insurance Portability and Accountability
Act of 1996, as amended, and the regulations (including proposed regulations)
thereunder.
          (g) Except as set forth on Schedule 2.8, the consummation of the
transactions contemplated hereby will not (i) entitle any current or former
employee or officer of any Seller to severance pay, unemployment compensation or
any other payment, (ii) accelerate the time of payment or vesting, or increase
the amount of compensation or benefits due any such employee or officer or
(iii) prevent any Seller from amending or terminating any Employee Plan or
Former Employee Plan.
          (h) Except as set forth on Schedule 2.8, there are no pending or, to
the knowledge of any Seller, threatened in writing or anticipated claims by or
on behalf of any Employee Plan or Former Employee Plan, by any employee or
beneficiary covered under any

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such Employee Plan or Former Employee Plan with respect to such plan, or
otherwise involving any such Employee Plan or Former Employee Plan, including
any audit or inquiry by the IRS or United States Department of Labor (other than
routine claims for benefits).
                    (i) There are no Employee Plans or Former Employee Plans
that are subject to the Law of any jurisdiction outside the United States.
     Section 2.9. Real and Personal Property.
          (a) Schedule 2.9(a) sets forth a description of the real property and
facilities leased in connection with the Businesses (the “Leased Real Property”)
and the address, approximate square footage, annual base rent and expiration
date thereof. A true and complete copy of the lease for such Leased Real
Property (including all amendments, subordination and non-disturbance
agreements, estoppel certificates and related documents) (together, the “Lease”)
has been delivered or made available to NaviSite. With respect to the Lease:
                    (i) Alabanza Corporation (the “Lessee”), which is the tenant
under such Lease, has good, valid and enforceable leasehold interests to the
leasehold estate in the Leased Real Property used by such Seller or Sellers,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors’ rights and general principles of equity; and
                    (ii) the Lease has been duly authorized and executed, is in
full force and effect and there is no existing material default by the Lessee
under the Lease.
          (b) Schedule 2.9(b) sets forth a true, correct and complete list of
all equipment, fixtures and trade fixtures of the Sellers as of June 30, 2007.
Except as set forth on Schedule 2.9(b), each Seller has good title to all of its
tangible personal property and assets shown on the June Balance Sheet or
acquired after the date of the June Balance Sheet, free and clear of any
mortgage, pledge, Lien, conditional sale agreement, security title, encumbrance
or other charge (collectively, “Encumbrances”), except for (i) assets which have
been disposed of to nonaffiliated third parties since June 30, 2007 in the
ordinary course of business, (ii) Encumbrances reflected in the June Balance
Sheet, (iii) Encumbrances for current Taxes not yet due and payable, and
(iv) Permitted Liens. The assets set forth on Schedule 2.9(b) constitute all of
the tangible personal property assets necessary for the operation of the
Businesses as conducted by the Sellers immediately prior to Closing, other than
the network infrastructure assets which constitute Excluded Assets and certain
other Excluded Assets (the benefit of which NaviSite will be provided during the
transition period under and in accordance with the terms of the Transition
Services Agreement, as hereinafter defined).
          (c) No Seller owns or has owned any real property.

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     Section 2.10. Labor and Employment Matters. Except as set forth in
Schedule 2.10 hereto:
          (a) There is no:
                    (i) collective bargaining agreement or any other agreement,
whether in writing or otherwise, with any labor organization, union, group or
association (“Labor Organization”) applicable to the employees of any Seller and
no Seller is subject to any charge, demand, petition or representation
proceeding seeking to compel, require or demand it to bargain with any labor
union or labor organization nor, as of the date of this Agreement, is there
pending or, to any Seller’s knowledge, threatened, any material labor strike,
dispute, walkout, work stoppage, slow down or lockout involving any Seller or
action or dispute by or with respect to any employees of any Seller;
                    (ii) unfair labor practice complaint pending or, to the
knowledge of any Seller, threatened in writing against any Seller before the
National Labor Relations Board or any other federal, state local or non-U.S.
agency;
                    (iii) pending or, to the knowledge of any Seller, threatened
representation question or union or labor organizing activities with respect to
employees of any Seller.
          (b) During the past three years, no Seller has effectuated (i) a
“plant closing” (as defined in the WARN Act, which is defined in Section 5.1(d))
affecting any site of employment or one or more facilities or operating units
within any site of employment or facility of any Seller; or (ii) a “mass layoff”
(as defined in the WARN Act) affecting any site of employment or facility of any
Seller; nor has any Seller been affected by any transaction or engaged in
layoffs or employment terminations sufficient in number to trigger application
of any similar state, local or non-U.S. Law. No employees of any Seller have
suffered an “employment loss” (as defined in the WARN Act) since three months
prior to the date of this Agreement.
          (c) Each of the Sellers has at all times and in all material respects
properly classified each of its respective employees as employees and each of
its independent contractors as independent contractors, as applicable, and no
indication has been received from any Governmental Authority that such
contractors would be considered employees for employment law or tax purposes at
any time.
          (d) Each of the Sellers has at all times paid its respective employees
in conformance with applicable federal, state, local and non-U.S. wage and hour
laws. There are not presently pending, or to the knowledge of the Sellers
threatened, in writing, any claims with respect to working hours or the payment
of wages, overtime or any other form of employee compensation.
          (e) Each of the Sellers does not, formally or informally, have a
custom or practice of making ex gratia severance payments to employees.

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     Section 2.11. Customers; Vendors.
          (a) Schedule 2.11(a) sets forth a true, complete and correct list of
the top 25 customers (and their known affiliates) of the Sellers and the
Businesses (the “Top Customers”) based on revenues for the period beginning
January 1, 2007 and ended May 31, 2007. Sellers, to their knowledge, have good
working relationships with each of the Top Customers. None of the Top Customers
has terminated its relationship with Sellers or the Businesses or, to the
knowledge of Sellers, threatened in writing to do so. To the knowledge of the
Sellers, none of the Top Customers is reasonably likely to terminate its
relationship with the Businesses as a result of the transactions contemplated by
this Agreement.
          (b) Schedule 2.11(b) sets forth a true, complete and correct list of
the top ten vendors (and their known affiliates) of the Sellers and the
Businesses based on amounts paid to such vendors for the period beginning
January 1, 2007 and ended May 31, 2007, and any other vendors (including without
limitation vendors providing bandwidth, operating systems, electricity or
hardware) that are essential to the uninterrupted operation of the Businesses
(the “Top Vendors”). Sellers, to their knowledge, have good working
relationships with each of the Top Vendors. None of the Top Vendors has
terminated its relationship with Sellers or the Businesses or, to the knowledge
of Sellers, threatened in writing to do so. To the knowledge of the Sellers,
none of the Top Vendors is reasonably likely to terminate its relationship with
the Businesses as a result of the transactions contemplated by this Agreement.
     Section 2.12. Contracts and Commitments.
          (a) Schedule 2.12 sets forth a true, complete and correct list
(including all amendments, modifications or supplements with respect thereto) of
the following agreements (written or oral) to which any Seller is a party to the
extent any such agreement (i) is currently in effect or (ii) has been terminated
on or prior to the date hereof but contains provisions that survived such
termination and such provisions are currently in effect (other than provisions
that customarily survive such termination and do not relate to the principal
business purpose of such agreement and which do not create any material or
ongoing financial or other liability to NaviSite):
                    (i) any loan agreement, note, mortgage, indenture, security
agreement and other agreement and instrument relating to the borrowing of money;
                    (ii) any agreement (or group of related agreements) between
any Seller and any Top Customer or Top Vendor;
                    (iii) any agreement concerning the establishment or
operation of a partnership, joint venture or limited liability company (other
than the Organizational Documents of the Sellers);
                    (iv) any agreement (or group of related agreements) under
which any Seller has created, incurred, assumed or guaranteed (or may create,
incur, assume or guarantee) indebtedness (including capitalized lease
obligations and operating lease commitments) involving more than $20,000 or
under which it has imposed (or may impose) an Encumbrance on any of the assets,
tangible or intangible, of any Seller or the Businesses;

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                    (v) any agreement for the disposition of any portion of the
assets of the Sellers or the Businesses (other than sales in the ordinary course
of business) or any agreement for the acquisition of the assets or business of
any other entity (other than purchases in the ordinary course of business);
                    (vi) any agreement concerning non-competition, exclusivity,
non-solicitation, non-recruitment or other such covenants that restricts any
conduct of any business by any Seller, in each case with respect to geographical
area of operations or scope or type of business of any Seller, other than
(A) non-competition agreements entered into between any Seller and its employees
or consultants and which do not restrict any Seller with respect to
non-competition or (B) customer contracts and non-disclosure agreements with
standard non-solicitation of employee provisions;
                    (vii) any employment or consulting agreement (other than
offer letters for at-will employment for employees that do not provide for any
severance benefit upon such employee’s termination);
                    (viii) any collective bargaining or similar agreement;
                    (ix) any agreement involving any current officer, employee,
director or shareholder of any Seller or consulting agreement with an individual
involving payments by any Seller in excess of $50,000 per annum other than
agreements entered into in connection with the issuance and exercise of options;
                    (x) any buy-sell or barter agreement;
                    (xi) any derivative contract and other hedging arrangement;
                    (xii) any acquisition agreement, by means of asset purchase,
merger, stock purchase, asset purchase, consolidation or other similar
transaction, of a person or business by any Seller (each, an “Acquisition”); and
                    (xiii) any other material agreement, including a guarantee,
not entered into in the ordinary course of business or that requires the payment
by any Seller in excess of $20,000.
          (b) All contracts, agreements and instruments required to be listed in
Schedule 2.12 (the “Material Contracts”) are valid and are in full force and
effect and constitute legal, valid and binding obligations of the Sellers and,
to the knowledge of the Sellers, of the other parties thereto, and are
enforceable in accordance with their respective terms subject, in each case, to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally and general principles of equity. The Sellers have no
knowledge of, and have not received, any notice regarding termination of any
Material Contracts and the Sellers have no knowledge of any Top Customer which
has indicated that it intends to terminate any Material Contract or not renew
upon its expiration. No Seller is in default and to the knowledge of the
Sellers, no other party is in material default in complying with any provisions
of any Material Contract, and to the knowledge of the Sellers, no condition or
event or fact exists which, with notice, lapse of time or

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both, could constitute a material default thereunder on the part of any Seller.
The Sellers have delivered or made available to NaviSite a true, correct and
complete copy of each of the Material Contracts.
          (c) Sellers are not in material default under any Assumed Obligation.
     Section 2.13. Intellectual Property.
          (a) For purposes of this Agreement,
                    (i) “Intellectual Property Assets” means all of the
following, to the extent owned or licensed by the Sellers or their Affiliates
and used in the Businesses (provided, however, that the Intellectual Property
Assets shall exclude any open source software used by the Sellers):
          (A) all patents, patent applications, patent rights, and inventions
and discoveries and invention disclosures (whether or not patented)
(collectively, “Patents”);
          (B) all trade names, trade dress, logos, packaging design, slogans,
Internet domain names, registered and unregistered trademarks and service marks
and applications (collectively, “Marks”);
          (C) all copyrights in both published and unpublished works, including
without limitation all compilations, databases and computer programs, and all
copyright registrations and applications, and all derivatives, translations,
adaptations and combinations of the above (collectively, “Copyrights”);
          (D) all know-how, trade secrets, confidential or proprietary
information, research in progress, algorithms, data, designs, processes,
formulae, drawings, schematics, blueprints, flow charts, models, prototypes,
techniques, Seller-designed reports, Beta testing procedures and Beta testing
results (collectively, “Trade Secrets”);
          (E) all goodwill, franchises, licenses, permits, consents, approvals,
technical information, telephone numbers, and claims of infringement against
third parties (the “Rights”);
          (F) all customer lists and telephone numbers, names of potential sales
leads, business strategies, outside analysts’ plans and reports, outlooks,
forecasts and other similar documents (collectively, “Other Intangibles”);
          (G) those services (including web hosting and application management),
computer programs, solutions and related documentation sold, marketed, or
provided by the Sellers as of the date hereof, including without limitation the
proprietary platform consisting of

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the major modules of Domain System Manager, Control Panel Software and Security
and System Administration Tools(collectively, the “Products”).
          (b) Ownership of Intellectual Property Assets. The Sellers have the
legal right to use all of the Intellectual Property Assets, free and clear of
all mortgages, pledges, charges, Liens, equities, security interests, or other
encumbrances created by the Sellers. No claim is pending or, to the Sellers’
knowledge, threatened in writing against any Seller and/or its directors,
officers, employees, and consultants to the effect that (i) any Seller’s right,
title and interest in and to the Intellectual Property Assets is reduced,
invalid or unenforceable by the Seller or that any of the Intellectual Property
Assets infringes, misappropriates, dilutes or otherwise violates the rights of a
third party, or (ii) challenging any Seller’s ownership or use of, or the
validity, enforceability or registerability of, any Intellectual Property Assets
and, to the knowledge of the Sellers, there is no reasonable basis for a claim
regarding any of the foregoing. There exists no prior act or current conduct or
use by the Sellers or any third party that would void or invalidate any
Intellectual Property Assets owned by the Sellers that are used or are necessary
for the conduct of the Businesses as currently conducted, or give cause to any
licensor of Intellectual Property Assets licensed to the Sellers to terminate or
otherwise impair the rights of the Sellers pursuant to any such license
agreement. Except as set forth in Schedule 2.13, the Sellers have not brought or
threatened a claim against any person (A) alleging infringement,
misappropriation, dilution or any other violation of the Intellectual Property
Assets, or (B) challenging any person’s ownership or use of, or the validity,
enforceability or registerability of, any Intellectual Property Assets and, to
the knowledge of the Sellers, there is no reasonable basis for a claim regarding
any of the foregoing. Except as set forth in Schedule 2.13, all former and
current employees of the Sellers have executed written instruments with the
Sellers that assign to the Sellers all rights to any inventions, improvements,
discoveries or information relating to the Businesses. Except as set forth in
Schedule 2.13, no current or former member, director, officer, employee or
contractor of any Seller (or any of their respective predecessors in interest)
has or will have, after giving effect to the transactions contemplated by this
Agreement, any legal or equitable right, title or interest in or to, or any
right to use, directly or indirectly, in whole or in part, any of the
Intellectual Property Assets owned by the Sellers. Except as set forth in
Schedule 2.13, all Intellectual Property Assets owned by the Sellers were
developed by either (x) employees of the Sellers within the scope of their
employment, or (y) independent contractors who have assigned all of their rights
in such Intellectual Property Assets to the Sellers pursuant to a written
agreement.
          (c) Patents. Schedule 2.13 sets forth a complete and accurate list and
summary description of all Patents owned by the Sellers. All of the issued
Patents owned by the Sellers are currently in compliance with formal legal
requirements (including without limitation payment of filing, examination and
maintenance fees and proofs of working or use), are valid and enforceable, and
are not subject to any maintenance fees or Taxes or actions falling due within
ninety (90) days after the Closing Date. In each case where a Patent is held by
any Seller by assignment, the assignment has been duly recorded with the U.S.
Patent and Trademark Office and all other jurisdictions of registration. No
issued Patent owned by the Sellers has been or is now involved in any
interference, reissue, re-examination or opposition proceeding. To the Sellers’
knowledge, there is no patent or patent application of any third party that
would potentially interfere with the operation of the Businesses by the Sellers.

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          (d) Trademarks. Schedule 2.13 sets forth a complete and accurate list
and summary description of all Marks owned by the Sellers. All Marks owned by
the Sellers that have been registered with the United States Patent and
Trademark Office and/or any other jurisdiction are currently in compliance with
formal legal requirements (including without limitation the timely
post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any maintenance
fees or Taxes or actions falling due within ninety (90) days after the Closing
Date. In each case where a Mark is held by any Seller by assignment, the
assignment has been duly recorded with the U.S. Patent and Trademark Office and
all other jurisdictions of registration. No registered Mark owned by the Sellers
has been or is now involved in any opposition, invalidation or cancellation
proceeding and, to the Sellers’ knowledge, no such action is threatened in
writing with respect to any of the Marks owned by the Sellers. All products and
materials of the Sellers containing a Mark owned by the Sellers bear the proper
notice where permitted by Law. No Marks have been abandoned by the Sellers, and
no Marks are the subject of a pending application for registration that is based
on the Sellers’ use of, or bona fide intent to use, such Marks. To the knowledge
of the Sellers, there has been no prior use of Marks owned by the Sellers by any
third party which would confer upon said third party superior rights in such
Marks, and the Sellers have reasonably policed the Marks owned by the Sellers
against third party infringement so as to maintain the validity of such Marks.
          (e) Copyrights. Schedule 2.13 sets forth a complete and accurate list
and summary description of all Copyrights owned by the Sellers. Except as set
forth in Schedule 2.13, all Copyrights owned by the Sellers that have been
registered with the United States Copyright Office are currently in compliance
with formal legal requirements, are valid and enforceable, and are not subject
to any fees or Taxes or actions falling due within ninety (90) days after the
Closing Date. In each case where a Copyright is held by any Seller by
assignment, the assignment has been duly recorded with the U.S. Copyright Office
and all other jurisdictions of registration. All products and materials of the
Sellers containing material protected by Copyrights owned by the Sellers bear
the proper notice where permitted by Law. No Copyrights have been released by
the Sellers.
          (f) Products. None of the source or object code, algorithms, or
structure developed by the Sellers that is included in the Products owned by the
Sellers is copied from, based upon, or derived from any other source or object
code, algorithm or structure in violation of the rights of any third party. Any
substantial similarity of any Products developed by Sellers to any computer
program owned by any third party did not result from the Products being copied
from, based upon, or derived from any such computer software program in
violation of the rights of any third party. Except as set forth in
Schedule 2.13, the Sellers have no obligation to any other Person to modify,
improve or upgrade the Products.
          (g) Trade Secrets. Except as set forth in Schedule 2.13, Sellers have
taken all reasonable measures (including, without limitation, entering into
appropriate confidentiality and nondisclosure agreements with all officers,
directors, employees, and consultants of the Sellers and any other persons with
access to the Trade Secrets) to protect the secrecy, confidentiality and value
of all Trade Secrets. Except as set forth in Schedule 2.13, to the knowledge of
the Sellers, there has not been any breach by any party to any such
confidentiality or non-disclosure agreement. The Trade Secrets have not been
disclosed by the Sellers to any person or entity

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other than employees or contractors of the Sellers who needed to know and use
the Trade Secrets in the course of their employment or contract performance, and
then only pursuant to a written agreement containing non-disclosure obligations
that adequately protect the Sellers’ proprietary interests in such Trade
Secrets. The Sellers have the right to use, free and clear of claims of third
parties, all Trade Secrets and, to the knowledge of the Sellers, no third party
has asserted that the use by the Sellers of any Trade Secret violates the rights
of any third party. To the knowledge of the Sellers, no third Person that is a
party to any agreement with the Sellers containing obligations of non-disclosure
with respect to such Trade Secrets is in breach or default thereof.
          (h) Other Intangibles. The Sellers have provided to NaviSite access to
all of the Other Intangibles used by the Sellers in connection with the
Businesses.
          (i) Exclusivity of Rights. The Sellers have the exclusive right to
use, license, distribute, transfer and bring infringement actions with respect
to the Intellectual Property Assets owned by the Sellers. Except as set forth on
Schedule 2.13, the Sellers (A) have not licensed or granted to anyone rights of
any nature to use, promote, market, sell, distribute or license any of its
Intellectual Property Assets; and (B) are not obligated to and do not pay
royalties or other fees to anyone for the Sellers’ ownership, use, license or
transfer of any of the Intellectual Property Assets owned by the Sellers. The
Intellectual Property Assets owned by the Sellers and, to the knowledge of the
Sellers, the Intellectual Property Assets owned by third Persons that are
subject license agreements, have been duly maintained, are valid and subsisting,
are full force and effect and have not been cancelled, expired or abandoned.
          (j) Infringement. None of the Intellectual Property Assets or the
Products or the modifications made by the Sellers to the Products sold by the
Sellers (excluding any third-party rights or products incorporated into such
Products for which the Sellers have a valid license) infringes or is alleged to
infringe any patent, trademark, service mark, trade name, copyright or other
proprietary right or is a derivative work based on the work of any other person.
          (k) Intellectual Property Assets Required in the Businesses. The
Intellectual Property Assets being transferred to the Buyer (taking into account
the exclusion of the Excluded Assets) under this Agreement (together with all
rights to open source software used by the Sellers in the Businesses) constitute
all of the intellectual property assets necessary for the ongoing operations of
the Businesses conducted by the Sellers immediately prior to Closing.
     Section 2.14. Environmental Matters.
          (a) The Sellers are in material compliance with Environmental Laws
(which compliance includes, but is not limited to, the possession by the Company
of all permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof). The
Sellers have not received any written notice, report or other information
regarding any actual or alleged material violation of Environmental Laws, or any
material liabilities or potential material liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise), including any investigatory,
remedial or corrective obligations, relating to the Sellers, the Businesses or
the Sellers’ facilities arising under Environmental Laws. There is no
Environmental Claim pending or, to the knowledge of

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the Sellers, threatened in writing against the Sellers. There are no past or
present actions, activities, circumstances, conditions, events or incidents
which reasonably would be expected to form the basis of an Environmental Claim
against the Sellers.
          (b) “Environmental Claim” means any action, investigation or notice by
any Person alleging potential Liability (including potential Liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (i) the presence, release or threatened
release of any hazardous materials at any location, whether or not owned or
operated by the Sellers, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
          (c) “Environmental Laws” means all applicable federal, state and local
statutes or laws, judgments, orders, regulations, licenses, permits, rules and
ordinances relating to pollution or protection of health, safety or the
environment, including, but not limited to the Federal Water Pollution Control
Act (33 U.S.C. §1251 et seq.), Resource Conservation and Recovery Act (42 U.S.C.
§6901 et. seq.), Safe Drinking Water Act (42 U.S.C. §3000(f) et. seq.), Toxic
Substances Control Act (15 U.S.C. §2601 et seq.), Clean Air Act (42 U.S.C. §7401
et. seq.), Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. §9601 et seq.), and other similar state and local statutes.
     Section 2.15. Insurance. Schedule 2.15 sets forth a true and correct
summary of the insurance policies or binders held by, or for the benefit of, the
Sellers and their directors, officers, employees and agents with respect to the
Businesses. Except as set forth in Schedule 2.15 hereto, (a) all such policies
or binders are in full force and effect and no premiums due and payable thereon
are delinquent, (b) there are no pending material claims against such insurance
policies or binders by the Sellers as to which the insurers have denied
Liability, (c) the Sellers have complied in all material respects with the
provisions of such policies and (d) there exist no material claims of the
Sellers under such insurance policies or binders that have not been properly and
timely submitted by the Sellers to their insurers. Schedule 2.15 sets forth a
list of all claims for all losses relating to the Businesses conducted by the
Sellers exceeding $25,000 submitted to insurers during the 18-month period
ending on the date of this Agreement.
     Section 2.16. Brokers. Except as set forth on Schedule 2.16 hereto, the
Sellers have not entered into any contract entitling any agent, broker,
investment banker, financial advisor or other firm or person to any broker’s,
finder’s, success fee or any other commission or similar fee in connection with
the transactions contemplated hereby.
     Section 2.17. Compliance with Laws.
          (a) The Sellers are not in default or violation of, and to the
knowledge of the Sellers, no event has occurred with respect to the Sellers or
the Businesses which, with the lapse of time or the giving of notice or both,
would result in the violation of or default under, any Law applicable to Sellers
or the Businesses or by which any property or asset of Sellers is bound, except
for any such conflicts, defaults or violations that would not, individually or
in the aggregate, have a Material Adverse Effect. The Company has not received
any written notice or

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written communication from any Governmental Authority alleging material
noncompliance with any applicable Law. The Company is not subject to reporting
or registration under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
          (b) To the knowledge of Sellers, neither the Sellers nor any of their
respective directors, officers, agents or employees have in the past three years
(i) used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to political activity, or (ii) made any unlawful
payment to non-U.S. or domestic government officials or employees or to non-U.S.
or domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
          (c) The Sellers are in possession of all authorizations, licenses,
permits, certificates, and approvals of any Governmental Authority necessary for
the Sellers to own, lease and operate their properties and to conduct the
Businesses substantially as they are being conducted as of the date hereof (the
“Permits”), and all such Permits are valid, and in full force and effect, except
where the failure to have, or the suspension or cancellation of, or failure to
be valid or in full force and effect of, any of the Permits would not,
individually or in the aggregate, reasonably be expected to (i) prevent or
materially delay consummation of the transactions contemplated hereby,
(ii) otherwise prevent or materially delay performance by the Sellers of any of
their material obligations under this Agreement or any Ancillary Agreement or
(iii) result in a Material Adverse Effect.
     Section 2.18. Transactions with Affiliates. Except as set forth on
Schedule 2.18, there are no loans, leases or other agreements or transactions
between any Seller and any present or former member, director, officer or
employee of any Seller, or to the Sellers’ knowledge, any person controlled by
such officer, director, employee or member or his or her immediate family. To
the knowledge of the Sellers, as of the date hereof, none of such persons has
any direct or indirect ownership interest in any firm or entity, except for less
than a 1% interest in any publicly-held corporation, with which any Seller is
affiliated or with which any Seller has a business relationship, or any firm or
corporation that competes with the Sellers. No employee, officer or director of
any Seller and no member of the immediate family of such persons is directly or
indirectly interested in any Material Contract or has or claims to have any
interest in the Intellectual Property Assets of the Sellers.
     Section 2.19. Product Warranties and Liabilities. Sellers have not given or
made any express warranties to third parties with respect to any products
manufactured or sold or services performed by Sellers, except for the limited
warranties stated in the standard forms of warranty used by it, as described in
Schedule 2.19. Sellers do not have any knowledge of any fact or of the
occurrence of any event forming the basis of any present or future claim against
Sellers, whether or not fully covered by insurance, for liability arising out of
the manufacture or sale of products or the performance of services by Sellers,
whether based on theories of negligence or products liability or on account of
any express or implied product warranty, except for warranty obligations and
product returns in the ordinary course of business and as set forth on Schedule
2.19.
     Section 2.20. Knowledge. Wherever there is a reference to the “knowledge”
(or words of similar import) of Sellers in this Agreement, such knowledge shall
be deemed to refer only to

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the actual knowledge of the directors and executive officers of any Seller and
the other persons listed on Schedule 2.20 hereto (the “Designated Individuals”).
Wherever there is a reference to the “knowledge” (or words of similar import) of
a particular Seller in this Agreement, such knowledge shall be deemed to refer
only to the actual knowledge of the directors and executive officers of such
Seller and any Designated Individual.
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF NAVISITE
     The NaviSite Disclosure Schedule shall be arranged in sections and
subsections corresponding to the numbered and lettered sections and subsections
contained in this Article III. The disclosures in any section or subsection of
the NaviSite Disclosure Schedule shall qualify other sections and subsections in
this Article III to the extent it is reasonably apparent from a reading of the
disclosure that such disclosure is applicable to such other sections and
subsections. Except as set forth in the NaviSite Disclosure Schedule attached
hereto and delivered by NaviSite, NaviSite hereby represents and warrants to the
Sellers as of the date hereof (or, if made as of a specified date, as of such
date) and as of the Closing Date, as follows.
     Section 3.1. Existence; Good Standing; Authority.
          (a) Each of Buyer and Parent is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
Each of Buyer and Parent has all requisite corporate power and authority and all
necessary governmental licenses, authorizations, consents and approvals to own,
operate, lease and encumber its properties and carry on its business as
currently operated and conducted. Each of Buyer and Parent is duly licensed or
qualified to do business as a foreign corporation, and is in good standing under
the laws of any other jurisdiction in which the character or ownership of its
properties or in which the transaction or character of its business makes such
qualification necessary, except where the failure to be so licensed or qualified
or in good standing would not, individually or in the aggregate, have a Material
Adverse Effect. Each of Buyer and Parent is not in violation of any provision of
its certificate of incorporation or bylaws.
          (b) Each of Buyer and Parent has the corporate power and authority to
execute and deliver this Agreement and each agreement, document and instrument
to be executed and delivered by or on behalf of each of Parent and Buyer
pursuant to this Agreement and the Ancillary Agreements and to carry out the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement by each of Buyer and Parent, the performance by each of Buyer and
Parent of its obligations hereunder and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of each of Buyer and Parent. This Agreement has
been duly executed and delivered by Buyer and Parent and, assuming the due
authorization, execution and delivery of this Agreement by the Sellers, this
Agreement constitutes a legal, valid and binding obligation of Buyer and Parent,
enforceable against Buyer and Parent in accordance with its terms. No other
corporate or similar action on the part of each of Buyer and Parent is necessary
to authorize the execution and delivery of this Agreement by Buyer or Parent or
the consummation by Buyer or Parent of the transactions contemplated hereby.

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     Section 3.2. No Conflict. Neither the execution and delivery by Buyer or
Parent of this Agreement and the other agreements, documents and instruments
contemplated hereby, nor the consummation by Buyer or Parent of the transactions
in accordance with the terms hereof and thereof, conflicts with or results in a
breach of any provisions of Buyer’s or Parent’s certificate of incorporation or
bylaws or other organizational documents. Except as set forth on Schedule 3.2,
the execution and delivery by Buyer or Parent of this Agreement and the other
agreements, documents and instruments contemplated hereby, and the consummation
by Buyer or Parent of the transactions in accordance with the terms hereof and
thereof, will neither (i) violate, or conflict with, or result in a breach of
any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
lease, contract or other agreement to which Buyer or Parent is a party, or by
which Buyer or Parent or any of their properties are bound, except, in each
case, as would not have a Material Adverse Effect, nor (ii) violate any order,
writ, injunction, decree, statute, law, rule or regulation applicable to Buyer
or Parent.
     Section 3.3. Consents and Approvals. Except as set forth on Schedule 3.3,
the execution, delivery and performance of this Agreement by NaviSite will not
require any consent, approval, permit, authorization or other action by, or
filing with or notification to, any Governmental Authority, except the
notification requirements of the HSR Act, if applicable.
     Section 3.4. Brokers. NaviSite has not incurred or become liable for any
broker’s commission or finder’s fee relating to or in connection with this
Agreement or the transactions contemplated hereby.
     Section 3.5. Financial Capabilities. Buyer is, as of the date hereof,
solvent and Buyer knows of no facts or circumstances which are reasonably likely
to render Buyer insolvent prior to the Cut-Off Date. Buyer will not be rendered
insolvent by any of the transactions contemplated by this Agreement, and, as
necessary, Parent shall provide Buyer with the financial resources in order for
Buyer to remain solvent. As used in this section, “insolvent” means that the sum
of the debts and other probable liabilities of Buyer exceeds the present fair
market value of Buyer’s assets. Immediately after giving effect to the
consummation of the transactions contemplated by this Agreement: (i) Buyer (with
the financial reserves of the Parent) will be able to pay its liabilities as
they become due in the usual course of its business; (ii) Buyer (with the
financial reserves of the Parent) will not have unreasonably small capital with
which to conduct its present or proposed business; and (iii) Buyer (with the
financial reserves of the Parent) will have assets (calculated at fair market
value) that exceed its liabilities.
     Section 3.6. Knowledge. Wherever there is a reference to the “knowledge”
(or words of similar import) of NaviSite, Parent or Buyer in this Agreement,
such knowledge shall be deemed to refer only to the actual knowledge of the
directors and executive officers of Parent and Buyer and any other persons
listed on Schedule 3.6 hereto.

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ARTICLE IV — CERTAIN COVENANTS OF THE PARTIES
     Section 4.1. Confidentiality. The parties shall adhere to the terms and
conditions of that certain Confidentiality Agreement dated as of April 27, 2007
by and between Parent and Sellers (the “Confidentiality Agreement”).
     Section 4.2. Further Action. Each of the parties hereto shall use its
respective commercially reasonable efforts to take or cause to be taken all
appropriate action, do or cause to be done all things necessary, proper or
advisable, and execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and consummate and make
effective the transactions contemplated by this Agreement. Notwithstanding any
confidentiality obligations pursuant to Section 4.1 or the Confidentiality
Agreement, prior to Closing and without the Sellers’ prior written consent,
NaviSite shall be permitted to use the Sellers’ confidential information (i) in
any disclosures required to be made by Parent by Law or by the rules of any
applicable self-regulatory organization, including without limitation the
Securities and Exchange Commission (“SEC”); provided, however, that Parent will
use its commercially reasonable efforts to allow Sellers reasonable time to
comment on the documents, or drafts of the documents, in which such confidential
information is to be used or disclosed, or (ii) in discussions or otherwise in
connection with any potential merger or acquisition transaction if the recipient
of such information executes a confidentiality agreement with Parent under which
they agree to maintain the confidentiality of such information.
     Section 4.3. Press Releases. The parties hereto will not, and will cause
each of their Affiliates and representatives not to, issue or cause the
publication of any press release or other public announcement with respect to
this Agreement or the transactions contemplated hereby without the prior written
consent of all of the parties hereto which consent shall not be unreasonably
withheld; provided, however, that Parent may, without the prior consent of the
other parties hereto, issue or cause publication of any such press release or
public announcement to the extent that Parent, in good faith, reasonably
determines, after consultation with outside legal counsel, such action to be
required by Law or by the rules of any applicable self-regulatory organization,
including without limitation the SEC, in which event Parent will use its
commercially reasonable efforts to allow Sellers reasonable time to comment on
such press release or public announcement in advance of its issuance.
     Section 4.4. Conveyance Taxes; Costs. Subject to the terms of this Section
4.4, NaviSite, on the one hand, and the Sellers, on the other, shall each be
liable for fifty percent (50%) of any transfer, sales, use, value added, excise,
stock transfer, stamp, recording, registration and any similar taxes
(collectively, “Sales Taxes” and each a “Sales Tax”) that become payable in
connection with the acquisition by Buyer of the Purchased Assets and other
transactions contemplated hereby, and the Sellers shall file such applications
and documents as shall permit any such Sales Taxes to be assessed and paid on or
prior to the Closing Date in accordance with any available pre-sale filing
procedure. Sellers shall prepare and file the requisite Sales Tax applications
within forty-five (45) days after Closing. NaviSite shall pay Sellers for fifty
percent (50%) of the aggregate amount of any Sales Taxes pursuant to this
Section 4.4 no later than ten (10) days after receiving an invoice from the
Sellers, which invoice shall be sent to Craig Campbell at NaviSite by email at
ccampbell@navisite.com, with a hard copy to follow by mail, and shall include
evidence of the amount of such Sales Taxes assessed and paid by or on behalf of
Sellers. Notwithstanding the foregoing, NaviSite shall not be liable

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for, and shall not be required to pay to Sellers, any amounts for Sales Taxes in
excess of an aggregate amount of twenty-five thousand dollars ($25,000) (50% of
$50,000 paid by Sellers).
     Section 4.5. Books and Records. NaviSite shall, until the seventh
anniversary of the Closing Date, retain all books, records and other documents
pertaining to the Purchased Assets or the Businesses and make the same available
for inspection and copying by the Sellers or any representative of the Sellers
at the expense of the Sellers during the normal business hours of NaviSite upon
reasonable request and upon reasonable notice.
     Section 4.6. Approval of Transactions. Sellers shall use their reasonable
best efforts to obtain, as promptly as practicable, all necessary approvals,
either at a special meeting of members or pursuant to a written consent executed
by all of the holders of the membership interests of Sellers, in accordance with
the applicable requirements of the Maryland Limited Liability Act (the “Maryland
LLC Act”). Copies of any written consent of Sellers’ members pursuant to the
Maryland LLC Act shall be delivered to NaviSite with a certificate of Sellers’
secretary certifying as to the accuracy of the written consent and that the
written consent has been received by Sellers and included in the books and
records of Sellers.
     Section 4.7. FIRPTA Certification. Prior to the Closing Date, each of
Sellers shall deliver to NaviSite an affidavit from such Seller, also delivered
to the Internal Revenue Service, that such Seller is not, and has not been, a
“U.S. real property holding corporation” in accordance with the Treasury
Regulations under Section 897 and 1445 of the Code, so that Buyer is exempt from
withholding any portion of the Purchase Price.
     Section 4.8. Use of Name; Use of Network. Except as otherwise set forth
below, following the Closing, NaviSite shall have the exclusive right to use the
names “Alabanza” and “Hosting Ventures,” and any derivations thereof, and
Sellers shall use their best efforts to cease using such names as soon as
reasonably practical after the Closing Date and shall take all actions
reasonably necessary, including changing the legal name of each Seller to a name
that is not similar to such name within thirty (30) business days after the
Closing, to allow NaviSite to exercise such right. In addition (a) the Sellers
shall be permitted to maintain the Non-profit “Guadalupe” accounts within the
current network for thirty (30) days after the Closing, to allow Sellers to move
such accounts to a different technical environment; and (b) the Sellers shall be
permitted to use the internet protocol addresses included in the Purchased
Assets for a period of thirty (30) days after Closing, to allow Sellers to
transition to alternative addresses.
     Section 4.9. Endorsement of Checks, Etc. Each Seller hereby authorizes
NaviSite following the Closing to endorse for deposit only its name on and
collect for NaviSite’s account any checks received in payment of any accounts
included in the Purchased Assets, and any refunds of deposits, prepaid expenses
and similar amounts included in the Purchased Assets. If any amounts due to
NaviSite are received by Sellers or Alabanza Corporation, Sellers will turn the
same over to NaviSite or cause Alabanza Corporation to turn the same over to
NaviSite, as the case may be, within ten (10) business days after the Sellers’
or Alabanza Corporation’s receipt thereof. Sellers will, and will cause Alabanza
Corporation to, hold such funds in trust exclusively for the benefit of
NaviSite, and Sellers will promptly deliver or cause Alabanza Corporation to
deliver such funds to NaviSite within ten (10) business days after the Sellers’
or Alabanza Corporation’s receipt thereof. In the event that Sellers do not
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Alabanza Corporation to deliver, any such funds to NaviSite prior to expiration
of the ten (10) business day period, Sellers shall immediately pay to NaviSite
(a) a penalty of five percent (5%) of the amount of such funds and (b) interest
on the amount of such funds at the rate of twelve percent (12%) per annum until
the funds are remitted to NaviSite.
     Section 4.10. Consents. After the Closing Date, Sellers and NaviSite will
cooperate and will each use commercially reasonable efforts to obtain all
consents required in connection with the transactions contemplated by this
Agreement, including without limitation those consents listed on Schedules 2.2
and 2.5 that are not obtained prior to the Closing Date. Notwithstanding
anything to the contrary herein, this Agreement shall not operate to assign any
agreement, lease, contract, license, commitment, understanding or undertaking,
or any claim, right or benefit arising thereunder or resulting therefrom, if an
attempted assignment thereof, without the consent of another party thereto,
would constitute a breach, default or other contravention thereof or in any way
adversely affect the rights of Sellers or NaviSite thereunder. In the event that
a consent required to assign any such agreement, lease, contract, license,
commitment, understanding or undertaking is not obtained on or prior to the
Closing Date or if an asset or assets are otherwise not assignable hereunder
(each such asset a “Non-Transferable Asset”), then, from and after the Closing
and, with respect to each such Non-Transferable Asset, until the earlier to
occur of (a) such time as such Non-Transferable Asset shall be properly and
lawfully transferred or assigned to NaviSite or (b) such time as the material
benefits intended to be transferred or assigned to NaviSite have been procured
by alternative means pursuant hereto, (i) the Non-Transferable Assets shall be
held by Sellers in trust exclusively for the benefit of NaviSite to the extent
permitted under applicable Law, and Sellers shall use commercially reasonable
efforts to perform and discharge all of the liabilities and other obligations of
Sellers under the terms of all such Non-Transferable Assets in effect as of the
Closing at NaviSite’s expense and (ii) Sellers shall use commercially reasonable
efforts to provide or cause to be provided to NaviSite all of the benefits of
Sellers under the terms of such Non-Transferable Assets in effect as of the
Closing, including by promptly paying to NaviSite any monies received by Sellers
from and after the Closing under such Non-Transferable Assets attributable
thereto. In the event that Sellers are unable to obtain any consent from any
person under any Non-Transferable Asset after the Closing Date through the use
of commercially reasonable efforts, NaviSite shall be entitled to procure the
material rights and benefits of Sellers under the terms of such Non-Transferable
Asset in effect as of the Closing by alternative means, including, without
limitation, by entering into new contracts with third persons or otherwise;
provided, however, that in the event that NaviSite shall exercise its rights
under this Section 4.10 in respect of any Non-Transferable Asset, the
obligations of Sellers and NaviSite under this Section 4.10 in respect of such
Non-Transferable Asset shall thereupon cease and expire.
     Section 4.11. Certain Tax Matters.
          (a) Sellers shall prepare and timely file all Tax Returns, if any,
required to be filed on or after the Closing Date for any time periods prior to
the Closing Date with respect to the Businesses, including without limitation
the Purchased Assets, and shall duly and timely pay all such Taxes due with
respect to such Tax Returns.
          (b) Each of NaviSite and Sellers shall provide the other party with
such assistance as may reasonably be requested by the other party in connection
with the preparation

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of any Tax Return, any audit or other examination by any taxing authority, or
any judicial or administrative proceedings related to liability for Taxes, and
each will retain and provide the requesting party with any records or
information which may be relevant to such return, audit or examination,
proceedings or determination. Any information obtained pursuant to this Section
4.11(b) or pursuant to any other Section hereof providing for the sharing of
information or review of any Tax Return or other schedule relating to Taxes
shall be kept confidential by the parties hereto.
ARTICLE V — EMPLOYEE MATTERS
     Section 5.1. Employees; Benefits.
          (a) Pursuant to the terms as set forth in this Section 5.1, NaviSite
shall offer employment effective as of the Closing Date to all of the employees
of the Sellers (or employees of Alabanza Corporation) related to the Businesses,
as listed on Schedule 5.1 (the “Employees”), on terms and conditions, including
provision of salary and benefits, which are no less favorable, taken as a whole,
than employees of NaviSite that are at similar job levels. NaviSite and Sellers
shall inform the Employees of the Closing and the transactions contemplated by
this Agreement at an employee meeting to be held jointly by NaviSite and Sellers
at Sellers’ offices no later than during the next business day after the Closing
Date (the “Employee Meeting”). Sellers and NaviSite shall use their best efforts
to keep this Agreement, and the transactions contemplated by this Agreement,
including without limitation the effect of the transactions on the employment of
the Employees, confidential from such Employees until the Employee Meeting.
NaviSite shall make employment offers to the Employees at such Employee Meeting
and shall immediately inform the Sellers of the employees who accept such offer
of employment (the “Retained Employees”). The Retained Employees shall be deemed
to be employed by NaviSite effective as of the Closing Date.
          (b) From and after the Closing Date, NaviSite shall provide the
Retained Employees with benefits (including, without limitation, retirement and
welfare benefits) that are no less favorable than the benefits provided by
NaviSite to its existing employees.
          (c) From and after the Closing Date, NaviSite shall pay severance to
the Retained Employees terminated other than for cause, and shall establish
appropriate agreements with management consistent with NaviSite policy.
          (d) From and after the Closing Date, NaviSite shall assume all accrued
and unpaid vacation relating to all Retained Employees. NaviSite shall not
assume or otherwise be responsible for (i) any sick leave of such employees that
accrued prior to the Closing Date, or (ii) any accrued and unpaid vacation or
severance relating to employees that are not Retained Employees.
          (e) NaviSite shall not, at any time prior to ninety-one (91) days
after the Closing Date, effect a “plant closing” or “mass layoff”, as those
terms are defined in the Worker Adjustment and Retraining Notification Act of
1988, as amended (the “WARN Act”), or take any other action affecting in whole
or in part any site of employment of NaviSite which could result in any
liability to Sellers without fully complying with all of the requirements of the

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WARN Act and any other applicable non-U.S., federal, state or other law (a “WARN
Act Violation”); provided, however, if NaviSite engages in a WARN Act Violation,
it shall indemnify and hold harmless Sellers against and in respect of any
damages, claims, losses, expenses, costs, obligations or liabilities arising
from such WARN Act Violation.
          (f) NaviSite shall offer health plan coverage to all of the Retained
Employees. For purposes of providing such coverage, to the extent permitted by
NaviSite’s existing benefit plans, NaviSite shall waive all preexisting
condition limitations and shall provide such health care coverage effective as
of the Closing Date without the application of any eligibility or waiting period
for coverage.
          (g) NaviSite shall provide each Retained Employee credit for
eligibility and vesting purposes for all service of the Retained Employee with
the Sellers prior to the Closing Date under any employees benefit plan or
arrangement maintained or established by NaviSite.
ARTICLE VI — CONDITIONS TO CLOSING
     Section 6.1. Conditions to Obligations of the Sellers. The obligations of
the Sellers to consummate the transactions contemplated by this Agreement for
the Closing shall be subject to the satisfaction or waiver, at or prior to the
Closing, of each of the following conditions:
          (a) All covenants contained in this Agreement to be complied with by
Buyer or Parent on or before the Closing shall have been complied with in all
material respects, and Sellers shall have received a certificate of each of
Buyer and Parent to such effect signed by a duly authorized officer of Buyer or
Parent, as applicable.
          (b) The representations and warranties of Buyer and Parent contained
in this Agreement that are qualified as to materiality, “Material Adverse
Effect” or other words of similar effect shall be true and correct in all
respects, and all other representations and warranties of Parent and Buyer
contained in this Agreement shall be true and correct in all material respects
(giving effect only to the materiality qualifications or material adverse effect
qualifications set forth therein), in each case as of the date of this Agreement
and as of the time of Closing, with the same force and effect as though such
representations and warranties had been made on and as of time of Closing
(except for representations and warranties that are made as of a specified date
or time, which shall be true and correct only as of such specific date or time)
and Sellers shall have received a certificate to such effect signed by an
authorized officer of Parent.
          (c) No Governmental Authority or court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and has the effect of making the transactions
contemplated by this Agreement for the Closing illegal or otherwise restraining
or prohibiting consummation of such transactions.
          (d) There shall be no pending action, suit, investigation or other
proceeding before any court or by any governmental body or other authority,
whether brought against any of Sellers or NaviSite, seeking to prevent the
consummation of the transactions contemplated by this Agreement, and no such
litigation shall have been threatened in writing nor shall there be in effect
any order restraining or prohibiting the consummation of the transactions
contemplated by

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this Agreement nor any proceedings pending with respect thereto. There shall be
no pending or threatened (in writing) litigation, or asserted or unasserted
claims, assessments, or other loss contingencies, materially affecting the
Businesses or any of the Purchased Assets, other than as disclosed in the
Schedules delivered pursuant hereto as of the date of this Agreement.
          (e) This Agreement and the transactions contemplated hereby shall have
been approved by the holders of all of the membership units of each of the
Sellers.
          (f) NaviSite shall have delivered to Sellers the NaviSite Deliverables
set forth in Section 6.3(b).
     Section 6.2. Conditions to Obligations of NaviSite. The obligations of
NaviSite to consummate the transactions contemplated by this Agreement for the
Closing shall be subject to the satisfaction or waiver, at or prior to the
Closing, of each of the following conditions:
          (a) All covenants contained in this Agreement to be complied with by
Sellers on or before the Closing shall have been complied with in all material
respects, and NaviSite shall have received a certificate of each of the Sellers
to such effect signed by a duly authorized officer of each of the Sellers.
          (b) The representations and warranties of Sellers contained in this
Agreement that are qualified as to materiality, “Material Adverse Effect” or
other words of similar effect shall be true and correct in all respects, and all
other representations and warranties of the Sellers contained in this Agreement
shall be true and correct in all material respects (giving effect only to the
materiality qualifications or material adverse effect qualifications set forth
therein), in each case as of the date of this Agreement and as of the time of
Closing, with the same force and effect as though such representations and
warranties had been made on and as of time of Closing (except for
representations and warranties that are made as of a specified date or time,
which shall be true and correct only as of such specific date or time) and
NaviSite shall have received a certificate to such effect signed by an
authorized officers of each Seller.
          (c) No Governmental Authority or court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making the transactions
contemplated by this Agreement for the Closing illegal or otherwise restraining
or prohibiting consummation of such transactions.
          (d) There shall be no pending action, suit, investigation or other
proceeding before any court or by any governmental body or other authority,
whether brought against any of Sellers or NaviSite, seeking to prevent the
consummation of the transactions contemplated by this Agreement, and no such
litigation shall have been threatened in writing nor shall there be in effect
any order restraining or prohibiting the consummation of the transactions
contemplated by this Agreement nor any proceedings pending with respect thereto.
There shall be no pending or threatened (in writing) litigation, or asserted or
unasserted claims, assessments, or other loss contingencies, materially
affecting the Businesses or any of the Purchased Assets, other than as disclosed
in the Schedules delivered pursuant hereto as of the date of this Agreement.

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          (e) Sellers shall have delivered to NaviSite the Sellers Deliverables
set forth in Section 6.3(a).
     Section 6.3. Deliveries at Closing.
          (a) At the Closing, Sellers will deliver or cause to be delivered to
NaviSite the following (collectively, the “Sellers Deliverables”):
                    (i) executed copies of all consents, approvals and
authorizations of any Governmental Authority set forth in Schedule 2.5;
                    (ii) executed copies of all other consents set forth in
Schedule 6.3(a) (the “Necessary Consents”);
                    (iii) the Escrow Agreement, executed by Sellers and the
Escrow Agent;
                    (iv) a Non-Competition and Non-Solicitation Agreement in the
form of Exhibit B hereto (the “Non-Competition Agreement”), executed by Sellers
and the other parties thereto;
                    (v) a Sublease Agreement in the form of Exhibit C hereto
(the “Sublease”), executed by Sellers;
                    (vi) an assignment and assumption agreement in the form of
Exhibit D hereto (the “Assignment and Assumption Agreement”), executed by
Sellers;
                    (vii) any assignment documents necessary to transfer
ownership of the Intellectual Property Assets to Buyer (the “IP Assignment
Documents”), executed by Sellers;
                    (viii) a bill of sale in the form of Exhibit E hereto (the
“Bill of Sale” and collectively with the Escrow Agreement, Non-Competition
Agreement, Sublease, IP Assignment Documents and Assignment and Assumption
Agreement, the “Ancillary Agreements”), executed by Sellers;
                    (ix) certificates of good standing of each of the Sellers,
dated as of a recent date, from the Maryland State Department of Assessments and
Taxation, and similar certificates of the appropriate state agencies of each
other state in which Sellers are qualified to do business;
                    (x) certificates signed by the Secretary of each Seller and
dated as of the Closing Date, as to the incumbency of each officer of each
Seller executing this Agreement and the other agreements being delivered
pursuant hereto, and certifying the effectiveness, accuracy and completeness of
the copies attached to such certificate of resolutions duly adopted by each
Seller’s board and its holders of membership interests, authorizing the
execution and delivery of this Agreement and the Ancillary Agreements by each
Seller, and the performance by each Seller of its respective obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby;

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                    (xi) UCC Termination Statements and such other releases as
NaviSite may reasonably request, duly completed and executed by each person
having any security interest, lien, claim or other encumbrances or adverse
interests in or on any of the Purchased Assets, in order to evidence the
termination thereof;
                    (xii) the transition services agreement (the “Transition
Services Agreement”) executed by the Sellers, in the form of Exhibit F hereto;
                    (xiii) each of the certificates, instruments and other
documents required to be delivered to NaviSite at the Closing pursuant to
Section 6.2 hereof;
                    (xiv) in electronic form to a computer(s) or server(s)
designated by NaviSite, by remote telecommunication, all Intangible Property
Rights; and
                    (xv) such other documents and instruments as NaviSite or
NaviSite’s counsel may reasonably request to better evidence or effectuate the
transactions contemplated hereby.
          (b) At the Closing, Buyer or Parent, as applicable, will deliver or
cause to be delivered to Sellers the following (collectively, the “NaviSite
Deliverables”):
                    (i) evidence of deposit with the Escrow Agent of the
Escrowed Funds;
                    (ii) the Closing Payment;
                    (iii) executed copies of all consents, approvals and
authorizations of any Governmental Authority set forth in Schedule 3.3;
                    (iv) the Escrow Agreement, executed by NaviSite and the
Escrow Agent;
                    (v) the Bill of Sale, executed by NaviSite;
                    (vi) the Assignment and Assumption Agreement, executed by
NaviSite;
                    (vii) the Sublease, executed by NaviSite;
                    (viii) the Transition Services Agreement, executed by
NaviSite;
                    (ix) certificates of good standing of each of Buyer and the
Parent, dated as of a recent date, from the Secretary of State of the State of
Delaware;
                    (x) certificates signed by the Secretary of each of Buyer
and Patent dated as of the Closing Date, as to the incumbency of each officer of
each Buyer and Parent executing this Agreement and the other agreements being
delivered pursuant hereto, and certifying the effectiveness, accuracy and
completeness of the copies attached to such certificate of resolutions duly
adopted by each Buyer’s and Parent’s board, authorizing the execution and

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delivery of this Agreement and the Ancillary Agreements by each of Buyer and
Parent, and the performance by each of Buyer and Parent of its respective
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby;
                    (xi) each of the certificates and other documents required
to be delivered at the Closing pursuant to Section 6.1 hereof; and
                    (xii) such other documents and instruments as Sellers or
Sellers’ counsel may reasonably request to better evidence or effectuate the
transactions contemplated hereby.
ARTICLE VII — SURVIVAL; INDEMNIFICATION
     Section 7.1. Survival. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing until six
months after the Closing Date (the “Cut-Off Date”). No claim for indemnification
hereunder may be brought after the Cut-Off Date, except for claims (a) of which
the Sellers have been notified in writing with reasonable specificity by
NaviSite prior to the Cut-Off Date, and (b) of which NaviSite has been notified
in writing with reasonable specificity by the Sellers prior to the Cut-Off Date.
     Section 7.2. Indemnification of NaviSite. Subject to Section 7.1, NaviSite
shall be indemnified and held harmless by the Sellers against and in respect of
any and all damages, claims, demands, losses, expenses, costs, obligations and
liabilities, including without limitation reasonable attorneys’ fees
(collectively, “Losses”), which arise or result from (i) any breach of any of
the representations or warranties contained in Article II, (ii) the failure of
the Sellers to perform any of their covenants or agreements contained herein, or
(iii) the Excluded Liabilities. Notwithstanding the foregoing,
          (a) there shall be no indemnification of NaviSite until the aggregate
amount of Losses incurred by NaviSite exceeds Fifty Thousand Dollars ($50,000)
(the “Threshold”), at which time the amount of Losses incurred in excess of the
Threshold shall be subject to indemnification hereunder;
          (b) there shall be no indemnification payments hereunder that exceed
in the aggregate ten percent (10%) of the Purchase Price (the “Indemnification
Cap”);
          (c) there shall be no indemnification of NaviSite with respect to
Losses arising out of breaches of the representations or warranties contained in
Article II to the extent that the Company has made a corresponding reserve for
such Losses on the June Balance Sheet, provided that such reserves are
specifically identified on such balance sheet; and
          (d) there shall be no indemnification of NaviSite for punitive
damages, speculative damages, special damages, incidental damages or lost
profits.
          In determining the foregoing thresholds and in otherwise determining
the amount of any Losses for which NaviSite is entitled to assert a claim for
indemnification hereunder, the amount of any such Losses shall be determined
after deducting therefrom the amount of any insurance proceeds and other third
party recoveries received by NaviSite in respect of such Losses (which
recoveries

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NaviSite shall use commercially reasonable efforts to obtain). If an
indemnification disbursement is received by NaviSite pursuant to this
Article VII, and NaviSite later receives insurance proceeds or other third party
recoveries in respect of the related Losses, NaviSite shall immediately pay to
the Sellers a sum equal to the lesser of (i) the actual amount of such insurance
proceeds or other third party recoveries or (ii) the actual amount of the
indemnification disbursement previously made with respect to such Losses.
     Section 7.3. Indemnification of Sellers. Subject to Section 7.1, Sellers
shall be indemnified and held harmless by NaviSite against and in respect of any
and all Losses, which arise or result from (i) any breach of any of the
representations or warranties contained in Article III, (ii) the failure of
NaviSite to perform any of their covenants or agreements contained herein, or
(iii) any Losses arising from, out of, or in respect of NaviSite’s operation of
the Businesses from and after the Closing, including (without limitation) Losses
arising from, out of, or in respect of the Assumed Obligations. Notwithstanding
the foregoing,
          (a) there shall be no indemnification of Sellers until the aggregate
amount of Losses incurred by the Sellers exceeds Fifty Thousand Dollars
($50,000), at which time the amount of Losses incurred in excess of the
Threshold shall be subject to indemnification hereunder;
          (b) there shall be no indemnification payments hereunder that exceed
in the aggregate ten percent (10%) of the Purchase Price;
          (c) there shall be no indemnification of Sellers for punitive damages,
speculative damages, special damages, incidental damages or lost profits.
          If an indemnification disbursement is received by Sellers pursuant to
this Article VII, and Sellers later received insurance proceeds or other third
party recoveries in respect of the related Losses, Sellers shall immediately pay
to NaviSite a sum equal to the lesser of (i) the actual amount of such insurance
proceeds or other third party recoveries or (ii) the actual amount of the
indemnification disbursement previously made with respect to such Losses.
     Section 7.4. Procedure for Indemnification of NaviSite-Two Party Claims.
          (a) In the event NaviSite should have a claim against Sellers
hereunder that does not involve a claim or demand being asserted against or
sought to be collected from it by a third party, NaviSite shall deliver to the
Escrow Agent and Sellers a certificate signed by any officer of NaviSite (a
“NaviSite Certificate”):
                    (i) stating that Losses exist in an aggregate amount greater
than the Threshold for claims against the Escrow Account (as defined in the
Escrow Agreement), and
                    (ii) specifying in reasonable detail the individual items
included in the amount of Losses in such claim, the date each such item,
properly accrued or arose and the nature of the misrepresentation, breach of
warranty or claim to which such item is related.
          (b) In the event that the Sellers disagree with the claim for
indemnification made by NaviSite in the NaviSite Certificate, the Sellers shall
have thirty (30) days after receipt

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of such NaviSite Certificate by the Sellers to deliver a certificate signed by
an officer of a Seller to the Escrow Agent and to NaviSite that specifies in
reasonable detail the nature of such objection and the basis therefore (the
“Written Escrow Objection”).
          (c) In the event that Sellers deliver the Written Escrow Objection to
the Escrow Agent and NaviSite pursuant to Section 7.4(b), NaviSite shall have
twenty (20) days after receipt of the Written Escrow Objection by NaviSite to
respond in a written statement addressed to the Escrow Agent and the Sellers. If
after such twenty-day period there remains a dispute as to any claims, the
Sellers and NaviSite shall attempt in good faith for twenty (20) days to agree
upon the rights of the respective parties with respect to each of such claims.
If the Sellers and NaviSite should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both parties and shall be furnished to
the Escrow Agent. The Escrow Agent shall be entitled to rely on any such
memorandum and shall make any disbursements agreed upon in such memorandum from
the Escrowed Funds to NaviSite as contemplated by Section 7.4(e).
          (d) If no agreement regarding the rights of the respective parties can
be reached after good faith negotiation, either the Sellers or NaviSite may seek
to resolve such dispute or claim in a court of competent jurisdiction or seek
other legal or equitable resolution in accordance with this Agreement.
Notwithstanding the foregoing, either the Sellers or NaviSite may at any time
apply to any court of competent jurisdiction for injunctive relief in connection
with a claim for indemnification or otherwise to prevent irreparable harm.
          (e) As soon as practicable following the earlier of: (i) receipt of
written authorization from the Sellers and NaviSite with respect to the
disposition of such claim or receipt of written notice of a final decision or
order of a court of competent jurisdiction with respect to such claim (in either
case, a “Distribution Directive”); or (ii) the close of business on the
thirtieth (30th) day following receipt by the Sellers and the Escrow Agent of a
NaviSite Certificate to which the Sellers have not delivered a Written Escrow
Objection in accordance with this Section 7.4, the Escrow Agent shall disburse
to NaviSite from the Escrowed Funds an amount equal to: (A) in the event of its
receipt of a Distribution Directive, the amount of the Losses stipulated in the
Distribution Directive or, (B) in the event that a Written Escrow Objection is
not received by the close of business on the thirtieth (30th) day following the
Escrow Agent’s receipt of a NaviSite Certificate, the amount of the Losses set
forth in the NaviSite Certificate.
     Section 7.5. Procedure for Indemnification of Sellers — Two Party Claims.
          (a) In the event either Seller should have a claim against NaviSite
that does not involve a claim or demand being asserted against or sought to be
collected from it by a third party, Sellers shall deliver to NaviSite a
certificate signed by any officer of a Seller (a “Seller Certificate”):
               (i) stating that Losses exist in an aggregate amount greater than
the Threshold, and

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               (ii) specifying in reasonable detail the individual items
included in the amount of Losses in such claim, the date each such item,
properly accrued or arose and the nature of the misrepresentation, breach of
warranty or claim to which such item is related.
          (b) In the event that NaviSite disagrees with the claim for
indemnification made by Sellers in the Seller Certificate, NaviSite shall have
thirty (30) days after receipt of such Seller Certificate by NaviSite to deliver
a certificate signed by an officer of NaviSite to the Sellers that specifies in
reasonable detail the nature of such objection and the basis therefore (the
“Written Objection”).
          (c) In the event that NaviSite delivers the Written Objection to the
Sellers pursuant to Section 7.5(b), Sellers shall have twenty (20) days after
receipt of the Written Objection by the Sellers to respond in a written
statement addressed to NaviSite. If after such twenty-day (20) period there
remains a dispute as to any claims, the Sellers and NaviSite shall attempt in
good faith for twenty (20) days to agree upon the rights of the respective
parties with respect to each of such claims. If the Sellers and NaviSite should
so agree, NaviSite shall pay such agreed-upon amount to Sellers within thirty
(30) days after such agreement. If NaviSite does not deliver a Written Objection
to the Sellers in accordance with Section 7.5(b) within thirty (30) days after
receipt of the Seller Certificate, NaviSite shall pay the amount of the Losses
set forth in the Seller Certificate to Sellers within forty-five (45) days after
receipt of such Seller Certificate.
          (d) If no agreement regarding the rights of the respective parties can
be reached after good faith negotiation, either the Sellers or NaviSite may seek
to resolve such dispute or claim in a court of competent jurisdiction or seek
other legal or equitable resolution in accordance with this Agreement.
Notwithstanding the foregoing, either the Sellers or NaviSite may at any time
apply to any court of competent jurisdiction for injunctive relief in connection
with a claim for indemnification or otherwise to prevent irreparable harm.
     Section 7.6. Method of Asserting Third-Party Claims.
          (a) Subject to the terms of this Article VII, in the event any claim
or demand for which Sellers would be liable to NaviSite is asserted against or
sought to be collected from NaviSite by a third party, NaviSite shall promptly
notify Sellers of such claim or demand in writing, specifying the nature and
estimated amount of the claim (which estimate shall not be conclusive of the
final amount of the claim and demand) (the “Claim Notice”). Sellers shall have
twenty (20) days from the actual receipt of the Claim Notice (the “Notice
Period”) to notify NaviSite in writing, (a) whether or not it disputes its
liability to NaviSite hereunder with respect to that claim or demand and
(b) notwithstanding any dispute, whether or not it desires, at its sole cost and
expense, to defend NaviSite against that claim or demand.
          (b) If Sellers dispute their liability with respect to the claim or
demand or the amount thereof (whether or not Sellers desire to defend NaviSite
against claim or demand as provided below), any dispute shall be resolved in
accordance with Section 8.11 unless satisfied by Sellers. Pending the resolution
of any dispute by Sellers of their liability with respect to any claim or
demand, that claim or demand shall not be settled without the prior written
consent of NaviSite, which consent shall not be unreasonably withheld, delayed
or conditioned.

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          (c) In the event that Sellers notify NaviSite within the Notice Period
that they desire to defend NaviSite against the claim or demand then, except as
hereinafter provided, Sellers shall have the right to defend NaviSite by
appropriate proceedings; provided, however, Sellers shall not, without the prior
written consent of NaviSite, consent to the entry of any judgment against
NaviSite or enter into any settlement or compromise which (i) does not include,
as an unconditional term, the giving by the claimant or plaintiff to NaviSite of
a release, in form and substance satisfactory to NaviSite, from all liability in
respect of such claim or litigation, or (ii) requires more than a monetary
payment for which NaviSite is fully indemnified by Sellers, or (iii) contains an
admission of wrongdoing on the part of NaviSite or has any other adverse effect
on any other claims that may be made against NaviSite. If NaviSite desires to
participate in, but not control, any defense or settlement with counsel other
than the counsel chosen by Sellers to represent both Sellers and NaviSite in
connection with such claim or demand, it may do so at its sole cost and expense.
          (d) If any claim or demand or the litigation or resolution of any
claim or demand involves an issue or matter which would have an adverse effect
on the business, operations, assets or properties of NaviSite, then NaviSite
shall have the right to control the defense or settlement of that claim or
demand and its reasonable costs and expenses (including expenses of counsel to
NaviSite) shall be included as part of the indemnification obligation of
Sellers, if any; provided, however, that NaviSite shall not, without the prior
written consent of the Sellers, consent to the entry of any judgment against the
Sellers or enter into any settlement or compromise which (i) does not include,
as an unconditional term, the giving by the claimant or plaintiff to the Sellers
of a release, in form and substance satisfactory to the Sellers, from all
liability (other than the agreed to liability of Sellers pursuant to this
Section 7.6) in respect of such claim or litigation, or (ii) requires a monetary
payment from Sellers (or, would subject the Sellers to claims from NaviSite for
indemnification under this Article VII as the result of any monetary payment
made by NaviSite upon consent to the entry of any judgment against the Sellers
or as part of any settlement or compromise), or (iii) contains an admission of
wrongdoing on the part of the Sellers or has any other adverse effect on any
other claims that may be made against the Sellers. If NaviSite should elect to
exercise such right, and Sellers desire to participate in, but not control, any
defense or settlement with counsel other than counsel chosen by NaviSite in
connection with such claim or demand, it may do so at its sole cost and expense.
          (e) All claims for indemnification by Sellers against NaviSite
relating to third party claims under this Agreement shall be asserted and
resolved under the procedures set forth above, substituting in the appropriate
place “NaviSite” for “Sellers” and “Sellers” for “NaviSite.”
     Section 7.7. Remedies Exclusive. The remedies provided in this Article VII
shall be the exclusive remedies of NaviSite and Sellers after the Closing in
connection with the transactions contemplated by this Agreement, including
without limitation any breach or non-performance of any representation or
warranty contained herein. Neither NaviSite nor Sellers may commence any suit,
action or proceeding against the other party with respect to the subject matter
of this Agreement, whether in contract, tort or otherwise, except to enforce
NaviSite’s or Sellers express rights under this Article VII, or by Sellers to
recover or release Escrowed Funds, or by either party to collect a working
capital adjustment pursuant to Section 1.5 from the Escrowed Funds (in the case
of a Reduction Amount due to Parent) or the other party (in the case of an
Increase Amount due to Sellers). After the Closing, the Escrow Account

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shall be NaviSite’s sole source for satisfaction of the indemnification
obligations under this Article VII. Notwithstanding the foregoing, either party
may seek to specifically enforce any covenant contained herein.
ARTICLE VIII — GENERAL PROVISIONS
     Section 8.1. Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed given
if delivered personally, or the next business day if sent by overnight courier
(providing proof of delivery), or on the same business day if sent via facsimile
on a business day during normal business hours to the parties at the following
addresses (or at such other address for a party as specified by like notice):
If to the Sellers, to:
Alabanza LLC and Hosting Ventures, LLC
c/o Alabanza Corporation
10 E. Baltimore Street
Suite 1000
Baltimore, MD 21202
Attn: Thomas V. Cunningham
Facsimile: (410) 779-1501
with a copy to:
Saul Ewing LLP
500 East Pratt Street
Suite 800
Baltimore, Maryland 21202
Attn: Eric G. Orlinsky, Esq.
Telephone: (410) 332-8687
Fax: (410) 332-8688
If to NaviSite, to:
NaviSite, Inc.
400 Minuteman Road
Andover, MA 01810
Attn: Monique Cormier, Esq.
Facsimile: (978) 946-7803

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with a copy to:
BRL Law Group LLC
31 St. James Avenue, Suite 850
Boston, MA 02116
Attn: Thomas B. Rosedale, Esq.
Facsimile: (617) 399-6930
     Section 8.2. Fees and Expenses. Except as provided otherwise herein, each
of NaviSite, on the one hand, and Sellers, prior to Closing, on the other hand,
shall bear its own expenses (including without limitation expenses of legal
counsel, accountants and other advisors) in connection with the negotiation and
the consummation of the transactions contemplated by this Agreement. If either
party files suit to enforce its rights under this Agreement, the substantially
prevailing party shall be entitled to recover from the other party all expenses
incurred by it in preparing for and in trying the case, including, but not
limited to, investigative costs, court costs and reasonable attorneys’ fees
(including expenses incurred to collect those expenses).
     Section 8.3. Certain Definitions. For purposes of this Agreement:
          (a) An “Affiliate” shall mean any affiliate, as defined in Rule 12b-2
under the Exchange Act;
          (b) “Effect” means any change, event, violation, inaccuracy,
circumstance or effect;
          (c) “Material Adverse Effect” means any Effect that (i) is materially
adverse to the business, assets (including intangible assets), capitalization,
financial condition or results of operations of a party (taking the Sellers, as
a whole), together with its subsidiaries taken as a whole or (ii) materially
impedes such party’s authority to consummate the transactions contemplated
hereby in accordance with the terms hereof and applicable Laws, provided that in
no event shall any of the following, alone or in combination, be deemed to
constitute, nor shall any of the following be taken into account in determining
whether there has been or shall be, a Material Adverse Effect: (A) any Effect
directly related to the announcement or pendency of the transactions
contemplated hereby, including, but not limited to, a decline in Parent’s stock
price; (B) any Effect that results from changes affecting any of the industries
in which such party operates generally or the United States economy generally
which does not have a disproportionate effect on such party; (C) any Effect that
results from changes affecting general worldwide economic or capital market
conditions which does not have a disproportionate effect on such party; or
(D) changes in Laws or regulations or the interpretation thereof;
          (d) “Person” means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity; and
     Section 8.4. Interpretation. When a reference is made in this Agreement to
an Article, Section, Schedule or Exhibit, such reference will be to an Article
or Section of, or a Schedule or Exhibit to, this Agreement unless otherwise
indicated. The table of contents and

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headings contained in this Agreement are for reference purposes only and will
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words “include”, “includes” or “including” are used in this Agreement, they
will be deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms used herein with initial capital letters
have the meanings ascribed to them herein. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of such
term. Any agreement, instrument or statute defined or referred to herein or in
any agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
     Section 8.5. Counterparts and Facsimile Signatures. This Agreement may be
executed in one or more counterparts, all of which will be considered one and
the same agreement and will become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties. This
Agreement may be executed by facsimile signature.
     Section 8.6. Amendments and Waivers. This Agreement may not be amended or
modified, nor may compliance with any condition or covenant set forth herein be
waived, except by a writing duly and validly executed by NaviSite and the
Sellers or in the case of a waiver, the party waiving compliance. No waiver by
any party with respect to any default, misrepresentation or breach of warranty
or covenant hereunder shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent occurrence.
     Section 8.7. Entire Agreement; Severability. This Agreement (including the
exhibits, schedules, documents and instruments referred to herein) and the
Confidentiality Agreement constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement. If any term, condition or
other provision of this Agreement is found to be invalid, illegal or incapable
of being enforced by virtue of any rule of law, public policy or court
determination, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the court making the determination of invalidity or
unenforceability shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.
     Section 8.8. Third Party Beneficiaries. Except as expressly provided in
this Agreement, each party hereto intends that this Agreement shall not benefit
or create any right or

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cause of action in or on behalf of any Person other than the parties hereto and
their respective successors and permitted assigns.
     Section 8.9. Governing Law. This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Delaware
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws.
     Section 8.10. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned, in whole or in
part, by operation of law or otherwise by the parties hereto without the prior
written consent of the other party; provided that the Sellers may assign their
rights under this Agreement to their members in connection with a merger or
dissolution of the Sellers; and provided further that Buyer may collaterally
assign this Agreement or a portion thereof to lenders in connection with the
financing of the transactions contemplated hereby (or any amendments,
supplements, restatements or refinancings thereof). Any assignment in violation
of the preceding sentence will be void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns
     Section 8.11. Consent to Jurisdiction. Each of the parties consent to the
jurisdiction of all state and federal courts sitting in the State of Delaware,
and the venue of the U.S. District Court for Delaware and all actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in a state or federal court in Delaware.
     Section 8.12. Mutual Drafting. The parties hereto are sophisticated and
have been represented by attorneys throughout the transactions contemplated
hereby who have carefully negotiated the provisions hereof. As a consequence,
the parties do not intend that the presumptions of Laws relating to the
interpretation of contracts against the drafter of any particular clause should
be applied to this Agreement or any agreement or instrument executed in
connection herewith, and therefore waive their effects.
     Section 8.13. Remedies. It is specifically understood and agreed that any
breach of the provisions of this Agreement or any other agreement executed and
delivered pursuant to this Agreement by any party hereto will result in
irreparable injury to the other parties hereto, that the remedy at law alone
will be an inadequate remedy for such breach, and that, in addition to any other
remedies which they may have, such other parties may enforce their respective
rights by actions for specific performance (to the extent permitted by Law).
     Section 8.14. Bulk Sales Law. NaviSite waives compliance by Sellers with
the provisions of any applicable bulk sales, fraudulent conveyance or other Law
for the protection of creditors in connection with the transactions contemplated
hereby.
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     IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.

                  SELLERS:
ALABANZA, LLC    
 
           
 
  By:             /s/ Thomas V. Cunningham
 
Name: Thomas V. Cunningham    
 
      Title: President and Chief Executive Officer    
 
                HOSTING VENTURES, LLC    
 
           
 
  By:             /s/ Thomas V. Cunningham    
 
           
 
      Name: Thomas V. Cunningham    
 
      Title: President and Chief Executive Officer    
 
                BUYER:
NAVI ACQUISITION CORP.    
 
           
 
  By:             /s/ James W. Pluntze    
 
           
 
      Name: James W. Pluntze    
 
      Title: Chief Financial Officer    
 
                PARENT: NAVISITE, INC.    
 
           
 
  By:             /s/ James W. Pluntze    
 
           
 
      Name: James W. Pluntze    
 
      Title: Chief Financial Officer    

Asset Purchase Agreement Signature Page